STRATEGIC MANAGEMENT
REPORT
GROUP MEMBERS
MAQSOOD AHMED (57711)
NIDA ASGHAR (
SAIMA (
MISHA (
TITLE:
FAYSAL BANK REPORT
DATE:
04-06-2022
GROUP NAME:
TROUBLE SHOOTERS
SUBMITTED TO:
FAISAL LATIF
INTRODUCTION TO BANKING INDUSTRY
Bank is a financial institution licensed to receive deposits and make loans. Two of the most
common types of banks are commercial/retail and investment banks. Depending on type, a bank
may also provide various financial services ranging from providing safe deposit boxes and
currency exchange to retirement and wealth management.
In the United States of America banks are regulated by the U.S. Federal Reserve Bank which is
one of the world's major central banks. Above all, central banks are responsible for currency
stability. They control inflation, dictate monetary policies, and oversee money demand and
supply in the market. Commercial or retail banks offer various services including, but not
limited to, managing money deposits and withdrawals, providing basic checking and saving
accounts, certificates of deposit, issuing debit and credit cards to qualified customers, supplying
short-and long-term loans such as car loans, home mortgages or equity line of credits.
Investment banks gear their services toward corporate clients. They provide services such as
merger and acquisition activity and underwriting among other investment services.
INTRODUCTION TO FAYSAL BANK
Faysal Bank Limited was incorporated in Pakistan on October 3rd, 1994 as a Public Limited
Company under the Companies Ordinance, 1984. The Bank’s shares are listed on Pakistan Stock
Exchange. Faysal Bank is engaged in Commercial, Retail, Corporate and Islamic banking
activities. Faysal Bank’s footprint now spreads over more than 200 cities with over 550
(including 414 Islamic) branches. With total assets in excess of PKR 601.974 Billion, placing it
amongst the significant players in Pakistan’s banking industry. Faysal Bank’s aim is to achieve
leadership in providing Shariah compliant products and services to its customers.
Faysal Bank Limited has been duly licensed as a Commercial Bank by the State Bank of
Pakistan (SBP). Faysal Bank is on track to convert the entire bank, including its branch network,
into a full-fledged Islamic Bank. Our branch network of 555 branches includes 414 Islamic
branches and 141 conventional branches. Faysal Bank carries on banking business activities in
line with the Banking Companies Ordinance, 1962.
FAYSAL BANK TOTAL OFFICE / ATM
Faysal Bank's footprint now spreads over more than 200 cities with over 550 (including 414
Islamic) branches network of more than 370 ATMs
FAYSAL BANK TOTAL EMPLOYEE
There are around 6,800 Employees in the Bank.
FAYSAL BANK HIERARCHY
VISION OF FAYSAL BANK
"Be the leading Islamic bank in Pakistan"
As they are focusing more on the Islamic values as they believe in Islamic Teachings.
MISSION OF FAYSAL BANK
"Achieve leadership in providing Shariah compliant financial services, with customer care and
employee focus at the heart of our business ethos together with innovation and technology being
the pillars of our growth."
Faysal Bank is an Islamic Bank which has focused on shariah. They made a team of Shariah
Board which is responsible for ensuring that Shariah guidelines are strictly adhered to in all
Islamic banking operations and activities of Faysal Bank Ltd. The Shariah Board at Faysal Bank
Limited comprises of renowned Shariah Scholars, namely: Chairman – Shariah Board Mufti
Muhammad Mohib ul Haq Siddiqui
VISION OF DIVERSITY, EQUITY AND INCLUSION (DEI) AT FAYSAL BANK
‘With the belief in core Islamic Values of equality, Faysal Bank values diversity and inclusivity
as its primary driving force to become the employer of choice, where we hold gender diversity,
equitable opportunities and differently abled inclusion as the cornerstone of our DEI strategy.
CORPORATE STRATEGY OF FAYSAL BANK
"We are always striving to build meaningful relationships with our customers and to become
partners in their growth and progress by acting as financial advisors and financiers. We extend
both short and long term financing facilities designed to fulfil the individual needs of each
corporate customer."
In this case they worked on different strategies to accomplish their goal such as:
CORPORATE FINANCING
Faysal Bank Limited is fully geared to meet the changing economic challenges present in
Pakistan. They are striving to build meaningful relationships with their customers and become
partners in their growth and progress by acting as financial advisors and consultants as well as
financiers. As there Corporate Finance Group extends both short and long term financing
facilities designed to fulfill the individual need of each corporate customer.
INVESTMENT BANKING
Faysal Bank Limited maintains one of the leading Investment Banking (IB) outfits in the
country. During the last decade, FBL’s team of IB professionals and product specialists have
structured and successfully concluded numerous innovative and large ticket transactions which is
a testament of their continued commitment to their customers and contribution to the
development of the financial and capital markets of Pakistan.
TRADE FINANCING
Faysal Bank has established a strong presence globally in Trade Financing through its network,
affiliates and correspondents. The Bank has conveniently maintained relationships with major
banks in the international financial market and continues to develop new ones wherever needed.
Trade Finance services include a full range of import, export and guarantee products, thus
offering tailor-made solution to fit the individual need of each customer.
EVALUATION OF EXTERNAL ENVIRONMENT OF FAYSAL BANK
As Faysal Bank believe in Go beyond the will so they are trying to meet the external
environment standards to update their banking system.
Faysal Bank strongly believes in giving back to the community in every best possible way for its
sustainability. Collectively, they are putting cohesive efforts so that the community becomes
strong enough to see many generations benefiting from it.
GO GREEN POLICY
With the emphasis on the “Go Green” policy regulated by the State Bank of Pakistan, Faysal
Bank has developed a Green-investment initiative called “Come Grow with Us”, that aims to
create a healthier and greener environment for the people of Pakistan. Its vision through these
initiatives is to engage and create awareness among the present and potential customers and
employees of the bank. Under this vision, Faysal Bank is working on its latest project in
partnership with Karachi Relief Trust for a “Green Mosque” initiative. This project consists of
installing “fixed volume delivery” taps at mosques in order to save water used doing ablution, as
well installing a recycling system which will use waste water from ablution for tree irrigation. In
addition to this, 400 trees will be planted near to these mosques.
DONATIONS TO THE EDUCATIONAL INSTITUTES
Faysal Bank Limited helped Institute of Business Administration construct an academic block in
their City Campus, Karachi by providing a generous donation of PKR 75 million. The block was
constructed and named after our bank and houses a purpose-built center for executive education,
center of business and economic research, state-of-the art classrooms, seminar rooms and video
conferencing room.
They collaborated with The Citizens Foundation built and sponsored 2 TCF secondary schools
located in the flood-hit areas of Khushab and Mianwali in September 2011. The schools were
made operational in 2012. While investment and budgetary allocations for the educational sector
have increased in rupee terms on an overall basis when compared to earlier periods,
unfortunately it is not enough. They have also invested in physical infrastructure like school
buildings but also the quality of our teachers as well as in initiatives to increase enrolment across
geographies, age-groups and genders. This gap in provision of quality education across the board
is not a problem faced by Pakistan alone, rather it is one faced by nearly all emerging economies,
however it is one of the key long term investments which really pays off in terms of national
development and growth.
FAYSAL BANK LTD. COMPETITORS AND INDUSTRY ANALYSIS
1.
2.
3.
4.
5.
6.
Faysal Bank Ltd. Direct Competitors
Comparison of Faysal Bank Ltd. And Direct Competitors Financial Ratios
Comparison of Faysal Bank Ltd. And Direct Competitors Stock Charts
Faysal Bank Ltd. Industry Analysis
Industry Snapshot
Faysal Bank Ltd. Industry Position Analysis
In the part that describes Faysal Bank Ltd. Competitors and the industry in whole, the
information about company’s financial ratios is compared to those of its competitors and to the
industry. The unique analysis of the market and company’s competitors along with detailed
information about the internal and external factors affecting the relevant industry will help to
manage your business environment. Your company’s business and sales activities will be
boosted by gaining an insight into your competitors’ businesses.
RESOURCES OF FAISAL BANK OF PAKISTAN
Overview:
Faysal Bank’s Financial Institutions (FI) Group is focused on providing a wide range of
correspondent banking services to customers through our strong relationships with many global
financial institutions, ensuring access to our customers to all the major global financial hubs. The
above arrangements ensure most efficient settlement of import & export payments and foreign
receipts/ payments of our customers. In addition to these global correspondent banking
relationships, we also maintain onshore correspondent banking arrangements with large local
banks to ensure coverage throughout the country.
Our trade finance services, in addition to provision of standard trade products including letters of
credit, foreign & local currency trade bill discounting, guarantees, import & export loans and
Export Refinance, offers advisory services on large ticket structured trade financing requirements
of the customers. These include arrangement of cross border trade confirmations and trade
related commercial & country risk syndications. Our onshore specialized trade services include
supply chain solutions for our corporate customer base, including vendor/ supplier & distributor
focused structured trade financing solutions.
Faysal Bank Limited maintains one of the leading Investment Banking (IB) outfits in the
country. During the last decade, FBL’s team of IB professionals and product specialists have
structured and successfully concluded numerous innovative and large ticket transactions which is
a testament of our continued commitment to our customers and contribution to the development
of the financial and capital markets of Pakistan. FBL’s Investment Banking team comprises of
the following units:
PROJECT & STRUCTURED FINANCE (PSF):
Project & Structured Finance team provides advisory and debt arrangement services for
structuring and financing of long-term.
FIVE FORCES MODEL
POWER OF SUPPLIER
Capital is the primary resource of any bank and there are four major suppliers (various other
suppliers [like fees) contribute to a lesser degree) of capital in the industry.
1. Customer deposits
2. Mortgage-based securities
3. Loans from other financial institutions. While utilizing these four major suppliers, the
bank needs to ensure that they have the necessary resources required to service their
customers’ borrowing needs while maintaining enough capital to meet withdrawal
expectations.
The power of the supplier is largely market dependent and can vary from medium to high.
POWER OF CUSTOMER
The end customer can be an individual or a firm. They don’t directly pose as a threat to the
whole banking industry, but a low switching cost between banks can be a major concern to the
banking players. Different banks will try to persuade customers to shift business with their banks
and in this scenario; the cost of switching can become one major factor for their decision. A
relatively Low cost of changing with better options might force the individual to switch banks;
similarly a high cost of changing can act as a deterrent. The recent internet oriented banking
facilities has reduced this barrier to a large extent and it is very convenient both cost and time
wise to switch between banks.
THREAT OF SUBSTITUTE PRODUCTS
There is major competition between Public sector and Private sector banks. While usually private
banks provide better facility and customer experience, the public sector banks help in enforcing
the trust with which they keep their money in the banks, by providing more stability because of
their backing by government. The industry does not suffer any real threat of substitutes as far as
deposits or withdrawals; however insurances, mutual funds, and fixed income securities are some
of the many banking services that are also offered by non-banking companies.
GROWTH OF THE BANKING SECTOR IN PAKISTAN
The banking system in Pakistan is the most extensive. The total asset value of the entire banking
sector in Pakistan is nearly US$ 270 billion. The total deposits is nearly US$ 220 billion.
Banking sector in Pakistan has been transformed completely. Presently the latest inclusions such
as Internet banking and Core banking have made banking operations more user friendly and
easy. The growth of financial sector in Pakistan at present is nearly 8.5% per year. The rise in the
growth rate suggests the growth of the economy. The financial policies and the monetary policies
are able to sustain a stable growth rate. The reforms pertaining to the monetary policies and the
macroeconomic policies over the last few years have influenced the Pakistani economy to the
core.
MICRO ENVIRONMENTAL
The microenvironment consists of five components. The first is the organization’s internal
environment—its several departments and management levels—as it affects marketing
management’s decision making. The second component includes the marketing channel firms
that cooperate to create value: the suppliers and marketing intermediaries (middlemen, physical
distribution firms, marketing-service agencies, financial intermediaries). The third component
consists of the five types of markets in which the organization can sell: the consumer, producer,
reseller, government, and international markets. The fourth component consists of the
competitors facing the organization. The fifth component consists of all the publics that have an
actual or potential interest in or impact on the organization’s ability to achieve its objectives:
financial, media, government, citizen action, and local, general, and internal publics. So the
micro environment consists of six forces close to the company that affect its ability to serve its
customers:
A. The company itself (including departments)
B. Suppliers
C. Marketing channel firms (intermediaries)
D. Customer markets
E. Competitors
F. Publics
SWOT ANALYSIS OF FAYSAL BANK LIMITED:
Strength:




Staff of faysal bank is well trained and provide most efficient and personalized services
to each and every customer.
Staff welfare has always been given a priority. New initiatives like, car buy facility and
home loan insurance have added in staff care policies.
Faysal bank has a country wide network of online branch banking business and ATMs in
all major cities of the country.
Heavy investment in Information Technology.
Weaknesses:



Bank has no adequate number of branches as compare to its competitors like bank
Alfalah and Askari bank etc.
FBL remittances charges are very much high as compared to other commercial banks.
Promotional activities are very low. Bank can capture large share of market by
advertising its new and innovative product, especially by promoting its newly launched
product “Credit Card Islamic Version” namely “NOOR”
Opportunities:




Faysal bank can get the opportunity by increasing its branch network domestically and
internationally.
FBL can introduce special schemes of lending for potential small industries.
FBL can increase its operations by proper promotional campaigns of its new innovative
services.
Bank should open branches in USA and UK.
Threats:

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
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Bank can lose market share due to insufficient promotional activities.
Economic condition of Pakistan
Competitors’ Strategic moves
Declining trend in banking sector, which can affect it to large extent because of its big
corporate clients which are few in number.
BCG (BOSTON CONSULTING GROUP) MATRIX:
This technique is particularly useful for multi-divisional or multi-product companies. The
divisions or products compromise the organizations “business portfolio”. The composition of the
portfolio can be critical to the growth and success of the company. The BCG matrix considers
two variables, which are:


Market Growth Rate
Relative Market Share
The market growth rate is shown on the vertical (y) axis while the horizontal (x) axis shows
relative market share. The share is calculated by reference to the largest competitor in the
market.
CONSTRUCTION OF BCG MATRIX FOR FAYSAL BANK LIMITED:
As BCG is concerned with the portfolio construction but we will present industry here so we will
consider only single bank BCG matrix. Following steps are involved in the construction of BCG
Matrix:
Step 1. Choose the product
Step 2. Define the market
Step 3. Calculate relative market share
Step 4. Find out market growth rate
Step 5. Draw the circles and pie on a matrix
Business
Products
Faysal
Bank
Industry
Growth
Rate
12.2 %
Market
Share
2.205%
Relative
Market
Share
9.86%
Revenues
Profits
%age of
Revenues
%age of
Profit
₨34.75
billion
Rs687,900
19.09%
8.61%
SPACE MATRIX (STRATEGIC POSITION & ACTION EVALUATION MATRIX)
The SPACE Matrix for Faysal Bank Limited is constructed by using the market data of the
company like financial statement that the company presents to its shareholders. The SPACE
Matrix is consisted of 4 quadrants which are representing different set of strategies like:

Aggressive Quadrant:
It includes strategies like integration, intensive and diversification.

Conservative Quadrant:
It includes strategies like intensive &diversification.

Defensive Quadrant:
It includes Defensive strategies like retrenchment, divestiture & liquidation strategies.

Competitive Quadrant:
It includes the integration and intensive strategies.
And the SPACE Matrix is used by gaining information regarding the company, the answers for
X-axis and Y-axis are calculated by using the following information of the company.




FP (Financial Strength)
CA (Competitive Advantage)
ES (Environmental Stability)
IS (Internal Strength)
INTERPRETATION OF SPACE MATRIX
The answers for x-axis and y-axis that are 0.6 and -1 respectively are plotted across the x,y plane
in the SPACE Matrix the resultant point of intersection lies in the 4th quadrant that is
competitive quadrant. This means that the company should adopt the integration and intensive
strategies in order to gain more profit and to be successful. The company can either go for any of
4 intensive strategies that are Market Penetration, Market Development, Product Development
and Backward, forward, horizontal integration strategy.
CONCLUSION WITH GAP ANALYSIS
It was a wonderful and learning experience for us while working on this project .Took me the
various phases of project development and give me real insight into the world of Banking
industry, Faysal Bank Limited is clearly the first choice of everyone who believes in qualitative
approach of banking. It pertains environment of highly responsible workforce. Bank is enjoying
a healthy market share and taste of good status in terms of its operative features and customer
support. Faysal Bank Limited is experiencing a good reputation and reasonable mark up with
respect to prevailing market mark up with assurance of satisfaction and support. Faysal Bank
management is competent enough to set the strategies in order to compete with their competitors
and attract more customers.
After gathering the information need to determine the current state of organization and its
programs and activities, the next step is to make decisions based on that information. It's the
responsibility of the planning team, in consultation with other stakeholders, to establish the
organization's strategic direction and priorities; to identify goals and milestones on the road to
achieving those priorities; and to craft objectives designed to meet those goals.
Faysal Bank should focus on their marketing activities to penetrate into the market with right
product to the right customer at the right time. Faysal bank is the second largest Islamic bank in
the country but most of their prospects don’t know about their actual market position. They
newly launched their Islamic version debit card that is “NOOR” but again 80% of their target
audience unaware of their product. This is the huge gap between current and desire standing of
FBL.
MEETING WITH BRANCH MANAGER:
BUSINESS CARD: