Intership Report of Askri Bank Amended Almost Final

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INTRODUCTION 3
1.1 Brief Introduction of Sector of the Organization 4
1.2 Objectives of Studying the Organization 5
ORGANIZATIONAL STRUCTURE 7
2.1 Overview of the Organization 7
2.2 Nature of the Organization 9
2.3 Business Volume 10
2.4 Number of Employees 11
2.5 Product lines 12
2.6 Askri Bank Personal’s Investment 12
2.7 Type of Accounts 13
2.8 Points to Remember 14
2.9 Unique Product 15
2.10 Different Services Provided By ACBL 16
2.11 Commercial Finance 17
2.12 Foreign Remittances 18
2.13 Modes of Creating Charge over Securities 20
2.14　Documentation
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STRUCTURE & FUNCTIONS OF OVERALL DEPARTMENTS OF THE
ORGANIZATION 27
3.1 Organizational Structure 29
3.2 Various Departments of the Organization (Functions & Responsibilities)
31
3.3 Methods of Opening of an Account 33
STRUCTURE & FUNCTIONS OF ACCOUNTS/FINANCE DEPARTMENT 35
4.1 Structure and Functions of the Accounts / Finance / Audit Department 36
4.2 The Role of Financial Manager 39
4.3 Working of Finance Department 40
4.4 Sources and Funds of ACBL 41
4.5 Generation of Funds 42
4.6 Allocations of Funds 44
FINANCIAL ANALYSIS 46
5.1 Financial Analysis 47
5.2 Five-Year Performance of ACBL 47
5.3 Balance sheet of ACBL 48
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5.4 Profit And Loss Account 49

5.5 Financial Ratio Analysis 50
5.7 Horizontal Analysis 72
ORGANIZATION ANALYSIS 79
FUTURE PROSPECTS OF THE ORGANIZATION 87
SHORTFALLS / WEAKNESSES 90
CONCLUSION 93
RECOMMENDATIONS 96
REFERENCES 98
ANNEXES 100
ANNEXES
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CHAPTER: 1
INTRODUCTION
1.1 Brief Introduction of Sector of the Organization

Askari commercial bank limited is categories in banking sector. The word
“Bank” is of a European origin and is derived from the Italian word “BANCO”, which
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means a table or a counter. Bank is a financial institution licensed by a government. Its

primary activity is to lend money. Many other financial activities were allowed over
time. For example banks are important players in financial markets and offer financial
services such as investment fund. The level of government regulation of the banking
industry varies widely, with counties such as Iceland, the United Kingdom and the
United States having relatively light regulation of the banking sector, and countries such
as China having relatively heavier regulation (including stricter regulations regarding
the level of reserves). 1947, banking in Pakistan was dominated by branches of British
banks. The State Bank of Pakistan, the central bank, was formed after partition in 1948.
It assumed the supervisory and monetary policy powers of the State Bank of India. In
the period of 60s to 70s the emergence of a number of specialized developments
finances institutions (DFIs) such as Industrial Development Bank of Pakistan (IDBP)
and the Agricultural Development Bank (ADB). These DFIs were either controlled
directly by the state or through the SBP, and were intended to concentrate on specific
Bank banks were nationalized by the
priority sector lending. In 1974 all domestic commercial
Government. The Pakistan Banking Council was established, which assumed the role
of a banking holding company but with limited supervisory powers. However, PBC
was dissolved in 1997, leaving the SBP as the sole regulatory authority for banks and
financial institutions in Pakistan. Nationalization of the banking sector led to pet
projects. The branch network of NCBs also proliferated in an effort to provide banking
services to all regions/territories of the country, often with disregard to the viability or
feasibility of such expansion.
Commercial Bank Exchange Bank
Central Bank Agriculture Bank

Industrial Bank
1.2 Objectives of Studying the Organization
The efforts to study the organization are to achieve the following objectives:-
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➢ The primary objective of my study is to meet the requirement of the course

MBA, internship. The secondary objective is to analyze the present system of
“Askri Commercial Bank Ltd.” to find out the effectiveness of the current
system. To get awareness about the business development & financial
techniques. To analyze the financial review of the bank as well as critical
analysis of financial statements.
➢ To get the awareness about the business development and financial techniques.
➢ Comparison of assets of organization with other organization.
➢ Policies followed by the organization enforced through laws of State Bank of
Pakistan.
➢ Study the facilities provided by the organization to common public in various
forms.
➢ This study has been carried out to meet the requirements of the Master in
Business Administration (MBA) program of Allama Iqbal Open University
Islamabad (AIOU).
➢ The purpose of the study is to acquire the experience in the field by applying the
theoretical knowledge / lectures in the practical life. To understand the various
operations of the banking system. To make recommendations in light of the
analysis. To improve the long report writing skills.
➢ It also give me chance to gain some professional experience and as well as
understanding of working environment of the organization.
➢ The administrative structure of the organization both as it is formally organized
and as it actually appears.
➢ The role of different types of organization personnel in performing the functions
of the organization.
➢ The organization’s philosophy and goals in relation to the services it provides to
the community.
➢ Deliver solutions that meet customers’ financial needs;
➢ Build and sustain a high performance culture;
➢ Build trusted relationship with all stakeholders;
➢ Build and manage the Bank’s portfolio of business to achieve strong and
sustainable shareholders returns; and create and leverage strategic assets and
capabilities for competitive advantage.
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CHAPTER: 2
ORGANIZATIONAL
STRUCTURE
2.1 Overview of the Organization

2.1.1 Brief History of the Organization
An important player in Pakistan’s financial services
industry, Askari Bank is now leading the way to the most
modern and dynamic banking in the country.
Incorporated in October 1991, Askari Bank commenced
its operations in April 1992, and has since expanded into
a nationwide presence of 150 branches, including 14
dedicated Islamic Banking branches connected online and
supported by a shared network of over 2,670 online ATMs
covering all major cities in Pakistan supports the
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delivery channels for customer service. Askari Bank also

has an Offshore Banking Unit in Bahrain.
Askari Bank is the leading private sector bank in
Pakistan, delivering quality service through innovative
technology.
In the success story of Askri Bank, one of the most
important factors, apart from its dynamic management and
prudent approach, is the QUALITY of its SERVICES, which
gives it a great edge over its competitors. Askari Bank
has always strived to facilitate its customers by
introducing various high quality hi-tech services for the
first time in Pakistan.
Askari Bank is proud of its pioneering role in
providing the most modern and technologically advanced
services to their customers. Knowing their customers and
their needs is the key to their business success. Their
products and services are as diverse as their market
segments. Technology has played a pivotal role in meeting
customer expectations, particularly with respect to the
speed and quality of services.
Askari Bank has fully automated transaction-
processing systems for back-office support. The branch
network is connected on-line real-time and customers have
access to off-site as well as on-site ATMs, all over
Pakistan. This includes not just establishing and
maintaining technology infrastructure for providing
operational support to all units of the Bank, but also
encompasses introducing latest state-of-the-art
technology-driven products and service delivery systems,
such as ATM networking, Internet Banking, Mobile ATM,
Credit Cards, Debit Card, Prepaid Card, utility bills
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payment through ATMs & Internet which have brought about

cost-effectiveness, timesaving and safety.
Askari bank has also achieved another milestone with
the launch of Askari Bank Zari Credit Card. This is the
first ever credit card offered to the farmers in Pakistan
with complete product features and service benefits. It
aims to meet farmer’s production and development needs and
to supplement cash flows, whenever required.
It is also a matter of satisfaction that ASKARI BANK
has been the first bank to introduce PTCL and WAPDA
utility bills payment electronically through ATM and
Internet on an Online-Real-Time Basis. For the first time
in Pakistan, they have introduced Mobile ATMs to provide
banking facilities at the doorsteps of their customers.
Askari bank’s mobile ATMs first in the banking history of
Pakistan, now four in number, continue to serve customer
needs.
Their Phone Banking and Internet Banking Facility
allows customers, to access their accounts from anywhere
in the world, and effect transactions.
Askari Bank has an internationally recognized
website, containing comprehensive information on Askari
Bank and its products. The bank is proud to mention that
the website was developed in-house and has received
several awards. Bank has established its Data Warehouse
and Customer Care Centre, a dedicated customer call center
to provide one window service to valued customers in terms
of their telephonic enquires.
Askari bank remains focused on using technology for
improving customer service standards and expanding the
range of products being offered and other technology based
solutions.
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Visit Askari Website (www.askaribank.com.pk)
2.2 Nature of the Organization
ACBL is private sector bank and is categorize in commercial bank. Commercial

bank is referring to a bank or a division of a bank primarily dealing with deposits and
loans from corporations or large businesses. Commercial banking may also be seen as
distinct from retail banking, which involves the provision of financial services direct to
consumers. ACBL offer both commercial and retail banking services. In retail banking
Services offered include: savings and checking accounts, mortgages, personal loans,
debit cards, credit cards, It provide both product and service to the consumer and the
business user and it also provides the followings services to their customers:-
➢ It provides deposit banking services.

➢ It provides credit and financing facilities.
➢ It acts on behalf of govt. in its receipts and payments.
➢ It performs Govt. treasury function.
➢ It helps govt. in sale/purchase of Securities Bonds and Certificates etc.
➢ It helps in Foreign Exchange transactions.
➢ Locker service and safe custody of valuable belongings.
➢ It provides Hajj facilities to citizens.
➢ Render investment advice & allied Svc
➢ ATMG
➢ Traveler cheques
➢ Special deposit products.
2.3 Business Volume. (Rs. In Millions)
Items 2005 2006 2007 2008 2009

Total Assets 145,099 166,033 182,172 206,191 254,327
118,7 131,8 143,0 167,6 205,9
Deposits
94 39 36 77 70
85,97 99,17 100,7 128,8 135,0
Advances
7 9 80 18 34
25,70 28,62 39,43 35,67 67,04
Investments
9 6 1 8 5
11,05 12,26 12,97 14,94
Shareholders’ equity 8,587
3 6 1 9
Pre-tax profit 2,859 3,347 2,300 461 1,642
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After Tax profit 2,021 2,250 2,681 386 1,108

Earnings per Share (Rs) 13.42 7.48 8.92 0.95 2.18
Return on Assets (pre-tax profit)% 1.60 1.40 1.54 0.20 0.48
Number of branches 99 122 150 200 226
Number of Employees 2,754 3,241 3,834 4,252 4,393
“Interpretation on Business Volume”
The total assets of the bank have shown a continuous increase in the last five
years. In 2005 the 145,099 but it begin to increase every year and reached at 25,437 in
2009, which is very fast growth.
The total deposits of the bank also showed a continuous increased in the value of
total deposits. In 2005 the total deposits of the bank are 118,794 and then after five
years the total deposits reached at 205,970. The total advances of the bank have shown a
continuous increase in the last five years. In 2005 the 85,970 but it begin to increase
every year and reached at 135,034 in 2009, which is very fast growth.
The total investment of the bank also showed a continuous increased in the value
of total deposits. In 2005 the total deposits of the bank are 25709 and then after five
years the total deposits reached at 67,045.
2.4 Number of Employees
No. of Employees 2005 2006 2007 2008 2009
Total 2,754 3,241 3,834 4,252 4,393
Total numbers of employees as on 31-12-2009 were 4,393.

There were following employees in different sections at ACBL, Sakeena Razvi
Road, and Mandi Bahauddin
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Sr.# Name Designation / Grade

1. Mr.Muhammad Anar Gondal Manager Grade/Branch Manager
2. Mr. Qasir Javaid Ranjah MG/Manager Operations
3. Mr. Raja Abid Hussain OG-I/ Incharge Credits
4. Mr. Faisal Shahzad Tarar OG-I/ACO
5. Miss. Arzo Ali OG-II
6. Mr. Asif Shahzad COG-II/Cash
7. Mr. Yasir Mehmood COG-II/Cash
8. Mr. Muhammad Nawaz OG-II
9. Mr. Farhat Iqbal OG-II/System Admin
TOTAL 09
2.5 Product lines

2.5.1 Premium Amdani
➢ First Pakistani Bank to offer on-line real time banking on a countrywide basis.
➢ First Bank with a nation-wide ATM network
➢ First Bank to offer Internet Banking services
➢ First Bank to offer E-Commerce solutions
➢ Investment period is 5 years
➢ Cash Card
➢ Profit is paid every month
2.5.2 Premium Saver
➢ Minimum saving balance of Rs. 20,001/- and a maximum balance of Rs.

300,000/-
➢ Free ACBL Cash Card (ATM + Debit).
➢ Two debit withdrawals allowed in a month and no limit on number of deposit
transactions.
➢ Profit calculated monthly and paid on half yearly basis.
➢ Earning up to 7.25% p.a.
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2.6 Askri Bank Personal’s Investment

➢ Loan amounts from Rs. 30000/- to Rs. 300000/- are
available
➢ Repayment period from 1 to 3 years
➢ Fixed monthly repayment
➢ Low markup rate i.e. 12%
➢ No pre-payment penalties
➢ Shortest Processing time i.e. 3 weeks
➢ Funds may be obtained at any ACBL branch
➢ Some restriction are apply on getting the loan
➢ Your age is between 21 yrs to 57 yrs
➢ You have a verifiable minimum gross monthly income of
Rs 15000/-
Minimum length of confirmed service with present employer is at least six

months with a total length of at least one-year service.
Demand Deposit:-These are payable on demand. They include current account,

sundry deposit (e.g. margin account) and call deposit receipt. No profit is given on
demand deposits.
Time Deposit:-Payable on demand with certain maturity. Attracts profit with

respect to time.
2.7 Type of Accounts

2.7.1 PLS Saving Bank Account
Saving deposits were introduction to inculcate and encourage the of saving
among people of small means in order to achieves of Islamisation of the banking system
in the country, the government authorized the banks to accept Saving Deposit on profit
and loss sharing basis. Deposits received under this scheme are invested in non-interest
bearing advances and other avenue so as to eliminate the element of interest.
2.7.2 Points to Remember

➢ The PLS Saving Account may be opened in the name of an individual, or jointly
in the names of two or more persons. These accounts may also be opened by
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charitable institutions or got provident fund and other funds of benevolent nature
by local bodies, autonomous corporations, companies, associations, societies and
educational institutions
➢ PLS SB Accounts can be opened with initial cash deposit of not less than
Rs.10000. The amount of initial deposit should be mentioned on AOF. A
minimum balance of Rs.500 (or as per bank policy announced from time to
time) will have to be maintained for qualifying for sharing profit/loss.
➢ Not more than one account may be opened in any one name except in cases
where such accounts are opened in the name of parent of guardian for more than
one child.
➢ Statement of PLS accounts are normally provided once in every six month as on
June 30 and December 31.
➢ No service charges shall be levied on PLS saving account as per SBP prudential
regulations.
➢ Profit on PLS SB deposit is calculated on minimum monthly balanced standing
from 6th of the month till the end of the month. The profit is paid on half yearly
basis announced by the Head officer after June 30 and December 31.
➢ Zakat at the rate of 2.5% is deducted from the PLS SB account holders on the
1st Ramazan-ul-Mubarik. Balanced below a certain limit that is announced by
the government every year is exempted from Zakat.
➢ A withholding tax at the rate of 10% on profit is also recovered from the account
holders irrespective of the amount of profit.
➢ The rate of return on PLS accounts vary with minimum balance. The rate of
return is 1% on minimum balance of up to Rs.9, 999, 2% on Rs.10, 000–24,999.
2.7.3 Current Account

A current account is a running account, which is continuously in operation, by
the customer on all working days of the bank. The customer deposits without the current
deposits without previous notice to the bank.
2.8 Points to Remember

➢ Current account can be opened with an initial deposit of not less than Rs.5, 000.
The amount of initial deposit should be mentioned on AOF. It is an open
account for which there is no fixed period for deposit.
➢ There is no restriction on making deposits in and withdrawals from this account.
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➢ Bank does not pay any interest on these deposits, as they can be withdrawn
without notice
➢ Cheques are used for withdrawals from these accounts.
➢ Loans and credits may be sanctioned to the credit worthy current account
holders with ease.
2.8.1 PLS Term Deposit:

Fixed or term deposits are the major source of funds of a commercial bank.
Term deposits, as the name implies, are deposits kept with a bank for a certain period of
time. They are not payable on demand like the current deposit. The depositor can only
withdraw them after the specified period of time. The persons or firms trust, religious
bodies, which have surplus funds keep the money in fixed deposits with bank.
2.8.2 Points to Remember

➢ PLS Term deposit is grouped into the following categories: 1 Month, 2 Months,
3 Months, 6 Months, 1 Year.
➢ Minimum balanced of Rs.5, 000 is to be maintained in PLS Term Deposit.
➢ Profit on this account is paid on maturity.
➢ Because the deposited amount remains fixed during the period the profit is
calculated on that fixed amount.
➢ The rate of interest on fixed deposits is higher than that of saving deposits and it
varies with time of deposit. Rate of interest is 1% on 1 Month, 1.25% on 2
Months, 1.50% on 3 Months, 2% on 6 Months, 2.5% on 1 Year.
➢ The holder of Term Deposit cannot issue cheque for the withdrawal of the
amount
2.9 Unique Product

Askari Paishgi Munafa term deposit account is an innovative addition in the
wide range of bank’s products and value added services. This unique product will meet
the immediate financial needs of individual investors who want to invest funds for a
medium term. The most significant feature of this product is that the customer will
receive the entire profit upfront.
2.9.1 Salient Features
Tenure: 15 Months.
Minimum Amount: Rs. 100,000/- or in multiples of Rs. 100,000/-
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Profit Amount: Rs. 12,000/- on a deposit amount of Rs.100,000/-

Profit Payment: Upfront at time of placement of funds.
2.9.2 Additional Benefits for Customers
➢ Financing Facility up to 90% of Principal amount.
➢ Free Visa Debit Card issuance.
➢ Free Accidental Life Insurance coverage up to Rs. 500,000.
➢ No Minimum Balance requirement in checking account.
➢ 2 Free Pay Orders in a month. (Withholding Tax and other Government charges
will be applicable as per Law)
➢ No maximum limit for investment.
2.9.3 Askari Debit Card/Visa Card
Askari Bank has introduced most innovative & competitive solutions for
customers with more efficient and personalized manner with the help of ATM (Visa
Card) having Accidental Life Insurance upto Rs.0.500M irrespective of balance in the
account. Askari Visa Card is tailored clients shopping needs & transfer to funds to any
other 21 largest banks within the country with maximum fund transfer limit of
Rs.0.250M within 24 hours etc.
2.9.4 Travelers Cheques
Askari Bank offers RTC (Rupee Traveler Cheques) with minimum

denomination of Rs.0.010M for its customers eliminating all financial risks while
traveling.
2.9.5 Profit/mark-up Rate on Products
AKBL allows/give very competitive rates of returns to his valued customers

based upon negotiation. Normal PLS rates will be applied @ 5% on all saving accounts.
2.10 Different Services Provided By ACBL

2.10.1 Demand Draft
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It is an instrument payable on demand for which value has been received, issued
by the branch of the bank drawn i.e. payable at some other place (branch) of the same
bank. If two banks are involved then the DD is sent to other bank but in other case it is
handed over to the applicant.
2.10.2 Mail Transfer
ACBL is also providing telegraphic transfer (T.T.)/mail transfer facility for

smooth and quick remittances.
2.10.3 Pay Order
It is an instrument issued for payment in same city. Pay order issued from on e
branch can only be payable from the same branch. It is normally referred to as banker’s
cheque. It is also called confirmed cheque, because bank issues this on its own
guarantee.
2.10.4 Traveler's Cheque
Traveler’s cheques are very much popular among travelers and businessmen
who travel frequently. These are generally issued to the people who travel abroad. Due
to its safety add convenience, these are also issued in Pakistani currency to be used
within the country. Traveler’s cheques are for fixed amount and are treated as Order
Cheques payable only to the purchaser whose specimen signature appears on traveler’s
cheque itself.
2.11 Commercial Finance

The international trade transaction, in which one country buys goods from other
country, is called import.
The import trade in Pakistan is governed by import and export Act of 1950.
Previously, the regulating body of imports was controller of Import and Export. But this
function has been shifted to Export Promotion Bureau.
Foreign Exchange Departments of all banks are restricted to word under the rules
and regulations of government.
2.11.1 Import License and Registration

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The individuals and firms who desire to import goods from the foreign countries
are required to obtain import license. Import licenses are a type of artificial restraint on
the import trade of a country. To acquire import license, the importer has to submit
applications to the licensing authority. The importers can only get their merchandize
cleared from the custom authorities if they have the import license duly issued in their
names. The import licenses issued by the Import Trade Controller are required to be
registered with the State Bank of Pakistan.
2.11.2 Contract of sale
After getting the license, the importer then negotiates with the exporter. When
they reach to an agreement on all terms of sale, they sign a contract. Thus contract
includes all information of terms and condition of sale.
2.12 Foreign Remittances

Earlier ACBL was able to attract customer due to their ancillary services like
ATM Cards, Credit Cards, and Online Banking etc. but now all the banks are offering
these services through their own network or through third party contracting, so ACBL
plus points are no more their advantages. So the only things through which they can
increase their deposits are their profit rates, because the customers only want maximum
profit on their investment.
Due to the increase in foreign remittances there are ample opportunities for good
deposits but a knowledgeable customer always invest in the stock exchange that are not
only growing day by day but are also giving handsome profits in the shape of dividends
and stock trading. The left behind deposit is invested in that financial institution which
provides him handsome return/profit, like national saving schemes and investment bank.
Now in the stock exchange that are not only day by day but also giving handsome
profits in the shape of either in dividend or the stock trading. APBUMA and HQ2 corps
are the main accounts that shifted to other banks due to our low profit rates. They totally
withdraw approximately 40 M during the 2nd quarter.
2.12.1 Agricultural Finance
ACBL provides Agricultural Finance to solidify faith, commitment and pride of

farmers who produce some of the best agricultural products in the World.
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2.12.2 Agricultural Finance Services
The aim of this new product is to help the farmers maximize the per acre
production with minimum of required input. For the purpose of loan following
procedure should be adopt to the customers:-
2.12.3 Letter of Credit

Letter of Credit issued by the bank can broadly be classified as under: -
➢ Sight letter of credit.

➢ Usance letter of credit.
The sight L/Cs calls for the draft to be drawn ‘at sight’. Documents negotiated
and received against sight are held as security till their retirement. Drafts drawn under
usance are for a tenure specified in the L/C and are payable by the customer on due
date.
Credit line proposal must clearly state the type of letter of credit the branch is intended to
issue.
2.12.4 Letter of Guarantee
Guarantees issued by the bank can be classified under three broad categories.
a) Financial Guarantee
Bank guarantees the fulfillment of a financial commitment on behalf of the
customer. Under these guarantees, the bank is called upon to pay in the event of a
breach of terms on the part of the customer.
b) Performance Guarantee
The bank guarantees the due fulfillment of a contract or other work as specified
in the guarantee, by the customer. The amount of guarantee is usually up to the extent of
the value of the contract.
c) Shipping Guarantee
Bank issues guarantee in favor of the shipping company to enable the importer to
obtain delivery of the goods without production of the Bill of Lading.
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2.13 Modes of Creating Charge over Securities

Primarily bankers rely on the character, capacity and capital of the borrower in
ensuring the safety of his funds. The viability of the project itself and its cash generating
capacity ensure to a large extent the safety of bank funds. But the banker cannot afford
to take any risk and hence the reliance is placed on the tangible assets of the borrower.
In case of default by the borrower in repaying the loan the banker’s interest if
safeguarded if he possesses change or right over the tangible assets of the borrower.
Loans with such rights conferred upon the bankers are called secured advances. In
secured advances, charges are created on the tangible assets in several ways depending
upon the nature of assets.
2.13.1 Modes of Creating Such Charges

a) Lien
Lien has been defined as the right of a person to retain the property of the
borrower until a debt due from him (borrower) is repaid. In ordinary lien, the ownership
of the property under the lien remains with the borrower, although it’s actual or the lien
remains with the borrower, although its actual or constructive possession is with the
creditor, though the creditor does not have any right to sell it. This is not the case with
banker’s lien, as a banker’s lien is an implied pledge and the banker has the right to sell
the securities under lien after giving a reasonable notice to the borrower in case of his
default.
b) Pledge
The bailment of goods as security for payment of a debt or performance of a
promise is called pledge. The relationship of a customer and a banker is this case is that
of a pledger (customer) and a pledge (banker). The ownership of the goods, pledge
remains with the borrower, while the possession is with the banker
Bailment is the delivery of goods by one person to another for some purpose,
upon a contract that they shall, when the purpose is accomplished be returned or
otherwise, disposed off according to the direction of the person delivering them.
c) Mortgage
A mortgage is the transfer of an interest in specific immovable property for the
purpose of securing the payment of money advanced or to be advanced by way of loan,
existing or future debt.
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The transferor is called a mortgagor and the transferee a mortgagee. The

principal amount and the interest of which the payment is secured are called the
mortgaged amount and instrument (if any) by which transfer is affected is called the
mortgage deed.
The mortgage does not transfer the ownership of the property and the actual
possession of the property is also not transferred. He (mortgagor) transfers only some of
his rights as an owner e.g. He now cannot sell the property without the consent of the
.
mortgagee
d) Hypothecation
An agreement to give a charge to goods or documents of title without
conferring possession is called hypothecation. The goods are charged as security for a
loan from the bank but ownership and possession remains with the borrower. The
security is granted by the borrower to the lender by a letter of hypothecation, which
contains the terms and conditions of the hypothecation agreement.
As physical possession of goods remains with the borrower, the banker seeks
periodical stock reports from the borrower confirming full description and value of the
stock hypothecated. In order to prevent a possible loss of stock by fire, theft, dacoity,
and the borrower is asked to get his stock insured. The hypothecated stock is liable to be
inspected by bank’s authorized person. The creditor (Banker) has the right to take
possession of the hypothecated goods as and when required.
2.13.2 Repayment of the Credit (Identify the source of repayment)

The banker’s most important single consideration should be on time repayment
of the credit extended t a borrower from the normal business operations of the borrower.
Availability of collateral securities although essential should never be considered for
extending credit. Any proposal, about which repayment from normal business
operations of the borrower is uncertain, even though it is supported by good securities,
is unfit for consideration. Bankers obtain collateral securities from borrowers for
recovering credit if market conditions make it impossible for the borrower to repay, not
as a protection against borrower’s dishonesty. If the borrowers’ intentions are doubtful,
better not lend at all because auctioning borrowers’ collateral is not your business.
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It is, therefore, important that the CLP must mention the scenario for repayment
and identify the sources of repayment after negotiation with the borrower.
➢ First source of the repayment is the revenue

generated by the business of the borrower. For this, the
likely market demand scenarios must be estimated.
➢ Second source of repayment is the general cash flow
of the borrowers business arising out of operations other
than the sale of specific goods.
➢ Third and the least derivable source of repayment is
encashment of collateral securities.
2.13.3 Period of Financing

The period for which the finance is issued is called the maturity period. It may
be for a month two months, 3 months, 6 months and for a maximum period of 1 year. If
the facility of advance is allowed up to 3 months then it will be considered as temporary
accommodation and if it exceeds to 6 months 1 year, then it will be a permanent limit.　
2.13.4 Making a Lending Decision

Bank credit decision for any proposal has to be very rational one, because there
are many restrictions on monetary and credit expansion by the State Bank of Pakistan
and it is no longer within the power of banks to distribute it freely. Credit office must
learn to make the best use of the bank’s available deposits by deploying them in the
most productive advances. To make a prudent decision it is required that decision
should be made only after comparing the benefits available from several competing
proposals and agree to finance the proposal which offers a risk-reward combination
closest to the standard set out in the Bank’s Credit Policy. Before recommending
facilities for any customer, banker must ask himself the question “Why should we lend
to this customer in particular? Why not the next one?
2.13.5 Consideration for Lending Decision

Usually, the two major considerations for recommending fresh credit facilities
are the business anticipated from the borrower in relation to the funded facilities and
projected earnings from facility utilization by the borrower. In case of renewal of
existing facilities the consideration is the business received in the past and earnings and
that promised by the borrower for the following year.
2
Besides these, there could be other supplementary considerations such as

deposits of the borrower, including title, amount, period and profit / interest rate being
paid on such deposits is important in order to ascertain the profitability of the overall
relationship.
The entire information will help the decision maker in reaching a conclusion
about the relative importance of the customer for the bank. But for making a profitable
and safe decision, the information on which the decision is based should be gathered
carefully and checked that the figures are correct.
After receiving the proposal and processing it by analyzing its all risk-return
characteristics, the credit officer prepares CLP. CLP is the input of the decision stage,
which is used for approval of the proposal. Once the CLP is prepared, first Branch
Credit Committee approves it and then it is forwarded to Head Office, from where the
final decision is made. The Credit Officer first uses his judgment and recommends
potential proposals. Then Branch Credit Committee further screens out risky proposal.
In this way a profitable portfolio is maintained.
2.14　Documentation
Document shall include any matter written, expressed or described upon any
substance by means of letters, figures or marks or by more than one of those means
which is intended to be used for the purpose of recording that matter.
Obtaining the proper documents, legally valid and enforceable, is a prerequisite

for the disbursement of an advance by bank. The type of document to be obtained
mainly depends on the following aspects:
➢ Type of Borrower
➢ Nature of Facility
➢ Kind of Security
➢ Mode of Charge
Rights and liabilities of the parties involved in the credit transaction are mainly
established from the contents of the documents executed by the parties. The banks
resorting to the court of law would only be benefited if the documents are properly
executed and they are valid and enforceable at law. If there is any defect in execution of
2
the documents, the bank may lose its claim. So, it is very essential to have proper
documentation before the loan is disbursed to the borrower.
Nothing is better proof than the documents themselves for the banker in pleading
for his claim. Therefore, utmost care should be taken in execution of the documents.
The banker must take care of the following:

➢ The documents must be properly stamped with full value.
➢ The parties should sign according to their usual specimen signatures; initials of
the parties are not enough.
➢ Each page of the document is required to be signed by the executing person.
➢ There should be no cutting, alteration, overwriting or erosion in the documents.
The executing person under his full signature if any must authenticate the
cuttings.
➢ Documents must be completed in all respects. Blank and undated documents
sometimes pose serious problems for the bank.
➢ Documents when executed should be:
a) Properly diaries.
b) Placed in Safe.
➢ Documents should not be punched or torn out.
➢ Documents where required must be duly registered.　
2.14.1 Maintaining and Balancing the Documents

Among other activities, maintaining and balancing the documents is also an
important activity of the Credit Department. These documents carry a substantial value
and create a great problem if any dislocation occurs. Different documents are of
different values. These documents are counted, stamped and properly placed in the
strong room of the branch. A separate ledger is maintained for these blank documents
for accounting purpose. After a short time period, the total value of actual documents is
matched with the balance in the ledger.
➢ Proper documents, which are legally valid and enforceable at law, are obtained.
➢ The concerned Credit Officer in the branches prepares proposal (CLP), it is also
known as Credit Sanction Advice (CSA). The purpose of making CLP is to
record the required information on it and having approval of the Branch Credit
Committee and Head Office on it.
1
➢ Credit line proposal include the following information:
a) Date of opening.
b) Date of maturity.
c) Nature of the business.
d) Type of facility.
e) Purpose of facility.
f) Securities.
g) Source of repayment.
➢ There is a Branch Credit Committee in each Branch. Committee holds a meeting
and takes decision whether to give loan or not. This decision is taken by keeping
in view all the risks associated with that borrower.
➢ New account with a new account number is opened. These account numbers are
previously fed into the computer if the system is online.
➢ The Drawing Power (DP) is issued to each borrower. Drawing Power depends
on the amount of loan and the period of financing.
➢ There are two accounts maintained for each borrower, Credit Account and the
borrowers account. In the start, the credit account has a credit balance equal to
the amount of loan.
➢ After all other requirements are fulfilled; the loan is actually transferred to the
borrower by debiting the credit account and crediting the customer account.
➢ Now the borrower can draw the amount from his account according to his
allotted Drawing Power (DP).
➢ After a fix time period, on each installment date, borrower has to repay the
principal and mark-up. Loan repayment installments are deducted by debiting
the customer account and crediting the credit account.
2.14.2 Account Monitoring Loan Status Review
Account monitoring system is an evaluation technique intended to provable a

basis for reviewing over all condition of an existing borrower. It will help in identifying
symptoms of possible problems in the areas of financial or business management and
indicate the need for corrective action to prevent the account from becoming slow
moving or eventually delinquent. This exercise of monitoring alerts the amulets or
2
account manager to the need for appropriate corrective action starting with a detailed
discussion with the borrower to understand the borrower’s point of view on the areas
highlighted by the analysis of the account.
a) Account Status Review

In this section, different things about the current status of the account are
checked. For instance, what is limit of the account? What drawing power was allotted to
the borrower? What is the outstanding balance? Since when the account is inactive?
What is the Net Asset Value?
b) Account Conduct Review

This section includes monitoring the account conduct. These questions are
answered for this purpose. The borrower draws cheques of what maximum value? Is
post dated cheques drawn by the borrower frequently or not? Is there a default on
interest or mark-up payment?
c) Foreign Currency Account

These accounts are maintained in foreign currencies to facilitate resident and
non-resident Pakistanis and foreign nationals who wish to keep their deposits in foreign
currency.
1
CHAPTER: 3
STRUCTURE & FUNCTIONS
OF OVERALL
DEPARTMENTS OF THE
ORGANIZATION
1
3.1 Organizational Structure

2
3.1.1 Comments on the organizational structure
The organizational structure of the ACBL, with its large branch network and
excessive layers of controlling offices requires a structural change in its organizational
set up for optimizing utilization of men and material resources to yield better
operational and business control and efficiency with greater focus on customer services.
Based on this understanding the Head Office of the Bank was reorganized in April,
2002.
ACCOUNTS INCHARGE &BD

MANAGER
MANAGER
CASHIER
BRANCH
A/CCREDIT
OPENING, IT INCHARGE
O
OPERATION
MANAGER
S
2
3.1.2 Comments on Organizational Structure of ACBL Main Branch, Mandi

Bahauddin
The Branch Manager is responsible for overall performance of the Branch. The
Operational Manager is responsible for overall operational activities and to controll all
the Departments of the bank i.e Deposit Deptt. , Cash Deptt, Compliance Deptt., Govt.
Deptt., Foreign Curreny Deptt., etc.
3.2 Various Departments of the Organization (Functions &

Responsibilities)
3.2.1 Departments
a) Accounts Department
This is one of the most important departments in ABL. The bank

daily transactions are recorded in computers, nowadays, so the function of this
department is to get a summary of all the transactions. The credit and debit vouchers are
arranged and saved for the record purpose. It also indicates, head office entries as
clearing, transfer delivery etc. On the weekend it has to prepare the extract which is
sending to head office for reconciliation. Thus this department will create a link
between head office and branch office. The functions of Accounts department are as
follows:
➢ Preparation of daily bank position Statement

➢ Checking Bank’s daily Activity
➢ Maintenance of book of the accounts of head office.
➢ Salary disbursement and investment of staff.
➢ Arrangement of stationary for bank.
➢ Dealing with disposal of commercial external audit reports and state bank of
Pakistan instructions.
➢ Pre audit checking of all bank transactions.
b) Remittance Department
1
The Remittance Department issues drafts, payment orders, traveler cheques etc.
Remittance means transfer of funds from one place to another place. Drafts are
issued for other cities while payment orders are issued for within a city purpose.
c) Cash Department:
The main function of this system is Receipts & payments to the customers, on
behalf of their account, through Cheques or any other negotiable instruments. All those
transactions, which are held on the counter on cash basis lies under the cash department.
The cash system mainly deals with following areas:
➢ Receipts
➢ Payments
d) HRM Department
The importance of manpower cannot be denied in any organization. In case of

banks it is the most valuable asset, because the bank is most sensitive organization and
to be in harmony with this sensitivity, need for proper human resource is felt badly.
e) Lockers Department
Lockers provide services of safe keeping the previous object of public. Locker
holders pay annual rent. One key of the locker is kept by the bank other is given to
the client.
f) Credit Department
It provides loans to various clients and has a major contribution in the bank's
profit and assets. Different types of loans are provided to the clients depending on
their needs and demands. Loan against property (Saiban Scheme) and Loan against
assets (advance salary) etc is provided. Such loan is given keeping in view the total
income as well as salary being drawn per month by the applicants.
g) Foreign Trade Department
The business of imports & exports of goods & services are being dealt with here.
Foreign trade transactions are carried out through Letter of Credit generally known
as (L.C.) Thus by helping the imports & exports, the branch is contributing a lot in
boosting the economic activities of the country.
2
h) Foreign Currency Department
It deals with the foreign currency accounts and transactions. Most of the
functions like account dealing, cash deposits/ withdrawals, remittances etc, are the
same as local currency department. In addition this department deals with:-
a) Traveller Cheques. b) Old Scheme Foreign Currency

Deposits.
c)New Foreign Accounts d) Special Foreign Currency Accounts

(f) Special US Dollar Bonds.
a) Audit Department
Every organization has certain rules and regulation and its functions are to keep
in mind those rules. ACBL follows the prudential regulations given by the State
Bank of Pakistan. Therefore, in order to check whether the organization is going on
right track, there is an Internal Audit and Inspection Department.
3.2.3 Functions of Audit
The main function of audit is to monitor the implementation of policies,

rules, regulations, and prescribed procedures with a view to ensure improved
operations. It maintains check and balance on behalf of management. This in turns
calls for a high standard of professional skills and judgments on part of Auditors.
3.3 Methods of Opening of an Account
3.3.1 Procedure of Opening of PLS Account
For the purpose of opening a new PLS account, a prescribed printed form is
available which every new customer has to fill in. The National Identity Card is to
be verified through the Verisys, a facility provided by the NADRA for verification.
After opening the account, cheque book is issued for the purpose of
operating the concerned account. A small amount is charged for issuance of cheque
book which is either received in cash or the expenditure is debited to the account. As
an acknowledgement, receipt is obtained from the recipients. Specimen signatures of
2
the account opener are obtained on a card which is kept with Office Incharge to
verify the signature of customer at the time of payment. The entry of new account is
made in the reference book and computer software also and the account opening
form is kept in relevant file for record. In last complimentary letter is issued to the
new client.
3.3.2 Procedure of opening of Current Deposit Account
Current Deposit Accounts can be opened as per following detail:-

➢ Individuals proprietary firms, partnership firms, private limited Company, Public
limited Company, Clubs, Association as well as govt. institutions can open the
current deposit account.
➢ Minors are not allowed to open current deposit amount except prior approval
from HQ. In such cases, guardians will operate the account.
➢ Sole partnership certificate is necessary in case of proprietary firms
2
CHAPTER: 4
STRUCTURE & FUNCTIONS
OF ACCOUNTS/FINANCE
DEPARTMENT
1
4.1 Structure and Functions of the Accounts / Finance / Audit

Department
Account Department of any branch of bank is a major department. It performs

all the activities of accounting in bank. This department is responsible to maintain the
proper record of account holders and other account of the branch.
4.1.1 Structure of the Finance Department
4.1.2 Functions of Account Department
The main function of this department is to handle the cash, record the cash
transaction, summarizes all the bank transaction daily and sends the report to head
office.
a) Branch Credit Committee.

b) Area / Regional Office Credit Committee
c) Head Office Credit Committee.
d) Executive Committee
1
e) Board of Directors.
Note: Each approved limit (BCC/AOCC/ROCC/HOCC/EC) will be subject

to Risk Asset Review by Risk Management Division, Head Office, and Rawalpindi.
a) Branch Credit Committee (BCC)
The first level for approvals is the Branch Credit Committee which has been
granted certain discretionary powers. The Credit Department in the branch prepares
Credit Line Proposals for each advance along-with supporting documents. The Credit
Line Proposals on the relevant prescribed form and the supporting documents should be
presented to the Branch Credit Committee for its consideration. The members of the
Committee should exercise their judgment on the proposals individually and judiciously
in accordance with the Bank's lending criteria and within the limitations set by the
regulatory authorities.
If the proposal is within the discretionary powers of the Committee, the same
may be approved after thorough evaluation of the credit risk. The approved limit should
be returned to the Credit Department of the branch for post approval administration.
Thereafter the Disbursement Authorization Certificate (DAC) shall be obtained from
the Committee, if not obtained along with CLP, for want of perfection of security /
support at the time of submission of proposal.
The Disbursement Authorization Certificate should be signed by the

Branch Credit Committee to ensure that security support is perfected before the release
of funds.
In case the credit line proposal is beyond the powers of the Branch
Credit Committee, the proposal should be first vetted by Branch Credit Committee and
should be forwarded for approval of the concerned Area/Regional Office Credit
Committee with their recommendation.
b) Area /Regional Office Credit Committee (AOCC/ROCC)
The next approval level in the lending organization is the credit

committee at Area /Regional Office(s). The credit Line Proposals which are beyond
the discretionary powers of Branch Credit Committee to be forwarded to the Area
2
/Regional Office with branch recommendation and along with all supporting
documents. Area /Regional Office will vet the application, seek necessary
clarifications, further information etc and approve the proposal if they are satisfied.
Original copy of the Credit Sanction Advice to be forwarded to the branch, with the
copy maintained at Area /Regional Office.
c) Head Office - Credit Committee (HOCC)
The next approval level in the lending organization is the Credit

Committee at Head Office. The Credit Line Proposals which are beyond the
discretionary powers of the AOCC/ROCC shall be sent to Credit Division at Head
Office along-with all supporting documents and the recommendation of the Branch
Credit Committee as well as AOCC/ROCC mentioned above.
The Credit Division shall process the proposal and present the same to
Head Office Credit Committee for their decision. The Credit Line proposal shall be
reviewed by the HOCC and decided upon as per the policy of the Bank if the proposal
is within its powers. The decision of the Credit Committee shall be conveyed to the
branch by the Credit Division, which will also maintain all the relevant records for the
approvals whether by CC/EC or the Board.
d) Executive Committee (EC)
The next level of sanctions is the Executive Committee. In case a proposal is

beyond the discretionary powers of the Head Office Credit Committee then the same
has to be forwarded by the HOCC, with its views to the Executive Committee for
their decision.
e) Board
The highest authority of credit approval vests in the Board of Directors. All
CLP’s beyond the powers of the Executive Committee shall be referred to the Board
by the Secretariat Division along-with the form as given in the Annexure for
submission of proposals to the Board.
f) Urgent Approvals
3
In exceptional circumstances if an approval is required at all, such referrals

must be accompanied by a priority decision request. The Credit Division with the
agreement of a quorum of the members of the appropriate Credit Committee will
advise approval for the proposed facility. All such approvals, together with the
appropriate supporting documentation, must be submitted to the respective Credit
Committee / and if required to the Executive Committee for information and Post
Facto approval at their next regular meeting.
4.2 The Role of Financial Manager

The finance department at head office reconciles the data collected from the
branches. The uses this data to prepare the overall position of the banks in terms of
➢ Prepare Balance sheet

➢ Income Statement
➢ Sources and Uses of Funds
➢ Cash Flow Statement
The department is also responsible to review the policies of bank in terms of

financial matters and give feedback to policy makers. Their participation in policy
making is encouraged by the bank management. In order to give suggestion in policy
making the department gathers feedback from the branch level.
The department is also responsible to publish the financial position of bank in

print and electronic media as per the SBP policy. The information provided by bank is
very important for investor because they very much rely on this information in order to
invest in the bank. The depositors also feel secure if the position of bank is positive.
4.2.1 Use of electronic data in decision making
ACBL also use electronic data and different software in its branches. The bank
uses operating system IBM-OS/400 for various workings. Moreover, the bank uses
programs like ORACLE and FOX PRO. The bank uses the software like ’10-ASF, EBS,
DB-2 and BBO in daily routine working. The bank is struggling for further up-gradation
of the on line banking services for its valued customers. The bank is also using special
2
accounts software for maintaining accounts, ledger and financial statements etc. ACBL
is engaged in performing the routine duties of banking business. Its finance system is to
collect surplus money from people and make loans and advances.
The finance department at head office reconciles the data collected from the
branches. The uses this data to prepare the overall position of the banks in terms of
➢ Prepare Balance sheet
➢ Income Statement
➢ Sources and Uses of Funds
➢ Cash Flow Statement
The department is also responsible to review the policies of bank in terms of

financial matters and give feedback to policy makers. Their participation in policy
making is encouraged by the bank management. In order to give suggestion in policy
making the department gathers feedback from the branch level.
The department is also responsible to publish the financial position of bank in

print and electronic media as per the SBP policy. The information provided by bank is
very important for investor because they very much rely on this information in order to
invest in the bank. The depositors also feel secure if the position of bank is positive.
4.3 Working of Finance Department

4.3.1 At Branches
a) Setting up Loan Account
The setting up of loan account means opening of a separate loan account in the
computer system for each lone after completion of all formalities and before the
disbursement of loan. To feed the limit details the security Loan Input Form shall also
be filled-in. The details of instalment amount, frequency of instalment, rate of mark-up,
security, nature of security, margins and expiry date etc shall be noted on the
security/loan Input Form. The form shall be signed by two authorized officer one of
whom shall be of Credit Deptt. In order to make reference to loanee's CD/SB account
the loan account shall be linked to the CD/SB account through which the disbursement
is routed. This can be done in the computer system through 'Grouping'.
1
b) Monthly Review of Loan & Mark-up Receivable Accounts
Every month/Quarter loan account shall be reviewed and installments shall be

recovered, as per agreement. The installment amount shall in no case be debited to the
loan account of the borrower.
At the month end the computer system generates reports of all outstanding
advances (Advances Register) and computes mark-up thereon. These reports shall be
reviewed to ensure that installments due have been received.
In case of any overdue installment or mark-up (per agreed arrangements) the

matter shall immediately by taken up with the borrower for regularization of the loan
account.
4.4 Sources and Funds of ACBL

The major sources of funds for Askri Commercial Bank Ltd. are public source
(deposits), money market, bond issued, corporate treasuries and government
institutions. Deposits are the major source of funds and life blood for banking industry.
80% deposits are from the general public. Figurative expression for the informal
network of dealers and investors over which short term debt securities are purchased
and sold. Money Market securities generally are highly liquid securities that mature in
less than one year, typically in less than ninety days. Corporate Treasuries and
Government Institutions, corporate sector is one of the major source of fund in all types
of banking. All major financial institutions, government, and private are the major
source of fund.
(Rs. In Millions)
Sources 2005 2006 2007 2008 2009

Interest Income 8,781 12,597 15,143 18,394 22,662
Non Interest Income 1,552 2,139 4,565 2,770 2,555
Profitability 10,333 14,736 19,709 21,100 25,216
1
Bank is generating its funds from providing different services to its clients. Such
as opening of their accounts, doing daily routine business. It is also providing advisory
services for its clients. The main sources of funds are clients and other financial
institutions, which are helpful for generation of funds. After generating of funds bank
allocate its funds to different assets.
4.5 Generation of Funds
The funds which the bank have before taxation e.g interest charged are the
generation of fund. The advances, expenditurs , interest paid on deposits, mark up on
advances , income from banking services, non interest income, return on average assets
are the generation of funds. Refinance borrowing from SBP , sub- ordinated loans ,
cash , short term funds and statuory deposits with SBP , return on average
shareholders fund etc are all the things which generate the funds of bank.
Bank is positively using its workforce to mobilize its funds. It has mission “Bank
for all” which means that bank is providing services to every individual without
discrimination. Marketing staff of bank is working in different areas to bring deposits for
the bank. It is due to efforts of the bank that the deposits of the bank are increased over the
last five years, which could be seen from the following.
As on 31st December
Particular/Years 2005 2006 2007 2008 2009

Share Capital 1,507 2,004 3,006 4,059 5,073
Deposits 118,795 131,839 143,037 167,677 205,970
Advances 85,977 99,179 100,780 128,818 135,034
Investments 25,708 28,626 39,431 35,678 67,046
2
Advances Rupee in ‘000’

Chemical and pharmaceuticals 84,433
Agribusiness 162,493
Textile 9,253,832
Cement 1,953,499
Commodities 880,497
Shoes & leather garments 79,322
Production and transmission of energy 6,161,514
Food and Tobacco 261,824
Metal Products 790,108
Oil, Gas, petroleum and energy 2,964,166
Services (other than financial, Hotelling & Traveling) 222,989
Sports Goods 1,047,352
Individuals 46,17,728
Paper Industries 571,775
Others 1,198,697
Total 27,348,179
From the above-mentioned table one can easily understand that how effectively
bank is using its sources in order to strengthen its deposits. Bank has special workforce
who motivates people to do dealing with bank.
4.6 Allocations of Funds

The funds generated through various deposit schemes are allocated to cater the
business needs of different sectors of society. It is ensured the finances are not advances
to a particular sector to avoid the collapse rather the bank has a broad based borrowers
structure covering agriculture, industrial and financial sector.
ACBL Provides finance to all types of industries i.e. textile, surgery tanneries,
sports, seasonal finance to growers, importers, exporters, unemployed persons, gold
loan for domestic needs etc. Detail of different sectors to which Askri Commercial Bank
Ltd.of Pakistan has allocated its funds is as under:
(Rs in
“Millons”)
2005 2006 2007 2008 2009

Admin Expenses 2,592 2,592 3,277 4,790 5,904
Cash Dividend 51 51 109 137 174
Bonus Share 33.00 50.00 35.00 25.00 20.00
Income Tax 828 983 99 17 561
2
Depreciation 275,437 339,606 400,230 511,063 645,958

Retained in
1,299 1,047 1,778 -628 1,108
Business
3
CHAPTER: 5
FINANCIAL ANALYSIS
1
5.1 Financial Analysis
Financial statement analysis means reporting the financial condition and the
result of operations of an organization, or in other words we can say that financial
analysis are carried out for the purpose of identifying the financial strengths and
weaknesses of an organization by properly establishing the relationship between the
balance sheet and income statement items. This analysis helps many parties in making
decision who are interested in business activities. To improve the quality of decision
making, proper analysis of these statements helps a lot. The firm itself and outsider
providers of capital, creditors and investors all undertake financial statement analysis.
5.2 Five-Year Performance of ACBL

(Rs in “Millons”)
Description 2005 2006 2007 2008 2009

145,0 166,0 182,17
TOTAL ASSETS 206,191 254,327
99 33 2
DEPOSITS 118,795 131,839 143,037 167,667 205,970
ADVANCES 85,977 99,179 100,780 128,818 135,034
25,70 28,62
INVESTMENTS 39,431 35,678 67,045
9 6
PRE-TAX PROFIT 2,859 3,347 2,300 461 1,642
AFTER-TAX
2,022 2,250 2,681 386 1,108
PROFIT
5.3 Balance sheet of ACBL
2005 2006 2007 2008 2009

Assets
Cash & Balances with 11,76 14,87
13,356 16,030 19,386
treasury banks 6 9
Balances with other
5,550 7,333 3,497 3,955 8,364
banks
Leadings to financial 10,17
8,392 14,444 4,480 4,614
institutions 2
Investments 25,70 28,62
39,431 35,678 67,045
9 6
2
Advances 85,97 99,17 100,78

128,818 135,034
7 9 0
Operating fixed assets 3,192 3,811 5,128 8,266 10,037
Deferred Tax Assets 0.00 0.00 0.00 0.00 0.00
Other Assets 2,733 3,813 5,536 8,964 9,847
145,0 166,0 182,17
206,191 254,327
99 33 2
Liabilities 2005 2006 2007 2008 2009
Bills Payable 1,315 1,839 2,627 2,585 2,946
Borrowings 10,56 14,96
17,554 15,190 19,300
2 4
Deposits & Other 118,7 131,8 143,03
167,677 205,970
Accounts 94 39 6
Sub-ordinate Loans 2,999 2,998 2,998 2,996 5,995
Liabilities against
assets subject to 1 0 0 0 0
finance lease
Deferred Tax
2,271 2,603 3,219 4,759 4,833
Liabilities-net
Other Liabilities 567 736 472 13 334
136,5 154,9 169,90
193,220 239,378
12 80 6
Net Assets 58.48 55.15 40.80 31.96 29.47
Represented by
Share capital 1,507 2,004 3,006 4,059 5,073
Reserves 5,862 5,816 6,948 7,667 7,183
Un-appropriate profit 0 1,799 2,145 309 886
7,369 9,619 12,099 12,035 13,142
Surplus on revaluation
1,218 1,434 166 936 1,807
of assets-net
11,05
8,587 12,265 12,971 14,949
3
5.4 Profit And Loss Account
1
2005 2006 2007 2008 2009

Mark up/return/interest earned 8,78 12,59 15,14 18,39 22,66
0 6 3 3 2
Mark up/return/interest 4,27 10,65 13,62
6,977 8,686
expensed 8 0 9
Net Mark up/Interest Income 4,50
5,619 6,457 7,743 9,033
2
Provision against non
performing loans and 637 1,128 3,920 3,825 2,324
advances
Reversal of provision for
diminution in the value of -36 0 1 248 508
investment
Bad debts written off directly -36 0 1 248 508
Net Mark up/Interest income 3,90

4,491 2,536 3,670 6,118
after provisions 0
Non Markup/Interest 5,45
6,630 7,101 6,377 8,672
Income 2
Fee, commission and
838 1,013 1,073 1,258 1,308
brokerage income
Dividend Income 51 109 137 174 162
Income from dealing in
357 584 656 874 538
foreign currencies
Gain on Sale and redemption
99 113 2,361 37 144
of securities
Unrealized loss on revaluation
of investments classified as 0.00 -2 2 22 -2
held-for-trading
5.5 Financial Ratio Analysis
5.5.1 SOLVENCY RATIOS

A ratio used to measure a company's ability to meet long-term obligations. The
solvency ratio measures the size of a company's after-tax income; excluding non-cash
depreciation expenses, as compared to the firm's total debt obligations. It provides a
measurement of how likely a company will be to continue meeting its debt obligations.
The measure is usually calculated as follows:
1
Solvency Ratio = After Tax Net Profit + Depreciation

Long Term Liabilities + Short Term Liabilities
Years 2005 2006 2007 2008 2009

”Rupees In Millions”
After Tax Net Profit 2,022 2,250 2,681 386 1,108
Depreciation 275437 339606 400230 511063 645958
Long term + Short 136,5 239,37
154,980 169,906 193,220
Term Liab. 12 8
Solvency Ratio 2.032 2.206 2.371 2.659 2.703
Interpretation
Acceptable solvency ratios will vary from industry to industry, but as a

general rule of thumb, a solvency ratio of greater than 20% is considered financially
healthy. Generally speaking, the lower a company's solvency ratio, the greater the
probability that the company will default on its debt obligations.
5.5.2 Current Ratio
Current ratios measure the number of times a company’s current assets cover its
current liabilities. The higher the ratio, the greater is the company’s ability to meet its
short term obligations as they come due. Current ratio is calculated by dividing current
assets by current liabilities.
Current Ratio= Current assets / current liabilities
Years 2005 2006 2007 2008 2009
Total Assets 145,09 166,03 182,17 206,19
254,327
9 3 2 1
Current Liabilities 136,51 154,98 169,90 193,22 239,378
1
2 0 6 0
Ratio 1.063 1.071 1.072 1.067 1.063
Interpretation
Current ratios measure the number of times a company’s current assets cover its
current liabilities. The higher the ratio, the greater is the company’s ability to meet its
short term obligations as they come due. Current ratio is calculated by dividing current
assets by current liabilities.
Current ratio shows a firm’s ability to cover its current liabilities with its current
assets. The ratio is starting to increase in year 2005 indicating stability of the bank,
which is a good sign. This ratio is not increasing due to the fact that management is not
improving its current assets. The ratio for year 2006-07 is the lowest, which reflects that
bank is not in a better position to meet its liabilities. Higher the current ratio, greater
will be the ability of the firm to pay its bills. But the above position of 2006-07is not a
good sign for the bank.
5.5.3 Debt to Assets Ratio
Debt ratio shows the fraction of the company’s assets that is financed by debts.
Creditor of company would generally like this ratio to be low. The ratio is derived by
dividing a firm’s total debt to its total assets.
Debt to assets Ratio= Total Debts / Total Assets
Years 2005 2006 2007 2008 2009

Total Debts 12,778 16,377 12,915 16,898 19,695
Total Assets 145,099 166,033 182,172 206,191 254,327
Debt Ratio 0.0881 0.0986 0.0709 0.0824 0.0774
Interpretation
1
The debt to assets ratio serves the similar purpose to the debt to equity ratio. It
highlights the relative improvement of debt financing to the bank by showing the
percentage of the firm assets that are supported by debt financing.
The debt to assets ratio of the ACBL shows that most of its assets are financed
by the debt financing and from year 2004 it is gradually decreased every year.
5.5.4 Debt to Equity Ratio
This ratio indicates the extent to which debt financing is used relative to equity
financing.
Debt to Equity Ratio= Total Debts / Share holders Equity
Years 2005 2006 2007 2008 2009
Total Debts 12,778 16,377 12,915 16,898 19,695
Shareholders’
8,813 11,053 12,266 12,971 14,949
Equity
Debt to Equity
1.45% 1.48% 1.13% 1.30% 1.32%
Ratio
Interpretation
The debt to equity ratio shows the extent to which the bank is financed by debt.
This ratio is obtained by dividing the total debts of the bank with the share holder’s
equity.
The debt to equity ratio of ACBL shows that the how much the bank is financed
by debt and figures shows that there is a gradual decrease in the debt to equity ratio
from 2004 and still going on decreases year by year.
5.5.5 Operating Profit Ratio

1
Operating Profit Ratio = Operating Profit/ Turnover
Years 2005 2006 2007 2008 2009
Operating Profit 3,461 4,476 6,222 4,534 4,557
Turnover 6,055 7,759 11,024 10,450 11,588
Operating Profit
57% 57% 56% 43% 39%
Ratio
5.5.6 Coverage Ratio
Coverage ratio shows the number of times a company can cover or meet
a particular financial charge or obligation. One of the most commonly used coverage
ratios is the interest coverage ratio.
It measures the number of times the income is available to pay interest charges
and covers the company’s interest and thus avoids bankruptcy. The ratio is calculated by
dividing the income before interest expense and tax of a period by interest expense of
the same period. The higher the ratio, the greater is the likelihood that the company
could cover the interest expenses.
Interest Coverage= Earnings before interest and taxes / Interest Expense

Interest Coverage
Years 2005 2006 2007 2008 2009

EBIT 2859 3347 2300 461 1642
Interest
4,278 6,977 8,686 10,651 13,629
Expense
Interest
0.67 0.48 0.26 0.04 0.12
Coverage
Interpretation
1
This ratio serves as one measure of the firm’s ability to meet interest payments
and thus avoid bankruptcy. The higher the ratio, the greater is the ability that the
company can cover its interest payments without difficulty. It also sheds some light on
the firm’s capacity to take on new debt.
The interest coverage ratio of ACBL has shown an improvement over the period
of three years. In the year 2006, the ratio is 1.92, which shows that the income in 2005
covers 1.85 times the interest expense. As the core business of a bank is borrowing and
lending, interest expense constitute the main expense of the business that’s why the
interest expense is so higher and ratio is so lower.
5.5.7 Activity Ratios
Total Asset Turnover (TAT) Ratio

This ratio measures relative efficiency of total assets to generate sales.
TAT= Net Sales / Total Assets
Years 2005 2006 2007 2008 2009

Net Sale 4,503 5,620 6,458 7,743 9,033
Total Assets 145,099 166,033 182,172 206,191 254,327
Total Assets
0.031 1.072 0.035 0.038 0.036
Turnover
Interpretation
The activity ratio measures that how effectively the bank is utilizing its assets
with the respect of its sales.
The activity ratio of ACBL shows that the bank is utilizing its assets quiet
effectively throughout the last five years. There is a steady increase in the activity ratio
of the bank from 2004 and it carries on increase every year.
5.5.8 Return on average Assets

1
Return on average Assets= Net Income/Total Assets
Years 2005 2006 2007 2008 2009
Net Income 2,022 2,250 2,681 386 1,108
Total Assets 145,099 166,033 182,172 206,191 254,327
Return on
average 1.40% 1.40% 1.50% 0.19% 0.44%
Assets
5.5.9 Profitability Ratios
5.5.9.1 Net Profit Margin
It measures the profit that is available from each rupee of sales after all expenses
have been paid, including cost of sales, selling, general, and administrative expenses,
depreciation, interest, and taxes. The ratio is calculated as follows:
Net profit margin= Net profit after taxes *100 / Turnover
Years 2005 2006 2007 2008 2009
Net Profit 2,022 2,250 2,681 386 1,108
Turnover 6,055 7,759 11,024 10,450 11,588
Net Profit
33% 28% 24.3% 3.6% 9.5%
Ratio
Interpretation
The Net profit margin ratio measures the profitability of the firm to respect to
sales generated by the firm; the net profit per 1Rs of sales.
1
The net profit margin of ACBL shows a gradual increase in the net profit of the
firm. That shows that the bank has increased its expenses and decreased the profit
margin with the graduate increase.
5.5.9.2 Operating Profit Margin: = (Operating Profit*100/ Sales)
It measures the profit that is available from each rupee of sales before all
expenses have been paid, including cost of sales, selling, general, and administrative
expenses, depreciation, interest, and taxes. The ratio is calculated as follows:
Operating profit margin= Operating profit *100/ net sales
years 2005 2006 2007 2008 2009
Operating Profit 3,461 4,476 6,222 4,534 4,557
Net Sale 4,503 5,620 6,458 7,743 9,033
Net Profit Margin 76.86% 79.64% 96.35% 58.56% 55.45%
5.5.9.3 Return on investment (ROI)
Return on investment (ROI) or return on assets, measures profitability per rupee

of investment in assets. The ratio is calculated as under:
ROI= Net profit after taxes * 100/ Total assets
Years 2005 2006 2007 2008 2009
Net Profit After
2,022 2,250 2,681 386 1,108
Tax
Total Assets 145,099 166,033 182,172 206,191 254,327
Net Profit Margin
1.39 1.36 1.47 0.19 0.44
%age
Interpretation
2
The ROI figures of ACBL shows a consistent increase over the last three years.
The reason for this increase is due to increase in the net profit of the bank. Although
total assets are also increasing but the increase in the net profits are more than the total
assets. The positive change in ROI figures shows the outstanding performance of the
bank.
5.5.9.4 Gross Profit Margin
Gross profit is the difference between revenues and cost of goods or services
sold. Gross profit is critical because it represents the amount of money remaining to pay
operating expenses, financing costs, and taxes, and to pay for profit. Gross profit margin
is the amount of each sale rupee left over after paying the cost of goods or services sold.
It is calculated as follows:
Gross profit margin= Gross profit *100/ Net sales
Years 2005 2006 2007 2008 2009

Gross Profit 2,859 3,347 2,300 461 1,642
Net Sale 4,503 5,620 6,458 7,743 9,033
Gross Profit Margin 63.49 59.56 35.61 5.95 18.18
Interpretation
The Gross profit margin ratio measures the profitability of the firm to respect to
sales generated by the firm; gross profit per 1Rs of sales.
The gross profit margin of ACBL shows a gradual decrease in the gross profit of
the firm. That shows that the bank has increased its sales and decreased the profit
margin with the gradual decrease.
5.5.10 Return on Equity (ROE)
It is another measure of overall performance of a company. The ratio is

calculated as under:
1
ROE= Net profit after taxes * 100/ Shareholders equity
Years 2005 2006 2007 2008 2009
Net Profit After Tax 2,022 2,250 2,681 386 1,108
Shareholders’ equity 8,587 11,053 12,266 12,971 14,949
Return on equity 23.5% 20.4% 21.9% 3.0% 7.4%
Interpretation
This ratio relates the net profits to the amount of capital funds that have been
employed in making that profit.
The above given ratios suggest that the profitability of the bank has increased
very in the year 2004 indicating more profitable operations of the bank. While
discussing the trend analysis, we mentioned that the mark up charges have increased in
some proportion but the mark up earned by the bank resulting increase in the profit
available on the capital funds employed. This ratio showing a very good financial
position of the bank.
5.5.11 Advances to Deposit Ratio
This ratio is bank’s financial ratio which is used to test the company financial
position by keeping in view its advances and deposits. Strength of bank is judged that
how much bank is capable to grasp the saving of people and how many people are
interesting to take loan facility from bank as profit of bank depends on higher advances
and advances comes from deposits of customers.
Years 2005 2006 2007 2008 2009

Advances 85,977 99,179 100,780 128,818 135,034
Deposits 118,794 131,839 143,036 167,677 205,970
Advances to
0.72 0.75 0.71 0.77 0.66
Deposit
1
Interpretation
This ratio is bank’s financial ratio which is used to test the company financial
position by keeping in view its advances and deposits. Strength of bank is judged that
how much bank is capable to grasp the saving of people and how many people are
interesting to take loan facility from bank as profit of bank depends on higher advances
and advances comes from deposits of customers. This ratio tells that for every one rupee
of deposits how much is advanced to others. In 2008 the Bank faces a decline in
advances as proportion to its deposits of about 15%. But in last two years this ratio
showing a pleasing trend which indicates that bank is using deposits efficiently.
5.5.12 Book value per Share = Total Shareholder’s Equity / No. of Outstanding
Shares
Book value is of limited to the investment analyst since it is based on historical

costs. Book value per share is showing mix trend but for last two year it’s almost
constant.
B.V/Share= total shareholder’s equity / No of Outstanding shares
Years 2005 2006 2007 2008 2009
T. Shareholder
8,587 11,053 12,266 12,971 14,949
equity
Outstanding shares 61208.36 44447.65 162892.94 38299 19078.22
Book value Per
0.096 0.25 0.075 0.34 0.78
Share
Interpretation
The firm’s Book value per share is generally of interest to present shareholders.
Book value per share represents the earning on behalf of each outstanding share of
1
common stock. The Book value per share increased in 2008 significantly as compared
to last year.
5.5.13 EPS Ratio
The firm’s EPS are generally of interest to present shareholders. EPS represent the
earning on behalf of each outstanding share of common stock. EPS increased in 2008
significantly as compared to last year.
PS = N. Profit / No of outstanding shares
Years 2005 2006 2007 2008 2009
Net Profit 2,022 2,250 2,681 386 1,108
Outstanding shares 61208.36 44447.65 162892.94 38299 19078.22
EPS(Rs) 0.033 0.050 0.016 0.01 0.058
Interpretation
The firm’s EPS are generally of interest to present shareholders. EPS represent
the earning on behalf of each outstanding share of common stock. EPS increased in
2008 significantly as compared to last year.
Dividend Payout Ratio
The Dividend Payout ratio measures the portion of current earnings per common
share being paid out in dividends. The table below shows that the bank’s dividend
payout ratio has declined, the reason the retaining the profits in the business for
expanding the business.
Dividend Payout Ratio = Dividend / Net Profit
Years 2005 2006 2007 2008 2009
Dividend 723 1,203 1,503 1,015 1,071
Net Profit 2,022 2,250 2,681 386 1,108
Dividend Payout
0.39 0.54 0.56 2.64 0.92
Ratio
2
Interpretation
In the above table we can see that the dividend payout ratio of the bank has
shown a variable trend. In 2004 it start decreasing till 2005 but in 2006 it increased and
also in year2008 it increased as compared to 2007. This is because of increasing the
business activities of the bank.
5.6 Vertical/Common size analysis
An analysis of percentage financial statements where all balance sheet items are
divided by total assets and all income statement items are divided by net sales or
revenues is called common size analysis. Common size analysis can give analyst
valuable insight into changes that have occurred in a firm’s financial condition and
performance. As common size analysis gives us relative percentage of an item with
respect to total, so the growth or decline in various items of balance sheet and income
statement cannot be detected from common size percentages.
5.6.1 Vertical Analysis of Balance Sheet
Years 2005 2006 2007 2008 2009

Assets
Cash & balances with treasury banks 8.11% 8.96% 7.33% 7.77% 7.62%
Balances with other banks 3.82% 4.42% 1.92% 1.92% 3.29%
Lending to financial institutes 7.01% 5.05% 7.93% 2.17% 1.81%
Investments 17.72 17.24
21.64% 17.30% 26.36%
% %
Advances 59.25 59.73
55.32% 62.48% 53.09%
% %
Operating fixed assets 2.20% 2.30% 2.81% 4.01% 3.95%
Deferred tax assets 0.00% - 2% 3% 4%
Other assets 1.88% 2.30% 3.04% 4.35% 3.87%
100% 100% 100% 100% 100%
Liabilities
Bills Payable 0.91% 1.11% 1.44% 1.25% 1.62%
Borrowings 7.28% 9.01% 9.64% 7.37% 10.59%
Deposits and other accounts 81.87
79.41% 78.52% 81.32% 113.06%
%
Sub-ordinate loans 2.07% 1.81% 1.65% 1.45% 3.29%
Liabilities against assets subject to
0.00% 0.00% 0.00% 0.00% 0.00%
Fin-lease
2
Deferred tax liabilities 1.57% 1.57% 1.77% 2.31% 2.65%

Other Liabilities 1.57% 1.57% 1.77% 2.31% 2.65%
94.08% 93.34% 93.27% 93.71% 131.40%
Represented by
Share Capital 1.17% 1.04% 1% 2% 2%
Reserves 4.03% 4.04% 4% 4% 4%
Un-appropriated profit - - 7% 8% 6%
Surplus on revaluation of assets-net

0.41% 0.84% 1% - -
of tax
100% 100% 100% 100% 100%
Analysis of Trend
Vertical analysis, also called common size analysis, is a technique for evaluating
financial statement data that expresses each item within a financial statement as a
percent of a base amount. On a balance sheet we use total assets as a base and for
income statement mark-up earned as base.
“Balance sheet”
a) Assets
i. Cash and Balance with Treasury and other Banks
From the above shown balance sheet, it can be seen that overall this asset has
favourable trend for last five years. This stability is due to the liquidity requirement.
ii. Lending to Financial Institution
Overall lending to financial institution percentage slightly decreases for at the

end of last year 2009. This is due to the fact that banking sector in these years competes
in consumer, corporate, agriculture and SME sectors in order to earn more. That’s
lending to financial institution decreases.
iii. Investment
It can be seen from the above balance sheet that percentage of investment
increased in total assets. The reason is the increase percentage of advances in total assets
in these years.
iv. Advances-Gross
1
The share of advances in total assets increases in the last five years which is a
good sign. Due to this reason bank income increases in these years.
v. Operating Fixed Assets
In the last five years operating fixed assets percentage slightly decreased. This
was mainly due to increase in Depreciation values.
vi. Other Assets

From the above balance sheet, it can be seen that other assets slightly decrease
as compare to last year 2008 however the oval assets has been increase from 2006. This
shows consistency in the attitude of management.
b) Liabilities
i. Customers Deposits
It is very important for a bank to have stability in customer’s deposits because

for a bank deposit is “lifeblood “. Askari Bank has this stability and its customer’s
deposits percentage increases steadily in the last five years. This is the result of
diversification in its product.
ii. Bank Borrowing
From the balance sheet, it can be seen that bank borrowings of Askari Bank
increased for last five years. This is due to meet MCR of the banks which is ordered by
the SBP.
iii. Bills Payable
The percentage of bills payable as compared to total assets increased for five
years.
iv. Other Liabilities
From the balance sheet, it can be seen that other liabilities percentage increases
for last five years but it is not too high.
v. Sub-Ordinate Loans
1
The percentages of sub-ordinated loans have increased as compared to previous

year. This was mainly due to cater the requirement of Minimum Capital Required by the
SBP to the banks.
vi. Equity
The percentage of equity as compared to total assets increases steadily during

the last five years. It increased by 15% during the year 2009, due to add in Net Surplus
on revaluations of assets including equities increased by 93% due to improvement in
bourses.
5.6.2 Vertical Analysis of Profit & Loss Account
Years 2005 2006 2007 2008 2009

Markup/return/interest expense 52% 54% 55% 57% 58%
Net Mark up/Interest Income 47% 46% 45% 43% 42%
Provision against non performing
15% 11% 9% 26% 21%
loans and advances
Bad debts written off directly - - - - 1%
Net Mark up/Interest income after
15% 11% 9% 26% 22%
provisions
Non Markup/Interest Income 100
100% 100% 100% 100%
%
Fee, commission and brokerage
8.1% 8.2% 8.0% 7.1% 6.9%
income
Dividend Income 0.7% 0.8% 0.9% 0.9% 1%
Income from dealing in foreign
4.2% 4.4% 4.6% 4% 4.8%
currencies
Gain on Sale and redemption of
6% 2% 0.9% 16% 0.2%
securities
Unrealized loss on revaluation of
investments classified as held-for- - - - - 0.1%
trading
Other Income 2.8% 2.6% 2.6% 2% 2%
Total non Mark up/Interest Income 21% 18% 17% 30% 15%
56% 55% 53% 47% 35%
Non-Mark up/Interest Expenses
Administrative Expenses 22% 24% 26% 32% 32%
Other provisions/ write
- - - - -
offs/Reversals
Other Charges - - - - -
1
Total non Mark up/Interest

22% 24% 26% 32% 32%
Expenses
Profit Before Taxation 29% 27% 27% 15% 3%
Taxation-Current 6% 9% 8% 1% 0.1%
- - - -2% -0.3%
-1% 1% 1% -2% 0.6%
Prior-years 5% 6% 9% -3% 0.4%
Deferred
10% 16% 18% 18% 2.6%
52% 54% 55% 57% 58%

Profit After Taxation 47% 46% 45% 43% 42%
5.6.3 Interpretation of Vertical Analysis of Profit & Loss Account
Vertical analysis shows much the same picture as in horizontal analysis.

Interest income and non-interest income of the bank has increasing trend, which
shows sound business of the bank. Income of bank from dealing in foreign
currencies is also having a sharp increase. Administration expenses have increased
in recent years, which are to control bank, more efficiently than before. Taxation
expense of the bank has also increasing trend which is due to increase in profits
which is a positive sign. Net profit is consistently increasing, which is a positive
sign for the sound working of the bank.
5.7 Horizontal Analysis

This type of analysis represents the percentage change in specific line item of
the income statement or balance sheet from the last year. This analysis used to comment
on the growth of specific line item of the organization.
5.7.1 Horizontal Analysis of Balance Sheet

1
2005 2006 2007 2008 2009

Assets
Cash & balances with treasury banks -
26.4 20.0 20.9
100% 10.2
6 2 4
4
Balances with other banks -
32.1 13.1 111.
100% 52.3
3 0 48
1
Lending to financial institutes - -
72.1
100% 17.5 68.9 2.99
2
0 8
Investments 11.3 37.7 - 87.9
100%
5 5 9.52 2
Advances 15.3 27.8
100% 1.61 4.83
6 2
Operating fixed assets 19.3 34.5 61.1 21.4
100%
9 6 9 3
Other assets 39.5 45.1 61.9
100% 9.85
2 9 2
Liabilities
Bills Payable 39.8 42.8 - 13.9
100%
5 5 1.60 7
Borrowings -
41.6 17.3 27.0
100% 13.4
8 1 6
7
Deposits and other accounts 10.9 17.2 22.8
100% 8.49
8 3 4
Sub- ordinate loans - - 100.
100% 0.00
0.03 0.07 10
Liabilities against assets subject to 100.
100% 0.00 0.00 0.00
Fin-lease 00
Deferred tax liabilities - -
29.8 2,46
100% 35.8 97.2
1 9.23
7 5
Other Liabilities 14.6 23.6 47.8
100% 1.55
2 7 4
Represented by
Share Capital 32.9 50.0 35.0 24.9
100%
8 0 3 8
Reserves - 19.4 10.3 -
100%
0.78 6 5 6.31
Un-appropriated profit -
19.2 186.
100% 0.00 85.5
3 73
9
Surplus on revaluation of assets-net -
17.7 463. 93.0
of tax100% 100% 88.4
3 86 6
2
2
Analysis of Trend
Horizontal analysis, also called trend analysis, is a technique for evaluating a

bank’s performance over a period of time. Its purpose is to determine any upward and
downward change. This change may be expressed as an amount or percentage; for
example above is the Askari Bank’s balance sheet for last five years. If we take 2005 as
a base year, we can compute the percentage change every year from the base year.
Assets
i. Cash and Balances with Treasury and Banks
The balance sheet shown above reveals a number of significant changes that
have occurred in the bank’s financial position for last four years. There has been an
overall increase in cash and balance with treasury and other banks. This is due to the
need of good liquidity position.
ii. Lending to Financial Institutions
On the other hand lending to financial institutions for last four years decreases due
to the reason that bank want to enter into corporate, agricultural and consumer market
in order to explore these market and earn more.
iii. Investments-Gross
From the above balance sheet, it can be seen that investment increases for the years
2006 & 2009 as compared to the base year. This is due to the fact that bank has went
aggressively in advances during that period. However, in the years 2008 & 2009 there is
reasonable increase in the investment.
iv. Advances
The bank has achieved remarkable success in the field of advances for last four
years. In 2009 there is a increase as compared to the base year. In the year 2009 it
increases by 6% as compared to base year which is a significant progress in the field of
advances. The main reason behind this progress is the bank’s entrance in different
sectors of economy.
v. Operating Fixed Assets

2
Overall there has been an increasing trend in the operating fixed assets of Askari
Bank during last five years. This is due to the fact that bank has increased its network in
different cities of the country.
vi. Other Assets
There is an increasing trend in the years of 2006-2009 as compared to the base year.
This shows how well the bank performed.
vii. Total Assets

From the above balance sheet, it can also be seen that the bank’s total assets
increased as compared to base year in the years of 2006-2009. This is due to the fact
that the bank has been purchased/injected fresh equity of M/s Askari Leasing in the year
2009. The new management takes it have performed remarkably well after it has taken
the office.
Liabilities
i. Customers Deposits
In the years of 2006-2009 customers deposits have been increased as compared to

the base year. The main reason behind that is the diversification in products of bank
which attracts the deposit.
ii. Inter bank Borrowings
Overall there has been an increasing trend in the inter bank borrowings. This is due
to the fact that bank wants to have enough funds at its disposal that it need from inter
bank borrowing increased.
iii. Bills Payable
From the balance sheet, it can be seen that the bank’s bills payable has been overall
reasonable during the last four years as compared to the base year. This gives a good
signal to investors by the bank’s management.
iv. Other Liabilities

2
It can be seen from the balance sheet that the other liabilities of the bank have an
increasing trend in the year 2006-2009 as compared to the base year. This is due the
reason that bank has entered into different businesses aggressively which gives rise to
liabilities.
v. Total Liabilities
During the last four years there has been an increasing trend overall in the total
liabilities. This is due the fact that the customers deposits have increased during that
period.
vi. Equity
During the last four years there is an increasing trend in the equity of bank. This
signals well to investors and shareholders. Also this is due to the requirement of State
Bank of Pakistan to raise gradually the equity of bank as per asked.
5.7.2 Horizontal Analysis of Income Statement

2005 2006 2007 2008 2009
Years
Mark up/return/interest earned 43.46
100% 20.22% 21.46% 23.21%
%
Mark up/return/interest 63.09
100% 24.49% 22.61% 27.97%
expensed %
Net Mark up/Interest Income 24.81
100% 14.91% 19.92% 16.66%
%
Provision against non 77.08 247.52
100% -2.42% -39.24%
performing loans and advances % %
Reversal of provision for
100.0 24,700
diminution in the value of 100% 0.00% 104.84%
0% %
investment
Bad debts written off directly 100% -36% 0.00% 1.00% 248%
Net Mark up/Interest income 15.15 -
100% 44.72% 66.70%
after provisions % 43.53%
Non Markup/Interest Income 21.61 -
100% 7.10% 35.99%
% 10.20%
Fee, commission and brokerage 20.88
100% 5.92% 17.24% 3.97%
income %
Dividend Income 113.7
100% 25.69% 27.01% -6.90%
3%
2
Income from dealing in foreign 63.59

100% 12.33% 33.23% -38.44%
currencies %
Gain on Sale and redemption of 14.14 -
100% 1,989% 289.19%
securities % 98.43%
Unrealized loss on revaluation
-
-
of investments classified as 100% 0.00% 200.00 0.00%
109.09%
%
held-for-trading
Other Income 55.56
100% 4.35% 1.79% 18.13%
%
Total non Mark up/Interest 37.82 113.42 -
100% -5.65%
Income % % 40.70%
17.07
100% -31.28 -79.96 256.18
%
Non-Mark up/Interest 21.61 -
100% 7.10% 35.99%
Expenses % 10.20%
Administrative Expenses 26.43
100% 46.17% 23.26% 18.50%
%
Other Charges 500.0
100% 83.33% 9.09% 183.33%
0%
Total non Mark up/Interest 26.61
100% 46.24% 23.22% 18.83%
Expenses %
Profit Before Taxation 17.07 - -
100% 256.18%
% 31.28% 79.96%
Taxation-Current 18.72 - - 3,200.0
100%
% 89.93% 82.83% 0%
Prior-years -
- -
100% 100.0 0.00%
78.63% 340.00%
0%
Deferred - - -
-
100% 42.42 315.79 143.90
236.11%
% % %
- -
30.91
100% 134.73 119.69 612.00%
%
% %
Profit After Taxation 11.33 -
100% 19.16% 187.05%
% 85.60%
Analysis of Trend
“Income Statement”
i. Mark-up Expense
2
From the above shown income statement, it can be seen that the mark-up expense
has increases for the last five years. Its percentage reaches at 60 % in the year 2009 as
compare to 48 % in 2005. This is due to the fact that deposit cost has increases as bank
competes in these years by offering higher rates on customer’s deposits.
ii. Net Mark-up/Interest Income
The percentage of net mark-up/interest income as compared to mark-up/interest

income decreased gradually during the last four years. This is due to the fact that the
competition in the banking industry caused the most banks cost of funds on upward
trend.
iii. Provisions
During the last five years the percentage of provision as compared to mark-up
earned increased due to book/addition of new NPL.
iv. Fee, Commission, Brokerage and Exchange Income
During the last five years the percentage of fee, commission and brokerage, and
exchange income has decreases gradually in the total income. This is due to the fact that
banks compete with each other by decreasing their service charges rates during that
period.
v. Dividend Income
It can be seen from the income statement that percentage of dividend stagnant
during the last two years. The main reason is the overall satisfactory performance of the
bank by during the last couple of years.
vi. Other Income
The percentage of other income as compared to mark-up/interest income remains

constant from the years 2005 to 2007. However it decreases from the year 2008 & 2009
due to the reason of free services provided by the bank in order to attract business
volume.
1
vii. Non Interest Income
The percentage of non interest income as compared to mark-up, earned decreases

during the last five years. This is due the fact that income from fee, commission,
brokerage and exchange earning decreases during that period.
viii.Profit before taxation
The percentage of profit before provisions as compared to mark-up/interest income

shows good overall performance during the last five years. This is the result of good
management of bank’s assets and liabilities.
ix. Taxation
In the years 2005 & 2006 the percentage of tax on the income of bank as compared
to the mark-up/interest income increases gradually. However from year 2007-2009 there
is gradual decrease in it.
1
CHAPTER: 6
ORGANIZATION ANALYSIS
6.1 Overview on the Major Players of Bank Industry

Organizational Analysis with Reference to Banking Industry
[Figures in Billion]
Peer Askari Allied Faysal Bank Bank Al NIB
Competitor Bank Bank Bank AL Falah Habib Bank
2
31-Dec-09 31-Dec-09 31-Dec-09 31-Dec-09 31-Dec-09 31-Dec-09
Net Profits 1 7 1 1 3 -7
Total Deposits 206 329 124 325 189 93
Total
Advances 148 237 91 188 106 84
Total Assets 254 418 181 389 250 207
Review of Banking Sector
Pakistan’s banking sector at attracted substantial inflows of foreign capital and

remained the fastest growing sector until the beginning of global financial meltdown.
Since then it has slipped into troubled waters mainly because of piling up of Non
Performing Loans (NPLs). The relatively disproportionate contribution of the finance
and banking sector to the overall GDP growth in the net domestic credit. With the
monetary tightening the banking sector assets’ growth slowed down to only 2-3% in
real or inflation-adjusted terms. According to available statistics, Deposits of
commercial banks increased to Rs 4.162 trillion by end – September, 2009 showing a
Y-o-Y growth of 10.0%, better than the growth of 9.15% a year before. But the
imminent slowdown in economic activities is continuously hampering the growth rate
of the banking system. As a matter of fact the key asset quality indicators have exhibited
a significant deterioration so far during the years 2009. The asset mix has witnessed a
significant shift from advances to investments in government papers and government
guaranteed debt securities that are relatively risk free and liquid. Resultantly, the
liquidity profile has slightly improved. The heightened credit risk transpired in
significant increase in NPLs. However, in the face of constraining factors, the banking
system earned before tax profit of Rs 26.2 billion for the Jan-March, 2009 that was
higher compared with Rs 10.5billion in previous quarter, though lower than
corresponding quarter of 2008. According to an analysis, average deposit rate of 6.3%
in end of 2009 has decreased by 150 bps, from 7.8 per cent during the corresponding of
last years. Slow down in economic growth, double digit inflation during last 15 months,
and prevailing uncertainty in law and order situation and war on terrorism are additional
factors contributing towards slow growth of deposits. It is pertinent to observe that the
2
bank have remained oblivious to increasing deposit rates, despite repeated assertion
made by the previous governors of the SBP. It is interesting to note that whereas
average deposit rate during one years period from 2008 and 2009 decreased by 150 bps,
the lending rate decreased by 0.1% during the same period from 13.8% to 13.7%.
Bankers have argued that fall in deposit rates is justified because of cut in interest rate
by the SBP by 200 bps during the past nine months. Consequently, bank spread has
increased to 7.4% near to its previous level of more than 7%. It is perhaps one of the
highest in the world to the grist disadvantage of customers. It clearly reflects that the
banking sector has acted to make up for its falling incomes.
Challenges
Growing non performing loans have been translated into a notice able addition
in Net NPLs. The infection ratio of corporate sector, having highest exposure in overall
portfolios, is worsening, Imprudent lending practices particularly in the realm of
consumer financing have also played havoc in banking sector. The curtailed repayment
capacity of the borrower due to static economic conditions, non conductive business
climate caused by frequent power outages, deteriorating law and or outages,
deteriorating law and or outages, deteriorating law and order condition and instability,
also resulted in a significant increase in NPLs.
In the wake of increased credit risk due to busted macroeconomic fundamentals

and slowdown in economic activities, banks are re-profiling their asset mix away from
loans and advances to less riskier investments. The SBP’s monetary policy also looks
unsuccessful in controlling resurgence of a potential default culture and mounting non
performing loans (NPL’s). In six months only (July-Dec-08)net NPL’s of commercial
banks and DFI’s increase by Rs83 billion. The banks booked provisions of Rs 14.8
billion during first quarter 2009 in their profit and loss accounts versus Rs 12.8 billion
in the same quarter of last years when FSV benefit was not allowed. This shows how
much the situation has deteriorated in the last one year in the banking industry.
The growth rate of the banking sector achieved during last few years is not
sustainable because high rate was mainly attributable to low rate of returns to
depositors, high banking spread and huge loan – loss provisions.
2
Banking sector is facing an intermediate level liquidity crunch since last couple
of years. Dire liquidity situation has cropped up because of low growth of deposits and
slackness in privates sector’s credit, owing to high interest rates and stringent credit
policies of the banks. Primary reason for reduction in deposits is low interest rates on
deposits offered by the banks. Inordinate commercial borrowing by the government to
meet its fiscal and energy sector needs has also badly affected the liquidity of banks.
Hefty remittances from abroad have also discontinued for an indefinite period. The
present rate of domestic savings is just not enough for sustaining the GDP growth rate
of even 6%. To increase the rate of savings. The policies of banking sector will have to
be restructured which would significantly reduce its profitability.
Myopic views of policy makers have also damaged banking sector when banks’
main focus has remained on making high profits. The very purpose of financing risk-
prone sectors of the economy and to make long-term investments such as development
of the country’s physical infrastructure, has slightly been touched. The proportion of
advances to SME, agriculture and other development project finance is very meagre and
inadequate. The structural deficiencies are to be removed in order to reach out to many
potential depositors and to expand portfolios in development finance.
➢ Total Assets of AKBL as Compare to Competitors/Peers
Investment and advances are the main component of bank’s total assets. The
banking industry investments, especially in the Government papers, which rebuts
increased by 23% in both absolute rupee terms as well as a proportion of total assets
during the end of year 2009, registered a handsome increase from 254Billion. Actually,
the major increase in asset book was recorded in aggregate investment portfolio that
grew by 88 percent during 2009 while the gross advances increased by 6 percent, to
Rs.148 billion from Rs.140 billion at end 2008. The Bank continued with the cautious
and selective approach while taking credit exposures and remained focused on risk
management and portfolio diversification. The efforts for effective loan portfolio
diversification which started last year yielded further positives and during 2009, the
Bank’s exposure in textiles, which sector has largely remained under pressure owing to
various internal and external developments, was reduced to 18 percent of the total
portfolio, compared to 20 percent at the close of the previous year. Also, the Bank
2
preferred financing against collaterals which improved our capital adequacy in

compliance with Basel II requirements which are stipulated by the SBP measures.
The banking system is marked with a high concentration as a fewer number of

banks hold a major share of the system's total assets and deposits. This concentration
has been following an overall declining trend as the medium sized banks gradually
gained market share. However, due to unusual liquidity stress that affected mainly the
small and medium sized banks, the market share of five large banks inched up to 52.4
percent.
The Bank’s NPLs stood at Rs.17.73 billion as of December 31, 2009 compared
to Rs.11.69 Billion at the end of previous year, an increase of 52 percent on a
comparative basis it's better than industry. The throughout industry the average growth
of NPLs has been close to 30%. So in this respect AKBL performed well. Debt
management of the bank has improved considerably over the years. This improvement
has been complemented by an impressive asset management approach. The debt ratios
of the bank have declined, indicating increasing equity portion of the bank's assets.
Generally, this has been the trend in the entire banking industry perhaps due to higher
interest rates resulting in higher cost of borrowings and the MCR requirements as
proposed by the SBP.
➢ Liabilities of AKBL as Compare to Competitors/Peers
Customer deposits are major component of any bank’s liabilities. The deposit
component, which used to witness a strong growth in year 2009, Total deposits
increased to Rs.7.46billion as on December 31, 2009 from Rs. 5.40 billion as on
December 31, 2008 – upsurge of 38%. The industry has been witnessing a gradual shift
in deposits from savings to term deposits for quite some time. This trend emerged
largely in response to SBP's policy incentives to encourage the mobilization of longer-
terms deposit so as to reduce the maturity mismatches. Consequently, fixed deposits
gained a significant share of savings deposits since 2005.
However, the SBP's policy to the reduction in Cash Reserve Requirements

(CRR) and Statutory Liquidity Requirements (SLR) requirements in early weeks of
October 2008 to manage the liquidity stress resulted in a significant decline in cash and
2
treasury bank balances by the end of December-08 quarter thus releasing funds for
financing the growth of advances. However, strong capacity developed by the banks and
regulators over the years and the offsetting measures taken by the State Bank of
Pakistan (SBP) enabled the system to avert this transitory stress from converting into a
financial crisis Jun-08 and exemption of long-term deposits from SLR requirements
during the last quarter seem to have considerably invigorated this trend. Other factors
like general rise in interest rates and innovative deposits scheme have also augmented
depositor’s preference for terms deposits. Other than customer's deposits, the bank's
funding source is the inter-bank money market. Change in the government monetary
policy and market expectations of a change in interest rates are main factors that can
adversely affect Askari Bank’s key funding source. The earning assets of the bank have
been growing all throughout. Higher deposits are being streamed into greater advances,
investments and landings, all generating a higher return. The cost of funds is raising
parallel to the yield, however, at a much lower level. This liquidity consistency may be
attributed to the excess liquidity that prevailed in the industry due to high reserve
growth of the banking sector.
i. Profitability of AKBL as Compare to Competitors/Peers
The cumulative profit of 22 listed commercial banks has declined by 21% to Rs

50.3bn in the year 2008 as compared to Rs 63.6 billion earned in the same period in
2007, mainly due to higher provisions for non-performing loans (NPLs) and impairment
loss. The full year profits of CY08 were however lower than profits for the last couple
of years but still it remained profitable. The overall profitability was neutralizing due to
more than proportionate increase in operating expenses and provisioning for loan losses.
In absolute terms, expenses increased by 33.4 percent to Rs 235.8 billion in CY08,
which affected the overall profitability of the system. In addition to higher provisions,
enhanced branch network with increased human resource base has soared the expense of
the system during the last quarter under review. Moreover, the stock market crash in the
second half of 2008 resulted in bank recognizing impairment loss of Rs 12 billion as
against only Rs 287 million recognised in 2007. High spreads of 7.29% in 2008 and
strong advances growth of 19% supported the net interest income, while non-interest
income increased by 11% on the back of surge in exchange gain as rupee remained
volatile against the dollar.
2
The annual audited results of the top five banks for the year 2008 show that their
profitability on average has remained at the previous year's level. The assets distribution
on the basis of ROA shows that 16 banks, holding 67.9 percent market share, have ROA
of one percent and below. The banking sector in Pakistan has remained somewhat
insulated from the global financial turmoil and has maintained its profitability albeit the
slower growth. The prevailing global economic downturn nevertheless has the potential
to impair corporate and business profitability that may ultimately heighten the credit
risk and may affect the earnings of the banking sector in the quarters ahead.
In spite of that and the decline in banking sector spread, Askari Bank's
profitability picture remained positive, indicating that the bank has prudent policies in
place for handling its deposits, advances and investments. Of the non-interest income,
the highest increase came from fee, commission and brokerage income as well income
from the purchase and sale of securities. The bank is predicted to continue its growth
momentum in the future. So it can be said that Askari Bank Limited performed
remarkable as compared to most of its competitors. Without exaggeration it can be said
that bank is among the top five performer in the industry which is the result of its
management and employees hard work, commitment and thirst of achieving common
goals.
4
CHAPTER: 7
FUTURE PROSPECTS OF
THE ORGANIZATION
3
7.1 Future Prospects of the Organization

The banking industry can be seen positively as some private credit increase is
observed in the year-end of 2009 and started picking up. With key policy rate at 12.5%
the SBP maintains to keep a balance and wants to increase the circulation of the money
in the economy and not keeping it tied up. On the other hand, much of the investments
still lie on the government securities as the government borrowing. With uncertainty
still hovering in the economy and the inflation till feb2010 still remains high at 13.8%,
the key policy rate is designed neither to be tight nor to be sluggish. Therefore much can
be expected in the upcoming year, as the pace for economy recovery along with
increase private credit can uplift the economic cycle. Concerns of SLR and CRR are not
in consideration for most banks as healthy safety is kept to ensure no bankruptcy is
involved. The only matter of concern would remain the outcome of the new monetary
policy which is said to be designed in a way to boost the economy.
Askari Bank in particular remains strong in terms of their balance sheet as their
asset base is strong and their liabilities are more of long term. Along with this the
current year performance is considered extraordinary. Therefore positive expectation
can be anticipated for the bank.
In the FY09, considering the political, economic, law and order situation of
the country, the banking sector performed reasonably well. The profitability of the
banking sector may improve in FY09 as compared to FY08 as the interest rates spread
still above 7.0%. However, the growth may not be same as witnessed in the past few
years but it may be better than the FY08 because the law and order situation improving
2
steadily. The factor which needs to be seen carefully is that in spite of bad performance
of economy Askari Bank Limited still sustains its growth.
The bank is expected to post a healthy profitability picture as compared to the

overall industry. The trends taking place in the industry will affect it and there may be a
slight decline in its profits but the firm is expected to tactfully counter them as it has
policies in place. The equity base of the bank is likely to see further expansion in the
coming years. This will ensure adequate loan coverage for the bank and profitability for
its shareholders.
The deposit base of Askari Bank will also improve in next FY10 as the bank is
introducing attractive products and services for its customers. This will also help the
bank in sustaining the customer’s loyalty as the competition in this regard is increasing
in the banking industry because every bank is now trying to capture a sizeable amount
of market share by offering new product and services.
2
CHAPTER: 8
SHORTFALLS /WEAKNESSES
3
8.1 Shortfalls / Weaknesses
Askari Bank Limited has the following weaknesses.
➢ Lack of Customer Services Tables/Counters
Askari Bank Limited lacks specialized counters or facilities such as:

i. Investment advisory counters
ii. Early disposal of FCY Currency from Branch’s end.
iii. Lunching of friendly/low rates customer services products i.e. DD. PO. TC On-
Line.
➢ Revival of the Charges
The rates for the various charges provided by the bank should be brought
down a bit, as it would result in increase in the number of customers of the bank.
➢ Manual book-keeping
Although the bank has computerized accounting system but, still the
bankers use to make their entries in the accounting register.
➢ Decentralization
The higher authorities should form team-based management rather than

centralized management. It would result in improvement in uplifting the morale
of the employees. They will be more motivated and involved in all their
operations resulting in overall effectiveness of the organization.
➢ Advertisement
1
Askari Bank has formulized good products and services for its
customers, even better than other commercial banks, but advertisement on
electronic media has not been much.
➢ Permanent Hiring
The fresh hiring should be made permanent so that they are secured of
their future. Further the allowances and perquisites attached with the permanent jobs
will also increase the motivation level of the employees.
➢ Lack-off/low-rate of Incentive
The bank lack incentives to motivate the employees. Due to this reason there
is a high employee turnover rate. The employees of higher ranks are given
incentives in the form of bonuses but the employees of lower rank are totally
ignored.
➢ Lack of Communication
There is lack of upward communication. Also there are barriers in horizontal

communication.
2
CHAPTER: 9
CONCLUSION
3
9.1 Conclusion
Askari Bank Limited is a well known and successful financial institution in the
banking sector, it is said, nothing is perfect in the world, and there is always space for
deficiencies.
Askari Bank Limited is playing a key role in the banking sector in Pakistan. It is
evident from this report and the financial statements of AKBL that it is making progress
by leaps and bounds. The profits of AKBL have grown considerably during the last five
years and this trend is expected to continue into the future.
As mentioned in its mission statement that it provides quality services through

innovative technology and effective HR resources management to its customers. This
makes this bank different from other banks. Bank strategy is to maximize the synergies
of branch network though an optimal allocation of financial, human and other recourses
in order to meet the dynamic challenges of present financial environment.
The business volume of last five years in terms of advances, investments,
deposits and revenues shows that how well the bank has performed over the years. The
diversification and quality of its products and services also helped the bank in achieving
its goals. High rates on different products helped the bank to attract large amount of
deposits and enhance its customer base.
The recruitment and training policies of the bank are according to the latest
requirements so the employees are motivated and work efficiently and effectively. But
training the incentive system is weak and this is the main reason which makes the
employees at lower level less motivated than the employees of the higher level. The
bank should make its policies by considering the present conditions of the banking
sector in order to compete in the market.
2
The profitability of Askari Bank Limited over the past few years shows the
success of its policies. The effective planning, controlling and implementation of its
policies help the management to achieve its goals. The management also encourages the
employees by making sure their participation in the process of decision making
Therefore, it can be concluded that AKBL has a very prosperous present and
future, which assures the shareholders of wealth maximization. The bank should also
cover and control on the above mentioned shortfalls then it would be in such a situation
that will really lead it towards the road of prosperity, development and integrity.
3
CHAPTER: 10
RECOMMENDATIONS
3
10.1 Recommendations
Askari Bank Limited is a well known and strongest financial institution in the
banking sector, as nothing is perfect in the world, and there is always space for
deficiencies. Following are the suggestions that can be recommended for overcoming
deficiencies.
➢ Rates of Customer Services Products i.e. D.D, P.O, On-line should be reduced.
➢ Make early arrangements for disposal of FCY Currency (FCY Notes) at all
branches level.
➢ Early Opening of New Branches Network.
➢ “Performer” Contractual Employee should be early confirmed.
➢ Customer advisory counters/Floor-Manager should be established or appointed
at each branch level in order to guide the customers and solve out their
problems. The staff at these counters must be highly trained and aware about the
bank products and services.
1
CHAPTER: 11
REFERENCES
3
11.1 References
➢ James C.V Horne’s (edition 11th), Fundamentals of Financial Management
➢ Hoans vane James: Financial Management in the edition 2005.
➢ Internet
➢ James C.V Horne’s (edition 11th), Fundamentals of Financial Management
➢ Hoans vane James: Financial Management in the edition 2005.
➢ Internet
➢ James C. Van Horne and John M. Wachowicz, JR. “Fundamental Of Financial
Management” , 126-143, 618-623
➢ Peter S. Rose “Commercial Bank Management”, 136-137, 573-579
➢ James A. O’Brien “Management Information Systems”, 264-271
➢ Askari Bank Ltd Annual report (2005-2009), Karachi.
➢ Meigs Williams Haka Bettner “Accounting” , 629-630, 1006-1007
➢ IBP “Management Accounting for Financial Services” , 150-161
1
1.
CHAPTER: 12
ANNEXES
3
12.1 Annexes
1
1
2
Islamic Products Profits Rates

3
1
Overall Organizational Structure

3

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1

5.4 Profit And Loss Account 49

1.1 Brief Introduction of Sector of the Organization

means a table or a counter. Bank is a financial institution licensed by a government. Its

Commercial Bank Exchange Bank

Central Bank Agriculture Bank

1.2 Objectives of Studying the Organization

➢ The primary objective of my study is to meet the requirement of the course

2.1 Overview of the Organization

delivery channels for customer service. Askari Bank also

payment through ATMs & Internet which have brought about

Visit Askari Website (www.askaribank.com.pk)

2.2 Nature of the Organization

ACBL is private sector bank and is categorize in commercial bank. Commercial

➢ It provides deposit banking services.

2.3 Business Volume. (Rs. In Millions)

Items 2005 2006 2007 2008 2009

After Tax profit 2,021 2,250 2,681 386 1,108

“Interpretation on Business Volume”

2.4 Number of Employees

No. of Employees 2005 2006 2007 2008 2009

Total 2,754 3,241 3,834 4,252 4,393

Total numbers of employees as on 31-12-2009 were 4,393.

Sr.# Name Designation / Grade

2.5 Product lines

2.5.2 Premium Saver

➢ Minimum saving balance of Rs. 20,001/- and a maximum balance of Rs.

2.6 Askri Bank Personal’s Investment

Minimum length of confirmed service with present employer is at least six

Demand Deposit:-These are payable on demand. They include current account,

Time Deposit:-Payable on demand with certain maturity. Attracts profit with

2.7 Type of Accounts

2.7.2 Points to Remember

2.7.3 Current Account

2.8 Points to Remember

2.8.1 PLS Term Deposit:

2.8.2 Points to Remember

2.9 Unique Product

2.9.1 Salient Features

Profit Amount: Rs. 12,000/- on a deposit amount of Rs.100,000/-

➢ Financing Facility up to 90% of Principal amount.

➢ Free Visa Debit Card issuance.

➢ Free Accidental Life Insurance coverage up to Rs. 500,000.

➢ No Minimum Balance requirement in checking account.

➢ No maximum limit for investment.

2.9.3 Askari Debit Card/Visa Card

2.9.4 Travelers Cheques

Askari Bank offers RTC (Rupee Traveler Cheques) with minimum

2.9.5 Profit/mark-up Rate on Products

AKBL allows/give very competitive rates of returns to his valued customers

2.10 Different Services Provided By ACBL

2.10.2 Mail Transfer

ACBL is also providing telegraphic transfer (T.T.)/mail transfer facility for

2.10.3 Pay Order

2.10.4 Traveler's Cheque

2.11 Commercial Finance

2.11.1 Import License and Registration

2.11.2 Contract of sale

2.12 Foreign Remittances

2.12.1 Agricultural Finance

ACBL provides Agricultural Finance to solidify faith, commitment and pride of

2.12.2 Agricultural Finance Services