CHAPTER-1
INTRODUCTION
1.1 INTRODUCTION TO THE REPORT:
The student of BBA, studying courses leading to Bachelor of Business are
required to undergo an internship program of 8 weeks in any well-reputed
organization. This is an essential academic requirement. It not only supports
the theoretical knowledge but also exposes the students to practical experiences
of the concerned field. Comprehensive report writing follows the internship.
The report encompasses the experiences of the internee, analyzing them and
making recommendation for the improvement of the organization.
This report would discuss pros and cons of the Allied Bank Limited (ABL)
Kohat Road Branch Peshawar
1.2 BACKGROUND OF THE STUDY:
The financial institution play very important role in the economic growth of the
developing nation. Banks are very important financial institution. No country
can be developed without banking, as banks plays the vital role in the economy
of a country. The economic activities, which might be in the forms of imports
and exports, trade, investment in agriculture etc. ensure economic prosperity
through the efficient working of the banking system.
Nowadays in the banking sector there is intense competition. The banks now
use sophisticated technology to satisfy their customer and to attract the
potential customer by giving incentives and introducing new products and
quality services. Moreover banks are very much acquainted with day to day
challenges due to this competition and remain continuously engaged stay ahead
of their Competitors. The government has also introduced number of reforms
in the banking sector.
1
1.3 PURPOSE OF THE STUDY:
 This report is based on a study carried out for the fulfillment of the
degree requirement of BBA.
 The purpose of the study is to analyze and evaluate the operation,
functions of the Allied Bank Limited, where the internship was carried
out. On the basis of the analysis of the operations of the bank and
observations made in different department, the recommendations were
made. Recommendations are given for the improvement the
performance and efficiency of the bank.
 The study also provides the platform to do practical work in the field
and apply the personal knowledge and understand the operations of the
bank. It also provides the opportunity to improve our personal skills and
writing skills.
1.3 SCOPE OF THE STUDY:
The scope of the study is confined to the Allied Bank Limited Kohat Road
Branch Peshawar. The different departments of branch were studied and
observed. The study resolves around the operations carried out at Allied Bank
Limited Kohat Road Branch Peshawar. The financial analysis of the bank was
also carried out.
1.4 METHODOLOGY OF THE STUDY
The methodology of the report for collection of data is primary as well as
secondary. The biggest source of information is my personal observation while
working with staff and having discussions with them. Formally arranged
interviews and discussions also helped me in this regard.
2
1.4.1 Primary Data
The sources for primary data collection are as follows,
 Personal observation
 Interviews of staff
 Discussion with officers.
1.4.2 Secondary Data
The sources for secondary data are as follow
 Manuals.
 Journals.
 Internship report
 Websites
 Newspapers
 Annual reports
1.5 SCHEME OF THE REPORT:
This report has been divided into four sections, which are in the following
order:
1.5.1 Section I
Section I consists of chapter that includes the background of the study,
purpose, scope, methodology, and scheme of the report.
1.5.2 Section II
This section of the report includes an overall view of Allied Bank Limited
(ABL). This section includes the banking review, development of banking in
Pakistan, history of Allied bank, the mission statement, objectives and values
3
of the ABL. Organizational structure of the ABL and their various
departments.
1.5.3 Section III
This is analysis section of the report. This section deals with financial analysis
and SWOT analysis of the ABL. This is totally based on the information
gathered from annual reports. The financial progress of the ABL is assessed in
this section.
1.5.4 Section IV
In this section, recommendations are given keeping in view the current
situation of the bank. First, the problems, which are faced by the bank, are
discussed, and then recommendation have been given.
4
CHAPTER-2
REVIEW OF THE REPORT
2.1EVOLUTION OF BANKING
There are various views about the origin of the word banking. This word is
derived from the words’ bancus’ or’ banque’ which means a bench. Other
authorities state that the word “Bank” is derived form the German word
“Back” which means “Joint Stock fund” and later on due to German
occupation of Italy, this word was’ italianated’ into “Bank. Authors quote
Babylonians developed banking system as early as 2000 B.C. It is evident that
the temples of Babylon were used as banks because of the prevalent respect
and confidence in the clergy. “Banking in fact is as ancient as human society.
Evaluation of banks can be associated with three classes of old times,
 Merchants
 Money Lenders
 Gold Smiths.
2.1.1 Merchants
In ancient times, merchants were considered to be the most respectable and
wealthy people. They were considered as the most trusted persons in financial
matters and other dealings. These merchants used to borrow from people in the
form of deposit and returned to depositor after some time with some reward
known as interest. These merchants had migrated from Lombardy in Italy to
England, where they started the business of lending the money on interest.
They were financially very strong even the king would ask them for financial
help. These merchants also helped the foreign trade, by issuing written
permission, latter on developed in the form of "Bank Draft".
5
2.1.2 Money Lenders
Money Lenders, were those persons who used to lend their own money in early
stages, However, in later stage with the expansion of their business, they
started borrowing from people having surplus money on interest and lending to
needy people on higher interest, hence making their profit by this practice,
Two major functions of modern banks, that is, "accepting deposits" and
"advancing loan" is the modified form of the activities of old money lenders.
2.1.3 Goldsmith
Long ago, when human life was not so secure, saving of money and other
valuable was very risky, for an individual. Goldsmith, because of their
profession, used to keep strong iron safe for keeping gold, money and other
valuables for safety.
Hence, the people started depositing their spare money and valuable with these
goldsmith for safety. Goldsmith charged some amount for this purpose and
returns the money and other valuable to their depositors when needed. They
started issuing receipts against the deposits of the people. Moreover banks
inherited their function of acceptance of deposits from the practice of these
goldsmiths. Experience showed these goldsmiths that large sum of money is
always lying idle and not all the depositors come to draw their deposits or
money at the same time. They also noticed that they are requested for loan by
needy people on good reward and security. It was a good idea to give money
on interest which was surplus; simply they were allowing the facility of
"Overdraft" as allowed by fewer bankers. But to earn more profit, every bank
started issuing overdraft facilities without maintaining adequate reserve for the
requirement of their depositors. This inability of different bankers resulted in
the failure of many banks.
6
2.1.4 Present-day banking
According to growth the present-day banker has three ancestors the merchants
the gold smiths and moneylender. In short we can define bank as a financial
institution, which deals with money and credit, it accepts deposits from
individuals firm and companies at a lower rate of interest and gives at higher
rate of interest to those who need them.
2.1.5 Banking in Pakistan
Banking started in Pakistan after the bold and emergent decision of
formulation of State Bank Of Pakistan on July 30, 1948. Thereafter this sector
has witnessed enormous growth. In 1974 banks were nationalized, in the hope
that new era of growth could be achieved through it. However the process is
reverse since 1991, up till now MCB, ABL, and ABL and HBL have been
privatized.
2.2 HISTORICAL BACKGROUND OF ALLIED BANK
2.2.1 History
Allied Bank is the first Muslim bank, to have been established on the territory
that became Pakistan. Established in December 1942 as the Australasia Bank
at Lahore with a paid-up share capital of Rs.0.12 million under the
Chairmanship of Khawaja Bashir Bux, the Bank had attracted deposits,
equivalent to Rs.0.431 million in its first eighteen months of business. Total
assets then amounted to Rs.0.572 million. The Allied Bank's stories is one of
dedication,
commitment
to
professionalism,
adaptation
to
changing
environmental challenges resulting into all round growth and stability, envied
and aspire
7
Later in 1973, Government of Pakistan decided to nationalize all banks of the
country and in the process; three smaller banks namely Sarhad Bank, Lahore
Commercial Bank and Pakistan Bank were merged with a relatively bigger and
stronger Australasia Bank. A joint force with fresh zeal and enthusiasm was
emerged, named as Allied Bank of Pakistan Limited. Being a National Bank,
ABL kept moving forward steadily, contributing towards economic growth of
country. As time passed, our nation entered into the phase of denationalization
and privatization. During 1991, the Government of Pakistan decided to
privatize Allied Bank of Pakistan Limited. Prime Minister Mian Muhammad
Nawaz Sharif during his first regime handed over management of the bank to
its own employees, as a unique phenomenon in the country.
2.2.2 Present status
Allied Bank is now one of the largest banks in Pakistan, operating through a
network of 766 branches in over 300 cities and towns offering real-time online
banking. The bank has in place the largest ATM network in the country with
502 ATMs in more than 145 cities and towns across Pakistan. The number of
employee of Allied Bank was up to 8,325 in 2008. At present the employees
are acquiring 51% shares where as the rest of 49% are held by Federal
Government. Apart from holding 49% bank’s shares, the Government has also
representation of 3 Directors in the total strength of 7 member of Board of
Directors of the bank who are fully and actively involved in the bank’s affairs
such as policy making and other financial matters.
2.2.3 Credit rating
Based on its financial performance and significant improvement in areas of
risk management and corporate governance, the Pakistan Credit Rating Agency
8
(PACRA) maintained the long-term credit rating of Allied Bank to AA
(doABLe A) and short-term rating to A1+ (A one plus).
Also, JCR-VIS Credit Rating Company Limited had assigned a corporate
governance rating of ‘CGR-8’ to the bank during the last year, which denotes
‘high level of corporate governance.
2.2.4 Auditors
 M. Yousuf Adil Saleem & Co.
(Chartered Accountants)
 M. Taseer Hadi & Co.
(Chartered Accountants)
2.2.5 Audit Committee
The Audit Committee consists of one chairman and three members of the
company
9
2.3 ORGANIZATIONAL STRUCTURE
Figure 2.1
CHAIRMAN
CHIEF EXECUTIVE OFFICER (CEO)/PRESIDENT
SENIOR EXECUTIVE VICE PRESIDENT (SEVP)
SENIOR VICE PRESIDENT (SVP)
EXECUTIVE VICE PRESIDENT (EVP)
ASSISTANT VICE PRESIDENT (AVP)
OFFICERS GROUP (OG1, OG2, OG3)
SUPPORTING STAFF
Source: Annual Report 2022.
10
2.4 VISION AND MISSION
2.4.1 Vision
 To become a dynamic and efficient bank providing integrated solutions
in order to be the first choice bank for the customers.
2.42 Mission
 To provide value added services to our customers.
 To provide high tech innovative solutions to meet customers
requirements.
 To create sustainable value through growth, efficiency and diversity for
all stakeholders.
 To provide a challenging work environment and reward dedicated team
members according to their abilities and performance.
 To play a proactive role in contributing towards the society.
2.5 Objective
The main objective of the bank is to accept deposits and provide loans to its
customers and also to be more efficient in providing services. The bank
maintained its commitment to most efficient and personalized services to its
customers. Allied bank gives advances to small, medium and big industries,
commercial establishment, agriculture construction companies and other needy
persons beside all of these objectives, profit is the primary objective of all
financial organizations, and all different activities are aimed towards its
achievement.
11
2.6 Core Values
 Integrity
 Excellence in service
 High performance
 Innovation and growth
2.7 Corporate profile
The Board of Directors of Allied Bank is providing strategic input and
guidance to the management through its various committees which include
Audit Committee, Strategic Planning and Monitoring Committee, Human
Capital Committee and e-Vision Committee. The Board oversight of the
management ensures effective implementation of its policy directives in line
with its strategic vision to promote a risk culture in the bank. The management
of the bank comprises of bankers led by CEO and is divided into different
groups on functional basis.
2.7.1 Management Committees
At the management level, there are six major committees that are:
 Management Committee,
 Human Resource Committee,
 Risk Management Committee,
 Assets and Liabilities Committee,
 Compliance Committee and
 IT Steering Committee.
12
2.7.2 Board of Directors
The board of directors consists of one chairman, five Non Executive Directors
including two government nominees, one Executive Director, three
Independent Directors and one Chief Executive Officer.
2.7.3 Executive Committee
Executive committee consists of:
 Chief Executive
 President
 Executive Vice President (EVP)
 Senior Vice President (SVP)
 Vice President (VP)
 Assistant Vice President (AVP)
2.8 ORGANIZATIONAL STRUCTURE OF ALLIED BANK, KOHAT
ROAD BRANCH
Figure 2.2
Operation Manager
2.8.1 Location
Allied Bank Limited, situated on the Kohat Road Peshawar. There are different
branches located in Peshawar.
13
2.8.2 Number of Employees
There are seven employees in this branch including
 (Branch Manager)
 (Branch Operational Manager)
 (G.b.o)

(Tellers/ Cashiers)

(Audit Officers)
 (Guard)
2.8.3 Assets and Liabilities Management Committee (ALCO)
To provide a wide array of investment products, Allied Bank launched its asset
management company, ABL Asset Management Company Limited, with a
paid up capital of Rs.500 million. The company was incorporated in October
2021
and also received its license for Asset Management and Financial
Advisory. The company launched its mutual fund in 2022 . ABL AMC
expanded its product suite by launching a stock fund in June 2022. The
company also has an income fund, launched in September 2022 . ABL AMC
has surpassed many old players in the market by growing its fund size to over
Rs.9 Billion in a relatively shorter operational period.
The recent economic trends suggest the possibility of a modest recovery during
2022. The major impetus for growth is expected to come from the services
sector, while LSM has also lately shown signs of recovery.
The positive improvement in macroeconomic indicators, mainly inflation and
contraction in external imbalances bodes well for the revival of economic
14
activity. However, risks to these improvements
remains as inflationary
pressures have not completely abated, the commodity prices may spur again to
unmanageable levels and foreign inflows may not materialize on time.
Meanwhile, the severe energy shortages and the sensitive security situation
remain a major threat to the potential output of the economy.
The continuing pressure in the operation environment suggests that the
challenges for the banking sector would persist in 2022. Your Bank, while
remaining prudent under the circumstances would continue to emphasize on
improving cost effective deposit mix, building risk weighted assets by ensuring
quality and optimizing costs to pursue the strategy of maintaining steady
growth.
2.8.4 Risk Management committee:
The management remained committed to instill a strong risk culture and
control environment across the Bank. A number of initiatives have been taken
during the year to strengthen the overall risk management function.
Those encompass development of policies and procedural covering various
risk areas including market risk management, asset liability management, and
operational risk management. The deployment of a suite of risk management
solutions from one of the leading global firms is in process. Given the difficult
credit environment, much emphasis is being placed on upgrading the credit risk
assessment and monitoring process.
The Bank is currently in the process of developing Loan Origination System
for corporate banking relationships, which would automate the credit
origination and approval process with an embedded obligor risk rating engine.
The Bank has appointed a consultant to assist in implementation of Operational
Risk Framework. Various policies and procedures with respect to the
framework are under approval process.
15
2.8.5 Human Resource:
The Bank remained active in its efforts to attract the best of the industry talent
by offering market based compensation and develop the skill set of existing
personnel. As part of the strategy to mix youth with experience, and to improve
the culture of the Bank, the management adopted the policy of inducting fresh
MBA/M.Com from business schools of repute as Management Trainee
Officers (MTOs).
The selection criterion is purely based on meritocracy with equal opportunity
for all. The candidates passing a written test prepared by Institute of Bankers
are called for interviews. The selected young men and women are trained and
inducted into various functions of the Bank.
During the last two years around 800 MTOs in two separate batches have been
hired, while the hiring of another batch of around 250 MTOs is in process.
The Management Development Centers (MDCs) have been set up, and various
training courses have been arranged in these MDCs where around 5,000
employees participated in these courses as part of career planning and
development policy.
The Bank has also nominated 1,100 employees on various courses held within
Pakistan and 76 of employees were sent abroad to attend the courses and
seminars during 2021. The Bank, during the year under review, has incurred
Rs.57.8 million on training of employees as compared to Rs.58.4million spent
in the previous year.
To promote employee engagement and satisfaction, a performance evaluation
system is in place whereby ‘pay to performance criteria’ inculcates the
motivation amongst the employees to achieve the goals/targets set for them.
16
CHAPTER – 3
WHAT I HAVE LEARNED
During my internship at ABL, I worked in different departments, and I successfully
completed all tasks and duties that were assigned to me.
This is one of ideal branches of ABL in Peshawar, working there for the customers
for almost one year, the duties which I performed and experiences that I gained
during each task of the day and explained below.
Basically during the first two weeks I got used to the environments and was introduced to the bank staff, till that point I was not assigned any task and once I got
familiar then I was given a green signal to work in different department from week to
week basis, as explained below in brief starting from 1st week.
My 1st & 2nd Week at Clearing Department
The branch manager was very cooperative with me during my internship period. First
of all he referred me to Clearing Department. First of all the concerned officer told
me to observe the bank environment that what is happening in bank for at least two or
three days. After two days of observing bank environment he started taking working
from me. He was the man to get me familiar with clearing cheques, filling out credit
& debit vouchers and stamping the cheques. There are different kinds of stamps for
clearing the cheques like Bank Cross Stamp, Clearing Stamp for next day date for
example if cheque come to bank for transfer money to another account that will be
clear on next day not on the same day because sometimes there will be no balance or
insufficient balance in respective cheque holder account.
I spent my whole first two weeks in this department and learn lots of work regarding
clearance of cheques and making credit debit vouchers.
17
My 3rd week
I came in contact with the officer who made me familiar with how to do online
transfer the money from one account to another city ABL branch account. I learnt that
there are several rules and limits of transferring cash from one account to another
account. Whenever client wants to credit or debit his own account he can only debit
& credit his account up to certain limited or maximum amount. And whenever one
client wants to transfer cash to another client account then there will be no limit of
transfer. There are different kinds of problems associated with online transferring
cash like sometimes the links of different cities branches got down then it will be not
possible to transfer cash from one account to another account. He also got me familiar
with how to handle Locker what are the procedures to give locker to customers.
My 4th week at Remittance Department
At the start of 4th week, I was promoted to another department that is Remittance
department that is mainly controlled by the junior remittance officer. The Remittance
Department primarily deals in Demand Drafts (D.D.), pay order, banker cheques and
fund transfer. From him I learned how to make SC (Short Credit), and LSC (Local
Short Credit) that includes handling cheques that belong to the local branches of our
bank (ABL) and all other banks as well. Cheque is presented at counter with credit
voucher. It is then properly stamped and logged in the clearing register. At the end of
the week I was also given idea about a lot of DDs, Pay Orders and Fund Transfers
etc.
5th week Accounts opening Depart
After spending week 4th in Remittances Department, I was sent to officer grade III,
and the opening officer. He guided me throughout all process of how to open a
Current, Saving and profit and loss account. When a customer wants to open an
account first of all bank will ask for his national identity card (NIC) photocopy then
bank will send that copy to NADRA officer for verification. After verification of
NIC, attestation of CNIC copy, proof of income, National Tax Number certificate and
18
Company Documents are required. The account-opening officer was extremely
cooperative as he always gave me much more time than needed to get familiar me
with account opening department.
6th & 7th Week
At the time of these weeks, I met with another two officers, who were responsible for
making government pension disbursement and advancing agricultural loans
respectively. Both were very cooperative with me they familiar me with the
procedure of the government pension disbursement. And I used to assist them during
their responsibilities. At this point of time I was also given the task of making pension
scrolls either manually of by computer. Form those officer, I came to know that
agricultural credit could be given in the form of farm credit and production loan.
Farm credit is provided on medium basis for Land improvements and purchase of
machinery such as tractors etc. Farm credit can be renewed for 1 month from 3
months. On the other hand Production loans are short term in nature such as to have
seeds, fertilizers and sprayers, etc.
8th Week
During my last week of internship I spent it with the head of Cash Department and
guided me throughout his job responsibilities that what are the task that he has to
perform in his department. I observed those tasks that are associated with this
department. This department deals in all kind of transactions in which there is
involvement of money. The payment and receiving of money is subject to the banks
rules and regulations, without which it's not possible. The record of money paid to the
customers is made manually. This department has to receive or pay money through
the cash receipts with the customers.
19
Last Day of Internship
This excellent experience finally came to as end when my internship time period
ended. I was waiting very anxiously to get the certificate/letter from ABL. I went to
the Operation Manager and offered him appreciation and thanks, there I informed him
that I was done with the internship program and he provided me with the
certificate/letter from ABL for my services as their internee. I thanked all the
employees associated with me in this excellent ended my internship.
20
CHAPTER 4
ANALYSIS
FINANCIAL ANALYSIS:
Financial analysis refers to an assessment of the viability, stability and
profitability of a business. Financial analysis is an evaluation of a firm’s past
financial performance and its prospects for the future. The main purpose of
financial analysis is to give a clear picture of the financial position by studying
the relationship and comparisons between the items in the financial statement.
Financial statements report both on a firms position at a point in time and on its
operations over some past period. However, the real values of financial
statements lie in the fact that they can be used to predict future earning,
dividends and cash flows. From investor’s point of view, predicting the future
is what financial statement analysis is all about, while from management stand
point, financial statement analysis is useful both to help anticipate future
conditions and more important, as a starting point for planning actions that will
improve the firm’s future performance.
The various stakeholders of business are interested in the analysis of financial
statement. But the focus of interest of all is not the same. For example,
creditors and credit reporting agencies are interested in finding out the credit
worthiness of the firm to which they have extended credit or intend to extend
credit. Short term creditors are interested in the short term liquidity of the
business and long run creditors are interested in long run cash flow which the
firm can generate over the long period of time. Investors are interested in the
firm’s ability to sustain profitability over a period of time. Government
agencies analyze financial data for tax purposes. The internal users of financial
statement like management like planning and control.
21
It consists of applying analytical tools and financial ratios to obtain useful
information. Financial ratios are designed to help evaluate financial statements.
The interested parties need to interpret this information about performance of
the company through the use of financial ratios and tools. Keeping in view its
importance the financial analysis are made by using the Balance Sheet and
Income Statement of the bank for the years 2020 , 2021 and 2022 and than
calculated the ratios to find out the financial health of the bank and also have
done the common size analysis of the balance sheet and the income statement.
4.1 COMMON SIZE ANALYSIS;
Common size analysis is an analysis of financial statements where all balance
sheet items are divided by total assets and all income statement items are
divided by net sales or revenues. Common size analysis can be extremely
helpful to highlight changes. But the common size analysis don’t show the
change in amount of a particular balance sheet item and income statement
item, it only show changes relative to asset or\and net
4.1.1Common size analysis of balance sheet:
The following table shows the common size analysis of balance sheet of ABL
for year 2020 , 2021 and 2022
22
Table 4.1 Common size analysis of Balance sheet
Rupees in (000)
common size (%)
Assets
2020
Cash
and
balances with
treasury banks 30408
Lending the
financial
18419
institution
2021
2022
2020
2021
2022
25751
27716
9.5%
7.0%
6.6%
15793
28123
5.8%
4.3%
6.75
Investment
84151
84602
96975
26.2%
22.4%
22.7%
Advances
Operating
Fixed Assets
Others Assets
178524
223640
249887
52.6%
58.1%
56.7%
7549
11134
12447
2.4%
3.0%
3.0%
11368
18399
17955
3.5%
5.0%
4.3%
32022 0
366696
418374
100.0%
100.0%
100.0%
297475
328875
82.3%
81.1%
78.6%
27778
39819
7.2%
7.6%
9.5%
2952
3162
1.1%
0.8%
0.8%
13636
11061
2.3%
3.7%
2.6%
2498
5497
0.8%
0.7%
1.3%
344340
388414
93.7%
93.9%
92.8%
Total assets
Liabilities
Customer
deposits
263972
Inter
bank
borrowings
22934
Bills payable
3494
Other
liabilities
7332
sub- ordinate
loans
2499
Total
liabilities
300231
Equities
Share capital
5386
6464
7110
1.7%
1.8%
1.7%
Reserves
Unappropriate
profit\ loss
2632
3463
4888
1.9%
1.6%
1.6%
6971
8537
12198
2.2%
2.3%
2.9%
23
Equity-tier 1
18408
Surplus
on
revaluation of
assets
1470
20805
25891
5.8%
5.7%
6.2%
1550
4069
0.5%
0.4%
1.0%
Total equity
22356
29960
6.3%
6.1%
7.2%
19878
Source: Annual report 2022
4.1.1.1 Interpretation:
The common size analysis of balance sheet indicates that the value of current
assets decline during the current period 2020 , 2021 and 2022 . The lending to
financial institution is however, shows the modest increase i-e 6.75% in 2022
from 4.3% of 2021 . The investment declines to 22.7% in 2022 as compare to
26% of 2020 . The decline trend is also observed in the case of advances in
2021 the advances are 58.1% which decreases to 56.7% in 2022 .
Customer’s deposit during the period under the analysis has also shown a
declining trend and constitutes only 78% of total Assets in 2022 . Considering
the liabilities and equities portion of the Balance sheet, the debt of the
company has shown the constant trend over a span of three years. The liability
of the bank in 2020 is 93.7%, in 2021 is 93.95% and in 2022 it is 92.8%,
there shows a slight difference, while the equities of the firm is 6.3% in 2020 ,
6.1% in 2021 and 7.2% in 2022 . The shareholder’s equity of the firm has
however, shown an increasing trend and went up to 2.9 billion in 2022 as
compare to 2.2 billion in 2020 . In 2022 7.2% of net assets is represented by
share holders equity.
4.1.2 Common size analysis of income statement:
The following table shows the common size analysis of income statement of
ABL for the year 2020 , 2021 and 2022
24
Table 4.2 Common size analysis of income statement:
Rupees in (000)
2020
2021
common size (%)
2022
2020
2021
2022
30.571
41122
84.4%
86.2%
87.3%
3266
3470
9.0%
9.2%
7.4%
1571
2452
6.3%
4.4%
5.2%
59
36
0.3%
0,2%
0.1%
5958
100.0%
100.0%
100.0%
17273
22422
40.2%
48.7%
47.6%
8431
9609
24.7%
24.0%
20.6%
9764
15049
11.4%
10.0%
9.4%
(1964)
(3414)
7.5%
5.6%
7.3%
6121
10536
88.8%
88.3%
84.9%
4157
7122
16.2%
11.7%
15.1%
Interest\return\ non interest earned
Markup\return\interest
earned
21.201
Fee, commission
or brokerage and
exchange income
2258
Capital gain and
dividend income
1585
Other income
77
Total
3920
4897
Interest\return\ non interest expense
Markup\return\non
interest expense
10093
Operating
expenses
6174
Profit
before
provision
8855
Taxation
(1877)
Total expenses(%)
of
total
income
5953
Profit\loss after
taxation
4076
Source: Annual report 2022
25
4.1.2.1 Interpretation:
The common size analysis of the income statement indicates that the mark up
or interest earned during 2022 is 87.3% which is greater as compare to 84.4%
in 2020 . However non-interest expense of the income also increased during
the period from 40.2% of 2007 to 47.6% of 2022 . The operating expenses of
the firm also decline showing the efficient management of Allied Bank in
controlling cost. Looking at the taxation values for the period under analysis a
mix trend is observed, taxation was 7.5% in 2020 which decline to 5.6% in
2021 . However, the taxation increases to 7.3% in 2022 .
Due to increase in mark-up or interest earned and decline in operating expenses
and taxation the net profit of the firm during 2022 increase to 15.1% from
11.7% of 2022 .
4.2 HORIZONTAL ANALYSIS:
A procedure is fundamental analysis in which an analyst compares ratio or line
items in a company’s financial statements over a certain period of time. The
analyst will use his or her discretion when choosing a particular time line.
However, the decision is often based on the investing time horizon under
consideration.
For example, when you hear some one says that revenue increased by 10% in
the past quarter, that person is using horizontal analysis. Horizontal analysis
can be used on any item in a company’s financials (from revenue to earning
per share), and is useful when comparing the performance of various
companies.
4.2.1Horizontal analysis of balance sheet:
The following table shows the horizontal analysis of the balance sheet of 2020,
2021 and 2022 .
26
Table 4.3 shows the horizontal analysis of Balance sheet
Rupees in (000)
Assets
Cash and balances with
treasury banks
Lending the financial
institution
Investment
Advances
Operating Fixed Assets
Others Assets
Total assets
Liabilities
Customer deposits
Inter bank borrowings
Bills payable
Other liabilities
sub- ordinate loans
Total liabilities
Equities
Share capital
Reserves
Un-appropriate profit\ loss
Equity-tier 1
Surplus on revaluation of
assets
Total equity
%ages
2020
2021
2022
Horizontal analysis
2020 vs. 2021
2021 vs. 2022
30408
18419
25751
15793
27716
28123
-15.30
-14.25
7.63
78.07
84151
178524
7549
11368
32022 0
84602
223640
11134
18399
366696
96975
249887
12447
17955
418374
0.535
25.27
47.48
61.84
14.55
78.34
11.73
11.79
-2.41
14.09
263972
22934
3494
7332
2499
300231
297475
27778
2952
13636
2498
344340
328875
39819
3162
11061
5497
388414
12.69
21.12
21.12
85.97
-0.040
14.69
10.55
43.34
7.11
-18.88
120
12.79
5386
2632
6971
18408
1470
6464
3463
8537
20805
1550
7110
4888
12198
25891
4069
20.01
31.57
22.46
13.02
5.44
9.99
41.19
42.88
24.44
162.5
19878
22356
29960
12.46
34.01
Source: Annual report 2022
4.2.1.1 Interpretation:
The horizontal analysis of the balance sheet for the year 2020 ,2021 and 2022
.showed that the total assets of the bank remains quite stable during both trends
i-e from 2020 to 2021 and 2021 to 2022 .deposits showed a modest growth
rate of 10.55%.lending to financial institutions showed drastic increases during
the year 2022 that is 78.07%.the inter bank borrowing has risen from 21.12%
to 43.34%,decreasing the advances from 25.27% to 11.73%.a slow down in
27
advances is due to high interest rate in economy as a cost of borrowing money
has rapidly risen up in the light of tight monetary policy. total debt showed the
decreasing trend from 14.69% to 12.79%.shareholders equity also shoed an
increasing trend from 12,46% to 34.01%
4.2.2 Horizontal Analysis of Income Statement:
The following table shows the horizontal analysis of the income statement of
the year 2020 , 2021 and 2022 .
Table 4.4 shows the horizontal analysis of income statement
Rupees in (000)
%ages
2021
2022
Trend analysis
2020 vs. 2021 2021 vs. 2022
2020
Interest\return\ non interest earned
Mark-up\return\interest
earned
Fee,
commission
or
brokerage and exchange
income
Capital gain and dividend
income
Other income
21201
30571
41122
44.19
34.01
2258
3266
3470
44.64
6.24
1585
1571
2452
-0.88
56.07
77
59
36
-23.37
-38.98
Total
3920
4897
5958
24.92
21.66
Mark-up\return\non interest 10093
expense
Operating expenses
6174
17273
22422
71.13
29.8
8431
9609
36.55
13.97
Profit before provision
8855
9764
15049
10.26
54.12
Taxation
(1877)
(1964)
(3414)
4.63
73.82
6121
10536
2.822
72.12
1.98
71.32
Interest\return\ non interest expense
Total expenses-percentage 5953
of total income
Profit\loss after
Taxation
4076
Source: Annual report 2022
4157
7122
28
4.2.2.1 Interpretation:
The horizontal analysis of income statement indicates that the bank has shown
a rapid increases in all segments during 2022 .allies bank declared profit after
tax of Rs.71.3%.profit has declared due to good performance of earning
assets(advances ,investments and lending to financial institutions).this
increases in profit is due to low operating expenses and interest expense.
The bank net interest income and non-interest income showed a stable growth
during both the trend. So overall the bank has witnessed the increase in profit.
4.3 Financial Ratio analysis:
Financial ratios are used to weight and evaluate the operating performance
of the firm. Financial ratios may be used to compare:
 One ratio to a related ratio
 The firm’s performance to management’s goal
 The firm’s past and present performance
 The firm’s performance to similar firm
These ratios are helpful to both internal and external users. Internal user such
as management also employs financial analysis for the purpose of internal
control and to better look over the financial performance of the organization.
As from external point of view creditors and investors have keen interest in
financial ratios.
4.3.1Liquidity analysis:
Liquidity ratio indicates how quickly and easily a company can obtain cash for
its need. These ratios measure the short-term solvency of the firm. These ratios
are special interest to short-term creditors. Two commonly used liquidity ratios
are current ratio and quick ratio.
29
4.3.1.1 Current ratio:
The current ratio compares assets of the firm (cash and other assets that can be
easily converted to cash) to all the company’s current liabilities (liabilities that
must be paid with cash soon). The higher the ratio, the greater is company’s
ability to meet its short-term obligation as they come due. Current ratio is
calculated by dividing current Assets by current liabilities.
Current ratio=current Assets\ current liabilities
The following table shows the current ratio of ABL for the last three
years.
Current ratio of ABL overtime
Table 4.4
2020
2021
2022
Current assets
311502
349786
402701
Current
290400
328205
371856
1.07
1.06
1.08
liabilities
Current ratios
Source: Annual report 2022
4.3.1.1.1 Interpretation:
Current ratio for year 2020 is 1.07 indicates that company has 1.07 in current
assets to cover RS.1.00 in Current liabilities.
Current ratio for year 2021 is 1.06 indicates that company has RS1.06 tin
current assets to cover RS.1.00 in current liabilities’
30
Current ratio for year 2022 is 1.08 in current Assets to cover RS.1.00 in
current liabilities.
The ABL current ratio shows up-ward trend in 2022 than decline in 2021 and
again moves up-ward in 2022 . There is a slight difference among the three
ratios. Higher the current ratio, higher is the ability of the bank to meet its
short-term obligations as they become due. This in turn decreases the risk of
short-term insolvency due to instability of meeting with small amount of
current assets to short term obligation as they become due.
4.3.2 Activity Ratio:
Activity ratio also known as efficiency or turn over ratio measures how
effectively the firm is using its assets. Every business faces fundamental
decisions about how much to invest in assets such as receivables inventories
and fixed assets ant then it has the responsibility of using these assets
effectively. To measure this efficiency, the following ratios are used.
4.3.2.1Advances Turnover Ratio:
The advance turnover ratio provides insight into the quality of the bank,
advances how successful the bank is in its collection and interest earned. This
ratio is calculated by dividing net advances by mark up earned.
Advances turn over ratio = markup earned / net advances
The advances turn over in days can also be calculated by dividing advance turn
over ratio by the days in year (365).
31
Formula:
Advances turn over in days = 365 / ATR
Table 4.6
2020
2021
2022
Markup earned
21201
30571
41122
Net assets
178524
223640
249887
over ratio
0.11
0.13
0.16
In %
11.87%
13.6%
16.4%
3031 Days
2633 Days
2188 Days
Advance turn
Advance turn
over days
Source: Annual report 2022
4.3.2.1.1Interpretation:
The advance turn over ratio shows an upward trend, which show that the credit
department of the firm is efficient in collecting advances. In 2020 the advance
turn over ratio is 0.11, it increases in 2021 up to 0.13 and in 009 it again
increases to 0.16.
The calculation shows the length of time of Allied bank to collect advances.
the credit department was efficient in colleting advances for 2022 is 2188days
as compared for 2020 in 3031 days.
4.3.2.2 Total Asset Turnover:
This shows revenue generated per rupee, investment in total assets. This ratio
is calculated by dividing total revenue / sales by total assets.
32
Formula:
Assets turn over ratio = Mark up earned / total assets.
Table 4.7
2020
2021
2022
Markup earned
21230
30571
41122
Total assets
32022 0
366696
418374
0.0833
0.098
Asset turner ratio 0.066
Source: Annual report 2022
4.3.2.2.1Interpretation:
Total asset turnover value for year 2022 is 9.8% which is greater as compared
to asset turn over for the year 2021 is 8.3% and for the year 2020 is 6.6%.
This higher turnover shows the shorter time in assets ability to generate
revenue. This shows that the efficiency of the firm is improving.
4.3.3 Leverage Ratio:
Leverage ratio means how much a company owes to others. The financial
analyst uses debt ratio to assess the relative size of a firm’s debt, loan and the
firm’s ability to pay off the debts. Leverage ratio measures the amount of
financial leverage. As debt is a major source of financing and banking industry
typically uses the highest percentage of debts. Debt financing provides the
significant tax advantage and its transaction costs are lower than that of equity.
33
Commonly used leverage ratios are debt ratio, debt to equity ratio and equity
multiplier.
4.3.3.1 Debt to the total asset ratio:
The debt to total asset ratio measure the percentage of the firm’s assets that are
financed with debt. Creditor of the company would generally like this ratio to
be low. Dividing a firm’s total debt by its total assets derives the desired ratio.
Formula:
Debt to the total asset ratio = total debt / total assets.
Table 4.8
2020
2021
2022
Total debt
300231
344340
388414
Total asset
32022 0
366696
418374
Debt ratio
0.937
0.939
0.928
Source: Annual report 2022
4.3.3.1.1 Interpretation:
The above table shows that almost 93% of ABL assets are financed by debt. In
other words, the claim of share holders over the bank assets is below 7%. High
debt ratio result in saving taxes and creating leverage effect due to which a
little change in revenue brings more than proportionate change in net income.
These decline values of debt ratio may indicate that the company stock holders
probably would not want to take a risk of debt. And want to protect the
stockholders from unfavorable effects of leverage.
34
4.3.3.2 Debt to equity ratio:
Debt to equity ratio is computed by simply dividing the total debt of firm
(including current liabilities) by its stock holder’s equity.
Formula:
Debt to equity ratio = total debt / share holders equity
Table 4.9
2020
2021
2022
Total debt
300231
344340
388414
Share holders
18408
20805
25891
16.3
16.5
15.00
equity
Debt to equity
ratio
Source: Annual report 2022
4.3.3.2.1Interpretation:
Debt to equity ratio of 16.5 for year 2021 and 15.00 for 2022 indicates the
owners equity in relation to total claim on business by all type of creditors. The
value shows that allied bank is making little use of debt and has its high ratio
of tangible net worth provides large cushion for creditors in wake of loss.
This shows that the debt acquired for boosting up bank’s performance has
decreased with a reasonable change in equity of the bank.
35
4.3.3.3 Equity ratio:
Equity ratio tells us about the shareholders percentage in the total assets of any
firm. The equity ratio is obtained by dividing shareholders equity by the total
asset.
Equity ratio = shareholders equity/total assets
Table 4.10
2020
Shareholders
2021
2022
18408
20805
25891
Total assets
32022 0
366696
418374
Equity ratio
0.057
0.056
0.061
equity
Source: Annual report 2022
4.3.3.3.1 Interpretation:
The above table shows a slight increase in the year 2022 as the total assets of
the bank increase, there was a proportionate increase in the shareholder’s
equity as well, which indicates shareholders interest. This increase has been
due to increase in capital reserves and tight control over the accumulated loss
and other reserves as compare to the previous year.
4.3.3.4 Equity Multiplier:
The equity multiplier is yet another measure of financial leverage. The equity
multiplier is obtained by dividing the total assets of the bank by the
shareholders equity of the bank.
36
Equity multiplier=total assets / shareholders equity
Table 4.11
2020
2021
2022
Total assets
32022 0
366696
418374
Shareholders
18408
20805
25891
17.62
16.15
equity
Equity multiplier 17.3
Source: Annual report 2022
4.3.3.4.1Interpretation:
ABL Equity Multiplier shows the decreasing trend as it drops from 17.3 in
2020 to 16.15 in 2022 .
4.3.4 Profitability ratios:
Profitability ratios measures how much company revenue is eaten up by
expenses, how much a company earns relative to sales generated, and amount
earned relative to the value of the firm’s assets and equity. Two kinds of
profitability of profitability ratios are commonly used; profit margins, which
measures performance in relation to sales, and return ratios that measures the
performance relative to some measure of the size of the investment.
4.3.5 Profit margin ratio:
Under this heading, two commonly used ratios are gross profit margin and net
profit margin ratios. These are now discussed in detail.
37
4.3.5.1Gross profit margin:
Gross profit is the difference between revenues and cost of goods or services
sold. Gross profit is a critical because it represents the amount of money
remaining to pay the operating expenses, financing cost, taxes and to pay for
profit. Gross profit margin is the amount of each sale rupee left over after
paying the cost of goods or services sold. It is calculated as follows:
Gross profit margin= gross profit/ revenues *100
Table 4.12
2020
2021
2022
Gross profit
11108
13298
18700
Revenues
21201
30571
41122
43%
45%
Gross
profit 52.3%
margin
Source: Annual report 2022
4.3.5.1.1 Interpretation;
ABL gross profit margin shows the decreasing trend from 2020 to 2021 i-e
from 52% decreases up to 43%, while in 2022 an increase in profit margin
takes places up to 45%. This shows that the ABL gross profit rate reasonably
unstable during the three years and also shows the instability in consumer
demand for the bank services. Thus the inefficiency of the bank’s in
controlling cost of sales (mark-up expense).
38
4.3.5.2 Net profit margin:
The net profit margin measures the profit that is available from each rupee of
sales after all expenses have been paid, including cost of sales, selling, general
and administration expenses, depreciation, interest and taxes. The ratio
calculated as follow
Net profit margin=net profit after taxes/revenues*100
Table 4.13
2020
2021
2022
Net income
4976
4157
7122
Revenues
21201
30571
41122
profit 19.2%
13.5%
17.3%
Net
margin
Source: Annual report 2022
4.3.5.2.1Interpretation:
Net profit margin of ABL has also improved over time and is showing a rising
trend in 2022 which is 17.3%. In 2021 NPM is 13.5% which decreases as
compare to NPM of 2020 is 19.2%. This increase in profit margin is due to
reduction in interest or tax expenses. However the percentage change in the
gross profit margin is more than the percentage change in net profit margin
after taking in to account cost of sales, Administration expenses, interest
expense and taxes.
39
4.3.5.3 Operating Profit Margin;
The operating profit margin ratio measures the cost of good sold, as reflected
in the gross profit margin ratio, as well as all the operating expenses. This ratio
is calculated by dividing earnings before interest and taxes (EBIT or operating
income) by sales\ revenue.
Operating profit margin = earning before interest and taxes/revenue
earned*100
Table 4.14
2020
2021
2022
EBIT
15029
18195
24658
Revenues
21201
30571
41122
70.88%
59.51%
59.96%
Operating profit
margin
Source: Annual report 2022
4.3.5.3.1Interpretation:
The operating profit margin of ABL has shown a decreasing trend over the
period of time. The highest percentage was recorded in year 2020 is 70.88%
while it went on decreasing for the year 2021 and 2022 up to 59.51% and
59.96% respectively.
4.3.6 Return ratio:
Unlike profit margins, return ratios express profitability in relation to various
measures of the investment in the company. Two ratios are commonly used:
Return on asset
40
Return on equity.
4.3.6.1Return on Assets:
Return on assets, also called return on investment (ROI), measures how much
income each rupee of assets produces on average. It shows whether the
business is investing in its assets effectively. The ROI ratio is calculated by
dividing net income by the total assets of the firm.
Return on investment = net profit after taxes/ total assets*100
Table 4.15
2020
2021
2022
Net income
4076
4157
7122
Total Assets
32022 0
366696
418374
ROI
1.27%
1.13%
1.702%
Source: Annual report 2022
4.3.6.1.1Interpretation;
The table shows that ROI of ABL has shown improvement over a period of 3
years. The return on assets shows that company has earned high return in year
2022 is 1.702% as compare to year 2021 and 2020 . This shows that business
of Allied bank is well managed and has bright future prospects.
4.3.6.2 Return on equity:
The return on equity (ROE) ratio measures the average return on the firm’s
capital contribution from its owners. It indicates how many rupee of income
was produced for each rupee invested by the stockholders.
41
Return on equity =net profit after taxes/stock holder’s equity*100
Table 4.16
2020
2021
2022
Net income
4076
4157
7122
Stockholders
18408
20805
25891
22%
20%
27%
equity
Return on equity
Source: Annual report 2022
4.3.6.2.1Interpretation:
This ratio shows that rate of return earned by company in year 2022 is high.
As bank has earned return of 27% on investment during year 2022 which is
greater than return earned on equity during year 2021 i-e 20%
42
4.4 SWOT Analysis:
SWOT is the abbreviation of four words that are “S” stands for strength “W”
stand for weaknesses “O” stands for opportunities and “T” stands for threats.
Strength and weaknesses are the internal factors of the organization and these
are also known as the micro factors but the opportunities and threats are the
external factors and these are known as the macro factors. Micro factors are the
controllable factors but the macro factors are uncontrollable.
The easiest way to know about any organization is the SWOT analysis. So to
reveal the hidden factors I did a SWOT analysis of the Allied bank. It is not the
SWOT analysis of ABL as a whole but only of the branch where I worked.
Many aspects are same almost in every branch of the Allied bank.
4.4.1 Strengths
 Allied bank has maximum number of branches in all over Pakistan. It
has more than 735 branches connected to each other through an online
network.
 The online banking feature provides less chances of fraud because
whenever some transactions take place, they can be checked any time
and their receipts are given to the customers.
 The facility of online banking allows a customer to send or deposit
money through cash or a check to an account of any other branch of
ABL. It also gives the facility of balance inquiry and cash with drawl
from a certain account of any other branch of ABL through check.
 Allied bank is the only bank that provides the lockers facility to their
customers at all of their branches.
43
 The bank provides the foreign exchange facilities including foreign
currency accounts, L/C and other export/import facilities. The
customers get the facility of money exchange on the current rates which
are provided by the head office daily.
 The customer care center of Allied Bank provides toll free numbers on
which customers can dial without paying anything to get support on the
spot.
 At Allied bank the customers having more than one account can have
the facility of the same account number only the suffix is changed. This
facility provides the customer with easy remembering of the account
number.
 Allied bank offers loans to its customers on very low rates. This thing
invites the customers to do a business with ABL.
 Cameras are installed in all the branches of the bank to ensure security.
Also security guards are available through out the day.
 The performance appraisal is done on quarterly basis in this
organization, which results in its better performance.
 The bank also conducts seminars on certain topics like how to improve
their service quality and the concerned person from almost every branch
of the region attends these seminars sharing their knowledge and
experience with each other.
 Staff of the bank is qualified and experienced. The bank officials have
got advance knowledge and experience in the fields of management,
banking law and practice.
44
 The relationship of the manager and the other staff of the organization
are really good with the customers, which results in good will and
loyalty of the customers towards the organization.
 For employees the relaxation is that the employees may get the 36
medical leaves and 1-month vacation in one year with their pay in case
of some emergency.
4.4.2 Weaknesses
 The decision making in the bank is completely centralized. The manager
has no power to take decisions by himself in some important aspects
like the extent of credit to customers. This takes a lot of time for
processing and causes a delay for the customer.
 Secondly, lack of computerized systems in the branch is another major
weakness in the bank. The MIS system is operated at the regional level
but not at the branch level.
4.4.3 Opportunities
 Allied Bank is still working in the corporate sector and its missing a big
market share of consumer banking. If it enters this market than this bank
can become the biggest and the most efficient bank of Pakistan.
 Due to the increase of interest of people in business field, many business
institutions have been established, which produces a lot of qualified and
competent business professionals. So, the bank can hire more qualified
people from market.
 The policies of the new government to uplift the economy and pursue
financial sector reforms are expected to yield positive result in the
45
banking industry of the country. The ABL is very well praised to avail
promising opportunities.
 As a result of the different steps taken by the government regarding the
betterment of the economy small barrowers are attracted to get the
financing and start small business. So the ABL has an opportunity to
attract the customers by giving them attractive schemes.
4.4.4 Threats
 The main competitors in the banking sector are the Bank-Alfalah,
Faysal Bank, Muslim Commercial Bank and Meezan bank etc. Due to
the tough competition the bank is forced to lower its rates and other
services at minimized cost. This reduces the profit margin which is a big
hurdle in the way of innovation and extended customer services.
 The Tax charged on the income of banking companies is much higher
than on the income of other companies causing threat to the bank. The
Govt. revises the tax policies on continuous basis, which often are not in
the interest of the industry including the banking sector.
 Political conditions in Pakistan have been unstable since a very long
period. Continuous changes of regimes and military intervention in the
political affairs are great threat towards the healthy growth of the
industry as a whole.
 The other organizations of similar nature are offering more salaries and
benefit packages to their employees. So, there is a threat to the
organization that their current employees may leave it.
46
CHAPTER 5
CONCLUSION AND RECOMMENDATIONS
CONCLUSION
During the last 50 years modern banking has emerged as a major
business, banking has become a profession which everyone is proud to join.
Allied Bank Limited has started it business on a very small scale but
now it is one of the leading operating in Pakistan as well as aboard. It is
providing good quality services to its customers.. throughout their business
with ABL it has launched many schemes for its customers and its also
providing them general utility service.
ABL has improved a lot since its beginning it has expected it branch
networked and its generating more and more business, people are satisfied with
its services, yet there is always a room for improvement.
From the above report it is clear that ABL has made tremendous
improvement in its business, it has attracted large number of customers and its
providing them with good quality services but yet it can make improvement by
the considering the above mentioned recommendation and by acting on the
Action plan, by doing so they will have good business and more and more
people will be attracted towards it.
So far the bank is doing well but it needs to control its expenditures as
far as possible, as it is said there is always a room for improvement.
47
RECOMMENDTION
 Consumer banking is the area bank is not dealing with and having a lot
of opportunities for the bank. So it will be beneficial for the bank if it
start dealing in auto loans, housing finance or any other consumer
requirement.
 Financing facilities in the bank are favorably given to those having huge
bank balances whereas others having small accounts, who are in a real
need are ignored. So financial facilities should be provided to those
having small bank balances as well.
 Short term lending of the bank has decreased in 2022 because the
balance of the bank with other banks has increased to a great extent. It
should be at least maintained so that the bank will be able to generate
profit in short period of time.
 The net interest income of the bank is low because of increased
expenses and as a result profit is also low. These expenses should be
minimized and managed efficiently to generate more profits for the
bank.
 Management information system is operated only at the regional level.
Bank should start its computerized system at the branch level as well to
increase its accuracy and processing and to keep its own data up to the
mark.
 As the business is expected to grow in the future so the bank needs to
expand its space to accommodate additional customers. Further,
customers, waiting for their turns, should be provided with proper
seating arrangements and proper parking facility for staff and customers
should be provided.
48
 Employees should be given on job training, refresher courses and
workshops, to get the required knowledge. All staff member should be
given training according to their respective department.
 The manager of the branch should delegated with some powers
regarding the credit extending facilities to save the time of customers
and to entertain more customers at the same time.
 As a bank fallows the very lengthy procedure for sanctioning the credit
proposal, especially, head office takes a lot of time for the approval of
proposal. This delay causes dissatisfaction among clients. In order to
remove all these difficulties the bank should adopt the flexible way of
acceptance and provide timely services to their customers.
 The bank officially should take extreme care to analyze the financial
statements of the borrowers. The bank some times does not use audited
financial statements, as they do not contain reliable data. Therefore bank
should ensure that audited financial statements are used and credit
extension is made to financially strong institution.
 For the motivation and enhancing the efficiency of the bank employees,
the bank should give performance based pay to their employees. The
bank should set performance target for the credit department and on
achievements employees should be awarded for their performance. It
will serve a direct incentive for staff to achieve targets particularly,
which encompasses the area of customers care.
 The management should clearly discuss plans/ strategies and once
adopted the plans/strategies should be clear to all levels of management
in the bank, as this improves the implementation of plans/strategies
49
REFERENCES:
David, R.F. (1998). 7th Edition strategic management: Concept and Cases.
New Jersey: Prentice-Hall Inc.
Emery, D.R. J.D. Stowe. (1998) Principles of financial management. New
Jersey: Prentice-Hall.
Griffin R.W (1997) Management. Delhi: A.I.T.B.S. PABLishers and
Distributors.
Nasir, M.S. Money Banking and Finance, Kitab Markaz: Faislabad.
Robert, F.M, JR. Williams, S.F. Haka, and M.S Bettner.(1999). 11th Edition,
Accounting; The Basis for Business Decisions. New York: Irwin McGrawHill
Samuel, C.C. (1989). 4th Edition, Principles of Modern Management.
Massachusetts:
Sayers, R.S. Modern Banking. Oxford: The Clarendon Press..
Van Horne, J.C, and J.M. Wachowicz. 10th Edition. (1998). Fundamentals of
Financial M
S. Kevin Professor of Commerce University of Kerala, Trivandrum: Portfolio
Management.
50