INTERNSHIP REPORT
On
NBP ISLAMIC BRANCH AITEMAAD (2340)
KARAK
Internship Report submitted to the Department of Management Sciences
In Partial Fulfillment of the Requirement for the Degree of
Bachelor of Business Administration.
DEPARTMENT OF MANAGEMENT SCIENCES
KHUSHAL KHAN KHATTAK UNIVERSITY KARAK
(2019-2023)
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INTERNSHIP REPORT
On
NBP ISLAMIC BRANCH AITEMAAD (2340)
KARAK
SUBMITTED BY
SUPERVISED BY
Mr. SAQIB USMAN
Mr. ISHFAQ AHMED
Registration No 41-KKKUK (Mgts)-F19
Lecturer in Mgt Science
BBA (Hons), HRM
DEPARTMENT OF MANAGEMENT SCIENCES
KHUSHAL KHAN KHATTAK UNIVERSITY KARAK
(2019-2023)
i
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INTERNSHIP CERTIFICATE
vi
DEDICATION
“I would like to dedicate this whole accomplishment to the martyrs of Kashmir who are struggling in
getting their peaceful life and existence. This whole effort was achieved with a kind support and
continuous guidance of my family, teachers and friends who throughout my life encouraged and rectified
my mistakes. Especially this whole achievement was impossible without my beloved parent’s prayers and
their guidance”.
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CERTIFICATE OF APPROVAL
It is certified that I have read the internship report NBP ISLAMIC BRANCH AITEMAAD bank by
Mr. Saqib Usman ,and that in my opinion this work meet the criteria for approving the
internship report submitted in partial fulfillment of the requirement for the degree of BBA
(Hons) at the department of Management Sciences, Khushal Khan Khattak University Karak.
Supervisor
HoD
Name…………….
Name…………..
Designation…………….
Signature:……………
Signature……………….
Date……………
Date…………………….
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EXECUTIVE SUMMARY
This report is about my internship with NBP, Aitimaad Islamic Banking Karak. The
main purpose of internship was to learn by working in practical environment and
to apply the knowledge acquired during the studies. There was only one
department named is general banking. I had worked in Remittance, where I filled
Pay order, Online transfer, Demand Draft, Call Deposit Receipt forms. I did all type
of clearing named as Normal Clearing, Same Day Clearing, and Intercity Clearing. I
had opened new account for new customers. I successfully completed the entire
tasks that were assigned to me.
During the Eight-weeks’ time period of my internship I learned about different
things that how the Branch Manager deals with the staff, customers and the kinds
of financing activities or opening new account etc.
Those things which I have mentioned above hove been discussed in detail and all
the procedures have been describe in thoroughly. In this report their detail
background, vision and mission statement and business operation, organization
structure, SWOT Analysis, Marketing Strategy, Competitive Strategy, Business
Process Analysis and some relative material of NBP.
I have done my best; I hope that this report will provide a complete and clear
image of National Bank of Pakistan.
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ACKNOWLEDGEMENT
“In the name of Allah, the most merciful and beneficent”
I am grateful to Almighty Allah who gave the courage to complete
my internship by utilizing my skills, abilities and knowledge as well my Parents;
who prays give me spirit of patience, consistency and courage during my
internship.
I pray my thanks to the Department of Management
Sciences, Khushal Khan Khattak University, especially my supervisor Mr.ISHFAQ
AHMED who provides me a chance to explore my skills, abilities and potential
through internship program.
I am thankful to the National Bank of Pakistan
which provide me an opportunity of internship to flourish myself that how
financial practices to be done in practical way.
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Table of Contents
INTERNSHIP CERTIFICATE………………………………………………………………………………...iii
DEDICATAION…………………………………………………………………………………………………iv
CERTIFICATE OF APPROVAL .............................................................................................................................V
EXECUTIVE SUMMARY ....................................................................... ОШИБКА! ЗАКЛАДКА НЕ ОПРЕДЕЛЕНА.I
ACKNOWLEDGEMENT…………………………………………………………………………………….VII
LIST OF ABBREVIATIONS ................................................................................................................................. XI
CHAPTER01 ...................................................................................................................................................... 3
INTRODUCTION TO THE REPORT ..................................................................................................................... 3
1.1
ORGANIZATIONAL BRIEF INTRODUCTION .........................................................................................................3
1.2
PURPOSE OF INTERNSHIP..............................................................................................................................3
1.3
SCOPE OFTHE STUDY ...................................................................................................................................3
1.4
METHODOLOGY OF THE REPORT ....................................................................................................................3
1.4.1
Primary data .....................................................................................................................................4
1.4.2
Secondary data ..................................................................................................................................4
1.5
OBJECTIVES OF THE STUDY ...........................................................................................................................4
1.6
LIMITATIONS OF THE STUDY ..........................................................................................................................4
1.7
SCHEME OF THE STUDY ................................................................................................................................5
CHAPTER02 ...................................................................................................................................................... 6
OVERVIEW OF THE ORGANIZATION ................................................................................................................. 6
2.1
BRIEF HISTORY OF ORGANIZATION .................................................................................................................6
2.2
NATURE OF THE ORGANIZATION ....................................................................................................................7
2.3
ORGANIZATIONAL HIERARCHY CHART AND ORGANIZATIONAL CHART ....................................................................8
2.4
BUSINESS OVERVIEW.................................................................................................................................10
2.5
BUSINESS VOLUME ...................................................................................................................................10
2.6
PRODUCTS AND SERVICES...........................................................................................................................10
2.6.1
Aitemaad Ijarah ..............................................................................................................................10
2.6.2
Aitemaad Murabaha ........................................................................................................................11
2.6.3
Aitemaad Diminishing Musharakah ................................................................................................11
2.6.4
Aitemaad Salam ..............................................................................................................................12
2.6.5
Aitemaad Istisna ..............................................................................................................................13
viii
2.6.6
Aitemaad Tijarat .............................................................................................................................14
2.6.7
Other Services .................................................................................................................................15
2.7
TYPES OF ACCOUNTS IN ISLAMIC BRANCH......................................................................................................16
2.7.1
Aitemaad Current Account ..............................................................................................................16
2.7.2
Aitemaad Saving Account................................................................................................................18
2.7.3
Aitemaad Term Deposit Certificate .................................................................................................20
2.7.4
Aitemaad Basic Banking Account ...................................................................................................22
2.7.5
Aitemaad Asaan Current Account ...................................................................................................24
2.7.6
Aitemaad Asaan Saving Account .....................................................................................................25
2.7.7
Aitemaad Merchant Account ...........................................................................................................27
2.8
BOARD OF DIRECTORS ...............................................................................................................................29
2.9
REGISTERED HEAD OFFICE ..........................................................................................................................30
2.10
AUDITORS FOR 2022 ................................................................................................................................30
2.11
SHARIAH BOARD MEMBERS........................................................................................................................30
2.12
STRUCTURE OF THE GENERAL BRANCH ..........................................................................................................32
2.13
WHY I SELECTED THIS ORGANIZATION ..........................................................................................................32
2.14
NUMBER OF EMPLOYEES WORKING IN THE BRANCH .......................................................................................33
2.15
DEPARTMENTAL OPERATIONS .....................................................................................................................33
CHAPTER03 .................................................................................................................................................... 34
FINANCIAL RATIOS AND DATA ANALYSIS ....................................................................................................... 34
3.1
FINANCIAL ANALYSIS .................................................................................................................................34
3.1.1
Financial Position ...........................................................................................................................34
3.1.2
Financial Performance ...................................................................................................................36
3.1.3
Summary of Cash Flows ..................................................................................................................37
3.2
HORIZONTAL ANALYSIS OF BALANCE SHEET ...................................................................................................39
3.3
VERTICAL ANALYSIS OF BALANCE SHEET ........................................................................................................41
3.4
HORIZONTAL ANALYSIS OF INCOME STATEMENT .............................................................................................43
3.6
VERTICAL ANALYSIS OF INCOME STATEMENT ..................................................................................................44
3.8
RATIO ANALYSIS .......................................................................................................................................45
3.8.1
Current ratio ...................................................................................................................................45
3.8.2
Debt to equity ratio .........................................................................................................................46
3.8.3
Debt to total assets ..........................................................................................................................47
3.8.4
Gross profit margin ratio ................................................................................................................48
3.8.5
Net profit margin ratio ....................................................................................................................49
3.8.6
Return on equity ..............................................................................................................................50
3.8.7
Asset turnover ratio .........................................................................................................................52
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3.8.8
Advances deposit ratio ....................................................................................................................53
3.9
FINANCIAL IMPACT OF NBP ON PAKISTAN ECONOMY ......................................................................................54
3.10
CONTRIBUTION OF NBP TOWARDS ECONOMIC DEVELOPMENT FINANCE .............................................................54
CHAPTER04 .................................................................................................................................................... 55
SWOT ANALYSIS ............................................................................................................................................ 55
4.1
NBP SWOT ANALYSIS ..............................................................................................................................55
4.2
STRENGTHS .............................................................................................................................................55
4.2.1
Oldest institution & distinctions ......................................................................................................55
4.2.2
More deposits than other banks ......................................................................................................55
4.2.3
Employee benefits............................................................................................................................55
4.2.4
Broad network .................................................................................................................................55
4.3
WEAKNESSES ...........................................................................................................................................56
4.3.1
Lack of marketing effort ..................................................................................................................56
4.3.2
NBP under political pressure ..........................................................................................................56
4.3.3
Favoritism and nepotism .................................................................................................................56
4.3.4
Inefficient counter services in the rush hours..................................................................................56
4.4
OPPORTUNITIES .......................................................................................................................................56
4.4.1
Electronic banking for salaries & pensioners .................................................................................57
4.4.2
Micro financing ...............................................................................................................................57
4.4.3
Yield of loans & maintenance of credibility ....................................................................................57
4.5
THREATS .................................................................................................................................................57
4.5.1
Reduction in private credit investment ............................................................................................57
4.5.2
Emergence of new competitors........................................................................................................58
4.5.3
Political pressure by elected government........................................................................................58
4.5.4
Downsizing ......................................................................................................................................58
4.5.5
Customers complaints .....................................................................................................................58
CHAPTER05 .................................................................................................................................................... 59
FINDINGS,RECOMMENDATIONSAND CONCLUSION ....................................................................................... 59
5.1
FINDINGS ................................................................................................................................................59
5.2
RECOMMENDATIONS.................................................................................................................................59
5.3
CONCLUSION ...........................................................................................................................................61
BIBLIOGRAPHY ..................................................................................................................................................63
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LIST OF ABBREVIATIONS
NBP
National Bank Of Pakistan
BM
Branch Manger
OM
Operational Manager
GBO
General Banking Officer
SBP
State Bank Of Pakistan
SAM
Special Asset Management
VISA
Visa International Service Association
PTCL
Pakistan Tale Communication Limited
SSGC
Sui Southern Gas Company
ATM
Automatic Teller Machine
KYC
Know Your Customer
SS Card
Signature Specimen Card
VDCR
Visa Debit Card Requisition
CBR
Cheque Book Requisition
NIFT
National Institution of Facilitation Technology
DD
Demand Draft
TT
Telegraphic Transfer
MT
Mail Transfer
A/C
Account
CEO
Chief Executive Officer
NPL
Non-Performing Loan
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CASD
Current and Saving Deposits
ROA
Return on Average Assets
ROE
Return on Average Equity
ROCE
Return on Capital Earning
IBB
Islamic Banking Branch
NIDA
National Income Daily Account
ACA
Aitemaad Current Account
ASA
Aitemaad Saving Account
ATDC
Aitemaad Term Deposit Certificate
ABBA
Aitemaad Basic Banking Account
AACA
Aitemaad Asaan Current Account
AASA
Aitemaad Asaan Saving Account
AMA
Aitemaad Merchant Account
2
CHAPTER01
INTRODUCTION TO THE REPORT
1.1
Organizational Brief Introduction
As part of the academic requirement for completing BBA (HRM) students are required to
undergo Eight Weeks of internship with an organization. The internship is to serve the
purpose of acquainting the students with the practice of knowledge of the discipline of
banking administration.
This report is about National Bank Pakistan (NBP).NBP operates 1,514domestic branches
(1323 conventional and 191 Islamic) in Pakistan and 19 overseas branches. I did my
internship in NBP Islamic Branch (2340) Main Bazar Karak to get experience in different
sections, such as Remittances, Account Opening, and General Banking Section. NBP was
established on November 09, 1949 and since then, it has expended its network, becoming the
largest commercial Bank of the country. It offers different products and services to its
customers. Source: NBP (Annual Report 2021)
1.2
Purpose of Internship
The main aim of the study is to work in the natural environment & to implement the
management abilities which I have learned. In this context following are the objectives:
a) For Enhancing my report writing skills
b) To create solid and practicable guidance.
c) To inspect banking functions/behavior i.e., financial inspection/analysis,
operational inspection/analysis.
1.3
Scope of the Study
As an internee in National Bank of Pakistan the main focus of my study research is
restricted to banking functions. An attempt to gather financial information and general
statistics of the bank has been made. Considering the purpose of the study, a best attempt has
been made to get familiar with the practical work in the bank environment.
1.4
Methodology of the Report
Two different methods have been used for the collection of data which are as below
Methodology instruments used are:
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1.4.1 Primary data
Such kind of information that is collected for the initial time on a subject by the
investigator.
a) Discussion with bank employees
b) Individual’s own observation
1.4.2 Secondary data
Such type of data which is already been collected by someone else on the topic for their
own use/purpose and you take that data and use it for yourself for your topic.
a) Newspapers, Magazines and Journals.
b) The Manuals of Bank
c) Bank’s websites
d) Reports available at the library of university
e) Internet
1.5
Objectives of the Study
Following are the main objectives of the report:
1) The initial & main aim of my study is to know that what actually the bank’s role is in
economy and what are their importance in the development of the businesses in Pakistan
on domestic level.
2) To get familiar with the operations which are carried out at the bank in natural
environment.
3) Another objective is to increase the real knowledge about the banking environment their
functions, transactions etc.
4) Also, to upgrade my abilities and get experience by performing with in the natural
environment of a well reputational firm.
5) The last but not the least objective of writing this report is to complete requirement to get
the degree of Bachelors in Business Administration.
1.6 Limitations of the Study
Following are the limitations of the study:
1. Eight weeks’ time period is not enough to completely understand the functions of
bank, also an internet cannot access to all the information of the branch because of
4
confidentiality. Therefore, it was not possible to acquire full knowledge of
instruction of branch.
2. More over some of the data was confidential and was not made available to me.
3. Sometimes due to busy schedule of the bank, complete information regarding
different activities was not providing in time.
1.7 Scheme of the study
The report consists of six chapters. The first chapter include the background, purpose,scope,
objectives and limitation of the internship report. Chapter 2 include theover view of the
organization, brief history, nature ofthe organization, organizational hierarchy chart and
organization structure, numbers of employees, introduction of all departments, business
volume, product line, competitors. Chapter 3 include departments of National Bank of
Pakistan. Chapter 4 includes financial data and financial analysis relevant to the focus of
internship where there is detailed observation of the focus area. The data (primary or
secondary) must be provided sources of information. Chapter 5 consists of strategic analyses
(SWOT Analysis) Strengths, weaknesses, Opportunities and threats. The chapter 6 is about
findings, recommendations and conclusion.
5
CHAPTER02
OVERVIEW OF THE ORGANIZATION
2.1 Brief History of Organization
The history of National Bank of Pakistan is piece of Pakistanis efforts for economic
development. National bank of Pakistan came into being on November 9, 1949 under the
ordinance, 1949 in order to compete with dangerous condition which was improved after
trade deadlock with India devaluation of Indian rupee in 1949. At the start the bank came into
existence with the objective to spread and develop credit to the agriculture sector. The normal
methods of establishing a banking company under the company’s law was set and the bank
ware came into being through the advertisement of an ordinance, due to the crisis situation
that had improved with regard to financing of jute trade. National bank has earned
recognition and numerous awards internationally. Source: NBP (Annual Report 2021)
i.
1323 Domestic conventional branches
ii.
191 domestic Islamic branches
iii.
In 1949 national bank of Pakistan NBP was 100% Government-owned. NBP worked
as a member of the central bank whenever the state bank had not had its own branch.
It also worked as Government treasury operations. Its initial branches were in those
areas which were developing in East Pakistan.
iv.
In 1950 NBP bring into existence a branch in Jeddah, Saudi Arabia.
v.
NBP had branch in London and Calcutta in 1955.
vi.
NBP bring into existence a branch in Baghdad, Iraq in 1957.
vii.
NBP bring into existences a branch in Dar-es-salaam Tanganyika in 1962.
viii.
NBP nationalized by Iraqi government, S Baghdad branch in 1964.
ix.
Tanzanian government nationalized the dar-es-salaam branch in 1967.
x.
NBP got bank of China’s two branches, one in Karachi and one in Chittagong in
1971. At salutation of East Pakistan NBP lost its branches there. NBP combined with
eastern mercantile bank with eastern bank corporation.
xi.
NBP nationalized by the government of Pakistan in 1974.
xii.
In 1977 an offshore brain Cairo opened by NBP.
xiii.
In 1994 Mehran Bank amalgamated with NBP.
xiv.
In Ashgabat, Turkmenistan operations started by NBP in 1997
6
xv.
In 2000 NBP started a representative office in Almaty, Kazakhstan
xvi.
In 2001 state bank of Pakistan and bank of England did deed to allow only 2 Pakistani
banks to run in the UK.
xvii.
In 2003 NBP allowed to operate a branch in Afghanistan.
xviii.
In 2005 NBP shut down its offshore branch in Cairo.
2.2 Nature of the Organization
National bank of Pakistan (NBP) is a services-oriented bank for trade, industry and economic
development within the commercial sector. Introduce the concept of relationship
management for commercial customer along with increase in market share without
compromising on the quality of portfolio Product development base on customer needs wants
and expectation.
Set up dedicated branches and services center for commercial, SME, agriculture and retail for
synergies in customer services and reducing TAT. Services of the bank are not only limited to
individual; these services are also entertained by corporate organization and government.In
today’s challenging business atmosphere, NBP required to develop its role and regulations
the public sector bank reputation, for a new commercial bank.
National bank of Pakistan is nowadays a continuous, enough, effective, and customer
emphasize organization. It developed a wide range of consumer products, to enhance
business and cater to the different segments of society.
7
2.3 Organizational Hierarchy Chart and Organizational Chart
The following figure shows the organizational hierarchy of NBP.
Figure 2.1: Organization Hierarchy of NBP
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AITEMAAD ISLAMIC BANK (2340)
KARAK
BRANCH STRUCTURE
Branch
Manager
Manager
Operations
Account
Openning
Incharge
Head
Cashier
General
Banking
Officer
Janitor
Security
Staff
Figure 2.2: Structure of NBP Aitemaad Karak Branch
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2.4 Business Overview
The following Table Show the short business overview of NBP.
Table 2.1 Overview of Business
No. of Customers
9 Million
Domestic Branches
1514
ATM’s
1500
Bank Staff
15409
Outsourced
1273
2.5 Business Volume
Business volume of National Bank of Pakistan from (2018-2022) is given below.
Table 2.2 Business Volume of NBP
Rupees in millions
Year
2018
2019
2020
2021
2022
Total assets 614,325,855
645,132,711
762,193,593
3,008,527
3,846,684
Deposits
492,761,239
501,872,249
591,907,435
2,418,966
3,019,155
Advances
295,113,426
316,110,406
340,677,10
983,255
1,113,392
Reserves
12,758,650
13,879,860
15,772,124
19,941,047
20,115,239
Investment
135,836,884
139,946,995
21,781,868
17,822,491
1,942,741
Source: (NBP annual report, 2022)
2.6
Products and Services
Services are he outputs of the firm which are in intangible form. NBP offers the following
services to the people.
2.6.1
Aitemaad Ijarah
Ijarah means "to give something on rent". The term "IJARAH" is analogous to the
English term"leasing".
Firstly the Bank will purchase the Assets as required by the Customer and subsequently
the assets will be leased to the Customer on the terms and conditions as agreed with him.
10
Ijarah Facility will be offered for the following assets
i.
Vehicles (both Commercial and Private)
ii.
Office Equipment
iii.
Plant and Machinery
2.6.2
Aitemaad Murabaha
Murabaha may be defined as a contract between a Buyer and Seller under which the Seller
discloses to the Buyer the cost of goods being sold and adds an agreed profit. Price is payable
on spot or at a certain future date, in lump sum or in installments (deferred payments).
Under the MURABAHA FACILITY, the Bank will first purchase the required goods directly
or through an Agent. All costs incurred on such purchases will be borne by the Bank.
Subsequently the Bank will sell the goods to the Customer on deferred payment basis (30
days to one year) at an agreed price comprising cost of goods purchased and Bank's profit.
On due date, the Customer will pay to the Bank the agreed price, in lump sum or as per the
agreed installment schedule.
2.6.3 Aitemaad Diminishing Musharakah
Diminishing Musharakah (DM) is a Shariah compliant concept, wherein the Bank and its
Customer enter in a joint ownership of an asset. The Bank after establishing this partnership
leases out its portion/share to the Customer at a rent agreed upon using a benchmark through
a separate Rental Payment Agreement. Further, the Customer also agrees to purchase the
share of the Bank in units at periodical intervals. For this purpose, the share of the Bank is
divided into units. The Customer over an agreed tenure purchases all the units of the Bank's
share through independent sale contract ultimately taking the complete ownership of the said
asset.
DM can be used in following avenues
11
i.
Construction of building
ii.
Acquisition of fixed assets
iii.
Purchase of plants, Machineries and Equipment
2.6.4 Aitemaad Salam
Aitemaad Salam is designed for Corporate / Commercial / SME / Agri Customers based on
'Salam with wakalah'. This product will cater the needs of farmers and merchants who need
working capital for their business enterprises at different levels that are involved in
agriculture and industrial production or trade etc.
2.6.4.1 Definition of Salam
A Salam transaction is the purchase of a commodity for deferred delivery in exchange for full
advance payment at the time of Salam contract. It is a type of sale in which the price, known
as the Salam capital, is paid at the time of contracting while the delivery of the item to be
sold, known as Al-Muslamfihi (the subject-matter of a Salam contract), is deferred. The
Customer (seller) and the Bank (buyer) are known as Al-Muslamilaihi and Al-Muslim or
Rabbul-Salam respectively. Salam is also known as salaf (borrowing).
2.6.4.1.1 Basic steps of this product are as follows
i.
Bank purchases goods at discounted price from Customer and must makes payment
100% full and in advance at the time of Salam contract.
ii.
The Customer provides the fungible goods and delivers to the Bank at the pre-agreed
date.
iii.
Once the goods are delivered by the Customer to the Bank, the Bank appoints the
Customer as an agent for selling the goods to the third party (ultimate buyer) at target
sale price on spot or credit basis and collects the sale proceeds in a specified number
of days.
iv.
After completion of sale, the agent will notify to Bank those goods have been sold to
third party (ultimate buyer) at target sale price on spot or credit basis.
12
v.
Afterwards, sale proceeds shall be deposited into Customer's account maintained with
the Bank as per the payment terms, Bank will debit the minimum selling price
(Contract Price + Profit + Agency Fee + Other transaction costs - Incentive) from
Customer's account whereas the remaining amount shall be given as Incentive Fee
and Agency Fee to the Customer.
Aitemaad Salam can be used for financing of every item / unit which one homogenous in
nature and can be identified through specification.
2.6.5 Aitemaad Istisna
Aitemaad Istisna is designed for Corporate / Commercial / SME / Agri Customers based on
'Istisna with wakalah' where production and value adding activities are involved.
2.6.5.1 Definition of Istisna
Istisna is a contract of sale of specified items to be manufactured or constructed, with an
obligation on the part of the manufacturer or builder (contractor) to deliver them to the
Customer upon completion. Istisna is one of the two sale contracts where exception to the
rules of existence of subject matter at the time of sale is allowed, as existence of subject
matter is not necessary in Istisna Contract. It can be executed on the goods that require
manufacturing.
It is necessary for the validity of Istisna that the price is fixed with the consent of the parties
and that the necessary specifications of the goods to be manufactured or constructed are preagreed between them. The Istisna price can either be paid in advance, or in installments or at
the time of delivery of goods.
2.6.5.2 Basic steps of this product are as follows
i.
Bank purchases goods at discounted price from Customer and makes payment either
in advance, in installments, at the time of delivery of goods or at any agreed payment
schedule.
ii.
The Customer manufactures or constructs the goods and delivers to the Bank at the
pre-agreed date.
iii.
Once the goods are delivered by the Customer to the Bank, the Bank appoints the
Customer as an agent for selling the goods to the third party (ultimate buyer) at target
sale price on spot or credit basis and collects the sale proceeds in a specified number
of days.
13
iv.
After completion of sale, the agent will notify to Bank those goods have been sold to
third party (ultimate buyer) at target sale price on spot or credit basis.
v.
Afterwards, sale proceeds shall be deposited into Customer's account maintained with
the Bank as per the payment terms, Bank will debit the minimum selling price
(Contract Price + Profit + Agency Fee + Other transaction costs - Incentive) from
Customer's account whereas the remaining amount shall be given as Incentive Fee
and Agency Fee to the Customer.
2.6.5.3 Aitemaad Istisna can be used for financing of
Cement Manufacturing, Sugar Manufacturing, Rice Packaging, Flour, Steel Items, Making of
Fertilizers, Manufacturing of Garments etc.
2.6.6 Aitemaad Tijarat
Aitemaad Tijarat is designed for Corporate / Commercial / SME / Agri Customers based on
'Musawamah with wakalah' for purchase and sale of 'finished goods' according to an agreed
upon specifications.
Aitemaad Tijarat is a sale (Musawamah) and wakalah (agency) based financing facility for
Customers. The facility will enable the Customers to sell their finished goods stock, meet
their working capital requirements and enjoy the benefits of cash sales. Under this concept,
the Bank will purchase the finished goods of the Customers on cash (Musawamah) and after
taking delivery of finished goods, the Bank will appoint the Customer as its agent to sell the
same goods in the market generally on credit basis (Wakalah).
It is necessary for the validity of Aitemaad Tijarat transaction that the price is fixed with the
consent of the Bank and Customer and that the necessary specification of the required items
is fully agreed between them. The price of finished goods under Aitemaad Tijarat can be paid
on spot or in installment with immediate delivery of goods.
2.6.6.1 Basic steps of this product are as follows
i.
Bank purchases 'finished goods' at discounted price from Customer and makes
payment either in advance, in installments, at the time of delivery of goods or at any
agreed payment schedule.
ii.
The Customer delivers 'finished goods' to the Bank at the pre-agreed date (usually on
spot).
14
iii.
Once the finished goods are delivered by the Customer to the Bank, the Bank appoints
the Customer as an agent for selling the finished goods to the third party (ultimate
buyer) at target sale price on spot or credit basis and collects the sale proceeds in a
specified number of days.
iv.
After completion of sale, the agent will notify to Bank those goods have been sold to
third party (ultimate buyer) at target sale price on spot or credit basis.
v.
Afterwards, sale proceeds shall be deposited into Customer's account maintained with
the Bank as per the payment terms, Bank will debit the minimum selling price
(Contract Price + Profit + Agency Fee + Other transaction costs - Incentive) from
Customer’s account whereas the remaining amount shall be given as Incentive Fee
and Agency Fee to the Customer.
2.6.6.2 Aitemaad Tijarat can be used for financing of
Cement, Sugar, Rice, Flour, Steel Items, Fertilizers, Garments etc.
2.6.7 Other Services
In Addition To Shariah Acceptable Standard General Banking Services, Following Services
Are Also Being Offered At The Islamic Banking Branch
A. Handling Of Remittances
B. Issuance Of Bank Drafts And Pay Orders
C. Issuance Of Call Deposit Receipt
D. Safe Custody In Safe-Deposit Lockers
i. Boxes And Packages
ii. Envelopes Services
iii. Safe Deposit Lockers Fee: Small/Medium/Large/Extra Large
E. SMS Alerts Services
F. Standing Instructions Fee
G. Services Of Bills
i. Documentary Bills
ii.Clean Bills Including Cheques, Dividend Warrants, Bank Drafts, Etc.
H. International Banking Services
i. Local Us Dollar Instruments Collection
ii. Foreign Currency Remittances – Outward/Inward.
15
I. Miscellaneous Services
i. Statement Of Account
ii. Issuance Of SBP Cheques
iii. SWIFT Messaging Services
2.7 Types of Accounts in Islamic Branch
Islamic branch opens different types of accounts which are given.
2.7.1 Aitemaad Current Account
The following Table shows the features and benefits of Aitemaad Current Account (ACA).
Table 2.7.1 Features and Benefits of ACA
AITEMAAD CURRENT ACCOUNT-PKR (BASIC FEATURES AND BENEFITS)
Underlying Islamic
Mode
Qardh
Type of Product
Current (Regular Non-Remunerative Account)
Currency
Pakistani Rupees (PKR)
PKR 1000/
Minimum / initial
amount for opening an
account
However, no initial deposit would be required for Mustahkeen of Zakat, Students,
Employees of Government or Semi Government institutions for salary and
pension purposes (including widows / children of deceased employees eligible for
family pension / benevolent fund grant, etc.)
Adult Individual
Sole Proprietorship
Minor
Customer Type
Partnership Limited Company / Corporation
NGO / NPO / Charity
Agent
Executor and Administrator
16
Trust / Club / Society / Association
Government Office Account (all types)
Profit Payment
Not Applicable
Loss Distribution
Not Applicable
Restriction on
withdrawals / credit
No
transactions
Restriction on low
No
account balance
Overdraft allowed
No
Following facilities are available for this account:
Cheque Book,
Debit Card,
Pay Order,
Demand Draft,
SMS Alerts,
Statement of Account,
Schedule of Charges
Lockers,
Online Banking (across the NBP network),
Digital Banking, etc.
Presently, this product is NOT eligible for Free Benefits. However, product
related charges / fees / waiver / grid / criteria will be updated in NBP Aitemaad Schedule of Charges (SOCs) from time to time.
Note: All Government taxes and levies (where applicable) will be recovered from
the account holder as per NBP Aitemaad – Schedule of Charges (SOCs).
17
2.7.2 Aitemaad Saving Account
The following Table shows the features and benefits of Aitemaad Saving Account (ASA).
Table 2.7.2 Features and Benefits of ASA
AITEMAAD SAVING ACCOUNT (BASIC FEATURES AND BENEFITS)
Underlying Islamic Mode
Mudharabah (Un-restricted)
Type of Product
Saving (Regular Remunerative Account)
Currency
Pakistani Rupees (PKR)
PKR 1000/-
Minimum / initial amount for opening an account
However, no initial deposit would be required for
Mustahkeen of Zakat, Students, Employees of Government
or Semi Government institutions for salary and pension
purposes (including widows / children of deceased
employees eligible for family pension / benevolent fund
grant, etc.)
Adult Individual
Sole Proprietorship
Minor
Partnership
Customer Type
Limited Company / Corporation
NGO / NPO / Charity
Agent
Executor and Administrator
18
Trust / Club / Society / Association
Government Office Account (all types)
Profit Calculation
Daily Product
Profit Payment
Monthly
In the event of loss, the ASA account holder and the Bank
will bear the same proportionate to their respective
Loss Distribution
investments provided there is no negligence on the part of
the Bank. In case it is proved that losses suffered in
Mudharabah pool are due to the Bank’s negligence, total
loss shall be borne by the Bank.
Restriction on withdrawals / credit transactions
No
Restriction on low
No
account balance
Overdraft allowed
No
Following facilities are available for this account:
Cheque Book,
Debit Card,
Pay Order,
Demand Draft,
Schedule of Charges
SMS Alerts,
Statement of Account,
Lockers,
Online Banking (across the NBP network),
Digital Banking, etc.
Presently, this product is NOT eligible for Free Benefits.
However, product related charges / fees / waiver / grid /
19
criteria will be updated in NBP Aitemaad - Schedule of
Charges (SOCs) from time to time.
Note: All Government taxes and levies (where applicable)
will be recovered from the account holder as per NBP
Aitemaad – Schedule of Charges (SOCs).
2.7.3 Aitemaad Term Deposit Certificate
The following Table shows the features and benefits of Aitemaad Term Deposit Certificate
(ATDC).
Table 2.7.3 Features and Benefits of ATDC
AITEMAAD SAVING ACCOUNT (BASIC FEATURES AND BENEFITS)
Underlying Islamic Mode
Mudharabah (Un-restricted)
Type of Product
Saving (Regular Remunerative Account)
Currency
Pakistani Rupees (PKR)
PKR 100/-
Minimum / initial amount for opening an account
However, no initial deposit would be required for
Mustahkeen of Zakat, Students, Employees of Government
or Semi Government institutions for salary and pension
purposes (including widows / children of deceased
employees eligible for family pension / benevolent fund
grant, etc.)
Adult Individual
Sole Proprietorship
Customer Type
Minor
Partnership
20
Limited Company / Corporation
NGO / NPO / Charity
Agent
Executor and Administrator
Trust / Club / Society / Association
Government Office Account (all types)
Profit Calculation
Daily Product
Profit Payment
Monthly
In the event of loss, the ASA account holder and the Bank
will bear the same proportionate to their respective
Loss Distribution
investments provided there is no negligence on the part of
the Bank. In case it is proved that losses suffered in
Mudharabah pool are due to the Bank’s negligence, total
loss shall be borne by the Bank.
Restriction on withdrawals / credit transactions
No
Restriction on low
No
account balance
Overdraft allowed
No
Following facilities are available for this account:
Cheque Book,
Debit Card,
Schedule of Charges
Pay Order,
Demand Draft,
SMS Alerts,
Statement of Account,
21
Lockers,
Online Banking (across the NBP network),
Digital Banking, etc.
Presently, this product is NOT eligible for Free Benefits.
However, product related charges / fees / waiver / grid /
criteria will be updated in NBP Aitemaad - Schedule of
Charges (SOCs) from time to time.
Note: All Government taxes and levies (where applicable)
will be recovered from the account holder as per NBP
Aitemaad – Schedule of Charges (SOCs).
2.7.4 Aitemaad Basic Banking Account
The following Table highlights the features and benefits of Aitemaad Basic Banking Account
(ABBA).
Table 2.7.4 Features and Benefits of ABBA
AITEMAAD BASIC BANKING ACCOUNT (BASIC FEATURES AND BENEFITS)
Underlying Islamic Mode
Qardh
Type of Product
Current (Non-Remunerative Account)
Currency
Pakistani Rupees (PKR)
Minimum / initial amount for
opening an account
Customer Type
PKR 1,000/-
Adult Individual
Minor
Profit Payment
Not Applicable
Loss Distribution
Not Applicable
Restriction on withdrawals / credit
Maximum two (02) deposit transactions and two (02) withdrawal
22
transactions
transactions are allowed (in total four transactions) in a month
through cash / clearing except for ATM withdrawals and system
generated debit transactions.
Restriction on low
No
account balance
Following facilities are available for this account:
Cheque Book,
Debit Card
Pay Order,
Demand Draft,
SMS Alerts,
Statement of Account,
Schedule of Charges
Lockers,
Online Banking (across the NBP network),
Digital Banking, etc.
Presently, this product is eligible for Free Statement of Account as
all-time Benefits. However, product related charges / fees / waiver /
grid / criteria will be updated in NBP Aitemaad - Schedule of
Charges (SOCs) from time to time.
Note: All Government taxes and levies (where applicable) will be
recovered from the account holder as per NBP Aitemaad – Schedule
23
of Charges (SOCs).
2.7.5 Aitemaad Asaan Current Account
The following Table shows the features and benefits of Aitemaad Asaan Current Account
(AACA).
Table 2.7.5 Features and Benefits AACA
AITEMAAD ASAAN CURRENT ACCOUNT (BASIC FEATURES AND BENEFITS)
Underlying Islamic Mode
Qardh
Type of Product
Current (Non-Remunerative Account)
Currency
Pakistani Rupees (PKR)
Minimum / initial amount for opening an account
PKR 100/-
Adult Individual
Minor
Customer Type
Includes Skilled / unskilled workforce, Less educated /
uneducated people, laborers / daily wagers, women /
housewives, self-employed individuals, pensioners, young
adult population, etc.
Profit Payment
Not Applicable
Loss Distribution
Not Applicable
Total Debit per month PKR 500,000/Restriction on withdrawals / credit transactions
Total Credit Balance Limit PKR 500,000/-
Restriction on low
No
account balance
24
Overdraft allowed
No
Following facilities are available for this account:
Cheque Book,
Debit Card Pay Order,
Demand Draft,
SMS Alerts,
Statement of Account,
Lockers,
Online Banking (across the NBP network),
Schedule of Charges
Digital Banking, etc.
All Time Free Benefits
Cheque Book (issuance)
Debit Card (issuance & annual fee)
Note:
All Government taxes and levies (where applicable) will be
recovered from the account holder as per NBP Aitemaad –
Schedule of Charges (SOCs).
The charges / fees / waiver / grid / criteria will be reviewed
and updated in NBP Aitemaad - Schedule of Charges
(SOCs) from time to time.
2.7.6 Aitemaad Asaan Saving Account
The following Table shows the features and benefits of Aitemaad Asaan Saving Account
(AASA).
Table 2.7.6 Features and Benefits of AASA
25
AITEMAAD ASAAN SAVING ACCOUNT (BASIC FEATURES AND BENEFITS)
Underlying Islamic
Mode
Mudharabah (Un-restricted)
Type of Product
Saving (Remunerative Account)
Currency
Pakistani Rupees (PKR)
Minimum / initial
amount for opening an
PKR 100/-
account
Adult Individual
Minor
Customer Type
Includes Skilled / unskilled workforce, Less educated / uneducated people, laborers / daily
wagers, women / housewives, self-employed individuals, pensioners, young adult population, etc.
Profit Calculation
Daily Product
Profit Payment
Monthly
In the event of loss, the AASA account holder and the Bank will bear the same proportionate to
Loss Distribution
their respective investments provided there is no negligence on the part of the Bank. In case it is
proved that losses suffered in Mudharabah pool are due to the Bank’s negligence, total loss shall
be borne by the Bank.
Total Debit per month PKR 500,000/Restriction on
withdrawals / credit
transactions
Total Credit Balance Limit PKR 500,000/ (except AASA related profit payment and taxes /
charges).
Restriction on low
No
account balance
Overdraft allowed
Schedule of Charges
No
Following facilities are available for this account:
26
Cheque Book,
Debit Card,
Pay Order,
Demand Draft,
SMS Alerts,
Statement of Account,
Lockers,
Online Banking (across the NBP network),
Digital Banking, etc.
All Time Free Benefits
Cheque Book (issuance)
Debit Card (issuance & annual fee)
Note:
All Government taxes and levies (where applicable) will be recovered from the account holder as
per NBP Aitemaad – Schedule of Charges (SOCs).
The charges / fees / waiver / grid / criteria will be reviewed and updated in NBP Aitemaad Schedule of Charges (SOCs) from time to time.
2.7.7 Aitemaad Merchant Account
The following Table shows the features and benefits of Aitemaad Merchant Account (AMA).
Table 2.7.7 Features and Benefits of AMA
27
Underlying Islamic
Mode
Mudharabah (Un-restricted)
Type of Product
Saving (Remunerative Current Account)
Currency
Pakistani Rupees (PKR)
Minimum / initial
amount for opening
PKR 1,000/-
an account
-Sole Proprietorship§ Partnership
-Limited Company / Corporation
-NGO / NPO / Charity
Customer Type
-Executor and Administrator
-Trust / Club / Society / Association
-Government Office Account (all types)
Profit Calculation
Daily Product
Profit Payment
Monthly
Restriction on
withdrawals / credit
No
transactions
Restriction on low
account balance
No
In the event of loss, the AMA account holder and the Bank will bear the same
Loss Distribution
proportionate to their respective investments provided there is no negligence on the part
of the Bank. In case it is proved that losses suffered in Mudharabah pool are due to the
Bank’s negligence, total loss shall be borne by the Bank.
1. All Time Free Benefits of AMA
Benefits and
Eligibility Criteria
-Online Banking (across the NBP network)
-SMS Alerts (for sole proprietorship only)
28
2. Free Benefits for the First Month of AMA (without balance criteria)
-Cheque Book – (issuance)
-Pay Order – (issuance)
-Demand Draft – (issuance)
-Statement of Account
-EMV Debit Card – (issuance & annual fee)
3. Free Benefits from the Second Month of AMA (with balance criteria)
If daily average balance (monthly average balance) of previous month is equal to or
greater than PKR 50,000/- then following free benefits will be offered for the current
month:
-Cheque Book – (issuance)
-Pay Order – (issuance)Demand Draft – (issuance)
-Statement of Account
-EMV Debit Card – (issuance & annual fee)
Note:
-All Government taxes and levies (where applicable) will be recovered from the account
holder as per NBP Aitemaad – Schedule of Charges (SOCs).
-The charges / fees / waiver / grid / criteria will be reviewed and updated in NBP
Aitemaad - Schedule of Charges (SOCs) from time to time
2.8 Board of Directors
Following are the board of directors.
29
Mr. Ashraf Mahmood Wathra,chairman
Mr.Rehmat Ali Hasnie,President/CEO
Mr. Asif Jooma,Director
Mr. Farid Malik,Director
Ms.Ali Syed, Director
Mr.Ahsan Ali Chughtai,Director
Mr.Nasim Ahmad,Director
MrAmjad Mahmood,Director
2.9 Registered Head Office
The head office of National bank of Pakistan is located in:
NBP Building I.I. Chundrigar Road Karachi, Pakistan
Phone: 92-21-99220100 (30 lines),
92-21-99062000 (60 lines),
Phone Banking: 111-627-627
2.10 Auditors for 2022
Following are the two auditors who audit the bank operations and activities recently in 2022..
Yousaf Adil
A.F. Ferguson and Co
Chartered Accountants
Chartered Accountants
2.11 Shariah Board Members
Following are the shariah board members of NBP IBB.
Mufti Ehsan Waquar
Chairman Shariah Board
30
Dr. Mufti Khalil Aazami
Shariah Board Member
Mufti Muhammad Imran
President Shariah Board Member
Mufti Sajjad Ashraf Usmani
Shariah Board Member
Mufti Muhammad Ahmad
Shariah Board Member
31
2.12 Structure of the General Branch
The following figure shows the general structure of NBP IBB.
GROUP HEAD
AREA HEAD
BRANCH MANAGER
OPERATIONAL MANAGER
BUSINESS DEVELOPMENT OFFICER
RELATIONSHP
RELATIONSHIP
BUSINESS SALE
BUSINESS SALE
MANAGER
MANAGER
OFFICER
OFFICER
Figure 2.3 Structure of NBP IBB
2.13 Why I Selected This Organization
There are multiple reasons for selecting National Bank of Pakistan for internship, some are
mention below.
1) Largest Commercial Bank of Pakistan
2) Wide branch network of more than 1500.
3) Largest account number and Transaction per day of more than 10million
4) Some extra department from any commercial bank like Government section, tax section,
etc.
5) Public limited bank
32
During my internship in this bank, I really enjoyed my work there with the staff of this bank
and a wish to be employer of this bank. It was impossible to work in all departments with that
so much low time but on my request the staff of the branch provides me the opportunity to
work in the different department for the sake of practical knowledge I am really happy for the
compromise of the staff in my experience growing.
2.14 Number of Employees Working in The Branch
There were nine employees in National Bank of Pakistan Karak branch
a) One Branch Manager
b) One Operation Manager
c) One Janitorial Boy
d) Three security guards
e) One Cashier
2.15 Departmental Operations
During my internship I worked with all departments in the bank in order to learn all
operational activities in the bank.
I worked in the following departments
1) Remittance department
2) Cash department
3) Clearance department
4) General banking
5) Account Opening Department
I am very happy to learn and have grown my experiences with have work in all
departments.
33
CHAPTER03
FINANCIAL RATIOS AND DATA ANALYSIS
3.1
Financial Analysis
Financial analysis, though varying according to the particular interests of the analyst, always
involves the use of various financial statement primarily the balance sheet and income
statement. The balance sheet summarizes the assets, liabilities, and owner’s equity of a
business at a point in time, and the income statement summarizes revenues and expenses of
the over a particular period of time. A conceptual framework for financial analysis provides
the analyst with an interlocking means for structuring the financing.
3.1.1
Financial Position
It is also known as balance sheet of a company. It highlights the financial health of a
company. It consists of assets on left side and liabilities on right side. It is prepared in a
particular point of time. It shows nature and value of assets and liabilities at a given time.
Need of Balance Sheet
i.
To ascertain the nature and value of assets.
ii.
To ascertain the nature and amount of liabilities.
iii.
To find out financial solvency of an enterprise.
The following table shows the financial position of a NBP at a given period of time.
34
Financial Position (Pkr” Mn)
2022
2021
2020
2019
Cash and balances with treasury banks
278,869
249,970
293,198
247,917
Balances with other banks
19,211
15,015
13,698
13,050
Lending to financial institutions
335,467
126,805
134,780
106,392
Investments
1,942,741
1,466,405
1,452,799
1,284,975
Advances
1,113,314
983,871
1,008,399
926,340
Operating fixed assets
56,005
56,109
55,990
55,196
Deferred tax assets
1,903
-
-
-
Right of use assets
7,091
7,017
7,447
-
Other assets
102,434
112,018
166,148
170,018
Total assets
3,857,035
3,017,210
3,132,360
2,803,886
Bills payable
21,848
16,795
19,867
9,944
Borrowings
312,925
138,539
471,757
392,739
Deposits and other accounts
3,018,148
2,418,928
2,197,985
2,011,313
Liabilities against assets subject to finance lease
134
197
194
121
Lease liability against right of use assets
8,361
7,869
7,831
-
Deferred tax liabilities
-
2,933
10,869
6,946
Other liabilities
200,596
157,545
184,633
171,762
Total liabilities
3,562,012
2,742,808
2,893,138
2,592,825
Share capital
21,275
21,275
21,275
21,275
Reserves
62,427
57,591
53,261
53,443
Surplus on revaluation of assets
64,995
73,988
70,359
59,262
Unappropriated profit
145,313
120,632
93,466
76,240
Sub Total
294,010
273,486
238,360
210,220
Non-Controlling Interest
1,013
916
863
842
Total
295,0232
274,402
239,223
211,061
Assets
Liabilities
Equity
Table 3.1 Balance Sheet of NBP
35
3.1.2 Financial Performance
It tells weather a company made profit or incurred loss. It highlights the operating
performance of a company over a period of time.
It is also called profit and loss statement, income statement, statement of business operation.
Financial Performance (Pkr” Mn)
2022
2021
2020
2019
Mark-up / return / interest earned
503,310
231,883
239,811
149,969
Mark-up / return / interest expensed
386,484
134,265
153,656
167,570
Net mark-up / interest income
916,827
97,618
104,155
71907,
Fee & commission income and Exchange income
28,602
23,314
22,327
25,170
Capital gain & Dividend income
6,345
10,783
9,987
5,262
Share of profit from joint venture-net of tax
218
(219)
(96)
(334)
Share of loss from associates-net of tax
23
43
37
(35)
Other income
1,856
3,965
5,817
6,724
Total non-markup / interest income
38,869
37,360
37,760
37,674
Total income
136,636
141,739
109,914
96,588
Operating Expenses (Interest Expense)
61,406
64,443
67,379
57,480
Profit before provisions
75,230
77,297
42,535
41,085
Provisions
11,659
30,912
13,557
11,205
Extra-Ordinary Item
9,779
-
-
-
Pre-tax profit
53,792
46,385
28,978
29,880
Taxation
25,032
15,798
12,331
9,844
After-tax profit
28,760
30,686
16,647
20,035
36
Table 3.2 Income Statement of NBP
3.1.3 Summary of Cash Flows
Statement of cash flow shows the actual cash position of a company. It report the amount of
cash collected and paid out by a company in operating, investing, and financing activities for
a period of time.
2022
2021
2020
2019
2018
Cash Flow from Operating Activities
1,561,683
470,702
(51,870)
293,000
(597,385)
Cash Flow from Investment Activities
(1,607,936) (459,106) 52,401
(254,952)
(536,224)
Classification
Table 3.2 Summary of Cash flow
PKR” Mn
37
Cash Flow from Financing Activities
(2,428)
(2,454)
(2,042)
(2,046)
(40)
Cash and cash equivalent at Beginning of
271,386
262,243
263,754
227,753
166,631
222,704
271,386
262,243
2263,754
227,753
the Year
Cash and cash equivalent at End of the
Year
38
3.2 Horizontal Analysis of Balance Sheet
In horizontal analysis, financial statements of two or more years are placed in relation to each
other for comparison. It shows increase or decrease in the items of financial statements both
in absolute term and percentage term.
Table 3.3 Horizontal Analysis of Balance Sheet
Horizontal Analysis
2022
2021
2020
2019
2018
Pkr
%
Pkr
%
Pkr
%
Pkr
%
Pkr
%
278,747
12
249,260
-15
292,513
18
247,518
55
160,090
0
17,667
24
14,227
8
13,221
8
12,202
-54
26,404
91
335,467
165
126,805
-6
134,780
27
106,392
295
26,916
-78
Investments
1,938,171
32
1,463,398
1
1,449,555
13
1,284,319
-1
1,295,720
44
Advances
1,113,392
13
983,255
-2
1,008,139
9
926,007
25
739,772
11
Operating fixed assets
54,754
0
54,717
0
54,679
1
54,106
65
32,752
0
Deferred tax assets
1,626
0
-
0
-
0
-
-100
7,317
42
Right of use assets
6,605
-1
6.670
-8
7,221
100
-
0
-
0
Other assets
100,255
-9
110,198
-33
164,281
-2
168,022
-22
216,351
96
Total assets
3,846,684
28
3,008,527
-4
3,124,389
-12
2,798,586
12
2,505,321
25
Bills payable
21,848
30
16,795
-15
19,867
100
9,944
-25
13,195
30
Borrowings
312,925
126
138,539
-71
471,757
20
392,739
9
360,106
703
Deposits and other accounts
3,019,155
25
2,418,966
10
2,198,049
9
2,011,385
16
1,727,102
4
-
0
-
0
-
0
-
-100
15
-43
7,894
5
7,534
0
7,640
100
-
0
-
0
2,978
-73
10,916
56
6,985
100
-
0
Assets
Cash and balances with
treasury banks
Balances with other banks
Lending to financial
institutions
Liabilities
Liabilities against assets
subject to finance lease
Lease liability against right of
use assets
-
Deferred tax liabilities
-
Other liabilities
198,660
27
156,156
-15
183,545
8
170,644
-26
229,522
92
Total liabilities
3,560,482
30
2,740,968
-5
2,891,775
12
2,591,698
11
2,329,939
27
Net Assets
286,203
7
267,559
15
232,614
12
206,869
18
175,382
-1
100
39
Share capital
21,275
0
21,275
0
21,275
0
21,275
0
21,275
0
Reserves
60,371
7
56,563
8
52,309
-2
53,274
6
50,357
8
64,482
-13
73,699
5
70,244
17
59,986
21
49,689
-12
Un appropriated profit
140,074
21
116,021
31
88,786
23
72,333
34
54,061
4
Total
286,203
7
267,559
15
232,614
12
206,869
18
175,382
-1
Surplus on revaluation of
assets
40
3.3 Vertical Analysis of Balance Sheet
In vertical analysis, financial statement of single year are reviewed and analyzed with proper
techniques like ratios.
Following table shows the vertical analysis of balance sheet of NBP from 2018-2022.
Table 3.4 Vertical Analysis of Balance Sheet
Vertical Analysis
2022
2021
2020
2019
2018
Pkr
%
Pkr
%
Pkr
%
Pkr
%
Pkr
%
229,911
4
278,747
7
249,260
8
292,513
9
247,518
9
18,594
0
17,667
0
14,227
0
12,202
0
12,202
0
31,272
1
335,467
9
126,805
4
134,780
5
106,392
4
Investments
3,477,354
66
1,938.171
50
1,463,398
49
1,449,555
46
1,284,319
46
Advances
1,230,522
23
1,113,392
29
983,255
33
1,008.139
32
926,007
33
Operating fixed assets
58,495
1
54,754
1
54,717
2
54,679
2
54,106
2
Deferred tax assets
22,299
0
1,626
0
-
0
-
0
-
0
Right of use assets
6,708
0
6,605
0
6,670
0
7,221
0
-
0
Other assets
165,279
3
100,255
3
110,196
4
164,281
5
168,022
6
Total assets
5,240,425
100
3,846,684
100
3,008,527
100
3,124.389
100
2,798,566
100
Bills payable
55,268
1
21,848
1
16,795
1
19,867
1
9,944
0
Borrowings
1,940,486
37
312,925
8
138,539
5
471,757
15
392,739
14
2,666,184
51
23,019,155
78
2,418,966
80
2,198,049
70
2,011,385
72
-
0
-
0
-
0
-
0
-
0
7,894
0
7,534
0
7,640
0
-
0
-
0
Deferred tax liabilities
8,268
0
-
0
2,978
0
10,916
0
7,985
0
Other liabilities
198,660
5
156,156
5
183,545
6
170,644
6
229,522
Total liabilities
4,939,577
94
3,560,482
93
2,740,968
91
2,891,775
93
2,591,698
93
Net Assets
300,848
6
286,203
7
267,559
9
232,614
7
206,869
7
Assets
Cash and balances with
treasury banks
Balances with other banks
Lending to financial
institutions
Liabilities
Deposits and other
accounts
Liabilities against assets
subject to finance lease
Lease liability against right
of use assets
41
Share capital
21,275
0
21,275
1
21,275
1
21,275
1
21,275
1
Reserves
64,144
1
60,371
2
56,563
2
52,309
2
53,274
2
42,917
1
64,482
2
73,699
2
70,244
2
59,986
2
Un appropriated profit
172,512
3
140,074
4
116,021
4
88,786
3
72,333
3
Equity
286,203
5
267,559
9
232,614
9
206,869
8
175,382
8
Surplus on revaluation of
assets
42
3.4 Horizontal Analysis of Income Statement
Following table shows the horizontal analysis of financial performance/ profit and loss
statement of NBP from 2018- 2022.
Table 3.5 Horizontal Analysis of income Statement
Horizontal Analysis
2022
2021
2020
2019
2018
Pkr
%
Pkr
%
Pkr
%
Pkr
%
Pkr
%
Mark-up / return / interest earned
231,883
-10
257,811
8
257,811
8
238,477
60
149,969
22
Mark-up / return / interest expensed
134,265
-13
153,656
-8
167,570
88
89,302
30
68,820
16
Net mark-up / interest income
97,618
-6
104,155
45
71,907
19
60,666
12
54,253
-1
Fee commission and Exchange income
24,314
9
22,327
-11
25,170
-7
27,017
42
19,026
12
Capital gains& Dividend income
10,783
10
9,787
86
5,262
-20
6,545
-36
10,301
-10
Other income
1,844
-53
3,963
-31
5,768
115
2,687
54
1,740
12
Non-interest income
36,942
2
36,077
0
36,199
0
36,249
17
31,066
4
Total income
134,559
-4
140,232
30
108.107
12
96,915
14
85,319
1
Operating Expenses
60,004
-5
63,112
-4
65,853
18
55,931
15
48,528
3
Profit before provisions
74,556
-3
77,120
83
42,254
3
40,984
11
36,791
-2
Provisions
11,916
-61
30,896
117
14,250
26
11,300
848
1,192
200
Extra-Ordinary Item
9,779
-
-
-
-
-
-
-
-
-
Pre-tax profit
52,860
14
46,224
65
28,003
-6
29,683
-17
35,599
-4
Taxation
24,852
59
15,665
28
12,194
26
9,668
-23
12,571
-13
After-tax profit
28,008
-8
30,559
93
15,810
-21
20,015
-13
23,028
1
Profitability
43
3.6 Vertical Analysis of Income Statement
Table 3.6 highlights the vertical analysis of profit and loss statement of NBP from 20182022.
Table 3.6 Vertical Analysis of Income Statement
Vertical Analysis
2022
2021
2020
2019
2018
Pkr
%
Pkr
%
Pkr
%
Pkr
%
Pkr
%
Mark-up / return / interest earned
503,310
93
231,883
86
257,811
88
238,477
87
149,969
81
Fee commission and Exchange income
28,602
5
24,314
9
22,327
8
25,170
9
27,017
15
Capital gains & Dividend income
10,783
1
10,783
4
9,787
3
5,262
2
6,545
3
Other income
1,737
0
1,844
1
3,963
1
5,768
2
2,687
1
Total income
539,994
100
268,824
100
293,888
100
275,677
100
186,218
100
Mark-up / return / interest expensed
386,484
72
134,265
50
153,656
52
167,570
61
89,302
48
Operating Expenses and other charges
78,173
14
60,004
22
63,112
21
65,853
24
55,931
30
Provisions
12,601
2
11,916
4
30,896
11
14,250
5
11,300
6
Extra-Ordinary Item
-
0
9,779
4
-
-
-
-
-
-
Taxation
32,327
6
24,852
9
15665
5
12,194
4
9,668
5
Total expense – as a % of total income
509,584
94
240,816
90
263,329
90
259,867
94
166,203
89
After-tax profit
30,410
6
28,008
10
30,559
10
15,810
6
20,015
11
Total
539,994
100
268,824
100
293,888
100
275,677
100
186,218
100
Profitability
Mark-up / return /non-interest expense
44
3.8 Ratio Analysis
Ratio analysis enables the analyst to compare items on a single financial statement or to
examine the relationships between items on two financial statements. After calculating ratios
for each year's financial data, the analyst can then examine trends for the company across
years. Since ratios adjust for size, using this analytical tool facilitates intercompany as well as
intercompany comparisons. Ratios are often classified using the following terms: profitability
ratios (also known as operating ratios), liquidity ratios, and solvency ratios. Profitability
ratios are gauges of the company's operating success for a given period of time. Liquidity
ratios are measures of the short-term ability of the company to pay its debts when they come
due and to meet unexpected needs for cash. Solvency ratios indicate the ability of the
company to meet its long-term obligations on a continuing basis and thus to survive over a
long period of time. Financial ratios allow for comparison:
a) Between companies
b) Between industries
c) Between different time periods for one company
d) Between a single company and its industry average
3.8.1 Current ratio
Current ratio measures the firm ability to meet the current ability from the current
assets. We can also define it as it shows the firm ability to how efficiently cover the short
terms debt with the help of short-term investments and the current ratio measure that how
many current assets are greater or less than the current liabilities. We can calculate it by
dividing the current ratio on current liability.
𝒄𝒖𝒓𝒓𝒆𝒏𝒕 𝒂𝒔𝒔𝒆𝒕𝒔
Current ratio= 𝒄𝒖𝒓𝒓𝒆𝒏𝒕 𝒍𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔
Table 3.7 Current Ratio of NBP
NBP Current Ratio
Year
2022
2021
2020
Current Assets
1,68,857,180
2,03,637,998 1,96,827,691
2,28,560,637
Current Liabilities
9,6503,399
1,16,201,353 1,61,128,710
1,62,256,891
Current ratio
1.75 Times
1.752 Times
1.40
1.22 Times
2019
SOURCE: (NBP Annual Reports, 2022)
45
Graph 3.1
Current Ratio
2
1,5
1
0,5
0
Current Ratio
2019
2020
2021
2022
1,75
1,752
1,221
1,4
Figure 3.1 Increase/Decrease in current Ratio of NBP from 2019-2022
Interpretation
The current ratio of NBP for all four years is not high because of current assets is not
in huge. The ratio is 1.75in 2019 but in 2020 it slightly moves up to 1.752& in 2020 it
slightly decrease to 1.22. In the 2020 current ratio 1.4 times.2020-year ratio 1.752 which is
the highest in all four years the bank. We can say that for every one rupee’s liability the bank
has 1.4 rupees in the 2022.
3.8.2 Debt to equity ratio
Debt to equity ratio is used to find total liability against the Total Shareholders’
Equity. This ratio shows the firm efficiency that how easily the liabilities of the firm on the
basis of Equity. This ratio helps us to tell the bank is suitable to take the risk or not. We can
calculate this with following formula
Debt to Equity Ratio=
𝑻𝒐𝒕𝒂𝒍 𝒍𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔
𝒕𝒐𝒕𝒂𝒍 𝒆𝒒𝒖𝒊𝒕𝒚
Table 3.8 Debt to Equity Ratio of NBP
NBP Debt to Equity Ratio
Year
2019
2020
2021
T. Liabilities
906,528,852 1,016,926,288 1,171,598,393
1,211,054,416
Shareholder
128,495,828 132,651,448
160,663,530
140,396,766
2022
Equity
46
Debt to Equity
7.05
7.67
8.34
7.537
ratio.
Graph 3.2
Debt to Equity Ratio
8,5
8
7,5
7
6,5
6
Debt to Equity Ratio
2019
2020
2021
2022
7,05
7,67
8,34
7,53
Figure 3.2 Increase/Decrease in Debt-to-Equity Ratio of NBP from 2019-2022
Interpretation
We can say from above table and graphs that debt to equity ratio increased from 7.05
in 2020 to 7.67 in 2021 and then further increased to 8.34 in 2020 which high efficiency of
NBP & in 2022 decreased to 7.53.
3.8.3 Debt to total assets
Debt to asset ratio measures the firm ability how efficiently the company cover its
total Debt with total assets. This ratio tells that the company or firm how many depend on
total debt and how many it depends on total assets. This ratio tells that how many of it is
greater than the risk will be greater. If value of it is less the risk will be less.
It is calculated as
𝑻𝒐𝒕𝒂𝒍 𝒅𝒆𝒃𝒕𝒔
Debt to Asset Ratio= 𝑻𝒐𝒕𝒂𝒍 𝒂𝒔𝒆𝒕𝒔 × 𝟏𝟎𝟎
47
Table 3.9 Debt to Asset Ratio of NBP
NBP Debt to Asset Ratio
Year
2019
2020
2021
2022
Total debt
906,528,852
1,016,926,288
1,171,598,393
1,211,054,416
Total Assets
1,035,024,680 1,149,577,736
1,311,995,159
1,371,717,946
Debt to asset ratio
87.6 %
89.3 %
88.2 %
88.5 %
Graph3.3
Debt to Asset Ratio
89,50%
89,00%
88,50%
88,00%
87,50%
87,00%
86,50%
Debt to Asset Ratio
2019
2020
2021
2022
87,60%
88,50%
89,30%
88,28%
Figure 3.3 Increase/Decrease in Debt to Asset Ratio of NBP from 2019-2022
Interpretation
On the above data and graph, it is clear that this ratio was going upward from 87.60%
in2020 to 88.50% in 2021 and then in 2022its value becomes 88.28%.
3.8.4
Gross profit margin ratio
Gross Profit Margin Ratio tell and indicate that firm how many earn the gross profit
from its sales. Or Gross Profit Margin Ratio that how efficiently utilize its sales to earn gross
revenue... “This ratio shows the profit margin in sales/ revenue”.
This is calculated as.
48
Gross Profit Margin Ratio =
𝑮𝒓𝒐𝒔𝒔 𝒑𝒓𝒐𝒇𝒊𝒕
𝒊𝒏𝒕𝒆𝒓𝒆𝒔𝒕 𝒆𝒂𝒓𝒏𝒆𝒅
× 𝟏𝟎𝟎
Table 3.10 Gross Profit Margin Ratio
1.1.1.1
NBP Gross Profit Margin Ratio
Year
2019
2020
2021
2022
Gross Profit
7,011,046
6,201,358
7,155,149
17,459,330
Interest earned
88,472,134
95,325,179
100,092,132
100,192,320
Gross profit ratio
7.92%
6.50%
7.14%
17.42%
Graph 3.4
Gross Profit Margin Ratio
20,00%
15,00%
10,00%
5,00%
0,00%
Gross Profit Margin
Ratio
2019
2020
2021
2022
7,92%
6,50%
7,14%
17,42%
Figure 3.4 Increase/Decrease in Gross Profit Margin of NBP from 2019-2022
Interpretation
The year of 2019 show the ratio of 7.92%. In2020 it is 6.50% and in 2020 it increases to
7.14% and then increased by a very high margin in 2022 17.42%.
3.8.5
Net profit margin ratio
Netprofit Margin Ratio measure the firm’s ability that how efficiently the firm utilize
interest earned to earn net profit. Net profit Margin ratio we can calculate by dividing net
income on its interest earned.
Formula of Net Profit Margin Ratio is given below:
Net profit margin ratio=
𝑵𝒆𝒕 𝒑𝒓𝒐𝒇𝒊𝒕 𝒂𝒇𝒕𝒆𝒓 𝒕𝒂𝒙𝒆𝒔
𝑰𝒏𝒕𝒆𝒓𝒆𝒔𝒕 𝒆𝒂𝒓𝒏𝒆𝒅
× 𝟏𝟎𝟎
49
Table 3.11 Net Profit Margin Ratio of NBP
1.1.1.2
NBP Net Profit Margin Ratio
Year
2019
2020
2021
2022
Net Profit after Taxes
17,563,214
17,604,722
16,162,635
5306783
Interest earned
88,472,134
95,325,179
100,092,132
100,192,320
Net profit margin ratio
19.9%
18.5%
16.14%
5.30 %
Graph 3.5
25,00%
20,00%
Net Profit Margin Ratio
15,00%
10,00%
5,00%
0,00%
Net Profit Margin
Ratio
2019
2020
2021
2022
19,90%
18,50%
16,14%
5,30%
Figure 3.5 Increase/Decrease in Net Profit Margin of NBP from 2019-2022
Interpretation
From the table and graph, it shows that the net profit margin of the bank is reduced
sequentially from 2021 to 2022. In 2020 net profit Margin is 19.90%, in 2020 net profit
margin ratio is 18.50 and in 2021 the net profit margin ratio is 16.14% and lowest in list is in
2022 which is 5.30 In all years the value of net profit margin ratio is decreases.
3.8.6
Return on equity
We can calculate as to divide the profit after taxation on by shareholders equity. On
ROE compares net profit after taxes to the Shareholder’s Equity.
50
ROE can calculate with the given formula:
𝑵𝒆𝒕 𝒑𝒓𝒐𝒇𝒊𝒕
Return on Equity= 𝒕𝒐𝒕𝒂𝒍 𝒆𝒒𝒖𝒊𝒕𝒚 × 𝟏𝟎𝟎
Table 3.12 ROE of NBP
NBP Return on Equity
Year
2019
2020
2021
2022
Net Income After
17,563,214
17,604,722
16,162,635
5306786
128,495,828
132,651,448
140,396,766 160,663,530
13.66%
13.3%
11.51%
Tax
T. shareholder’s
equity
Return On Equity
3.31 %
Graph 3.6
Return On Equity
15,00%
10,00%
5,00%
0,00%
2019
2020
2021
2022
Return On Equity 13,66% 13,30% 11,51% 3,31%
Figure 3.6 Increase/Decrease in ROE of NBP from 2019-2022
Interpretation
From above explanation it is clear that Return on Equity Ratio have a negative trend
of NBP from 2020 to 2021. In 2020 it is 13.66%; in 2020 it decreases to 13.30% and in 2021
further decreases to 11.51%. And lowest in 2022 which is 3.31.
51
3.8.7
Asset turnover ratio
Asset turnover Ratio show the firm how effectively utilizes its assets to generate sales.
We can obtain it from divided sales or interest earned on total assets.
We can write the formula as:
Asset Turnover Ratio=
𝒔𝒂𝒍𝒆𝒔 𝒐𝒓 𝒓𝒆𝒗𝒆𝒏𝒖𝒆
𝒕𝒐𝒕𝒂𝒍 𝒂𝒔𝒔𝒆𝒕𝒔
Table 3.13 Asset Turnover Ratio of NBP
NBP Asset Turn over
Year
2019
2020
2021
2022
Revenue
88,472,134
95,325,179
100,092,132
100,192,320
Total Assets
1,037,750,318 1,149,577,736
1,311,995,159
1,211,054,416
Asset
.085
.076
.0827
.082
Turnover
Ratio
Graph 3.7
Asset Turn Over
0,09
0,085
0,08
0,075
0,07
88882
2019
2020
2021
2022
0,085
0,082
0,076
0,082
Figure 3.7 Increase/Decrease in Asset Turnover Ratio of NBP from 2019-2022
Interpretation
The ROA of national bank of Pakistan is show negative trend from 2020 to 2020respectively
and then it shows further negative trend from 2020 and 2020 it become 0.082 in 2021. In
2019, 2020, 2021 and 2022 the return on assets is 0.085, 0.82, 0.076 and 0.082 respectively.
As shown in above graph.
52
3.8.8
Advances deposit ratio
This ratio shows that how much efficiently the banks advance the deposits of their customer
to borrower.
It is calculated as.
𝐴𝑑𝑣𝑎𝑛𝑐𝑒𝑠
Advances deposit ratio = 𝐷𝑒𝑝𝑜𝑠𝑖𝑡𝑠
Table 3.14 Advance Deposit Ratio of NBP
NBP Advances deposit ratio
Year
2019
2020
2021
2022
Advances
477,506,564
525,045,764
657,381,154
620,216,609
Total deposit
832,151,888
927,42,438
1,037,784,947
1,101,845,283
Advances
0.57
0.56
0.63
0.56
deposit ratio
Graph 3.8
Advances deposit ratio
0,65
0,6
0,55
0,5
Advances
deposit ratio
2019
2020
2021
2022
0,57
0,56
0,63
0,56
Figure 3.8 Increase/Decrease in Advance Deposit of NBP from 2019-2022
Interpretation
From above table and graph, it is clear that in the ratio is going to decrease because of low
advances. Which means the efficiency on NBP is not good at this year and they have not used
their deposits efficiently in advancing to borrowers.
53
3.9 Financial impact of NBP on Pakistan Economy
Pakistan’s economy has been growing slowly over the past two decades. Annual per capita
growth has averaged only 2 percent, less than half of the South Asia average, partly due to
inconsistent macroeconomic policies and an under-reliance on investment and exports to
drive economic growth. Short periods of rapid consumption-fueled growth frequently led to
sizable current account and fiscal deficits that ultimately required policy tightening, resulting
in recurrent boom-bust cycles.
3.10 Contribution of NBP towards Economic Development Finance
NBP has been playing a key role in financing and developmental activities in Pakistan. It
helps in the growth of economy in all spheres of our national life. It has contributed
significantly to economic growth of the country and has served trade and industry in a wide
range of operations.
NBP was the first bank who introduce scheme of credit to small borrowers like farmers etc.,
for the promotion of agriculture. Small short-term loans are given to the farmers, free of
interest. NBP is able to attract large number of deposits through its large number of branches
all over the country and thus is able to provide large amount of loans to different sectors.
NBP is also providing finances to small-scale industries for the period up to five years; it has
introduced the people’s credit facilities to the common man at the large and more liberal scale
than before. The main objective of this scheme is to make a contribution toward building up
of a developing nation. The NBP also helps to promote the establishment of new companies
by underwriting their shares. The bank also contributes towards the earning of foreign
exchange though its foreign exchange business in Pakistan and abroad.
Last four years performance is showing in graph that how it decreases and increase in 2019
its ratio was 1.126 and 2020 it increases to 2.803 similarly in 2020 due to covid-19 it
decreases and 2021 it increases show some stability and in last 2022 its increases.
This effect of the last four year shows that it has stabilized its financial position. These effect
of the last four year shows that it has stabilize its financial position.
54
CHAPTER04
SWOT ANALYSIS
4.1 NBP SWOT Analysis
SWOT is an acronym for an organization’s strengths, weaknesses, opportunities and threats.
A SWOT analysis consists of sizing up a firm’s internal strengths and weaknesses and its
external opportunities and threats. The SWOT analysis of N.B.P as follows:
4.2 Strengths
Following are the strengths of National Bank Of Pakistan.
4.2.1 Oldest institution & distinctions
NBP is one of the oldest banks of Pakistan and first nationalized bank Hence its customer
base is strength from this plus point as customers have more confidence in the bank. NBP
continued its journey of success based on their strategy of serving clients better, a company
agile enough to take advantage of its unique domestic and international footprint, capitalizing
on the largest balance sheet and customer base in Pakistan with high cross sell potential.
NBP’s standalone AAA rating (the highest in the industry), our RoE, which is amongst the
highest in the Asian banking industry, and NBP’s comfortable capital adequacy ratios,
positions well in front of its competitors for future growth.
4.2.2 More deposits than other banks
NBP has the relative competence in having more deposits than the other bank. This is
because of the confidence the customer has in the bank. The bank being the privileged
and oldest bank in banking sector of Pakistan enjoys this edge over all others, lacking it.
4.2.3 Employee benefits
Employeesare offered reasonable monetary benefit. Normally two bonuses are given at Eid ul
Fitr and Eid ul Adha.
This serves as an additional benefit andcompetency for the bank and a source of motivation f
or theemployees.
4.2.4 Broad network
The bank has another competency i.e., it has broad-basses network of branches throughout
the country also more than one branch in high productive cities. The customers are provided
services at their nearest possible place to confirm customer satisfied. Year 2007 has been an
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outstanding year with the bank recording the highest profiting its history. NBP’s wide range
of product offering, large branch network and committed workforce is some of its
fundamental strengths that enabled it to achieve exceptional results in a very competitive
market.
4.3 Weaknesses
Following are the weaknesses of NBP which should be overcome by the management of
NBP.
4.3.1 Lack of marketing effort
NBP is not much involved in marketing at electronic and print media, reason observed behind
this is bank already gained a huge credibility and not done some kind of advertisement
through electronic, but in this era of competition every organizationneed a massive marketing
campaign remain involved in the minds of customer.
4.3.2
NBP under political pressure
The strong political hold of some parties and government and their dominance is affecting the
bank in a negative way. They sometime have to provide loan under the pressure, which leads
to uneven and adjusted feeling in the bank employees
4.3.3 Favoritism and nepotism
The promotions and bonuses etc. in the bank are often powered by senior’s favoritism. This
adds to the negative factors, which denominate the employees, this results the performance
negatively.
4.3.4 Inefficient counter services in the rush hours
During the rush hours, the bank is founded out to be a total flop to handle the mob of people
peaking from windows and doors. The bank has deficiency to operate in the stages of rush
hours where the people find them services entangled in a situation of nowhere because they
are not well served.
4.4 Opportunities
Following are the opportunities of NBP which should be grabbed by the management as soon
as possible to increase the performance of a bank.
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4.4.1 Electronic banking for salaries & pensioners
The world today has become a global village because of advancement in the technologies,
especially in communication sector. More emphasis is now given to avail the modern
technologies to better the performances. NBP can utilize the electronic banking opportunity
to ensure on line banking 24 hours a day. This would give a competitive edge over others.
NBP should look into other I.T. products for salary and pension disbursements and Ebanking for better services.
4.4.2 Micro financing
Because of the need for micro financing in the market, there are lot of opportunities in this
regard. Other banks have already initiated, now the time has arrived when the NBP must
realize it and take on step to cater an ongoing demand. NBP is going to capitalize on its
strengths of potential to cross sell, introduction of new delivery channels and organic as well
as strategic expansion through acquisition. NBP should focus on effective deployment of its
capital to further enhance its earning potential and will continue to tap into un-banked areas
through our micro finance and SME products.
4.4.3 Yield of loans & maintenance of credibility
Despite many threats and challenges at NBP its corporate team should increase the volume
and also yield of loans.
4.5 Threats
National Bank of Pakistan should avoid the given threats for maintaining and sustaining the
successful operations.
4.5.1 Reduction in private credit investment
The challenges to corporate business in year 2007 were manifold, including reduction in
private
credit
investment
as
a
result
of
slowing
down of economy as well as rising interest rates but sometimes old employees show some
laziness. Due to increasing pressure upon textile industry reduced lending to this sector.
In addition, the bank’s corporate loans yield also faced pressure assubstitute form of funding
sources are available in the market in form of Islamic financing, mutual funds, issuance of
debt instruments like TFCs and Bonds and the Capital markets.
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4.5.2 Emergence of new competitors
The bank is facing threats with the emergence of new competitors especially in terms of
foreign banks are empowering with excellent and innovative ways of performing their
services. The bank has to take initiative in this regard or will find itself far back in
competition.
4.5.3 Political pressure by elected government
The ongoing shift in power in political arena in the country effects the performance of the
bank has to forward loans to politically powerful persons which create a sense of insecurity
and demoralization in the customer as well as employees.
4.5.4 Downsizing
The bank is currently acting upon the policy of downsizing which threaten the environment
of the bank Employees feel insecurity in doing their jobs and work, hence affecting the
overall performance of employees negatively.
4.5.5 Customers complaints
There exists no regular and specific system of the removal of customer complaints. Now a
day a need for total customer satisfaction is emerging and in their demanding consequences
customer's complaints are ignored.
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CHAPTER05
FINDINGS, RECOMMENDATIONS AND CONCLUSION
5.1 Findings
During my twelve weeks internship I find it so productive and learnable.
i.
I find a good corporative environment and a good healthy situation of working and
helping each other.
ii.
I find to learn many things about banking online banking cheques and deposit department.
iii.
I have found a good experience and real-life work experience.
iv.
Be able to complete a job or assignment given by the employer well and successfully.
v.
During the training period, I was exposed to an environment that is professional in
identifying the tasks of workers. From there, I can see how a banker may play a role.
vi.
All the staff have their own duties in carrying out the tasks listed. This situation has
helped me to work smoothly and always ask when I'm in trouble. If I encounter any
problems in the work done, other staff will also be able to assist me as well as provide
valuable and helpful guidance for me because their willingness to share experiences and
knowledge. Additionally, I always try to assist all staff and ensure that all work is done
smoothly and in order.
I worked there in all departments and learn all routine activities which were really good for
me.
5.2 Recommendations
I want to recommend some changes in all NBP on the basis of SWOT analysis that NBP
have need to focus on the employees because they are the most important assets of this
organization, also need to improve the training of these employees.
They also have need to bring some changes in their products for compete in the market
and they need to improve the assets of bank because it is one of the largest banks.
They also need to describe the mission statement well and also increase the level of
overseas branches they also need to increase the incentives of employees and provide the
great product to its customers.
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Doing my internship in NBP I have experienced some recommendations for the bank
which would be helpful in becoming the world class bank in the future. The bank must follow
the given steps for facing the competitiveness in the whole country.
i.
The management should provide better arrangement for the employee.
ii.
The bank should need to satisfy the employees through giving the rewards. A happy
and satisfied employee delivers more than the unsatisfied employee. The bank should
give the salaries at the fixed time and do the promotions on the sincerity,
hardworking, experience and merit basis.
iii.
Selection of the employees must be through the media and newspaper so the better
and qualified employees can be formulated.
iv.
The bank must investigate the borrower while lending. The financial conditions of the
borrowers must be investigated that in the future he will be able to repay the money or
not. Loans must be given to the well reputed organizations because the risk of loss can
be eliminated.
v.
The Bank management should be very careful while granting the loans.
vi.
The bank will definitely get the benefits if it improves their working environment
through providing the friendly environment. As it enhances the level of trust and the
sincerity. It also helps to improve the production of the bank.
vii.
Special attention should be given to the employee’s behavior towards the customer
because without the customers the bank worth nothing. The bank should need to
behave with the customers in a very inspiring way. It will create the positive impact in
the minds of the public which ultimately higher your profit level.
viii.
As for as Islamic Banking environment is concerned the management and employees
of NBP should work together for basic research for discovering their own laws,
developing theories or concepts for the better direction of their own business
environment according to Quran & Sunnah.
ix.
The branches should reduce its large expenses in order to increase the value of the
bank.
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x.
The NBP should strengthen incentives and accelerate a results-oriented training and
communications programs for management and staff.
xi.
In order to compete in the ever-expanding market both nationally and internationally,
introducing new and efficient products is one of its major requirements.
xii.
Aggressive publicity campaign must be introduced through press and electronic media
for new products and scheme by initiating vigorous marketing policy.
xiii.
Consumer financing should be initiated to capture the market share.
xiv.
The National bank of Pakistan should monitor the impact of its operations on the
environment, which is mainly through the use of power and the generation of waste.
xv.
The bank should provide support to the Micro, Small and Medium enterprises thereby
reducing unemployment and helping to create a more equitable distribution of wealth.
5.3 Conclusion
With the help and cooperation of all the branch members, I have been able to learn and
experience many new things related to the banking sector and the banks operations.
As a result of this internship now i am able to deal with the public in banking sector with
great respect and carry out many functions and operations of the bank to achive
organizational goals and objectives.
Finally, I concluded that NBP IBB is a very good organization for a person to persue
long term career. Overall working environment of NBP IBB is very comfortable and the staff
is highly qualified, skilled and cooperative which helps in creating and maintaining a good
professional environment.
Management of the bank is very strong. Employees of NBP IBB Karak branch work
more than their working hours and all the workings take place in a very friendly atmosphere
that does not induce pressure on the person working there. It also shows their loyalty and
commitment to the organization.This branch of NBP IBB is relatively small and has climbed
its way up very quickly and all this is only because of the employee’s efforts and
consideration for each other.
At short there is no such association on the planet that is free from issues and
difficulties. During a deep study and witnessing everything which I see in the branch, I am
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then making a conclusion that yes there are some small issues but overall the National bank
of Pakistan is very good organization and have a long-term history and experience so in today
competitive environment, every organization should compete well in the environmentto
survive if notthenorganization will face troubles in upcoming future.
I had done my internship at NBP IBB and I found it very great organization because I
learned a lot from the employees who work there. If you work practically, you will learn
easily.
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BIBLIOGRAPHY
NBP annual report. (2022). Business volume. Retrieved on 18, December 2022 from
http://nbp.com.pk/aboutus/businessvolume.aspx
NBP annual report. (2022). competitors. Retrieved on December 20, 2022 from
http://nbp.com.pk/aboutus/competitors.aspx
NBP annual report. (2022).Corporate Branches. Retrieved on December 15, 2022 from
http://nbp.com.pk/BRNTWRK/corporatebr.aspx
NBP annual report. (2022). Departments. Retrieved on December 18, 2022 from
http://www.nbp.com.pk/departments//index.as
NBP annual report. (2022). Introduction to NBP. Retrieved on December 12, 2022 from
http://www.nbp.com.pk/introduction/index.aspx
NBP annual report. (2022). Number of employees. Retrieved on 17, December 2022 from
http://nbp.com.pk/aboutus/number of employees.aspx
NBP annual report. (2022). Organizational Chart. Retrieved on December 15, 2022 from
http://nbp.com.pk/aboutus/organizationalchart.aspx
NBP annual report. (2022). Organizational structure. Retrieved on December 15, 2022 from
http://nbp.com.pk/aboutus/organizationalstructure.aspx
NBP annual report. (2022). Product line. Retrieved on December 20, 2022 from
http://nbp.com.pk/aboutus/productline.aspx
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