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Internship Report on Bank
Alfalah Limited
Author(s): Muhammad Rashid Badar
E-mail: rashid.badar@hotmail.com
Research Student, Department of Management Sciences, The Islamia University
of Bahawalpur, Punjab, Pakistan
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Preface
Internship is the integral and basic requirement of all the business study programmes in all of
the business study institutes as it is necessary and basic requirement of the BBA(Hons) degree
of the Department of Management Sciences The Islamia University of Bahawalpur. Because it
is the practical implication of the theoretical knowledge which we have taught in our business
subjects to gain further knowledge and experience about professional business activities. It
equips us with the necessary knowledge, skills and values of business culture which are basic
requirement of the business professional and which also helps new graduates to perform
professionally as they get first step in their practical professional life.
For this reason I was placed at Bank Alfalah Limited Circular Road Branch Bahawalpur where I
have done my six weeks internship. During my internship tenure I have gained a lot of
knowledge about operations under the supervision and guidance of my Internship Supervisor.
During my whole duration I was rotated in all the different departments of the bank and was
thoroughly briefed about the procedures of all the banking operations by the concerned staff.
My internship report contains all the knowledge which I have learnt there. Dear readers this
report is prepared in very simple, easy and understandable way so that common and ordinary
readers who do not have banking knowledge can also take benefit from this report. I hope my
report will give you easy and deep overlook of all the banking operations to the readers.
Thank you
Muhammad Rashid Badar
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Acknowledgement
All praises are for Allah Almighty that has bestowed upon human being the crown of creation
and has endowed him with knowledge and wisdom. After Allah, the last Prophet Mohammad
(PBUH) Who brought for us revelation and unlimited knowledge and civilized the barbarian
human being.
I am very thank full to Allah Almighty who gave me the courage to complete this complex task
and to my ever caring and loving parents whose prayers helped me to reach this stage of my
life.
Besides, there are many people who supported me in formulation of this report and without
the support of them I could never be able to complete this report successfully. In this respect I
am very thank full to Mr.Zeshan Mustafa (Branch Manager), Mr. Zeshan Naqvi (Operations
Manager & Incharge Internship) and the qualified staff members of Bank Alfalah Limited
Bahawalpur, who cooperated with me with their guidance at each step of my internship. They
have provided me a lot of important information and knowledge about the banking operations
in a very short period of time.
Last but not least, my very special thanks to Mr. Nazik Hussain (Incharge Internship &
Placement) who provided me with his guidance and profitable knowledge whenever I need
that.
Thank you
Muhammad Rashid Badar
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Dedicated to:
My ever caring and loving Parents
&
Respectable Teachers
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Table of Contents
Executive Summary
06
Introduction of Organization
07


Banking History
Introduction of Bank Alfalah Limited
07
08
Mission, Vision of Organization
10
Objectives of Organization
11
Corporate, Business and Departmental Level Strategies
15
Organizational Structure
16
Performance of Bank Alfalah
17
Working of Various Divisions/Departments
20
 Account Opening Department
 Car Financing Department
 Remittances Department
 Credits
 Trade Finance
20
25
27
29
31
 Clearing
32
Financial Analysis
44
SWOT Analysis
59
Suggestions and Recommendations
60
Conclusion
60
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Executive Summary
Bank Alfalah is a private bank providing financial services to the customers under the charge
and ownership of Abu-Dahbi group under the leadership of His Highness Sheikh Nahayan
Mabarak Al-Nayayan. Bank is engaged in corporate and retail banking.
Currently bank continues to strengthen its presence in market by the help of expansion plan. By
the end of 2009 bank has 321 branches which includes 60 Islamic Banking branches with seven
foreign branches out of which five branches are in Bangladesh and two in Afghanistan and one
offshore branch in Bahrain.
The Bank Alfalah is growing very impressively and making profits which growing higher day by
day with the slogan of “The Caring Bank” making the wishes of people come true through the
philosophy of transferring concepts to reality. Bank is providing its financial services to
customers with the help of his qualified human work force of 9,551, who is very energetic and
humble towards customers which is beneficial for the bank.
This report includes the introduction of banking, Introduction and history of the Bank Alfalah,
the strategies, policies which they have implemented, about departments, products and
complete overlook on the financial performance of the bank with SWOT analysis of the bank,
some recommendations and suggestions with a full conclusion of the Bank Alfalah’s internship
report.
Bank’s product portfolio includes such type of innovative products according to the needs and
preferences of the customers which are providing benefits to customers as well as adding
profits to the bank. These products includes Alfalah car financing, Alfalah credit cards, Alfalah
Hilal Cards, Alfalah Zarie Sahulat. Advances credits, Money Gram, Royal Profits, online banking
and Islamic Banking.
Bank’s growth graph is showing upward, positive and continuous trends and its profit
percentage is increasing every year. Last but not the least, this report almost includes each and
every aspect about Bank Alfalah which is very helpful for every reader.
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Introduction
History of Banking:
The word “Bank” is derived from the Italian word “Bancus or Banque” which means bench,
desk or counter. Because in ancient times the benches were used by the Jews for the purpose
of exchanging money. In ancient times the religious temples were used as the safest place for
keeping money and gold by people of that time under the supervision of the priests. Goldsmiths
then acted as the financial agents in exchange of gold and valuables which provided the basis of
modern banking. Today’s modern banking system is the ultimate and step by step achievement
of the ancient banking system of accepting deposits from those who have surplus and lending
to those who do not have it or have little.
Banking In Pakistan:
Prior to Independence British banks controlled the banking operation in Pakistan. After
independence there were no resources so that Pakistanis could start their own banking system
in a very short period of time. Then at that time it was decided that “Reserve Bank of India” will
control the banking operations in Pakistan. But this was not good for the best interest of
Pakistan because British Government at that time distributed the reserves of the “Reserve Bank
of India” between India and Pakistan with the share of 70% India and 30% Pakistan. It was a
very big loss for Pakistan at that time as being a new nation with new country having few
resources for survival. Then “Quaid-e-Azam Muhammad Ali Jinnah” (The Governor General of
Pakistan) at that time took a step ahead and inaugurated “The State Bank of Pakistan” on July
1st , 1948 which then took control of all the banking operations of Pakistan.
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Introduction of Bank Alfalah Limited (The Caring Bank):
Bank Alfalah Limited was incorporated on June 21st, 1992 as a public limited company under
the Companies Ordinance 1984. Its banking operations commenced from November 1st ,1997.
The bank is engaged in commercial banking and related services as defined in the Banking
companies ordinance, 1962. The Bank is currently operating through 195 branches in 74 cities,
with
the
registered
office
at
B.A.Building,
I.I.Chundrigar,
Karachi.
Since its inception, as the new identity of H.C.E.B after the privatization in 1997, the
management of the bank has implemented strategies and policies to carve a distinct position
for the bank in the market place.
Strengthened with the banking of the Abu Dhabi Group and driven by the strategic goals set out
by its board of management, the Bank has invested in revolutionary technology to have an
extensive
range
of
products
and
services.
This facilitates our commitment to a culture of innovation and seeks out synergies with clients
and service providers to ensure uninterrupted services to its customers. We perceive the
requirements of our customers and match them with quality products and service solutions.
During the past five years, we have emerged as one of the foremost financial institution in the
region endeavoring to meet the needs of tomorrow today.
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Board of Directors:
H.E. Sheikh Hamdan Bin
Mubarak
Al
Nahayan
Chairman
Mr.
Abdulla
Nasser
Hawalileel
Al-Mansoori
Director
Mr. Abdull Khalil Al Mutawa
Director
Mr.Khalid Mana Saeed Al
Otaiba
Director
Mr. Ikram Ul-Majeed Sehgal
Director
Mr. Nadeem Iqbal Sheikh
Director
Mr.
Sirajuddin
Director & CEO
Aziz
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Mission
To develop & deliver the most
innovative products, manage
customer experience, deliver
quality services that contributes
to brand strength, establishes a
competitive advantage and
enhances profitability, thus
providing
value
to
the
stakeholders of the bank.
Vision
To be the premier organization
operating
locally
&
internationality that provides
the complete range of financial
services to all segments under
one roof.
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Objectives




To create an efficient
system of banking in
Pakistan.
Maintain high profits.
Expanding Islamic banking.
Delivering every service
and product under one
roof.
Human Resource Management:
As it’s a universal fact that the success of any organization lies in the hands of their human
resource or the employees working for that organization and the human resource is the most
valuable asset of any organization. In this concern the management of Bank Afalah is well
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known for their hard work, innovative thinking and full dedication to satisfy and retain the
clients of the Bank and keep the Bank on front row.
The employees of Bank Alfalah is well equiped with skills, knowledge and vast experience of
financial world which is required to keep the Bank on the way of modern banking with the
objective of gaining high profits. The core ideology of Bank Alfalah in respect of their human
resource selection is to hire multi talented and dedicated professionals, who can perform well
best for the Bank with little external and in-house training to increase the efficiency and
productivity of the human resource. Although the head office of Human Resource Management
of Bank Alfalah is in Karachi but every branch is managing its employees on its own with the
philosophy of controlling every subordinate by his supervisor because these supervisors are
working according to the policies directed by the Head Office. In this way they are cooperating
with one another and are achieving the goals and standards of the Bank set by the top
management.
Training and Development of the Human Resource:
After hiring the human resource, their training and development is essential and necessary to
keep them up to date about new methods of working and performing operations. In this
respect Bank Alfalah conducts training programmes and conferences with the passage of time
and at regular intervals of the year at Head Office Karachi for increasing skills, knowledge and
productivity of human resource. This is essential for every employee to attend these training
and development programmes and conferences once in a year. For this purpose Bank Alfalah is
providing training to their employees in following important areas,








Marketing
Credit administration/documentation
Consumer banking operations
Performance appraisal skills
Consumer banking operation.
Credit marketing and proposals.
Trade Finance
Time management
Products & Services:





Debit Card/ Hilal card
Car Financing
Money Gram
Agri Finance
Credit Cards
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
Online Banking
1. Debit Card/ Hilal Card:
Alfalah debit or Hilal card gives you the immediate and easy access to your current or saving
account anywhere and anytime with a simple swipe of your card at millions of ATM’S and retail
shops. With the Visa Network Hilal card is acceptable at more than 1.2 million ATM’s and 29
Million retail outlets around the world. If you have this facility then there is no need of dealing
in physical cash withdrawal, just swipe your card and your transaction will be completed in no
time.
2. Car Financing:
Bank Alfalah has introduced Car Financing in which you have two options, either you get the
vehicle leased or financed.




There is no hidden charges
Minimum down payment
Quickest processing
Tenure period 1-5 years
3. Money Gram:
Bank Alfalah is providing the facility of Money gram which is the person to person transfer of
money that allows consumers to receive money in just few moments. Money Gram is available
in over 180 countries and territories and in more than 190,000 locations worldwide, and money
is handled by quality agents linked through computers who makes it sure that your money is
safely transferred to the desired place and person.
4. Agri Finance ( Alfalah Zarie Sahulat):
In view of importance of agriculture for the Pakistan economy and keeping in view the small
farmers who have little resources for production for them, Bank Alfalah has designed “Rural
Finance Programme” which is named as “Bank Alfalah Zarie Sahulat”This facility is available for
short, medium and long term durations.
Bank Alfalah has designed this facility to achieve following objectives



Provide
Help
reliable
farmers
infrastructure
utilize
funds
for
Agri
efficiently
and
customers.
effectively.
Provide farmers an integrated package of credit, supervision and technical know-how.
5. Credit Cards:
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Alfalah credit card is globally accepted at all those locations which have the logo of VISA. It is
accepted at nearly 29 million locations in more than 200 countries around the world. and in
Pakistan also. It enables you to pay for shopping, travel, entertainment, meals and much more.
The features which makes Alfalah Credit card as an important product for customers are,





No joining/ Annual / Renewal fee (except Platinum Card)
Electricity, Sui Gas, PTCL abd Warid bills payment through 24 hour Call Center and Auto
Debit instructions.
SMS for card usage, mini statement, payment receipt confirmation, etc.
Cash withdrawal at all 1LINK ATMs
Special offer on Warid post paid connections.
6. Online Banking:
Bank is providing online banking services to its customers such as balance inquiries statement
requests through automated online telephone service and online ATM services anywhere and
at every place where bank exists.
Corporate, Business and Departmental level Strategies:
Bank Alfalah is successfully completing its journey towards progress with the help of its
specialized, skilled, highly qualified and professional management at all levels. Top
management formulates the strategies in accordance with the standards formulate to achieve
the desired goals and objectives. As with the passage of time and it is fact that the external
business environment is very dynamic in nature so these strategies keep on changing to keep
the Bank up to date. For this purpose the managerial policies which are adopted by the Bank
Alfalah are as under.
Corporate Level Strategies:
At the corporate/top level there is board of directors and executive committee, who
controls such important functions as determining goals and objectives, formulations of business
policies and strategic planning. Corporate philosophy stresses the highest level of security,
reliability and value for its client’s money which is the core strength of the bank.
Business Level Strategies:
Top management formulates the business level strategies. Chief Managers are also the part of
this management level who formulates the strategies and technical planning which determines
the methods of getting the best and in time completion of jobs from its human resource. They
define and interpret the objectives and goals and formulate policies to achieve them.
Departmental Level Strategies:
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At this level Head of the Departments formulate these strategies. Each and every branch
manager formulates the policies according to the branch setup and at each level of bank
environment because he is directly responsible for the management and controlling the
activities of the employees. For implementation of these policies meeting are called with the
presence of Head of the Departments to get the best and efficient and desired goals behind
these formulated policies.
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Performance of Bank Alfalah:
Source: Bank Alfalah Annual Report 2009
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Source: Bank Alfalah Annual Report 2009
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Source: Bank Alfalah Annual Report 2009
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Departments Worked During Internship
I did my internship at Bank Alfalah Limited Circular Road Bahawalpur. During my whole
duration of six months I have done work in the following departments.






Accounts Opening
Car Finance
Remittances
Credits
Trade Finance
Clearing
Accounts Opening Department
Most important and front line department of bank which comes under the retail/ general
banking. Following are the types of the accounts,
1. Current Account
2. Saving Account
1.
Current Account:
It is a non-interest bearing account. The minimum balance requirement for opening this
account is Rs.10,000. Furthermore there is no restriction of deposition and withdrawal of
money from this account at any point of time. All the current account holders receive a Hilal
Debit Card to get benefit from the ATM service of the bank. Following are the types of accounts
which come under the head of current account. They are



Basic Banking Account (BBA account)
Simple Current Account
Alfalah Kamyab Karobar Account
Thee detail on each is as under.
i).Basic Banking Account (BBA account)
This account is introduced for low income people like persons with 25,000 salary and for
students who cannot maintain minimum balance of Rs.10,000 in their accounts because in this
account there is no requirement of minimum balance maintenance. This account is also called
as “Student Account”.
Features:
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



Minimum Initial deposit of Rs. 1,000.
No service charges at all.
Facility of ATM.
Only 4 transactions through cheque are allowed in a month otherwise Rs.58 will be
charged per month.
ii).Simple Current Account:




A minimum initial deposit of Rs.10,000 is required to open this account.
Average balance of Rs.10,000 should be maintained in this account otherwise Rs.58 will
be charged per month to account holder.
Online service is available (on customer demand)
No charges for online service.
iii).Alfalah Kamyab Karobar Account:



This account is especially for businessmen.
Initial deposit of Rs.5000 is required.
Average balance maintenance is according to the type of category in which the
customer lies.
The category and average balance maintenance in respective category are
Silver Category Rs 5,000-50,000
Gold Category Rs.50, 000-100,000
Platinum Category above Rs.100, 000
2. Saving Account:
Saving account is an interest-bearing account. It has following types of accounts,
 Simple saving account
 Royal Profit Account
 Kifayat Account.
 Alfalah Mahan Amdan Account
 Alfalah Mahan Amdan Plus(Term Deposit)
i).Simple Saving Account:
 Initial deposit and average balance maintenance is Rs.5,000.
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 Profit rate is 5 %
 Profit is distributed on half yearly basis.
ii).Royal Profit Account:



Initial deposit and average balance maintenance is Rs.50,000 for this account.
Profit is distributed at rate of 5 % per year but its calculations are done on monthly
basis.
If there is not maintained a balance of Rs.50,000 then the account holder will not get
any profit. For getting profit there must be above Rs.50,000 balance in account.
iii).Kifayat Account:





It is a type of saving account in which minimum initial deposit and average balance
maintenance of Rs.10,000 is required.
Maximum amount of deposit in this account is of Rs.1 million.
Profit is paid at the rate of 7% per annum. If balance falls from 10,000 then no profit will
be given to account holder.
Profit is given on Quarterly basis.
Only 3 debit transactions are allowed per month.
iv).Alfalah Mahan Amdan Account:
It’s a term deposit for three years.
Minimum balance of account is Rs.100,000 with an upper limit of Rs 1.5 million.
Profit rate is 10 % per annum and paid on monthly basis.
v).Alfalah Mahan Amdan Plus(Term Deposit):
In this account the amount is fixed for one year.
Minimum balance of account is of Rs.50,000 with no upper limit.
Profit rate is 10.5% on monthly basis.
Free insurance.
In case of withdrawn of your money before maturity date then the profit will be distributed as
follows,
 If you withdraw your money within 6 months you will get a profit at 5% .
 If you withdraw your money between 6-9 months you will get a profit at 8%.
 If you withdraw your money between 9-12 months you will get a profit at 9%.
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Opening an Account:
For new customers who want to open an account at Bank Alfalah has to fill a “Relationship
Contract”, which includes such information as follows
1. Title of Account.
2. Personal information of applicant
3. Next of Kin
This portion is important for securing the money of the customer in case of his/her death of or
any incident with the account holder. By this thing the account holder specifies and provide the
information and data of the person who will be the owner of his/her money after his/her death
or any serious incident with him/her. If account holder leaves it blank then bank will be the
owner of his/her money.
Address for correspondence
4. Type of Entity
 Individual
 Joint sole proprietorship
 Public/Private Ltd Co.
 Partnership.
5. Nature of Account
 Current Account
 PLS Saving Account
 Royal Profit Account
 Saving Account
 Others
6. Currency of Accounts
Bank Alfalah deals in five currencies and account holder must have select from them. These are
PKR, USD, GBP, Euro, and JPY
7. Zakat Deduction
8. Details of other bank accounts
9. Introduced by
Basic Requisites for Opening an Account for individuals/self employed persons
are as follows
 CNIC



Company letterhead or authorization (as required)
NTN certificate (optional)
Source of income (salary slip etc)
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The basic Requisites to open an account for a partnership:




NTN certificate (optional)
Partnership Deed
Company Letterhead
Partners CNIC
The basic Requisites to open an account for companies:





Article of Association
Directors CNIC
Memorandum of Association
NTN certificate (optional)
Company Letterhead
Car Financing Department
In the age of today’s modern banking, car financing is one of the most important and selling
product of of all the banks including Bank Alfalah. Because it is very easy for the people to save
them from paying a huge sum of money that’s why people prefer to have finance their vehicles.
Features of Bank Alfalah’s Car Financing:





Tenure period ranging from 1-5 years
Minimum down payment starting from 20 %
No hidden charges
Insurance facility
Premature termination charges should be paid by the customer according to the year in
which he/she terminated the contract of payments on the remaining amount which are,
Year
Mark up

1
5%
2
4%
3
4%
4
3%
5
2%
Mark up rates of Bank Afalah for all presented vehicles for financing are,
Financing Product
Car Loan for Brand
New Vehicles
Car Loan for Brand
New
Imported
Vehicles
Band New Semi
Commercial Vehicles
(locally
manufactured)
Second
Hand
Vehicles
1Yr
2Yr
3Yr
4Yr
5Yr
17.50%
17.50%
18.00%
18.50%
18.50%
19.00%
19.00%
19.00%
19.00%
19.00%
20.00%
20.00%
20.00%
20.00%
20.00%
21.00%
21.00%
21.00%
21.00%
21.00%
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Source: Bank Alfalah Website
Procedure:
The procedure of financing car starts when a person comes and asks for a vehicle to be
financed. First thing which that person have to do is to fill an application form stating the car
which he wants to be financed, its color and two references with his complete personal
information regarding his profession, source of income, age etc. This is all what is required from
the customer. After this bank working starts.
Bank verifies all the information provided by the customer along with the verification of two
references provided. After completing the verification process Bank generates the Credit Line
Proposal (CRP).This proposal then sent to the Area Office for approval.
After the approval from the Area office the customer will sing a legal document of this deal with
Bank along with the down payment. When this process completes a quotation is sent to the car
dealer for a stated car. Registration of car is carried out and Bank insured the car with
collaboration of Insurance Company and car handed over to customer. After the completion of
finance tenure the Bank issues NOC to customer stating that there is no obligation left to be
fulfilled by the customer.
Remittances Department
Remittance means the transfer of funds form one account to another or one city to other city.
Instruments which are used for transfer of money are,



Demand Draft
Pay slip
Pay order (payment order
i).Demand Draft:



It’s a negotiable instrument
It’s a written order drawn by one branch of a bank upon another branch of the same
bank or upon another bank under special arrangements to pay a certain sum of money
according to the order by the customer.
DD is cannot be issued within the same city.
There are two ways in which a demand draft can be used for transfer of money,
Outward DD:
When money is transferred from Bank Alfalah to other city on the demand of the customer it’s
known as outward DD. The procedure foe this is that the customer will fill the DD application
form and present the cash he wants to transfer through DD. After checking all the provided
details the bank officer will make a DD and pass the following entries for this transaction,
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For Cash
Sundry Account (Dr)
Head Office (Cr)
For Cheque:
Customer Account (Dr)
Head Office (Cr)
Inward DD:
When the issuing branch of the DD send advice in the form of the copy of the instrument or DD
then following entries are passed,
Head office (Dr)
DD payable account (Cr)
When the Bank Alfalah’s account holder comes with DD to receive money then following
entries are passed
DD payable Account (Dr)
Customer Account (Cr)
When the customer comes with DD who is not the account holder of Bank Alfalah then
following entries are passed
DD payable Account (Dr)
Cash (Cr)
Charges for making DD are Rs.58 including 16 % federal excise duty.
ii).Pay Slip:
This is Bank’s cheque book, used for the payment of the branch expenses. This is also called as
true banker cheque. The entries for the payments are passed as,
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Expenses Account (Dr)
Pay Slip (Cr)
iii).Pay order (Payment order):
Pay order is the way of transferring money within the same city. It is issued, paid and
maintained by the same branch. It is also called as Banker Cheque or Manager Cheque. It is
cleared in 5-6 days and it is crossed by default.
Procedure:
The customer fills the application form for pay order along with his details and cash or cheque.
Usually cheque is used for transfer of money through pay order. After paying the charges for
making pay order the pay order is issue to the customer. The entry for the issuance of pay order
is,
Customer Account (Dr)
Pay order Payable (Cr)
Charges for making Pay Order are Rs.58 including 16 % federal excise duty (FED).
When the customer comes to get the money through pay order then following entry is passed
by the bank,
Pay order Payable (Dr)
Customer Account (Cr)
Credits Department
Credits department advances loans to needy and eligible customers and this department adds a
big share of profit to overall profit of the Bank Alfalah. These loans are sanctioned by the Head
Office at Karachi. Bank Alfalah’s credit department works both with Retail and middle market
group and corporate groups.
Types of Credit line Facilities:
Bank Alfalah is providing two types of credit line facilities,
i.
ii.
Funded
Non-Funded
1. Funded Credit Line Facility:
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In funded facility the amount of loan is physically dispersed to the customer. The products
which comes under credit line facility are as follows,




Running/Current Finance
Cash Finance
Term finance
Lease Finance
i).Running/Current Finance:
Current finance is provided to the companies for supporting their operations for a short time
period of one year. Bank provides funds against some securities like mortgage securities. And
Bank advances funds up to 60% of the given securities. This credit facility is very attractive for
the companies in managing their working capital because mark up is charged by the bank only
on the utilized part of the funds.
ii).Cash Financing:
Cash financing is also a short term credit facility of one year. This is basically a stock financing
for those small businessmen who can run their business very smoothly if they get credit from
the bank which they can’t perform well otherwise. Financing is done on the basis of analysis of
the business.
iii).Term Finance:
Term finance is a long term credit facility of 2, 3, and 5 years. It is also known as project
financing. The important point in this credit facility is, mark up is charged by the bank on the
whole amount of funds either customer utilized the sanction limit or not. Repayment is done in
installments.
iv).Lease Finance:
It is also a long term credit facility provided by Bank Alfalah. It is also known as equipment
financing. Actually financing is done for the equipment. In this credit facility, the ownership is
on the name of bank first, after repayment of funds the ownership is transferred to the
customer.
2.Non Funded Credit Line Facility:
It’s a commissioned based financing. In this credit facility funds are not transferred to the
customer directly. This credit facility has two products,


Letter of Credit
Letter of Guarantee/Bank Guarantee
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i).Letter of Credit:
This is used for the purpose of foreign trade. It is actually a written undertaking by the issuing
bank for the payment a sum of money during a specified duration of time on the request of
applicant (buyer) to the beneficiary (seller). It will be discussed in detail in department of
“Trade Finance.”
ii).Letter of Guarantee/Bank Guarantee:
It is a written guarantee by the bank on the behalf of the customer which bank gives to the
specific company because it is usually used in bidding and tenders filling. It will be discussed in
detail in department of “Trade Finance.
Trade Finance Department
This department controls the trade which occurs across the borders from Pakistan to other
countries or in short foreign trade which includes imports and exports. For this purpose “Letter
of Credit” is issued by the issuing bank to facilitate the trade between two traders of the
different countries. It provides security and safety for the payment of a sum of money involves
in trading to the applicant and beneficiary who are doing imports or exports.
Letter of Credit:
As it is stated earlier in non funded credit facility in “Credit Department” that Letter of Credit is
actually a written undertaking by the issuing bank for the payment of a sum of money during a
specified duration of time on the request of applicant (buyer) to the beneficiary (seller). It is
issued against some securities like mortgage properties, pledge of stocks etc.
Types of LC’s:
There are two types of LC’s
i.
ii.
Site LC
Usance LC
i).Site LC:
Site LC is the form of LC in which the bank honors the beneficiary against the documents and
the material stated in the LC at the place which is stated by the mutual consent of the applicant
and beneficiary. Receiving of shipment and payment occurs at the same time.
ii).Usance LC:
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In this type of LC payment is made against the acceptance of the items stated in the LC with
stated conditions. Payment is done after some time.
Documents/Requirements for LC:
Applicant will provide the following things for a LC,
i.
ii.
iii.
iv.
LC application request
Sale Contract/Performa Invoice
LC application form
Customer Portfolio
Beneficiary will provide the following things,
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
LC amount
Quantity of imports (Weight, units)
Partail shipment allowed or not allowed
Certificate of Origin
Bill of Lending
Airway Bill
Truck Receipts
Packing List
Performa Invoice
After verification of securities and details provided by the application, a credit line proposal is
made which is sent to the Area Office. After Area Office approval the LC is issued to the
customer.
Clearing Department
Clearing means the transfer of funds within the same bank or to other banks. It is the part of
the Remittances Department. Clearing is done for cross cheques only. Clearing can be done in
following ways,
Inward Clearing
Outward Clearing
Inward Clearing:
When a customer comes who has his account in Bank Alfalah and he presents a cheque which is
also of Bank Alfalah then transferring of funds in this case through cheque from one account to
another is termed as inward clearing.
Outward Clearing:
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When a person with his account in Bank Alfalah comes and presents a cheque of the bank other
than Bank Alfalah then transferring of funds in this case through cheque from one account of
the other bank to another account of Bank Alfalah is termed as outward clearing. Usually it
takes 4-5 days for clearing a cheque.
Same day clearing:
Clearing of cheques which occurs in one day is called same day clearing. Presentation and
clearing of cheques is carried out in the same day. But there is a condition under which a
customer can use the facility of same day clearing and that is, cheque should be above than
Rs.200,000 otherwise a person can’t use the facility of same day clearing.
The process of clearing is done in a clearing house of the State Bank. National Institutional
Facilitator Technologies (NIFT) is used for this purpose. The NIFT employees come daily and
take all the cheques from the bank for clearing purpose and deliver them to State Bank. In this
way the process of clearing is done by The Bank Alfalah.
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Financial Analysis
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Balance Sheet As At December 31, 2009 & December 31, 2008
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Source: Bank Alfalah Limited Annual Report 2009 (with little editing according to requirement)
Balance Sheet As At December 31, 2007 & December 31, 2006
Source: Bank Alfalah Limited Annual Report 2007 (with little editing according to requirement)
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Balance Sheet As At December 31, 2005
Source: Bank Alfalah Limited Annual Report 2006 (with little editing according to requirement)
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Profit and Loss Account For the Year Ended December 31, 2009 & December 31,
2008
Source: Bank Alfalah Limited Annual Report 2009 (with little editing according to requirement)
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Profit and Loss Account For the Year Ended December 31, 2007& December 31,
2006
Source: Bank Alfalah Limited Annual Report 2007 (with little editing according to requirement)
Profit and Loss Account For the Year Ended December 31, 2005
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Source: Bank Alfalah Limited Annual Report 2007 (with little editing according to requirement)
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Source: Bank Alfalah Limited Annual Report 2009
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Financial Ratios
1. Total Assets Turnover:
This ratio measures that how much turnover is generated by the total assets of the
organization. This is calculated by the given formula,
Total Assets Turnover = Annual Sales or Total Income/Average Total Assets
Year
2009
2008
2007
2006
2005
TAT
3.88%
3.46%
4.24%
3.23%
3.42%
Interpretation:
This ratio should be high which is better for the business but, Bank Alfalah’s total assets
turnover showing a mixed trend of increase and decrease in past five years. In 2009 it is high at
3.88% as compare to 2008 at 3.46% but is even less of the highest value of 4.24% in 2007.
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2. Return on Investment:
This ratio is calculated by dividing Op profit by the average of operating assets as shown by the
formula,
Return on Investment = Op Profit/Average Operating Assets
Year
2009
2008
2007
2006
2005
ROI
0.324%
0.623%
1.75%
1.14%
1.48%
Interpretation:
The answer of this ratio should be high or should be shown a positive increasing trend for
better and favorable results. Bank Alfalah’s ROI showing a decreasing trend over the past five
years with lowest in 2009 that is 0.324% and highest as 1.75% in 2007 which is not favorable for
the bank.
3. Return on Deposits:
This ratio measures the return on deposits by the total deposits of the organization obtained by
dividing net income after taxes to total deposits as shown by the formula,
Return on Deposits = Net Income After Tax/Total Deposits
Year
2009
2008
2007
2006
2005
ROD
0.276%
0.432%
1.14%
0.735%
0.765%
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Interpretation:
As this ratio shows the total return which business gains from the total deposits, so it should be
high which will be better for the business but it is showing a continuous decreasing trend from
2005 to 2009 except a highest value in 2007 which is 1.14% with lowest value as 0.276% in 2009
which is not good for the Bank Alfalah.
4. Fixed Assets Turnover:
This ratio measures the efficiency of using fixed assets in generating income or sales. It is the
ratio of annual sales to total fixed assets as given by the formula,
Fixed Assets Turnover = Annual Sales or Total Income/Total Fixed Assets
Year
2009
2008
2007
2006
2005
FAT
82.92%
85.32%
107.56%
24.43%
38.72%
Interpretation:
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The result of this ratio should always be high for favorable business environment because high
ratio shows that business is investing more efficiently and effectively in fixed assets for
generating sales. It is showing a very ambiguous trend, as it was high in 2005 then decreased in
2006 then increases in 2007 to a very high level and onward there is a continuous decreasing
trend which is not good for the bank.
5. Current Ratio:
Current ratio indicates the liquidity position of the business that whether business can fulfill its
obligation or not. It is the ratio of current assets to current liabilities as,
Current Ratio = Current Assets/ Current Liabilities
Year
2009
2008
2007
2006
2005
CR
2.97
3.35
2.02
4.61
6.42
Interpretation:
The current ratio should be in reasonable range. It should not be too high or too low, both
conditions are not favorable. In this case of Bank Alfalah, it is showing a decreasing trend which
is not favorable for the business because it may pose difficulty for the bank to fulfill its current
obligations.
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6. Dividend Payout Ratio:
This ratio tells about the relationship between earnings and dividend that whether earnings are
supporting dividend payments or not. It is calculated by dividing dividend per share to earnings
per share (EPS) as shown by the given formula,
Dividend Payout Ratio = Dividend per share/EPS
Year
2009
2008
2007
2006
2005
DPR
112.67%
86.52%
Nil
Nil
Nil
Interpretation:
Usually higher dividend payout ratio is favorable and it is high for Bank Alfalah in 2009 which is
favorable.
7. Debt Equity Ratio:
This ratio tells about the financial leverage of the organization that what proportion of debt and
what proportion of equity is being used by the organization for financing its available assets. It
is calculated by dividing long term debt to total capitalization as shown by the given formula,
Debt Equity Ratio = Long Term Debt/ Total Capitalization
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Year
2009
2008
2007
2006
2005
DER
25.93%
14.02%
22.09%
29.58%
33.18%
Interpretation:
A higher value of debt equity ratio is much favorable for the business as its high value tells
about the efficiency of the business to using its available debt for financing. Bank Alfalah’s debt
equity ratio is showing a decreasing trend over the past five years but as compare to 2008 it is
increased in 2009 from 14.02% in 2008 to 25.93% in 2009 but it is still lower as compare to
highest level of 33.18% in 2005.
Ratio Analysis
Profitability Ratios:
These ratios tells about the profitability of the business and is consists of the following ratios
from which we can assess the profitability of the business.
i). Net Profit Margin:
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This ratio is mostly used for the internal comparison. This ratio shows the percentage of net
profit after tax to the total income/revenue. A higher profit margin ratio indicates a higher
margin safety and lower risk for the organization and vice versa. It is calculated by the formula,
Year
2009
Net
Profit 7.46%
Margin
2008
2007
2006
2005
11.07%
24.40%
20.77%
24.64%
Interpretation:
It is showing a mixed trend from 2005 to 2007 but onward showing a decreasing trend which is
not better for the business. It is indicating a greater risk and low margin safety for the business.
ii). Operating Profit Margin:
This ratio tells us about the percentage of operating profit to total income. It is calculated by
the following formula
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Year
2009
2008
2007
2006
2005
Op-margin
8.45%
15.27%
35.36%
30.24%
37.10%
Interpretation:
Its high value is favorable for the business. It is overall showing a decreasing trend from 2005 to
2009 except an increase in 2007 as compare to 2006 which is even then low as compare to
2005 results. It is not favorable for the business.
Iii). Return on Total Assets (ROTA):
This ratio tells about the percentage of net profit/earnings which business is attaining by using
its total available assets. It is calculated by dividing net profit to total assets as shown by the
given formula,
Return on Total Assets =
Net Profit/Total Assets
Year
2009
2008
2007
2006
2005
ROTA
0.230%
0.372%
0.951%
0.639%
0.685%
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Interpretation:
Higher ROTA is favorable for the business which shows better use of asstes by the business for
generating profits. Bank Afalah’s ROTA is showing a decreasing trend over past five years except
in 2007 with a highest value of 0.951%.
iv).Return on Equity:
This ratio shows a relationship between net income after taxes and shareholder’s equity, and
measures the efficiency of the organization of generating profits by using shareholder’s equity.
It is calculated by dividing net income after taxes to shareholder’s equity as shown by the given
formula,
Year
2009
2008
2007
2006
2005
ROE
4.05%
7.63%
19.30%
14.40%
22.80%
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Interpretation:
It should be high for favorable results. This ratio of Bank Alfalah is showing a decreasing trend
except in 2005 and 2007 over past five years.
2. Efficiency Ratios:
These ratios tells about the efficient use of the assets and liabilities of the business which is
calculated by the following ratios,
i).Investment to Total Assets Ratio (ITA):
This ratio tells about the percentage of investment to assets calculated by dividing investment
to assets as shown by the following formula,
Investment to Total Assets Ratio = Investment/Assets
Year
2009
2008
2007
2006
2005
ITA
25.48%
21.76%
26.90%
20.5%
23.12%
Interpretation:
This ratio should be in high figures for favorable results of the business. Bank Alfalah’s ITA is
showing a mixed trend of increasing and decreasing over the past five years. In 2009 it is high at
25.48% as compare to 2008 at 21.76% which is favorable. But bank should try to keep it high by
making better policies.
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ii).Deposits to Total Liabilities:
It is calculated by dividing total deposits to total liabilities as shown by the given formula,
Deposits to Total Liabilities = Total Deposits/Total Liabilities
Year
2009
2008
2007
2006
2005
DTL
88.50%
90.6%
87.36%
90.91%
92.31%
Interpretation:
It is showing a mixed trend of increase and decrease over past five years. As it is decreased in
2009 to 88.50% from 90.6% in 2008 which is not favorable.
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3. Capital Adequacy Ratios:
i).Equity to deposits ratio:
This is the ratio of total shareholder’s equity to total deposits and is calculated by the following
formula,
Equity to deposits ratio = Total Shareholder’s Equity/ Total Deposits
Year
2009
2008
2007
2006
2005
ED
6.81%
4.88%
5.93%
5.11%
3.35%
Interpretation:
It is showing an average increasing trend over the past five years which is favorable.
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ii).Equity to Assets Ratio:
This is the ratio of total shareholder’s equity to total assets and is calculated by the following
formula,
Equity to Assets Ratio = Total Shareholder’s Equity/Total Assets
Year
2009
2008
2007
2006
2005
ETA
5.69%
4..88%
4.93%
4.44%
3.00%
Interpretation:
It is showing an increasing trend except in 2008 decreased trend but overall it is increasing
which is favorable for the business.
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4. Regulatory Ratios:
i).Cash to Deposit Ratio:
This ratio tells about the percentage of cash available as compare to the deposits. It is
calculated by dividing cash on hand and with other banks to total deposits as shown by the
given formula,
Cash to Deposit Ratio = Cash on hand and with other Banks/ Total Deposits
Year
2009
2008
2007
2006
2005
CTD
17.79%
18.04%
17.50%
16.94%
15.52%
Interpretation:
As this ratio tells about the liquidity status of the bank. It is showing an increasing trend from
2005 to 2008 and in 2009 it becomes lower.
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ii). Advances to Deposits Ratio:
This is the ratio of advances to deposits which shows the percentage of advances as compare to
deposits and is calculated by the given formula,
Advances to Deposits Ratio = Advances/Deposits
Year
2009
2008
2007
2006
2005
AD
57.90%
63.77%
62.67%
62.62%
53.45%
Interpretation:
This ratio tells about the status and measure of the level for advancing loans. It is showing an
increasing trend from 2005 t0 2008 but it lowers in 2009 which shows that bank is not
advancing loans as much as it was in previous four years from 2005 to 2008.
SWOT Analysis
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Strengths:









Very attractive Brand name
Continuous and Phenomenal growth in profitability as its age is increasing
The support of the Pakistani Government
Workforce is very energetic because most of the workforce consists of the young
employees
Highly trained, skilled and professional HR
Branch location is very ideal
Attractive buildings of bank
Less cost of funds as compare to competitors
Training schedule of employees is better than other banks
Weaknesses:






Inexperienced workforce
Small age of bank
Lack huge foreign network
Work overload on employees
Less banking experience
Lack of professionally trained staff at head quarters
Opportunities:





Increasing demand of consumer banking
Increasing branch network in Pakistan
Increasing branch network at International level
Growing Islamic Banking branch network
Increased rate of interest
Threats:






Adverse economic conditions
Privatization of banks
Terrorism
Government policies are very much inconsistent
Lack of experienced workforce
Trend of banks merging.
Suggestions and Recommendations:
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During my internship I found some of the faults and lack of some of the facilities in bank’s
operations. Here are some of the suggestions which I recommend to the Bank Alfalah.
 The advertising of bank and bank’s products is not so much good and exposed to
people. So, Bank should hire some of the skilled marketers who can design creative and
attractive advertisements and advertising campaigns by using all possible medias to
make every person aware of the bank’s updates about old and new products and
services.
 Bank is using token system to avoid difficulties for the customers to withdraw or pay
deposits. But uneducated and some of the educated customers do not know that which
token should they get from the machine. So there must be a bank employee for the
guidance of customers.
 Training sessions of bank employees of all over the country are conducted by bank at
Head Office Karachi which is very expensive for the bank to bear the accommodation
and meal charges of the employees. So bank should expand and establish some more
training centers in other cities of the country in order to reduce these expenses.
 Bank is somewhat slow in launching new products. So bank should review its policies of
launching new products in short and reasonable time.
 Foreign branch network should be increased in order to capture profits from all over the
world.
 There should be a communication link between executives and top level management.
 Incentives and award system should be introduced for the employees for their
motivation.
 Employees should not be overloaded with work, this helps in relaxation of employees
and will increase job satisfaction of employees which is in best interest of the bank.
Conclusion
The “bank” is actually an institution which accepts or collects the money or deposits from those
who have surplus of it and lend it to those who have in need of it or have capital in deficit, it
actually acts as a financial intermediary which connects persons with surplus money to those
who have shortage of money. In this process banks earn profit or commission for connecting
these people. The word “bank” originates from the Italian word “ banque or bancus” and no
one is sure about its true origin. In the past times the people used religious temples as a place
for keeping their money, savings and gold with precious metals as well because the people
thought that their money and gold is safe there. Goldsmiths of that time started the exchange
of money and gold and they acted as bank agents between the people, that was the time which
started the concepts and need of proper system of banks. But today’s modern banking system
is much different from that system.
The history of banking in Pakistan is very interesting because at the time of independence there
was no bank in Pakistan which could perform the banking operations for this area of the world.
Till the end of June,1948 the financial operations of Pakistan was governed by the “Reserve
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bank of India” but that casted a loss to Pakistan in a sense that British Government distributed
the 70% of reserves to India and Pakistan got just 30%. After this Quaid-e-Azam laid down the
foundation of “The State Bank of Pakistan” in July 1st, 1948.
In Paksitan there are a number of commercial banks which are accepting deposits and
advancing loans to customers with a lot of other facilities of providing financial services and
products to customers like car financing, home loans, debit and credit cards, agricultural loans
and a lot of other products.
Bank Alfalah is one of the most important, emerging and profitable bank in Pakistan which is
owned by the Abu Dahbi Group and is governed by His Highness Sheikh Nahayan Mabarak AlNayayan. It was incorporated on June 21st, 1992 and started its banking operations from
November 1st ,1997. In its 13 years of age it showed a remarkable performance and
improvement with huge profits which is becoming high and high. But do not forget about the
“Global Economic Crisis 2008” which affected all the banks including all the businesses.
Bank Alfalah has aimed to provide the customers all those financial services which is better for
them and to become the leading bank of Pakistan. The mission of the bank is complement and
to the services which the bank is providing to the customers. The mission of the bank is,
“To develop & deliver the most innovative products, manage customer experience, deliver
quality services that contributes to brand strength, establishes a competitive advantage and
enhances profitability, thus providing value to the stakeholders of the bank”.
The existing state of bank shows that the bank management is skilled enough because they are
providing innovative products to customers and are delivering quality services which has
strengthened the brand name of the bank and are getting high profits which is shown by their
mission statement. So the bank is on its way to achieve its missions and objectives very
enthusiastically and energetically in this age of high and tough business environment with the
passage of time.
It is very interesting to know that at the time of its inception there were only three branches of
Bank Alfalah which faced a number of problems to start with and had no experience at that
particular time of its working but now at this time of modern banking Bank Alfalah is operating
through 321 branches including 60 Islamic Banking branches with seven foreign branches out of
which five branches are in Bangladesh and two in Afghanistan and one offshore branch in
Bahrain which is providing its financial services to customers. This is showing that it is one of
the emerging and fast growing banks of Pakistan.
Bank is engaged in such activities which are helpful for the bank to be premier banking
institution of the Pakistan, although it is very difficult and challenging goal but is realistic for
achieving.
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Strategic planning continuously reviewed by the bank so their policies and planning remains
relevant to the diverse business environment. And this is helpful for the bank for handling the
difficult situations.
Despite the fact of Global Finacial Crisis the performance of the bank is very appreciable and
remarkable at the end of 2008 but we it affected its growth in 2009 because at the end of 2009
the financial performance was not like that of 2008. Bank is more committed towards achieving
the standards which are set by the top management of BAL. It has grown its branch network a
lot not only at national level but also in Bangladesh, Afghanistan and Bahrain, and has an
expansion plan for spreading its branches all over the globe.
The BAL has the products like, Alfalah debit or Hilal card which gives you the immediate and
easy access to your current or saving account anywhere and anytime with a simple swap of
your card at millions of ATM’S and retail shops. With the Visa Network Hilal card is acceptable
at more than 1.2 million ATM’s and 29 Million retail outlets around the world. If you have this
facility then there is no need of dealing in physical cash withdrawal, just swipe your card and
your transaction will be completed in no time.
Bank Alfalah is providing the facility of Money gram which is the person to person transfer of
money that allows consumers to receive money in just few moments. Money Gram is available
in over 180 countries and territories and in more than 190,000 locations worldwide, and money
is handled by quality agents linked through computers who makes it sure that your money is
safely transferred to the desired place and person.
In view of importance of agriculture for the Pakistan economy and keeping in view the small
farmers who have little resources for production for them, Bank Alfalah has designed “Rural
Finance Programme” which is named as “Bank Alfalah Zarie Sahulat”This facility is available for
short, medium and long term durations. Bank Alfalah has designed this facility to achieve the
objectives
like
Providing
reliable
infrastructure
for
Agri
customers,
helping
farmers
utilizing
funds
efficiently
and
effectively.
and providing farmers an integrated package of credit, supervision and technical know-how.
Alfalah credit card is globally accepted at all those locations which have the logo of VISA. It is
accepted at nearly 29 million locations in more than 200 countries around the world. and in
Pakistan also. It enables you to pay for shopping, travel, entertainment, meals and much more.
The features which makes Alfalah Credit card as an important product for customers are, no
joning/ Annual / Renewal fee (except Platinum Card) ,electricity, Sui Gas, PTCL abd Warid bills
payment through 24 hour Call Center and Auto Debit instructions. ,SMS for card usage, mini
statement, payment receipt confirmation, etc, cash withdrawal at all 1LINK ATMs ,Special offer
on Warid post paid connections.
From the very beginning the BAL has focused on the concept of excellence and precision in
providing financial services to customers. The management of BAL is working on the providing
highest level of satisfaction, value, safety, security and reliability to clients and their money.
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There are numerous departments in BAL which is performing their jobs according to the
policies implanted by the top management. The staff of BAL is very skilled, experienced,
energetic and enthusiastic which is very friendly towards the customers which is in a sense a
competitive edge for the BAL. Similarly the human resource department of the BAL is very
skilled and experienced who is recruiting only those candidates who have the ability, capability,
skills and power for the required jobs. The staff members are also very satisfied and feel proud
as a part of the BAL the fastest growing banks in Pakistan.
The departments of BAL includes accounts opening department, accounts department,
remittances department, foreign trade department, car financing department, credits
department, clearing department, credit cards department and agri finance department. All
the departments are working together with cooperation.
The accounts opening department have working of opening different accounts according to the
need and will of the customer and to maintain them, either to communicate with the account
holder in any situation or which account has to close or not.A customer has to sing a
“relationship contract” which includes the complete detail of the customer who is willing to
open an account in BAL. Bank Alfalah deals in five types of the currencies and a person can
open his account only in those currencies. A number of documents are required for opening an
account with two authenticated referrals which introduced the customer. His verification along
with two referrals is necessary for opening an account.
Remittances department transfer funds from person to person. Foreign trade department
deals in imports, exports, letter of credits and letter of guarantees. Car financing department
advances vehicle loans while credits department advances loans for businesses while agri
finance department advances loans for agricultural purposes. Clearing department perform the
function of transfer of funds and a part of remittances department.
The BAL’s culture is very strong, cooperative and is in collaboration with stakeholders for better
bank and customer relationship development by using the ethical business practices. The
members of the staff are very committed to their jobs and have developed the sense of
ownership amongst the employees which is very helful for the motivation of the employees.
After analysis and careful examination, BAL has developed the product portfolio according to
the needs of the customers. BAL’s products are meeting the diverse demands of customers. The
product portfolio of BAL consists of agricultural loans, business loans, home loans, Hilal cards,
money gram, online banking and many more. Royal profit and Royal Pariot are the examples of
the innovative products of the bank.
As BAL has developed innovative products for their valued customers, so it is not enough to
develop products unless there exists a proper marketing plan for this. As in today’s age of
diverse, competitive, globalized and changing business environment marketing is very
important for attracting targeted customers. For meeting these standards and business
environment every bank has a marketing department now. Similarly BAL has its own marketing
department at Head Office Karachi as well as at branch levels which is responsible for making
people aware of the products of the bank and creating demand for that. The marketing staff
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personally meets customers and if required make calls to customers and solve their problems
and queries and tell them about bank’s products and their benefits as compare to the other
banks.
Bank Alfalah also deals in Islamic banking. Its branches are located at many cities of Pakistan.
Bank Alfalah’s Islamic banking policies are made according to the “SHARIA”. The products which
are launched by Islamic banking of Bank Alfalah are according to the “SHARIA”.
Online banking of Bank Alfalah is meeting the demand and needs of the customers all over the
branch setups and availability. ATM’s are available, merchant machines are available and there
is now no need to go bank and have withdraw your money through cheque and then make
payment to a shopkeeper or a business trader. There is no need to have physical cash in your
pocket. Just swap your card through merchant machine and have complete your transaction.
Funds are automatically transferd to the shopkeeper’s or business trader’s account through
online facility. By using online facility you can transfer your money to other cities and countries
in no time.
In today’s age of modern banking and business environment no one can deny the importance
of technology and it is almost impossible to control the banking operations without modern
technology thats why Bank Alfalah gave much importance to the use of technology in their
banking operations. And bank is acting as a technological leader in the market because it is
engaged in adopting new technologies and implementing them in business to meet the
challenges of the diverse business environment.
As it’s a universal fact that the success of any organization lies in the hands of their human
resource or the employees working for that organization and the human resource is the most
valuable asset of any organization. In this concern the management of Bank Afalah is well
known for their hard work, innovative thinking and full dedication to satisfy and retain the
clients of the Bank and keep the Bank on front row.
The employees of Bank Alfalah is well equipped with skills, knowledge and vast experience
of financial world which is required to keep the Bank on the way of modern banking
with the objective of gaining high profits. The core ideology of Bank Alfalah in respect of their
human resource selection is to hire multi talented and dedicated professionals, who can
perform well best for the Bank with little external and in-house training to increase the
efficiency and productivity of the human resource. Although the head office of Human
Resource Management of Bank Alfalah is in Karachi but every branch is managing its employees
on its own with the philosophy of controlling every subordinate by his supervisor because these
supervisors are working according to the policies directed by the Head Office. In this way they
are cooperating with one another and are achieving the goals and standards of the Bank set by
the top management.
Man power or human resource is a very important part for any organization whether it is
banking organization, education organization or any production company. No one can
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underestimate the importance of human resource. As mentioned earlier that human resource
power of the Bank Alfalah is very skilled and experience as its human resource department, but
to meet the changing needs and requirements of the business environment the training of
human resource is very important and essential. To meet these requirements the bank has a
training department at Head Office which arranges seminars and workshops at time to times
and train existing staff members about the new business dealing behaviors, new ways of
working and dealing customers, about competitors and many more. Human resource
department hires 30 fresh post graduates as MTO’s (management training officers) who train
staff of the bank.
Bank Alfalah is successfully completing its journey towards progress with the help of its
specialized, skilled , highly qualified and professional management at all levels. Top
management formulates the strategies in accordance with the standards formulate to achieve
the desired goals and objectives. As with the passage of time and it is fact that the external
business environment is very dynamic in nature so these strategies keep on changing to keep
the Bank up to date. For this purpose bank adopted corporate, business and departmental level
strategies which helps the bank perform well.
At the corporate/top level there is board of directors and executive committee, who
controls such important functions as determining goals and objectives, formulations of
business policies and strategic planning. Corporate philosophy stresses the highest level of
security, reliability and value for its client’s money which is the core strength of the bank.
Top management formulates the business level strategies. Chief Managers are also the part of
this management level who formulates the strategies and technical planning which determines
the methods of getting the best and in time completion of jobs from its human resource. They
define and interpret the objectives and goals and formulate policies to achieve them
Department strategies are formulated at the department level and are formulated by the Head
of the Department.. Each and every branch manager formulates the policies according to the
branch setup and at each level of bank environment because he is directly responsible for the
management and controlling the activities of the employees. For implementation of these
policies meeting are called with the presence of Head of the Departments to get the best and
efficient and desired goals behind these formulated policies.
Bank Alfalah is the fastest growing and expanding bank in Pakistan. It is establishing its
branches all over the Pakistan not just in urban areas but also near some rural areas so that
every person can have access to the bank. Simelarly bank is aimed to expand at international
level to serve the customers as its vision statement shows,
“To be the premier organization operating locally & internationality that provides the complete
range of financial services to all segments under one roof”.
The bank’s primary and foremost priority is to find and support clients’ financial needs. At Bank
Alfalah all is ensured through constant restraining regimes, they are going towards professional
development, advanced banking solutions and information technology.
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For the satisfaction of the valued customers and the shareholders the management of bank
implemented some of the new and modern ways of doing work and policies which aimed at
consolidated the bank’s financial position and creating a very big, strong, consisten and
diversified business base.
Despite the fact that the economic condition n of the country as well as of the world is not
favorable, even then the performance of the bank over the years remained very good and
progressing. And this is the result of the highly prioritized product portfolio, specifically tailored
to suit discerning needs and preferences of highly valued customers.
Bank Alfalah is aimed at maintaining quality banking, profit performance and reliable customer
service and these things will make it a responsible corporate citizen. The key mission is the
emphasis on innovation and quality both in products and services as well as the quality of
human resource. At this time bank has maintained its positions as a quality financial institution.
The success of every business depends upon the good clientele. Bank Alfalah is very good at its
policy of selecting clients which will retain for a long time and will provide profits to the bank.
The bank checks all the particular and required things and references about the clients before
final selection. Bank confirms and verifies all the provided detail and referrals before final
selection of the client and having a relationship with the customer. This bank’s policy helps and
protects the integrity of the bank and a long term relationship with the customer.
The marketing department of the bank works on the philosophy that the customer is the
central focus of the bank’s business because without customer there is no existence of tha
bank.
Products are launched by placing the customer at the centre of the business, and each service is
developed for the satisfaction and fulfillment of the customer needs as best as possible.
Bank ALfalah’s culture is service excellence oriented. Bank is working on the enrichment and
development of the quality services which will distinguish it from other banks and provides it a
competitive advantage by developing new areas of activities.
Bank Alfalah has made a remarkable progress in the areas of consumer banking as a niche area
for the bank and earned a lot of profit from it. Like car financing and debit and credits cards.
The bank has developed a system for internal control and monitoring for measuring risks which
can be arise from the consumer banking and developed automated, electronic and
computerized environment to control this.
Bank has great strengths which its competitors do not have as it has a vaery attractive brand
name with a slogan of “The Caring Bank” which is somewhat emotional touchy for the persons
who seeks for care. The HR of the bank are very trained, professional and skilled which is
contributing towards the profits of the bank and bank in this way going towards attaining
continuous profits. The workforce of the bank is very young and energetic and working is being
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done on standard basis. Pkiatan government is supporting the bank because it is the foreign
investment bank which is acting as FDI for Pakistan.
The graph of the bank’s performance is going in upward position which is a very good sign for
the bank. It was possible for the bank because the bank has given a lot of importance and
attention to its customers and made the product portfolio according to the needs and wants of
the customers. Because bank is using the continuous process of assessing the needs and
preferences of the customers which is very helpful in making new products and for providing
the desired services to the customers.
In 2009 the bank was able to attained 2nd position in respect of the size of the balance sheet. In
that year bank maintained the capital adequacy ratio of over 13 %.
As in the portion of financial analysis I have calculated a number of financial ratios for BAL for
past five years which are clearly showing that the performance of the bank is very good with
little variations in the profit but realistically the growth has fallen in 2009 because of the affects
of Global Financial Crisis of 2008 which affected not only the performance of BAL but also of
the other businesses as well. Similarly the economic and political condition of the Pakistan is
not very good for the bank because changing political situations, terrorism and changing
government policies affecting the performance of the bank very badly.
Last but not the least; Bank Alfalah has all the capabilities for coping with the changing business
environment, bad economic conditions and political condition of the bank. If the bank will keep
on moving on its way like this with the help of their unique business policies then the time is
near when The Bank Alfalah The Caring Bank will be at the top of all the banks.
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