Professional Documents
Culture Documents
FEB-2018
1
FINANCIAL AND ENVIRONMENTAL (SWOT) ANALYSIS OF
BANK ALFALAH: EVIDENCE FROM PESHAWAR BRANCH
BY
ABDUL SATTAR
Class No. 6043
SESSION: 2014-2018
______________________________ Supervisor
Miss. Sajida Gul
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FEB-2018
ACKNOWLEDGEMENTS
The internship reported in this manuscript was conducted under the kind supervision of
Miss Sajida Gul , Lecturer abasyn university. The Abasyn University Peshawar for their
inspiring guidance cooperation, valuable suggestion and sympathetic attitude throughout
the course of this project work.
I express my highest regards to my sympathetic and respectable parents, and other family
members for their prayers, good wishes, everlasting encouragement and financial support
throughout my academic life.
Abdul Sattar
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EXECUTIVE SUMMARY
The Islamic banks being money market players play a vital role in the development of the
economy. With the emerging, development and growth of the leasing market in Pakistan,
the car Ijara being relatively a new concept is going popularity day by day. New
companies are emerging with new and different kind of schemes, so in this way the
customers is getting more and more aware due to string competing and persuading from
them. Due to this rapid development car leasing the car sales of automobile companies
have increase from 15% to 20%.
Moreover the proportion of total debts in the house hold sector has significantly
increased. The auto-financing schemes in different banks are coming with a lot
improvements but still there is many come for the banks to avail the opportunities present
in the growing market in Pakistan. The banks can still come with a lot new or
improvements in the existing products and services. Due to this reason the State Bank of
Pakistan is coming with reforms in the banking sector, which is the by factor of
motivating the banks to come of with new products and services. A brief overview of the
regulations been made by SBP for the auto finance has been given in the report followed
by the scheme being used by Bank Alfalah, in order to see the limitations being followed
by BAL. is one of the leading commercial banks in Pakistan. In the least for years it has
improved a lot, making a better cooperate image. The demand of car financing in BAL is
very high. It offers different models and kinds of which on lease, therefore capturing
different segments of different income class people.
The previous thoughts being kept in mind, a proposed auto finance scheme is given for
bank Alfalah Limited. It a product with much flexible tenures, markup rates and a few
other features with the aim to attract greeters fact of the market. So a product with a good
detail and segmentation is proposed in a suppurate section. Furthermore the Islamic
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mode of auto finance is included in order to attract the segment attracted towards Islamic
banking. For that purpose the automobiles can be financed through Mudarabah and
Musharakah modes of financing. A brief SWOT analysis of the proposed product is done
is order to be aware of the external and internal environment. The most significant part
and positive aspects of the product is that it will attract the part of market to bank Alfalah
which is not availing its services due to not being in accordance with their demands. In
the end some recommendations have been made for making the proposed product more
feasible for operations.
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CHAPTER 1
This report is an essential part of the BBA (Hons) Finance degree requirement
that is offered by the Abasyn University. It is based on the Eight weeks internship
program that the students had to undergo with the major banks in Peshawar region. I am
doing BBA (Hon’s) from this university and for my internship I selected Bank Alfalah
because BAL-IDB is one of the strongest banks of Pakistan and now a day it has a strong
hold in banking sector. As per rule of our University I worked as an internee In IBG
Charsadda Road Branch Peshawar.
The purpose of the study is to experience real life banking practices in order to
bridge the gap between the theoretical and the actual for better comprehension and
knowledge of the different aspects of this vast field of profession. The main purpose of
this report is to critically analyze and comprehend banking operations and suggest
measures in the form of concrete and weighted recommendations. Besides, the report also
aims to inculcate amongst the students the method of collecting relevant material and
shaping it in the form of formal report writing.
Banking is a much diversified field and has various dimensions and treatments.
However, for a meaningful dialogue resulting in a definitive conclusion the study for this
report has been confined to banking operations as the objective is to make an
acquaintance with the practical aspect of banking.
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1.4 Methodology of study
The report was prepared using both primary and secondary data that included the
following methodological tools:
The data, which is collected for the first time and exist in raw form, is called
primary data.
It includes:
Unstructured interview method used to collect the data from different employees
regarding their performance and job speification
The data gathered from existing sources are called secondary data. They are in
processed form.
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1.5 Limitations of the study
The banks hesitation to reveal certain facts and figures apart from major managerial and
organizational secrets made it slightly difficult to gain all the information that would have
resulted in a report applicable to the organization as a whole along with remedial
suggestions. The daily busy routine of the employees also allowed for foregoing any
queries that cropped up in the mind while undergoing the training within the assigned
branches. Although there was enough time yet the space constraint and non-availability
of resources on the part of the writer to personally visit places of interest and relevance
has limited the study to only gather those facts and figures that are significant to the
purpose of the study and do not prove the conclusions.
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CHAPTER 2
To be sure, while the world's first Islamic bank was founded back in 1975, it is
only in the last five years or so that Islamic finance has surged. Sniffing opportunity,
conventional banks are now scrambling to set up Shari'a-compliant operations; and there
has been a flurry of all-Islamic start-ups, from full-service investment banks to specialist
advisory firms. Products have moved beyond lending, insurance and investment funds to
include sukuk, hedge funds, currency swaps, and more.
Despite this boom largely concentrated in the Middle East and South-East Asia it's
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plain the Islamic finance industry still lacks global scale. Professor Rodney Wilson of the
Institute for Middle Eastern and Islamic studies at Durham University in the UK
estimates Islamic banking assets speak for less than 0.5% of the world's total. And
worldwide sukuk debt outstanding amounts to perhaps USD 100 billion – just 0.1% of
the global bond market.
Still, the signs point to a continuing surge in Islamic finance. Take economic
growth: The Middle East and Asia are the two fastest-growing areas of the world. Kuwait
Finance House expects 2007 GDP to rise 6.1% in the GCC and 6.2% in South-East Asia
– in contrast to 2.4% in the EU and 2.2% in the US. Oil revenues lie behind the boom in
the GCC; and in South-East Asia it is "the financial rigour adopted in the wake of the
Asian currency crises," according to Douglas Clark Johnson, CEO of Calyx Financial, an
alternative investment adviser based in New York.
Continuing growth in the GCC states and South-East Asia is fast creating a
prosperous middle class among the regions' combined 410 m-strong Muslim population.
As the ranks of the regions' newly well-off snap up credit to buy homes and cars, and
invest in savings and retirement plans, demand for Sharia-compliant retail financial
services is set to accelerate. Behind such consumer products is a need for Islamic
institutional finance too.
Consider, too, the vast cash-flows into the GCC region and South-East Asia: The
IMF expects Indonesia and Malaysia alone to record a cumulative current account surplus
of USD 132 billion for the five-year period to end-2014, in contrast to a deficit of USD
32 billion for the same period a decade earlier. And in the GCC, the surplus should reach
USD 680 billion, versus a prior deficit of USD 8 billion.
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is eyeing a debut sukuk issue, with plans to raise USD 2.5 billion.
2.2.1 Musharakah
Musharakah is one of the two ideal modes of Islamic financing. The other one
being Mudarabah. Musharakah is a contractual relationship formed through mutual
consent of the parties for sharing of profits and losses in a joint venture. Assets in the
venture are jointly owned in proportion to each partner’s contribution. The profits are
shared in a pre-agreed ratio. Losses, however, are incurred in proportion to each partner’s
investment. Islamic Bank representing share of its depositors invests funds in the joint
venture alongside other investor(s).
2.2.2 Mudarabah
2.2.3 Murabaha
2.2.4 Ijara
Under this facility a client may take on rent, property, vehicle or any other real
asset belonging to the bank. The bank transfers the right of use of the asset to the client,
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while retaining the ownership of the asset. The client pays periodic rent to the bank for
the use of the asset. Basis for rentals can be fixed as well as floating. Any change is rental
may be made through mutual consent.
2.2.5 Salam
2.2.6 Istisna
Transforming savings received primarily from households into credit (Loans) for
business firms and others in order to make investments in new buildings, equipment, and
other goods.
Carrying out payments for goods and services on behalf of their customers (such
as by issuing and clearing checks, wiring funds, providing a conduit for electronic
payments, and dispensing currency and coin).
Standing behind their customers to pay off customer debts when those customer
are unable to pay (such as by issuing Latter of Credit).
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Assisting customers in preparing financially for the risk of loss to property and
person.
Aiding customers in fulfilling their long-range goals for a better life by building,
Like all the banks of Pakistan Bank Alfalah is also a financial field to help the
customers. It provides loans on interest base and deposits the same. All the
activities and operations perform by the Alfalah is under the guideline of SBP. SBP
BAL is a commercial bank, which transacts the business of banking in accordance with
the provisions of BCO, 1962. Section 7 of the Act authorizes banks to engage in the
prescribed form of business. In the light of this section BAL’s functions can be
categorized as under:
1) Agency services
2) Money gram service
3) Underwriting of loans raised by the Government or public bodies and trading by
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corporations etc.
4) Providing specialized services to customers,
Being a financial institution. The BAL is facing the competition of many commercial banks
and DFI’s. However, the major competitors relating to product offering and distribution
channels are sharing business of BAL.
6 Khyber bank
7 Standard charter
9 Bank of Punjab
10 Faysal bank
11 Meezan bank
Bank Alfalah Islamic Charsadda Road Branch Peshawar started its operations on
21st Nov, 2004 and with a short span of time the bank’s performance grow day by day,
because of its high valuable clients. BAL-IDB Peshawar became one of the most
progressive and dynamic banks in a very short time and overtook several other well-
established competitor banks.
This branch is situated in very busy centers, which brings a great number of
deposits to the branch, from this in a short span of four years; the deposits grew higher
than all other banks functioning for last many decades or more. Beside the deposits, the
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number of the transaction of other products of the branch i.e. Consumer finance products,
remittances, Foreign Exchange etc, also increases day by day. The branch performs all
the functions of a commercial bank. The BAL IDB Peshawar is headed by the Manager.
Several staff officers are delegated different responsibilities.
2.8.1 Objectives
The following are the main objectives of the BAL IDB Peshawar for which it is
structured:
Active mobilization of saving and deposits of the valued clients of BAL IDB
Charsadda road Peshawar.
The branch tries to actively promoting their products in different areas. The
branch has also to ensure suitable training for improvements in staff skills and those to
the Islamic/corporate clients, technical and most importantly management skills that are
encouraged through the bank association with the client’s enterprises. Organizational
structure
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CHAPTER 3
ORGANIZATIONAL STRUCTURE
Like every successful organization BAL-IDB also requires an efficient organizational
structure for the successful operation of its activities. As it works on the principles
leading to its successful procedures.
BAL-IDB is one of the largest and complicated organizations of Pakistan and having 400
branches and administrative offices all over the country.
Like all the banks of Pakistan Bank Alfalah is also a financial field to help the customers.
It provides loans on interest base and deposits the same. All the activities and operations
perform by the Alfalah is under the guideline of SBP. SBP is main body of all the
financial institutions working in Pakistan.
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Mr.Ikram Ullah-Majeed Sehgal Director
Chairman& President
Board of Directors
President’s Secretariat
Secretary Board of Directors
Credit Management
Corporate & Investment Banking Group Group
Audit & Inspection Group
Compliance Group
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Table 3.2 Number of Employees
Permanent 7500
Temporary/ Contractual Basis 355
Bank’s own staff strength at the end of the year 7855
Out sourced 2100
Total staff strength 9955
Source: Annual report BAL 2016
An employee may be defined as: "A person in the service of another under any
contract of hire, express or implied, oral or written, where the employer has the power or
right to control and direct the employee in the material details of how the work is to be
performed.” An employee contributes labor and expertise to an endeavor. Employees
perform the discrete activity of economic production. Of the three factors of production,
employees usually provide the labour.Specifically, an employee is any person hired by an
employer to do a specific "job".
BAL-IDB has a large network of branches, which extends to the remotest areas of
the country. Alfalah was established in 1997 and its Islamic division started operations in
2004 and its yearend reflected a modest capital base of Rs. 100 million and deposits
totaling Rs 113.7m. By following yearend, BAL-IDB’s equity had risen more than 4
times to Rs 569m and the balance sheet footing had swelled to Rs 7,799 million.
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3.4 Head Office
The Head Office of BAL is situated on Chundrigar road in Karachi. All branches and
regional offices work according to the rules and regulations issued by Head Office from
time to time. The Head Office of BAL which is primarily responsible for making policies
and execution of policy decision includes. And BAL-IDB main branch is situated in
Lahore
1. Current Account
2. PLS Savings Account
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3. Royal Profit
4. Basic Banking Account
5. Alfalah Kifayat
6. Alfalah Mahana Amdan
7. Alfalah Education
City Branch provides different types of deposits for various business segments
Bank Alfalah Islamic Banking Division (BAL-IBD) offers Current, Savings and
Term Deposit facilities to its customers seeking personal banking relationships with the
The officers of the bank open an account at the request of a customer. When a customer
visits the BAL Peshawar City Branch he is asked for two references, one person who is a
relative of him, in case of emergency or in case of any information required by the bank
the bank call that person for getting information about his customer i.e. Next of Kin.
Next, he is asked who introduced him to BAL Peshawar city branch as a customer. The
introducer must be an account holder of the bank or an official of the bank. After the
initial formalities, he is asked to fill the form in the officer’s presence. The following are
the important information in the account opening form which is filled by the customer
while opening an account:
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1. Nature of Account i.e. individual, joint, business account etc.
3. The name of the account opener along with his father’s in block letters.
5. In case he is serving somewhere the name of his organization otherwise the name
and nature of his business.
A copy of the customer’s original identity card must be attached to the account opening
form and the original shown to the officer.
In order to operate a current and savings account a Cheque book is required that is
issued by the concerned officer the requisition slip is filled in and the number of leaves
that the customer feels he would need is mentioned. The charges for the Cheque book are
recovered by debiting his account.
E. WITHDRAWALS
The account holder makes withdrawals after he presents Cheque and other
payment instruments signed exactly in the fashion on the specimen card up to the limit of
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CHAPTER 4
CRITICAL ANALYSIS
These section efforts have been made to cover all relevant aspects of the financial
performance of BAL. Overtime comparison and Common Size analysis are carried out
with the view to extract concrete conclusion to describe financial standing and
performance of the bank.
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4.2.1 Bank Alfalah Information
Great journeys begin with but a single step and mighty oaks are born out of
humble seedlings. Bank Alfalah – Islamic Banking Division (BAL-IBD) – presently a
division of Bank Alfalah Limited – is gearing up to become a separate, full-fledged
Islamic Banking entity. BAL-IBD offers to its customers a broad range of Islamic
products under personal, consumer and corporate banking modes. The array of Islamic
instruments at the disposal of BAL-IBD is equipped to provide efficient and satisfying
solutions to our customers’ needs. Our Islamic products are Shariah-compliant carrying
the seal of approval of the Centre of Islamic Economics, an institution vested with
powers to attest authenticity and legitimacy of Islamic banking products in Pakistan.
BAL-IBD has entered into a Shariah Consultancy agreement with the Centre of
Islamic Economics, Karachi, which is a noted and well-known seat of learning for
Shariah scholars and a prominent institution dealing in Shariah Advisory services.
Besides assisting in advancement of the Division’s product portfolio, the Centre also
stamps approval of the Division’s conduct of business following periodic audits. These
audits are in addition to those carried out by the State Bank of Pakistan and the internal
audits undertaken by the Division itself.
4.2.2 Performance
The pace of frenetic, triple digit growth was continued over the next twelve
months as equity more than doubled to Rs 1,278 million from Rs 569m. Assets also
recorded a more than 100% growth, climbing to Rs 15,634 million from Rs 7,799
million. Deposits alone failed to double – rising to Rs 12,476m from Rs 6,548 million yet
managing a healthy 90% increase.
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Financial results as of June 30, 2006, reflect growth but at more modest pace.
Total balance sheet size fell shy of Rs 18 billion – Rs 17,970m vs. Rs 15,634m – and
deposits climbed to Rs 14,111 million, rising Rs 1,635 million in six month’s period.
Income for the 6-month period was Rs 111.23 million.
In our endeavor to provide you versatile banking options to fulfill your financial
needs, Bank Alfalah Limited presents the Alfalah Hilal Card, a Debit Card which gives
you unlimited access to your current / savings account with a simple swipe at millions of
retail shops and ATMs worldwide. The Alfalah Hilal Card comes with a host of
conveniences and benefits combined with the wide reach of Visa Network, enabling it to
be accepted at more than 1 million ATMs and 29 million retail outlets around the world,
making it the most acceptable Debit Card available in Pakistan.
What's more, it is easy to operate and can be used on any electronic self-printing
POS machine where VISA is accepted, locally and internationally. No more hassle of
remembering your PIN for retail transactions and no need to go to the ATM for cash
withdrawal! one swipe and your transaction is complete.
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4.2.6 Convenient And Fast
Money Gram is available in over 154 countries and in more than 40,000 locations
worldwide. With Money Gram your money is transferred immediately and usually arrives
at the receiving end within 10 minutes while other services can take days or weeks. There
are no complicated procedures and you do not need a bank account or a credit card.
What’s more, the receiver is handed the cash immediately.
Bank Alfalah presents Rs. 1,000, 5,000 and 10,000 denominations of traveler’s
Cheque, making it very convenient to carry money while traveling or keeping
your emergency cash safe.
4.2.8 Features
1. Maximum security features Special embossed intaglio printing in the UK, Alfalah
security thread and Alfalah watermark. Just some of the advanced features that make TCs
secure
2. Fully Refundable
4. Unlimited validity
5. No account needed
6. Network of Branches
Bank Alfalah now offers the facility of on-line banking to its customers through
its country wide network of branches. Customers can use the ATMs or the banking
counters of any branch for day-to-day banking needs, irrespective of branch where they
maintain their accounts. For Corporate customers centralized Cash Management facility
is also offered through on-line banking.
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4.2.10 Foreign Trade & Correspondent Banking
We have provided against the list of correspondents their world and country
ranking. These ranking have been taken from The Bankers Almanac – July 2001 issue.
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currencies based on our trade flows and business requirements.
The correspondents are listed on a country-wise basis. The banks are listed
alphabetically.
Alfalah car scheme enables customers to own a car at easily affordable and
flexible installments with minimum down payment and insurance.
Locker services are offered at select branches. Lockers are available in three sizes
small, medium and large. Annual charges for the lockers are as follows:
Lockers are available to account holders and carry an insurance value of Rs.250,
000/-
4.4 Comparison between Current Strategies and Vision & Mission of BAL
After studying deeply the vision, mission and current strategies of BAL I realize
that the current strategies of BAL totally matched with its Vision and Mission
statement because as we can see in vision statement they talk about to provide
financial services and safe future of its customers so this is also mention in the
current strategies of BAL.
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In the Mission statement they talk about the long term relationships with
customer by providing them new and effective products and services so same is
mentioned in the current strategies.
The bank is primarily subject to interest rate, credit and currency risks. The bank has
designated and implemented a frame work of controls to identify, monitor and manage
these risks are as follow;
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The various stakeholders of business are all interested in the analysis of financial
statements. But the focus of interest of all is not the same. Financial statements are
prepared primarily for decision-making. They play a dominant role in setting the
framework of managerial decisions. But the information in the financial statements is not
an end in itself as no meaningful conclusions can be drawn from these statements alone.
However the information provided in the financial statements is of immense use in
making decisions through analysis and interpretation of financial statements.
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Table 4.1 STATEMENT OF FINANCIAL POSTION (BALANCE SHEET)
For the year ending June 30
Statement of Financial Rupees in “000”
ASSETS June 30, June 30, June 30,
2016 2015 2014
Cash & Balances with treasury 2,904,139 1,542,102
5,079,720
Banks
Balances with other Banks 2,488,477 1,502,684 2,403,698
Lending’s to financial institutions 2,708,76 2,562,093 1,810,846
Investments 29,341,227 19,852,73 17,925,911
0
Advances 21,846,716 18,238,33 11,835,962
3
Operating Fixed assets 1,184,180 1,121,554 1,013,670
Deferred tax asset-net 311,306 443,320 456,420
Other assets 1,807,663 1,993,869 1,821,961
TOTAL ASSETS 60,154,58 50,794,30 38,810,57
4 3 0
LIABILITIES
Bills payable 249,648 280,665 223,973
Borrowings 2,581,884 2,894,759 5,147,036
Deposits & other accounts 45,384,411 36,981,35 26,285,794
1
Sub-ordinated loans - - -
Liabilities against assets subject - -
-
to finance lease
Deferred tax liabilities - - -
Other liabilities 2,025,450 1,237,155 1,185,470
TOTAL LIABILITIES 50,241,39 41,393,93 32,848,27
3 0 3
NET ASSETS REPRESENTED BY
Share Capital 5,004,001 5,004,001 5,004,001
Reserves 640,009 548,039 435,342
Unappropriated profit / 419,959 (398,710)
52,079
(accumulated loss)
Advance against shares 3,224,000 3,224,000 224,000
subscription
Surplus on revaluation of assets 625,222 572,254 697,664
TOTAL REPRESENTED 9,913,191 9,400,373 5,962,297
Source: BAL annual report 2014, 2015, 2016.
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Table 4.2 PROFIT AND LOSS ACCOUNT (INCOME STATEMENT)
For the year ending June 30
PROFIT AND LOSS Rupees in ‘000’
June 30, June 30, June 30,
2016 2015 2014
Mark-up/return/interest earned 1,568,284 4,207,155 3,390,014
Mark-up/ return/ interest income 968,838 2,925,066 2,390,388
Net mark-up/ interest income 599,446 1,282,089 999,626
Reversal of provision against non- (15,411) 48,916 659,758
performing loans and advances-net
Provision for diminution in the value 27,610 (371,682)
of investments-net 602,061
Bad Debts written off directly - - -
12,199 (322,766) 1,261,81
Net mark-up/ interest income after 587,247 1,604,855 (262,193)
provisions
NON MARK-UP/ INTEREST
INCOME
Fee, Commission and brokerage 63,857
172,565 127,123
income
Dividend income 46,947 74,848 117,458
Income from dealing in foreign 11,061
30,761 3,371
currencies
Gain on sale of securities-net 8,548 (285,934) 67,148
Unrealized loss on revaluation of (15,666)
investments classified as held for
trading 1,431 (1,294)
Other income 21,845 66,006 69,896
Total non mark-up/ interest income 136,592 59,677 383,702
NET INCOME 723,839 1,664,532 121,509
NON MARK-UP/ INTEREST
EXPENSES
Administrative expenses 353,181 943,680 719,453
Other provisions/ write offs - (5,705) 185,500
Other charges 8,884 13,416 15,326
Total non mark-up/ interest 362,065
951,391 920,279
expenses
NET EXPENSES 361,774 713,141 (798,770)
PROFIT/ (LOSS) BEFORE 361,774
713,141 (798,770)
TAXATION
Taxation
Current (81,818) 89,631 75,292
Prior - 2,040 -
Deferred (100,266) 57,984 (236,879)
NET TAX
149,655 161,587
(182,084)
PROFIT/ LOSS) AFTER TAXATION 179,690 563,486 637,183
Earnings per share 0.36 1.13 (1.27)
Source: BAL annual report 2014, 2015, 2016.
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4.8 RATIO ANALYSIS:
Financial ratio is an index that relates two according numbers and in obtain by dividing one
number by other.
LIQUIDITY RATIO:
Ratio that measures a firm’s ability to meet short term obligation .liquidity ratios are current ratio
and quick ratio.
“This ratio relates current assets to its current liabilities”. It shows that
how the organization has more assets and strength of the liquidity to pay its
debts. It is calculated as
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Interpretation:
35
Interpretation:
This ratio shows that how efficiently an organization use its assets.
High value of total asset turnover means that the company is using its assets
efficiently. This measure is probably of greatest interest to management,
because it indicates whether the efficient operation has been financially
efficient. Total asset turnover is increasing in 2014 as compared to 2015 &
2016 which needs to be improved.
36
Interpretation:
This ratio indicates the profit that the firm earns on the interest. In
2011 the Gross profit margin ration is decreasing and in 2014 & 2015 this
ratio is increasing. It shows that the firm Gross profit is recovering.
37
Interpretation:
38
4.14 RETURN ON EQUITY:
ROE compares net profit after taxes to the Share holder’s Equity. This ratio is
calculated as:
Interpretation:
It indicates the Profit after taxes to the share holder’s equity. Increase
in this ratio means that profit after taxes is higher with respect to the share
holder’s equity and vice versa. In 2011 it is increasing as compared to 2014
& 2015. In 2014 it is also increasing as compared to 2015.
39
( formula ) ROA = Profit after Tax/Total Assets
Interpretation:
This ratio shows that how the firm efficiently utilizes their assets.
Increase in this ratio indicates that the firm profit after tax is higher as
compared to its total assets. In 2014 it is increasing as compared to 2015 &
2016. In 2014 it is decreasing as compared to 2015 & 2016.
40
Year 2016 2015 2014
29,341,227 19,852,730 17,925,911
Investments
45,384,411 36,981,351 26,285,794
Deposits
Investment 0.646 0.536 0.681
DepositRatioRatio
Source: BAL annual report 2014, 2015, 2016..
Interpretation:
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1.43 1.42 1.38
Debt Ratio
Source: BAL annual report 2014, 2015, 2016.
Interpretation:
The Debt ratio shows the percentage that how much out of total asset
has been borrowed. The greater the ratio the greater the amount of other
people’s money being used to generate profit. In 2014 it has been
decreasing as compared to 2014& 2015. In 2015 it has been decreasing as
compared to 2016.
4.11 Strengths
1. BAL is one of the largest private banks of the country with a deposit base of
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Rs.76698 million in the 2003.
2. Parties of financial repute and credit worthiness like the State Bank of Pakistan,
and the Abu Dhabi Consortium besides by the Government of Pakistan.
3. The management efficiency and effectiveness of the bank has improved greatly as
is evident from the income pattern and provisions for loan/ write off practices. The
Deposits are increased by 48.40%. The profit after Tax is increased by 376.40%. The
Total Assets of the Bank is increased 51.845 from the last year.
7. It is very active in foreign trade transactions and the volume grew at a rate of
36.07% over the previous year.
8. Based on the Bank’s operations, it has been able to maintain its credit rating in
long term to AA- and short term to A1+.
9. BAL has long-term vision, which plays a very important role in organization’s
success.
10. Bank’s emphasis on consumer banking by providing them with innovative saving
schemes, products and services suiting best to their life style.
12. Best and optional policies and attractive compensation packages, for employees,
which has really improved their commitment, dedication and hard work, towards the
accomplishment of banks objectives.
13. BAL instant financing products for customer wanting instant loan facility at BAL
branches.
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15. Pioneer in introduction of BAL Credit Cards and RTC, which minimize the
degree of riskiness.
18. Advances schemes to agriculture sector and small and medium enterprises.
4.12 Weaknesses
1. Increase in the non-performing loans due to political, economic and legal factors
has adversely affected the bank’s image.
3. Promotions are carried out on annual basis ignoring the importance of capabilities
and performance outputs.
8. The banking hours of the bank are maximum that is from 9 A.M to 6 P.M.
9. Customers having account, with small amounts are not given some services and
dealing to those with high accounts.
4.13 Opportunities
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small and medium businesses finances.
5. Expand its product line similar to other competitive banks by introducing various
other modes of consumer financing such as car and consumer durables micro finances.
7. The introduction of ATM facility in the every branch will most certainly result in
a positive image and improve the services offered to its customers.
4.14 Threats
3. Extensive promotional campaigns run by the other banks are a major threat to
BAL in that they are able to attract more customers.
4. The American elections is going on which is big threat to the policies of the bank.
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8. Loss of confidence of the customers due to freezing of accounts
CHAPTER 5
CONCLUSION AND RECOMMENDATIONS
5.1 Conclusion
BAL is one of those organizations who is efficiently operating on their set
procedures and making profit. BAL fallows the guidelines of SBP in other words State
Bank of Pakistan provides policies to the banks operating in Pakistan and BAL is one of
them.
I worked in The Charsadda road branch of BAL and during my internship I learn a lot
about banking sector and practically do different tasks e.g. Account opening, online funds
transfer and much more. Now I am quit capable to deal with customers.
By concluding this report I will say that ALFALAH is a very good organization for long
term carrier because the staff is very friendly with each other and respectful too.
5.2 Recommendations
After doing the internship in BAL and deeply studying all the information regarding BAL
I will give few recommendations.
5.2.1Simplification Of Procedure
The procedure of opening an account should be simplified. The account opening form
should be self-explanatory and include translations in Urdu for those customers who are
not well read, since the fact cannot be ignored that many people do not have a good
understanding of English.
Those who deposit large amounts of money or are old customers of the bank should be
given free credit lines up to a certain limit. Besides, financial advice should be provided
to customers in case there is a change in the market trend before they seek for it.
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5.2.3 Integrated Marketing Approach
All the officers in Deposits Department should be involved in marketing and not just
opening accounts and maintaining their records. This can be done through improving
their personnel relations skills of visiting the potential customers at their offices and
homes.
The Cash Department at the Branch needs special attention in the sense that the cash
counter is small and becomes crowded when there are more than 10 to 15 customers to
attend. Customers make online fund transfer, use the debit card, withdrawals and deposits
from the very same counter. Hence, if a new counter cannot be built due to certain
limitations, the management should try to make lines of the customers or give tokens to
them, to minimize the crowed.
The load of work on the Clearing officer is high as compared to the other staff members
of the branch. The Human Resource Department at Head Office should hire more
employees for this department.
Nowadays no organization can survive in this tough competitive world without having
able to market itself and its products. Keeping this in mind a Marketing Department
should be introduced in all branches that would
Good managerial skills make positive contribution towards higher effective results. BAL
should focus on the effective utilization of its human resource by applying the modern
style of management. This can only be possible if political interferences are discouraged
especially when hiring and placing personnel and the recruitment policies are changed to
give preference to M.B.A. and M. Com. Students.
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5.2.8 Increasing Employees Salaries
BAL have strong financial position and earning more profits day by day so
according to me the salaries of employees must be increased because currently
BAL didn’t provide good salaries to its employees.
REFERENCES
http:/www.bankalfalah.com.pk
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