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111505 ABDUL QAYYUM

MARKETING
ASSIGNMENTS PEST Analyses of Askari Bank

(Shehla Sohaib)

Resource Person

EXTERNAL ENVIRONMENT OR PEST ANALYSIS


Askari Bank
1) History. Askari Bank Ltd (formerly Askari Commercial Bank)

was incorporated in Pakistan on October 9, 1991, as a Public Limited Company. It started its operations on April 1, 1992. The bank principally deals with banking, as defined in the Banking Companies Ordinance, 1962. The Bank is listed on the Karachi, Lahore & Islamabad Stock Exchanges and its shares are currently the highest quoted from among the new private sector banks in Pakistan.
2)

Political Ethical and Legal Factors.

Although Pakistan is

currently under democratic rule, still the political condition is quite volatile. The country has seen various martial laws, coupes, wars with neighboring India, Afghan war etc. With the increasing turmoil in northern areas and Baluchistan, the situation is very unpredictable. Pakistans relations with its neighboring countries also see various ups and downs except with China, which also instills instability. The relations with America also face criticism from both internal and external stake holders. Thus over all political scenario has worsened over the period of time and does not depict a good picture. With such political conditions no business can withstand the challenges and banks are no exception to it. Also based on Pakistans political scenario, IMF and other global financial institutes are hesitant to provide assistance to the financial

problems to Pakistan. In such circumstances, banks face the challenges of lower profits, insecurity among the investors to invest in the banks in Pakistan etc. As Askari bank is working under the umbrella of AWT, it does not get the same pressure as other banks do; still the political conditions equally play havoc to the strategic and financial goals of the bank. There is nothing negative about ethical behavior of the bank. The bank approach towards the social welfare is not much significant.
3) Economic and Demographic Factors

a) Economic i) Pakistans economy has been facing unprecedented challenges over last few years. This has been majorly caused due to ii) Severe macroeconomic crises that resulted from policyinduced imbalances from previous years; iii)A sharp deterioration in Pakistans net external terms of trade as a result of the spike in recent years in world commodity prices of which Pakistan is a net importer and its adverse impact on our balance of payments; iv)The significant supply shocks suffered by the economy in the provision of energy due to high oil prices and sector management management; problems, especially circular debt

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v)

Adverse effect of the turmoil in global financial markets that caused the sharp decline in the global demand for greater stability and positive trends in macroeconomic indicators other than inflation.

vi)Askari Bank has expanded into a network of 226 branches, including 31 dedicated Islamic banking branches, and a wholesale bank branch in Bahrain. A shared network of 4,173 online ATMs covering all major cities in Pakistan supports the delivery channels for customer service. vii) Askari Bank achieved planned growth in business and

operations during 2009. The total assets of the Bank amounted to Rs.254 billion as at December 31, 2009, registering an increase of 23 percent over December 31, 2008.Customer deposits reached Rs.206 billion by December 31, 2009, an increase of 23 percent over December 31, 2008. Profit after taxation showed an increase of 187% at Rs.1.11 billion, when compared with last years Rs.386 million b) Demographic
i)

Bank is providing services to both genders, public, business, small and big organizations.

ii) They have their branches all over the big cities. iii)Their main focus of servicing is armed forces.

5 4) Social, Cultural and Religious Factors. In Pakistan, we find

a lot of variety in the social structure. Pakistan is a densely populated country with high birth rates and bigger families. The population is almost 50-50 balanced among the male and female, however it is male dominated. In urban parts, male members of the family make the earning majorly. Small percentage of female population is in earning the livelihood for a family. In rural areas, although male are dominant, both the genders strive to keep their family matters running. Literacy ratio is quite low (~ 30%) where female are less educated among this percentage. High unemployment prevails in the population. There is a high trend of moving from rural to urban areas for making the income. Population is strongly bonded to the religious and regional cultural norms. With such sociocultural setup, majority of the population is under served with the banking facilities. Less branches, limited access to ATMs and online branches, limited options of investment are the major challenges banks have in the current scenario. The banks have a very difficult task in getting customers, making them understand their policies and making new market segments. The banking sector has a very limited marketing scope in this regard. Askari bank, being the major bank for the armed forces, has reach from high officials to the low ranks in armed forces. With this distinction, it strives to bring in general public as its customer and to make profits for its business. This helps Askari bank to keep its market share, even enhance it

and gives a competitive edge. With its diverse products and services for various sectors like agriculture, textile and industry, the bank thrives to meet the market requirements. The bank is abiding the banking rules of the country so they are not facing any religious problem.

5)
a)

Technological and Physical factors In banking sector, Technology has played a pivotal role in meeting customer expectations, particularly with respect to speed and quality of service. Although a third world country, Pakistan is keeping abreast with the technological advancements in this field.

b) Although the infrastructure may not be that good, but still its enough to meet the requirements in the country. Availability of computers and high speed internet is improving day by day particularly in the urban parts of Pakistan. Extensive growth of the cellular industry has also brought about a new shape in the tech. industry. Mobile and online banking has been on rise with the improvement of facilities and education of the customers. c) Improvement in the infrastructure and technology for connecting whole of the network with central system has also been remarkable. Newer options, solutions and products are now available for banks for connecting their branches and networks in more robust manner. Introduction of 1-link systems has joined together all major banks networks 81

online. It is among the corporate objectives of Askari bank to maximize operations, use of technology to ensure cost-effective system, efficient management information

enhanced delivery capability and high service standards. Askari Bank is proud of its pioneering role in providing the most modern and technologically advanced services. In 2008, the Electronic Technology Division embarked upon an ambitious programme of modernizing the IT of Askari Bank. This programme seeks to introduce cutting edge IT best practices, processes, tools, applications and more, enabling IT to be closely aligned with business in terms of growth, efficiency, risk control and compliance, thus creating an agile and lean technology organization.