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Samina Ameer Din
Mc090404110
MBA
Finance
National Bank of Pakistan
Brief Introduction of the
Organization
History of National Bank of
Pakistan



NBP is the largest commercial bank.
Acts as an agent of central bank.
Moved from public sector organization to commercial
bank.
 Provide both public sector and commercial banking
services.
 Handle treasury transactions.
 A major lead player.
Business Volume of NBP
2010 (Particulars)
Total Assets
(Rs. in Million)
1,035,025
Deposits
Advances
Investments
832,152
477,507
301,324
Shareholder’s Equity
Pre-tax Profit
After-tax Profit
103,762
24,415
17,563
Earning Per Share (Rs.)
Number of Branches
Number of Employees
13.05
1,289
16,457
Competitors of NBP
Competitors at Public Sector
First Women Bank Limited
The Bank of Khyber
The Bank of Punjab
(FWB)
(KB)
(BOP)
Competitors at Private Sector
My Bank Limited
Allied Bank Limited
Bank Al-Falah Limited
Atlas Bank
Bank Al Habib Limited
Habib Bank Limited
Askari Bank
Saudi Pak Bank Limited
Faysal Bank Limited
Metropolitan Bank limited
Muslim Commercial Bank Limited
Organizational Hierarchy Chart
1. President
Executive
s
2. SEVP
4. SVP
3. EVP
5. VP
6. AVP
Officers
OG-II
OG-I
Cash
Dept.
Head Cashier
OG-III
Clerical
Staff
Assistant
Cashier
Non
Clerical
Staff
Peon, Guards
etc
Hierarchy of Branch
Branch
Manager
Credit Officer
Operations
Manager
All other staff
HR Officer
Training Program
1)
2)
3)
Account Opening Department
Clearing Department
Remittance Department
Description of the Tasks Assigned to
me During my Internship








PLS Saving A/C
Current A/C
Inward / Out ward Clearing
Local Clearing
Intercity Clearing
Pay Order (PO)
Demand Draft (DD)
Call Deposit at Receipts (CDR)
Ratio Analysis
Financial Statements
All the financial statements for the preparation of these PPT
slides are downloaded from the Website of NBP:
www.nbp.com.pk
National Bank of Pakistan
Ratio
(Net profit/ Revenue) *100
Analysis
Year 2010
Year 2009
Year 2008
1. Net
17,563,214/
17,561,846/
15,458,590/
Profit
88,472,134*100 77,947,697*100 60,942,798*100
Margin =19.85%
= 22.53%
= 25.36%
Net Profit Margin
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Year 2008
Year 2009
Year 2010
National Bank of Pakistan
Ratio
(Mark-up / return / interest earned - Mark-up / return
Analysis
/ interest expensed) / Mark-up / return / interest
earned*100
Year 2010
Year 2009
Year 2008
2. Gross 43,221,658/
37,458,048/
37,058,030/
Spread 88,472,134*100 77,947,697*100 60,942,798*100
Ratio
= 48.85%
= 48.05%
= 60.80%
Gross Spread Ratio
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Year 2008
Year 2009
Year 2010
Working of Net Interest Margin
Net Interest Margin = Mark-up / return / interest earned Mark-up / return / interest expensed
2010) Net interest margin = (88,472,134-45,250,476)
= 43,221,658
2009) Net interest margin = (77,947,697-40,489,649)
= 37,458,048
2008) Net interest margin = (60,942,798-23,884,768)
= 37,058,030
National Bank of Pakistan
Ratio
non mark-up/interest income/ (non mark-up/interest
Analysis
income +Mark-up/return/interest earned)*100
Year 2010
Year 2009
Year 2008
3. Non
17,632,640/
19,025,357/
16,415,862/
Interest 106,104,774*100 96,973,054*100 77,358,660*100
Income = 16.61%
= 19.61%
= 21.22%
to Total
Income
Non Interest Income to Total Income Ratio
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Year 2008
Year 2009
Year 2010
Working of Total Income
Total Income = (non mark-up / interest income +Mark-up
/ return / interest earned)
2010) Total Income = (17,632,640+88,472,134)
= 106,104,774
2009) Total Income = (19,025,357+77,947,697)
= 96,973,054
2008) Total Income = (16,415,862+60,942,798)
= 77,358,660
National Bank of Pakistan
Interest Earned / Interest Expensed
Ratio
Analysis
Year 2010
4.Spread 88,472,134 /
Ratio
45,250,476
=1.95 times
Year 2009
77,947,697 /
40,489,649
= 1.92 times
Spread Ratio
3
2.5
2
1.5
1
0.5
0
Year 2008
Year 2009
Year 2010
Year 2008
60,942,798 /
23,884,768
= 2.55 times
National Bank of Pakistan
Ratio
(Net profit/ Total assets) *100
Analysis
Year 2010
Year 2009
Year 2008
5.Return 17,563,214/
17,561,846/
15,458,590/
on
1,035,024,680*100 944,582,762*100 817,758,326*100
Assets
= 1.69%
= 1.85%
= 1.89%
Return on Assets
1.90%
1.85%
1.80%
1.75%
1.70%
1.65%
1.60%
1.55%
Year 2008
Year 2009
Year 2010
Working of Total Assets
Total Assets
Year 2010
(Rs)
115,442,360
Year 2009
(Rs)
115,827,868
Year 2008
(Rs)
106,503,756
30,389,664
28,405,564
38,344,608
23,025,156
19,587,176
17,128,032
301,323,804
477,506,564
26,888,226
217,642,822
475,243,431
25,147,192
170,822,491
412,986,865
24,217,655
6,952,666
3,062,271
3,204,572
Other assets-net
53,496,240
59,666,438
44,550,347
Total
1,035,024,680 944,582,762
Cash and balances
Balances with other
banks
Lending to financial
institution-net
Investments-net
Advances-net
Operating fixed assets
Deffered tax assets
817,758,326
Ratio
Analysis
6.
Dupont
Return
on
Assets
National Bank of Pakistan
((net income/revenues)*(revenues/assets))*100
Year 2010
((17,563,214/
88,472,134)*
(88,472,134/
1,035,024,680)*100
= 1.69%
Year 2009
((17,561,846/
77,947,697)*
(77,947,697/
944,582,762)*100
= 1.85%
Dupont Return on Assets
1.90%
1.85%
1.80%
1.75%
1.70%
1.65%
1.60%
1.55%
Year 2008
Year 2009
Year 2010
Year 2008
((15,458,590/
60,942,798)*
(60,942,798/
817,758,326)*100
= 1.88%
National Bank of Pakistan
Ratio
Net Income/ Total equity*100
Analysis
Year 2010
Year 2009
Year 2008
7.Return 17,563,214/
17,561,846/
15,458,590/
on Total 103,762,310*100 94,141,919*100 81,367,002*100
Equity
= 16.92%
= 18.65%
= 18.99%
Return on Total Equity
19.00%
18.50%
18.00%
17.50%
17.00%
16.50%
16.00%
15.50%
Year 2008
Year 2009
Year 2010
Working of Total Equity
Total Equity
Year 2010
(Rs)
Year 2009
(Rs)
Year 2008
(Rs)
Share capital
Reserves
Un appropriated profit
13,454,628
24,450,244
65,857,438
10,763,702
22,681,707
60,696,510
8,969,751
19,941,047
52,456,204
Total
103,762,310
94,141,919
170,822,491
National Bank of Pakistan
Ratio
(Total debt/ Total assets)*100
Analysis
Year 2010
Year 2009
Year 2008
8. Debt 906,528,852/
825,676,384/
715,299,108/
Ratio
1,035,024,680*100 944,582,762*100 817,758,326*100
=87%
=87%
=87%
Debt Ratio
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Year 2008
Year 2009
Year 2010
National Bank of Pakistan
Ratio
(total debt/ total equity)
Analysis
Year 2010
Year 2009
Year 2008
9. Debt / 906,528,852/
825,676,384/
715,299,108/
Equity
103,762,310
94,141,919
81,367,002
Ratio
= 8.73 times
= 8.77 times
= 8.79 times
Debt / Equity Ratio
8.79
8.78
8.77
8.76
8.75
8.74
8.73
8.72
8.71
8.7
2008
2009
2010
National Bank of Pakistan
Ratio
(EBIT/ total interest)
Analysis
Year 2010
Year 2009
Year 2008
10. Time 69,665,595/
61,789,822/
46,885,766/
Interest 45,250,476
40,489,649
23,884,768
Earned = 1.53 times
= 1.52 times
= 1.96 times
Ratio
Time Interest Earned Ratio
2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2008
2009
2010
Working of EBIT
EBIT= Profit before Taxation+ Mark-up / return / interest
expensed
2010) EBIT = 24,415,119+45,250,476= 69,665,595
2009) EBIT = 21,300,173+40,489,649= 61,789,822
2008) EBIT = 23,000,998+23,884,768= 46,885,766
National Bank of Pakistan
Ratio
Total Advances/ Total Deposits
Analysis
Year 2010
Year 2009
Year 2008
11.
477,506,564/ 475,243,431/
412,986,865/
Advances 832,151,888
727,464,825
624,939,016
/Deposits = 0.5738 times = 0.6532 times = 0.6608 times
Ratio
Advances / Deposits Ratio
0.68
0.66
0.64
0.62
0.6
0.58
0.56
0.54
0.52
2008
2009
2010
Ratio
Analysis
12.
OCF
Ratio
National Bank of Pakistan
Net cash generated from operating activities/
Current Liabilities
Year 2010
Year 2009
Year 2008
93,163,784/
867,626,368
= 0.107 times
41,576,364/
725,293,720
= 0.057 times
Operating Cash Flow Ratio
0.12
0.1
0.08
0.06
0.04
0.02
0
2008
2009
2010
2,532,681/
682,905,461
= 0.003 times
Working of Current Liabilities
Total Current
Liabilities
Year 2010
(Rs)
Year 2009
(Rs)
Year 2008
(Rs)
Bills payable (short
term)
Borrowings (short term)
Deposits and other
accounts (short term)
Liabilities against assets
subject to finance lease
(short term)
8,006,631
10,621,169
10,219,061
17,154,131
816,172,861
37,057,189
655,031,896
37,409,288
614,538,859
43,963
20,408
16,517
26,248,782
22,563,058
20,721,736
867,626,368
725,293,720
682,905,461
Other liabilities (short
term)
Total
National Bank of Pakistan
Ratio
Dividends paid to Shareholders/ Average common
Analysis
shares outstanding
Year 2010
Year 2009
Year 2008
13. Div
Per
Share
8,072,777/
1,345,462.8
= Rs.6
5,830,338/
1,076,370.2
= Rs.5.41
6,115,739/
869,975.1
= Rs.6.81
Dividend Per Share
7
6
5
4
3
2
1
0
2008
2009
2010
National Bank of Pakistan
Ratio
Net income/ outstanding number of shares
Analysis
Year 2010
Year 2009
Year 2008
14.
17,563,214/ 17,561,846/
15,458,590/
Earning 1,345,463
1,345,463
1,076,370
Per
= Rs. 13.05
= Rs. 13.05
= Rs. 14.36
Share
Earning Per Share
14.4
14.2
14
13.8
13.6
13.4
13.2
13
12.8
12.6
12.4
12.2
2008
2009
2010
National Bank of Pakistan
Ratio
Analysis
Current Market Share Price/ EPS
Year 2010
Year 2009
Year 2008
15. Price 76.82/13.05 74.37/13.05
/Earning
= Rs. 5.88 = Rs. 5.69
Ratio
50.32/14.36
= Rs. 3.50
Price / Earning Ratio
6
5
4
3
2
1
0
2008
2009
2010
Conclusion
 The net profit margin of NBP in all of the years is good.
 Gross spread ratio is also good in all of over the years.
 Spread ratio of NBP is also good because it covers its interest
expenses.
 Non Interest Income to Total Income Ratio of NBP is good.
 Return on assets ratio of NBP is low.
 Dupont return on assets ratio is also low.
 Return on total equity ratio is good in all over the years.
 Debt ratio of NBP is very high in all of the year that is not
good.
Conclusion
 Debt ratio of NBP is very high in all of the year that is not
good.
 Debt to equity ratio is also too high of NBP that is not god.
 Time Interest earned ratio of NBP is good.
 Advances / Deposits ratio is very low and not good for NBP.
 Operating Cash Flow ratio is also very low in all over the
year that is not good.
 Dividend per share ratio of NBP is good.
 Earning per share ratio is very good.
 P / E ratio is also good of NBP.
Recommendations
 NBP can also increase the net profit margin ratio by
decreasing its non mark-up interest expenses and taxes.
 NBP can increase more its gross spread ratio by decreasing
the interest expenses.
 Return on assets ratio & Dupont return on assets ratio can
also be increased by utilizing the assets in an efficient
manner.
 NBP need to decrease its debts to manage the debt ratio
because a high debt is not a good sign for NBP.
Recommendations
 Debt to equity ratio is also very high. NBP should decrease
its debts because the equity investors will not invest in it due
to high debts.
 NBP can increase its advances / deposits ratio by giving
advances to the customers.
 NBP needs to improve its liquidity by increasing assets for
operating cash flow.
Thank You
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