997S

Customer Relationship Management in the
Banking Sector of Pakistan
By
Mohammad Majid Mahmood Bagram
NATIONAL UNIVERSITY OF MODERN LANGUAGES

ISLAMABAD
June 2010
Customer Relationship Management in the

Banking Sector of Pakistan
By
Mohammad Majid Mahmood Bagram

MPA, Quaid-e-Azam University, Islamabad, 1992
A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF

THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY
In Management Sciences
To
FACULTY OF ADVANCED INTEGRATED STUDIES AND RESEARCH

(Management Sciences)
NATIONAL UNIVERSITY OF MODERN LANGUAGES, ISLAMABAD

June 2010
Mohammad Majid Mahmood Bagram, 2010
NATIONAL UNIVERSITY OF MODERN LANGUAGES
FACULTY OF ADVANCED INTEGRATED STUDIES & RESEARCH
DISSERTATION AND DEFENSE APPROVAL FORM

The undersigned certify that they have read the following thesis, examined the defense, are satisfied with the
overall exam performance, and recommend the thesis to the Faculty of Advanced Integrated Studies &
Research for acceptance:
Thesis/ Dissertation Title: Customer Relationship
Submitted By: Mohammad
Management in the Banking Sector of Pakistan
Majid Mahmood Bagram
Registration #: 141-Ph.D/MS/2003 (Jan)
Name of Student
Doctor of Philosophy
Degree Name in Full (e.g Master of Philosophy, Doctor of Philosophy)
Management Sciences
Name of Discipline
Prof. Dr. Anwar Hussain Siddiqui

Name of Research Supervisor
Prof. Dr. Shazra Munnawer
_______________________________
Signature of Research Supervisor
_______________________________
Signature of Dean (FAISR)
Name of Dean (FAISR)
Prof. Dr. Aziz Ahmad Khan

Name of Rector
_______________________________
Signature of Rector
_______________________________
Date
ii
CANDIDATE DECLARATION FORM
I Mohammad Majid Mahmood Bagram

Son of Dr. Mushtaq Ali Bagram
Registration # 141-Ph.D/MS/2003 (Jan)
Discipline Management Sciences
Candidate of PhD in Management Sciences at the National University of
Modern Languages do hereby declare that the thesis (Title) Customer Relationship Management
in the Banking Sector of Pakistan
submitted by me in partial fulfillment of PhD degree, is my original work, and has not been
submitted or published earlier. I also solemnly declare that it shall not, in future, be submitted by
me for obtaining any other degree from this or any other university or institution.
I also understand that if evidence of plagiarism is found in my thesis/dissertation at any stage,
even after the award of a degree, the work may be cancelled and the degree revoked.
______________
Date
_____________________________________
Signature of Candidate
Name of Candidate: Mohammad Majid Mahmood Bagram
iii
ABSTRACT
Thesis Title: Customer Relationship Management in the banking sector of Pakistan
Banking sector all over the world facing immense competition and Pakistani banking
sector is not an exception. It is an acceptable fact that acquiring new customer is more costly
than retaining the existing customer. The researcher followed the same fact and developed the
basic purpose of this research study, that is to discover the major factors that affect customer
loyalty, which is a focus of Customer Relationship Management (CRM) for overcoming high
competition in the banking sector of Pakistan.
Although there are many aspects of Customer Relationship Management (CRM) in the
banking sector, this research study focuses on its customer part. Understanding customers is the
key to success of any bank. Banks having an in-depth understanding of their customers develop a
better competitive edge over their competitors. The major focus of CRM is to not only to acquire
new customers but also to retain the existing ones. This research study will help banks to build
customer loyalty.
Every bank tries its best to acquire and retain their customers but due to increased
competition and rapid improvements in technology, customers have quick access to thousands
and thousands of products and services.
The researcher collected data from customers of banks with the help of questionnaire and
for doing demographic, correlation, and regression analysis used SPSS software version 16.00.
After detailed analysis and discussions, results of this research study indicate that identified
factors do affect customer loyalty and their relationships with each other vary from bank to bank.
These identified variations can help banks to overcome their existing weaknesses to develop
better customer loyalty strategies.
The researcher identified factors of trust, perceived value, satisfaction, switching barriers,
and culture that affect customer loyalty. After measuring relationships of these factors with each
other, researcher responded to this research study`s questions and hypotheses and developed a
customer loyalty model for the banking sector of Pakistan for the mutual benefits of customers
and banks. Furthermore, this research study`s findings and recommendations contributes towards
improvement in existing customer loyalty strategies of banks.
The researcher would also like to mention here that there is hardly any research study in
Pakistan that has seen the affects of customer culture and customer trust on customer loyalty as
the results of this research study indicate that these factors affect customer loyalty in the banking
sector of Pakistan.
iv
TABLE OF CONTENTS
CHAPTER
PAGE
Title Page
Dissertation and Defense Approval Form
ii
Candidate Declaration Form
iii
Abstract
iv
Table of Contents
List of Appendices
xiii
List of Tables
xiv
List of Bar Charts
xxiii
List of Figures
xxiv
List of abbreviations
xxv
Acknowledgement
xxvi
CHAPTER 1:
INTRODUCTION
1.1
Significance of relationships
1.2
Customer
1.3
Banking
1.4
Banking sector of Pakistan
1.5
Customer relationships with banks
1.6
Customer Relationship Management
1.6.1
Characteristics of Customer Relationship Management
1.6.2
Customer loyalty as a focus of Customer Relationship

Management
7
v
1.7
Background to the study
1.8
Significance of the research study
1.9
Statement of the problem
1.10
Hypotheses of the research study
1.11
Research questions
10
1.12
Study procedure:
10
1.12.1 Population
10
1.12.2 Sampling
11
1.12.3 Research instruments
12
1.12.4 Pilot testing of questionnaire
12
1.12.5 Data collection
13
1.12.6 Data analysis
13
Limitations of the research study
13
1.13
CHAPTER 2:
REVIEW OF RELATED LITERATURE

2.1
Customers-seller bond
2.2
Customer loyalty as a focus of Customer Relationship
2.3
15
Management
16
Banking sector of Pakistan
18
2.4.1
21
Customer Relationship Management in banking sector
2.4
Customer loyalty
26
2.5
Customer Relationship Management (CRM) and

customer loyalty in the banking sector
28
2.6
Models relating to research study
30
2.7
Offensive and defensive strategies
34
2.8
Factors that affect customer loyalty in the banking sector
35
2.8.1
Customer trust
35
2.8.2
Customer perceived value
35
2.8.3
Customer satisfaction
36
2.8.3.1
Conceptual differences between customer

satisfaction and customer perceived value
vi
37
CHAPTER 3:
2.8.4
Customer switching barriers
37
2.8.5
Customer culture
38
FRAME OF REFERENCE
3.1
Conceptualization
39
3.2
Previous research and models relevant to this research study
40
3.3
Emerged frame of reference
43
CHAPTER 4:
RESEARCH METHODOLOGY
4.1
Research Process Onion
45
4.2
Research design:
46
4.3
4.2.1
Exploratory research study
46
4.2.2
Descriptive research study
46
4.2.3
Causal research study
46
Research strategy:
4.3.1
4.4
Selection of questionnaire survey method
Research study factors:

4.4.1
4.5
48
48
50
Operational definitions
50
Operationalization of research study factors:
51
4.5.1
Customer trust
51
4.5.2
51
4.5.3
52
4.5.4
52
4.5.5
Customer culture
52
4.5.6
Customer loyalty
53
4.6
Progression of questionnaire`s questions
53
4.7
Time horizon
54
4.8
Population
54
4.9
Sampling:
55
4.9.1
Sample size
56
4.9.2
Sample selection
56
vii
4.10
Instruments for data collection
58
4.11
Pretesting of questionnaire
58
4.12
Analysis of data:
61
4.12.1 Coding of questions
61
4.12.2 Data analysis techniques
61
4.13
Triangulation
62
4.14
Reliability and validity of the research constructs:
62
4.14.1 Reliability
63
4.14.2 Validity
64
Field issues during research study
64
4.15
CHAPTER 5:
EMPIRICAL FINDINGS
5.1
5.2
5.3
5.4
CHAPTER 6:
Overview of the National Bank of Pakistan
65
5.1.1
Business profile
66
5.1.2
Responses of customers
67
5.1.3
Challenges and future opportunities
68
Overview of the Citibank, Pakistan
69
5.2.1
Business profile
69
5.2.2
70
5.2.3
70
Overview of the Meezan Bank Limited, Pakistan
70
5.3.1
Business profile
71
5.3.2
71
5.3.3
72
Overview of the Habib Bank Limited, Pakistan
73
5.4.1
Business profile
73
5.4.2
74
5.4.3
74
DATA ANALYSIS AND DISCUSSIONS

6.1
Research instrument
76
viii
6.2
6.1.1
Customer trust
76
6.1.2
77
6.1.3
77
6.1.4
78
6.1.5
Customer culture
78
6.1.6
Customer loyalty
79
Demographic analysis
79
6.2.1
Demographic analysis - Citibank, Pakistan
6.2.2
Demographic analysis - National Bank of

Pakistan (NBP), Pakistan
6.2.3
89
Demographic analysis - Habib Bank Limited,

Pakistan (HBL), Pakistan
6.3
84
Demographic analysis - Meezan Bank

Limited, Pakistan
6.2.4
79
94
Correlation analysis
99
6.3.1
Correlation analysis Citibank, Pakistan
99
6.3.2
Correlation analysis National Bank of

Pakistan (NBP), Pakistan
6.3.3
Correlation analysis Meezan Bank Limited,

Pakistan
6.3.4
105
111
Correlation analysis Habib Bank

Limited (HBL), Pakistan
117
6.4
Multivariate Data Analysis - Citibank, Pakistan
123
6.5
Regression Model - Citibank, Pakistan
124
6.5.1
Customer Perceived Value (PV)
124
6.5.2
Customer Loyalty
126
6.5.3
Customer Satisfaction (CS)
128
6.5.4
Customer Trust
130
6.5.5
Customer Culture
132
6.5.6
Customer Switching Barriers (CSB)
134
ix
6.6
6.7
6.8
6.9
Stage-Wise Multiple Regression - Citibank, Pakistan
136
6.6.1
136
6.6.2
Customer Loyalty
140
6.6.3
144
6.6.4
Customer Trust
148
6.6.5
Customer Culture
152
6.6.6
156
Multivariate Data Analysis - National Bank of Pakistan,

Pakistan
160
Regression Model - National Bank of Pakistan (NBP), Pakistan
161
6.8.1
161
6.8.2
Customer Loyalty
163
6.8.3
165
6.8.4
Customer Trust
167
6.8.5
Customer Culture
169
6.8.6
171
Stage-Wise Multiple Regression - National Bank of Pakistan,

Pakistan
173
6.9.1
173
6.9.2
Customer Loyalty
177
6.9.3
181
6.9.4
Customer Trust
185
6.9.5
Customer Culture
189
6.9.6
193
6.10
Multivariate Data Analysis Meezan Bank Limited, Pakistan
197
6.11
Regression Model Meezan Bank Limited, Pakistan
198
6.11.1
198
6.11.2
Customer Loyalty
200
6.11.3
202
6.11.4
Customer Trust
204
6.11.5
Customer Culture
206
6.11.6
6.12
Stage-Wise Multiple Regression Meezan Bank Limited,

Pakistan
6.13
6.14
6.15
210
6.12.1
210
6.12.2
Customer Loyalty
214
6.12.3
218
6.12.4
Customer Trust
222
6.12.5
Customer Culture
226
6.12.6
230
Multivariate Data Analysis Habib Bank Limited (HBL),

Pakistan
234
Regression Model Habib Bank Limited (HBL), Pakistan
235
6.14.1
235
6.14.2
Customer Loyalty
237
6.14.3
239
6.14.4
Customer Trust
241
6.14.5
Customer Culture
243
6.14.6
245
Stage-Wise Multiple Regression Habib Bank Limited (HBL),

Pakistan
CHAPTER 7:
208
247
6.15.1
247
6.15.2
Customer Loyalty
251
6.15.3
255
6.15.4
Customer Trust
259
6.15.5
Customer Culture
263
6.15.6
267
SUMMARY, FINDINGS, CONCLUSIONS &

RECOMMENDATIONS
7.1
Summary
271
7.2
Findings of the research study
274
xi
7.3
Conclusions
281
7.4
Recommendations
282
7.5
Implications for theory and practice
283
7.6
Future directions of research
284
BIBLIOGRAPHY
286
xii
LIST OF APPENDICES
Appendix-I:
Questionnaire for customers of banks
299
Appendix-II:
Organogram of the State Bank of Pakistan
303
Appendix-III:
Banks/DFIs regulated by the State Bank of Pakistan
304
Appendix-IV:
Banking sector performance in Pakistan
321
Appendix-V:
Citibank network
323
Appendix-VI:
Milestones of Citibank, Pakistan
327
Appendix-VII:
Customer Relationship Management, software
329
Appendix-VIII:
Central Board of Directors, State Bank of Pakistan
336
Appendix-IX:
Various departments of the State Bank of Pakistan
337
Appendix-X:
The Quaid-i-Azam's Speech on the occasion of the opening

ceremony of the State Bank of Pakistan on 1st July, 1948
339
Appendix-XI:
Statutory obligations of the State Bank of Pakistan
342
Appendix-XII:
Core functions of the State Bank of Pakistan
345
Appendix-XIII:
Vision, Mission, & Core Values of the National Bank of Pakistan
351
Appendix-XIV:
Awards & achievements - National Bank of Pakistan
352
Appendix-XV:
Board of Directors, National Bank of Pakistan
355
Appendix-XVI:
Director`s report, National Bank of Pakistan
358
Appendix-XVII:
Citi Pakistans grants
367
Appendix-XVIII:
Citibank - business profile
369
Appendix-XIX:
Citi in Pakistan - building communities
370
Appendix-XX:
Meezan Bank Limited, vision, mission, & service mission
371
Appendix-XXI:
Meezan Bank Limited, branch network
372
Appendix-XXII:
Habib Bank Limited, Pakistan, Board of Directors
373
Appendix-XXIII:
Habib Bank Limited, Pakistan, services
374
xiii
LIST OF TABLES
Table
2.1:
Page
Conceptual differences between customer satisfaction and customer

perceived value
37
4.1:
Distribution of questionnaire in banks
57
6.1:
Measuring customer trust
76
6.2:
Measuring customer perceived value
77
6.3:
Measuring customer satisfaction
77
6.4:
Measuring customer-switching barriers
78
6.5:
Measuring customer culture
78
6.6:
Measuring customer loyalty
79
6.7:
Customer`s gender Citibank
80
6.8:
Customer`s marital status Citibank
80
6.9:
Customer`s income Citibank
81
6.10: Customer`s age Citibank
82
6.11: Customer`s education level Citibank
83
6.12: Customer`s gender - National Bank of Pakistan
84
6.13: Customer`s marital status - National Bank of Pakistan
85
6.14: Customer`s income - National Bank of Pakistan
86
6.15: Customer`s age - National Bank of Pakistan
87
6.16: Customer`s education level - National Bank of Pakistan
88
6.17: Customer`s gender - Meezan Bank Limited
89
6.18: Customer`s marital status- Meezan Bank Limited
90
6.19: Customer`s income - Meezan Bank Limited
91
6.20: Customer`s age - Meezan Bank Limited
92
6.21: Customer`s education level - Meezan Bank Limited
93
6.22: Customer`s gender Habib Bank Limited
94
xiv
6.23: Customer`s marital status - Habib Bank Limited
95
6.24: Customer`s income - Habib Bank Limited
96
6.25: Customer`s age - Habib Bank Limited
97
6.26: Customer`s education level - Habib Bank Limited
98
6.27: Correlations between customer trust & customer perceived value Citibank
100
6.28: Correlations between customer trust and customer loyalty Citibank
101
6.29: Correlations between customer trust and customer satisfaction Citibank
101
6.30: Correlations between customer perceived value & customer satisfaction

- Citibank
102
6.31: Correlations between customer switching barriers & customer loyalty

Citibank
103
6.32: Correlations between customer culture & customer loyalty Citibank
103
6.33: Correlations between customer satisfaction & customer loyalty Citibank
104
6.34: Correlations between all studied variables Citibank
105
6.35: Correlations between customer trust & customer perceived value - National
Bank of Pakistan
106
6.36: Correlations between customer trust and customer loyalty - National Bank of
Pakistan
106

- National Bank of Pakistan
107
6.38: Correlations between customer trust and customer satisfaction

108

108
6.40: Correlations between customer culture & customer loyalty

109
6.41: Correlations between customer satisfaction & customer loyalty

110
6.42: Correlations between all studied factors - National Bank of Pakistan
111
6.43: Correlations between customer trust & customer perceived value

- Meezan Bank Limited
112
xv
6.44: Correlations between customer trust and customer loyalty

112
6.45: Correlations between customer trust and customer satisfaction

Meezan Bank Limited
113

114

114
6.48: Correlations between customer culture & customer loyalty

115
6.49: Correlations between customer satisfaction & customer loyalty - Meezan

Bank Limited
116
6.50: Correlations between all studied factors - Meezan Bank Limited
117
6.51: Correlations between customer trust & customer perceived value

- Habib Bank Limited
118
6.52: Correlations between customer trust and customer loyalty - Habib

Bank Limited
118
6.53: Correlations between customer trust and customer satisfaction Habib

Bank Limited
119

120

120
6.56: Correlations between customer culture & customer loyalty - Habib Bank
Limited
121
6.57: Correlations between customer satisfaction & customer loyalty - Habib Bank
Limited
121
6.58: Correlations between all studied factors - Habib Bank Limited
122
6.59: Multivariate Data Analysis - Citibank, Pakistan
123
6.60: Regression Model - Customer Perceived Value (PV), Citibank, Pakistan
125
xvi
6.61: Regression Model - Customer Loyalty, Citibank, Pakistan
127
6.62: Regression Model - Customer Satisfaction
129
(CS), Citibank, Pakistan
6.63: Regression Model - Customer Trust, Citibank, Pakistan
131
6.64: Regression Model - Customer Culture, Citibank, Pakistan
133
6.65: Regression Model - Customer Switching Barriers (CSB), Citibank, Pakistan
135
6.66: Stage-Wise Multiple Regression Model - Customer Perceived Value (PV),

Citibank, Pakistan
136
6.67: Stage-Wise Multiple Regression Model - Model Summary, Customer

Perceived Value (PV), Citibank, Pakistan
137
6.68: Stage-Wise Multiple Regression Model - ANOVA, Customer Perceived

Value (PV), Citibank, Pakistan
139
6.69: Stage-Wise Multiple Regression Model - Customer Loyalty, Citibank,

Pakistan
140

Loyalty, Citibank, Pakistan
141
6.71: Stage-Wise Multiple Regression Model - ANOVA, Customer Loyalty,

Citibank, Pakistan
143
6.72: Stage-Wise Multiple Regression Model - Customer Satisfaction
(CS),
Citibank, Pakistan
144

Satisfaction (CS), Citibank, Pakistan
145
6.74: Stage-Wise Multiple Regression Model - ANOVA, Customer Satisfaction

, Citibank, Pakistan
(CS)
147
6.75: Stage-Wise Multiple Regression Model - Customer Trust, Citibank,

Pakistan
148
6.76: Stage-Wise Multiple Regression Model - Model Summary, Customer Trust

149
6.77: Stage-Wise Multiple Regression Model - ANOVA, Customer Trust

151
6.78: Stage-Wise Multiple Regression Model - Customer Culture,

Citibank, Pakistan
152
xvii

Culture, Citibank, Pakistan
153
6.80: Stage-Wise Multiple Regression Model - ANOVA, Customer Culture

155
6.81: Stage-Wise Multiple Regression Model - Customer Switching Barriers

(CSB), Citibank, Pakistan
156

Switching Barriers (CSB), Citibank, Pakistan
157
6.83: Stage-Wise Multiple Regression Model - ANOVA, Customer Switching

Barriers (CSB), Citibank, Pakistan
159
6.84: Multivariate Data Analysis - NBP, Pakistan
160
6.85: Regression Model - Customer Perceived Value (PV), NBP, Pakistan
162
6.86: Regression Model - Customer Loyalty, NBP, Pakistan
164
166
(CS), NBP, Pakistan
6.88: Regression Model - Customer Trust, NBP, Pakistan
168
6.89: Regression Model - Customer Culture, NBP, Pakistan
170
6.90: Regression Model - Customer Switching Barriers (CSB), NBP, Pakistan
172

NBP, Pakistan
173

Perceived Value (PV), NBP, Pakistan
174

Value (PV), NBP, Pakistan
176
6.94: Stage-Wise Multiple Regression Model - Customer Loyalty, NBP,

Pakistan
177

Loyalty, NBP, Pakistan
178

NBP, Pakistan
180
6.97: Stage-Wise Multiple Regression Model - Customer Satisfaction

NBP, Pakistan
(CS),
181
xviii

Satisfaction (CS), NBP, Pakistan
182
6.99: Stage-Wise Multiple Regression Model - ANOVA, Customer Satisfaction

, NBP, Pakistan
(CS)
184
6.100: Stage-Wise Multiple Regression Model - Customer Trust, NBP,

Pakistan
185

, NBP, Pakistan
186

, NBP, Pakistan
188

NBP, Pakistan
189

Culture , NBP, Pakistan
190

, NBP, Pakistan
192

(CSB), NBP, Pakistan
193

Switching Barriers (CSB), NBP, Pakistan
194

Barriers (CSB), NBP, Pakistan
196
6.109: Multivariate Data Analysis - Meezan, Pakistan
197
6.110: Regression Model - Customer Perceived Value (PV), Meezan, Pakistan
199
6.111: Regression Model - Customer Loyalty, Meezan, Pakistan
201
203
(CS), Meezan, Pakistan
6.113: Regression Model - Customer Trust, Meezan, Pakistan
205
6.114: Regression Model - Customer Culture, Meezan, Pakistan
207
6.115: Regression Model - Customer Switching Barriers (CSB), Meezan, Pakistan
209

Meezan, Pakistan
210
xix

Perceived Value (PV), Meezan, Pakistan
211

Value (PV), Meezan, Pakistan
213
6.119: Stage-Wise Multiple Regression Model - Customer Loyalty, Meezan,

Pakistan
214

Loyalty, Meezan, Pakistan
215

Meezan, Pakistan
217
6.122: Stage-Wise Multiple Regression Model - Customer Satisfaction (CS),

Meezan, Pakistan
218

Satisfaction (CS), Meezan, Pakistan
219
6.124: Stage-Wise Multiple Regression Model - ANOVA, Customer Satisfaction (CS)

, Meezan, Pakistan
221
6.125 Stage-Wise Multiple Regression Model - Customer Trust, Meezan,

Pakistan
222

, Meezan, Pakistan
223

, Meezan, Pakistan
225

Meezan, Pakistan
226

Culture , Meezan, Pakistan
227

, Meezan, Pakistan
229

(CSB), Meezan, Pakistan
230

xx
Switching Barriers (CSB), Meezan, Pakistan
231

Barriers (CSB), Meezan, Pakistan
233
6.134: Multivariate Data Analysis - HBL, Pakistan
234
6.135: Regression Model - Customer Perceived Value (PV), HBL, Pakistan
236
6.136: Regression Model - Customer Loyalty, HBL, Pakistan
238
240
(CS), HBL, Pakistan
6.138: Regression Model - Customer Trust, HBL, Pakistan
242
6.139: Regression Model - Customer Culture, HBL, Pakistan
244
6.140: Regression Model - Customer Switching Barriers (CSB), HBL, Pakistan
246

HBL, Pakistan
247

Perceived Value (PV), HBL, Pakistan
248

Value (PV), HBL, Pakistan
250
6.144: Stage-Wise Multiple Regression Model - Customer Loyalty, HBL,

Pakistan
251

Loyalty, HBL, Pakistan
252
6.146 Stage-Wise Multiple Regression Model - ANOVA, Customer Loyalty,

HBL, Pakistan
254
6.147: Stage-Wise Multiple Regression Model - Customer Satisfaction (CS),

HBL, Pakistan
255

Satisfaction (CS), HBL, Pakistan
256
6.149: Stage-Wise Multiple Regression Model - ANOVA, Customer Satisfaction (CS)

, HBL, Pakistan
258
6.150: Stage-Wise Multiple Regression Model - Customer Trust, HBL,

Pakistan
259

xxi
, HBL, Pakistan
260

, HBL, Pakistan
262

HBL, Pakistan
263

Culture , HBL, Pakistan
264

, HBL, Pakistan
266

(CSB), HBL, Pakistan
267
6.157: Stage-Wise Multiple Regression Model - Model Summary, Customer Switching

Barriers (CSB), HBL, Pakistan
268

Barriers (CSB), HBL, Pakistan
7.1:
270
Correlation analysis of the data collected from customers of the studied

banks
278
xxii
LIST OF BAR CHARTS
Bar Chart
Page
6.1:
Customer`s gender frequencies Citibank
80
6.2:
Customer`s marital status frequencies Citibank
81
6.3:
Customer's income frequencies Citibank
82
6.4:
Customer's age frequencies Citibank
83
6.5:
Customer`s education level frequencies Citibank
84
6.6:
Customer`s gender frequencies - National Bank of Pakistan
85
6.7:
Customer`s marital status frequencies National Bank of Pakistan
86
6.8:
Customer`s income frequencies National Bank of Pakistan
87
6.9:
Customer`s age frequencies National Bank of Pakistan
88
6.10: Customer`s education level frequencies National Bank of Pakistan
89
6.11: Customer`s gender frequencies Meezan Bank Limited
90
6.12: Customer`s marital status frequencies Meezan Bank Limited
91
6.13: Customer`s income frequencies Meezan Bank Limited
92
6.14: Customer`s age frequencies Meezan Bank Limited
93
6.15: Customer`s education level frequencies Meezan Bank Limited
94
6.16: Customer`s gender frequencies Habib Bank Limited
95
6.17: Customer`s marital status frequencies Habib Bank Limited
96
6.18: Customer`s income frequencies Habib Bank Limited
97
6.19: Customer`s age frequencies Habib Bank Limited
98
6.20: Customer`s education level frequencies Habib Bank Limited
99
xxiii
LIST OF FIGURES
Figure
Page
2.1:
Financial services customer segmentation
16
2.2:
Loyalty model
31
2.3.
The integrated framework for customer value and CRM performance.
32
2.4:
The employee-customer-profit chain at Sears
33
2.5:
The CRM value chain (Buttle, 2004)
33
2.6:
Offensive and defensive strategies (Fornell, 1992)
34
3.1:
Loyalty model (Beerli, Martin & Quintana, 2004)
40
3.2:
The Integrated Framework for Customer Value and CRM Performance

(Wang et al., 2004, p. 171)
41
3.3:
The Employee-Customer-Profit Chain at Sears
41
3.4:
Offensive and defensive strategies, (Fornell, 1992)
42
3.5:
Customer loyalty model developed by the researcher
44
2:
Research Process Onion (Saunders et al., 2003)
45
4.1:
60
7.1:
277
xxiv
LIST OF ABBREVIATIONS
ATM Automated Teller Machine

CC - Customer Culture
CL - Customer Loyalty
CRM Customer Relationship Management
CS - Customer Satisfaction
CSB - Customer Switching Barriers
CT - Customer Trust
DFIs - Development Finance Institutions
FFM - Fullerton Fund Management
FIB - First Investment Bank
HBL Habib Bank Limited
KSE Karachi Stock Exchange
MFBs - Microfinance Banks
NBFCs - Non-Banking Finance Companies
NBP National Bank Of Pakistan
PV - Perceived Value
SBP State Bank Of Pakistan
SSTs - Self-Service Technologies
UNB - United National Bank
xxv
ACKNOWLEDGEMENT
The researcher has prepared this thesis with the blessings of Almighty Allah. The
researcher would also like to acknowledge many personalities who guided during the entire
research process. Firstly, the researcher would like to thank his supervisor Prof. Dr. Anwar
Hussain Siddiqui, President, International Islamic University, Islamabad, Pakistan whose
academic support and guidance made this possible.
The researcher would like to specially thank Prof. Dr. Shazra Munnawer, Dean, Faculty
of Advanced Integrated Studies & Research, and Prof. Dr. Rasheed Ahmad Khan, Dean, Faculty
of Management Sciences, National University of Modern Languages (NUML), Islamabad,
Pakistan for their encouragement and academic guidance during this research study.
The researcher would also like to thank all customers and concerned employees of banks
who gave their most valuable responses without which this research study would not be possible.
Finally, the researcher would like to thank his father Dr. Mushtaq Ali Bagram and dearest
mother for their never-ending motivation.
The researcher dedicates this research study to his beloved wife and son Mohammad
Aayan Ali for their immeasurable persistence during the entire period of this research study.
(Mohammad Majid Mahmood Bagram)
xxvi
CHAPTER 1
INTRODUCTION
1.1
SIGNIFICANCE OF RELATIONSHIPS
Defining relationship is a difficult work and mostly defining relationship at academic and
practical level is avoided (Bagozzi, 1995). Operationally, relationship consists of a number of

episodes and that buying a service twice is a minimum requirement for relationships (Liljander and
Strandvik, 1995). Similarly, a relationship exists when a series of interactions between customer
and organization occur (Storbacka, 1994).
Relationships plays vital role in human`s daily and professional lives, for example, choosing
careers, involvement in work, etc. Generally, people make major decisions in their lives based on
their relationships with organizations and persons.
Based on the above criteria, firstly it shows clearly that there is commitment on both sides
that is commitment on the side of bank as well as on the side of its customers. Secondly, banks
accommodate customers as best as it can. Thirdly, there is trust on both sides, that is customer and
bank trust each other. Fourthly, both parties that is customers and banks respect each other, fifthly,
there is affection among customers and banks, sixthly, there is effective communication between
banks and customers like verbal and non-verbal communication. Seventhly, banks give priority to
its customers and try to take care of the various interests on its customers with banks. Eighth, banks
try to support its customers and if a customer has a strong relationship with their banks, they also
support their banks like mouth reference etc. Finally, banks try to assist their customers in
achieving their long-term goals.
1.2
CUSTOMER
A customer is a person who buys goods or services from a shop or business (Oxford English
Dictionary, 2009). One that purchases a commodity or service is called a customer (Customer,
2009).
Customers buy and leave, so it may be easy to say that since the organization is able to sell
its product or deliver its services hence it is a successful organization. Actually, it is not that easy to
say as almost all the businesses depend on repeated purchases of customers hence if customers do
not return then what happens? Therefore, organizations need to understand all the touch points of
their customers. Mostly customers choose those banks that offer the best services though their touch
points (Dyche, 2001).
The world is changing rapidly and there is a shift of power from seller to buyer, hence for
the success of any organization, understanding customer has become the most important factor. It is
important to know what customers think about products, services, and about organizations
providing those products and services. Therefore, if customers have a good experience with any
organization through its various touch points then they not only buy more but they also become that
organization`s marketing volunteers. Hence, customer`s touch points with your organization are
most important areas where organizations need to focus more.
As it is generally known that customers provide their personal information to only those
organizations that they trust, otherwise they are not willing to provide majority of the information.
In addition, most banks do not have complete information about their customers; hence, these banks
lose the most important competitive advantage over their competitors. Therefore, to obtain detailed
information
about customers, the
banking
sector has
begun to develop
and strengthen their
relationships with their customers.
1.3
BANKING
The banking sector all over the world has a key role in the economy of any country.
Banking sector all over the world is changing rapidly due to many internal and external forces
2
(Gentle, 1993, Nellis, 1998). The most popular saying that customer is the real king is true for the
banking sector as well. High competition in the banking sector has forced banks to act according to
the customer`s needs and wants. These days, customers are much aware about various products and
services hence banks need to respond according to customer`s preferences about products and
services.
1.4
BANKING SECTOR OF PAKISTAN

In Pakistan, there are 9,115 branches of different banks; it includes 1,722 branches of public
sector banks, 6,770 branches of local private banks, 534 branches of specialized banks, and 89
branches of foreign banks. The total assets of all these banks during 2008-09 was Rs. 5652.7
billions; it includes assets of Rs. 1064.0 billions of public sector banks, Rs. 4229.2 billions of local
private banks, Rs. 127.6 billions of specialized banks, and Rs. 231.7 billions of foreign banks in
Pakistan (Ministry of Finance, 2008-09). Financial performance indicators of the banking sector in
Pakistan are capital adequacy, asset quality, earnings, and liquidity as briefly shown in AppendixIV (State Bank of Pakistan, 2009).
At present, banks in Pakistan are facing high competition and they are trying to retain and
increase their customers in order to survive in the market. Banks/ development finance institutions
in Pakistan comprises of the following seven categories regulated by the State Bank of Pakistan as
shown in Appendix-III (State Bank of Pakistan, 2009):
1) Public sector banks
2) Specialized banks
3) Private banks
4) Islamic banks
5) Foreign banks
6) Micro finance banks / institutions
7) Development finance institutions
1.5
CUSTOMER RELATIONSHIPS WITH BANKS

There are facts to recommend that customers give importance to relationships with their
banks. Barnes (1997) explored the relationships of customers with their banks by doing research at
400 banks and their customers. Bank`s customers give importance to their relationships with their
banks (Colgate, 1996).
The performance of banks depends on the level of their understanding of their customers.
Banks that have detailed information about their customers are in a better position than those banks
lacking information about their customers. Customer Relationship Management (CRM) helps to
integrate various activities of banks for improved efficiency and effectiveness.
The above researchers prove that bank customers not only want close relationships with
their banks, they also value this relationship. In Pakistan, there are more trends of savings in banks
so it is really of most importance for banks to develop and build relationships with their customers
as bank`s success depend on long-term relations with their customers.
1.6
CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

Organizations have various sources of information like internal sources of information and
external sources of information (Galbreath & Rogers, 1999). All the information collected from
internal sources information and external sources of information is processed by Customer
Relationship Management (CRM) application. This collected information from all possible sources
is used for developing and improving products and services better than competitors and as per
needs and wants of customers. Customer Relationship Management (CRM) has no proper definition
yet that can describe it completely as still work on Customer Relationship Management (CRM) is
going on in the world (Zineldin, 2000).
In business world, Customer Relationship Management (CRM) is not new. In various

businesses all over the world, many models remained in use for decades. Traditional models
focused more on selling efforts but current Customer Relationship Management (CRM) focuses on
4
the real objective of the businesses that is customer loyalty. Now Customer Relationship
Management (CRM) focuses on customer loyalty through identification of target customers, getting
new customers and retaining the existing customers through developing strong relationships with
them. These relationships development with customers give organizations a competitive edge that
help them satisfy their customers and make profits.
The basic difference between the traditional and current Customer Relationship
Management (CRM) models is that the traditional models mostly work independent of one another
whereas current models are integrated models. New CRM models integrate all business activities at
one platform whereas traditional models were unable to do this effectively. In traditional models,
information gained from customers about selling could not be shared with other departments in the
organization effectively.
Technology advancements have made it possible through Customer Relationship

Management (CRM) that now different departments can share and use each others information
collectively for making efficient and effective strategies for their customers (Given, 2006). These
new technologies have made it possible for organizations to collect customer`s data from all
company`s customer touch points, and use this information at all levels for improved performance
in all areas. Therefore, traditional Customer Relationship Management (CRM) has been changed
with most efficient and effective modern Customer Relationship Management (CRM) strategy.
The activities a business performs to identify, qualify, acquire, develop and retain
increasingly loyal and profitable customers by delivering the right product or service, to the right
customer, through the right channel, at the right time and the right cost is called CRM (Galbreath &
Rogers 1999, p162).
Therefore, for unbeaten Customer Relationship Management (CRM), organizations should

include all of their functions in CRM application (Hamel & Prahalad, 1994).
Hence, in simple words, CRM used by different organizations to seek, obtain, and retain
customers. Therefore, CRM helps organizations to manage their relations with customers in a better
5
way. A winning Customer Relationship Management (CRM) system focuses on customer loyalty as
a focus of Customer Relationship Management (CRM). Customer Relationship Management
(CRM) helps organizations to integrate their entire functions in a better way and the result is
customer loyalty.
Most competitive organizations use Customer Relationship Management (CRM) software

(Appendix-VII) (2020software.com, 2009). CRM software helps organizations to retain their
customers better than their competitors do by providing most customized product and service
offerings.
Customer Relationship Management helps organizations to know their customers well in
order to satisfy their needs (Patton, 2005). At present, customers are well informed about various
products and services than ever, by clicking computer mouse can give them thousands and
thousands of choices. This rapid development of technology has increased competition in every
field of life.
Customer Relationship Management is needed when organizations do not have in-depth
understanding of their customers like what are their present and future needs (Patton, 2005).
Therefore, organizations should focus more on understanding their customers better than their
competitors and that is possible through Customer Relationship Management (CRM) system.
1.6.1
Characteristics of CRM
The major characteristic of Customer Relationship Management (CRM) is customer

therefore, the prime focus of organizations should be their customers, some customers give more
profit to organizations and some give less profit, and customers have changing needs and wants
(Wong, et al, 2003).
Therefore, if organizations are more aware about their customers then they can make better
strategies resulting in improved and new products and services.
1.6.2
Customer loyalty as a focus of Customer Relationship Management

Success of banks depends largely on building customer loyalty (Khirallah, 2001).
Consequently, banks should emphasize on building customer loyalty, which is a focus of Customer
Relationship Management (CRM) because it creates a superior competitive advantage.
Knowing customers better and then developing relations with them is important for every
organization these days. The major focus of Customer Relationship Management (CRM) in any
organization is to build loyal customers. There are certain factors that affect customer loyalty hence
in order to build customer loyalty, understanding the relationships between those factors that affect
customer loyalty, which is a focus of Customer Relationship Management (CRM), is of most
significance.
To build customer loyalty, banks need to improve their relations with their customers.
Since, products and services offered by banks cover the long-term needs of their customers so this
relationship becomes more important. Banks need to focus on offering customized products and
services better than their competitors in order retain their customers.
1.7
BACKGROUND TO THE STUDY

Up to 80% of organizations lack understanding about how Customer Relationship
Management (CRM) helps them to make their customers loyal (Kirkby, 2002). Due to this, most of
the organizations are unsuccessful to build customer loyalty. Therefore, this high rate of failure has
forced experts and researchers to find out the factors that build and influence customer loyalty as
banks depend on lasting relations with customers. Furthermore, inadequate understanding among
the management and employees about customer loyalty, which is a focus of Customer Relationship
Management (CRM), become reasons for failure (Caulfield, 2001).
Even organizations having enormous data warehouses also lack in-depth understanding
about their customer`s loyalty factors (Davenport et al. 2001). Hence, these organizations do not get
the maximum benefit of this data for better mutual benefits of their customers and for themselves.
7
1.8
SIGNIFICANCE OF THE RESEARCH STUDY

Building and strengthening relations with customers is vital in banks (Zineldin,1995). If
banks build up and maintain firm relationships with their customers, it is hard for their competitors
to beat them (Gilbert,2003).
The most significant area for banks these days is to make their customers loyal. Banks
depend on lifelong relationships with their customers as the customer grows, generally profits also
grow so customer loyalty ultimately increases bank`s profits.
Bank`s basic purpose is to make profit and to remain successful, making customers loyal
become vital for these banks as loyal customers contribute more towards profits of the banks. Loyal
customers also recommend their bank to their family and friends and through this mouth
referencing, bank is able to acquire and retain more customers. Increase in customer retention
increases more profits (Reichheld, 1992, 1996), and Storbacka, 1994). Customer loyalty is more
important than increasing number of customers in a bank (Colgate, 1999).
A critical review of banking sector indicates that customer loyalty has been neglected in the
banking sector especially in public sector banks in Pakistan. The researcher developed his interest
and found that a research study would be of much significance to be undertaken within the capacity
limits of the researcher to discover the major factors that affect customer loyalty, which is a focus
of Customer Relationship Management (CRM) for overcoming high competition in the banking
sector of Pakistan. Findings of this research study will be of great use for banking sector. The
results of this research study will also be helpful in improving CRM application in banks. This
research study will also be helpful for banks to make their customers loyal to overcome high
competition in the banking sector of Pakistan.
1.9
STATEMENT OF THE PROBLEM

To overcome high competition in the banking sector, banks need to strengthen relations
with their customers to make their customers loyal (Bose, 2002). Banks should focus constantly on
8
building relationship with their customers, because it is the only competitive advantage remaining
to them (Xu, 2002).
As world has become a global village, it results in tough competition between organizations
and formed a climate of continuous change, gaining and retaining customers has become vital for
the success of any organization and Pakistan is no exception. Customers now have more awareness
and choice of various products and services due to newer channels of communication like Internet
etc than ever before. So due to increased customer awareness, customers are more demanding, and
those banks having strong relationships with their customers have strong competitive edge over
other banks. Therefore, customer loyalty, which is a major focus of Customer Relationship
Management (CRM), gives these banks a competitive advantage over other banks.
It is also a fact that acquiring a new customer costs more than to retain the existing
customer. Therefore, in order to overcome high competition in banks, building customer loyalty is a
challenging area faced by banks these days. The researcher will try to discover the major factors
that affect customer loyalty, which is a focus of Customer Relationship Management (CRM) for
overcoming high competition in the banking sector of Pakistan for mutual benefits of customers
and banks.
1.10 HYPOTHESES OF THE RESEARCH STUDY

The researcher has developed following hypotheses based on the purpose of this research:
H1:
there is significant influence of customer trust on customer perceived value.
H2:
there is significant influence of customer trust on customer satisfaction.
H3:
there is significant influence of customer trust on customer loyalty.
H4:
there is significant influence of customer perceived value on customer satisfaction.
H5:
there is significant influence of customer satisfaction on customer loyalty.
H6:
there is significant influence of customer switching barriers on customer loyalty.
H7:
there is significant influence of customer culture on customer loyalty.
1.11 RESEARCH QUESTIONS

This research study`s basic aim is to discover the major factors that affect customer loyalty,
which is a focus of Customer Relationship Management (CRM) for overcoming high competition
in the banking sector of Pakistan. Following research questions will help the researcher to achieve
this research study`s purpose:
1) What are the factors that affect customer loyalty, which is a focus of Customer
Relationship Management (CRM) in the banking sector of Pakistan?
2) What is the relationship between the factors that affect customer loyalty in the
banking sector of Pakistan?
3) How to build a customer loyalty model for the banking sector of Pakistan?
1.12 STUDY PROCEDURE

1.12.1 Population
A population consists of all elements-individuals, items, or objects-whose characteristics are

being studied. The population that is being studied is also called the target population (Mann,
1995).
The population of this research study consists of customers of banks in Pakistan. Banks/
development finance institutions in Pakistan comprises of seven categories, which are regulated by
the State Bank of Pakistan (Appendix-III) (State Bank of Pakistan, 2009). In the first category,
government owns public sector banks and they do the commercial tasks, which are described in the
Pakistani banking rules. The second category, specialized banks that are the same as the first group
but their activities are more focused on some special tasks, like agriculture, industries, house and
buildings, etc. Third category banks are called private banks owned by a person or a group of
persons. Fourth category, Islamic banks, fifth category, foreign banks and finally sixth & seventh
categories, micro finance institutions and Development Finance Institutions respectively perform
10
some limited tasks and activities. State Bank of Pakistan regulates all these banks / development
finance institutions.
The researcher has chosen customers of the following banking categories as population of
this research study that offer their services to public at large, and have a large market-share:
1) Public banks,
2) Private banks,
3) Islamic banks, and
4) Foreign banks.
1.12.2 Sampling
Following sampling criteria is adopted for the selection of banks from the research study`s
population:
Banks with highest business achievements
Banks having diversified target customers, and different groups
Banks having branches in major areas in Pakistan
Banks having national and/or international representation
Researcher`s time, money, and other resource constraints
Based on the above sampling criteria, following banks are selected for this research study:
1) National Bank of Pakistan (NBP) serving as a public bank.

2) Habib Bank Limited (HBL), Pakistan serving as a private bank.
3) Meezan Bank Limited, Pakistan serving as an Islamic bank.
4) Citibank serving as a foreign bank in Pakistan.
11
1.12.3 Research instrument
Questions given in questionnaire for bank`s customers as an instrument for data collection
are adopted from the existing literature relating to the basic purpose of this research study. The
researcher has made minor changes in this adopted questionnaire after three phase pilot testing.
To measure customer trust, the researcher uses the measure of Hess (1995), Jarvenpaa &
Tractinsky (1999), Gurviez & Korchia (2002), Gefen et al. (2003), and Chiou & Droge (2006). The
researcher uses the measures of Wang et al. (2001) and Llosa (1996) to measure customer
satisfaction. The researcher uses the measures of Lassar et al. (1995) scale to measure customer
perceived value. The researcher uses the measures of Kim, et. al., (2003) to measure customer
switching barriers. The researcher uses the measure of Hofstede (1980; 1994) scale to measure
customer culture. Lastly, the researcher uses the measures of Boulaire and Mathiew (2000),
Srinivasan et al. (2002) and Huang (2008) to measure customer loyalty.
1.12.4 Pilot testing of questionnaire
The purpose of the pilot testing of the questionnaire is to refine questionnaire for more
accurate responses (Saunders et al., 2000). Based on this purpose of pilot testing of questionnaire,
the researcher did three-stage pilot testing of questionnaire from the customers of banks.
With the help of pilot testing of questionnaire, respondents are comfortable in responding to
questions asked in the questionnaire. For a single researcher with lack of resources, it is not
possible to take response from entire population hence a sample size is selected according to
sampling criteria.
Pilot testing of questionnaire is of high importance for any researcher. A minimum

respondents should be 30 in any pilot testing of questionnaire. The researcher did three-stage pilot
testing of questionnaire. During the first stage of the pilot testing of questionnaire, the researcher
got responses from randomly selected regular customers and experienced employees of selected
banks.
12
The researcher received various comments/suggestions regarding this research study`s

questionnaire. The researcher did minor changes in the questionnaire as per comments/suggestions.
During the secong stage of the pilot testing of the questionnaire, the researcher distributed again 30
questionnaires to randomly sleeted customers of four banks. The researcher again received
comments/suggestions from respondents and revised questionnaire.
During the final third stage of questionnaire pilot testing, the researcher gave 30
questionnaires to customers of banks; and finally got positive response. It is to mention here that
respondents of pilot testing of this questionnaire were excluded for having unbiased responses.
1.12.5 Data collection
Data collection was a difficult process as respondents raised many questions like privacy
and usage of their responses. The researcher persuaded and ensured respondents about the privacy
and appropriate usage of the information provided by these respondents. The researcher visited all
the selected banks personally in order to ensure the quality of work.
1.12.6 Data analysis
For data analysis, the researcher will use SPSS software for doing demographic analysis,
correlation analysis, and regression analysis. For easier understanding, the researcher will use
tables, figures, and bar charts followed by discussions on each analysis.
1.13 LIMITATIONS OF THE RESEARCH STUDY

This study is confined to the basic purpose of this research study, that is, to discover the
major factors that affect customer loyalty, which is a focus of Customer Relationship Management
(CRM) for overcoming high competition in the banking sector of Pakistan. Based on sampling
criteria, researcher will examine four categories of banks in Pakistan namely National Bank of
Pakistan (NBP) serving as a public bank, Habib Bank Limited (HBL), Pakistan serving as a private
bank, Meezan Bank Limited, Pakistan serving as an Islamic bank, and Citibank serving as a foreign
13
bank in Pakistan. The researcher distributed questionnaires to customers of banks for on the spot
filling and return. This may not have given enough time to customers to think more about their
answers. Only willing customers were given questionnaires. This research study is limited to
Islamabad & Rawalpindi areas because of researcher`s time, costs and other resource constraints.
Finally, this research study will look at the bank`s customers views.
The researcher will do his best that these identified limitations will have no impact on this
research study`s results.
14
CHAPTER 2
REVIEW OF RELATED LITERATURE
2.1
CUSTOMERS-SELLER BOND
A research about customers-seller bond gave the following three levels of customer-seller
bond (Berry and Parasuraman, 1991):
1) Financial bond: In this financial bond between customer and seller, they have a
strongly connected via price factor;
2) Social bond: In the social bond between customer and seller, they are strongly
connected via social relations like attachments, friendships; and
3) Structural bond: In this structural bond between customer and seller, they have a
strongly connected via partnership.
Furthermore, the connection between a bank and a customer can be of following three types
(Berry and Parasuraman, 1991):
1) Using of bank`s ATM machines or using other technologies to interact with bank`s
customers.
2) Customer-bank connection via bank`s representatives, for instance front desk bank`s
officers interaction with bank`s customers, bank`s customer services representatives
interaction with bank`s customers, and
3) Both 1 & 2 above.
15
2.2
CUSTOMER LOYALTY AS A FOCUS OF CUSTOMER

RELATIONSHIP MANAGEMENT
It is generally known that customers who are loyal to any organizations products and
services become the major profit giver to that organization. Customers become loyal when they are
satisfied and they believe that they are getting the best value from that product or service. Customer
loyalty as a focus of Customer Relationship Management (CRM) helps banks to compete better in
the highly competitive banking sector.
Organizations are trying their best to have closest relations with their customers by focusing
more on satisfying their needs and wants better than their competitors (El Sawy and Bowles, 1997).
Organizations need to focus more on the existing customers and to strengthen relations with
existing customers rather than focusing on the entire market (Peppers and Rogers, 1995). Similarly,
organizations should focus on customer loyalty, as loyal customer is less costly than obtaining a
new customer (Reichheld and Sasser, 1990).
Banks generally do segmentation of their customers based on age, income level, education
etc but these factors are not very strong to identify the needs of customers. Organizations (Figure
2.1) try to group their customers according to similarities and customers having similar
characteristics are placed one group and so on (Machauer, A. and Morgner, S., 2001). The basic
purpose of is to achieve improved customer loyalty and less cost.
Figure 2.1: Financial services customer segmentation (Machauer, A. and Morgner, S., 2001)
16
A model of Customer-Centric philosophy in Customer Relationship Management (CRM)

evaluation, presents a customer-focused viewpoint that focuses on customer loyalty as a focus of
Customer Relationship Management (Kim, 2003).
In the present age of globalization, almost all the businesses depend on the regular
customers and not on the occasional customers therefore, in order to remain and compete in the
present highly competitive environment, customer loyalty is vital. Mostly businesses are of the
view that people know about me so they will come to me in any case but it is not true as your
competitors are also there in the market so they can reach customers before you do.
For example, car manufacturer`s showrooms in Pakistan may send reminders to their
existing customers about new features about new or existing products and services as well about
their car tuning dates. Therefore, these reminders not only make their customers much delighted but
also strengthen their relations with them.
If any occasional customer turns into a loyal customer then of course organization`s profit
will increase much. These loyal customers not only buy more but also at the same do your
marketing as a volunteer by mouth reference. In a country like Pakistan, personal references about
any product or service are considered of higher importance than any other effort.
Customer frequency depends on the type of product or service. For instance, daily or on
alternate days, going to buy bread is a good frequency and buying shoes after 6 to 8 months is
considered a good frequency.
Loyal customers open great opportunities for organizations as loyal customers buy more,
buy other products and services offered by the same seller, and also become organization`s
volunteer marketer by recommending organization`s products and services to their friends and
relatives. Furthermore, organizations may go for joint ventures that result in effective customer
loyalty.
17
Everyone is not buying all the time, so organizations should keep in contact with their
customers so whenever customers are willing to buy, there are better chances that your
organizations products and services will be their first preference.
At present, almost all the persons are busy and new improved products and services are
easily available in the market or via internet or telephone etc, so if an organization is already in
contact with their customers then their chances are better than their competitors who are not in
contact with their customers.
2.3
BANKING SECTOR OF PAKISTAN

Banks all over the world have the most significant impact on the economic development of
any country. For instance, banks provide financial resources to various industries and sectors for
their development. Banks also provide employment and tries to reduce poverty. In other words,
banking sector has a control on providing financial resources to almost all sectors of an economy.
World is a global village and almost every organization is facing high competition and
banking sector is no exception. Therefore, banks are trying their best to compete and perform better
than their competitors. Hence, banks are focusing on new methods of interactions with their
customers.
It is easily observed that banking sector is changing rapidly due to the advancement of new
channels of communication, internet, online accounts, and so on. Due to technological
advancements, competition among banks has increased a lot.
The financial sector in Pakistan comprises of Commercial Banks, Development Finance

Institutions (DFIs), Microfinance Banks (MFBs), Non-banking Finance Companies (NBFCs)
(leasing companies, Investment Banks, Discount Houses, Housing Finance Companies, Venture
Capital Companies, Mutual Funds), Modarabas, Stock Exchange and Insurance Companies (State
Bank of Pakistan, 2008). The Central Board of Directors of the State Bank of Pakistan (SBP)
comprises of seven members, one corporate secretary, and boards Chairman is the Governor. The
18
Organogram and details of Central Board of Directors of the State Bank of Pakistan (SBP) is at
Appendix-II and Appendix-VIII respectively. It is functioning in areas of agriculture, onsite
inspections, policy and regulations, Surveillance, and so on; its complete detail is shown in
Appendix-IX.
The Quaid-i-Azam Muhammad Ali Jinnah in his address to the SBP on 1st July, 1948,
emphasized its major role and responsibilities in socio-economic development of Islamic Republic
of Pakistan, details at Appendix-X.
The major statutory obligations of the State Bank of Pakistan (SBP) are statutory cash
reserve, statutory liquidity requirement, maintenance of liquidity against certain liabilities,
submission of annual audited accounts, annual accounts, minimum capital requirements, and
submission of returns as shown in Appendix-XI.
The State Bank of Pakistan (SBP) monitors and supervises banks, Development Finance
Institutions (DFIs), and Microfinance Banks (MFBs) whereas all other financial
institutions
supervised by Securities and Exchange Commission and Controller of Insurance.
At present, there are 41 scheduled banks, 6 Development Finance Institutions (DFIs), and 2
Microfinance Banks (MFBs) operating in Pakistan whose activities are regulated and supervised by
the State Bank of Pakistan. The commercial banks comprise of 3 nationalized banks, 3 privatized
banks, 15 private sector banks, 14 foreign banks, 2 provincial scheduled banks, and 4 specialized
banks (State Bank of Pakistan, 2008).
The banking industrys assets have risen to over $60 billion, and almost 81% of banking
assets are in the private hands (Akhtar, 2007). Now banks are trying to make all of their accounts
profitable. Core Functions of the State Bank of Pakistan are regulation of liquidity, regulation and
supervision, exchange rate management and balance of payments, and developmental role of state
bank as described in detail at Appendix-XII.
19
Banking sector in Pakistan in an effort to reduce cost of services is now moving towards
adopting most advanced technologies. Now customers of banks can operate their accounts online
but there are issues like online frauds etc so banks need to have most secure online systems. Many
of the new technologies may give immediate benefits to banks but in the long run, the only
competitive advantage banks can have is their strong relations with their customers.
There is less human interaction of banks with their customers due to new technologies
(Puccinelli, 1999). Customers needs and wants change rapidly and this forces banks to act
accordingly. Those banks that are taking care of their customers better than their competitors are
ahead in competition.
On the other side, technology has a vital impact on service delivery; customers get
immediate information and response from banks.
It is generally seen that new technology is replacing employees like Automated Teller
Machines (ATMs) have replaced cashiers, and so on. Technology is replacing human interactions
because banks are trying to provide services as quickly as possible to remain ahead of their
competitors.
Banks are trying to strengthen their relations with their customers (Durkin, M., 2004).
Banks are using different technologies like emails to respond to their customers. Customers are
provided immediate response of their queries through these emails managed by artificial
intelligence system. In case of any unsolved or unique issue, these artificial intelligence systems
direct the said emails of customers to bank concerned employees for their individual attention.
The impact of new technology is immense on the financial sector (Sherif, 2002). Banks
were dependent on manual work and branch operations for the last many decades but since 1980,
new technology has changed working of banks and as a result, computers are replacing humans in
most of the banking operations.
20
Globalization has brought creativity and innovation in doing business as well as new
challenges to the banks. In order to remain competitive or in some cases, in order to survive in the
market, banks need to react rapidly to these global challenges.
As we know that customer is the real king or the real boss, is very true for the banking
sector as well. It is the customer who decides what you offer and how you offer, not the bank
therefore, its vital to develop a comprehensive data base of customers in order to not only know
customer`s changing needs and wants but also banks can use this customer`s data base to predict
their future needs and wants.
Government rules and regulations have also increased customer rights so it is also important
to fulfil their rights better than competitors. As we also observe that internet has also changed the
behaviour of customers, their lifestyles, and most importantly their awareness regarding banking
services.
2.3.1
Customer Relationship Management in the banking sector
These days, banks are focusing on Self-Service Technologies (SSTs). In SSTs, customers
can use bank services when and where they want without time or place barriers, without any
personal contact with the banks (Durkin, & Howcroft (2003).
Organizations are focusing on strengthening their relations with their customers (Palmer,
2001; Robertson & Kellow, 2001). Organizations focusing on customer loyalty which is a major
competitive advantage (Galbreath & Rogers, 1999; Valentine, 1999).
Developing and strengthening relations with customers is not only a software or technical
issue, it is the communication of all business activities with customers in the most efficient and
effective manner.
Customer correct need identification helps CRM work effectively. Following are the major
needs of customers of banks in Pakistan:
21
a) customers need to get better bank services at low cost;

b) customers having more than one bank accounts should have convenience in
managing their accounts.;
c) banks should offer the best products and services to satisfy and retain customers.
Companies should focus on the integration of people, processes and technology to gain
long-term competitive edge over competitors and in order to earn profit (Bygstad, 2002 cited
Ciborra and Failla, 2000). At present, Customer Relationship Management (CRM) is under
energetic thoughts of organizations all over the world (Fox, 2001). Customer focus is the basic
concept behind Customer Relationship Management (CRM).
All over the world, there are quick changes due to changes in the business environment. Due
to globalization, there is a tight completion in the business world. Therefore, in order to remain and
beat competitors, companies need to keep on improving their strategies.
Banks in Pakistan are already using various CRM activities like communicational and
operational CRM. For example, checking account balances, checking bank account records, getting
check books, transferring funds, payment to others, paying utility bills, and paying bank credit card
bills. In banks in Pakistan, following are the major channels of communication with the customers:
1) Bank branches: there is a face-to-face communication between customers and banks in

various bank branches.
2) Automated Teller Machine (ATM): customers of banks can draw cash from these
machines round the clock.
3) Internet banking: customers can access their accounts and do transactions while sitting
in their offices, homes, or from anywhere with the help of computers.
4) Mobile banking: customers can access their accounts and do transactions from anywhere
with the help of their mobiles.
5) Technological help: in case of any problem, customers of banks can get support and help
from technological help centers via telephone or in person.
22
6) Marketing channels: various marketing channels like print and electronic media are used
by banks these days to reach and satisfy their customers better than their competitors.
7) Follow-up: after sales services to customers through customer follow-ups.
These contact points provide required information immediately that results in more
customer satisfaction. Customers spend less time to get more information, as these days, almost
everyone is busy doing something so when a bank saves precious time of its customers, it makes its
customers more loyal (Lindgreen, 2005).
Almost all businesses are going through quick changes that demands long-term competitive
strategies in the world. Due to increased technology, customers are well informed about products
and services and it is easy to access information within seconds about any product or service.
Hence, banks are moving towards customer-centric strategies. As customer is the real source of
information, so the methods of working have changed. Therefore, banks do what their customers
need and want.
E-banking is categorized into following 4 categories (Jayawardhena, 2000):
1) Account balances or credit transfers viewing,

2) Account control functions,
3) New services, and
4) Reconciliation functions.
1- Account balances or credit transfers viewing:
Mostly customers need to view their account balances or credit transfers. This view-only
function allows customers to view their account information at any time. Before this function, bank
employees maximum time spent on providing this account balance information to their customers
but now due to this function, workload on bank employees have decreased a lot and on the other
side, customers also get the required information immediately at their own convenience.
23
2- Account control functions:
Few controls of customers like payment of utility bills, account transfers between different
bank accounts or transferring amount to other`s bank accounts are some of the functions of this
account control function.
3- New services:
Any new customer is allowed to fill new bank account opening forms in this function.
However, due to some legal requirements, new customers have to visit banks for signatures and
providing attested hardcopies of required documents.
4- Reconciliation functions:
Now banks offer downloading and other relevant services to their customers through this
function. Customers can download their account related information from the bank website to their
personal documents.
Customer Relationship Management applications generally include (Reynols, 2002):
Call Center Automation,
Campaign Management,
Contact Management,
Data Warehousing,
Email Management,
Field Service Automation,
Knowledge Management,
Marketing Automation,
Personalization, and
Sales Force Automation.
24
At present, banks are using the best available technology resulting in the best use of each
customer contact more effectively than ever. As described by many researchers, an effective CRM
application helps organizations to manage their customers in better manner by focusing on
customers that are more profitable that result in improved profitability.
Banks use Customer Relationship Management (CRM) techniques to obtain following

results (Foss, 2002):
1) To develop customer-centric environment in banks;

2) To develop and strengthen relations with their customers;
3) To deliver best products and services to customers; and
4) To identify the cost-effective customers in banks.
Firstly, almost all the major organizations including banks are focusing on customers as it is
the customer who can really strengthen your bank. Hence, as Foss has mentioned above that having
a more customer focused culture can enable the banks to achieve their objectives better than their
competitors can. Secondly, as earlier discussed, relationships play a vital role in human lives so it is
almost impossible for banks to ignore this most important factor of their customers. Thirdly, by
delivering and providing the best services to customers can help banks achieve their financial goals,
and finally Customer Relationship Management (CRM) helps to indentify and focus on the most
profitable customers.
Increasing competition and decreasing margins have made it mandatory for banks to adopt
Customer Relationship Management (CRM) strategies and technologies with the purpose of
satisfying ever-increasing needs of their shareholders and customers. More recently, banks have
begun to realize its fundamental value as it facilitates banks:
To focus on those customers that give the maximum profit
To focus on those customers who have a higher frequency
To focus on the what and how much buying of customers
To know better their customers

25
To know their needs, wants, desires
To know their family size, likes, dislikes, background etc, and
To develop proactive strategies regarding their customers, products, and

services
If banks have a comprehensive awareness of their customers then this definitely can bring a
better change as earlier described in Customer Relationship Management (CRM). Understanding
customer is not an easy task for banks as now competition among banks is on building their
customers loyal. Customer Relationship Management (CRM) helps banks to target and reward most
profitable customers.
2.4
CUSTOMER LOYALTY
Today in almost every field, there is high competition and all organizations are trying to do
their best in the market if they want to remain and grow in the market. If organizations need to
develop, strong long-term competitive edges then they have to make their customers loyal. Making
customers loyal is not easy for the organizations because of high awareness of today`s customers.
Print & electronic media and other sources of information has increased customer`s knowledge and
awareness about most advanced most attractive products and services offering a benchmark quality
in the markets. New and improved products and services enter market rapidly so its becoming
really hard for organizations to compete on the basis of most rapid changes therefore the only
competitive long-term edge they may have is to build their customer`s loyalty.
Customer`s loyalty means that customers have a commitment to repurchase product/service
even other organizations are offering better products/services and doing a lot of marketing but your
customers remain with you (Oliver, 1999).
Customers loyalty is the positive attitude of customers toward repurchase (Lin and Wang,
2006).
During the past many decades, organizations got customers because of lack of competition
or no competition at all. Generally customers have no choices or options or substitutes and the
markets were growing rapidly and mostly organizations didnt worry about the customer`s
26
satisfaction. Organizations thought that there will be high demand of their products and services
and if they are unable to retain 200 customers, they get 2000 more customers quickly and this goes
on for many years. Organizations believed that there are always new customers to replace the
defecting ones (Kotler p. 405).
Customer loyalty has become the most important aspect of organizations because getting a
new customer costs much higher than retaining an existing customer so organizations should focus
more on customer loyalty in order to be profitable (Ro King, 2005).
In most of the organizations, like banks, losing only few most profitable customers may
result in big loss as compare to losing many average customers. Therefore, customer loyalty results
in profit as well as collection of further data about customers. This large customer data helps
organizations like banks to communicate better with its customers, developing better strategies
about their products and services, more customer satisfaction, prediction of customer wants
resulting in more purchases by the customers.
The basic objective of any business is to create a customer (Peter Drucker, 1973). Five
percent enhancement of loyalty enhances twenty five percent to ninety five percent worth (Dawkins
and Reichheld, 1990). This most surprising finding brought a rapid change in the market regarding
significance of customer loyalty. Therefore, organizations realized the vital importance of customer
loyalty and almost all the major organizations developed various customer loyalty strategies
according to their own business environments.
Customer loyalty is the most important objective of especially those organizations that are
involved in Customer Relationship Management and it can be most beneficial for companies in this
highly competitive world (Grnroos, 1991; and Coviello et al., 2002). They further reported that
loyal customers of any company might pay even higher prices of offered products and services as
compare to new customers who are not willing to pay higher price. Therefore, the result is
increased profits. This was a major finding in the area of customer loyalty in the world.
Organizations then started focusing more on customer loyalty in order to improve their profits by
developing long-term relations with their customers.
27
Another most significant finding is that retaining a customer is 10 times less costly than
getting a new customer, whereas to bring new customer on the same profit level is sixteen times
more costly (Lindgreen, 2000).
Customers complaints are like a treasure to any organization. When any customer
complains, the concerned organization gets the most important information about its weak areas
without spending millions and millions of rupees on identification of their weak areas. Therefore,
organizations through improved customer problem handling system have a better chance to fix that
problem by working on the root causes of that identified problem. After identification of the root
causes, organizations try to solve customers problems to make them loyal.
Customer`s increase in loyalty means that customers wants to stay with the current provider
of products and services. Customer`s loyalty mostly depend on his/her values and successful
organizations act accordingly. Therefore, organizations offering the most valued products and
services to their customers have more loyal customers than their competitors.
If any organizations need to have, loyal customers then they should take measures to
involve customers with them. Involvement results in increased loyalty (Zeithaml et al., 1988).
When the customer-seller service is of long-term then these relationships become the most
important for the organization (Zeithaml, 1981). These effective relationships between the customer
and the service provider can result in customer retention. Furthermore, customer`s level of
participation with the service provider can decide their level of customer-provider relationships
(Farquahar, 2004; Ennew & Martin R. Binks, 1996).
2.5
CUSTOMER RELATIONSHIP MANAGEMENT AND CUSTOMER

LOYALTY IN THE BANKING SECTOR
The major focus of Customer Relationship Management (CRM) in any organization is to
build relations with customers (Rigby, Reichheld & Dawson, 2003). The basic purpose is to
understand customers and factors that affect customer loyalty. Loyal customers for any company
can always give a better competitive advantage than any other factor. Chances of customer accounts
28
also grow with the age of customers so if those customers growing customers remain with their
banks then it gives a strong long-term competitive edge to their banks.
As the Customer Relationship Management (CRM) helps banks to make their customers
loyal, and customer loyalty depends on certain factors that affect customer loyalty. Understanding
and knowing those factors and their relationships with each other can help banks to develop better
customer-centric strategies, which is a focus of Customer Relationship Management (CRM).
During last few decades, major changes occurred in the banking sector like privatization,
and same is true for Pakistan. Many public banks have been privatized that results in high market
competition.
Banks use new technology to provide quick services to their customers but on the other side,
this technology results in decreased relations between the banks and their customers. Those banks
that did not change or improve their products and services have lost their major market share.
Hence, banks that are not considering this fast changing environment to maintain strong position
are likely to lose their customers.
Banks have started realizing that no bank is excellent for all so banks are trying to explore
innovative competitive advantage to compete and beat their competitors (Olsen, 1992). At present,
strong relationships with customers have become vital, none of the banks can avoid it otherwise
retaining, and increasing customers becomes very difficult. If a bank needs to have a competitive
position then its relations with its customers becomes the most significant factor.
Customers loyalty is decreasing in different sectors including the banking sector. The basic
reasons behind this customer`s declining loyalty towards different sectors are (Payne, Christopher,
Clark, & Peck, 1999):
1) Use of latest technology:

2) High competition
3) Customers increased awareness
29
1)
Use of latest technology:
There is rapid improvement and innovation of technology in the world than

ever, mostly companies using latest technology like internet, telemarketing, autoanswering machines, and so on to satisfy their customers resulting in decreased
loyalty as customers are more used to interact with machines.
2)
High competition:
There is high competition in the market due to new banks entering as well as
cellular companies providing financial services like easy paisa by Telenor Cellular
Company in Pakistan.
3)
Customers increased awareness:
These days, customers are well informed than ever due to rapid expansion of
print and electronic media in Pakistan. Media has increased customers awareness
about what is going on in the world, and this increased awareness about financial
services has increased customer demands and changed their behaviours towards
financial services.
Relationship in the banking sector is becoming more and more significant (Colgate,
Alexander, Marks & Spencer, 1998 ).
2.6
MODELS RELATING TO RESEARCH STUDY

Many philosophers presented customer loyalty models. In the loyalty model (Figure 2.2),
presented by Beerli, Martin and Quintana, (2004) variables that impact customer`s loyalty namely
perceived quality, satisfaction, and switching cost are shown. As shown in this model of loyalty,
perceived quality influences customer satisfaction and in turn, customer satisfaction influences
30
customer loyalty. Switching cost also influence customer loyalty (Beerli, Martin and Quintana,
2004).
Perceived
Quality
Satisfaction
Switching
cost
Loyalty
Figure 2.2: Loyalty Model (Beerli, Martin & Quintana, 2004)
The integrative framework for customer value and CRM performance model (Figure 2.3) is
developed by Wang et al., 2004. According to this model, if these four customer values are met
then it results in customer satisfaction that turns into brand loyalty.
Here the researcher comments that customer satisfaction is the major influencing factor in
the model presented by Wang et al. (2004) and also in the loyalty model presented by Beerli,
Martin and Quintana (2004).
31
Figure 2.3. The Integrated Framework for Customer Value and CRM Performance.
Source: Wang et al., 2004, p. 171
According to this model, employees behaviors depend on their attitude so we need to take
care of the attitude of our employees if we want to increase profitability of our business resulting
from customer retention.
32
Figure 2.4: The Employee-Customer-Profit Chain at Sears
The CRM Value Chain Model, (Figure 2.5) presented by Francis Buttle (2004) as a
guideline to apply CRM in organizations to improve their profits. The CRM Value Chain Model
comprises of five primary stages and four supporting conditions Figure 2.5:
Figure 2.5: The CRM Value Chain (Source: Buttle 2004)

33
The major objective of this model is establishing positive mutually beneficial relations
between the customers and organizations.
2.7
OFFENSIVE AND DEFENSIVE STRATEGIES

The service providers have offensive and defensive strategies to manage their relationships
with their customers (Fornell, 1992).
Fornell (1992) says that, in offensive strategy, a service provider attracts new customers
whereas in defensive strategy, a service provider tries to retain the existing customers. Following
Figure 2.6 presented by Fornell (1992) shows these offensive and defensive strategies:
Figure 2.6: Offensive and defensive strategies, Fornell, 1992, p-8
Generally, companies used to allocate more resources and energies towards getting new
customers but presently that concept has changed and now the companies try to apply both the
offensive and defensive strategies in a better manner than their competitors do. The possible result
of these strategies is customer retention.
34
2.8
FACTORS THAT AFFECT CUSTOMER LOYALTY IN THE

BANKING SECTOR
Researcher here discusses the major influences of factors that affect customer loyalty in the
banking sector.
2.8.1
Customer Trust
Closer relations between bank and its customer, higher the customer trust and vice versa.
This close relationship between customer and bank is not due to any bias but it is due to a
relationship between customer and bank that results in customer loyalty. Therefore, customer trust
influences customer loyalty and higher the customer trust higher the customer loyalty.
It is a general truth that if you know and trust a person, you definitely give him/her
importance in your decisions. Same is true for customers as those customers who knows your
company`s products and services and trust you, they become regular customers. Any company that
has effective channels of communications with its customers like customer services, companys
website, etc has better chances that its customers will trust them and this trust converts into loyalty.
2.8.2
Customer Perceived Value
There is rapidly growing interest in companies regarding customer value. Customer value is
the most influencing factor (Watchword, 1990). Customer value is the core of marketing (Andreas
Eggert and Wolfgang Ulaga, 1990).
Customer satisfaction has arisen many questions in the minds of researchers like there are
many examples that, where there is high customer satisfaction but on the other hand, companies
market-shares are going down. Many researchers found it surprising and here critics have argued
that old customer satisfaction models focused only on the existing customers satisfaction and those
models completely ignored possible customers, new customers, non-customers, and competitors.
This ignorance resulted in failures in achieving company`s objectives. Furthermore, customer`s
thinking about 4Ps of marketing that is product, price, place, and promotion should also be
35
considered. Therefore, in developing marketing strategies, customer perceived value has a vital role
(Gross, 1997).
The researcher after going through detailed literature review found that there are generally
three common elements of perceived value namely value components, value perceptions, and
importance of competition.
As humans are different, so their perceptions are also different. Generally, people
perceptions about any same product are different and so is the customer perceived value.
Finally, any company offering better value of their products and services than competitors
can develop a competitive advantage. Generally, customers go for those products and services that
offer better value in the market.
In Pakistan, customers also buy products and services due to their emotional attachments
with a particular product and service. For example, customers buying shoes from Bata Shoe
Company in Pakistan is also a result of emotional attachment with Bata Shoe Company and hence
that results in more value and better perception about those company products.
Customer perceived value is closely related with the customer satisfaction and customer
satisfaction in turn is closely related with customer loyalty. Customer`s satisfaction generally
require his/her previous product/service experiences, price factors etc whereas customer`s perceived
value is not dependent on customer`s previous experiences of products and services.
2.8.3
Customer Satisfaction
If there is no difference between customer satisfaction and customer`s expectations than the
customer is satisfied, otherwise customer is not satisfied. Companies try to not only minimize the
difference between these factors but also trying to provide products and services to their customers
that exceed their expectations in order to retain them as loyal customers (Jamal and Kamal, 2002).
36
Customer satisfaction is an important factor in customer retention. If customer satisfied then

he/she may become volunteer marketer of that product or service.
Customer develops an attitude after using any product or service and it is called customer
satisfaction (Jamal and Kamal, 2002).
Customer performs an emotional assessment about various products and services before
buying and after using it (Lin, 2003). Customers have expectations about products and services they
use and these expectations are developed from their previous buying, from friends and relatives
opinions. If customers expectations are met then he/she is satisfied otherwise dissatisfied.
Customer satisfaction is important and it is significant source of loyalty and retention.
2.8.3.1
Conceptual differences between customer satisfaction and customer perceived

value
The literature review shows that customer satisfaction and customer perceived value are
complementary, yet different constructs. Following Table 2.1 shows the conceptual differences
between customer satisfaction and customer perceived value:
Table 2.1: conceptual differences between customer satisfaction and customer perceived value.
1. Emotional factor
1. Cognitive factor
2. After buying customer`s viewpoint
2. Before buying customer`s viewpoint
3. Existing customers
3. Both existing customers and possible customers
2.8.4
Customer Switching Barriers
There are many switching barriers of customers like emotional barriers, cost barriers, time
shortage barriers, and so on (Selnes, 1993).
Customer`s options availability plays an important role in his/her buying decision. Options
availability of different products and services also influence customer`s loyalty. If any customer has
37
more options available then his/her loyalty may also change as compare to a customer who has less
or no other options available of other same products and services offered by some other providers.
Loyalty is linked to customer`s behaviour and customer`s attitude.
2.8.5
Customer Culture
Culture (from the Latin cultura stemming from colere, meaning, "to cultivate) is a term that
has different meanings. Culture can be defined in 164 ways (Alfred Kroeber and Clyde Kluckhohn,
1952).
Culture is basically, the common values, habits, attitudes, and behaviors of a group of
people, or a company.
It is a fact that culture affects customers attitudes and customer`s behaviours (Hofstede,
1980). Therefore, customers who have proneness to any bank may become loyal customers. Here
most of the philosophers are also of the view that customers who have stronger culture have high
loyalty for banks.
The researcher being a Pakistani has observed that mostly Pakistani people are strong in
certain values of their culture. It is generally seen that people develop certain habits due to their
culture and if banks discover those values of culture then it may help banks to develop better
customer loyalty strategies, which is a focus of Customer Relationship Management.
38
CHAPTER 3
FRAME OF REFERENCE
3.1
CONCEPTUALIZATION
A conceptual framework (Miles & Huberman, 1994, p.18):
Explains, either graphically or in narrative form, the main things to be studied.
Hence, in order to reach this research study`s purpose, the following research questions are
stated:
The researcher has developed following hypotheses based on the purpose of this research:
H1:
H2:
H3:
H4:
H5:
H6:
H7:
39
3.2
PREVIOUS RESEARCH AND MODELS RELEVANT TO THIS

RESEARCH STUDY
The researcher now describes previous researches, and models that relates to his research
study`s purpose.
The customer loyalty model presented by Beerli, Martin and Quintana (2004) is shown in
Figure 3.1. They have shown the influence of different factors on customer loyalty. The researcher
based on literature review, comments here that the most influencing factor shown in this loyalty
model is customer satisfaction. It is also a fact that when a customer is satisfied then the chances of
loyalty are higher as compare to when a customer is dissatisfied.
In the following model Figure 3.1, Martin and Quintana (2004) have also given another
factor that influences on customer loyalty that is switching cost. Here the researcher again based on
literature review comments that almost every customer has some switching cost to pay whenever
customer wants to switch to another product or service. For instance, times, money, legal
restrictions, distance are some of the costs a customer has to pay is customer switches to another
product or service.
Perceived
Quality
Satisfaction
Switching
cost
Loyalty
Figure 3.1: Loyalty Model (Beerli, Martin & Quintana, 2004)

40
The next model The integrated framework for customer value and CRM performance
presented by Wang et al. (2004) focuses on four customer values, when these values are fulfilled,
customer satisfaction is achieved and customer satisfaction in turn creates customer loyalty as
shown in Figure3.2.
Figure 3.2: The Integrated Framework for Customer Value and CRM Performance. Source:
Wang et al., 2004, p. 171
Model as shown Figure 3.3 presented by Rucci, Kirn, & Quinn (1999) shows the
relationships between behaviours of employees and customers.
Figure 3.3: Employee-Customer-Profit Chain at Sears

41
The researcher based on literature review, comments here that there is cause and effect
relationship in banks. If employees are satisfied with the bank then in turn employees make their
customers happy, hence, there is a cause and effect relationship here.
Relationship of customers with their banks is of two type namely offensive strategy and
defensive strategy (Fornell, 1992). Banks try to acquire new customer in offensive strategy whereas
when a bank tries to keep existing customer then it is called defensive strategy as shown in Figure
3.4.
Figure3.4: Offensive and defensive strategies, Fornell (1992, p.8)
As the researcher earlier discussed in the previous chapter on the review of related literature
about the following factors affect customer loyalty in the banking sector of Pakistan:
1) Customer trust,
2) Customer perceived value,
3) Customer satisfaction,
4) Customer culture, and
5) Customer switching barriers.
42
The researcher predict that the relationship between these factors also affect customer
loyalty, customer trust has an influence on customer perceived value, customer satisfaction, and on
customer loyalty as shown in the emerged frame of reference Figure 3.5. Customer perceived value
also influences customer satisfaction and customer satisfaction in turn influences customer loyalty.
Customer switching barriers and customer culture also influence customer loyalty as shown in
Figure 3.5.
3.3
EMERGED FRAME OF REFERENCE

A frame of reference according to Miles and Huberman (1994) explains the main things to
be studied, the key factors, constructs, or variables and the presumed relationship between them.
Consequently, a frame of reference presents the theories and models that are most suitable for the
research problem.
The researcher anticipates that based on this emerged frame of reference, there will be better
CRM utilization in banking sector, and banks will be able to build customer loyalty in order to have
a better long-term competitive edge over their competitors.
The Figure 3.5 presents the research variables used in the research questions and the chosen
operational definitions.
According to the above discussions and emerged frame of reference as shown in Figure 3.5,
the researcher would be in a better position to study this research study`s questions and hypotheses.
43
CUSTOMER
SATISFACTION
CUSTOMER PERCEIVED VALUE
H
H
CUSTOMER TRUST
CUSTOMER SWITCHING BARRIERS

CUSTOMER LOYALTY
CUSTOMER CULTURE
H
H
Figure 3.5: Emerged frame of reference

Source: Researcher`s own construction
44
CHAPTER 4
RESEARCH METHODOLOGY
4.1
RESEARCH PROCESS ONION

According to the Research Process Onion presented by Saunders et al, 2003, Figure2, first
layer research onion shows research philosophy that is positivism, realism, and interpretivism,
second layer shows the various research approaches like inductive or deductive research approach,
third layer shows research strategies such as experiment, survey, case study, grounded theory,
ethnography, and action research, forth layer shows time horizons like cross-sectional, and
longitudinal, the fifth layer shows various primary and secondary data collection methods, and
finally, reliability & validity of the research is measured.
Figure 2: Research Process Onion presented by Saunders et al. (2003)

45
Positivism and phenomenology are the 2 major research processses (Saunders et al., 2000).
Scientific discoveries made during the 18th and 19th centuries have a deep impact on positivism
approach. During 18th and 19th centuries, it seemed apparent that the body of knowledge existed
independently of whether people knew it or not, and the scientific task was to find out this
knowledge. People believed that there are laws that manage the operation of the social world and
these laws can be discovered. It was also assumed that there is hidden absolute truth and if we find
absolute truth then it can be used to create a better society.
In this research study, in order to discover the major factors that affect customer loyalty,
in the banking sector of Pakistan, positivism is the philosophy.
4.2
RESEARCH DESIGN
Research design describes the data collection methods and its analysis (Burns & Bush,
2002).
4.2.1
Exploratory research study

In exploratory research study is conducted when a problem is not clear and it
being used to get deeper understanding of any issue (Saunders et al., 2006).
4.2.2
Descriptive research study

In the descriptive research study, actual situation described and is also known
as statistical research, and it answers the questions who, what, where, when and how
(Saunders et al., 2006).
4.2.3
Causal Research Study

Causal Research discovers the effect of one factor on another and it is used to
forecast with the help of results that what will influence a business in future (DJS
Research Ltd, 2008).
46
When any factor or variable influences on another factor or variable and brings some
changes then it is called causal relationship between these two factors or variables. These changes
are measured and analyzed by researchers for making profitable decisions of companies.
Following research questions will help the researcher to achieve this research study`s
purpose:
Consequently, the researcher has developed following hypotheses based on the purpose of
this research:
H1:
H2:
H3:
H4:
H5:
H6:
H7:
Therefore, in order to accomplish the research purpose and respond to stated research
questions and hypotheses, the researcher will begin with a descriptive research study and this
descriptive research study will help the researcher to design a causal research study.
Furthermore, this research study relates to causal research study, as the researcher needs to
find out the influence of factors on one another. The researcher is going to discover relationship
among different factor that affect customer loyalty that is customer trust, customer perceived value,
47
customer satisfaction, customer switching barriers, and customer culture. Therefore, causal research
study is the most appropriate research study for finding these kinds of relationships Parasuraman
(1991).
4.3
RESEARCH STRATEGY
The research strategy is used to address the research questions of any research study
(Saunders et al., 2000).
4.3.1
Selection of questionnaire survey method
Grounded theory involves various data collection stages, data refinement and observing
interrelationship of different categories of collected data (Creswell, 2003; p. 14). The researcher
tries to develop a theory here out of data gathered. The basic feature of grounded theory is the
constant interaction between data collection and data analysis (Myers, 1997). The grounded theory
strategy is not suitable for the present research study because this grounded theory takes more time
for data collection as data needs to be gathered many times and the researcher has limited
timeframe, so this was not a suitable option.
In order to approve or disapprove new hypotheses or theories, experiments are used

(Devine, 2006). To respond research questions or examine problems, experiments are carried out
(Griffith, W. Thomas, 2001).
In surveys, researchers collect data from a sample of a population e.g., we may study
Allama Iqbal Open University`s students, or all the customers of banks in Pakistan. As these
populations as given in these examples are too large so it is not possible for researcher to study the
entire population so researchers use questionnaire surveys of only samples and these samples are
selected according to a specified criteria.
48
In ethnography, it is compulsory for an ethnographer to spend more time in the field.

Ethnographers deeply involve themselves in people lives they study (Lewis 1985, p. 380). This is
obviously more time consuming so due to time limitation, its not possible for the researcher to
consider this option.
In action research, firstly, the problem is researched, necessary changes are made, and this
process repeats many times until the problem is solved (Garson, 1997). Action research is time
consuming as well it costs more which constraints researcher to use this option.
Case study research can be defined in many ways. Case study research is a "systematic
inquiry into an event or a set of related events which aims to describe and explain the phenomenon
of interest" (Bromley, 1990, p.302). The use of case studies is widespread in management research.
Based on the above detailed arguments, the researcher used questionnaire survey method,
the researcher selected National Bank of Pakistan (NBP), Pakistan serving as a public bank, Habib
Bank Limited (HBL), Pakistan serving as a private bank, Meezan Bank Limited, Pakistan serving
as an Islamic bank, and Citibank serving as a foreign bank in Pakistan according to the sampling
criteria. The researcher used close-ended questions on 5-Point Likert Scale. The researcher used
self-administered questionnaire for getting responses from 400 customers of these banks. Almost all
possible options were given to respondents in this questionnaire; researcher also added few open
questions asking about customers comments/suggestions in order to find out any other possible
option, which is not given in the questionnaire. Therefore, in this way, it makes this questionnaire
more effective.
The researcher experienced Customer Relationship Management (CRM) settings in the

banks during working hours. The researcher collected data relevant to his research study like bank
annual reports, public documents, marketing literature, and other relevant banks reports. The
researcher also had few opportunities to observe Customer Relationship Management (CRM) team
meetings at different banks, which proved vital for the existing research study.
49
The researcher selected questionnaire survey method due to the reasons presented by Aaker
et al. (2000), as they said that the selection of a questionnaire survey method depends on nature of
the research study and its purpose. The selection of a questionnaire survey method also depends on
the type of questions asked from the customers, culture of customers, and resources involved. The
researcher adopted personally administered questionnaire method due to the following factors:
1) Customers of banks may ask for any clarification of questions asked on the spot. Due to
any misunderstandings, customers may give incorrect responses due to misunderstands
so it is very important to clarify any question asked in the questionnaire in order to
convey correct understanding of the questions asked in the questionnaire.
2) Customers are more interested in giving their responses due to the presence of
researcher.
3) All the questionnaires are taken back immediately after filling without missing any
questionnaire, and
4) The researcher persuaded respondents that the information provided by them will be
used for academic purpose only.
In questionnaire survey, the researcher asked customers of banks about their age, income,
marital status, and education levels. The researcher then included questions in the questionnaire
relating to this research study`s purpose.
4.4
RESEARCH STUDY FACTORS
4.4.1
Operational definitions
Operational definitions are required for data collection questionnaire (Davis & Cosenza,
1993). It means that every factor that influences customer loyalty should have specific questions to
be asked. For measuring factors or constructs of this research study namely customer trust,
customer perceived value, customer satisfaction, customer switching barriers, customer culture, and
customer loyalty, operationalisation is used.
50
4.5
OPERATIONALIZATION OF RESEARCH STUDY FACTORS
4.5.1
Customer Trust
For measuring customer trust, following 7 questions are asked from respondents (Hess,
1995; Jarvenpaa & Tractinsky, 1999; Gurviez & Korchia, 2002; Gefen et al., 2003; and Chiou &
Droge, 2006):
1) This bank keeps its promises

2) This bank is honest
3) This bank is reliable
4) This bank meets my needs
5) This bank seems capable to manage transactions on line
6) This bank seems to have solid knowledge in its field
7) I trust the know-how of this bank
Based on the above, this research study has seven items customer trust construct.
4.5.2
For measuring customer satisfaction, following 4 questions are asked from respondents
(Wang et al., 2001; and Liosa, 1996):
1) I am satisfied with this bank

2) This bank leaves me a pleasant impression
3) I want to return to this bank in the future
4) I will advise this bank to my friends
Based on the above, this research study has four items customer satisfaction construct.
51
4.5.3
For measuring customer perceived value, following 3 questions are asked from respondents
(Lassar et al., 1995):
1) The price of services offered by this bank is fair

2) Comparing to what I pay, I receive much more in terms of money, effort and time
3) On the base of simultaneous consideration of what I pay and what I gain, I consider
that bank service is of value
Based on the above, this research study has three items customer perceived value construct.
4.5.4
For measuring customer switching barriers, following 5 questions are asked from
respondents (Kim, et. al., 2003):
1) In general switching to a new bank would be a hassle.

2) It would cost me a lot of money to switch from my current bank to another bank.
3) It would cost me a lot of time to switch from my current bank to another bank.
4) Prices of other banks are higher.
5) It would cost me a lot of effort to switch from my current bank to another bank.
Based on the above, this research study has five items customer switching barriers construct.
4.5.5
Customer Culture
For measuring customer culture, following 4 questions are asked from respondents
(Hofstede, 1980, 1994):
1) You have a top priority towards personal goals

2) You feel uncomfortable in unusual situations
52
3) You buy what you desire without worrying about how others feel or think
4) You buy what you like and stick to your brand
Based on the above, this research study has four items customer culture construct.
4.5.6
Customer Loyalty
Finally, for measuring customer loyalty, following 6 questions are asked from respondents
(Boulaire et Mathieu, 2000; Srinivasan et al., 2002; and Huang, 2008):
1) I regularly visit this bank

2) I seldom think of changing this bank to another one
3) I use this bank each time I need to make any financial transaction
4) I consider this bank as my preferred one
5) I like to use this bank
6) Each time I want to make any financial transaction, this bank is my first choice
Based on the above, this research study has six items customer loyalty construct.
4.6
PROGRESSION OF QUESTIONNAIRE`S QUESTIONS

The researcher has used simple sequence of questions for better understanding of customers
of banks. In the beginning, the researcher has asked questions relating to age, income, marital
status, and educational level. After this, researcher has asked questions about each of the following
factors that affect customer loyalty in the following sequence:
1) Customer perceived value

2) Customer satisfaction
3) Customer switching barriers
4) Customer culture
5) Customer trust
53
6) Customer loyalty
The basic purpose of this above sequence of questions is to motivate the respondents by
asking simple most interesting questions in the beginning then customer culture, customer trust, and
customer loyalty questions are given that generally takes more time to respond.
4.7
TIME HORIZON
Methods of descriptive research are cross-sectional & longitudinal (Saunders et al., 2000).
Here the researcher had to choose between longitudinal research or cross sectional research. Crosssectional research helps researchers to measure variable(s) in a shorter time so that these
measurements may be viewed as contemporaneous (Baltes, Reese, & Nesslroade, 1988; and
Creswell, 1998). Therefore, the major benefits of using cross-sectional research are that it is more
time saving and more cost saving as compare to longitudinal research study. On the other hand, in
longitudinal studies, repeated observations are made of the same items over a very long period,
mostly covering many decades. It is mostly used in psychology and in sociology. For instance, in
the field of psychology, humans psychological trends over their entire lives are studied, and
in sociology, it is used to study generation to generation various life events. In longitudinal studies,
same humans are studied mostly their entire life span resulting in more accurate results than any
other research study and these results are mostly not influenced by their cultures or any other factor.
Based on the above discussions and researches, the researcher has used cross-sectional
research study for this research study.
4.8
POPULATION
A population consists of all elements-individuals, items, or objects-whose characteristics are
being studied. The population that is being studied is also called the target population (Mann,
1995).
54
Banks/ development finance institutions in Pakistan comprises of seven categories, which

are regulated by the SBP (Appendix-III) (State Bank of Pakistan, 2009). In the first category,
government owns public sector banks, second category, specialized banks that are the same as the
first group but their activities are more focused on some special tasks, like agriculture, industries,
house and buildings, etc. Third category banks are called private banks owned by a person or a
group of persons. Fourth category, Islamic banks, fifth category, foreign banks and finally sixth &
seventh categories, micro finance institutions and Development Finance Institutions respectively
perform some limited tasks and activities. State Bank of Pakistan regulates all these banks /
development finance institutions.
The researcher has chosen customers of the following banking categories as population of
this research study that offer their services to public at large, and have a large market-share:
1) Public banks,
2) Private banks,
3) Islamic banks, and
4) Foreign banks.
4.9
SAMPLING
Selection of sampling technique depends on the probability of collecting data to address
research`s questions & research objectives from the entire population (Saunders et al, 2000).
In census, data is collected from entire population, which is not possible for the researcher
due to resource constraints. It is not possible for researcher to study all customers of all banks
serving in Pakistan hence a sampling criteria is used as it provides valid alternative to the census
(Saunders etal., 2000).
For achieving this research study`s purpose, the researcher has chosen customers of four
banking categories namely public banks, private banks, Islamic banks, & foreign banks according
to the following sampling criteria:
Banks with large market-share,

55
Banks offering services to public at large,
Banks having network of branches,
Banks having nationwide and/or worldwide representation, and
Researcher`s resource constraints.
According to the above mentioned sampling criteria, National Bank of Pakistan (NBP)
serving as public bank, Habib Bank Limited (HBL), Pakistan serving as private bank, Meezan Bank
Limited, Pakistan serving as an Islamic bank, and Citibank serving as a foreign bank in Pakistan
fulfilled the above-mentioned sampling criteria hence this will make the sample representative of
the population as a whole (Egan, 2007, p. 133). Furthermore, banks fulfilling sampling criteria as
mentioned above similar to Beerli et al. (2004) were chosen.
The researcher collected data personally from customers of above mentioned banks from the
areas of Islamabad and Rawalpindi because of the researcher`s time, money, and other resource
constraints.
4.9.1
Sample size
A sample size of 300 respondents is good (Comrey & Lee, 1992; and Tabachnick & Fidell,
2001). A sample of 200 to 500 is considered adequate for most customer surveys (Hill and
Alexander, 2000 p. 88). 5 to 10 responses from each item are adequate (Hair, Anderson, Tatham, &
Black, 1998). Therefore, the researcher keeping in mind all these researchers sample size criteria,
finalized sample size of 400.
4.9.2
Sample selection
The researcher then randomly selected two branches of each bank as shown in Table 1. The
researcher decided that every 10th customer-entering bank would be taken as respondent of this
research study and the researcher continued the process like this for few weeks until 400 responses
were received as shown in Table 4.1.
56
Table 4.1: Distribution of questionnaire in banks
S#
Bank
No. of Branches
No. of Customers
NBP branches:
1
1) NBP, branch code 0341, civic centre
100
Br. G-6, Islamabad), Pakistan
02
2) NBP, G-9 branch, branch code 1932,
(50 customers of each

branch)
Al-Markaz G-9,Br. Islamabad, Pakistan

Habib Bank Limited (HBL), Pakistan:
2
Branches:
1) Habib Bank Limited (HBL), 4th Floor,
100
Habib Bank Tower, Jinnah Avenue,
02
Islamabad, Pakistan.

branch)
2) Habib Bank Limited (HBL), 5-C plaza,

F-10 Markaz, Islamabad, Pakistan.
Meezan Bank Limited, Pakistan:
3
Branches:
1) Meezan Bank Limited, F-10 Markaz
100
Branch, Plot # 2-F, Super Trade Centre,
02
F-10 Markaz, Islamabad, Pakistan.

branch)
2) Meezan Bank Limited, Jinnah Avenue

Branch, 32 Sohrab Plaza, Blue Area,
Islamabad, Pakistan
Citibank, Pakistan:
4
Branches:
100
1) Citibank, 94 West, Jinnah Avenue
02
Blue Area, Islamabad, Pakistan.

branch)
2) Citibank, 168-D, Adamjee Road,

Rawalpindi, Pakistan
TOTAL:
08 BRANCHES
57
400 CUSTOMERS
4.10 INSTRUMENTS FOR DATA COLLECTION

A self-administered questionnaire was developed as attached at Appendix-I as an instrument
for data collection from customers of four major banks in Pakistan namely National Bank of
Pakistan (NBP), Habib Bank Limited (HBL), Meezan Bank Limited, and Citibank, Pakistan. These
banks were selected according to the criteria as earlier specified. In order to get true response from
the customers of these banks, the researcher included brief instructions in the beginning of
questionnaire. Likert 5-point scale was used to determine the perceived relative importance of the
services provided by banks in Pakistan, as well as to evaluate the relative importance of the
attributes commonly used in selecting a bank. Open-ended questions were also given in the
questionnaire to find out any other factors, if not included in the close-ended questions.
Data collected for this research study was personally administered and collected by the
researcher. The researcher provided clarifications to respondents, if they asked.
4.11 PRETESTING OF QUESTIONNAIRE

Pretesting of the questionnaire improves it and customers easily respond (Saunders et al.,
2000). For small-scale questionnaires, it is not likely to have ample time or financial resources for
such testing (Fink, 1995). However, it is still important to have the questionnaire pilot tested. For
most questionnaires, the minimum number for a pilot testing is 30. Therefore, during first stage of
pilot testing of questionnaire, the researcher took help from experts of the selected banks as well as
from randomly selected customers of banks. They gave their comments on researcher`s
questionnaire. During second stage of pilot testing of questionnaire, the researcher gave 30
questionnaires as per Fink (1995), each to randomly selected customers of banks. During this
second stage, the researcher personally got feedback from each customer and noted down various
comments. After the second stage, the researcher again revised this questionnaire.
During the final third stage of questionnaire pilot testing, the researcher gave 30
questionnaires to customers of banks; and finally got positive response. It is to mention here that
respondents of pilot testing of this questionnaire were excluded for having unbiased responses.
58
Questionnaire for customers of banks includes various factors and these factors have 29
items according to defined measurement scales as shown in the following proposed model of
customer loyalty in Figure 4.1. These questions relate to customer trust (7 items), customer
perceived value (3 items), customer satisfaction (4 items), customer switching barriers (5 items),
customer culture (4 items), and customer loyalty (6 items)
59
Figure 4.1:
CUSTOMER PERCEIVED VALUE
CUSTOMER
SATISFACTION
H
H
CUSTOMER TRUST
CUSTOMER SWITCHING BARRIERS

CUSTOMER LOYALTY
CUSTOMER CULTURE
H
H
60
At the end of the questionnaire, 2 open-ended questions were given to find out any further
comments and suggestions of the customers of banks.
4.12 ANALYSIS OF DATA

For the analysis of data from respondents, researcher followed the following procedure:
4.12.1 Coding of questions
The researcher did coding of questions before entering these into SPSS software version
16.00. For questions relating to customer perceived value, researcher coded these as PV1, PV2, and
PV3. For questions relating to customer satisfaction, researcher coded these as CS4, CS5, CS6, and
CS7. For questions relating to customer switching barriers, researcher coded these as CSB8, CSB9,
CSB10, CSB11, and CSB12. For questions relating to customer culture, the researcher coded these
as CC13, CC14, CC15, and CC16. For questions relating to customer trust, the researcher coded
these as CT17, CT18, CT19, CT20, CT21, CT22, and CT23. Finally, for questions relating to
customer loyalty, the researcher coded these as CL24, CL25, CL26, CL27, CL28, and CL29.
4.12.2 Data analysis techniques
A data analysis statistical technique is dependent on the purpose of research study

(Malhotra, 1999). Researcher used statistical techniques like correlation and regression analysis
The researcher has used SPSS software for applying relevant tests to these factors to
measure their relationships. The researcher entered all the data of this research study in SPSS
software version 16.00 for doing data analysis of each element of factors. Researcher did
correlation analysis to find out Pearson Correlation and Sig. (2-tailed) of the various elements of
research study`s factors. Then researcher did the Regression Model, Multivariate Data Analysis, and
Stage-Wise Multiple Regression analysis that includes model summary in which, R and R Square were
calculated. Then with the help of ANOVA, the researcher calculated df, Sig., F, and Mean Square.
Finally, standardized coefficients Beta, t-test and significance of factors were measured.
61
To explore relationships between the research`s factors, correlation analysis was done as it
helps to understand the relationships between these factors.
Likert Scales are suitable to measure responses as Likert scales gives better results than any
other method (Aaker et al., 2000; Wong, 1999; Hayes, 1998; Garland, 1991; Burns & Bush, 2002;
Zikmund, 2000; and Kassim, 2001).
The researcher collected responses from customers of banks with the help of 5-point Likert
Scale with a series of statements. Finally, the researcher gave descriptive analysis of each item of
this research study`s factors.
4.13 TRIANGULATION
In research, triangulation means using two or more research theories, using multiple data
sources, collecting data from different places and at different times, data collection from different
managerial levels, different individuals, or groups of people, for a research study (Hilton, 2005).
For increased data reliability and validity, the researcher collected data from multiple
sources like data collection with the help of questionnaire, bank reports, expert opinions of bank
employees, and regular customers of banks. Triangulation is a broad strategy of data collection and
analysis within which a range and variety of techniques can be utilized (Elliott, 2009).
The supposition at this point is that people comprehend the situation in different ways
according to their practical good and concerns. Thus, any broad view of a situation needs to
consider these manifold perspectives.
4.14 RELIABILITY & VALIDITY OF THE RESEARCH CONSTRUCTS

In research design, reliability and validity factors have to paid attention in order to minimize
possibility of getting incorrect responses (Saunders etal., 2000).
62
The researcher has used Cronbach coefficient alpha for the evaluating the different
measures of the research questionnaire. Cronbach coefficient alpha for research instrument should
be 0.70 or higher if it is reliable (Hair et al., 1995; Pallant, 2001).
4.14.1 Reliability
Threats to reliability are (Robson, 1993):
1) Subject error: Generally, time selection for taking questionnaire response from the
customers of banks for research study is inappropriate like asking customers to fill
questionnaires during early or near to closing timings of banks.
2) Subject bias: In some situations, customers respond what others ask them to say
instead of what they really want to say.
3) Observer error: This error can be minimized by improving structure of the

questionnaire.
4) Observer bias: This concerns with how the researcher interprets data.
In order to minimize subject error, the researcher took customers responses with the help of
questionnaire on the convenience of customers only and not on researchers personal convenience.
Subject error was minimized by taking confidence of customers by persuading them that this
research study is for academic purpose and data collected will not be quoted anywhere else except
in this research report without the prior consent of the customers and the concerned organizations,
names confidentiality was also given so in this way, most of the customers gave true responses.
Finally, unbiased interpretations were made to overcome observer bias.
In this research study, the Cronbach`s Alpha value of all constructs is higher than 0.70 that
indicates reliability of the research instrument.
63
4.14.2 Validity
To assess the content validity, the researcher got feedback from bank`s experts and bank`s
most regular customers on questionnaire and made changes accordingly. A three-stage pilot testing
of questionnaire was also performed for improvements/changes in this questionnaire. Furthermore,
in order to have increased validity, the researcher personally administered all the questionnaires and
in case of any misunderstanding, customers were given immediate clarifications.
The researcher used review of related literature for the validity and scope of factors of this
research study. For increased validity, and before going for pilot testing of questionnaire, the
researcher also got pertinent experts suggestions from various universities in Pakistan.
4.15 FIELD ISSUES DURING RESEARCH STUDY

During data collection, the researcher faced different problems and some of these problems
were unexpected. For instance, some customers hesitated to fill questionnaire but most of the
customers were not hesitant. The researcher finally convinced almost all the customers that the data
collected is purely for academic purpose.
Generally, customers are in a hurry while visiting banks and mostly they are unwilling to fill
any questionnaire so this also created certain difficulties for the researcher.
Few branches of banks didnt allow the researcher to get responses from their customers as
these bank`s managers thought that the researcher may provide responses of their customers to their
competitors and it may create problems for their banks. The researcher was able to convince most
of the bank managers but few managers did not allow getting responses of their customers.
Mentioning these field issues during data collection has two main reasons, firstly, researcher
want to create awareness about the practical problems during data collection, secondly, other
researchers may learn lesson from these difficulties experienced. In addition, these issues justifies
the long time taken to prepare this research study.
64
CHAPTER 5
EMPIRICAL FINDINGS
5.1
OVERVIEW OF THE NATIONAL BANK OF PAKISTAN (NBP)

NBP is a public sector bank having 1250 branches in Pakistan and abroad covering almost
all areas of Pakistan. The services of the National Bank of Pakistan (NBP) are available to all
including small account holders to multinational companies serving in Pakistan and abroad and its
unique feature is, NBP also acts as SBP agent. It clearly shows trust of SBP on NBP (NBP, 2009).
At Present, customer`s needs are not easy to identify and met due to high level of
complexity as these needs and wants changes with the passage of time. Therefore, these rapid
changes forced all banks including the National Bank of Pakistan to emphasize more on
developing and strengthening relations with its customers.
The NBP is also listed on the KSE. According to the management of NBP, NBP is
committed to serve its customers better than their competitors. This bank also addresses the lowincome level class in Pakistan with its schemes like Karobar, Saiban, Kisan Dost, and Cash & Gold
(NBP, 2009).
NBP`s vision describes its commitment as well as social responsibilities & its mission
focuses on merit, creating unique identity in the market, following benchmarks, improving
customer`s value and creating excellent national and international repute (NBP, 2009).
Its basic core values are creating benchmarks, teamwork, best services, training and
development of human resources, and community development. The vision, mission, and core
values details of the National Bank of Pakistan (NBP) are attached as Appendix-XIII.
The National Bank of Pakistan (NBP) can get a competitive edge over its major competitors
in Pakistan and abroad if it recognizes the truth that well-trained employees and CRM-based
65
business processes are essential for its success. Since NBP has a large network of 1250 branches,
hence it is most important for National Bank of Pakistan (NBP) to strengthen its customer retention
strategies as banks are redefining their role in the world.
5.1.1
Business profile
NBP has 1250 branches in our country and abroad. The joint ventures of the NBP are with
UNB UK, FIB UK, and with FFM of Singapore (NBP, 2009).
The NBP got many awards & made big achievements since its establishment. Details of its
awards and achievements are attached as Appendix-XIV. Details of the NBP`s Director`s Board is
attached at Appendix-XV.
The Director`s Report about major areas NBP prepared by S. Ali Raza, Chairman &
President on behalf of Board of Directors of NBP attached at Appendix-XVI. This report briefly
highlights major functional areas of NBP like corporate and investment banking, commercial &
retail banking, overseas banking, agriculture finance, treasury management, Islamic banking, global
home remittances management, equity investment division, operations, special assets management,
information technology, human resource management, audit & inspection, credit and risk
management, compliance, domestic branches network, credit rating, social responsibility, profit &
loss appropriation, audit committee, HR management committee, pattern of share holding,
appointment of auditors, risk management framework, and finally it presents statement of internal
controls (NBP, director`s report, 2009).
Generally, NBP uses some of the gathered information about their customers for analysis
and decision making purposes. NBP provides normal services to all of their customers but special
services are offered to big customers having big accounts in their bank. Especially during closing of
financial years, the bank managers and all other concerned employees focus more on targeting their
big customers for high deposits.
One interesting factor about NBP is that, some of the bank employees have developed
personal relations with their customers and in case, that employee moves to some other bank, their
high deposit customers also move to that new bank with all of their deposits immediately.
66
For corporate customers, NBP offers many investment options. According to top-level
management of NBP, branches are closer to their customers than Head Office of NBP as branches
deal regularly and directly with majority of their customers.
NBP uses different channels of communication with its customers, for instance, NBP
communicates with its customers through its large network of branches all over Pakistan and
abroad, through print and electronic media, via telephone, and through personal contacts that
improves its performance. According to one of the managers of NBP, customers can contact us
round the clock through our website and from morning till evening through telephone.
5.1.2
Now researcher is going to present briefly major responses from the customers of this bank
regarding different factors that affect customer loyalty.

Since the National Bank of Pakistan has a large network of branches and also a public bank
so most of its customers responded that they do trust this bank and they have a convenience and
easy accessibility to its various branches but they are also dissatisfied because of its poor services.
Majority customers responded that their perceived value do not match with the services
provided by this bank as other banks are offering high value products and services in Pakistan.
Regarding customer satisfaction, some respondents were pleased due to its low prices but
majority were dissatisfied.
Since NBP is a Pakistani bank so majority of its customers being Pakistani want to remain
with this bank. Furthermore, most of its customers are existing government employees or retired
government employees and their salaries are transferred by their organizations in this bank so they
have no other bank choice. Another major barrier is of those government employees who have their
pension accounts here. These pensioners have no choice to switch their accounts to some other
bank for better services. There are other customers like business customers or individuals who are
serving in private sector in Pakistan. These customers do not want to switch to some other bank
because they responded in the questionnaire that since the price of services of the National Bank of
67
Pakistan is less than other banks so it is affordable and they cannot afford higher prices of other
banks. Another switching barrier that the researcher found with the help of questionnaire that since
this bank has a very large numbers of branch hence it is easily accessible hence customers want to
remain with NBP.
5.1.3

The main issue here at NBP is, most of its employees are not aware about how to build
customer loyalty. The management of NBP is flexible in accepting and implementing new ideas
and technologies. Top management of NBP is trying to bring change in their systems through
ad1option of CRM in all of their branches in Pakistan and abroad.
There is high resistance from employees at NBP because they do not want to do customer`s
data entry as they believe that its more time consuming without any financial gains.
Lack of employees interest in trainings is another challenge for NBP. Another problem
faced by bank these days is of load shedding, so extra money is spent on using other sources of
energy in large network of NBP branches all over Pakistan.
NBP can convert its weaknesses into strengths by focusing more on effectively training their
employees. Financial and non-financial rewards may be provided to NBP employees who perform
well and achieve their assigned targets in time.
According to the management of NBP, they are strictly committed to their vision, mission,
and core values. Employees are provided on-going trainings in different areas. NBP also showed its
commitment towards all its stakeholders.
Since the top management of NBP is already of the view that CRM can bring excellent
results especially in the area of customer retention, hence the bank is in the process of
implementing CRM in all of its branches all over Pakistan and abroad.
68
5.2
OVERVIEW OF THE CITIBANK

Citibank is operating in more than hundred countries in the world and it is one of the biggest
banks in the world (Current News - Citibank, 2009). Citibank works on proactive strategies
regarding all its operations. It has a true customer-centric approach.
Citibank started its operations in Pakistan in 1961 and earned the most respectable repute in
few years. Citibank is known for setting benchmarks and its highest standards all over the world
and in Pakistan has made it one of the best banks serving in Pakistan. The high motivation of
human resources has helped Citibank to be the leading bank. In almost all areas of banking,
Citibank has set benchmarks.
Its worldwide consumer bank and global corporate investment bank are the most reputable
brands in the financial world. Citibank in Pakistan has offered its customers many new services and
at present, more than 1000 employees are serving Citibank, Pakistan.
5.2.1
Business profile
These days, customers are much aware about different products and service offerings than
ever. It means that if a bank needs to be the first choice of customers then it has to strengthen its
relations with its customers. Strong relations matters most in current business world specially
retaining customers have become the prime objective of most competitive organizations all over the
world. Major details of the business profile of the Citibank is attached at Appendix-XVIII.
Citibank provides grants to different areas like poverty alleviation, education, health and so
on. Details of these grants is attached at Appendix-XVII. Furthermore, brief details of Citibank`s
building communities is attached at Appendix-XIX.
Citibank has a large global network in Africa, Asia Pacific, Central America / Caribbean,
Europe, South America, North America, and Middle East. Details attached at Appendix-V.
69
5.2.2
Now the researcher is going to present very briefly major responses from the customers of
the Citibank regarding different factors that affect customer loyalty:

Majority of the customers responded that they trust this bank because of its high quality
reliable services much better than other banks in Pakistan. Another reason they gave that this bank
has strong international repute and they believe that their accounts are much safer here.
According to majority customers, this bank matches or sometimes exceeds their perceived
value. After using services of Citibank, most of the customers are satisfied, as they believe that they
are getting the world class banking services in this bank.
Most of the customers of this bank belong to at least high middle-income level as
questionnaire response shows. Some customers responded that they do not have time to check the
services of other banks.
5.2.3

Citibank has set highest standards in Pakistani banking sector and according to the Citibank
management, these milestones will continue. Details of the Citibank Pakistan's Milestones is
attached at Appendix-VI.
Although Citibank provides the best quality in Pakistan but prices of its products and
services as compare to other banks serving in Pakistan are higher. So making it affordable for
public should be the strategy of Citibank.
Other major challenges faced by Citibank are maintaining and developing the existing
quality of its products and services.
5.3
OVERVIEW OF THE MEEZAN BANK LIMITED, PAKISTAN

The Islamic banking sector is growing rapidly worldwide. For instance, Citibank has also
established branches in different countries in the world as per Shariah principles.

70
Meezan Bank Limited, Pakistan is a large bank with 201 branches at 54 places in Pakistan
(Meezan Bank, 2009).
Meezan Bank`s vision focuses on fair and justice to humanity through Islamic banking.
Finally, the service mission of this bank focuses on development of commitment of bank for
providing the best products and services (Meezan Bank, 2009). A detail of the vision and mission
of the Meezan Bank Limited, Pakistan is attached at Appendix-XX.
Meezan Bank Limited, Pakistan is growing rapidly in Pakistan and it shows the rapid
growth of Islamic banking in Pakistan (Meezan Bank, 2009). A detail about the complete branch
network of Meezan bank is attached at Appendix-XXI. Meezan Bank Limited has a good image in
the minds of its customers as its customers showed their satisfaction through questionnaire.
5.3.1
Business profile
Meezan Bank Limited is a publicly listed company. Meezan Bank is the largest Islamic
Bank in Pakistan with a network of 201 branches in 54 cities.

The bank has achieved a strong balance sheet with outstanding working profitability, as well
as a capital adequacy ratio that places the bank at top of the banking sector with a long-term entity
rating of A+, and a short-term entity rating of A1.
The key shareholders of the Meezan Bank Limited are leading local and international
financial institutions. The Bank has an internationally renowned, high calibre and pro-active
Shariah Supervisory Board presided over by Justice (Retd.) Muhammad Taqi Usmani.
5.3.2
Now the researcher is going to present briefly major responses from the customers of the
Meezan Bank Limited, Pakistan regarding different factors that affect customer loyalty:
71
Mostly customers trust this bank because of its Islamic banking functions. Some of the
customers responded that they do not trust this bank because it is a comparatively new Islamic bank
in Pakistan.
Majority customers responded that their perceived value almost matches with the services
and products offered by this bank.
Majority of the customers of Meezan Bank Limited showed their satisfaction with this bank
but they also responded that services offered by this bank are not of high standard as offered by
other good banks in the country.
Culture in Pakistan also supports Islamic banks hence the result is, majority of the
customers of this bank are also culturally motivated to keep their accounts here.
There are almost no switching barriers according to the majority respondents of this bank.
The one is same like customers of other banks that they believe that it is a hassle to change banks.
According to some customers, they have no time to check services of other banks that is why they
do not want to switch to some other bank. Meezan Bank Limited needs to improve its services in
order to get more market-share.
5.3.3
Meezan Bank Limited, Pakistan faces few challenges like, all of its branches are not online
and certain online branches are not functioning adequately. Service charges of this bank are little
high as compare to other Islamic banks serving in Pakistan. Ongoing training of employees is
another challenge here at Meezan. Its marketing department is not using its maximum potential.
Meezan Bank is going to launch a new product called RibaFree. The launching of RibaFree
has been scheduled to coincide with Hujjat ul Wida, the last sermon delivered by Prophet
Mohammad (PBUH) in which the interest was declared forever as "Haram".
Meezan Bank is a premier Islamic investment bank in Pakistan operating firmly under the
principles of Islamic Sharia'a. It offers innovative Shariaa well-matched products and services to
72
satisfy its customers. People working here at Meezan Bank are highly committed and dedicated
towards their work.
5.4
OVERVIEW OF THE HABIB BANK LIMITED (HBL), PAKISTAN

Habib Bank Limited (HBL), Pakistan started its operations in Pakistan in 1947. Over the
years, HBL has grown its branch network and become the largest private sector bank with over
1,450 branches across the country and a customer base exceeding five million relationships.
The Government of Pakistan privatized HBL in 2004 through which Aga Khan Fund for
Economic Development (AKFED) acquired 51% of the Bank's shareholding and management
control. HBL is majority owned (51%) by the Aga Khan Fund for Economic Development, 42.5%
of the shareholding is retained by the Government of Pakistan (GOP), whilst 6.5% is owned by the
general public. Habib Bank Limited (HBL) needs improvements like all other banks.
Board of Directors of the Habib Bank Limited (HBL), Pakistan comprises of One Chairman,
President & CEO, and five directors, details attached at Appendix-XXII (HBL, 2009).
5.4.1
Business profile
Habib
Bank
Limited
is
the
Best
Emerging
Market
Banks
in
Asia
(GlobalFinanceMagazine,2009) as it has earned various awards.

With a presence in 25 countries, subsidiaries in Hong Kong and the UK, affiliates in Nepal,
Nigeria, Kenya and Kyrgyzstan and rep offices in Iran and China, HBL is also the largest domestic
multinational. The Bank is expanding its presence in principal international markets including the
UK,
UAE,
South
and
Central
Asia,
Africa
and
the
Far
East
(HBL,
2009).
Habib Bank Limited offers best facilities in different areas to its customers including
business and individual customers. A detail of these services is attached at Appendix-XXIII.
73
5.4.2
Now the researcher is going to present briefly major responses from the customers of the
Habib Bank Limited (HBL), Pakistan regarding different factors that affect customer loyalty:
Majority of the customers responded that they trust this bank because of its most reliable
history and strong image in Pakistan.
Majority customers responded that this bank provides them best services as per their
perceived value. Mostly customers responded their satisfaction with services & products offered by
Habib Bank Limited.
Pakistani culture also supports this bank as shown by questionnaire responses of the
customers of HBL. Same like Citibank, there is almost no major switching barrier here at this bank
according to majority of the customers of this bank.
5.4.3

Soundness of any bank depends on its efficiency and effectiveness in its all areas. As the
researcher discussed in detail that there is high competition in the banking sector all over the world
and Pakistan is no exception. Therefore, banks not only have national but international competition
in all areas.
Strengthening of bank depends on relations with its customers, and same is the issue here at
Habib Bank Limited, Pakistan. Understanding customers is a big challenge and an opportunity for
HBL.
Other issues include modernization of payment system, arresting bad debts, continuous
improvements in all areas, and up-gradation of risk management system. Habib Bank Limited needs
to focus more on customer loyalty as there is ever growing competition in the banking sector of
Pakistan.
As the competition in banking system has become severe and the profit margins on
conventional modes of doing business are under pressure, therefore, HBL is moving towards
74
modern modes of doing business. These new areas require building customer loyalty, expertise,
systems and procedures, controls, technology and risk management techniques.
75
CHAPTER 6
DATA ANALYSIS AND DISCUSSIONS
6.1
RESEARCH INSTRUMENT
The researcher collected data from 400 customers of banks in Pakistan through self-
administered questionnaires. Research questionnaire`s questions are adopted from the existing
literature relating to this research study`s purpose. Researcher has made minor changes in this
adopted questionnaire after three-phase pilot testing as earlier described in introduction chapter, and
made minor changes accordingly.
For measuring factors or constructs of this research study namely customer trust, customer
perceived value, customer satisfaction, customer switching barriers, customer culture, and customer
loyalty, operationalisation is used.
6.1.1
Customer Trust
For measuring customer trust, following 7 questions are asked from respondents
(Hess, 1995; Jarvenpaa & Tractinsky, 1999; Gurviez & Korchia, 2002; Gefen et al., 2003;
and Chiou & Droge, 2006) as shown in the following Table 6.1:
Table 6.1: measuring customer trust

TRUST
Hess(1995), Jarvenpaa & Tractinsky (1999), Gurviez & Korchia (2002), Gefen et al. (2000), Chiou
& Droge (2006)
1
This bank keeps its promises
This bank is honest
This bank is reliable
This bank meets my needs
76
This bank seems capable to manage transactions on line
This bank seems to have solid knowledge in its field
I trust the know-how of this bank
6.1.2
For measuring customer perceived value, following 3 questions are asked from
respondents (Lassar et al., 1995) as shown in the following Table 6.2:
Table 6.2: measuring customer perceived value

PERCEIVED VALUE
Lassar et al. (1995)
1 The price of services offered by this bank is fair
2 Comparing to what I pay, I receive much more in terms of money, effort and time
3 On the base of simultaneous consideration of what I pay and what I gain, I consider that bank
service is of value
6.1.3
For measuring customer satisfaction, following 4 questions are asked from

respondents (Wang et al., 2001; and Liosa, 1996) as shown in the following Table 6.3:
Table 6.3: measuring customer satisfaction

SATISFACTION
Wang et al. (2001), Llosa (1996)
1
I am satisfied with this bank
This bank leaves me a pleasant impression
I want to return to this bank in the future
I will advise this bank to my friends
77
6.1.4
For measuring customer switching barriers, following 5 questions are asked from
respondents (Kim, et. al., 2003) as shown in the following Table 6.4:
Table 6.4: measuring customer-switching barriers

SWITCHING BARRIERS
Kim, et. al., 2003
1
In general switching to a new bank would be a hassle.
It would cost me a lot of money to switch from my current bank to another bank.
It would cost me a lot of time to switch from my current bank to another bank.
It would cost me a lot of effort to switch from my current bank to another bank.
Prices of other banks are higher.
6.1.5
Customer Culture
For measuring customer culture, following 4 questions are asked from respondents
(Hofstede, 1980, 1994) as shown in the following Table 6.5:
Table 6.5: measuring customer culture

CULTURE
Hofstede (1980; 1994)
1
You have a top priority towards personal goals
You feel uncomfortable in unusual situations
You buy what you desire without worrying about how others feel or think
You buy what you like and stick to your brand
78
6.1.6
Customer Loyalty
Finally, for measuring customer loyalty, following 6 questions are asked from
respondents (Boulaire et Mathieu, 2000; Srinivasan et al., 2002; and Huang, 2008) as shown
in the following Table 6.6:
Table 6.6: measuring customer loyalty

LOYALTY
Boulaire et Mathieu (2000), Srinivasan et al. (2002), Huang (2008).
1
I regularly visit this bank
I seldom think of changing this bank to another one
I use this bank each time I need to make any financial transaction
I consider this bank as my preferred one
I like to use this bank
Each time I want to make any financial transaction, this bank is my first choice
6.2
DEMOGRAPHIC ANALYSIS
6.2.1
Demographic Analysis - Citibank, Pakistan
The demographic data analysis of the customers of Citibank, Pakistan is as below:
According to the following Table 6.7, 62% of the respondents are males (N=62), and
females constitute 38% (N=38) of the total sample. It indicates that majority customers of this bank
are males that is 62%.
79
Table 6.7: Customer`s Gender - (N=100), Citibank

Frequency
Valid
Percent
Valid Percent
Cumulative Percent
Male
62
62.0
62.0
62.0
Female
38
38.0
38.0
100.0
100
100.0
100.0
Total
Following bar chart 6.1 shows customer`s gender frequencies:
According to the following Table 6.8, 37% of the respondents are single (N=37), and 63%
are married i.e. (N=63). It indicates that majority of the customers of this bank are married.
Table 6.8: Customer`s marital status - (N=100), Citibank
Valid
Frequency
Percent
Valid Percent
Cumulative Percent
single
37
37.0
37.0
37.0
married
63
63.0
63.0
100.0
Total
100
100.0
100.0
80
Following bar chart 6.2, shows customer`s marital status frequencies:
According to the table 6.9, the higher percentage lies in the category of Rupees 51,000 and
above making 44% (N=44), while only 3% lies in the category of Rupees 21000 to 30,000 (N=3).
Table 6.9: Customer`s income - (N=100), Citibank

Frequency
Percent
Valid Percent
Cumulative Percent
Valid 21000-30000
3.0
3.0
3.0
31000-40000
16
16.0
16.0
19.0
41000-50000
37
37.0
37.0
56.0
51,000 and above
44
44.0
44.0
100.0
100
100.0
100.0
Total
81
Following bar chart 6.3 shows customer's income frequencies:
According to Table 6.10, 13% of the individuals in the sample were between the age of 2030 (N=13), 30% of the individuals in the sample were between the age of 31-40 (N=30), 26% of
the customers in the sample were between the age of 41-50 (N=26), and 31% of the customers in
the sample were between the age of 51 and above (N=31). It indicates that majority of customers
fall in the category of 51 years and above.
Table 6.10: Customer`s age - (N=100), Citibank

Frequency
Valid
Percent
Valid Percent
Cumulative Percent
20-30
13
13.0
13.0
13.0
31-40
30
30.0
30.0
43.0
41-50
26
26.0
26.0
69.0
51 and above
31
31.0
31.0
100.0
100
100.0
100.0
Total
82
Following bar chart 6.4 shows customer's age frequencies:
Table 6.11, clearly shows, most the customers were bachelors degree holders i.e., 52%
(N=52), rest of the ccustomers with their education levels are shown in this table 6.11.
Table 6.11: customer`s education level - (N=100), Citibank

Frequency Percent
Valid Intermediate and Below
Valid Percent
Cumulative Percent
6.0
6.0
6.0
Bachelors
52
52.0
52.0
58.0
Masters and Above
42
42.0
42.0
100.0
100
100.0
100.0
Total
83
Following bar chart 6.5 shows customer`s education level frequencies:
6.2.2
Demographic Analysis - National Bank of Pakistan (NBP), Pakistan
The demographic data analysis of the customers of the NBP is as below:
As per following Table6.12, 68% of the respondents are males (N=68), and females
constitute 32% (N=32) of the total sample. It indicates that majority of the customers of this banks
are males that is 68%.
Table 6.12: customer`s Gender - (N=100), National Bank of Pakistan
Frequency
Valid
Percent
Valid Percent
Cumulative Percent
male
68
68.0
68.0
68.0
female
32
32.0
32.0
100.0
100
100.0
100.0
Total
84
According to the following Table 6.13, 25% of the respondents are single (N=25), and 75% are
married i.e. (N=75). It indicates are majority number of customers (75%) are married.
Table 6.13: customer`s marital status - (N=100), National Bank of Pakistan

Frequency
Valid
Percent
Valid Percent
Cumulative Percent
single
25
25.0
25.0
25.0
married
75
75.0
75.0
100.0
100
100.0
100.0
Total
85
Following bar chart 6.7 shows customer`s marital status frequencies:
above that is 60% (N=60), while only 6% lies in the category of less than 10,000 (N=6).
Table 6.14: customer`s income - (N=100), National Bank of Pakistan

Frequency
Valid less than 10,000
Percent
Valid Percent
Cumulative Percent
6.0
6.0
6.0
10000-20000
3.0
3.0
9.0
21000-30000
8.0
8.0
17.0
31000-40000
12
12.0
12.0
29.0
41000-50000
11
11.0
11.0
40.0
51,000 and above
60
60.0
60.0
100.0
100
100.0
100.0
Total
86
Following bar chart 6.8 shows customer`s income frequencies:
Table 6.15: customer`s age - (N=100), National Bank of Pakistan

Frequency
Valid
Percent
Valid Percent
Cumulative Percent
20-30
13
13.0
13.0
13.0
31-40
17
17.0
17.0
30.0
41-50
23
23.0
23.0
53.0
51 and above
47
47.0
47.0
100.0
100
100.0
100.0
Total
87
Following bar chart 6.9 shows customer`s age frequencies:
As per following Table6.16, mostly the customers were bachelors degree holders i.e., 49%
(N=49), rest of the customers with their education levels are shown in this table.
Table 6.16: customer`s education level - (N=100), National Bank of Pakistan

Frequency Percent
Valid Percent
Cumulative Percent
10
10.0
10.0
10.0
Bachelors
49
49.0
49.0
59.0
Masters and Above
41
41.0
41.0
100.0
100
100.0
100.0
Total
88
6.2.3
Demographic Analysis - Meezan Bank Limited, Pakistan
The demographic data analysis of the customers of Meezan Bank Limited, Pakistan is as
below:
According to the following Table 6.17, 54% of the customers are males (N=54), and
females constitute 46% (N=46) of the total sample. It indicates that majority customers of this bank
are males.
Table 6.17: customer`s gender - (N=100), Meezan Bank Limited

Frequency
Valid
Percent
Valid Percent
Cumulative Percent
male
54
54.0
54.0
54.0
female
46
46.0
46.0
100.0
100
100.0
100.0
Total
89
According to the following Table 6.18, 44% of the customers are single (N=44), and 56%
are married i.e. (N=56). It indicates that number of married males that is 56% is higher than single
customers of this bank.
Table 6.18: customer`s marital status- (N=100), Meezan Bank Limited

Frequency
Valid
Percent
Valid Percent
Cumulative Percent
single
44
44.0
44.0
44.0
married
56
56.0
56.0
100.0
100
100.0
100.0
Total
90
Following bar chart 6.12 shows customer`s marital status frequencies:
above making 43% (N=43), while only 5% lies in the category of less than Rupees 10,000 (N=5).
Table 6.19: customer`s income - (N=100), Meezan Bank Limited

Frequency
Valid less than 10,000
Percent
Valid Percent
Cumulative Percent
5.0
5.0
5.0
10000-20000
6.0
6.0
11.0
21000-30000
12
12.0
12.0
23.0
31000-40000
18
18.0
18.0
41.0
41000-50000
16
16.0
16.0
57.0
51,000 and above
43
43.0
43.0
100.0
100
100.0
100.0
Total
91
Table 6.20: customer`s age - (N=100), Meezan Bank Limited

Frequency
Valid
Percent
Valid Percent
Cumulative Percent
20-30
14
14.0
14.0
14.0
31-40
15
15.0
15.0
29.0
41-50
31
31.0
31.0
60.0
51 and above
40
40.0
40.0
100.0
100
100.0
100.0
Total
92
From the Table6.21, shows that mostly customers are bachelors degree holders i.e., 51%
(N=51), rest of the respondents with their education levels are shown in this table.
Table6.21: customer`s education level - (N=100), Meezan Bank Limited

Frequency Percent
Valid Percent
Cumulative Percent
11
11.0
11.0
11.0
Bachelors
51
51.0
51.0
62.0
Masters and Above
38
38.0
38.0
100.0
100
100.0
100.0
Total
93
6.2.4
Demographic Analysis - Habib Bank Limited, Pakistan (HBL), Pakistan
The demographic data analysis of the customers of Habib Bank Limited, Pakistan (HBL) is
as below:
According to the following Table 6.22, 71% of the customers are males (N=71), and
females constitute 29% (N=29) of the total sample. It indicates that male customers are more than
female customers in this bank that is 71%.
Table 6.22: customer`s gender - (N=100), Habib Bank Limited

Frequency
Valid
Percent
Valid Percent
Cumulative Percent
Male
71
71.0
71.0
71.0
female
29
29.0
29.0
100.0
100
100.0
100.0
Total
94
According to the following Table 6.23, 27% of the customers are single (N=27), and 73%
are married i.e. (N=73). It indicates that majority of the customers of this bank are married that is
73%.
Table 6.23: customer`s marital status - (N=100), Habib Bank Limited

Frequency
Valid
Percent
Valid Percent
Cumulative Percent
single
27
27.0
27.0
27.0
married
73
73.0
73.0
100.0
100
100.0
100.0
Total
95
Following bar chart 6.17, shows customer`s marital status frequencies:
above making 48% (N=48), while only 3% lies in the category of Rupees 21000 to 30,000 (N=3).
Table 6.24: customer`s income - (N=100), Habib Bank Limited

Frequency
Percent
Valid Percent
Cumulative Percent
Valid 21000-30000
3.0
3.0
3.0
31000-40000
13
13.0
13.0
16.0
41000-50000
36
36.0
36.0
52.0
51,000 and above
48
48.0
48.0
100.0
100
100.0
100.0
Total
96
According to Table 6.25, 9% of the individuals in the sample were between the age of 20-30
(N=9), 21% of the individuals in the sample were between the age of 31-40 (N=21), 22% of the
customers in the sample were between the age of 41-50 (N=22), and 48% of the customers in the
sample were between the age of 51 and above (N=48). It indicates that majority of customers fall in
the category of 51 years and above.
Table 6.25: customer`s age - (N=100), Habib Bank Limited

Frequency
Valid
Percent
Valid Percent
Cumulative Percent
20-30
9.0
9.0
9.0
31-40
21
21.0
21.0
30.0
41-50
22
22.0
22.0
52.0
51 and above
48
48.0
48.0
100.0
100
100.0
100.0
Total
97
Table 6.26, shows most customers were bachelors degree holders i.e., 48% (N=48), rest of
the respondents with their education levels are shown in this table.
Table 6.26:customer`s education level - (N=100), Habib Bank Limited

Frequency Percent
Valid Percent
Cumulative Percent
13
13.0
13.0
13.0
Bachelors
48
48.0
48.0
61.0
Masters and Above
39
39.0
39.0
100.0
100
100.0
100.0
Total
98
6.3
CORRELATION ANALYSIS
The Correlation and Regressions analysis of data obtained through self-administered
questionnaire from customers of the following four banks is presented as below:
1) Citibank, Pakistan
2) National Bank of Pakistan (NBP)
3) Meezan Bank Limited, Pakistan
4) Habib Bank Limited (HBL), Pakistan
6.3.1
Correlation Analysis Citibank, Pakistan
In following Table 6.27, the correlation analysis suggests that a moderate positive
correlation exists between customer trust and customer perceived value that is 0.387 yielding the
fact that customer trust has a significant impact on customer perceived value, which in turn
99
generates customer satisfaction, which is a strong driving factor of customer loyalty. As

significance is less than 0.05, so the researcher also concludes that, the correlation between
customer trust and customer perceived value is significant.
Table 6.27: Correlations between customer trust & customer perceived value - Citibank (N-100)
PV
PV
Pearson Correlation
TRUST
1
Sig. (2-tailed)
.000
N
TRUST
.387**
Pearson Correlation
100
100
.387**
Sig. (2-tailed)
.000
100
100
In Table 6.28, the correlation analysis suggests that a moderate positive correlation exist
between customer trust and customer loyalty that is 0.474 yielding the fact that customer trust has a
significant impact on customer loyalty. As significance is less than 0.05, so the researcher also
concludes that the correlation between customer trust and customer loyalty is significant.
100
Table 6.28: Correlations between customer trust and customer loyalty - Citibank (N-100)
LOYALTY
LOYALTY
TRUST
Pearson Correlation
.474**
Sig. (2-tailed)
.000
N
TRUST
Pearson Correlation
100
100
.474**
Sig. (2-tailed)
.000
100
100
**. Correlation is significant at the 0.01 level (2-tailed).
between customer trust and customer satisfaction that is .573 yielding the fact that customer trust
has a significant impact on customer satisfaction. As significance is less than 0.05, so the researcher
also concludes that, the correlation between customer trust and customer satisfaction is significant.
Table 6.29: Correlations between customer trust and customer satisfaction - Citibank (N-100)
CS
CS
Pearson Correlation
TRUST
1
Sig. (2-tailed)
.000
N
TRUST
.573**
Pearson Correlation
100
100
.573**
Sig. (2-tailed)
.000
100
101
100
between customer perceived value & customer satisfaction that is 0.665 yielding the fact that
customer perceived value has a significant impact on customer satisfaction, which is a strong
driving factor of customer loyalty. As significance is less than 0.05, so the researcher concludes
that, the correlation between customer perceived value & customer satisfaction is significant.
Table 6.30: Correlations between customer perceived value & customer satisfaction
- Citibank (N-100)
CS
CS
Pearson Correlation
PV
1
Sig. (2-tailed)
.000
N
PV
.665**
Pearson Correlation
100
100
.665**
Sig. (2-tailed)
.000
100
100
between customer switching barriers & customer loyalty value that is 0.487 yielding the fact that
customer-switching barriers have a significant impact on customer loyalty. As significance is less
than 0.05, so the researcher concludes that, the correlation between customer switching barriers &
customer loyalty value is significant.
102
Table 6.31: Correlations between customer switching barriers & customer loyalty
- Citibank (N-100)
LOYALTY
LOYALTY
Pearson Correlation
CSB
1
.487**
Sig. (2-tailed)
.000
N
CSB
Pearson Correlation
100
100
.487**
Sig. (2-tailed)
.000
100
100
between customer culture & customer loyalty that is 0.446 yielding the fact that customer culture
has a significant impact on customer loyalty. As significance is less than 0.05, so the researcher also
concludes that, the correlation between customer culture & customer loyalty is significant.
Table 6.32: Correlations between customer culture & customer loyalty - Citibank (N-100)
LOYALTY
LOYALTY
Pearson Correlation
CULTURE
1
Sig. (2-tailed)
.000
N
CULTURE
.446**
Pearson Correlation
100
100
.446**
Sig. (2-tailed)
.000
100
103
100
between customer satisfaction & customer loyalty that is .657 yielding the fact that customer
satisfaction has a significant impact on customer loyalty. As significance is less than 0.05, so the
researcher concludes that, the correlation between customer satisfaction & customer loyalty value is
significant.
Table 6.33: Correlations between customer satisfaction & customer loyalty - Citibank (N-100)
LOYALTY
LOYALTY
Pearson Correlation
CS
1
Sig. (2-tailed)
.000
N
CS
.657**
Pearson Correlation
100
100
.657**
Sig. (2-tailed)
.000
100
100
The table 6.34 shows the correlation values yielded from data analysis of 100 customers of
Citibank. A significant and positive relationship found to exist between all studied variables. The
table 6.34 shows the details of correlation analysis of all the studied variables. As significance is
less than 0.05 as shown earlier in this chapter, so the researcher also concludes that, the correlation
between all studied factors is significant.
104
Table 6.34: Correlations between all studied variables - Citibank (N-100)

Customer
Trust
Customer
Trust
Customer
Perceived
Value
Customer
Satisfaction
0.387
0.573
0.665
Customer
Customer
Switching
Culture
Barriers
Customer
Loyalty
0.474
Customer
Perceived
Value
Customer
Satisfaction
0.657
Customer
Switching
0.487
Barriers
Customer
Culture
Customer
Loyalty
6.3.2
0.446
Correlation Analysis National Bank of Pakistan (NBP), Pakistan
between customer trust and customer perceived value that is 0.305 yielding the fact that customer
trust has a significant impact on customer perceived value, which in turn generates customer
satisfaction, which is a strong driving factor of customer loyalty. As significance is less than 0.05,
so the researcher also concludes that, the correlation between customer trust and customer
perceived value is significant.
105
Table 6.35: Correlations between customer trust & customer perceived value - NBP (N-100)
PV
PV
Pearson Correlation
TRUST
1
.305**
Sig. (2-tailed)
.000
N
TRUST
Pearson Correlation
100
100
.305**
Sig. (2-tailed)
.000
100
100
between customer trust and customer loyalty that is 0.419 yielding the fact that trust has a
concludes that, the correlation between customer trust and customer loyalty is significant.
Table 6.36: Correlations between customer trust and customer loyalty - NBP (N-100)
LOYALTY
LOYALTY
Pearson Correlation
TRUST
1
Sig. (2-tailed)
.000
N
TRUST
.419**
Pearson Correlation
100
100
.419**
Sig. (2-tailed)
.000
100
106
100
between customer perceived value & customer satisfaction that is 0.354 yielding the fact that
driving factor of customer loyalty. As significance is less than 0.05, so the researcher also
concludes that, the correlation between customer perceived value & customer satisfaction is
significant.
Table 6.37: Correlations between customer perceived value & customer satisfaction - NBP (N-100)
CS
CS
Pearson Correlation
PV
1
Sig. (2-tailed)
.000
N
PV
.354**
Pearson Correlation
100
100
.354**
Sig. (2-tailed)
.000
100
100
107
Table 6.38: Correlations between customer trust and customer satisfaction - NBP (N-100)
CS
CS
Pearson Correlation
TRUST
.336**
Sig. (2-tailed)
.000
N
TRUST
Pearson Correlation
100
100
.336**
Sig. (2-tailed)
.000
100
100
between customer switching barriers & customer loyalty that is 0.439 yielding the fact that
than 0.05, so the researcher also concludes that, the correlation between customer switching barriers
& customer loyalty is significant.
Table 6.39: Correlations between customer switching barriers & customer loyalty - NBP (N-100)
LOYALTY
LOYALTY
Pearson Correlation
CS
1
Sig. (2-tailed)
.000
N
CS
.439**
Pearson Correlation
100
100
.439**
Sig. (2-tailed)
.000
100
108
100
between customer culture & customer loyalty that is .365 yielding the fact that the customer culture
Table 6.40: Correlations between customer culture & customer loyalty - NBP (N-100)
LOYALTY
LOYALTY
Pearson Correlation
CULTURE
1
Sig. (2-tailed)
.000
N
CULTURE
.365**
Pearson Correlation
100
100
.365**
Sig. (2-tailed)
.000
100
100
between customer satisfaction & customer loyalty that is 0.439 yielding the fact that customer
satisfaction has a significant influence on customer loyalty. As significance is less than 0.05, so the
researcher also concludes that, the correlation between customer satisfaction & customer loyalty is
significant.
109
Table 6.41: Correlations between customer satisfaction & customer loyalty - NBP (N-100)
LOYALTY
LOYALTY
Pearson Correlation
CS
1
Sig. (2-tailed)
.000
N
CS
.439**
Pearson Correlation
100
100
.439**
Sig. (2-tailed)
.000
100
100
the National Bank of Pakistan (NBP). A significant and positive relationship found to exist between
all studied factors. The table 6.42 shows the details of correlation analysis of all the studied
variables. As significance is less than 0.05 as shown earlier in this chapter, so the researcher also
concludes that, the correlation between all studied factors is significant.
110
Table 6.42: Correlations between all studied factors - NBP (N-100)

Customer
Trust
Customer
Trust
Customer
Perceived
Value
Customer
Satisfaction
0.305
0.336
0.354
Customer
Customer
Switching
Culture
Barriers
Customer
Loyalty
0.419
Customer
Perceived
Value
Customer
Satisfaction
0.439
Customer
Switching
0.493
Barriers
Customer
Culture
Customer
Loyalty
6.3.3
0.365
Correlation Analysis Meezan Bank Limited, Pakistan
correlation exist between customer trust and customer perceived value that is .333 yielding the fact
that customer trust has a significant impact on customer perceived value, which in turn generates
customer satisfaction, which is a strong driving factor of customer loyalty. As significance is less
than 0.05, so the researcher also concludes that, the correlation between customer trust and
customer perceived value is significant.
111
Table 6.43: Correlations between customer trust & customer perceived value - Meezan (N-100)
PV
PV
TRUST
Pearson Correlation
.333**
Sig. (2-tailed)
.000
N
TRUST
Pearson Correlation
100
100
.333**
Sig. (2-tailed)
.000
100
100
Table 6.44: Correlations between customer trust and customer loyalty - Meezan (N-100)
LOYALTY
LOYALTY
Pearson Correlation
TRUST
1
Sig. (2-tailed)
.000
N
TRUST
.419**
Pearson Correlation
100
100
.419**
Sig. (2-tailed)
.000
100
112
100
Table 6.45: Correlations between customer trust and customer satisfaction Meezan, (N-100)
CS
CS
Pearson Correlation
TRUST
1
Sig. (2-tailed)
.000
N
TRUST
.330**
Pearson Correlation
100
100
.330**
Sig. (2-tailed)
.000
100
100
between customer perceived value & customer satisfaction that is .352 yielding the fact that
significant.
113
Table 6.46: Correlations between customer perceived value & customer satisfaction
- Meezan (N-100)
CS
CS
Pearson Correlation
PV
1
.352**
Sig. (2-tailed)
.000
N
PV
Pearson Correlation
100
100
.352**
Sig. (2-tailed)
.000
100
100
between customer switching barriers & customer loyalty that is .349 yielding the fact that customerswitching barriers have a significant impact on customer loyalty. As significance is less than 0.05,
so the researcher also concludes that, the correlation between customer switching barriers &
customer loyalty is significant.
Table 6.47: Correlations between customer switching barriers & customer loyalty
Meezan (N-100)
LOYALTY
LOYALTY
Pearson Correlation
CSB
1
Sig. (2-tailed)
.000
N
CSB
.349**
Pearson Correlation
100
100
.349**
Sig. (2-tailed)
.000
100
114
100
between customer culture & customer loyalty that is 0.483 yielding the fact that customer culture
Table 6.48: Correlations between customer culture & customer loyalty - Meezan (N-100)
LOYALTY
LOYALTY
Pearson Correlation
CULTURE
1
Sig. (2-tailed)
.000
N
CULTURE
.483**
Pearson Correlation
100
100
.483**
Sig. (2-tailed)
.000
100
100
between customer satisfaction & customer loyalty that is 0.418 yielding the fact that customer
significant.
115
Table 6.49: Correlations between customer satisfaction & customer loyalty - Meezan (N-100)
LOYALTY
LOYALTY
Pearson Correlation
CS
1
Sig. (2-tailed)
.000
N
CS
.418**
Pearson Correlation
100
100
.418**
Sig. (2-tailed)
.000
100
100
the Meezan Bank Limited, Pakistan. A significant and positive relationship found to exist between
all studied factors. The Table 6.50 shows the details of correlation analysis of all the studied
variables. As significance is less than 0.05 as shown earlier in this chapter, so the researcher also
concludes that, the correlation between all studied factors is significant.
116
Table 6.50: Correlations between all studied factors - Meezan (N-100)

Customer
Trust
Customer
Trust
Customer
Perceived
Value
Customer
Satisfaction
0.333
0.330
0.352
Customer
Customer
Switching
Culture
Barriers
Customer
Loyalty
0.419
Customer
Perceived
Value
Customer
Satisfaction
0.418
Customer
Switching
0.349
Barriers
Customer
Culture
Customer
Loyalty
6.3.4
0.483
Correlation Analysis Habib Bank Limited (HBL), Pakistan
correlation exist between customer trust and customer perceived value that is 0.359 yielding the fact
that customer trust has a significant impact on customer perceived value, which in turn generates
customer satisfaction, which is a strong driving factor of customer loyalty. As significance is less
than 0.05, so the researcher also concludes that, the correlation between customer trust and
customer perceived value is significant.
117
Table 6.51: Correlations between customer trust & customer perceived value - HBL (N-100)
PV
PV
TRUST
Pearson Correlation
.359**
Sig. (2-tailed)
.000
N
TRUST
Pearson Correlation
100
100
.359**
Sig. (2-tailed)
.000
100
100
Table 6.52: Correlations between customer trust and customer loyalty - HBL (N-100)
LOYALTY
LOYALTY
Pearson Correlation
TRUST
1
Sig. (2-tailed)
.000
N
TRUST
.447**
Pearson Correlation
100
100
.447**
Sig. (2-tailed)
.000
100
118
100
Table 6.53: Correlations between customer trust and customer satisfaction HBL, (N-100)
CS
CS
Pearson Correlation
TRUST
1
Sig. (2-tailed)
.000
N
TRUST
.587**
Pearson Correlation
100
100
.587**
Sig. (2-tailed)
.000
100
100
between customer perceived value & customer satisfaction that is .605 yielding the fact that
significant.
119
Table 6.54: Correlations between customer perceived value & customer satisfaction - HBL (N-100)
CS
CS
Pearson Correlation
PV
1
.605**
Sig. (2-tailed)
.000
N
PV
Pearson Correlation
100
100
.605**
Sig. (2-tailed)
.000
100
100
between customer switching barriers & customer loyalty that is 0.446 yielding the fact that
than 0.05, so the researcher also concludes that, the correlation between customer switching barriers
& customer loyalty is significant.
Table 6.55: Correlations between customer switching barriers & customer loyalty - HBL (N-100)
LOYALTY
LOYALTY
Pearson Correlation
CSB
1
Sig. (2-tailed)
.000
N
CSB
.446**
Pearson Correlation
100
100
.446**
Sig. (2-tailed)
.000
100
120
100
between customer culture & customer loyalty that is .403 yielding the fact that customer culture has
a significant impact on customer loyalty. As significance is less than 0.05, so the researcher also
Table 6.56: Correlations between customer culture & customer loyalty - HBL (N-100)
LOYALTY
LOYALTY
Pearson Correlation
CULTURE
1
.403**
Sig. (2-tailed)
.000
N
CULTURE
Pearson Correlation
100
100
.403**
Sig. (2-tailed)
.000
100
100

between customer satisfaction & customer loyalty that is .615 yielding the fact that customer
significant.
Table 6.57: Correlations between customer satisfaction & customer loyalty - HBL (N-100)
LOYALTY
LOYALTY
Pearson Correlation
CS
1
Sig. (2-tailed)
.000
N
CS
.615**
Pearson Correlation
100
100
.615**
Sig. (2-tailed)
.000
100
121
100
The following table 6.58 shows the correlation values yielded from data analysis of 100
customers of Habib Bank Limited, Pakistan. A significant and positive relationship found to exist
between all studied factors. The following Table 6.58 shows the details of correlation analysis of all
the studied variables. As significance is less than 0.05 as shown earlier in this chapter, so the
researcher also concludes that, the correlation between all studied factors is significant.
Table 6.58: Correlations between all studied factors - HBL (N-100)

Customer
Trust
Customer
Trust
Customer
Perceived
Value
Customer
Satisfaction
0.359
0.587
0.605
Customer
Customer
Switching
Culture
Barriers
Customer
Loyalty
0.447
Customer
Perceived
Value
Customer
Satisfaction
0.615
Customer
Switching
0.446
Barriers
Customer
Culture
Customer
0.403
Loyalty
122
6.4
MULTIVARIATE DATA ANALYSIS - CITIBANK, PAKISTAN

The first component Customer Loyalty explains 57% variance of the total variation alone.
The second component Customer Satisfaction (CS) explains 18% variance of the total variation
alone. The first & second components together explain 76% variance of the total variation. The
third component Customer Perceived Value (PV) explains 11% variance of the total variation
alone. The second and third components together explain 87% variance of the total variation. The
fourth component Customer Trust explains 7% variance of the total variation alone. The third and
fourth components together explain 94% variance of the total variation. The fifth component
Customer-Switching Barriers (CSB) explains 3% variance of the total variation alone. The fourth
and fifth components together explain 97% variance of the total variation. Finally, sixth component
Customer Culture explains 2% variance of the total variation alone. The fifth and sixth components
together explain 100% variance of the total variation as shown in Table 6.59.
Table 6.59
Total Variance Explained
Initial Eigenvalues
% of Variance
Extraction Sums of Squared Loadings
Component
Total
Cumulative %
3.989
57.654
57.654 3.989
57.654
57.654
1.546
18.546
76.2 1.546
18.546
18.546
.876
11.001
87.201
.678
7.594
94.795
.765
3.104
97.899
.320
2.101
100.000
Extraction Method: Principal Component Analysis.
123
Total % of Variance
Cumulative %
6.5
REGRESSION MODEL - CITIBANK, PAKISTAN
6.5.1
In the first regression model, Independent Variables Customer Loyalty and the constant both
are significant; the coefficient of Customer Loyalty is .786 as shown in Table 6.60.
In the second regression model, Independent Variables Customer Loyalty and Customer
Satisfaction (CS) both are significant and constant is also significant, the coefficient of Customer
Satisfaction (CS) is .658, Customer Loyalty is .526, and constant is .299 as shown in Table 6.60.
In the third regression model, Independent Variables Customer Loyalty, Customer

Satisfaction (CS), and Customer-Switching Barriers (CSB) are significant and constant is also
significant, the coefficient of Customer-Switching Barriers (CSB).542, Customer Satisfaction (CS)
is .368, Customer Loyalty is .524, and constant is .214 as shown in Table 6.60.
In the fourth regression model, Independent Variables Customer Loyalty, Customer

Satisfaction (CS), Customer-Switching Barriers (CSB), and Customer Trust are significant and
constant is also significant, the coefficient of Customer Trust is .521, Customer-Switching Barriers
(CSB) is .254, Customer Satisfaction (CS) is .521, Customer Loyalty is .625, and constant is .547 as
shown in Table 6.60.
In the fifth regression model, Independent Variables Customer Loyalty, Customer

Satisfaction (CS), Customer-Switching Barriers (CSB), Customer Trust, Customer Culture and the
constant are significant, the coefficient of Customer Culture is .458, Customer Trust is .485,
Customer-Switching Barriers (CSB) is .215, Customer Satisfaction (CS) is .412, Customer Loyalty
is .524, and constant is .526 as shown in Table 6.60.
124
Table 6.60
Coefficientsa
Unstandardized Coefficients
Model
1
B
(Constant)
Std. Error
Sig.
1.765
.251
6.002
.000
Loyalty
.786
.214
13.214
.000
(Constant)
.301
.264
1.528
.000
Loyalty
.526
.124
12.548
.000
CS
.658
.521
6.548
.000
(Constant)
.214
.214
.528
.000
Loyalty
.524
.478
6.258
.000
CS
.368
.462
5.658
.000
CSB
.542
.467
3.584
.000
(Constant)
.547
.471
1.998
.000
Loyalty
.625
.154
6.528
.000
CS
.521
.418
4.889
.000
CSB
.254
.447
4.584
.000
Trust
.521
.214
2.528
.000
(Constant)
.526
.325
2.998
.000
Loyalty
.524
.145
7.154
.000
CS
.412
.552
4.558
.000
CSB
.215
.125
3.589
.000
Trust
.485
.325
3.002
.000
Culture
.458
.854
3.002
.000
a. Dependent Variable: PV
125
6.5.2
Customer Loyalty
In the first regression model, Independent Variables Customer-Switching Barriers (CSB)

and the constant both are significant, the coefficient of Customer-Switching Barriers (CSB) is .985
as shown in Table 6.61.
In the second regression model, Independent Variables Customer-Switching Barriers (CSB)

and Customer Satisfaction (CS) both are significant and constant is also significant, the coefficient
of Customer Satisfaction (CS) is .528, Customer-Switching Barriers (CSB) is .542, and constant is
.452 as shown in Table 6.61.
In the third regression model, Independent Variables Customer-Switching Barriers (CSB),

Customer Satisfaction (CS), and Customer Perceived Value (PV) are significant and constant is
also significant, the coefficient of Customer Perceived Value (PV).478, Customer Satisfaction (CS)
is .356, Customer-Switching Barriers (CSB) is .589, and constant is .354 as shown in Table 6.61.
In the fourth regression model, Independent Variables Customer-Switching Barriers (CSB),

Customer Satisfaction (CS), Customer Perceived Value (PV), and Customer Trust are significant
and constant is also significant, the coefficient of Customer Trust is .552, Customer Perceived
Value (PV) is .475, Customer Satisfaction (CS) is .374, Customer-Switching Barriers (CSB) is
.542, and constant is .458 as shown in Table 6.61.
In the fifth regression model, Independent Variables Customer-Switching Barriers (CSB),

Customer Satisfaction (CS), Customer Perceived Value (PV), Customer Trust, Customer Culture
and the constant are significant, the coefficient of Customer Culture is .452, Customer Trust is .436,
Customer Perceived Value (PV) is .487, Customer Satisfaction (CS) is .358, Customer-Switching
Barriers (CSB) is .475, and constant is .521 as shown in Table 6.61.
126
Table 6.61
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.884
.251
5.524
.000
CSB
.985
.254
14.115
.000
(Constant)
.452
.452
2.002
.000
CSB
.542
.421
12.986
.000
CS
.528
.462
6.115
.000
(Constant)
.354
.265
.652
.000
CSB
.589
.426
9.225
.000
CS
.356
.436
5.524
.000
PV
.478
.265
4.254
.000
(Constant)
.458
.524
2.524
.000
CSB
.542
.264
8.254
.000
CS
.374
.259
4.895
.000
PV
.475
.555
4.568
.000
Trust
.552
.456
2.988
.000
(Constant)
.521
.221
3.526
.000
CSB
.475
.187
8.524
.000
CS
.358
.196
5.256
.000
PV
.487
.168
3.002
.000
Trust
.436
.152
2.986
.000
Culture
.452
.256
2.865
.000
a. Dependent Variable: Loyalty
127
6.5.3
are significant, the coefficient of Customer Loyalty is .652 as shown in Table 6.62.
Perceived Value (PV) both are significant and constant is also significant, the coefficient of
Customer Perceived Value (PV) is .452, Customer Loyalty is .569, and constant is .335 as shown in
Table 6.62.

Perceived Value (PV), and Customer-Switching Barriers (CSB) are significant and constant is also
significant, the coefficient of Customer-Switching Barriers (CSB).356, Customer Perceived Value
(PV) is .289, Customer Loyalty is .399, and constant is .356 as shown in Table 6.62.

Perceived Value (PV), Customer-Switching Barriers (CSB), and Customer Trust are significant and
(CSB) is .288, Customer Perceived Value (PV) is .336, Customer Loyalty is .445, and constant is
In the fifth regression model, Independent Variables Customer Loyalty, Customer Perceived
Value (PV), Customer-Switching Barriers (CSB), Customer Trust, Customer Culture and the
Customer-Switching Barriers (CSB) is .251, Customer Perceived Value (PV) is .325, Customer
Loyalty is .452, and constant is .365 as shown in Table 6.62.
128
Table 6.62
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.254
.184
5.214
.000
Loyalty
.652
.081
12.521
.000
(Constant)
.335
.012
2.542
.000
Loyalty
.569
.032
11.251
.000
PV
.452
.014
6.245
.000
(Constant)
.356
.199
.224
.000
Loyalty
.399
.054
7.254
.000
PV
.289
.021
5.521
.000
CSB
.356
.047
2.854
.000
(Constant)
.458
.202
2.888
.000
Loyalty
.445
.032
5.251
.000
PV
.336
.078
4.251
.000
CSB
.288
.045
4.365
.000
Trust
.451
.038
3.254
.000
(Constant)
.365
.285
3.254
.000
Loyalty
.452
.047
7.258
.000
PV
.325
.024
3.584
.000
CSB
.251
.035
2.852
.000
Trust
.229
.054
2.765
.000
Culture
.287
.487
2.012
.000
a. Dependent Variable: CS
129
6.5.4
Customer Trust
Table 6.63.


Perceived Value (PV), Customer-Switching Barriers (CSB), and Customer Satisfaction (CS) are
significant and constant is also significant, the coefficient of Customer Satisfaction (CS) is .166,
Value (PV), Customer-Switching Barriers (CSB), Customer Satisfaction (CS), Customer Culture
and the constant are significant, the coefficient of Customer Culture is .294, Customer Satisfaction
(CS) is .184, Customer-Switching Barriers (CSB) is .285, Customer Perceived Value (PV) is .259,
Customer Loyalty is .273, and constant is .391 as shown in Table 6.63.
130
Table 6.63
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.569
.152
4.665
.000
Loyalty
.452
.078
13.469
.000
(Constant)
.241
.182
2.562
.000
Loyalty
.485
.052
11.562
.000
PV
.412
.042
5.628
.000
(Constant)
.351
.326
.425
.000
Loyalty
.456
.045
6.695
.000
PV
.228
.199
5.986
.000
CSB
.315
.255
3.521
.000
(Constant)
.287
.269
3.895
.000
Loyalty
.386
.487
5.478
.000
PV
.256
.102
3.885
.000
CSB
.288
.054
4.454
.000
CS
.166
.077
2.658
.000
(Constant)
.391
.262
2.787
.000
Loyalty
.273
.087
6.269
.000
PV
.259
.094
3.895
.000
CSB
.285
.099
2.173
.000
CS
.184
.096
2.992
.000
Culture
.294
.654
1.568
.000
a. Dependent Variable: Trust
131
6.5.5
Customer Culture
are significant, the coefficient of Customer Loyalty is .369 as shown in Table 6.64
Table 6.64.


Value (PV), Customer-Switching Barriers (CSB), Customer Satisfaction (CS), Customer Trust and
the constant are significant, the coefficient of Customer Trust is .162, Customer Satisfaction (CS) is
.251, Customer-Switching Barriers (CSB) is .299, Customer Perceived Value (PV) is .352,
132
Table 6.64
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.562
.251
4.265
.000
Loyalty
.369
.056
10.526
.000
(Constant)
.445
.197
1.256
.000
Loyalty
.547
.066
9.025
.000
PV
.458
.025
5.652
.000
(Constant)
.215
.265
.558
.000
Loyalty
.469
.054
8.652
.000
PV
.284
.187
5.025
.000
CSB
.269
.286
3.658
.000
(Constant)
.277
.293
2.898
.000
Loyalty
.395
.397
5.658
.000
PV
.265
.057
3.487
.000
CSB
.296
.054
3.896
.000
CS
.158
.064
2.659
.000
(Constant)
.389
.287
2.776
.000
Loyalty
.352
.099
6.542
.000
PV
.299
.065
3.261
.000
CSB
.251
.048
2.854
.000
CS
.162
.089
2.548
.000
Trust
.284
.449
1.958
.000
a. Dependent Variable: Culture
133
6.5.6

Satisfaction (CS), and Customer Perceived Value (PV) are significant and constant is also
significant, the coefficient of Customer Perceived Value (PV).521, Customer Satisfaction (CS) is
.326, Customer Loyalty is .569, and constant is .251 as shown in Table 6.65.

Satisfaction (CS), Customer Perceived Value (PV), and Customer Trust are significant and constant
is also significant, the coefficient of Trust is .256, Customer Perceived Value (PV) is .254,
Customer Satisfaction (CS) is .369, Customer Loyalty is .454, and constant is .487 as shown in
Table 6.65.

Satisfaction (CS), Customer Perceived Value (PV), Customer Trust, Customer Culture and the
Customer Perceived Value (PV) is .233, Customer Satisfaction (CS) is .325, Customer Loyalty is
134
Table 6.65
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.254
.205
6.521
.000
Loyalty
.458
.075
15.251
.000
(Constant)
.658
.285
2.548
.000
Loyalty
.421
.066
14.589
.000
CS
.458
.084
6.251
.000
(Constant)
.251
.296
.658
.000
Loyalty
.569
.087
9.251
.000
CS
.326
.069
5.254
.000
PV
.521
.099
4.895
.000
(Constant)
.487
.285
1.795
.000
Loyalty
.454
.088
7.895
.000
CS
.369
.054
4.695
.000
PV
.254
.097
3.885
.000
Trust
.256
.078
2.695
.000
(Constant)
.587
.363
2.254
.000
Loyalty
.541
.089
8.251
.000
CS
.325
.095
4.652
.000
PV
.233
.087
3.251
.000
Trust
.205
.095
2.956
.000
Culture
.382
.185
2.589
.000
a. Dependent Variable: CSB
135
6.6
STAGE-WISE MULTIPLE REGRESSION - CITIBANK, PAKISTAN
6.6.1
Stage-Wise Multiple Regression Model Suggests that all the five Independent Variables
namely Customer Loyalty, Customer Satisfaction (CS), Customer-Switching Barriers (CSB),
Customer Trust, and Customer Culture have a significant effect on Dependent Variable CustomerPerceived Value (PV) and their Regression Coefficients are also significant at 5% level of
significance as shown in Table 6.66.
Table 6.66
Variables Entered/Removeda
Model
Variables
Variables
Entered
Removed
1
LOYALTY
2
CS
CSB
TRUST
CULTURE
Method
Stepwise (Criteria: Probability-of-F-to-enter <= .050,
Probability-of-F-to-remove >= .100).
136
In Table 6.67, the first model gives 79% R Square; it means that Customer Loyalty is the
most influential variable on Customer-Perceived Value (PV). The second model gives 81% R
Square; it means that Customer Satisfaction (CS) influences Customer-Perceived Value (PV). The
third model gives 89% R Square; it means that Customer-Switching Barriers (CSB) influences
Customer-Perceived Value (PV). The fourth model gives 95% R Square; it means that Customer
Trust influences Customer-Perceived Value (PV). The fifth model gives 97% R Square; it means
that Customer Culture influences Customer-Perceived Value (PV).
Table 6.67
Model Summary
Model
R Square
Adjusted R Square
Std. Error of the Estimate
.812a
.798
.765
.40212
.866b
.812
.872
.40987
.871c
.899
.767
.41275
.889d
.951
.874
.42354
.892e
.972
.899
.43867
a. Predictors: (Constant), Loyalty

b. Predictors: (Constant), Loyalty, CS
c. Predictors: (Constant), Loyalty, CS, CSB
d. Predictors: (Constant), Loyalty, CS, CSB, Trust
e. Predictors: (Constant), Loyalty, CS, CSB, Trust, Culture
137
The overall regression for model 1 is significant it means that Customer Loyalty has a
significant influence on Customer Perceived Value (PV) as F value that is 190.251 shows the
significance of the factor implied in the study with a significance of 0.000 as shown in Table 6.68.
Overall regression for model 2 is significant it means that Customer Satisfaction (CS) has a
Overall regression for model 3 is significant it means that Customer-Switching Barriers

(CSB) has a significant influence on Customer Perceived Value (PV) as F value that is 181.524
shows the significance of the factor implied in the study with a significance of 0.000 as shown in
Table 6.68.
Overall regression for model 4 is significant it means that Customer Trust has a significant
influence on Customer Perceived Value (PV) as F value that is 150.254 shows the significance of
the factor implied in the study with a significance of 0.000 as shown in Table 6.68.
Overall regression for model 5 is significant it means that Customer Culture has a
138
Table 6.68
ANOVAf
Model
1
Sum of Squares
df
Mean Square
Regression
32.756
32.756
Residual
16.878
98
.251
Total
49.634
99
Regression
34.765
17.521
Residual
14.869
98
.255
Total
49.634
99
Regression
36.879
12.548
Residual
12.755
97
.224
Total
49.634
98
Regression
37.879
10.524
Residual
11.755
98
.351
Total
49.634
99
Regression
38.521
8.221
Residual
11.113
96
.254
Total
49.634
98

f. Dependent Variable: PV
139
Sig.
190.251
.000a
185.985
.000b
181.524
.000c
150.254
.000d
98.251
.000e
6.6.2
Customer Loyalty
Stage-Wise Multiple Regression Model suggests that all the five Independent Variables
namely Customer-Switching Barriers (CSB), Customer Satisfaction (CS), Customer Perceived
Value (PV), Customer Trust, and Customer Culture have a significant effect on Dependent Variable
Customer Loyalty and their Regression Coefficients are also significant at 5% level of significance
Table 6.69
Variables
Variables
Entered
Removed
Model
1
CSB
CS
PV
TRUST
CULTURE
Method
140
In Table 6.70, the first model gives 70% R Square; it means that Customer-Switching
Barriers (CSB) is the most influential variable on Customer Loyalty. The second model gives 75%
R Square; it means that Customer Satisfaction (CS) influences Customer Loyalty. The third model
gives 78% R Square; it means that Customer Perceived Value (PV) influences Customer Loyalty.
The fourth model gives 79% R Square; it means that Customer Trust influences Customer Loyalty.
The fifth model gives 81% R Square; it means that Customer Culture influences Customer Loyalty.
Table 6.70
Model Summary
Model
R Square
Adjusted R Square
.810a
.703
.521
.39521
.853b
.755
.611
.38565
.861c
.786
.647
.37584
.830d
.794
.659
.35854
.854e
.812
.729
.33421
a. Predictors: (Constant), CSB

b. Predictors: (Constant), CSB , CS
c. Predictors: (Constant), CSB , CS, PV
d. Predictors: (Constant), CSB , CS, PV, Trust
e. Predictors: (Constant), CSB , CS, PV, Trust, Culture
141
The overall regression for model 1 is significant it means that Customer-Switching Barriers
(CSB) has a significant influence on Customer Loyalty as F value that is 189.521 shows the
significant influence on Customer Loyalty as F value that is 176.251 shows the significance of the
factor implied in the study with a significance of 0.000 as shown in Table 6.71.
Overall regression for model 3 is significant it means that Customer Perceived Value (PV)
has a significant influence on Customer Loyalty as F value that is 164.251 shows the
influence on Customer Loyalty as F value that is 121.854 shows the significance of the factor
implied in the study with a significance of 0.000 as shown in Table 6.71.
142
Table 6.71
ANOVAf
Model
1
Sum of Squares
df
Mean Square
Regression
33.524
33.524
Residual
19.253
97
.251
Total
52.777
98
Regression
34.589
15.547
Residual
18.188
99
.216
Total
52.777
97
Regression
36.568
10.254
Residual
16.209
96
.122
Total
52.777
98
Regression
37.684
7.548
Residual
15.093
95
.225
Total
52.777
98
Regression
38.025
6.524
Residual
14.752
96
.281
Total
52.777
99

f. Dependent Variable: Loyalty
143
Sig.
189.521
.000a
176.251
.000b
164.251
.000c
121.854
.000d
85.147
.000e
6.6.3
namely Customer Loyalty, Customer Perceived Value (PV), Customer-Switching Barriers (CSB),
Customer Trust, and Customer Culture have a significant effect on Dependent Variable Customer
Satisfaction (CS) and their Regression Coefficients are also significant at 5% level of significance
Table 6.72
Variables
Variables
Entered
Removed
Model
1
LOYALTY
PV
CSB
TRUST
CULTURE
Method
144
most influential variable on Customer Satisfaction (CS). The second model gives 68% R Square; it
means that Customer Perceived Value (PV) influences Customer Satisfaction (CS). The third model
gives 71% R Square; it means that Customer-Switching Barriers (CSB) influences Customer
Satisfaction (CS). The fourth model gives 74% R Square; it means that Customer Trust influences
Customer Satisfaction (CS). The fifth model gives 78% R Square; it means that Customer Culture
influences Customer Satisfaction (CS).
Table 6.73
Model Summary
Model
R Square
Adjusted R Square
.822a
.675
.652
.38521
.828b
.684
.524
.37254
.829c
.710
.689
.36281
.888d
.745
.854
.35214
.891e
.780
.548
.32545

b. Predictors: (Constant), Loyalty, PV
c. Predictors: (Constant), Loyalty, PV, CSB
d. Predictors: (Constant), Loyalty, PV, CSB, Trust
e. Predictors: (Constant), Loyalty, PV, CSB, Trust, Culture
145
significant influence on Customer Satisfaction (CS) as F value that is 175.542 shows the
has a significant influence on Customer Satisfaction (CS) as F value that is 170.526 shows the

(CSB) has a significant influence on Customer Satisfaction (CS) as F value that is 165.251 shows
the significance of the factor implied in the study with a significance of 0.000 as shown in Table
6.74.
influence on Customer Satisfaction (CS) as F value that is 84.521 shows the significance of the
significant influence on Customer Satisfaction (CS) as F value that is 79.524 shows the significance
of the factor implied in the study with a significance of 0.000 as shown in Table 6.74.
146
Table 6.74
ANOVAf
Model
1
Sum of Squares
Mean Square
Regression
36.251
36.251
Residual
16.521
99
.225
Total
52.772
98
Regression
34.432
16.521
18.34
97
.228
Total
52.772
98
Regression
35.435
12.254
Residual
17.337
98
.188
Total
52.772
99
Regression
37.564
10.215
Residual
15.208
96
.215
Total
52.772
97
Regression
38.786
8.521
Residual
13.986
98
.158
Total
52.772
99
Residual
df

f. Dependent Variable: CS
147
Sig.
175.542
.000a
170.526
.000b
165.251
.000c
84.521
.000d
79.524
.000e
6.6.4
Customer Trust
Customer Satisfaction (CS), and Customer Culture have a significant effect on Dependent Variable
Customer Trust and their Regression Coefficients are also significant at 5% level of significance as
Table 6.75
Variables
Variables
Entered
Removed
Model
1
LOYALTY
PV
CSB
CS
CULTURE
Method
148
most influential variable on Customer Trust. The second model gives 71% R Square; it means that
Customer Perceived Value (PV) influences Customer Trust. The third model gives 75% R Square;
it means that Customer-Switching Barriers (CSB) influences Customer Trust. The fourth model
gives 78% R Square; it means that Customer Satisfaction (CS) influences Customer Trust. The fifth
model gives 80% R Square; it means that Customer Culture influences Customer Trust.
Table 6.76
Model Summary
Model
R Square
Adjusted R Square
.814a
.655
.562
.39589
.825b
.712
.458
.38548
.846c
.754
.489
.36478
.862d
.784
.596
.34589
.878e
.801
.648
.33632

d. Predictors: (Constant), Loyalty, PV, CSB, CS
e. Predictors: (Constant), Loyalty, PV, CSB, CS, Culture
149
significant influence on Customer Trust as F value that is 188.251 shows the significance of the
has a significant influence on Customer Trust as F value that is 182.212 shows the significance of

(CSB) has a significant influence on Customer Trust as F value that is 179.564 shows the
150
Table 6.77
ANOVAf
Model
1
Sum of Squares
Mean Square
Regression
38.521
38.521
Residual
12.251
98
.154
Total
50.772
99
Regression
39.251
19.521
Residual
11.521
96
.125
Total
50.772
97
Regression
40.121
16.251
Residual
10.651
99
.158
Total
50.772
98
Regression
41.251
14.251
9.521
99
.668
Total
50.772
97
Regression
42.258
10.251
8.514
97
.253
50.772
98
Residual
df
Residual
Total

f. Dependent Variable: Trust
151
Sig.
188.251
.000a
182.212
.000b
179.564
.000c
99.254
.000d
85.245
.000e
6.6.5
Customer Culture
Customer Satisfaction (CS), and Customer Trust have a significant effect on Dependent Variable
Customer Culture and their Regression Coefficients are also significant at 5% level of significance
Table 6.78
Variables
Variables
Entered
Removed
Model
1
LOYALTY
PV
CSB
CS
TRUST
Method
152
most influential variable on Customer Culture. The second model gives 65% R Square; it means
that Customer Perceived Value (PV) influences Customer Culture. The third model gives 77% R
Square; it means that Customer-Switching Barriers (CSB) influences Customer Culture. The fourth
model gives 86% R Square; it means that Customer Satisfaction (CS) influences Customer Culture.
The fifth model gives 89% R Square; it means that Customer Trust influences Customer Culture.
Table 6.79
Model Summary
Model
R Square
Adjusted R Square
.829a
.521
.569
.39652
.842b
.652
.632
.38452
.866c
.775
.521
.37548
.878d
.865
.594
.35645
.897e
.897
.599
.33265

e. Predictors: (Constant), Loyalty, PV, CSB, CS, Trust
153
significant influence on Customer Culture as F value that is 187.251 shows the significance of the
has a significant influence on Customer Culture as F value that is 181.215 shows the significance of

(CSB) has a significant influence on Customer Culture as F value that is 168.542 shows the
influence on Customer Culture as F value that is 90.251 shows the significance of the factor implied
in the study with a significance of 0.000 as shown in Table 6.80.
154
Table 6.80
ANOVAf
Sum of
Model
1
Squares
Df
Mean Square
Regression
35.521
35.521
Residual
11.254
99
.156
Total
46.775
98
Regression
34.209
16.254
Residual
12.566
97
.165
Total
46.775
96
Regression
35.654
13.251
Residual
11.121
97
.187
Total
46.775
98
Regression
36.654
11.584
Residual
10.121
98
.285
Total
46.775
99
Regression
37.444
9.251
9.331
97
.195
46.775
98
Residual
Total

b. Predictors: (Constant), Loyalty,
PV
f. Dependent Variable: Culture
155
Sig.
187.251
.000a
181.215
.000b
168.542
.000c
94.251
.000d
90.251
.000e
6.6.6
namely Customer Loyalty, Customer Satisfaction (CS), Customer Perceived Value (PV), Customer
Trust, and Customer Culture have a significant effect on Dependent Variable Customer-Switching
Barriers (CSB) and their Regression Coefficients are also significant at 5% level of significance as
Table 6.81
Variables
Variables
Entered
Removed
Model
1
LOYALTY
CS
PV
TRUST
CULTURE
Method
156
most influential variable on Customer-Switching Barriers (CSB). The second model gives 67% R
Square; it means that Customer Satisfaction (CS) influences Customer-Switching Barriers (CSB).
The third model gives 70% R Square; it means that Customer Perceived Value (PV) influences
Customer-Switching Barriers (CSB). The fourth model gives 74% R Square; it means that
Customer Trust influences Customer-Switching Barriers (CSB). The fifth model gives 78% R
Square; it means that Customer Culture influences Customer-Switching Barriers (CSB).
Table 6.82
Model Summary
Model
R Square
Adjusted R Square
.810a
.645
.526
.39562
.832b
.675
.654
.38562
.848c
.702
.755
.36254
.859d
.745
.787
.35265
.884e
.789
.763
.34585

b. Predictors: (Constant), Loyalty , CS
c. Predictors: (Constant), Loyalty , CS, PV
d. Predictors: (Constant), Loyalty , CS, PV, Trust
e. Predictors: (Constant), Loyalty , CS, PV, Trust, Culture
157
significant influence on Customer-Switching Barriers (CSB) as F value that is 181.251 shows the
has a significant influence on Customer-Switching Barriers (CSB) as F value that is
150.254 shows the significance of the factor implied in the study with a significance of 0.000 as
influence on Customer-Switching Barriers (CSB) as F value that is 90.568 shows the significance
158
Table 6.83
ANOVAf
Model
1
Sum of Squares
df
Mean Square
Regression
36.254
36.254
Residual
15.251
97
.188
Total
51.505
98
Regression
35.356
16.215
Residual
16.149
98
.152
Total
51.505
99
Regression
37.243
13.215
Residual
14.262
97
.154
Total
51.505
98
Regression
37.968
10.254
Residual
13.537
97
.165
Total
51.505
98
Regression
38.411
7.998
Residual
13.094
98
.185
Total
51.505
99
a. Predictors: (Constant), CS
b. Predictors: (Constant), CS, PV
c. Predictors: (Constant), CS, PV, CULTURE
d. Predictors: (Constant), CS, PV, CULTURE, TRUST
e. Predictors: (Constant), CS, PV, CULTURE, TRUST, LOYALTY
f. Dependent Variable: CSB
159
Sig.
181.251
.000a
180.256
.000b
150.254
.000c
90.568
.000d
77.256
.000e
6.7
MULTIVARIATE DATA ANALYSIS - NATIONAL BANK OF

PAKISTAN, PAKISTAN
third component Customer Perceived Value (PV) explains 9% variance of the total variation alone.
The second and third components together explain 66% variance of the total variation. The fourth
component Customer Trust explains 5% variance of the total variation alone. The third and fourth
components together explain 72% variance of the total variation. The fifth component CustomerSwitching Barriers (CSB) explains 20% variance of the total variation alone. The fourth and fifth
components together explain 92% variance of the total variation. Finally, sixth component
Table 6.84
Initial Eigenvalues
% of Variance
Component
Total
Cumulative %
2.254
46.521
46.521 2.254
46.521
46.521
1.548
10.215
56.736 1.548
10.215
10.215
.785
9.845
66.581
.265
5.584
72.165
.654
20.251
92.416
.321
7.584
100.000
160
Total % of Variance
Cumulative %
6.8
REGRESSION MODEL - NATIONAL BANK OF PAKISTAN,

PAKISTAN
6.8.1



161
Table 6.85
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.221
.199
5.251
.000
Loyalty
.665
.205
10.514
.000
(Constant)
.215
.222
1.002
.000
Loyalty
.452
.021
11.555
.000
CS
.452
.358
5.521
.000
(Constant)
.125
.204
.452
.000
Loyalty
.452
.412
6.112
.000
CS
.236
.365
5.114
.000
CSB
.448
.325
2.45
.000
(Constant)
.478
.369
1.251
.000
Loyalty
.558
.117
6.021
.000
CS
.442
.354
4.854
.000
CSB
.201
.365
4.114
.000
Trust
.416
.211
2.051
.000
(Constant)
.447
.295
2.124
.000
Loyalty
.412
.129
6.542
.000
CS
.398
.421
4.142
.000
CSB
.215
.021
3.184
.000
Trust
.462
.248
2.325
.000
Culture
.396
.562
2.225
.000
162
6.8.2
Customer Loyalty





163
Table 6.86
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.251
.201
5.002
.000
CSB
.652
.200
12.251
.000
(Constant)
.412
.325
1.996
.000
CSB
.447
.321
11.235
.000
CS
.496
.362
5.215
.000
(Constant)
.311
.165
.524
.000
CSB
.456
.326
10.256
.000
CS
.316
.396
5.221
.000
PV
.410
.185
3.965
.000
(Constant)
.398
.494
2.214
.000
CSB
.489
.184
7.256
.000
CS
.324
.211
4.112
.000
PV
.426
.425
4.142
.000
Trust
.405
.402
2.269
.000
(Constant)
.458
.199
3.145
.000
CSB
.356
.120
8.269
.000
CS
.325
.112
4.256
.000
PV
.418
.154
2.658
.000
Trust
.401
.108
2.256
.000
Culture
.403
.206
2.159
.000
164
6.8.3
Table 6.87.


165
Table 6.87
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.003
.169
4.526
.000
Loyalty
.524
.045
11.652
.000
(Constant)
.299
.002
2.021
.000
Loyalty
.446
.012
10.215
.000
PV
.396
.011
6.002
.000
(Constant)
.310
.154
.125
.000
Loyalty
.365
.045
6.885
.000
PV
.202
.010
5.426
.000
CSB
.321
.032
2.625
.000
(Constant)
.368
.158
2.214
.000
Loyalty
.359
.011
4.251
.000
PV
.302
.054
3.251
.000
CSB
.201
.039
4.115
.000
Trust
.421
.021
3.114
.000
(Constant)
.301
.269
3.254
.000
Loyalty
.403
.022
7.145
.000
PV
.299
.015
3.256
.000
CSB
.208
.026
2.485
.000
Trust
.198
.039
2.652
.000
Culture
.242
.466
1.899
.000
166
6.8.4
Customer Trust
Table 6.88.


167
Table 6.88
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.002
.122
4.325
.000
Loyalty
.365
.062
12.526
.000
(Constant)
.211
.151
2.136
.000
Loyalty
.411
.032
10.254
.000
PV
.351
.028
5.214
.000
(Constant)
.309
.310
.226
.000
Loyalty
.401
.026
6.421
.000
PV
.211
.136
5.254
.000
CSB
.299
.201
3.125
.000
(Constant)
.241
.234
3.265
.000
Loyalty
.325
.404
5.021
.000
PV
.221
.054
2.154
.000
CSB
.254
.032
3.256
.000
CS
.122
.041
1.215
.000
(Constant)
.324
.212
2.025
.000
Loyalty
.238
.025
5.248
.000
PV
.224
.055
3.625
.000
CSB
.254
.021
1.251
.000
CS
.155
.064
2.025
.000
Culture
.262
.521
1.198
.000
168
6.8.5
Customer Culture
Table 6.89.


169
Table 6.89
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.256
.211
3.584
.000
Loyalty
.315
.045
9.521
.000
(Constant)
.417
.125
1.112
.000
Loyalty
.445
.042
8.256
.000
PV
.325
.010
5.265
.000
(Constant)
.115
.225
.458
.000
Loyalty
.365
.036
7.369
.000
PV
.158
.142
4.258
.000
CSB
.214
.225
3.358
.000
(Constant)
.212
.274
2.254
.000
Loyalty
.385
.348
5.145
.000
PV
.241
.026
3.325
.000
CSB
.223
.047
3.025
.000
CS
.101
.026
2.114
.000
(Constant)
.321
.255
2.471
.000
Loyalty
.322
.044
6.022
.000
PV
.226
.042
1.236
.000
CSB
.211
.036
2.325
.000
CS
.128
.078
2.214
.000
Trust
.218
.431
1.326
.000
170
6.8.6


Table 6.90.

171
Table 6.90
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.365
.198
6.356
.000
Loyalty
.325
.025
15.021
.000
(Constant)
.542
.224
2.365
.000
Loyalty
.318
.045
13.451
.000
CS
.325
.063
5.251
.000
(Constant)
.221
.225
.521
.000
Loyalty
.478
.074
8.521
.000
CS
.258
.062
4.562
.000
PV
.456
.078
4.568
.000
(Constant)
.365
.271
1.225
.000
Loyalty
.425
.035
7.118
.000
CS
.321
.025
4.659
.000
PV
.211
.045
3.215
.000
Trust
.225
.052
2.154
.000
(Constant)
.415
.348
2.058
.000
Loyalty
.421
.045
8.014
.000
CS
.289
.070
4.654
.000
PV
.199
.029
3.221
.000
Trust
.186
.077
2.486
.000
Culture
.269
.168
2.029
.000
172
6.9
STAGE-WISE MULTIPLE REGRESSION - NATIONAL BANK OF

PAKISTAN, PAKISTAN
6.9.1
Table 6.91
Model
Variables
Variables
Entered
Removed
1
LOYALTY
2
CS
CSB
TRUST
CULTURE
Method
173
Table 6.92
Model Summary
Model
R Square
Adjusted R Square
.801a
.662
.625
.38524
.810b
.695
.699
.39521
.825c
.721
.712
.40215
.856d
.764
.788
.41452
.879e
.872
.812
.41988

174

Table 6.93
175
Table 6.93
ANOVAf
Model
1
Sum of Squares
30.521
30.521
Residual
12.214
97
.221
Total
42.735
98
Regression
32.251
15.251
Residual
10.484
96
.125
Total
42.735
97
Regression
33.269
11.125
9.466
97
.201
Total
42.735
98
Regression
35.525
9.251
7.21
97
.286
Total
42.735
98
Regression
35.885
7.256
6.85
98
.211
42.735
99
Residual
Mean Square
Regression
Residual
df
Residual
Total

176
Sig.
182.214
.000a
171.252
.000b
165.214
.000c
140.212
.000d
96.251
.000e
6.9.2
Customer Loyalty
Table 6.94
Variables
Variables
Entered
Removed
Model
1
CSB
CS
PV
TRUST
CULTURE
Method
177
Table 6.95
Model Summary
Model
R Square
Adjusted R Square
.803a
.652
.485
.38215
.821b
.708
.562
.37214
.836c
.752
.578
.36521
.842d
.762
.584
.35584
.849e
.799
.658
.34215

178
179
Table 6.96
ANOVAf
Model
1
Sum of Squares
Mean Square
Regression
30.221
30.221
Residual
12.214
98
.214
Total
42.435
99
Regression
31.251
12.251
Residual
11.184
97
.210
Total
42.435
98
Regression
32.252
9.225
Residual
10.183
98
.102
Total
42.435
99
Regression
33.251
7.251
9.184
96
.199
Total
42.435
97
Regression
34.584
6.028
7.851
97
.200
42.435
98
Residual
df
Residual
Total

180
Sig.
172.695
.000a
160.485
.000b
154.251
.000c
112.569
.000d
79.265
.000e
6.9.3
Table 6.97
Variables
Variables
Entered
Removed
Model
1
LOYALTY
PV
CSB
TRUST
CULTURE
Method
181
Table 6.98
Model Summary
Model
R Square
Adjusted R Square
.811a
.565
.526
.37251
.819b
.625
.456
.36251
.822c
.699
.569
.35487
.848d
.710
.785
.34521
.865e
.742
.521
.33265

182

6.99.
183
Table 6.99
ANOVAf
Model
1
Sum of Squares
31.112
31.112
Residual
11.412
98
.156
Total
42.524
99
Regression
32.521
15.251
Residual
10.003
97
.158
Total
42.524
98
Regression
33.215
11.548
9.309
96
.108
Total
42.524
97
Regression
34.589
9.259
7.935
98
.165
Total
42.524
99
Regression
36.264
8.112
6.26
97
.1004
42.524
98
Residual
Mean Square
Regression
Residual
df
Residual
Total

184
Sig.
171.251
.000a
162.252
.000b
148.215
.000c
81.269
.000d
74.584
.000e
6.9.4
Customer Trust
Table 6.100
Variables
Variables
Entered
Removed
Model
1
LOYALTY
PV
CSB
CS
CULTURE
Method
185
6.101
Model Summary
Model
R Square
Adjusted R Square
.811a
.621
.465
.38542
.819b
.689
.488
.37856
.825c
.721
.512
.36235
.836d
.755
.536
.35214
.854e
.798
.598
.34586

186

187
Table 6.102
ANOVAf
Model
1
Sum of Squares
31.524
31.524
Residual
10.254
97
.021
Total
41.778
98
Regression
32.521
12.258
9.257
98
.102
Total
41.778
99
Regression
34.256
11.251
7.522
98
.125
Total
41.778
99
Regression
36.254
9.215
5.524
96
.445
Total
41.778
97
Regression
39.568
8.215
2.21
97
.211
41.778
98
Residual
Residual
Mean Square
Regression
Residual
df
Residual
Total

188
Sig.
179.254
.000a
175.214
.000b
171.022
.000c
96.021
.000d
75.251
.000e
6.9.5
Customer Culture
Table 6.103
Variables
Variables
Entered
Removed
Model
1
LOYALTY
PV
CSB
CS
TRUST
Method
189
Table 6.104
Model Summary
Model
R Square
Adjusted R Square
.801a
.514
.456
.37526
.814b
.589
.526
.36256
.820c
.652
.425
.35142
.835d
.712
.489
.34852
.846e
.756
.526
.32654

190

191
Table 6.105
ANOVAf
Sum of
Model
1
Squares
Mean Square
Regression
33.521
33.521
Residual
10.589
98
.121
44.11
99
34.209
11.521
Residual
9.901
97
.122
Total
44.11
98
35.654
10.221
Residual
8.456
98
.153
Total
44.11
99
36.654
9.214
Residual
7.456
98
.242
Total
44.11
99
37.444
8.256
Residual
6.666
96
.152
Total
44.11
97
Total
2
Df
Regression
Regression
Regression
Regression

PV
192
Sig.
184.256
.000a
172.526
.000b
154.265
.000c
89.235
.000d
80.569
.000e
6.9.6
Table 6.106
Variables
Variables
Entered
Removed
Model
1
LOYALTY
CS
PV
TRUST
CULTURE
Method
193
Table 6.107
Model Summary
Model
R Square
Adjusted R Square
.812a
.548
.548
.39202
.825b
.612
.598
.38562
.836c
.689
.698
.37254
.849d
.712
.702
.36255
.878e
.758
.788
.35215

194
195
Table 6.108
ANOVAf
Model
1
Sum of Squares
30.586
30.586
Residual
12.589
98
.128
Total
43.175
99
Regression
33.526
15.565
9.649
96
.132
Total
43.175
97
Regression
34.526
11.254
8.649
97
.035
Total
43.175
98
Regression
35.259
9.256
7.916
98
.058
Total
43.175
99
Regression
36.589
7.658
6.586
98
.128
43.175
99
Residual
Residual
Mean Square
Regression
Residual
df
Residual
Total

196
Sig.
175.584
.000a
162.247
.000b
140.569
.000c
88.547
.000d
74.569
.000e
6.10 MULTIVARIATE DATA ANALYSIS MEEZAN BANK LIMITED,

PAKISTAN
third component Customer Perceived Value (PV) explains 9% variance of the total variation alone.
The second and third components together explain 62% variance of the total variation. The fourth
component Customer Trust explains 16% variance of the total variation alone. The third and fourth
components together explain 79% variance of the total variation. The fifth component CustomerSwitching Barriers (CSB) explains 5% variance of the total variation alone. The fourth and fifth
components together explain 84% variance of the total variation. Finally, sixth component
Customer Culture explains 15% variance of the total variation alone. The fifth and sixth
components together explain 100% variance of the total variation as shown in Table 6.109.
Table 6.109
Initial Eigenvalues
% of Variance
Component
Total
Cumulative %
1.989
41.461
41.461 1.989
41.461
41.461
1.214
11.024
52.485 1.214
11.024
11.024
.525
9.845
62.33
.458
16.889
79.219
.754
5.255
84.474
.789
15.526
100.000
197
Total % of Variance
Cumulative %
6.11 REGRESSION MODEL MEEZAN BANK LIMITED, PAKISTAN

6.11.1 Customer Perceived Value (PV)



198
Table 6.110
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.115
.154
4.521
.000
Loyalty
.458
.195
9.245
.000
(Constant)
.195
.195
1.001
.000
Loyalty
.354
.011
10.265
.000
CS
.369
.245
5.021
.000
(Constant)
.101
.156
.336
.000
Loyalty
.354
.369
5.215
.000
CS
.202
.321
4.585
.000
CSB
.401
.287
2.01
.000
(Constant)
.421
.322
1.032
.000
Loyalty
.511
.100
5.216
.000
CS
.424
.321
3.215
.000
CSB
.199
.308
3.265
.000
Trust
.369
.187
1.023
.000
(Constant)
.354
.226
1.452
.000
Loyalty
.358
.104
5.225
.000
CS
.248
.365
3.265
.000
CSB
.199
.015
2.548
.000
Trust
.398
.227
2.458
.000
Culture
.295
.501
1.569
.000
199
6.11.2 Customer Loyalty





200
Table 6.111
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.004
.195
4.265
.000
CSB
.521
.195
10.215
.000
(Constant)
.325
.321
1.215
.000
CSB
.324
.285
10.639
.000
CS
.357
.306
4.896
.000
(Constant)
.289
.122
.421
.000
CSB
.412
.331
9.236
.000
CS
.278
.352
4.112
.000
PV
.375
.141
3.221
.000
(Constant)
.345
.402
2.154
.000
CSB
.440
.141
6.215
.000
CS
.289
.145
4.112
.000
PV
.348
.365
3.596
.000
Trust
.396
.385
1.254
.000
(Constant)
.326
.155
2.589
.000
CSB
.311
.021
7.589
.000
CS
.284
.105
3.965
.000
PV
.356
.126
2.021
.000
Trust
.378
.102
2.115
.000
Culture
.398
.201
2.021
.000
201
6.11.3 Customer Satisfaction (CS)
Table 6.112.


202
Table 6.112
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.221
.145
4.452
.000
Loyalty
.452
.001
9.236
.000
(Constant)
.159
.021
2.145
.000
Loyalty
.400
.002
8.215
.000
PV
.342
.001
5.215
.000
(Constant)
.215
.165
.251
.000
Loyalty
.325
.025
5.215
.000
PV
.198
.045
5.321
.000
CSB
.269
.021
2.652
.000
(Constant)
.321
.198
2.452
.000
Loyalty
.341
.045
3.251
.000
PV
.287
.066
2.514
.000
CSB
.185
.078
3.256
.000
Trust
.365
.065
2.362
.000
(Constant)
.215
.202
2.541
.000
Loyalty
.365
.054
6.526
.000
PV
.247
.025
2.216
.000
CSB
.145
.035
2.021
.000
Trust
.165
.030
2.452
.000
Culture
.202
.302
1.785
.000
203
6.11.4 Customer Trust
Table 6.113.


204
Table 6.113
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.652
.100
5.256
.000
Loyalty
.356
.045
13.251
.000
(Constant)
.201
.151
1.253
.000
Loyalty
.362
.022
12.562
.000
PV
.314
.023
4.521
.000
(Constant)
.289
.287
.452
.000
Loyalty
.369
.020
10.256
.000
PV
.184
.114
4.256
.000
CSB
.208
.174
4.526
.000
(Constant)
.201
.230
2.562
.000
Loyalty
.278
.354
4.526
.000
PV
.201
.025
1.023
.000
CSB
.263
.045
2.215
.000
CS
.101
.056
1.021
.000
(Constant)
.265
.201
2.558
.000
Loyalty
.216
.056
4.256
.000
PV
.224
.041
2.596
.000
CSB
.215
.065
1.252
.000
CS
.121
.052
1.089
.000
Culture
.201
.425
2.562
.000
205
6.11.5 Customer Culture
Table 6.114.


206
Table 6.114
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.852
.215
3.145
.000
Loyalty
.215
.452
9.321
.000
(Constant)
.452
.125
1.021
.000
Loyalty
.365
.021
8.012
.000
PV
.225
.030
5.045
.000
(Constant)
.289
.202
.322
.000
Loyalty
.365
.045
6.425
.000
PV
.102
.132
4.021
.000
CSB
.201
.201
3.114
.000
(Constant)
.176
.266
2.215
.000
Loyalty
.289
.315
5.102
.000
PV
.232
.012
3.311
.000
CSB
.201
.037
3.002
.000
CS
.154
.041
2.101
.000
(Constant)
.215
.242
3.125
.000
Loyalty
.256
.033
5.251
.000
PV
.115
.012
1.115
.000
CSB
.452
.033
2.321
.000
CS
.251
.015
2.121
.000
Trust
.142
.402
1.222
.000
207
6.11.6 Customer Switching Barriers (CSB)


Table 6.115.

208
Table 6.115
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.251
.162
5.526
.000
Loyalty
.322
.012
14.215
.000
(Constant)
.502
.202
2.021
.000
Loyalty
.299
.032
12.021
.000
CS
.312
.051
4.256
.000
(Constant)
.177
.215
.425
.000
Loyalty
.365
.025
10.252
.000
CS
.225
.041
4.002
.000
PV
.401
.063
4.132
.000
(Constant)
.341
.254
1.232
.000
Loyalty
.325
.010
7.014
.000
CS
.215
.014
4.121
.000
PV
.189
.022
3.121
.000
Trust
.184
.012
1.236
.000
(Constant)
.325
.215
1.252
.000
Loyalty
.398
.021
7.215
.000
CS
.245
.050
4.251
.000
PV
.152
.013
3.112
.000
Trust
.141
.062
2.332
.000
Culture
.226
.148
1.121
.000
209
6.12 STAGE-WISE MULTIPLE REGRESSION MEEZAN BANK

LIMITED, PAKISTAN
Table 6.116
Model
Variables
Variables
Entered
Removed
1
LOYALTY
2
CS
CSB
TRUST
CULTURE
Method
210
Table 6.117
Model Summary
Model
R Square
Adjusted R Square
.812a
.562
.562
.39524
.815b
.578
.599
.38154
.825c
.658
.625
.39652
.874d
.699
.687
.40215
.885e
.785
.745
.41214

211

Table 6.118.
212
Table 6.118
ANOVAf
Model
1
Sum of Squares
Regression
30.251
9.215
98
.128
Total
39.466
99
Regression
30.889
13.214
8.577
97
.025
Total
39.466
98
Regression
31.251
10.214
8.215
97
.125
Total
39.466
98
Regression
32.125
8.125
7.341
98
.198
Total
39.466
99
Regression
33.154
7.542
6.312
97
.165
39.466
98
Residual
Residual
Residual
Mean Square
30.251
Residual
df
Residual
Total

213
Sig.
175.214
.000a
166.214
.000b
141.251
.000c
132.652
.000d
80.269
.000e
Table 6.119
Variables
Variables
Entered
Removed
Model
1
CSB
CS
PV
TRUST
CULTURE
Method
214
Table 6.120
Model Summary
Model
R Square
Adjusted R Square
.811a
.562
.396
.39652
.832b
.632
.485
.38542
.841c
.689
.512
.36325
.848d
.721
.522
.34251
.859e
.758
.547
.33269

215
216
Table 6.121
ANOVAf
Model
1
Sum of Squares
Regression
29.256
9.251
97
.121
Total
38.507
98
Regression
30.251
9.214
8.256
98
.112
Total
38.507
99
Regression
30.998
7.521
7.509
98
.021
Total
38.507
99
Regression
31.215
6.231
7.292
97
.125
Total
38.507
98
Regression
31.889
5.215
6.618
98
.185
38.507
99
Residual
Residual
Residual
Mean Square
29.256
Residual
df
Residual
Total

217
Sig.
164.251
.000a
145.269
.000b
131.251
.000c
105.251
.000d
73.652
.000e
Table 6.122
Variables
Variables
Entered
Removed
Model
1
LOYALTY
PV
CSB
TRUST
CULTURE
Method
218
Table 6.123
Model Summary
Model
R Square
Adjusted R Square
.854a
.452
.425
.38251
.865b
.558
.325
.37548
.875c
.699
.458
.36253
.879d
.785
.625
.35144
.885e
.825
.546
.34562

219

6.124.
220
Table 6.124
ANOVAf
Model
1
Sum of Squares
Regression
28.251
9.265
97
.215
Total
37.516
98
Regression
29.265
12.215
8.251
98
.121
Total
37.516
99
Regression
30.215
10.562
7.301
97
.021
Total
37.516
98
Regression
31.698
8.256
5.818
98
.221
Total
37.516
99
Regression
32.485
7.263
5.031
98
.125
37.516
99
Residual
Residual
Residual
Mean Square
28.251
Residual
df
Residual
Total

221
Sig.
181.215
.000a
167.589
.000b
145.589
.000c
77.562
.000d
66.542
.000e
Table 6.125
Variables
Variables
Entered
Removed
Model
1
LOYALTY
PV
CSB
CS
CULTURE
Method
222
Table 6.126
Model Summary
Model
R Square
Adjusted R Square
.823a
.662
.362
.39652
.845b
.698
.345
.38542
.878c
.741
.425
.36256
.892d
.789
.468
.34521
.952e
.812
.547
.33265

223

224
Table 6.127
ANOVAf
Model
1
Sum of Squares
Regression
33.251
8.551
98
.112
Total
41.802
99
Regression
34.215
10.254
7.587
97
.265
Total
41.802
98
Regression
35.212
9.235
6.59
98
.102
Total
41.802
99
Regression
36.015
8.425
5.805
98
.325
Total
41.802
99
Regression
37.521
7.256
4.281
97
.198
41.802
98
Residual
Residual
Residual
Mean Square
33.251
Residual
df
Residual
Total

225
Sig.
166.256
.000a
152.142
.000b
137.586
.000c
85.265
.000d
71.256
.000e
Table 6.128
Variables
Variables
Entered
Removed
Model
1
LOYALTY
PV
CSB
CS
TRUST
Method
226
Table 6.129
Model Summary
Model
R Square
Adjusted R Square
.822a
.452
.389
.38562
.835b
.442
.452
.36251
.842c
.562
.489
.35265
.859d
.632
.526
.35125
.868e
.688
.547
.34521

227

228
Table 6.130
ANOVAf
Sum of
Model
1
Squares
Regression
30.521
9.251
97
.221
Total
39.772
98
Regression
31.521
10.252
Residual
12.589
98
.115
44.11
99
Regression
32.252
9.235
Residual
11.858
98
.102
44.11
99
Regression
33.256
8.526
Residual
10.854
97
.218
44.11
98
34.241
7.562
Residual
9.869
98
.089
Total
44.11
99
Total
3
Total
4
Total
5
Mean Square
30.521
Residual
Df
Regression

PV
229
Sig.
168.256
.000a
154.256
.000b
144.333
.000c
87.521
.000d
75.215
.000e
Table 6.131
Variables
Variables
Entered
Removed
Model
1
LOYALTY
CS
PV
TRUST
CULTURE
Method
230
Square; it means that Customer Culture influences Customer-Switching Barriers.
Table 6.132
Model Summary
Model
R Square
Adjusted R Square
.852a
.552
.452
.39236
.862b
.589
.488
.38452
.885c
.647
.596
.36325
.892d
.678
.612
.35485
.897e
.852
.698
.35215

231
232
Table 6.133
ANOVAf
Model
1
Sum of Squares
Regression
28.251
9.215
97
.021
Total
37.466
98
Regression
29.215
10.251
8.251
96
.102
Total
37.466
97
Regression
30.256
9.256
7.21
98
.021
Total
37.466
99
Regression
31.252
8.542
6.214
98
.044
Total
37.466
99
Regression
32.236
7.263
5.23
97
.104
37.466
98
Residual
Residual
Residual
Mean Square
28.251
Residual
df
Residual
Total

233
Sig.
162.221
.000a
139.521
.000b
122.521
.000c
81.215
.000d
71.256
.000e
6.13 MULTIVARIATE DATA ANALYSIS - HABIB BANK LIMITED,

PAKISTAN
third component Customer Perceived Value (PV) explains 10% variance of the total variation
alone. The second and third components together explain 83% variance of the total variation. The
fourth component Customer Trust explains 7% variance of the total variation alone. The third and
fourth components together explain 91% variance of the total variation. The fifth component
Customer-Switching Barriers (CSB) explains 6% variance of the total variation alone. The fourth
and fifth components together explain 97% variance of the total variation. Finally, sixth component
Table 6.134
Initial Eigenvalues
% of Variance
Component
Total
Cumulative %
3.346
55.764
55.764 3.346
55.764
55.764
1.041
17.345
73.109 1.041
17.345
73.109
.637
10.616
83.725
.456
7.594
91.319
.380
6.340
97.658
.140
2.342
100.000
234
Total % of Variance
Cumulative %
6.14 REGRESSION MODEL - HABIB BANK LIMITED, PAKISTAN




235
Table 6.135
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.095
.182
5.764
.000
Loyalty
.694
.055
12.987
.000
(Constant)
.299
.198
1.769
.000
Loyalty
.496
.049
11.212
.000
CS
.334
.057
5.656
.000
(Constant)
.121
.213
.443
.000
Loyalty
.448
.041
7.345
.000
CS
.281
.053
4.321
.000
CSB
.211
.052
3.998
.000
(Constant)
.259
.212
1.001
.000
Loyalty
.332
.038
6.294
.000
CS
.218
.055
4.021
.000
CSB
.231
.073
3.358
.000
Trust
.165
.042
2.432
.000
(Constant)
.319
.299
2.336
.000
Loyalty
.227
.048
7.453
.000
CS
.223
.058
4.321
.000
CSB
.199
.065
2.786
.000
Trust
.175
.076
2.321
.000
Culture
.198
.997
2.001
.000
236

and the constant both are significant; the coefficient of Customer-Switching Barriers (CSB) is .663




237
Table 6.136
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.095
.190
4.665
.000
CSB
.663
.044
12.098
.000
(Constant)
.299
.202
1.778
.000
CSB
.497
.039
10.986
.000
CS
.339
.057
5.023
.000
(Constant)
.129
.226
.499
.000
CSB
.441
.043
8.001
.000
CS
.198
.055
4.657
.000
PV
.197
.059
3.998
.000
(Constant)
.311
.212
1.221
.000
CSB
.355
.041
7.021
.000
CS
.220
.044
4.231
.000
PV
.299
.066
3.222
.000
Trust
.131
.050
2.002
.000
(Constant)
.318
.301
2.321
.000
CSB
.421
.040
7.291
.000
CS
.239
.049
4.332
.000
PV
.199
.063
2.765
.000
Trust
.130
.047
2.234
.000
Culture
.202
.101
2.034
.000
238

Table 6.137.


239
Table 6.137
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.121
.176
4.876
.000
Loyalty
.567
.055
11.857
.000
(Constant)
.238
.198
1.768
.000
Loyalty
.434
.034
10.543
.000
PV
.331
.055
5.541
.000
(Constant)
.221
.200
.398
.000
Loyalty
.345
.038
6.213
.000
PV
.245
.043
4.333
.000
CSB
.209
.038
2.765
.000
(Constant)
.232
.247
2.546
.000
Loyalty
.303
.021
5.453
.000
PV
.229
.054
3.998
.000
CSB
.226
.073
3.767
.000
Trust
.146
.025
2.221
.000
(Constant)
.299
.267
2.001
.000
Loyalty
.234
.058
6.553
.000
PV
.287
.054
3.324
.000
CSB
.190
.059
2.435
.000
Trust
.128
.071
2.021
.000
Culture
.154
.870
1.971
.000
240
Table 6.138.


241
Table 6.138
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.009
.198
4.112
.000
Loyalty
.465
.049
10.978
.000
(Constant)
.212
.179
1.656
.000
Loyalty
.399
.012
9.898
.000
PV
.309
.043
5.434
.000
(Constant)
.202
.199
.377
.000
Loyalty
.321
.022
6.003
.000
PV
.198
.123
4.094
.000
CSB
.218
.212
2.565
.000
(Constant)
.243
.254
2.876
.000
Loyalty
.323
.321
5.453
.000
PV
.211
.044
3.454
.000
CSB
.200
.048
3.675
.000
CS
.132
.022
2.333
.000
(Constant)
.343
.212
2.121
.000
Loyalty
.213
.054
6.232
.000
PV
.223
.043
3.435
.000
CSB
.188
.023
2.232
.000
CS
.112
.057
2.121
.000
Culture
.232
.546
1.232
.000
242
Table 6.139.


243
Table 6.139
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.122
.188
3.567
.000
Loyalty
.343
.037
9.322
.000
(Constant)
.432
.169
1.232
.000
Loyalty
.233
.011
8.765
.000
PV
.403
.038
4.665
.000
(Constant)
.199
.198
.312
.000
Loyalty
.434
.013
5.998
.000
PV
.177
.125
4.001
.000
CSB
.204
.221
2.432
.000
(Constant)
.202
.234
2.221
.000
Loyalty
.321
.329
5.021
.000
PV
.203
.042
3.223
.000
CSB
.210
.023
3.121
.000
CS
.122
.017
2.112
.000
(Constant)
.340
.256
2.021
.000
Loyalty
.199
.043
6.002
.000
PV
.202
.039
3.232
.000
CSB
.167
.045
2.223
.000
CS
.109
.041
1.998
.000
Trust
.233
.453
1.675
.000
244
6.14.6


Table 6.140.

245
Table 6.140
Coefficientsa
Model
1
B
(Constant)
Std. Error
Sig.
1.125
.191
5.878
.000
Loyalty
.714
.053
13.498
.000
(Constant)
.390
.216
1.806
.000
Loyalty
.588
.052
11.311
.000
CS
.352
.065
5.444
.000
(Constant)
.130
.238
.547
.000
Loyalty
.474
.056
8.489
.000
CS
.290
.062
4.682
.000
PV
.294
.073
4.049
.000
(Constant)
.325
.243
1.335
.000
Loyalty
.421
.058
7.247
.000
CS
.270
.061
4.437
.000
PV
.246
.073
3.358
.000
Trust
.177
.068
2.583
.000
(Constant)
.417
.375
2.447
.000
Loyalty
.449
.059
7.645
.000
CS
.268
.060
4.478
.000
PV
.218
.073
2.985
.000
Trust
.168
.067
2.497
.000
Culture
.211
.103
2.054
.000
246
6.15 STAGE-WISE MULTIPLE REGRESSION - HABIB BANK LIMITED,

PAKISTAN
Table 6.141
Model
Variables
Variables
Entered
Removed
1
LOYALTY
2
CS
CSB
TRUST
CULTURE
Method
247
Table 6.142
Model Summary
Model
R Square
Adjusted R Square
.802a
.680
.688
.39869
.841b
.792
.876
.38797
.865c
.840
.790
.38768
.877d
.872
.801
.40021
.887e
.899
.768
.43212

248

Table 6.143.
influence on Customer Perceived Value (PV) as F value that is 88.342 shows the significance of the
249
Table 6.143
ANOVAf
Model
1
Sum of Squares
Mean Square
Regression
30.564
30.564
Residual
15.770
97
.162
Total
46.334
96
Regression
33.397
16.224
Residual
12.937
97
.133
Total
46.334
99
Regression
36.222
11.321
Residual
10.112
95
.115
Total
46.334
98
Regression
36.337
9.492
9.997
94
.113
Total
46.334
99
Regression
37.677
7.543
8.657
95
.100
46.334
98
Residual
df
Residual
Total

250
Sig.
177.324
.000a
168.765
.000b
102.887
.000c
88.342
.000d
70.997
.000e
Table 6.144
Variables
Variables
Entered
Removed
Model
1
CSB
CS
PV
TRUST
CULTURE
Method
251
Table 6.145
Model Summary
Model
R Square
Adjusted R Square
.808a
.720
.599
.40293
.855b
.772
..654
.39453
.869c
.791
.724
.37879
.838d
.802
.798
.35675
.876e
.832
.803
.33435

252
significant influence on Customer Loyalty as F value that is 167.543shows the significance of the
253
Table 6.146
ANOVAf
Model
1
Sum of Squares
df
Mean Square
Regression
30.119
30.119
Residual
16.890
98
.154
Total
47.009
99
Regression
34.072
16.564
Residual
12.937
98
.128
Total
47.009
99
Regression
35.959
11.333
Residual
11.050
97
.108
Total
47.009
98
Regression
36.684
8.657
Residual
10.325
94
.100
Total
47.009
98
Regression
37.127
7.434
9.882
96
.101
47.009
98
Residual
Total

254
Sig.
176.543
.000a
167.543
.000b
103.454
.000c
76.232
.000d
70.231
.000e
Table 6.147
Variables
Variables
Entered
Removed
Model
1
LOYALTY
PV
CSB
TRUST
CULTURE
Method
255
Table 6.148
Model Summary
Model
R Square
Adjusted R Square
.800a
.610
.567
.37687
.832b
.722
.546
.36576
.832c
.770
.675
.37564
.897d
.792
.778
.34543
.899e
.843
.664
.39876

256

6.149.
257
Table 6.149
ANOVAf
Model
1
Sum of Squares
df
Mean Square
Regression
32.768
33.453
Residual
14.881
98
.137
Total
47.649
99
Regression
34.432
15.123
Residual
13.217
96
.101
Total
47.649
98
Regression
35.435
10.342
Residual
12.214
94
.109
Total
47.649
98
Regression
37.564
9.768
Residual
10.085
97
.111
Total
47.649
98
Regression
38.786
7.657
8.863
97
.137
47.649
99
Residual
Total

258
Sig.
179.675
.000a
175.876
.000b
168.978
.000c
90.675
.000d
82.879
.000e
Table 6.150
Variables
Variables
Entered
Removed
Model
1
LOYALTY
PV
CSB
CS
CULTURE
Method
259
Table 6.151
Model Summary
Model
R Square
Adjusted R Square
.805a
.690
.668
.39657
.833b
.742
.643
.38767
.867c
.780
.567
.36565
.876d
.802
.661
.35543
.887e
.823
.652
.34576

260

261
Table 6.152
ANOVAf
Model
1
Sum of Squares
34.546
34.546
Residual
13.654
99
.137
48.2
98
Regression
34.432
14.543
Residual
13.217
97
.100
48.2
98
Regression
35.435
10.001
Residual
12.214
95
.112
48.2
99
Regression
37.564
8.765
Residual
10.085
98
.121
48.2
99
38.786
6.765
8.863
96
.122
48.2
98
Total
3
Total
4
Total
5
Mean Square
Regression
Total
2
df
Regression
Residual
Total

262
Sig.
180.565
.000a
177.524
.000b
172.582
.000c
95.524
.000d
88.654
.000e
Table 6.153
Variables
Variables
Entered
Removed
Model
1
LOYALTY
PV
CSB
CS
TRUST
Method
263
Table 6.154
Model Summary
Model
R Square
Adjusted R Square
.811a
.600
.665
.38765
.834b
.732
.632
.37876
.864c
.780
.553
.35654
.853d
.812
.565
.34345
.843e
.843
.554
.32343

264

265
Table 6.155
ANOVAf
Model
1
Sum of Squares
Mean Square
Regression
33.454
33.454
Residual
12.543
98
.112
Total
45.997
99
Regression
34.209
12.251
Residual
11.342
96
.112
Total
45.997
97
Regression
35.654
11.253
Residual
10.343
96
.119
Total
45.997
97
Regression
36.654
10.524
9.343
97
.241
Total
45.997
98
Regression
37.444
8.524
8.553
96
.114
45.997
97
Residual
df
Residual
Total

f. Dependent Variable: Custom Culture
266
Sig.
178.542
.000a
176.548
.000b
172.254
.000c
96.524
.000d
89.256
.000e
Table 6.156
Variables
Variables
Entered
Removed
Model
1
LOYALTY
CS
PV
TRUST
CULTURE
Method
267
Table 6.157
Model Summary
Model
R Square
Adjusted R Square
.806a
.650
.647
.41515
.856b
.732
.727
.36521
.878c
.771
.764
.33928
.887d
.786
.777
.32968
.892e
.795
.784
.32423

268
269
Table 6.158
ANOVAf
Model
1
Sum of Squares
df
Mean Square
Regression
31.403
31.403
Residual
16.890
98
.172
Total
48.293
99
Regression
35.356
17.678
Residual
12.937
97
.133
Total
48.293
99
Regression
37.243
12.414
Residual
11.050
96
.115
Total
48.293
99
Regression
37.968
9.492
Residual
10.325
95
.109
Total
48.293
99
Regression
38.411
7.682
9.882
94
.105
48.293
99
Residual
Total

270
Sig.
182.204
.000a
132.543
.000b
107.849
.000c
87.332
.000d
73.078
.000e
CHAPTER 7
SUMMARY, FINDINGS, CONCLUSIONS &

RECOMMENDATIONS
7.1
SUMMARY
Building and strengthening relations with customers is essential (Zineldin,1995). The more
stronger the relations of banks with their customers, higher the chances of their success.
If banks build and maintain strong relationships with their customers, it is difficult for competitors
to beat them (Gilbert,2003). Therefore, building and maintaining close relations with customers is
of high importance for any organization.
Although there are many aspects of Customer Relationship Management (CRM) in the
banking sector, this research study focuses on its customer part. The major focus of CRM in banks
is to not only to acquire new customers but also to build customer loyalty in the existing ones. This
research study will help banks to build customer loyalty, which is a major focus of Customer
Relationship Management (CRM).
Customer loyalty is more important than increasing number of customers in a bank

(Colgate,1999). Having many customers without loyalty with their bank can result in loss of
customers anytime as competing banks are trying their best to attract your existing customers as
well. To overcome high competition in the banking sector, banks need to strengthen relations with
their customers to make their customers loyal (Bose,2002). Banks should focus constantly on
building relationship with their customers, because it is the only competitive advantage remaining
to them (Xu,2002).
Banks having more knowledge about their customers gives them a better position than their
competitors who have lack of knowledge about their customers. This thorough understanding of
customers results in better strategies development. As the most successful organizations these days
271
focus on their customers and intensely observe any change in their customer`s lifestyles, wants,
income level, age, preferences, etc so that they can respond to those changes immediately than their
competitors.
Banking sector all over the world facing immense competition and Pakistani banking sector
is not an exception. It is an acceptable fact that acquiring new customer is more costly than
retaining the existing customer. The researcher followed the same fact and developed the basic
purpose of this research study that is to discover the major factors that affect customer loyalty,
in the banking sector of Pakistan. Following research questions helped the researcher to achieve this
research study`s purpose:
2) What is the relationship between the factors that affect customer loyalty in the banking
sector of Pakistan?
The population of this research study consists of customers of banks. Different researchers
have recommended different sample sizes. For instance, 300 respondents are good (Comrey & Lee
,1992; Tabachnick & Fidell, 2001). A sample of 200 to 500 is considered adequate for most
customer surveys (Hill and Alexander, 2000). The sample size should allow at least five responses
for each item and a more acceptable sample size would allow ten responses for each item to be
analyzed (Hair, Anderson, Tatham, & Black, 1998). Therefore, the researcher keeping in mind all
of these researchers sample size criteria, finalized sample size of 400 customers of the four banks
namely National Bank of Pakistan (NBP) serving as a public bank, Habib Bank Limited (HBL),
Pakistan serving as a private bank, Meezan Bank Limited, Pakistan serving as an Islamic bank, and
Citibank serving as a foreign bank in Pakistan.
Operational definitions are required for data collection questionnaire (Davis & Cosenza,
1993). It means that every factor that influences customer loyalty should have specific questions to
272
be asked. For measuring factors or constructs of this research study namely customer trust,
customer perceived value, customer satisfaction, customer switching barriers, customer culture, and
customer loyalty, operationalisation is used.
To measure customer trust, the researcher uses the measure of Hess (1995), Jarvenpaa &
Tractinsky (1999), Gurviez & Korchia (2002), Gefen et al. (2003), and Chiou & Droge (2006). The
researcher uses the measures of Wang et al. (2001) and Llosa (1996) to measure customer
satisfaction. The researcher uses the measures of Lassar et al. (1995) scale to measure customer
perceived value. The researcher uses the measures of Kim, et. al., (2003) to measure customer
switching barriers. The researcher uses the measure of Hofstede (1980; 1994) scale to measure
customer culture. Lastly, the researcher uses the measures of Boulaire and Mathiew (2000),
Srinivasan et al. (2002) and Huang (2008) to measure customer loyalty.
A well-structured, self-administered questionnaire was developed as attached at Appendix-I
as an instrument for data collection from customers of banks. The researcher included brief
instructions in the beginning of questionnaire for improved response with Likert 5-point scale.
Pretesting of the questionnaire improves it and customers easily respond (Saunders et al.,
2000). Hence, the researcher did three-stage pilot testing of the questionnaire.
In the research design, reliability and validity factors have to paid attention in order to
minimize possibility of getting incorrect responses (Saunders et al., 2000). In this research study,
the Cronbach`s Alpha value of all constructs is higher than .70 that indicates reliability of the
research instrument.
The validity of a measurement instrument refers to how well it captures what it is designed
to measure (Rosenthal & Rosnow, 1984). For the validity of the research instrument, the researcher
has used review of related literature for the validity of factors of this research study. The researcher
found the scope of factors of this research study through detailed related literature review.
Researcher also got relevant experts suggestions from various universities in Pakistan for reviewing
this research study`s questionnaire before going for the pilot-testing.
273
To assess the content validity, the researcher got feedback from bank`s experts and bank`s
most regular customers on questionnaire and made changes in this questionnaire accordingly. A
three-stage pilot testing of questionnaire as mentioned above was also performed for improvements
in questionnaire.
The researcher-entered data collected from customers of the selected banks namely
Citibank, National Bank of Pakistan (NBP), Meezan Bank Limited, and Habib Bank Limited
(HBL), Pakistan in SPSS software version 16.00 for demographic analysis, correlation analysis, and
regression analysis. ANOVA, F, Beta, t-test, significance, and coefficient tests were performed to
measure the affects of customer trust, customer perceived value, customer satisfaction, customer
switching barriers, and customer culture on customer loyalty and also to measure the relationships
between these factors.
After detailed analysis and discussions, results of this research study indicate that customer
trust, customer perceived value, customer satisfaction, customer switching barriers, and customer
culture does affect customer loyalty and relationships between these factors vary from bank to
bank.
After measuring relationships of these factors with each other and their affect on customer
loyalty, the researcher responded to this research study`s questions and hypotheses and developed a
customer loyalty model for the banking sector of Pakistan for the mutual benefits of customers and
banks.
7.2
FINDINGS OF THE RESEARCH STUDY

According to the customer loyalty model developed by the researcher as shown in the
Figure 7.1, the affect of studied factors on customer loyalty and their affect on each other vary from
bank to bank, and this variation can help banks to understand their weaknesses, in order to build
and strengthen loyalty of their customers.
Firstly, customer loyalty model developed by the researcher as shown in the Figure 7.1
clearly shows that the affect of customer trust on customer perceived value in case of Citibank is
274
.387, in case of National Bank of Pakistan (NBP) is .305, in case of Meezan Bank Limited is .333,
and in case of Habib Bank Limited is .359. Here a clear variation is seen as the highest affect of
customer trust on customer perceived value is in the case of Citibank that is .387. Therefore, it
proves that customer trust affects customer perceived value and it also proves this research studys
hypothesis H1 that customer trust has a significant influence on customer perceived value.
Secondly, the model shows that the affect of customer trust on customer satisfaction in case
of Citibank is .573, in case of National Bank of Pakistan (NBP) is .336, in case of Meezan Bank
Limited is .330, and in case of Habib Bank Limited is .587. Here a clear variation is seen as the
highest affect of customer trust on customer satisfaction is in the case of Habib Bank Limited that is
.587. Therefore, it proves that customer trust affects customer satisfaction and it also proves this
research studys hypothesis H2 that customer trust has a significant influence on customer
satisfaction.
Thirdly, the model shows that the affect of customer trust on customer loyalty also varies
from bank to bank. The affect of customer trust on customer loyalty, in case of Citibank is .474, in
case of National Bank of Pakistan (NBP) is .419, in case of Meezan Bank Limited is .419, and in
case of Habib Bank Limited is .447. Here a clear variation is seen as the highest affect of customer
trust on customer loyalty is in the case of Citibank that is .474. Therefore, it proves that customer
trust affects customer loyalty and it also proves this research studys hypothesis H3 that customer
trust has a significant influence on customer loyalty.
Fourthly, the model shows that the affect of customer perceived value on customer
satisfaction also varies from bank to bank. The affect of customer perceived value on customer
satisfaction, in case of Citibank is .665, in case of National Bank of Pakistan (NBP) is .354, in case
of Meezan Bank Limited is .352, and in case of Habib Bank Limited is .605. Here a clear variation
is seen as the highest affect of customer perceived value on customer satisfaction is in the case of
Citibank that is .665. Therefore, it proves that customer perceived value affects customer
satisfaction and it also proves this research studys hypothesis H4 that customer perceived value has
a significant influence on customer satisfaction.
275
Fifthly, the model shows that the affect of customer satisfaction on customer loyalty also
varies from bank to bank. The affect of customer satisfaction on customer loyalty, in case of
Citibank is .657, in case of National Bank of Pakistan (NBP) is .439, in case of Meezan Bank
Limited is .418, and in case of Habib Bank Limited is .615. Here a clear variation is seen as the
highest affect of customer perceived value on customer satisfaction is in the case of Citibank that is
.657. Therefore, it proves that customer satisfaction affects customer loyalty and it also proves this
research studys hypothesis H5 that customer satisfaction has a significant influence on customer
loyalty.
Sixthly, the model shows that the affect of customer switching barriers on customer loyalty
also varies from bank to bank. The affect of customer switching barriers on customer loyalty, in
case of Citibank is .487, in case of National Bank of Pakistan (NBP) is .493, in case of Meezan
Bank Limited is .349, and in case of Habib Bank Limited is .446. Here a clear variation is seen as
the highest affect of customer switching barriers on customer loyalty is in the case of National Bank
of Pakistan (NBP) that is .493. Therefore, it proves that customer-switching barriers affects
customer loyalty and it also proves this research studys hypothesis H6 that customer switching
barriers has a significant influence on customer loyalty.
276
Figure 7.1:
3 items
Citibank .665
NBP .354
Meezan .352
HBL .605
CUSTOMER
PERCEIVED VALUE
Citibank .387
NBP .305
Meezan .333
HBL .359
H H4
H1
4 items
CUSTOMER
SATISFACTION
H2
Citibank .573
NBP .336
Meezan .330
HBL .587
CUSTOMER TRUST
7 items
H5
Citibank .657
NBP .439
Meezan .418
HBL .615
H3
H
5 items
CUSTOMER SWITCHING
BARRIERS
H6
Citibank .487
NBP .493
Meezan .349
HBL .446
H7
Citibank .474
NBP .419
Meezan .419
HBL .447
CUSTOMER
LOYALTY
CUSTOMER CULTURE
4 items
Citibank .446
NBP .365
Meezan .483
HBL .403
277
6 items
Seventhly, the model shows that the affect of customer culture on customer loyalty also
varies from bank to bank. The affect of customer culture on customer loyalty, in case of Citibank is
.446, in case of National Bank of Pakistan (NBP) is .365, in case of Meezan Bank Limited is .483,
and in case of Habib Bank Limited is .403. Here a clear variation is seen as the highest affect of
customer culture on customer loyalty is in the case of Meezan Bank Limited that is .483. Therefore,
it proves that customer culture affects customer loyalty and it also proves this research studys
hypothesis H7 that customer culture has a significant influence on customer loyalty.
The Table 7.1 shows the findings of the joint correlation analysis of data collected from the
customers of banks namely Citibank, National Bank of Pakistan (NBP), Meezan Bank Limited, and
Habib Bank Limited (HBL), Pakistan.
Table 7.1: correlation analysis of the data collected from the customers of the studied banks namely
Citibank, National Bank of Pakistan, Meezan Bank Limited, & Habib Bank Limited, Pakistan
customer
customer
customer
customer
customer
customer
trust
perceived
satisfaction
switching
culture
loyalty
value
Customer
Trust
barriers
0.346
0.457
0.440
Customer
Perceived
0.494
Value
Customer
Satisfaction
0.532
Customer
Switching
0.444
Barriers
Customer
Culture
Customer
0.424
Loyalty
278
As Table 7.1 shows that few factors affect customer loyalty more than other factors. Here
the researcher sees that customer satisfaction is the most correlated element with customer loyalty
having a value of .532. It indicates that customer loyalty will decrease if there is a decrease in
customer satisfaction; and customer loyalty will increase more if there is an increase in the
customer satisfaction and this also proves this research study`s hypothesis H5 that there is
significant influence of customer satisfaction on customer loyalty. Beerli, Martin and Quintana,
(2004), in their loyalty model are also of the view that the customer satisfaction has strong
influence on the customer loyalty. Customer satisfaction helps more to build customer loyalty than
any other factor (Ehigie, 2006). The researcher emphasizes that banks should focus more on the
customer satisfaction being the highest influencer on the customer loyalty. Customer satisfaction
builds customer loyalty and helps to achieve more profit (Jamal and Naser, 2002; Reichheld, 1993;
Federal Express, 1992; Winstanley, 1997). Furthermore, in review of related literature, the
researcher already discussed that customer satisfaction has most influence on customer loyalty as
according to the loyalty models presented by Jamal & Kamal (2004), Levesque & Mc Dougall
(1996), and Moutinho & Smith (2000).
Trust has influence on perceived value, satisfaction, and loyalty (Morgan & Hunt, 1994;
Kaacbachi, 2006). According to Table 7.1, the researcher indicates that correlation between
customer trust and customer perceived value is 0.346 which proves this research study`s hypothesis
H1 that there is significant influence of customer trust on customer perceived value.
According to Table 7.1, the correlation between customer trust and customer satisfaction is
0.457 which proves this research study`s hypothesis H2 that there is significant influence of
customer trust on customer satisfaction, and correlation between customer trust and customer
loyalty is 0.440 which proves this research study`s hypothesis H3 that there is significant influence
of customer trust on customer loyalty. Customer trust correlations with customer perceived value,
customer satisfaction, and customer loyalty factors show that there is a significant influence of
customer trust on customer loyalty. The researcher here emphasizes that banks should focus on
customer trust that directly and indirectly enhances customer loyalty and the result is more loyal
customers, which is the focus of Customer Relationship Management (CRM).
279
In the model presented by Beerli, Martin and Quintana, (2004), customer perceived value
influences customer satisfaction. According to the researcher`s proposed model, correlation
between customer perceived value and customer satisfaction is 0.494 (Table 7.1) meaning that
customer perceived value also influences the customer satisfaction and then customer satisfaction
influences customer loyalty therefore it proves this research study`s hypothesis H4 that there is
significant influence of customer perceived value on customer satisfaction. This finding indicates
that customer perceived value has a strong influence on customer satisfaction, and as earlier
discussed, that the customer satisfaction that is 0.532 (Table 7.1) has the highest correlation than
other factors hence customer perception value role becomes highly significant.
Correlation between customer satisfaction and customer loyalty is 0.532 (Table 7.1) and that
also proves this research study`s hypothesis H5 that there is significant influence of the customer
satisfaction on the customer loyalty. It indicates that customer satisfaction strongly affects the
customer loyalty hence banks in Pakistan should focus more on customer satisfaction.
According to the proposed model, correlation between customer switching barriers and
customer loyalty is 0.444 (Table 7.1) as also presented in the model by Beerli, Martin and
Quintana, (2004) and that also proves this research study`s hypothesis H6 that there is significant
influence of the customer switching barriers on the customer loyalty. It indicates that customerswitching barriers affect the customer loyalty hence banks in Pakistan should focus on this aspect as
well.
Correlation between customer culture and customer loyalty is 0.424 that finally proves this
research study`s hypothesis H7 that there is significant influence of customer culture on customer
loyalty whereas in the model presented by Beerli, Martin and Quintana, (2004), culture factor is not
given. According to the review of related literature, Pakistani culture has a significant influence on
Pakistani customers. This finding indicates that customer loyalty is influenced by customer culture
as well and in case of cultural differences, this influence becomes more significant.
The t-value in all the findings of this research study is higher than 2 which mean that the
relationship between each question and relevant factor is valid. Therefore, based on all these
280
findings, analysis, and arguments, it proves that researcher`s proposed model of customer loyalty as
shown in Figure 7.1 is valid for the banking sector of Pakistan.
7.3
CONCLUSIONS
A well-integrated process of Customer Relationship Management (CRM) in any bank is not
effective until banks recognize and observe the drivers of customer trust, customer perceived value,
customer satisfaction, customer switching barriers, customer culture, and customer loyalty as this
research study found that these factors affect each other and have a strong influence on building
customer loyalty.
This research study contributes in identifying the affects of customer trust, customer
perceived value, customer satisfaction, customer switching barriers, and customer culture on
customer loyalty in the banking sector of Pakistan. The researcher has also indentified the affect of
these factors on customer loyalty that vary from bank to bank in his customer loyalty model.
Therefore, with the help of this customer loyalty model, banks can understand the causes of these
variations. It is also a fact that precondition to customer loyalty is customer satisfaction as this
research study has also proved it.
Dissatisfied customers of any bank easily switch to another bank at any time therefore it is
essential for banks to understand and recognize the value of customer switching barriers. This
research study proved that if customer-switching barriers are high then the chances of switching
customers to other banks decreases and if the customer switching barriers are low then the chances
of switching customers to other banks increases. Therefore, with the help of this research study,
banks can increase customer-switching barriers to make their customers loyal.
The researcher would also like to mention here that there is hardly any research study
conducted in Pakistan that has seen the affects of customer culture and customer trust on customer
loyalty as the findings of this research study indicates that customer culture and customer trust
affect customer loyalty in the banking sector of Pakistan.
281
Analyses also indicate that relationship of these factors with each other also vary from bank
to bank. The researcher added factors to the existing loyalty model of Beerli, Martin & Quintana
(2004) which improved this existing model.
7.4
RECOMMENDATIONS
Based on the findings of this research study, major recommendations for the banking sector
of Pakistan are:
1) The researcher has indentified variations among key factors namely customer trust,
customer perceived value, customer satisfaction, customer switching barriers, and customer
culture that affect customer loyalty in the banking sector of Pakistan. These identified
variations can help the banking sector of Pakistan to understand real causes of their
weaknesses so that they can overcome these in order to build their customers loyalty.
2) Based on the different responses of customers, banks need to do vigilant segmentation of

customers in order to provide the right products and services to the right customers.
3) This research study proves that customer satisfaction has a significant influence on customer
loyalty, and satisfied customers rarely switch to any other bank. Therefore, in order to
satisfy bank customers better than their competitors, banks have to keep on improving their
existing customer satisfaction strategies.
4) This research study proves that the customer trust affects customer perceived value,
customer satisfaction, and customer loyalty. Therefore, banks by strengthening trust of their
customers can increase customer perceived value, customer satisfaction, and customer
loyalty.
5) Customer perceived value has a significant influence on customer satisfaction hence; banks
should emphasize on improving customer perceived value that results in increased customer
satisfaction.
282
6) As proved by this research study, customer-switching barriers have a significant influence

on customer loyalty. If customer-switching barriers decrease than the chances of leaving
customers are high so banks should keep on improving their products and services to
increase their customer-switching barriers. Therefore, if a bank`s products and services are
of high quality and better than their competitors then it becomes hard for their customers to
switch to some other bank.
7) Banks should focus more on the customer satisfaction being the highest influencer on the
customer loyalty as proved by the customer loyalty model developed by the researcher. This
model also indicates that customer loyalty will decrease if there is a decrease in customer
satisfaction; and customer loyalty will increase more if there is an increase in the customer
satisfaction.
8) Customer culture has a significant influence on customer loyalty as proved by this research
study. It also proves that majority customers of banks in Pakistan believe on collectivism.
Therefore; banks need to focus more on cultural aspects of their customers in order to build
and strengthen customer`s loyalty.
At present, there is intense competition in the banking sector; these recommendations can
help banks to build customer loyalty, as it is one of the major competitive advantages remaining to
banks.
7.5
IMPLICATIONS FOR THEORY AND PRACTICE

Findings and contributions of this research have several implications for theory and practice
as the findings of this research study contribute towards current knowledge on customer loyalty in
the banking sector of Pakistan.
This research identifies the key factors that affect customer loyalty, therefore, banks should
invest resources to enhance customer trust, customer perceived value, customer satisfaction,
customer switching barriers, and customer culture leading to customer loyalty.
283
The researcher strongly believes on the basis of the findings of this research study that
variations among customer trust, customer perceived value, customer satisfaction, customer
switching barriers, and customer culture in banks can help the banking sector of Pakistan to
overcome their existing weaknesses, and improve and develop their existing business strategies in
order to build and strengthen customer loyalty.
This research study`s findings and results will also help banks to better understand cultural
aspects of host countries.
Building customer loyalty is not a simple thing to do for any bank as there is tough
competition going on as every bank is trying its best to absorb customers. Failures of many banks
these days have proved that previous models and traditional methods of working and handling
customers are not working well and banks have to bring change in their strategies to build and
strengthen relations with their customers because it is the only major competitive advantage
remaining.
The findings of this research study will help banks to build customer loyalty of their
customers and it will benefit both the customers and their banks. Furthermore, this research study`s
findings and recommendations contribute towards improvement in existing customer loyalty
strategies of banks.
7.6
FUTURE DIRECTIONS OF RESEARCH

The researcher collected data with the help of questionnaire manually. This research study
could be improved if a web-based survey is conducted to concurrently assess customer`s reactions

to their banks while they interact with bank`s websites. Therefore, another possible direction for
further research might be to use an instant web-based survey in order to enhance validity.
Further research could be conducted to identify the business value of establishing and
developing relationships with varying groups of customers in different countries.
284
This research could be applied more widely to verify to what extent the results can be
transposed to other regions of the world.
The researcher is confident about the implications of his research study but it may be noted
that this research study is based on data collected from only few areas in Pakistan and has a sample
of 400 customers of banks in Pakistan; future research study may focus on data collection from an
entire country or from different countries for better generalization.
The researcher also believes based on this research study`s findings that there may be other
factors that also affect customer loyalty, therefore, research to discover further factors that affect
customer loyalty is recommended.
285
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13
Appendix-I
Questionnaire for customers of banks
Dear Sir/Madam,
Thanks for your most valuable time for filling this questionnaire. Firstly, let me introduce myself, I
am PhD scholar at the National University of Modern Languages (NUML), Islamabad, Pakistan. As
a requirement of my PhD thesis, I am doing this research study to discover the major factors that
affect customer loyalty, which is a focus of Customer Relationship Management (CRM) for
overcoming high competition in the banking sector of Pakistan.
The basic purpose of this questionnaire is to get your feedback about your experience with your
bank.
This survey is anonymous and your responses will be held in the strictest confidence. I thank you
for your time and most useful feedback.
(Mohammad Majid Mahmood Bagram)

PhD scholar
National University of Modern Languages (NUML),
Islamabad, Pakistan
bagram@hotmail.com, 03335188677
14
QUESTIONNAIRE FOR CUSTOMERS OF BANKS

(Thanks for your most valuable time and feedback)
Kindly tick the relevant:
GENDER:
1) Male ___________
2)
Female ___________
MARITAL STATUS:
1) Single _______________
2)
Married ______________
1) 21000-30000 _____________
2)
31000-40000 _____________
3) 41000-50000 _____________
4)
51,000 and above _____________
INCOME:
AGE:
1) 20-30 years ________
2) 31-40 years ________
3) 41-50 years ________
4) 51 and above years ________
EDUCATION LEVEL:
1) Intermediate and below ________
2) Bachelor degree ________
3) Masters and above ________
15
Kindly tick only one best option (in your point of view) out of five given options
(Please indicate your level of agreement or disagreement with each statement in this questionnaire)
Strongly
Strongly
Agree Neutral Disagree
Agree
Disagree
5
PERCEIVED VALUE
Lassar et al. (1995)
1 The price of services offered by this bank is
fair
2 Comparing to what I pay, I receive much
more in terms of money, effort and time
3 On the base of simultaneous consideration
of what I pay and what I gain, I consider
that bank service is of value
SATISFACTION
Wang et al. (2001), Llosa (1996)
4 I am satisfied with this bank
5 This bank leaves me a pleasant impression
6 I want to return to this bank in the future
7 I will advise this bank to my friends
SWITCHING BARRIERS
Kim, et. al., 2003
8 In general switching to a new bank would
be a hassle.
9 It would cost me a lot of money to switch
from my current bank to another bank.
10 It would cost me a lot of time to switch
11 It would cost me a lot of effort to switch
12 Prices of other banks are higher.
CULTURE
Hofstede (1980; 1994)
13 You have a top priority towards personal
goals
14 You feel uncomfortable in unusual
situations
15 You buy what you desire without worrying
about how others feel or think
16 You buy what you like and stick to your
brand
16
TRUST
Hess(1995), Jarvenpaa & Tractinsky (1999),
Gurviez & Korchia (2002), Gefen et al. (2000),
Chiou & Droge (2006)
17 This bank keeps its promises
18 This bank is honest
19 This bank is reliable
20 This bank meets my needs
21 This bank seems capable to manage
transactions on line
22 This bank seems to have solid knowledge
in its field
23 I trust the know-how of this bank
LOYALTY
Boulaire et Mathieu (2000), Srinivasan et al.
(2002), Huang (2008).
24 I regularly visit this bank
25 I seldom think of changing this bank to
another one
26 I use this bank each time I need to make
any financial transaction
27 I consider this bank as my preferred one
28 I like to use this bank
29 Each time I want to make any financial
transaction, this bank is my first choice
OPEN ENDED QUESTIONS

1. What are your comments regarding current services provided by this bank (you may attach
additional sheets if required)?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
2. Any suggestions for improvement of various services offered by this bank (you may attach
additional sheets if required):
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Thanks again for your most valuable time & feedback.
17
Appendix-II,
State Bank of Pakistan (SBP) - Organogram
18
Appendix-III
BANKS/ DEVELOPMENT FINANCE INSTITUTIONS REGULATED BY THE

STATE BANK OF PAKISTAN
S#
1
BANKS
PUBLIC
First Women Bank Limited
SECTOR BANKS
Mrs. Shafqat Sultana, President

Dr. Syedna Tahir Saifuddin Memorial Foundation Building,
CL-10/20/2
Beaumont Road, Civil Lines, Karachi
Telephone Office:021-35657681, 35657683
Fax Number:021-35657755
Website :- http://www.fwbl.com.pk
UAN: 111-676-767
National Bank of Pakistan

Syed Ali Raza, President
Head Office, I.I. Chundrigar Road, Karachi
Telephone Office: 021-99212200 & 99212208
Fax Number: 021-99212774
Website :- http://www.nbp.com.pk
The Bank of Khyber

Mr. Bilal Mustafa, Managing Director
24- The Mall, Head Office, Peshawar Cantt.
Fax Number: 091-5276838
19
Website :- http://www.bok.com.pk
UAN: 111-95-95-95
The Bank of Punjab

Mr. Naeemuddin Khan, President
Head Office, BOP TOWER, 10-B, Block E-11, Main
Boulevard Gulberg-III, Lahore
Telephone Office:042-35783711 & 35783712
Fax Number:042-35783713
Website :- http://www.bop.com.pk
SPECIALIZED
Industrial Development Bank of Pakistan
BANKS
Mr. Jamal Nasim, Acting Managing Director

State Life Building No. 2, Wallace Road
Off. I. I. Chundrigar Road, Karachi
Telephone Office: 021-99213615
Fax Number: 021-99213617
Website :- http://www.idbp.com.pk
SME Bank Limited

Mr. R. A. Chughtai, President / Chief Executive Officer
40,Jang Building, A. K. Fazal-ul-Haq Road
Blue Area, Islamabad
Telephone Office:051-9203962
Fax Number: 051-9206735
Website :- http://www.smebank.org
UAN: 111-11-00-11
The Punjab Provincial Cooperative Bank Ltd

Mr. Maqsood Qadir Shah, President / Chief Executive Officer
Bank Square, Shahrah-e-Quaid-e-Azam
20
The Mall, Lahore

Fax Number: 042-99211442
Zarai Taraqiati Bank Limited

Mr. Muhammad Zaka Ashraf, President / Chief Executive
Officer
Head Office, 1-Faisal Avenue, P. O. Box No.1400, Islamabad
Fax Number: 051-9252737
Website :- http://www.ztbl.com.pk
PRIVATE
Allied Bank Limited
BANKS
Mr. Mohammad Aftab Manzoor, President / Chief Executive

Officer
Central Office, Main Clifton Road
Bath Island, Karachi
Telephone Office: 021-35874221-021-35871339
Fax Number: 021-35835525
Website :- http://www.abl.com
UAN: 111-110-110
Arif Habib Bank Limited

Mr. Husain Lawai, President / Chief Executive Officer
23 Arif Habib Centre, M.T. Khan Road, Karachi
Telephone Office: 021- 32463570
Fax Number: 021-32463575
Website :- http://www.arifhabibbank.com/
UAN: 111-124-725
21
Askari Bank Limited

Mr. Mohammad Rafiquddin Mehkari, President/Chief
Executive Officer
1st Floor, AWT Plaza, The Mall, Rawalpindi.
Fax Number: 051-9271982
Website :-http://www.askaribank.com.pk
UAN: 111-000-786
Atlas Bank Limited

Mr. Abdul Aziz Rajkotwala, President / Chief Executive
Officer
3rd Floor, Federation House
Abdullah Shah Ghazi Road, Clifton, Karachi
Telephone Office: 021-35369283, 35369264
Fax Number: 021-35290274
Website :- http://www.atlasbank.com.pk
Bank Alfalah Limited

Mr. Sirajuddin Aziz, Chief Executive Officer
Head Office, 2nd Floor, B.A. Building
I.I. Chundrigar Road, Karachi
Telephone Office: 021-32416966, 32416795
Fax Number: 021-32434183
Website :- http://www.bankalfalah.com
UAN: 111-777-786
Bank Al Habib Limited

Mr. Abbas D. Habib
Chief Executive/Managing Director
Mackinnons Building
22

Telephone Office: 021- 32419216
Fax Number: 021- 32419752 & 32441881
Website :- http://www.bankalhabib.com
UAN: 111-014-014
Faysal Bank Limited

Mr. Naved A. Khan
President/Chief Executive
Faysal House, ST-02, Commercial, Main Shahrah-e-Faisal,
Karachi
Fax Number: 021-32793131
Website :- http://www.faysalbank.com
UAN: 111-747-747
Habib Bank Limited

Mr. R. Zakir Mahmood
22-Habib Bank Plaza
Telephone Office: 021 - 3241 2128
Fax Number: 021- 3241 1566
Website :- http://www.habibbankltd.com
Habib Metropolitan Bank Limited

Mr. Anjum Zahoor Iqbal
Spencer Building
I. I. Chundrigar Road, Karachi.
23
Fax Number: 021-32630496

Website :- http://www.hmb.com.pk
UAN: 111-18-18-18
JS Bank Limited
Mr. Naveed Qazi
President / Chief Executive
1st Floor, Shaheen Commercial Complex
Dr. Ziauddin Ahmed Road, Karachi
Telephone Office: 021-32635208/32633820
Fax Number: 021-32631803
Website :- http://www.jsbl.com
UAN: 111-777-999
KASB Bank Limited

Mr. Muneer Kamal
President/CEO
Principal Office, Business & Finance Centre
Registered Office, Razia Sharif Plaza (Basement), Jinnah
Avenue, 90 Blue Area, Islamabad
Telephone Office: 021-32446800, 99217082, 051-2276827-30
Fax Number: 021-99217588, 051-2270727
Website :- http://www.kasbbank.com
UAN: 111-555-666
MCB Bank Limited

Mr. Atif Aslam Bajwa
22nd Floor, MCB Tower, I.I. Chundrigar Road, Karachi
9th Floor, MCB House, 15-Main Gulberg, Lahore
24
Telephone Office: 021-32270075-76 & 042-36041900-01

Fax Number: 021-32270078 & 042-35776619
Website :- http://www.mcb.com.pk
UAN: 111-000-111
Mybank Limited
Mr. Muhammad Bilal Sheikh
President/Chief Executive Officer
2nd Mezzanine Floor, Business & Finance Centre, I. I.
Chundrigar Road, Karachi
Fax Number: 021-32471951
Website :- http://www.mybank.com
UAN: 111-443-111
NIB Bank Limited

Khawaja Iqbal Hassan
President / Chief Executive Officer
Muhammadi House, I. I. Chundrigar Road Karachi
Telephone Office: 021-32420333/021-32427887
Fax Number: 021-32472258
Website :- http://www.nibpk.com
UAN: 111-333-111
SAMBA Bank Limited

Mr. Tawfiq A. Husain
6th Floor, Sidco Avenue Centre, Maulana Deen Muhammad
Wafai Road, Karachi
Telephone Office: 021-35686267, 021-35683059
Fax Number: 021-35658059
25
Website :- http://www.samba.com.pk
UAN: 111-999-333
SILKBANK Limited
Mr. Azmat Shahzad Ahmed Tarin
Central Office, Saudi Pak Building
6-Q Block, Gulberg II, Lahore
:042-35757190-1
Fax Number: 021-32460464
: 042-35761112
Website :- http://www.saudipakbank.com
UAN: 111-00-1987
Soneri Bank Limited

Mr. Safar Ali K. Lakhani
Central Office, 5th Floor, Al-Rahim Tower
Fax Number: 021-32439561
Website :- http://www.soneri.com
UAN: 111-567-890
Standard Chartered Bank (Pakistan) Limited

Mr. Badar Kazmi
3rd Floor, Main Branch, P. O. Box No. 5556
I. I. Chundrigar Road, Karachi
26
Telephone Office: 021-32450288-89

Fax Number: 021-32414914
Website :- http://www.standardchartered.com.pk
UAN: 111-002-002
The Royal Bank of Scotland Limited

Mr. Shehzad Naqvi
Chief Executive Officer
16 Abdullah Haroon Road, Karachi
Fax Number: 021-35683432
Website:-www.rbs.com.pk
United Bank Limited

Mr. Atif R. Bokhari
President & CEO
Head Office, 8th Floor, State Life Building No.1, I.I.
Chundrigar Road, Karachi
Fax Number: 021-32413492
Website :- http://www.ubl.com.pk
UAN: 0800-11-825
ISLAMIC
BankIslami Pakistan Limited
BANKS
Mr. Hasan Bilgrami

Chief Executive Officer
11th Floor, Executive Tower, Dolmen City Marine Drive,
Block-4, Clifton, Karachi
Telephone Office: 021-35379797 & 111-247-111 Ext-2001
Fax Number: 021-35379796
Website :-http://www.bankislami.com.pk
27
UAN: 111-247-111
Dawood Islamic Bank Limited

Mr. Pervez Said
3rd Floor, Trade Centre, I. I. Chundrigar Road, Karachi
Fax Number: 021-32272466
Website :- http://www.dawoodislamic.com/
Dubai Islamic Bank Pakistan Limited

Mr. Mohammad Ahmed Mannan
President / Chief Executive
Hassan Chambers, 3rd Floor, Plot DC-7
Block-7, Kehkashan Clifton, Karachi
Telephone Office: 021 -35308923
Fax Number: 021 -35821071 & 35308921
Website :- http://www.dibpak.com/
Emirates Global Islamic Bank Limited

Syed Tariq Hussain
Plot No. 162, Bangalore Co-operative Housing Societies Ltd
(Bangalore Town), Block 7 & 8, Shahrah-e-Faisal, Karachi.
Telephone Office: 021-34307000- 7001/251
Fax Number: 021-34530981
Website :- http://www.egibl.com
Meezan Bank Limited

Mr. Irfan Siddiqui
President & Chief Executive Officer
28
2nd Floor, PNSC Building, M. T. Khan Road Karachi

Fax Number: 021-35610676
Website :- http://www.meezanbank.com
UAN: 111-331-331
5
FOREIGN
Albaraka Islamic Bank B.S.C. (E.C.),
BANKS
Mr. Shafqaat Ahmed

Country Head Pakistan
95-B Hali Road, Gulberg II, Lahore
Fax Number: 042-35756877
Website :- http://www.albaraka.com.pk
UAN: 111-742-742
Barclays Bank PLC

Mr. Mohsin Ali Nathani
Country Head & Managing Director
Dawood Centre, M.T.Khan Road,
Karachi
Fax Number: 021-35634039
Website :-www.barclays.pk
Citibank N.A. - Pakistan Operations

Mr. Arif Usmani
Managing Director & Citi Country Officer
1st Floor, AWT Plaza
Fax Number: 021-32638211
Website :- http://www.citibank.com.pk
29
UAN: 111-333-333
Deutsche Bank AG - Pakistan Operations

Mr. Shazad Dada
Chief Country Officer
Avari Plaza, Fatima Jinnah Road
Karachi -75530
Fax Number: 021-35658325
Website :- http://www.db.com/pakistan/
UAN: 111-555-777
HSBC Bank Middle East Limited - Pakistan Operations

Mr. Muhammad Tahir Sadiq
Chief Executive Officer Pakistan
Bahria Complex III, 9th Floor, M.T. Khan Road, Karachi
Fax Number: 021- 35615226
Website :- http://www.hsbc.com.pk
UAN: 111-852-852
Oman International Bank S.A.O.G Pakistan Operations

Mr. Aziz Abbas
Acting Country Manager Pakistan
Ground Floor, Nadir House Building
Fax Number: 021-32418920
Website :- http://www.oiboman.com
30
The Bank of Tokyo-Mitsubishi UFJ Limited - Pakistan

Operations
Mr. Satoshi Hirano
General Manager
1st Floor, Shaheen Complex
M.R. Kayani Road, Karachi
Fax Number: 021-32631368
Website :- http://www.bk.mufg.jp
6
MICRO
KASHF Microfinance Bank Limited
FINANCE
Mr. Ghazanfar Azzam
BANKS /
President
INSTITUTIONS
387-E, Mollana Shoukat Ali Road, Johar Town, Lahore

Telephone Office: 042- 35222784,
042-37747913
Fax Number: 042-35222851
Khushhali Bank Limited

Mr. Muhammad Ghalib Nishtar
President
94 West, 4th Floor, Amir Plaza, Jinnah Avenue Blue Area, P.
O. Box 3111, Islamabad
Fax Number: 051-9206080
Website :- http://www.khushhalibank.com.pk/
UAN: 111-092-092
Network Microfinance Bank Limited

Mr. M. Moazzam Khan
Head Office
31
202-Azayam Plaza, Opp. FTC Building, S.M.C.H.S. Shahrahe-Faisal, Karachi

Telephone Office: 021-34311720 - 21
Fax Number: 021-34311722
Website: www.networkmicrobank.com
Pak Oman Microfinance Bank Limited

Mr. Munawar Suleman
Head Office, 2nd Floor, Tower C, Finance & Trade Centre,
Shahrah-e-Faisal, Karachi
Fax Number: 021-35630949
Website :- http://www.pomicro.com/
Rozgar Microfinance Bank Limited

Mr. Azmat Khan
Acting President / Chief Executive Officer
Business Executive Centre
F-17/3, Block-8 Clifton, Karachi
Fax Number: 021-35865145
Website :-http://www.rozgarbank.com/
The First Micro Finance Bank Limited

Mr. Hussain Tejany
62-C, Tauheed Commercial Area
25th Commercial Street, DHA Phase V
Karachi
32
Fax Number: 021-35822434

Website :- http://www.mfb.com.pk
Tameer Micro Finance Bank Limited

Syed Nadeem Hussain
15-A, Block 7 & 8, Central Commercial Area
K.C.H.S. Union, Karachi
Telephone Office: 021 34325576
& 111-111-004 Ext-1111
Fax Number: 021- 34325575
Website :- http://www.tameerbank.com/
7.
DEVELOPMENT
House Building Finance Corporation Limited
FINANCE
Syed Azhar Abbas Jaffri
INSTITUTIONS
Managing Director / Chief Executive Officer

3rd Floor, Finance & Trade Centre, Tower 'B' Sharea Faisal,
Karachi -74400
Telephone Office:021-99202314
Fax Number: 021-99202360
Website :- http://www.hbfc.com.pk
UAN: 0800 50005
Pak Brunei investment Company Limited

Ms. Ayesha Aziz
Khadija Towers, Plot No. 11/5, Block No.2, Scheme No.5,
Clifton, Karachi
Fax Number: 021-35361213
Website :- http://www.pakbrunei.com.pk
33
Pak-China Investment Company Limited

Mr. Chen Jianbo
13th Floor, Saudi Pak Tower,61-A, Jinnah Avenue, Islamabad
Telephone Office: 051-2800291/688Fax Number: 0512800277
Pak Iran Joint Investment Company Limited

Mr. Aizaz Sarfraz
507-508, 5th floor, Progressive Plaza, Beaumont Road, Civil
Lines, Karachi
Fax Number: 021-35638589
Website :- http://www.pijicl.com
Pakistan Kuwait Investment Company Limited

Mr. Shamsul Hasan
4th Floor, Block C, FTC Building
Shahrea Faisal, Karachi
Fax Number: 021-35630939-40
Website :- http://www.pkic.com
UAN: 111-611-611
Pak Libya Holding Company Limited

Mr. Kamal Uddin Khan
5th Floor, Block 'C' Finance & Trade Centre Shahrea Faisal,
Karachi
34

Fax Number: 021-35630654
Website :- http://www.paklibya.com.pk
UAN: 111-111-115
Pak Oman Investment Company Limited

Mr. Agha Ahmed Shah
Managing Director & Chief Executive Officer
1st Floor, Tower 'A', Finance & Trade Centre, Shahrea Faisal,
Karachi
Telephone Office: 021-35630960 & 35630971-75
Fax Number: 021-35630961
Website :- http://www.pakoman.net/
Saudi Pak Industrial & Agricultural Investment Company

Limited
Mr. Muhammad Rashid Zahir
19th Floor, Saudi Pak Tower, 61/A
Jinnah Avenue, Blue Area, Islamabad
Fax Number: 051-2800308
Website :- http://www.saudipak.com
UAN: 111-222-003
35
Appendix-IV
36
Appendix-IV
37
Appendix-V
Citibank - network
Citibank
Global locations
Africa
1) Algeria
2) Cameroon
3) Congo, Democratic Republic of
4) Egypt
5) Gabon
6) Ghana
7) Ivory Coast
8) Kenya
9) Morocco
10) Nigeria
11) Senegal
12) South Africa
13) Tanzania
14) Tunisia
15) Uganda
16) Zambia
Asia Pacific
17) Australia
18) Bangladesh
19) Brunei
20) China, Peoples Republic of
21) Guam
22) Hong Kong
23) India
24) Indonesia
38
25) Japan
26) Korea
27) Macau
28) Malaysia
29) New Zealand
30) Philippines
31) Singapore
32) Sri Lanka
33) Taiwan
34) Thailand
35) Vietnam
Central America / Caribbean
36) Bahamas
37) Barbados
38) Cayman Islands
39) Costa Rica
40) Dominican Republic
41) El Salvador
42) Guatemala
43) Haiti
44) Honduras
45) Jamaica
46) Nicaragua
47) Panama
48) Puerto Rico
49) Trinidad and Tobago
Europe
50) Austria
51) Belgium
52) Bulgaria
53) Czech Republic
39
54) Denmark
55) Finland
56) France
57) Germany
58) Greece
59) Hungary
60) Ireland
61) Italy
62) Jersey
63) Kazakhstan
64) Luxembourg
65) Monaco
66) Netherlands
67) Norway
68) Poland
69) Portugal
70) Romania
71) Russia
72) Serbia
73) Slovakia
74) Spain
75) Sweden
76) Switzerland
77) Turkey
78) Ukraine
79) United Kingdom
Middle East
80) Bahrain
81) Israel
82) Jordan
83) Kuwait
40
84) Lebanon
85) Pakistan
86) Qatar
87) United Arab Emirates
North America
South America
88)
Canada
89)
Mexico
90)
United States
91) Argentina
92) Bolivia
93) Brazil
94) Colombia
95) Ecuador
96) Paraguay
97) Peru
98) Uruguay
99) Venezuela
Source: (citigroup.com, 2009)
41
Appendix-VI
Citibank Pakistan Milestones
CITIBANK PAKISTAN'S MILESTONES
The nineties were a decade of domination and leadership for Citibank in the Pakistani marketplace
and the trend continues into the new millennium.
1990
Consumer Bank was established.
1992
Consumer Asset Business is launched.
Car Financing is introduced.
Citigold Priority Banking is established.
CitiPhone Banking launched.
1994
Citibank Visa Card (Gold and Silver) is launched.
1995
Self-Service Banking launched.
1996
Citibank, N.A. launches its Intranet System in April.
First bank to launch a Photo Credit Card.
Citibank wins over 35 awards under the Euromoney Excellence Awards. These
1997
awards included "Best Bank" and "Best Emerging Market Bank" for two successive
years.
42
Citibank Credit Cards acquire 100,000 members in less than 3 years. This milestone
was achieved faster than any other Citibank business in the Asia Pacific Region.
Citibank and IBA develop an MBA program focused on Marketing of Financial

Services (MFS).
Citibank, N.A. undertakes a three year support program for fund raising for the Lady
Dufferin Hospital.
Citibank, N.A. pledges a donation to LUMS for their "Students Aid Program".
Citibank, N.A. in November holds its first ever Car Financing Dealer conference in
Bhurban.
Citibank, N.A. opens its sixth branch on Shahra-e-Faisal in Karachi in December.

This branch has the first 24-hour zone with ATMs and CitiPhone booths.
1998
Citibank launched Pakistan's first affinity card known as the "Citibank-Shaheen

Credit Card".
1999
First foreign bank to launch MasterCard in Pakistan.
Citibank Home Loans is launched.
Car Financing Product Feature enhancement (25% Down Payment, Free Preapproved Credit Card with each car).
0% Down Payment product for your second car.
Complaint Tracking System (CTS) launched.
43
Appendix-VII
Customer Relationship Management
Software
TOP 7 CRM SOFTWARE WITH BRIEF DESCRIPTIONS
CRM Software
Brief Description
Epicor Sales
Advantages of Epicor - Sales Management
Management
Software: Epicor is optimized for rapid installation, low

training costs, simple operation, easy modification and costeffective expansion.
Epicor - Sales Management Technology: Epicor offers

you the choice of a SQL or Progress database, as well as the
ability to run on Windows, Unix or Linux. Epicor also offers
software delivery on-premise, web based, or hosted.
Epicor - Sales Management Software Modules: Web

2.0, Epicor Tools and Technology, Service
Management, Sales Management, Production
Management, Product Data Management, Planning &
Scheduling, Master Data Management, Human Capital
Management, Enterprise Performance
Management, Customer Relationship
Management, Compliance Management, Supply Chain
Management, Financial Management
Epicor - Sales Management Software Pricing: $4,000 $500,000+

2
NetSuite
NetSuite CRM+
CRM+
Advantages of NetSuite CRM+ Software: NetSuite is the
44
only web-based CRM system to provide a complete view of

your customers and prospects. NetSuite helps your sales and
service teams sell more effectively improve customer
service, and increase upsell revenue.
NetSuite CRM+ Technology: NetSuite CRM+ is webbased SaaS (Software as a Service) software, allowing you
to focus on managing your business not your software.
NetSuite CRM+ Software Modules: Sales Force

Automation, SFA: Order Management, SFA: Upsell/CrossSell, SFA: Incentive Management, Customer Support &
Service, Partner Relationship Management, Real-time
Dashboards, Business Intelligence, Marketing
Automation, Productivity tools, Document Management &
Publishing, Self-Service Customer Portal, Website and
Analytics, Job & Project Tracking, NetFlex
NetSuite CRM+ Software Pricing: $129/ user/ month

(includes maintenance & support)
3
SAP CRM
SAP CRM 2007
2007
Advantages of SAP CRM 2007 Software: SAP CRM
excels because it provides the flexibility to create unique
customer experiences, enables a wide range of end-to-end
business processes to address an array of marketing, sales,
and service situations, and can be deployed step-by-step to
create a more distinctive customer experience.
SAP CRM 2007 Technology: SAP CRM, powered by the

SAP NetWeaver platform, allows for adaptability to
45
changing business needs & to drive customer & user-centric

sales, services, & marketing with an open & flexible
architecture to foster innovation, connect with partners &
suppliers, & run your business more cost-efficiently.
SAP CRM 2007 Software Modules: Business

Communications Management, Sales Capability, Service
Capability, Marketing Capability, Web Channel
Capability, Partner Channel Management Capability
SAP CRM 2007 Software Pricing: Register now to obtain

SAP pricing
46
Sage
SalesLogix
Sage SalesLogix
Advantages of Sage SalesLogix Software: With Sage

SalesLogix, your sales, marketing, and support teams get
everything they need to target, close, and retain customers
for life. You'll sell more, sell faster, and sell smarter.
Sage SalesLogix Technology: Written for the Microsoft

Windows environments, utilizing the Microsoft SQL and
Oracle DBMS'.
Sage SalesLogix Software

Modules: Sales, Marketing, Customer
Service, Support, Mobile Solutions, Dashboards and Sales
Reporting, Application Integration, Outlook
Integration, Windows Client Requirements, Business
Alerts & Notifications
Sage SalesLogix Software Pricing: Not Available

5
ACT! by Sage
2010
ACT! by Sage 2010
Advantages of ACT! by Sage 2010 Software: With ACT!,

you can organize all the details of your customer
relationships in one placefrom basic contact information
to detailed notes on past interactionsfor a complete view
of the people you do business with. Take action on your
most qualified sales leads with total visibility and control of
your pipeline.
47
ACT! by Sage 2010 Technology: ACT! includes both

Windows and Web-based options. ACT! is built on .NET
technology and uses a Microsoft SQL Server Database.
The ACT! SDK (Software Developer Kit) enables powerful
customized solutions. ACT! Seamlessly integrates with
popular applications like Microsoft Office.
ACT! by Sage 2010 Software Modules: ACT!

2010, ACT! Corporate Edition 2010, ACT! for Real Estate
2009 (11.0), ACT! for Financial Professionals 2009
(11.0), ACT! Premium 2010
ACT! by Sage 2010 Software Pricing: From $229.99

MSRP
48
Sage
SageCRM /
Sage SageCRM / SageCRM.com
SageCRM.com
Advantages of Sage SageCRM / SageCRM.com
Software: With SageCRM your sales, marketing, and
support teams get everything they need to target, close, and
retain customers for life. You'll sell more, sell faster, and
sell smarter.
Sage SageCRM / SageCRM.com Technology: Written for

the Microsoft Windows environments, utilizing the
Microsoft SQL and Oracle DBMS'.
Sage SageCRM / SageCRM.com Software

Modules: Advanced Features, Customer Care, Marketing
Automation, Microsoft Outlook Integration, Offline
Synchronization, Sales Automation, Wireless PDA
Access, Customer Care, Marketing Automation, Sales
Automation, Why On-Demand CRM, Wireless PDA
Access
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50
Appendix-VIII
Central Board of Directors,

State Bank of Pakistan (SBP)
1
2
3
4
5
6
7
8
Governor
Mr. Salman Siddique
Mr. Kamran Y. Mirza
Mr. Zaffar A. Khan
Mirza Qamar Baig
Mr. Asad Umar
Mr. Waqar A. Malik
Mr. Aftab Mustafa Khan
Chairman
Member
Member
Member
Member
Member
Member
Corporate Secretary
51
Appendix-IX
Various departments of the State Bank of Pakistan (SBP)
VARIOUS DEPARTMENTS OF THE STATE BANK OF PAKISTAN (SBP)
Agricultural Credit Department

Banking Inspection (On-Site) Department
Banking Policy & Regulations Department
Banking Surveillance Department
Business Support Services Department
Domestic Market & Monetary Management Department
Economic Analysis Department
Exchange Policy Department
External Relations Department
Finance Department
Financial Markets Strategy & Conduct Department
Financial Stability Department
General Counsel's Office
Human Resource Department
Information Systems & Technology Department
Infrastructure / Housing Finance Department
Internal Audit & Compliance Department
International Markets & Investments Department
Islamic Banking Department
Monetary Policy Department
Museum & Art Gallery Department
NIBAF Karachi & Islamabad
52
Office of the Corporate Secretary

Off-site Supervision & Enforcement Department
Payment System Department
Research Department
Risk Management and Compliance Department.
Real Time Gross Settlement System (RTGS System)
Microfinance Department
SME Finance Department
Statistics and Data Warehouse Department
Strategic and Corporate Planning Department
Training & Development Department
Treasury Operations (Back Office) Department
53
Appendix-X
Quaid-i-Azam's Speech
On the occasion of the Opening Ceremony of The State Bank of Pakistan on 1st July, 1948
"Mr. Governor, Directors of State Bank, Ladies and Gentlemen.

The opening of the State Bank of Pakistan symbolises the sovereignty of our State in the
financial sphere and I am very glad to be here today to perform the opening ceremony. It
was not considered feasible to start a Bank of our own simultaneously with the coming into
being of Pakistan in August last year. A good deal of preparatory work must precede the
inauguration of an institution responsible for such technical and delicate work as note issue
and banking. To allow for this preparation, it was provided, under the Pakistan Monetary
System and Reserve Bank Order, 1947, that the Reserve Bank of India should continue to be
the currency and banking authority of Pakistan till the 30th September, 1948. Later on it was
felt that it would be in the best interests of our State if the Reserve Bank of India were
relieved of its functions in Pakistan, as early as possible. The State of transfer of these
functions to a Pakistan agency was consequently advanced by three months in agreement
with the Government of India and the Reserve Bank. It was at the same time decided to
establish a Central Bank of Pakistan in preference to any other agency for managing our
currency and banking. This decision left very little time for the small band of trained
personnel in this field in Pakistan to complete the preliminaries and they have by their
untiring effort and hard work completed their task by the due date which is very creditable
to them, and I wish to record a note of our appreciation of their labours.
As you have observed, Mr. Governor in undivided India banking was kept a close preserve
of non-Muslims and their migration from Western Pakistan has caused a good deal of
dislocation in the economic life of our young State. In order that the wheels of commerce
and industry should run smoothly, it is imperative that the vacuum caused by the exodus of
54
non-Muslims should be filled without delay. I am glad to note that schemes for training
Pakistan nationals in banking are in hand. I will watch their progress with interest and I am
confident that the State Bank will receive the co-operation of all concerned including the
banks and Universities in pushing them forward. Banking will provide a new and wide field
in which the genius of our young men can find full play. I am sure that they will come
forward in large numbers to take advantage of the training facilities which are proposed to
be provided. While doing so, they will not only be benefiting themselves but also
contributing to the well-being of our State.
I need hardly dilate on the important role that the State Bank will have to play in regulating
the economic life of our country. The monetary policy of the bank will have a direct bearing
on our trade and commerce, both inside Pakistan as well as with the outside world and it is
only to be desired that your policy should encourage maximum production and a free flow
of trade. The monetary policy pursued during the war years contributed, in no small
measure, to our present day economic problems. The abnormal rise in the cost of living has
hit the poorer sections of society including those with fixed incomes very hard indeed and is
responsible to a great extent for the prevailing unrest in the country. The policy of the
Pakistan Government is to stabilise prices at a level that would be fair to the producer, as
well as the consumer. I hope your efforts will be directed in the same direction in order to
tackle this crucial problem with success.
I shall watch with keenness the work of your Research Organization in evolving banking
practices compatible with Islamic ideas of social and economic life. The economic system
of the West has created almost insoluble problems for humanity and to many of us it
appears that only a miracle can save it from disaster that is not facing the world. It has failed
to do justice between man and man and to eradicate friction from the international field. On
the contrary, it was largely responsible for the two world wars in the last half century. The
Western world, in spite of its advantages, of mechanization and industrial efficiency is today
in a worse mess than ever before in history. The adoption of Western economic theory and
practice will not help us in achieving our goal of creating a happy and contended people.
We must work our destiny in our own way and present to the world an economic system
55
based on true Islamic concept of equality of manhood and social justice. We will thereby be
fulfilling our mission as Muslims and giving to humanity the message of peace which alone
can save it and secure the welfare, happiness and prosperity of mankind.
May the Sate Bank of Pakistan prosper and fulfil the high ideals which have been set as its
goal.
In the end I thank you, Mr. Governor, for the warm welcome given to me by you and your
colleagues, and the distinguished guests who have graced this occasion as a mark of their
good wishes and the honour your have done me in inviting me to perform this historic
opening ceremony of the State Bank which I feel will develop into one of our greatest
national institutions and play its part fully throughout the world."
Quaid-i-Azam Muhammad Ali Jinnah

1st July, 1948
56
Appendix-XI
STATUTORY OBLIGATIONS OF
THE STATE BANK OF PAKISTAN (SBP)
STATUTORY OBLIGATIONS
STATUTORY CASH RESERVE
In terms of Section36(1) SBP Act, 1956, every scheduled bank is required to maintain with
State Bank a balance the amount of which shall not at the close of business or any day be
less than such percentage of Time & Demand Liabilities in Pakistan as may be determined
by State Bank.
Presently the requirement is 5% on weekly average basis subject to daily minimum of 4% of
Time & Demand Liabilities (reference BPRD Circular No.27 dated 2nd July,1999).
STATUTORY LIQUIDITY REQUIREMENT
In terms of Section 29(1) of Banking Companies Ordinance, 1962 every banking company
shall maintain in Pakistan in cash, gold or un-encumbered approved securities valued at
price not exceeding "the lower of cost or the current market price" an amount which shall
not at the close of business in any day be less than such percentage of the total of its time &
demand liabilities in Pakistan, as may be notified by State Bank from time to time.
Presently the requirement is 15% (excluding 5% statutory cash reserve) of the total of its
time and demand liabilities in Pakistan (BPRD Circular No.26 dated 2nd July, 1999).
MAINTENANCE OF LIQUIDITY AGAINST CERTAIN LIABILITIES
In terms of Rule 6 of NBFIs Rules of Business, all NBFIs are required to invest 14% of their
liabilities defined in the Rule, in Government Securities, NIT Units, shares of listed
companies or listed debt securities in the prescribed manner. For the purpose of this rule,
57
liabilities shall not include NBFIs equity, borrowings from financial institutions including
accruals thereon, lease key money, deferred taxation not payable within 12 months,
dividend payable within two months, advance lease rentals and deposits from financial
institutions. In addition, they are also required to maintain cash balance with State Bank,
which shall not be less than 1% of their liabilities as defined above.
SUBMISSION OF ANNUAL AUDITED ACCOUNTS BY NBFIs
Under Rule 17 of NBFIs Rule of Business, all NBFIs are required to invest to submit their
annual audited accounts within a period of 6 months after the close of their accounting year.
ANNUAL ACCOUNTS
At the expiration of each calendar year every banking company incorporated in Pakistan, in
respect of all business transacted by it, and every banking company incorporated outside
Pakistan, in respect of all business transited through its branches in Pakistan, shall prepare
with reference to that year a balance-sheet and profit and loss account as on the last woking
day of the year in the prescribed forms(Section 34 of Banking Companies Ordinance, 1962).
SUBMISSION OF RETURNS.
The accounts and balance-sheet referred to in section 34 together with the auditors report as
passed in the annual General Meeting shall be published in the prescribed manner, and three
copies thereof shall be furnished as returns to the State Bank within three months of the
close of the period to which they relate (Section 36 of Banking Companies Ordinance,
1962).
MINIMUM CAPITAL REQUIREMENTS
In terms of Section 13 of Banking Companies Ordinance, 1962 no banking company shall
commence business unless it has a minimum paid up capital as may be determined by the
State Bank or carry on business unless the aggregate of its capital and unencumbered
general reserves is of such minimum value within such period as may be determined and
58
notified by the State Bank from time to time for banking companies in general or for a
banking company in particular.
As present, all banks operating in Pakistan are required to maintain capital and
unhecumbered general reserve, the value of which is not less than 8% of their risk weighted
assets. Additionally they are also required to maintain a minimum paid up capital of Rs.500
million.
59
Appendix-XII
CORE FUNCTIONS OF STATE BANK OF PAKISTAN
State Bank of Pakistan is the Central Bank of the country. While its constitution, as
originally laid down in the State Bank of Pakistan Order 1948, remained basically
unchanged until 1st January 1974 when the Bank was nationalised, the scope of its functions
was considerably enlarged. The State Bank of Pakistan Act 1956, with subsequent
amendments, forms the basis of its operations today.
Under the State Bank of Pakistan Order 1948, the Bank was charged with the duty to
"regulate the issue of Bank notes and keeping of reserves with a view to securing monetary
stability in Pakistan and generally to operate the currency and credit system of the country
to its advantage". The scope of the Banks operations was considerably widened in the State
Bank of Pakistan Act 1956, which required the Bank to "regulate the monetary and credit
system of Pakistan and to foster its growth in the best national interest with a view to
securing monetary stability and fuller utilisation of the countrys productive resources".
Under financial sector reforms, the State Bank of Pakistan was granted autonomy in
February 1994. On 21st January, 1997, this autonomy was further strengthened by issuing
three Amendment Ordinances (which were approved by the Parliament in May, 1997)
namely, State Bank of Pakistan Act, 1956, Banking Companies Ordinance, 1962 and Banks
Nationalisation Act, 1974. The changes in the State Bank Act gave full and exclusive
authority to the State Bank to regulate the banking sector, to conduct an independent
monetary policy and to set limit on government borrowings from the State Bank of Pakistan.
The amendments in Banks Nationalisation Act abolished the Pakistan Banking Council (an
institution established to look after the affairs of NCBs) and institutionalised the process of
appointment of the Chief Executives and Boards of the nationalised commercial banks
(NCBs) and development finance institutions (DFIs), with the Sate Bank having a role in
their appointment and removal. The amendments also increased the autonomy and
accountability of the Chief Executives and the Boards of Directors of banks and DFIs.
60
Like a Central Bank in any developing country, State Bank of Pakistan performs both the
traditional and developmental functions to achieve macro-economic goals. The traditional
functions, which are generally performed by central banks almost all over the world, may be
classified into two groups: (a) the primary functions including issue of notes, regulation and
supervision of the financial system, bankers bank, lender of the last resort, banker to
Government, and conduct of monetary policy, and (b) the secondary functions including the
agency functions like management of public debt, management of foreign exchange, etc.,
and other functions like advising the government on policy matters and maintaining close
relationships with international financial institutions. The non-traditional or promotional
functions, performed by the State Bank include development of financial framework,
institutionalisation of savings and investment, provision of training facilities to bankers, and
provision of credit to priority sectors. The State Bank also has been playing an active part in
the process of islamization of the banking system. The main functions and responsibilities
of the State Bank can be broadly categorised as under.
REGULATION OF LIQUIDITY
Being the Central Bank of the country, State Bank of Pakistan has been entrusted with the
responsibility to formulate and conduct monetary and credit policy in a manner consistent
with the Governments targets for growth and inflation and the recommendations of the
Monetary and Fiscal Policies Co-ordination Board with respect to macro-economic policy
objectives. The basic objective underlying its functions is two-fold i.e. the maintenance of
monetary stability, thereby leading towards the stability in the domestic prices, as well as
the promotion of economic growth.
To regulate the volume and the direction of flow of credit to different uses and sectors, the
Bank makes use of both direct and indirect instruments of monetary management. Until
recently, the monetary and credit scenario was characterised by acute segmentation of credit
markets with all the attendant distortions. Pakistan embarked upon a program of financial
sector reforms in the late 1980s. A number of fundamental changes have since been made in
the conduct of monetary management which essentially marked a departure from
61
administrative controls and quantitative restrictions to market-based monetary management.

A reserve money management programme has been developed. In terms of the programme,
the intermediate target of M2 would be achieved by observing the desired path of reserve
money - the operating target. While use in now being made of such indirect instruments of
control as cash reserve ratio and liquidity ratio, the programs reliance is mainly on open
market operations.
ENSURING THE SOUNDNESS OF FINANCIAL SYSTEM:
REGULATION AND SUPERVISION
One of the fundamental responsibilities of the State Bank is regulation and supervision of
the financial system to ensure its soundness and stability as well as to protect the interests of
depositors. The rapid advancement in information technology, together with growing
complexities of modern banking operations, has made the supervisory role more difficult
and challenging. The institutional complexity is increasing, technical sophistication is
improving and technical base of banking activities is expanding. All this requires the State
Bank for endeavoring hard to keep pace with the fast-changing financial landscape of the
country. Accordingly, the out dated inspection techniques have been replaced with the new
ones to have better inspection and supervision of the financial institutions. The banking
activities are now being monitored through a system of off-site surveillance and on-site
inspection and supervision. Off-site surveillance is conducted by the State Bank through
regular checking of various returns regularly received from the different banks. On other
hand, on-site inspection is undertaken by the State Bank in the premises of the concerned
banks when required.
To deepen and broaden financial markets as also to diversify the sources of credit, a number
of non-bank financial institutions (NBFIs) were allowed to increase substantially. The State
Bank has also been charged with the responsibilities of regulating and supervising of such
institutions. To regulate and supervise the activities of these institutions, a new Department
namely, NBFIs Regulation and Supervision Department was set up. Moreover, in order to
62
safeguard the interest of ultimate users of the financial services, and to ensure the viability
of institutions providing these services, the State Bank has issued a comprehensive set of
Prudential Regulations (for commercial banks) and Rules of Business (for NBFIs).
The "Prudential Regulations" for banks, besides providing for credit and risk exposure
limits, prescribe guide lines relating to classification of short-term and long-term loan
facilities, set criteria for management, prohibit criminal use of banking channels for the
purpose of money laundering and other unlawful activities, lay down rules for the payment
of dividends, direct banks to refrain from window dressing and prohibit them to extend fresh
laon to defaulters of old loans. The existing format of balance sheet and profit-and-loss
account has been changed to conform to international standards, ensuring adequate
transparency of operations. Revised capital requirements, envisaging minimum paid up
capital of Rs.500 million have been enforced. Effective December,1997, every bank was
required to maintain capital and unencumbered general reserves equivalent to 8 per cent of
its risk weighted assets.
The "Rules of Business" for NBFIs became effective since the day NBFIs came under State
Banks jurisdiction. As from January, 1997, modarbas and leasing companies, which are
also specialized type of NBFIs, are being regulated/supervised by the Securities and
Exchange Commission (SECP), rather than the State Bank of Pakistan.
EXCHANGE RATE MANAGEMENT AND BALANCE OF PAYMENTS
One of the major responsibilities of the State Bank is the maintenance of external value of
the currency. In this regard, the Bank is required, among other measures taken by it, to
regulate foreign exchange reserves of the country in line with the stipulations of the Foreign
Exchange Act 1947. As an agent to the Government, the Bank has been authorised to
purchase and sale gold, silver or approved foreign exchange and transactions of Special
Drawing Rights with the International Monetary Fund under sub-sections 13(a) and 13(f) of
Section 17 of the State Bank of Pakistan Act, 1956.
63
The Bank is responsible to keep the exchange rate of the rupee at an appropriate level and
prevent it from wide fluctuations in order to maintain competitiveness of our exports and
maintain stability in the foreign exchange market. To achieve the objective, various
exchange policies have been adopted from time to time keeping in view the prevailing
circumstances. Pak-rupee remained linked to Pound Sterling till September, 1971 and
subsequently to U.S. Dollar. However, it was decided to adopt the managed floating
exchange rate system w.e.f. January 8, 1982 under which the value of the rupee was
determined on daily basis, with reference to a basket of currencies of Pakistans major
trading partners and competitors. Adjustments were made in its value as and when the
circumstances so warranted. During the course of time, an important development took
place when Pakistan accepted obligations of Article-VIII, Section 2, 3 and 4 of the IMF
Articles of Agreement, thereby making the Pak-rupee convertible for current international
transactions with effect from July 1, 1994.
After nuclear detonation by Pakistan in 1998, a two-tier exchange rate system was
introduced w.e.f. 22nd July 1998, with a view to reduce the pressure on official reserves and
prevent the economy to some extent from adverse implications of sanctions imposed on
Pakistan. However, effective 19th May 1999, the exchange rate has been unified, with the
introduction of market-based floating exchange rate system, under which the exchange rate
is determined by the demand and supply positions in the foreign exchange market. The
surrender requirement of foreign exchange receipts on account of exports and services,
previously required to be made to State Bank through authorized dealers, has now been
done away with and the commercial banks and other authorised dealers have been made free
to hold and undertake transaction in foreign currencies.
As the custodian of countrys external reserves, the State Bank is also responsible for the
management of the foreign exchange reserves. The task is being performed by an
Investment Committee which, after taking into consideration the overall level of reserves,
maturities and payment obligations, takes decision to make investment of surplus funds in
such a manner that ensures liquidity of funds as well as maximises the earnings. These
reserves are also being used for intervention in the foreign exchange market. For this
64
purpose, a Foreign Exchange Dealing Room has been set up at the Central Directorate of
State Bank of Pakistan and services of a Forex Expert have been acquired.
DEVELOPMENTAL ROLE OF STATE BANK
The responsibility of a Central Bank in a developing country goes well beyond the
regulatory duties of managing the monetary policy in order to achieve the macro-economic
goals. This role covers not only the development of important components of monetary and
capital markets but also to assist the process of economic growth and promote the fuller
utilisation of a countrys resources.
Ever since its establishment, the State Bank of Pakistan, besides discharging its traditional
functions of regulating money and credit, has played an active developmental role to
promote the realisation of macro-economic goals. The explicit recognition of the
promotional role of the Central Bank evidently stems from a desire to re-orientate all
policies towards the goal of rapid economic growth. Accordingly, the orthodox central
banking functions have been combined by the State Bank with a well-recognised
developmental role.
The scope of Banks operations has been widened considerably by including the economic
growth objective in its statute under the State Bank of Pakistan Act 1956. The Banks
participation in the development process has been in the form of rehabilitation of banking
system in Pakistan, development of new financial institutions and debt instruments in order
to promote financial intermediation, establishment of Development Financial Institutions
(DFIs), directing the use of credit according to selected development priorities, providing
subsidised credit, and development of the capital market.
65
Appendix-XIII
NATIONAL BANK OF PAKISTAN (NBP)

VISION, MISSION, & CORE VALUES
VISION
National Bank of Pakistan`s (NBP) vision is to be recognized as a leader and a brand synonymous
with trust, highest standards of service quality, international best practices and social responsibility
(NBP, 2009).
MISSION
National Bank of Pakistan`s (NBP) mission is stated as:
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 (NBP, 2009)
CORE VALUES
National Bank of Pakistan`s (NBP) core values are:
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 (NBP, 2009)

66
Appendix-XIV
AWARDS & ACHIEVEMENTS
THE NATIONAL BANK OF PAKISTAN
"Best Foreign Exchange Bank
Euromoney Magazine, a leading and
2008 awarded by world's leading financial
prestigious journal, published from London ,
journal Global Finance."
UK , in its issue of March 2005 has

published Moody's Investors
Stable AAA/A-1+(Triple A/A-One Plus)

rating (Standalone Basis) by JCR-VIS (July
2007)
Best Return on Capital for 2006 amongst all
Banks in Asia . - Banker Magazine in July
2007
World's leading financial journal, Global
Finance has named NBP as the Best
Emerging Market Bank from Pakistan for
the year 2006 .
"Best Foreign Exchange Bank
Pakistan award for the year 2006 by world's
leading financial journal Global Finance .
Service rankings in which NBP is the only

Pakistani bank which has been ranked among
the Top 100 banks of Asia for it performance
in the fiscal year 2003
WEBCOP-AASHA, an alliance against
gender discrimination at workplace, presented
a Recognition Award to National Bank of
Pakistan on December 18, 2004 for having
a Gender Sensitive Management .
In May 2004, NBP's standalone long-term
rating was upgraded by JCR-VIS Credit
Rating Agency to AA (double A) from AA -(
double A minus) with stable outlook, while
standalone short-term rating was maintained at
Due to consistent improvement in NBP's
A-1+(A one plus). This is now the best
Core Profitability , Asset Quality and
rating for a local commercial bank in
Economic Capitalization in recent years
Pakistan .
,Moody's Investors Service upgraded the

Financial Strength Rating (FSR) rom E+ to
D-, in November 2005 .
In its issue of March 2004, Global

Finance has also declared NBP as The Best
Foreign Exchange Bank in Pakistan .
Best Foreign Exchange Bank

The Banker Magazine in July 2003
67
Pakistan award for the year 2005 by world's recognized NBP as the bank with the highest
leading financial journal Global Finance .
return on capital in Asia and No.8 in the

world.
Best Bank - Pakistan award for the year

2005 by world's leading financial
World's leading financial journal, Global
journal Global Finance .
Financeafter a worldwide survey declared

NBP in its issue of May 2003 as one of
The Asian Banker, a reputable financial
the best banks in the emerging markets.
journal, has published the report of its research

project on the ranking of 300 of Asia 's
Bank of the Year awarded for the
Strongest Banks based on a 11-Dimensional
year 2002 by the world renowned The
Dynamic Scoring Criteria has adjudged
Banker magazine owned by the Financial
National Bank of Pakistan as theStrongest
Times Group, London
Bank in Pakistan .
On the basis of overall financial performance
during 2004, NBP has been listed Amongst
top 1000 banks in the world and Number Times Group, London
1 Bank in Pakistan by the
prestigious Banker Magazine in its issue of
July 2005 .
The Banker Magazine in July 2005
recognized NBP as the10th Best Bank in
terms of Profit on Capital' in the world .
President's Awards:
1) Mr. S. Ali Raza, Chairman & President,
NBP was awarded The Asian Banker
Leadership Achievement Award 2007 by
Asian Banker ( an internationally reputed
Financial Journal) in its issue of June 2007

Times Group, London.
2) Mr. S. Ali Raza Chairman & President,

NBP, was conferred Sitara-i-Imtiaz by the
President of Pakistan , General Pervaiz
Musharraf on August 14, 2005
On an all Pakistan basis National Bank of

3) Business Week of The McGraw Hill
68
Pakistan was awarded the Kissan Times
Companies in its July 11,2005 edition has
Award for the year 2005 by the Prime
adjudged Mr. S. Ali Raza, Chairman
Minister , Mr. Shaukat Aziz, for its services in President, NBP as one of the twenty
the Agriculture Sector .World's leading
five Leaders of Asia at the & Forefront of
financial journal, Global Finance in an
Change and has identified them as Stars of
exclusive survey has named NBP as the Best
Asiaincluding the President of Indonesia
Emerging Market Bank from Pakistan for

the year 2005 .
4) Mr. S. Ali Raza's (Chairman & President,

NBP) capabilities were also recognized by
Bank of the Year award for the
the Institute of Bankers in Pakistan when he
was awarded a gold medal in 2003 .

Times Group , London .
69
Appendix-XV
Board of Directors
National Bank of Pakistan
Syed Ali Raza

Chairman & President
Syed Ali Raza is the Chairman and President of National Bank of
Pakistan (NBP), the largest commercial bank of the country. Mr. Raza is
a graduate of the London School of Economics and M.Sc. in Admn.
Sciences as well as a Fellow Member of The Institute of Bankers in
Pakistan. He started his career in 1974 with Bank of America, arising to
become Managing Director and Regional Manager for the Middle East,
North Africa and Pakistan for Bank of America.
Mr. Tariq Kirmani
Director
Soon after completing his Masters in Business Administration (MBA)
Mr. Kirmani embarked upon a rewarding career, starting with a multinational Oil Company (Caltex later Chevron Pakistan) in 1969 and
worked for seven years in the United States of America, United Arab
Emirates and Australia in different senior management positions in
Marketing Operations and Finance. In 1991, Mr. Kirmani became the
first Pakistani to be elected as a Company Director of the mentioned
multi-national company.
70
Mrs. Haniya Shahid Naseem

Director
Mrs. Haniya Shahid Naseem is an MBA with more than fifteen years
experience of working in the education, social, industrial textile and
agriculture sectors of Pakistan. She has served for 5 years on the Board
of a textile company, having a turnover of more than one Billion Rupees.
Presently she is actively involved in the administration of Pakistan Public
School Multan. She is a progressive agriculturist and actively participates
in the management of her familys agricultural farms. She is a member
of the Multan Chamber of Commerce and Industry, and is also on the
guest faculty of IBA, Multan.
Ms. Nazrat Bashir
Director
Ms. Nazrat Bashir belongs to District Management Group of Civil
Services of Pakistan. She is Masters in Economics from New York
University, New York, USA and Master in Psychology from Peshawar
University, Peshawar
She has extensively traveled abroad and has attended various
international Seminars and Conferences such as on Micro Finance, Anti
Money Laundering, Instruments of Financial Markets etc. Domestically
too she has attended various programmes in some of very prestigious
institutions of Pakistan.
Mr. Ekhlaq Ahmed
Secretary Board of Directors
Mr. Ekhlaq Ahmed, EVP is the Company Secretary of the Bank and also
the Secretary of Credit & Operations Committees. He is M.A.
(Economics) from Rajshahi University, Bangladesh (former East
Pakistan). He is a Diplomaed Associate Institute of Bankers, Pakistan
(DAIBP) and secured overall 1 st position in order of merit and won
71
Muslim Commercial Bank Prize in the subject of Foreign Trade &

Foreign Exchange. He is an Associate of Institute of Corporate
Secretaries of Pakistan (ACIS). He is also a Certified Director on the
panel of Pakistan Institute of Corporate Governance (PICG) since
November, 2007. Mr. Ekhlaq Ahmed is the first senior executive of the
Bank who has achieved the status of Certified Director.
72
Appendix-XVI
Director`s Report
The National Bank of Pakistan
Corporate and Investment Banking
Corporate & Investment Banking Group enjoys robust relationship with premier corporate
clients. The length and breadth of our corporate clientele has been built on corporate strategy
of providing comprehensive and customized financial solutions to our corporate customers.
Varied banking and investment products are offered to the corporate clients from working
capital financing to infrastructure project, structured and syndicated financing, divestitures,
financial restructuring, mergers and acquisitions assignments and associated financing
solutions.
Audit & Inspection
Internal Auditing is an independent, objective assurance and consulting activity designed to add
value and improve organizational operations. It helps the bank accomplish its objectives by
bringing a systematic, disciplined approach to
evaluate and improve the effectiveness of risk management, control and governance processes.
Credit and Risk Management
NBP is continuously upgrading its risk management process to identify, evaluate and manage risk.
Our focus includes analysis, evaluation and management of all risks which include credit, liquidity,
market, operational and reputation risks. The banks risk management policies and procedures are
subject to high degree of supervision and guidance to ensure that all risk categories are
systematically identified, measured, analyzed and proactively managed.
Compliance
73
Compliance is an independent function that identifies, assesses, advises, monitors and reports on
the Banks compliance risk, i.e. the risk of legal or regulatory sanctions, financial loss or loss to the
reputation which the bank may suffer as a result of its failure to comply with applicable laws,
regulations, and codes of conduct and standards of best practices. The bank has accelerated its
efforts proactively to strengthen compliance culture in the bank. During 2009 we have revised
Compliance Review Program (CRP) to incorporate relevant changes in rules, regulations and
changing dynamics to help senior management in identifying and assessing risk. In view of
development of Compliance Review Program, Exception Reporting Mechanism has improved and
now senior management receives report of violations promptly. Immediate corrective measures are
initiated to secure the banks interest.
Domestic Branches Network

We expanded our operations in 2009 and 11 more branches across Pakistan were opened in 2009
taking the domestic branch network to 1265. NBP has a well defined strategy for branch expansion
to enter the untapped markets and to strike a balance between its rural and urban coverage.
Credit Rating
NBP enjoys the highest rating of AAA in the industry assigned by M/s JCR-VIS Credit Rating
Company. The ratings assigned to NBP are primarily driven by the banks role in the national
economy as an agent of the State Bank of Pakistan and as a bank to the Government of Pakistan.
Additionally, ratings also derive strength from the banks consistently high capitalization levels,
and nationwide access that has enabled it to secure a cost effective and diversified deposit base.
Social Responsibility
NBP has been at the forefront of socioeconomic development in the country. It has over the years
funded projects which best serve the economic objectives and social needs of the country. The bank
has made tremendous contribution to the development of small and medium sized entrepreneurs
and to self-employment schemes. The Bank fulfils its social responsibility through contribution
74
towards various causes. The Bank have always been generously donating in cases of national
disasters and times of difficulty being faced by the nation, whether it was the devastating
earthquake, flood relief efforts or the issue of Internally displaced persons (IDPs) the bank and its
employees have been at the forefront to help and support the nation.
Profit & Loss Appropriation
The Profit for the year 2009 after carry over of accumulated profit of 2008 is proposed to be
appropriated as follows: Rupees in Millions
Net Profit before taxation for year 2009
22,300
Taxation
Current year
9,221
Prior year(s)
(4,133)
Deferred
(1,000)
4,088
After Tax Profit
18,212
Profit Brought Forward
52,456
Transfer from surplus on revalution of fixed assets
124
Profit available for appropriation
70,792
Transfer to Statutory Reserve (10% of after tax profit)
1,821
Issue of bonus shares
1,794
Cash dividend
5,830
9,445
Profit carried forward
61,347
Future Outlook
75
NBP remains committed to the interest of all stake holders including its employees, owners,
regulators and the Pakistani nation. We have well defined strategy on where and how we want to
proceed in the years to come. With the implementation of new Core Banking Package, NBP will
completely automate its functions which in turn will appreciably enhance work efficiency. We will
continue to diversify our customer segments thereby increasing our product offering. Our
commitment towards the employees empowerment / development will continue as we believe that
a motivated and well trained work force is necessary to ensure sustenance and growth. On the
business side our main focus would be to reduce non-performing loans and increase deposits.
We remain committed to our Vision, Mission & core values and our strategy for the future includes
recovery efforts and revival of non performing loans, deposit mobilization, consolidation of loans,
expense management and tapping into untapped markets by increasing our network both
domestically and internationally. Customer service will remain our main focus of operations
management.
REVIEW OF BOARD OF DIRECTORS COMMITTEES AT NBP
At NBP, the Board of Directors have an active role in providing their able guidance and support to
the Banks management. For this purpose a number of Boards
committees have been constituted in the bank. These committees have well defined terms of
reference and they meet at regular intervals to review and make decisions on matters of importance
for their respective area of functioning. The following are the committees:
Name of the Committees
Number
Number of
of
Meetings held
Chairman of the Committee
Directors in 2008
Audit Committee
28
Mr. Ibrar A. Mumtaz
HR Management Committee
23
Mian Kauser Hameed
I.T Committee
14
Mr. Tariq Kirmani
Board Risk Committee
13
Mr. M Ayub Khan Tarin
Agriculture Finance Committee
11
Mr. Ibrar A. Mumtaz
Islamic Banking &
13
Mr. Tariq Kirmani
76
Subsidiaries Committee
Sports & Culture Committee
11
Mr. Sikander Hayat Jamali
Audit Committee
This committee has the oversight monitoring / assurance responsibility mainly relating to the
effectiveness of the Banks internal audit function, integrity of the Banks financial statements,
system of internal control, safeguarding of Banks assets and associated risks, compliance with the
applicable legal and regulatory
requirements, corporate governance and Banks Code of Conduct and co-ordination with external
auditors, making recommendations with respect to other matters relating to their independence,
performance, appointment and remuneration and approval of provision of other than audit services.
The major achievement of the committee includes conducting a Quality Assurance Review of the
banks internal audit function through independent consultants to align the internal audit function
with international standards/best practices of corporate governance. The Committee ensured
independence of the Internal Audit function and further strengthened it in line with the
requirements of International Standards on Internal Auditing, Institute of Internal Auditors USA,
regulators and best practices of corporate governance.
HR Management Committee
The committee is an advisory and assurance committee which assists the board in fulfilling its
responsibilities relating to all HR policy matters. It reviews and formulates human resource policies
and best practices for attraction, retention, succession, motivation, training and development
policies to achieve corporate objectives. It also recommends to the board the compensation, annual
increase, performance bonuses, and perquisites of the CEO, Chief Internal Auditor, Secretary to the
Board, CFO and all positions reporting to the CEO. It suggests strategies for negotiations with
training and educational institutions both nationally & internationally for collaborating in training
activities. It is also responsible for improvements in training methodology and identifying areas
relevant to the needs of the organization. During 2009 several decisions were taken for
77
improvement in the areas of HR policies, planning, training & development, compensation &
pension, institutional discipline, and other HR related areas.
I.T Committee
The Committee is responsible for identifying areas of the prospective automation, reviews and
decides strategic technology implementation and provides guidance and approves selection of
appropriate technology solution; software, hardware, infrastructure and outsourcing.
For the first time in the history of National Bank a comprehensive IT strategy for the Bank was
designed which encompasses the phase-1 focusing on Strategy for Systems Quality Assurance &
Testing Strategy (Policy, Procedures, Methodology and Framework). The phase-2 of the strategy
will cover the entire bank wide transformation and full spectrum automation, systems and data
center integration, depth and width of IT Service Portfolio, IT Operations, plus incorporating the IT
Internal Control Framework supported by COBIT, ISO ISMS 27001 and ITIL.
Boards Risk Committee (BRC)
BRC over sighted the risk related issues of the bank and took several decisions for implementation.
The functional scope of the Risk Management Committee is to develop the risk management role
by identifying the relevant/new risk management tools as per Basel guidelines and developing the
road map for implementing Basel II framework as per SBP guidelines. It also works for Risk &
Exposure Reporting by development of Basel IIs economic capital management frame work. This
committee also provides the reporting and research for Board of Directors. It also reviews the
liquidity position, forecasting and projections and portfolio of the Bank. In 2009 the committee
approved rating model for corporate & commercial borrowers.
Agriculture Finance Committee
Agriculture Finance Committee directed restructuring and reorganization of Agriculture Finance

Group and approved TOR, vision & mission statement of the group, Livestock/Dairy Farm
Financing policy and Agricultural Finance Policy Manual. Particular emphasis was given to
78
disbursement of finance to improve the yield/out put of this sector while maintaining the healthy
recovery ratio.
Islamic Banking & Subsidiaries Committee
This Committee provides strategic guidance and recommends initiatives for expansions, mergers &
acquisitions. The strategic endeavors resulted in expansion in NBP Islamic banking branch network
covering all major cities of the country. To evaluate the commercial viability, future profitability
and growth of Islamic banking, the committee guided Islamic Banking Group to prepare business
plan for the year-2010 and henceforth strategic plan 2011-2013.
Sports & Culture Committee
The functional scope of the Committee is to devise strategies to promote sports and cultural
activities in the bank as well as in the country.
During 2009 the Committee reviewed the progress of various activities undertaken by the Sports,
Culture & CSR Division and also approved various incentive and cash award policies for
sportspersons working for NBP. The Committee also finalized the fee structure and membership
rules & regulations of NBP Sports Club.
The number of board meeting held during the year was 8 and attended by
the directors as
follows:
Syed Ali Raza
President / Chairman 8
Mr. Muhammad Ayub Khan Tarin
Director
Mr. Sikandar Hayat Jamali
Director
Mr. Tariq Kirmani
Director
Mian Kausar Hameed
Director
Mr. Ibrar A. Mumtaz
Director
Mrs. Haniya Shahid Naseem
Director
79
The Board places on record its sincerest appreciation to the outgoing Directors, Dr. Waqar Masood
Khan, and Mr. Azam Faruque to whom we are indebted for their prudent, professional and diligent
guidance that helped in achieving such tremendous performance.
(j) Value of investments of Employees Pension Fund and Employees Provident
Fund as at
December 31, 2009 (un-audited) was as follows:

Rs. in - `000
Employees Pension Fund
19,781,585
Employees Provident Fund
8,448,101
Pattern of Share holding

The pattern of share holding as at December 31, 2009 is given in Annual Report.
Earning per share
After tax earning per share for the year 2009 is Rs. 16.92.
Appointment of Auditors
The Board of Directors on the recommendation of the Audit Committee has recommended M/s
Anjum Asim Shahid Rahman & Co. Chartered Accountants & M/s M. Yousuf Adil Saleem & Co.
Chartered Accountants as statutory auditors for the year ending December 31, 2010. Both the firms
being eligible offer themselves for appointment.
Risk Management Framework
80
NBP Board of Directors and Senior Management are fully committed to strengthen the Risk
Management structure and practices. Several initiatives taken and planned by the Bank, in this
regard, reflect commitment of Senior Management & Board of Directors to upgrade the quality of
Risk Management process such as formation of Board Risk Committee, Executive Risk
Management Committee, Basel II Implementation Committee, strengthening of Risk Management
Division, conducting of exercises like Basel II Gap Analysis, Hiring of consultant for Basel II
advisory services, implementation of software / systems for Credit Risk, designing of Internal
Rating system, Scorecards for Consumer Credits , Revision and continuous improvement in
policies, procedures, reporting structure for effective Risk Management and shift from fixed
markup rate structure to floating rates for markup for managing Interest Rate Risk.
Statement of Internal Controls
The Board is pleased to endorse the statement made by management relating to internal control.
The Managements Statement on Internal Control is included in the Annual Report.
We extend our appreciation to the banks staff for their commitment, dedication and hard work in
achieving these excellent results. We would like to express our sincere reverence to the Board
members whose valuable guidance has always enlightened us in our decision making. Finally we
would like to express our appreciation to our stakeholders, regulators and our valued customers for
their support and continued confidence in NBP.
On behalf of Board of Directors

S. Ali Raza
Chairman & President
81
Appendix-XVII
CITI PAKISTANS GRANTS
Some of the grants Citi Pakistan has closely been involved with include:
Citi Microentrepreneurship Awards (CMA): US$55,000 for the CMA that have been conducted in
Pakistan since 2005, in collaboration with the Pakistan Poverty Alleviation Fund. The pivotal aim
of the CMA is to support existing small enterprises and incentivize the creation of new ones.
Citi Microfinance Network Strengthening Program: Additionally, Pakistan is one of nine
countries included in the Citi Microfinance Network Strengthening Program (NSP), which is
supported by a 3-year Citi Foundation grant (started in 2007). The Citi Foundations global NSP
initiative is intended to help expand microfinance outreach through resource development,
advocacy and knowledge creation. In Pakistan, the NSP provides financial and volunteer skillbased support to the Pakistan Microfinance Network, which consists of organizations that are
engaged in microfinance and dedicated to improving the outreach and sustainability of
microfinance services in the country.
Citi-LUMS Management Development Training for micro-finance institutions (MFIs): Grant
worth US$65,000 to fund training modules for middle and upper MFI management in Pakistan
Microfinance Research: A Citi Foundation grant to Acumen Fund supports research on the design
of financial products for low income communities. Acumen Fund is a non-profit, global venture
capital fund that addresses poverty by working to fill the niche left between traditional capital
markets and grant-based philanthropy
Development in Literacy (DIL): US$20,000 for a teacher training given to DIL for its supporting
its schools in the Orangi town area in Karachi
Thardeep Rural Development Program: US$22,000 for a micro-credit training program that will
reach 2,000 women in Tharparkar, one of Pakistans most disadvantageous districts, in the province
of Sindh
82
Health: A Citi Foundation multi-year grant of US $280,000 was given to the Aga Khan
Foundation to support its Urban Credit and Health Program, which endeavors to achieve
sustainable improvements in health status among women of childbearing age and children in
Karachis underprivileged areas
Previously, grants have also been provided to the Lahore University of Management Sciences,
Kashf Foundation, The Citizens Foundation, Institute of Business Administration, Institute of
Business Management, Akhuwat Foundation, Tarraqi Foundation, Thardeep Rural Development
Program and Development in Literacy over recent years.
83
Appendix-XVIII
BUSINESS PROFILE - Citibank
Citi has been present in Pakistan since 1961 and will be completing its 50th anniversary in 2011.
Citi has US$105MM invested in the country and employs approximately 847 permanent employees
across Pakistan. Citi Pakistan has 18 fully operational retail branch outlets, with a focus on the main
commercial centres of Karachi, Lahore, Islamabad, Faisalabad and Rawalpindi. Citi Pakistans
business provides a variety of best-in-class products and services to more than 200,000 consumer
and institutional clients. Citi is the leading bank in Pakistan for delivering export agency and
multilateral financing and has been instrumental in the development of Pakistans market for
derivatives and other treasury products.
Citi Pakistan has also been at the forefront of the financial sector reform process in Pakistan and has
been the lead bank in bringing the Pakistani Government to international capital markets. Over
these years it has come to be reputed as an industry leader, recognized as the pioneer for a spectrum
of banking products and services in Pakistan.
Some Citi Firsts in Pakistan include:
Pioneered Consumer Banking first to launch Credit Cards, Auto Loans, Mortgages
Derivatives (Interest Rate Swaps, Currency Swaps, Options)
First 30-year US Dollar sovereign bond
Issuance of the first foreign currency Islamic bonds or sukuks
OPIC risk participation programs & structured ECA financings (volumes hit $1 billion or 20% of
Citi global ECA business in 05)
Bill processing for Public Sector utilities
Customized remittance product for expatriates
Back office processing (Private Label) for banks
Providing the first equity offering in over a decade
84
Appendix-XIX
CITI IN PAKISTAN: BUILDING COMMUNITIES
Community Development:
Further, Citi Pakistan has played its part in supporting the Internally Displaced Persons (IDPs) by
raising over $50,000 for this cause. Citi Pakistans employees donated one days salary on a
voluntary basis for the IDPs which was matched by Citis funds. Similarly during the 2005
Earthquake in the Northern Areas, Citi supported the construction of a girls school by The Citizens
Foundation (TCF) in Mansehra. This year, the left over Earthquake Relief Funds have been donated
to TCF for maintaining the operating costs of the Mansehra school campus for the next ten years.
Additionally, the Citi Foundation provided a grant of US $1.9 million to the American Red Cross
(ARC) National Headquarters for its Pakistan Earthquake Reconstruction Project, following the
earthquake of 2005.
The Citi Foundation Marks a Decade of Support in Pakistan by Exceeding the US$1.5
Million Mark
As Citi Pakistan approaches its 50th anniversary in January 2011, the Citi Foundation, Citigroups
social investment arm, marks a decade of support towards various socio-economic projects in the
country, exceeding the total mark of US$1.5million in social sector support to Pakistan. Just this
year, the Citi Foundation has provided US$400,000 through five new grants to Pakistan, for a
spectrum of development related initiatives.
Citis main community objectives revolve around microfinance, financial education and
environmental projects. Our efforts in the areas where we operate have benefits that extend beyond
these cities as well. We are proud to have received the CSR National Excellence Award in 2007
and 2009 for outstanding corporate social responsibility. We were also one of the top ten companies
to have received special recognition for our CSR efforts at the CSR Asia Forum in Manila in
November 2009.
85
Appendix-XX
MEEZAN BANK LIMITED, PAKISTAN
Vision, Mission, & Service Mission
Our Vision
Establish Islamic banking as banking of first choice to facilitate the
implementation of an equitable economic system, providing a strong
foundation for establishing a fair and just society for mankind.
Our Mission
To be a premier Islamic bank, offering a one-stop shop for innovative
value added products and services to our customers within the bounds of
Shariah, while optimizing the stakeholders value through an
organizational culture based on learning, fairness, respect for individual
enterprise and performance.
Our Service Mission

To develop a committed service culture which ensures the consistent
delivery of our products and services within the highest quality service
parameters, promoting Islamic values and ensuring recognition and a
quality banking experience to our customers.
86
Appendix-XXI
MEEZAN'S BRANCH NETWORK
The Bank is currently segmented into three Regions of Pakistan. The cities in which
the Bank presently operates are as follows:
Southern Region
Central Region
Northern Region
Hub (Lasbela)
Arifwala
Abbottabad
Hyderabad
Bahawalpur
Attock
Karachi
Burewala
Dera Ismail Khan
Mirpurkhas
Chiniot
Dina
Nawabshah
Daska
Gujar Khan
Quetta
Dera Ghazi Khan
Haripur
Sakrand
Faisalabad
Havelian
Sukkur
Gojra
Islamabad
Tando Adam
Gujranwala
Jhelum
Tando-Allah-Yar
Gujrat
Kohat
Hafizabad
Mansehra
Jhang
Mardan
Kasur
Muzaffarabad
Khanpur
Nowshera
Khushab
Peshawar
Lahore
Rawalpindi
Lalamusa
Swat
Mandi Bahauddin
Mian Channu
Multan
Okara
Rahim Yar Khan
Sadiqabad
Sahiwal
Sargodha
Sheikhupura
Sialkot
87
Appendix-XXII
Habib Bank Limited (HBL), Pakistan

Board of Directors
Sultan Ali Allana

Chairman
Ahmed Jawad
Director
Sajid Zahid
Director
Sikandar
Mustafa Khan
Director
Mushtaq Malik
Director
Moez Jamal
Director
R. Zakir Mahmood
President & CEO
88
HBL Worldwide
Appendix-XXIII
HABIB BANK LIMITED (HBL), PAKISTAN

Services to Individual & Business Customers
INDIVIDUAL CUSTOMERS
CarToCar
o Car Calculator
o Car Showroom
o FAQs
Car Loan
o Car Calculator
o Car Showroom
o FAQs
Credit Cards
o Benefits
o Features
o Promotions
o Dining Discounts
o Drop Box Finder
o Handset Plans
o FAQs
o Apply Online
Deposit Accounts
o Term Accounts
o Current Accounts
Freedom Account
o Savings Accounts
o Foregin Currency Accounts
Bancassurance
o Amaan
o Tabeer
o Branch Network
Debit Card
PhoneBanking
Mutual Funds
89
BUSINESS CUSTOMERS
Corporate Banking
o Cash Management
o Islamic Banking
Commercial Banking
Investment Banking
Islamic Banking
Cash Management
Zarai Banking
Global Treasury
Asset Management
State Bank of Pakistan - Revised Organization Structure

Management Committee
Governor
Anti Money Laundering Unit
Chief Economist *
(Monetary Policy / Research)
Governors Secretariat
Deputy Governor
(Banking)
Economic Advisor
(Policy / Research)
Executive Director
(Development Finance)
Director
Monetary Policy
Director
Agriculture Credit
Director
Economic Analysis
Executive Director
(Banking Supervision)
Director
Banking
Inspection
(On-site)
Director
Microfinance
Director
Research
Director
Infrastructure &
Housing Finance
Director
Statistics & Data
Warehouse
Director
Off-site
Supervision &
Enforcement
Director
Small Medium
Enterprise Finance
Director
Financial Stability
Deputy Governor
(Corporate Services)
Executive Director
(Banking Policy &
Regulation)
Executive Director
(Financial Markets /
Reserve Management)
Director
Banking Policy &
Regulation
Director
Domestic Markets &
Monetary Management
Director
Banking
Surveillance
Director
International Markets &
Investments
Director
Islamic Banking
Director
Financial Markets
Strategy & Conduct
Director
Consumer
Protection
Director
Exchange Policy
Chief Librarian
Library
Monetary Policy & Research Cluster (MPR Cluster)
Corporate
Secretary
Corporate
Secretarys Office
30-10-2008
Banking Cluster
Financial Markets & Reserve Management

Cluster (FMRM Cluster)
Comptroller Finance
(Financial Resources
Management)
Group Head
(Human Resources)
Director
Payment System
Director
Human Resources
Project Manager
RTGS Project
Director
Business Support
Services
Director
Finance
Director
Training &
Development
Director/Head
Treasury Operations
(Back Office)
Corporate Services Cluster (CS Cluster)
Executive Director
Internal Audit &
Compliance
Note: RTGS will be part of Payment Systems Department as a Division on completion of the RTGS Project.
Director /
Chief Spokesman
External Relations
Chief Risk Officer

Risk Management
& Compliance
Special Counsel
General Counsels
Office
Governors Office
IT & Museum Group
Chief Information
Officer
Information Systems
& Technology
Director
Museum & Art Gallery
Appendix-IV

Financial Soundness Indicators*
Indicators
2004
2005
2006
2007
2008
Mar-09 Jun-09 Sep-09 Dec-09
CAPITAL ADEQUACY
Risk Weighted CAR**

Public Sector Commercial Banks
Local Private Banks
Foreign Banks
Commercial Banks
Specialized Banks
All Banks
13.4
10.1
17.4
11.4
(9.0)
10.5
14.5
10.6
16.4
11.9
(7.7)
11.3
15.2
12.7
15.0
13.3
(8.3)
12.7
16.1
11.8
14.6
12.8
(6.2)
12.3
13.2
12.1
21.8
12.7
(4.9)
12.3
13.9
12.7
22.4
13.3
(2.1)
12.9
14.5
13.3
23.7
14.0
(3.4)
13.5
15.6
14.2
23.8
14.9
(5.0)
14.3
14.8
14.1
23.6
14.6
(2.1)
14.1
Tier 1 Capital to RWA**

Local Private Banks
Foreign Banks
Commercial Banks
Specialized Banks
All Banks
8.6
7.5
17.1
8.6
(15.0)
7.6
8.8
8.3
16.1
9.1
(13.6)
8.3
11.1
10.4
14.3
10.8
(13.3)
10.0
12.2
9.9
14.0
10.5
(12.5)
10.0
11.0
10.2
21.3
10.8
(10.1)
10.2
11.6
10.7
21.9
11.3
(7.4)
10.8
12.0
11.2
23.1
11.8
(7.4)
11.3
12.8
11.8
23.3
12.4
(8.2)
11.9
12.4
11.5
23.1
12.1
(6.3)
11.6
Capital to Total Assets

Local Private Banks
Foreign Banks
Commercial Banks
Specialized Banks
All Banks
8.7
6.5
8.9
7.2
(9.4)
6.7
12.6
7.0
9.5
8.4
(8.1)
7.9
12.2
9.2
10.1
9.9
(8.0)
9.4
13.7
10.2
11.2
10.9
(5.4)
10.5
10.7
10.0
14.5
10.3
(3.2)
10.0
11.1
10.3
14.4
10.6
(2.7)
10.3
10.9
10.2
14.8
10.5
(2.5)
10.2
11.9
10.3
14.8
10.8
(3.4)
10.5
11.1
10.0
14.9
10.4
(1.8)
10.1
NPLs to Total Loans

Local Private Banks
Foreign Banks
Commercial Banks
Specialized Banks
All Banks
13.3
9.0
1.6
9.0
54.1
11.6
10.0
6.4
1.2
6.7
46.0
8.3
9.0
5.2
1.0
5.7
39.1
6.9
8.4
6.5
1.6
6.7
34.3
7.6
16.3
8.6
2.9
9.9
28.8
10.5
17.5
9.7
3.6
11.0
29.0
11.5
16.8
9.8
4.5
11.1
25.8
11.5
17.4
10.5
5.3
11.7
31.4
12.4
16.4
10.7
6.5
11.7
25.4
12.2
Provision to NPLs
Local Private Banks
Foreign Banks
Commercial Banks
Specialized Banks
All Banks
77.0
69.9
101.9
72.4
64.9
70.4
86.8
76.4
145.9
80.4
64.8
76.7
84.5
78.7
191.7
81.5
64.1
77.8
89.0
88.5
157.0
89.1
68.6
86.1
66.9
70.2
81.9
69.3
72.4
69.6
65.3
71.2
81.3
69.5
66.4
69.2
65.9
71.6
83.4
70.0
72.8
70.2
67.2
72.1
81.3
70.8
57.1
69.7
69.0
72.3
72.4
71.4
66.3
71.0
Net NPLs to Net Loans

Local Private Banks
Foreign Banks
Commercial Banks
Specialized Banks
All Banks
3.4
2.9
(0.0)
2.7
29.3
3.8
1.5
1.6
(0.6)
1.4
23.1
2.1
1.5
1.1
(1.0)
1.1
18.7
1.6
1.0
0.8
(0.9)
0.8
14.0
1.1
6.1
2.7
0.5
3.3
10.0
3.4
6.9
3.0
0.7
3.6
12.1
3.9
6.4
3.0
0.8
3.6
8.6
3.7
6.5
3.2
1.0
3.7
16.4
4.1
5.7
3.2
1.9
3.7
10.3
3.9
Net NPLs to Capital

Local Private Banks
Foreign Banks
Commercial Banks
Specialized Banks
All Banks
16.2
24.3
(0.2)
19.0
29.2
5.5
13.0
(3.0)
9.0
14.3
6.4
7.1
(5.1)
6.2
9.7
3.4
4.1
(4.1)
3.7
5.6
30.3
15.9
1.6
17.9
19.4
31.6
15.4
2.0
17.9
19.6
30.0
15.6
1.9
17.8
19.0
27.6
15.8
2.4
17.6
19.9
26.2
15.9
4.8
17.4
18.9
2.4
1.7
2.5
2.0
(0.4)
1.9
3.3
2.7
3.6
2.9
(1.0)
2.8
4.0
3.1
3.2
3.2
(1.3)
3.1
3.5
2.0
1.5
2.3
1.4
2.2
0.6
1.3
0.0
1.1
3.2
1.2
1.7
1.9
1.0
1.8
3.8
1.8
1.1
1.8
0.4
1.6
3.3
1.7
1.5
1.7
0.1
1.6
1.3
1.6
1.5
1.6
(0.3)
1.5
2.5
1.5
ASSET QUALITY
EARNINGS
Return on Assets (Before Tax)

Local Private Banks
Foreign Banks
Commercial Banks
Specialized Banks
All Banks
231
Appendix-IV

Financial Soundness Indicators*
Indicators
2004
2005
2006
2007
2008 Mar-09 Jun-09 Sep-09 Dec-09
EARNINGS
Return on Assets (After Tax)

Local Private Banks
Foreign Banks
Commercial Banks
Specialized Banks
All Banks
1.3
1.2
2.0
1.3
(0.8)
1.2
2.2
1.8
2.5
2.0
(1.2)
1.9
2.7
2.1
2.1
2.2
(1.8)
2.1
2.5
1.4
0.7
1.6
0.7
1.5
0.5
0.9
0.3
0.8
1.8
0.8
0.9
1.2
0.4
1.1
2.4
1.1
0.6
1.1
0.1
1.0
1.9
1.0
1.0
1.0
(0.1)
1.0
(0.6)
0.9
0.9
1.0
(0.3)
0.9
0.6
0.9
ROE (Avg. Equity& Surplus) (Before Tax)

Local Private Banks
Foreign Banks
Commercial Banks
Specialized Banks
All Banks
30.8
28.8
26.7
29.0
30.5
30.7
40.1
38.9
37.2
38.2
32.4
36.2
30.0
34.7
35.2
27.2
20.4
13.1
21.8
22.6
5.2
12.9
0.0
10.6
11.4
14.7
18.1
6.7
16.8
17.7
9.5
17.8
2.8
15.2
16.0
12.8
16.4
0.4
14.7
15.1
13.2
15.2
(2.1)
13.9
14.5
ROE (Avg. Equity &Surplus) (After Tax)

Local Private Banks
Foreign Banks
Commercial Banks
Specialized Banks
All Banks
17.2
20.2
21.5
19.6
20.3
20.9
27.2
27.1
25.4
25.8
21.7
25.0
20.4
23.7
23.8
19.5
13.8
6.0
15.0
15.4
4.4
8.5
2.2
7.3
7.8
7.8
11.3
2.8
10.1
10.7
5.3
11.0
0.5
9.2
9.7
8.4
10.0
(0.9)
9.1
9.0
8.0
9.4
(2.0)
8.5
8.6
NII/Gross Income
Local Private Banks
Foreign Banks
Commercial Banks
Specialized Banks
All Banks
63.7
62.0
57.7
61.9
81.9
62.8
71.3
73.0
61.5
71.3
87.7
72.0
69.5
73.5
65.8
72.1
40.1
70.9
65.9
70.7
59.1
69.2
42.8
68.2
65.4
73.3
61.3
71.3
46.6
70.4
68.6
78.9
54.8
76.1
65.9
75.8
70.0
75.9
57.2
74.1
41.3
73.0
68.2
75.7
60.6
73.8
48.2
73.1
62.6
75.8
64.4
73.1
47.9
72.3
Cost / Income Ratio

Local Private Banks
Foreign Banks
Commercial Banks
Specialized Banks
All Banks
39.5
56.2
49.0
51.7
57.8
52.0
34.3
43.1
42.2
41.2
47.8
41.5
31.8
40.7
49.8
39.4
62.6
40.3
30.2
45.4
57.0
42.8
53.2
43.2
39.1
51.8
69.6
50.2
52.1
50.3
48.1
49.2
58.6
49.5
60.4
49.9
48.4
48.6
63.6
49.3
70.6
50.1
45.7
49.3
69.9
49.7
63.7
50.1
49.3
50.5
77.5
51.5
55.4
51.6
Liquid Assets/Total Assets

Local Private Banks
Foreign Banks
Commercial Banks
Specialized Banks
All Banks
43.9
34.3
39.8
37.0
25.3
36.6
35.6
32.4
41.8
33.9
25.8
33.7
33.9
31.1
41.0
32.2
23.0
31.9
37.0
32.5
41.6
33.8
27.9
33.6
30.5
27.4
45.3
28.7
24.5
28.6
31.4
29.5
49.6
30.7
21.6
30.5
30.2
30.5
54.7
31.5
22.2
31.2
29.3
30.9
57.2
31.6
19.0
31.4
29.8
32.2
54.7
32.6
19.0
32.3
Liquid Assets/Total Deposits

Local Private Banks
Foreign Banks
Commercial Banks
Specialized Banks
All Banks
52.6
42.3
53.4
45.7
154.1
46.5
44.7
40.3
57.9
42.7
183.2
43.5
42.6
40.6
61.1
42.0
205.4
42.7
47.1
42.9
61.1
44.3
247.7
45.1
38.8
35.7
71.9
37.6
229.4
38.2
40.3
39.3
79.6
41.0
243.7
41.5
38.6
39.9
84.2
41.2
206.9
41.7
38.7
41.2
83.3
42.3
193.5
42.7
38.4
43.4
82.2
43.7
155.3
44.1
Advances/Deposits
Local Private Banks
Foreign Banks
Commercial Banks
Specialized Banks
All Banks
49.7
67.3
70.1
63.6
370.5
65.8
59.8
70.8
68.7
68.4
400.7
70.2
64.6
74.5
80.1
72.7
528.4
74.6
60.0
70.1
75.2
73.8
507.3
69.7
68.4
75.4
69.1
73.8
577.0
75.5
65.2
71.4
65.1
69.9
721.3
71.7
65.0
69.2
57.5
67.9
597.2
69.6
67.0
68.8
50.2
67.8
683.3
69.6
65.1
66.9
56.3
66.2
544.9
67.9
LIQUIDITY
*Source: (State Bank of Pakistan, 2009)
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Customer Relationship Management in the

Banking Sector of Pakistan

Mohammad Majid Mahmood Bagram

NATIONAL UNIVERSITY OF MODERN LANGUAGES

Customer Relationship Management in the

Mohammad Majid Mahmood Bagram

A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF

FACULTY OF ADVANCED INTEGRATED STUDIES AND RESEARCH

NATIONAL UNIVERSITY OF MODERN LANGUAGES, ISLAMABAD

NATIONAL UNIVERSITY OF MODERN LANGUAGES

FACULTY OF ADVANCED INTEGRATED STUDIES & RESEARCH

DISSERTATION AND DEFENSE APPROVAL FORM

Thesis/ Dissertation Title: Customer Relationship

Submitted By: Mohammad

Management in the Banking Sector of Pakistan

Majid Mahmood Bagram

Registration #: 141-Ph.D/MS/2003 (Jan)

Prof. Dr. Anwar Hussain Siddiqui

Prof. Dr. Shazra Munnawer

Name of Dean (FAISR)

Prof. Dr. Aziz Ahmad Khan

CANDIDATE DECLARATION FORM

I Mohammad Majid Mahmood Bagram

Thesis Title: Customer Relationship Management in the banking sector of Pakistan

Dissertation and Defense Approval Form

Candidate Declaration Form

List of Bar Charts

Banking sector of Pakistan

Customer relationships with banks

Customer Relationship Management

Characteristics of Customer Relationship Management

Customer loyalty as a focus of Customer Relationship

Background to the study

Significance of the research study

Statement of the problem

Hypotheses of the research study

1.12.3 Research instruments

1.12.4 Pilot testing of questionnaire

1.12.5 Data collection

1.12.6 Data analysis

Limitations of the research study

REVIEW OF RELATED LITERATURE

Customer loyalty as a focus of Customer Relationship

Banking sector of Pakistan

Customer Relationship Management in banking sector

Customer Relationship Management (CRM) and

Models relating to research study

Offensive and defensive strategies

Factors that affect customer loyalty in the banking sector

Customer perceived value

Conceptual differences between customer

Customer switching barriers

Previous research and models relevant to this research study

Emerged frame of reference

Research Process Onion

Exploratory research study

Descriptive research study

Causal research study

Selection of questionnaire survey method

Research study factors:

Operationalization of research study factors:

Customer perceived value

Customer switching barriers

Progression of questionnaire`s questions