askari bank limited internship report

INTERNSHIP REPORT ON

ASKARI BANK LTD

(Tufail Road Branch)

Submitted by: SARA NAEEM

BBA (Hons)

345

Session: 2009-2013

Department Of Management Sciences

Lahore College for Women University Lahore

INTERNSHIP REPORT INTERNSHIP REPORT

LAHORE COLLEGE FOR WOMEN UNIVERSITY



INTERNSHIP REPORT ON ASKARI BANK LTD

(TUFAIL ROAD BRANCH)

Submitted by: Sara Naeem

BBA-8

345

Year of submission: 2013

Supervisor: Miss Malahat Jatoi

Department Of Management Sciences

Lahore College for Women University Lahore



INTERNSHIP REPORT ON ASKARI BANK LTD

(TUFAIL ROAD BRANCH)

Submitted by Supervisor Registrar

SARA NAEEM MISS MALAHAT JATOI Dr. S.E BENJAMIN



DECLARATION

An Internship report submitted to the department of Management sciences, Lahore

College For Women University, Lahore in partial fulfillment of the requirement for

the degree of BBA / MBA



DEDICATION

I dedicate my report to my parents and my teachers who helped me in the

completion of such a lengthy and complicated project.



PREFACE

The main purpose of the internship is to fulfill the academic requirements of my

study. It encourages learning with emphasis on assigned projects. Besides this,

the other purpose is to give a comprehensive review of ACBL. The most important

point in an Internship Program is that the student should spend their time in a true

manner and with the spirit to learn practical orientation of theoretical study

framework. This report is about my internship that I have undergone at Askari

Commercial Bank Limited Tufail Road Branch from 30th

July 2012 to 11th

September 2012. During my internship I was able to learn practical aspect of

business, and get good working experience.



TABLE OF CONTENTS

Chapter Topic Pg no

1 INTRODUCTION

HISTORY & BACKGROUND

VISSION / MISSION STATEMENT

CORPORATE PHILOSOPHY

3

6

8

2 MANAGEMENT SYSTEM

ORGANIZATIONAL CHART

CORPORATE PROFILE

MANAGEMENT HIERARCHY

MANGERIAL POLICIES

CREDIT RATING

11

13

15

16

19

3 MARKETING MIX

PRODUCT

PRICE

PLACE

PROMOTION

22

41

48

53



4 FIANANCIAL STATEMENT ANALYSIS

TREND/ HORIZONTAL ANALYSIS

VERTICAL ANALYSIS

FINANCIAL RATIO ANALYSIS

59

63

67

5 SWOT ANALYSIS

STRENGTH

WEAKNESS

OPPORTUNITY

THREAT

111

114

115

117

6 TRAINING PROGRAMME

DIVISIONAL OR DEPARTMENTAL DETAIL

ACTIVITIES OF INTERN

121

142

7 PROBLEMS AND RECOMMENDATIONS

CONCLUSION

LIST OF ANNEXURE

152



EXECUTIVE SUMMARY

The comprehensive study of Askari bank helps to suggest the organizational wide plans that

determine the long run success of the organization, finding new ways to add value, flexibility,

and developing unique skills and ideas to manage people. After analyzing one can explain that

how a bank can provide diversified products & services to the customers in order to provide

them maximum utility. The purpose of Askari bank is to provide professional integrity, customer

satisfaction and teamwork. To achieve sustained growth and profitability in all areas of business.

This report is a comprehensive study to know the potential of Askari bank. Askari Commercial

Bank is one of the leading banks in Pakistan, which is growing rapidly. Economy of Pakistan

specially banking sector is developing very fast, so there are opportunities in banking sector.

Askari bank was incorporated in Pakistan on October 9, 1991, as a public limited company. It

commenced its operations on April 1, 1992, and is principally engaged in the business of

banking, as defined in the banking companies‟ ordinance, 1962. The bank is listed on the

KARACHI, LAHORE AND ISLAMABAD Stock Exchanges and its share is currently the

highest quoted from among the new private sector banks in Pakistan.


2


CHAPTER # 1

INTRODUCTION

HISTORY AND BACKGROUND

VISSION AND MISSION STATEMENT

CORPORATE PHIILOSOPHY


3


HISTORY AND BACKGROUND

Pakistan Armed Forces has established several organizations such as Army Welfare Trust

(AWT), Fauji Foundation and Shaheen Foundation for running industrial and commercial

enterprises. These organizations have been established with the aim to provide employment for

ex-servicemen, besides creating job opportunities for others.

The story of AWT is that of perseverance, innovation, business acumen and going beyond the

frontiers in agriculture, cement, pharmaceuticals, leasing, insurance, banking, energy,

information technology and many other diverse fields. Being a subsidiary business unit, Askari

Bank Limited is powered by Army Welfare Trust (AWT).

“21 years of banking”

Askari Bank was incorporated in Pakistan on October 9, 1991, as a public limited company. It

commenced operations on April 1, 1992, and is principally engaged in the business of banking,

as defined in the Banking Companies Ordinance, 1962. The Bank is listed on Karachi, Lahore

and Islamabad Stock Exchanges and its share is currently the highest quoted from among the

new private sector banks in Pakistan.

Askari Bank has expanded into a nationwide presence of 245 branches / sub-branches,

including 31 dedicated Islamic banking branches, and a wholesale bank branch in the Kingdom

of Bahrain. A shared network of 5,319 online ATMs covering major cities of Pakistan, internet

banking (i-net) and call centers operating on 24/7 basis supports the alternate delivery channels

for customer service. As at December 31, 2011 the Bank had equity of Rs. 17.8 billion and total

assets of Rs. 343.8 billion, with 919,096 banking customers, serviced by our 5,994 employees.

Askari Investment Management Limited and Askari Securities Limited are subsidiaries of Askari

Bank primarily engaged in managing mutual funds and share brokerage, respectively.

Askari Commercial Bank Limited was the first bank in Pakistan to offer Internet banking

Services and B2B e-commerce (Business to Business electronic Commerce) solutions for

merchants looking to purchase on credit. Askari Bank is the only bank with its operational head

office in the twin cities of Rawalpindi-Islamabad, which have relatively limited opportunities as

compared to Karachi and Lahore. This created its own challenges and opportunities, and forced

as to evolve an outward-looking strategy in terms of Askari market emphasis. As a result, Askari

developed a geographically diversified assets base instead of a concentration and heavy reliance

on business in the major commercial centers of Karachi and Lahore, where most other banks

have their operational Head offices.


4


ACHIEVEMENTS AND AWARDS

Askari Bank continues its success in competition. Over the years, ACBL has received several

awards for the quality of its banking service to individuals and corporate. These include:

Euro money and Asia money

Award for 1994, 1996 & 1997

Commercial Bank of the Year

Award for 1994 & 96

By Asia money magazine

Best Presented Accounts

Ranking prizes awarded from 1997 to 2002

By South Asian Federation of Accountants (SAFA)

Best Presented Annual Accounts

Award for 2000, 2001and 2002

By the Institute of Chartered Accountants in Pakistan (ICAP), and the Institute of Cost and

Management Accountants in Pakistan (ICAMP)

Best Corporate Report

1st prize awarded for 2000, 2001, 2003 & 2004

By Institute of Chartered Accountants of Pakistan (ICAP) and institute of Cost &

Management of Accountants of Pakistan (ICMAP)

The Best Bank in Pakistan

Award for 2001 & 2002

By Global Finance Magazine

Best Consumer Internet Bank in Pakistan

Award for 2002, 2003 & 2004 By Global Finance magazine

Corporate Excellence

Awards for 2002, 2003, 2004 & 2005

The Management Association of Pakistan (MAP)


5


Best Retail Bank in Pakistan

Award 2004 & 2005

By The Asian Banker

Best Corporate / Institutional Internet Bank in Pakistan

Award for 2004

By Global Finance magazine

Best Commercial Bank

Consumer Choice award 2005

By The Consumers Association of Pakistan

The Best Consumer Banking

Award for 2005, 2006 & 2007

By the consumer Association of Pakistan

The Best Retail Banking Award 2008

Award for 2008

By Pakistan Guarantee Export Corporation Ltd.

The Best Corporate Report Award

For the year 2008

By ICAP & ICMAP

The Best Annual Report Award

For the year 2010

By ICAP & ICMAP

The Best Presented Accounts Award 2010 - 2nd Runner Up-Joint

For the year 2010

By South Asian Federation of Accountants

Over the years, Askari Bank has proved its strength as a leading banking sector entity, by

achieving the following firsts in Pakistani Banking:

First Bank to offer on-line real-time banking on a country-wide basis.

First Bank with a nation-wide ATM network.

First Bank to offer Internet Banking Services

First Bank to offer e-commerce solutions

First bank to offer i-net banking


6


VISION AND MISSION STATEMENT

Our vision:

“To be the bank of first choice in the region”

Our mission:

To be the leading private sector bank in Pakistan with an international presence, delivering

quality service through innovative technology and effective human resource management in a

modern and progressive organizational culture of meritocracy, maintaining high ethical and

professional standards, while providing enhanced value to all our stakeholders, and

contributing to society.

The VISION to be the bank of first choice in the region demands continuous strive for creation

of business opportunities with innovation while maintaining the core values to meet the

commitment to all bank‟s stakeholders. The range of the products aims to serve the diverse

customer base that comprises of corporate, SMEs, individual savers, households and, farmers. At

the same time, the people are constantly engaged in assessing customer needs and market

dynamics to realign the products and the priorities to attain brand recognition and competitive

edge. ACBL are reshaping its portfolio of businesses by investing in higher growth areas,

extending and developing the core competencies and moving out of weak and non– core

segments.


7


OUR THINKING

Our thinking, in the light of our mission statement, holds great regards to building relationships

with our stakeholders as well as maintaining our values.

Inspiring Ethical Values

Integrity is the most valued standard in whatever one do. ACBL understands that the

commitment to satisfy customer‟s needs that must be fulfilled within a professional and ethical

framework. The intrinsic values, which are the corner stone‟s of the corporate behavior, are:

Commitment Integrity Fairness Teamwork Service Customers Investors Regulators Employees Communities

Inspiring Customer Relationship

Askari Bank‟s client relationship with the managers are well equipped and well trained to

provide the most efficient and personalized service to the customers. Askari Bank is proud of its

pioneering role in providing the most modern and technologically advanced services to its

984,485 relationships.

Inspiring Investor’s Confidence

ACBL believes that the bottom line of any business is creating shareholder value. To gain their

trust and confidence, it believes in providing the investors timely, regular and reliable

information on the activities, structure, financial situation, and performance.

Our Inspiring Regulators

We firmly believe in regulatory discipline and harmony of our corporate objectives with

regulatory framework. Our business methodologies are designed to ensure compliance with

directives of all our regulators.

Inspiring Employee Relationship

The bank strongly believes that the interest of the Bank and the employees are inseparable.

ACBL try to create a „we‟ culture where there is mutual trust and respect for each other. The

bank is committed to develop and enhance each employee‟s skills and capabilities through

extensive in–house and external training programs and job rotations. In order to ensure

meritocracy, the appraisal system is purely performance based.


8


CORPORATE PHILOSOPHY

From knowing our customers‟ requirements to understanding employee needs, from utilizing

modern technology to making responsible social contributions, from enhancing stake-holders

value to practising corporate ethics.... We are continuously and consistently striving to address

newer challenges with a single motivation: “the power to inspire and be inspired”

Our Objectives

To achieve sustained growth and profitability in all areas of business.

To build and sustain a high performance culture, with a continuous improvement focus.

To develop a customer-service oriented culture with special emphasis on customer care

and convenience.

To build an enabling environment, where employees are motivated to contribute to their

full potential.

To effectively manage and mitigate all kinds of risks inherent in the banking business.

To maximize use of technology to ensure cost-effective operations, efficient management

information system, enhanced delivery capability and high service standards.

To manage the Bank's portfolio of businesses to achieve strong and sustainable

shareholder returns and to continuously build shareholder value.

To deliver timely solutions those best meet the customers‟ financial needs.

To explore new avenues for growth and profitability.

Strategic Planning

To comprehensively plan for the future to ensure sustained growth and profitability.

To facilitate alignment of the Vision, Mission, Corporate Objectives and Corporate

Philosophy, with the

Business Goals and Objectives.

To provide strategic initiatives and solutions for projects, products, policies and

procedures.

To provide strategic solutions to mitigate weak areas and to counter threats to profits.

To identify strategic initiatives and opportunities for profit.

To create and leverage strategic assets and capabilities for competitive advantage.

Code of Business Principles:

Our Code of Business Principles is to:

Deliver solutions that meet customers‟ financial needs

Build and sustain a high performance culture


9


Build trusted relationships with all stakeholders

Build and manage the Bank‟s portfolio of businesses to achieve strong and sustainable

shareholder returns

Create and leverage strategic assets and capabilities for competitive advantage

Business Ethics and Conduct

Askari Bank seeks to maintain high standards of service and ethics enabling it to be perceived as

impartial, ethical and independent. In addition to the general guidelines, the following are the

salient features of the Bank‟s code of ethics and conduct.

Presence of a corporate culture that seeks to create an environment where all persons

are treated equitably and with respect.

Employees must carry out their responsibilities in a professional manner at all times.

They must act in a prudent manner and must avoid situations that could reflect

unfavorably on themselves, the Bank or its customers.

Employees must commit to the continued development of the service culture in which the

Bank consistently seeks to exceed customers‟ expectations. Fairness, Truthfulness and

Transparency govern our customer relationships in determining the transactional terms,

conditions, rights and obligations.

Employees must safeguard confidential information which may come to their possession

during the discharge of their responsibilities. Respect for customers' confidential matters,

merits the same care as does the protection of the Bank's own affairs or other interests.

Employees must ensure that know your customer principals are adhered by obtaining

sufficient information about the customers to reasonably satisfy ourselves as to their

reputation, standing and the nature of their business activities.

Employees must avoid circumstances in which their personal interest conflicts, or may

appear to conflict, with the interest of the Bank or its customers. Employees must never

use their position in the Bank to obtain an advantage or gain.

Employees must not enter into an agreement, understanding or arrangement with any

competitor with respect to pricing of services, profit rates and / or marketing policies,

which may adversely affect the Bank's business.

Employees must not accept gifts, business entertainment or other benefits from a

customer or a supplier / vendor, which appear or may appear to compromise commercial

or business relationship.

Employees must remain alert and vigilant with respect to frauds, thefts or illegal

activities committed within the Bank premises.


10


CHAPTER # 2

MANAGEMENT SYSTEM


CORPORATE PROFILE


POLICY FORMATION PROCESS

MANAGERIAL POLICIES

CREDIT RATING


11



Hierarchy at Tufail Road Branch


12


Hierarchy at Tufail Road Branch

BRANCH MANAGER

OPERATION

MANAGER

CLEARING

CASH

DEPARTMENTNT

FOREIGN

EXCHANGE\TRADE

DEPT

CREDIT

DEPT

CUSTOMER

SERVICE

ACCOUNT

OPENING

INCHARGE

GENERAL

BANKING

REMITTANCES

NON-CLERICAL STAFF


13


CORPORATE PROFILE

Board of Directors

Lt. Gen. Waseem Ahmed Ashraf Chairman

Lt. Gen. (R) Zarrar Azim Chairman Executive Committee

Mr. Shaharyar Ahmad President & Chief Executive

Brig (R) Muhammad Shiraz Baig Director

Brig (R) Asmat Ullah Khan Niazi Director

Mr. Muhammad Najam Ali Director

Mr. Muhammad Afzal Munif Director

Mr. Tariq lqbal Khan Director (NIT Nominee)

Company Secretary

Mr. Saleem Anwar

Audit Committee

Brig (R) Asmat Ullah Khan Niazi Chairman

Brig (R) Muhammad Shiraz Baig Member

Mr. Kashif Mateen Ansari Member

Auditors

A.F.Ferguson & Co. Chartered Accountants

Legal Advisors

Rizvi, Isa, Afridi & Angell

Shariah advisor

Dr. Muhammad Tahir Mansoori


14


Main Offices

REGISTERED \HEAD OFFICE

AWT Plaza, the MALL

P.O. BOX. NO: 1080

Rawalpindi: 46000

Pakistan.

Tel: 92-51-9063000

Fax: 92-51-9272455

E-mail: [email protected]

REGISTRAR\SHARE TRANSFER OFFICE

THK Associate (PVT) Limited

Ground Floor. State Life Building 3

Dr.Ziauddin Ahmad Road, Karachi 75530

P.O. box 8533, Karachi.

WHOLESALE BANK BRANCH, BAHRAIN


15



President (CEO)

Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President

Assistant Vice President

Branch Manager

Assistant Branch Manager

Operations Manager

Officers Grade I,II

Clerical And Non-clerical Staff


16


MANAGERIAL POLICIES

Askari bank‟s policies can be divided under the following heads:

A. FINANCIAL POLICIES

B. PROCUREMENT POLICIES

C. MARKETING POLICIES

D. PROMOTIONAL POLICIES

E. LENDING POLICIES

F. PERSONAL POLICIES

Each of these policies is discussed below briefly.

FINANCIAL POLICIES

The financial policies of any bank are the most important policies through which the whole

banking activity is conducted. These policies are primarily conducted on:

Source of funds

Use of funds

SOURCE OF FUNDS:

The bank finance policy is acquiring funds from the following sources:

Deposits of account holders.

Interest on advances and loans granted to the borrowers.

Income and commission from the services provided by the bank.

Bank opens various types of accounts for its customers services are provided for earning.

Interest income and commission bank providing the services to its customer.

USE OF FUNDS:

After the acquisition of the funds their acquisition becomes necessary. The bank seeks the best

way for making investment to get more profit with the maximum security. The bank has an

investment portfolio in which it allocate its funds for crediting to borrowers, investment in the


17


stock market, investment in the real estate property etc. for allocation of funds a bank has to

follow some banking policies and the prudential regulations of SBP these are:

A bank has to maintain liquidity with central bank, i.e. 25 %of its total deposits.

A bank cannot invest all of its funds otherwise it will be difficult to meet urgent needs.

A substantial part of funds is received from interest on loans and advances. Before granting a

loan the bank analyzes and observes the borrower and conduct a complete ratio analysis. Bank

prepares credit line for this purpose the major thing is granting an advance is the security offered

by the borrower and its actual market value.

PROCUREMENT POLICIES

Procurement policies are more concerned with manufacturing organizations. In bank industry that

is service industry procurement means the procurement of funds from various sources such as

deposits. It involves attracting and holding the funds of the depositors. After the acquisition of

funds, the bank invest the acquire funds. One alternative is to lend its money and earned interest

markup or invest in govt. securities etc. as already mentioned in the above paragraph the major

sources of funds for a bank are the deposit of the general and the other sources of income includes

interest or markup charges received for various services offered by the bank to its clients.

A bank tries to attract maximum no. Of accounts so that it can increase it‟s deposits and these

lending ability. In order to get maximum no. of accounts the staff of the bank must be efficient as

compared to the other banks and the manager of the branch must take personal interest in

attracting deposits. Good quality of the service is the key to success.

MARKETING POLICIES

Marketing policies are also one of the most important policies because they are related to the

growth of the organization. Marketing for a bank would mean:

1. Creation of new product and services.

2. The bank marketing must be consumer oriented.

Following are the marketing policies of the ACBL.

Keeping the track of latest development in the world and incorporating the latest and

most modern equipment to make the banking procedures simple and easy for the

customers.

Development of products for the customers.

Giving good services and maintaining good relations with the customers.


18


These policies can be implemented by providing the right product and service to the customer at

the right place, at the right time, at the right price. It is necessary for the managers to keep in

touch with consumers, observe their needs and develop products, which meet their needs.

PROMOTIONAL POLICIES

Public relation and advertising has assumed a great importance in the modern banking business.

As for as promotional activities are concerned, the main objective of the bank is to inform the

existing clients and other people about its new products or change in the existing services. ACBL

establishes its purpose through:

1. Direct contact with customers.

2. Relation with business organizations.

3. Community relations.

LENDING POLICIES

Every bank has its own lending policies except for those, which are common for all the banks,

i.e. the policies, which are imposed on all the commercial banks by the SBP, are known as

prudential regulations. The lending policies of ACBL are as follows:

The bank only invests in those sound and viable projects, which have good rate of return.

Bank prefers to advance loan to their account holders.

Loan is given to reliable person only.

No political loan is sanctioned by bank.

Any account holder can apply for running finance or demand finance. The manger

appraises the past record of account holder and his credit worthiness. If he finds anything

wrong he can refuse to sanction the amount.

The bank while taking security prefers govt. Securities to shares.

It also advances working capital loans.

PERSONAL POLICIES

Personal policies have an important role in the success of any organization. ACBL have its

proper personal policies. Good personal policies motivate the employees towards hardworking.

Following are the main personal policies of ACBL:


19


Selection of employees on merit

Selection of capable employees.

Attractive salary package for motivation of employees.

To train and develop the future management of the bank.

Every employee must have certain set of clearly defined duties

Effective communication at al levels of the organization.

CREDIT STANDING

Askari bank has following credit rating by Pakistan Credit Rating Agency (PACRA)

Long term: AA

Short term: A1+

Definitions by PACRA:

A1+: Obligations supported by the highest capacity for timely repayment.

AA: Denote a very low expectation of credit risk. They indicate very strong capacity for timely

payment of financial commitments. This capacity is not significantly vulnerable to foreseeable

events.

A plus (+) appended to a rating denotes relative status within major rating categories.

AA represents very high credit quality. AA ratings denote a very low expectation of credit risk.

Also show very strong position of timely payments. A1+ shows obligations supported by the

highest capacity for timely payments.

COMPETITORS

Banking industry is growing much fast. So Askari bank is facing a lot of competition in the market. There

are following competitors:

ABN Amro

Bank al Falah (Pvt) Ltd

Union Bank Ltd

Soneri Bank Ltd

Prime Commercial bank

The bank of Punjab


20


Bank Al-Habib Ltd

My bank Ltd

Silk Bank Ltd

NIB Ltd


21


CHAPTER # 3

MARKETING MIX

PRODUCT & SERVICES

PRICE

PLACE

PROMOTION


22


PRODUCT & SERVICES

FUNCTIONS OF ACBL

There are following functions that Askari Bank performs:

Acceptance of deposits

Advancing of loans

Agency services

General utility services

Investment

Overdraft facility

Transfer of money

Creation of credit

Facilitates foreign trade

Executor of the standing orders

Acting as a trust

MARKET OFFERIGS

Askari Bank presents you an entire range of products... whether you are looking for high returns

on your deposits, lockers for your valuables, liquidity for your business needs, loans to meet an

emergency cash need, or financing for the purchase of an automobile, we have the solutions to

your questions.

In order to fulfill all the above mentioned functions, Askari bank is offering the following

products and services to its customers.

Branch banking

Corporate and investment banking

Consumer banking

Agricultural banking

Islamic banking

Alternate delivery channels

Each of these products and services is explained along with other necessary details.


23


BRANCH BANKING

Askari bank provides comprehensive product menu range of

innovative saving schemes in the form of Term Deposits and

Saving accounts with competitive profit rates and financing

options that provide convenient and flexible banking solutions

to our valued customers, coupled with superior services by our

friendly staff in order to give them an excellent banking

experience.

MAHANA BACHAT

Askari Mahana Bachat account is a term deposit account designed for individuals with a short to

medium term investment appetite. It offers customers the

option of investing for one to three years tenures and has been

designed keeping in view saving need of customers who want

profit on a monthly basis. With competitive rates of return

monthly on the 1st

of every month and the option of getting a

financing facility of up to 90%, Askari Mahana Bachat

Account caters to customers savings needs without blocking

their funds for a longer duration. Other details of this product

are summarized in the table below:

FEATURES DETAILS

Eligibility Pakistani Resident (Individuals Only).

Balance Requirement Minimum Rs. 50,000/- & Maximum Up to Rs.10,000,000

Profit Amount “Earn Rs. 633/- per month on investment of every Rs. 100,000/-

for one year!"

“Earn Rs. 708/- per month on investment of every Rs. 100,000/-

for three years!”

Expected Rate of Return: 1 Year Term: 7.6% p.a.

3 Years Term: 8.5% p.a.


24


PAISHGI MUNAFA

Askari Paishgi Munafa Account is a unique term deposit

designed to meet the immediate financial needs of the

individual investors/savers who want to invest their funds

for a medium term lasting for 15 months tenure. The most

significant feature of this product is that the customer

receives the entire profit upfront at the time of placing the

deposit in a way that the investors / savers can fulfill their

financial needs of today without depleting their savings.

FEATURES DETAILS


Balance Requirement Minimum Rs. 100,000/- or in multiples of Rs. 100,000/-.

Profit Amount Rs. 9,375/- on a deposit amount of Rs. 100,000/- (expected rate of

return 7.5 % p.a)

Benefits 1. Financing Facility up to 80% of Principal amount.

2. Free Visa Debit Card issuance.

3. No Minimum Balance requirement in checking account.

4. 2 Free Pay Orders in a month (Withholding Tax and other

Government charges will be applicable as per Law).

5. No maximum limit for investment.

VALUE PLUS DEPOSIT

An Askari value plus rupee deposit account offers value and

flexibility. This product promises greater financial freedom and

security with matching flexibility. Now customers can open a

“Value Plus Account” while enjoying the features of a normal

checking account.


25


CURRENT ACCOUNT

Current account caters to the variety of financial needs of our diverse customer base with added

benefits of free ATM card, cheque books, and issue of demand drafts/payorders and much

more. These products include value plus current accounts, basic account with no minimum

balance requirement.

FEATURES DETAILS


Balance Requirement Individuals : Minimum Rs. 25,000/-

Business : Minimum Rs. 100,000/-

Minimum Monthly Average

Balance Requirements

Individuals :Rs. 25,000/-*

Business : Rs. 100,000/-*

Important features Issuance of Visa Debit Card. Annual and replacement fee

would apply

ATM Cash Withdrawal Insurance coverage up to daily

cash withdrawal limit of the debit card from Askari Bank

ATMs

On-line fund transfer facility

i-Net Banking facility

SMS Alerts of ATM Cash withdrawal to Visa Debit Card

holders.

24 hours world-wide “Accidental Death & Permanent

Disability” insurance coverage to Debit Card / Visa Debit

Card Holders. Rs. 500,000/- and Rs. 700,000/- for Classic

and Gold Visa Debit Cards respectively

Issuance of Pay orders / Demand drafts and cheque books


26


SAVINGS ACCOUNT

A range of savings account offered by the Bank to both

individuals and institutional customers include Askari

Special Deposit, Value Plus Savings besides normal

savings account based on profit and loss sharing basis.

Askari savings deposits offer attractive features and

competitive returns and certain flexibility similar to

current accounts.

FEATURES DETAILS

Types of Value Plus Account 1- Saving Account.

2- Time Deposits Account.

Expected Rate of Return: Savings A/C 3 months 6%

p.a

Times deposit 6 months 6.5%

p.a

(Min. deposit Rs. 25,000) 1 year 7%

p.a

Important features Free issuance of Debit Card.

Free global accidental insurance coverage against debit

card irrespective of balance in the account or age of the

cardholder

Free ATM Cash Withdrawal insurance.

Free online funds transfer facility.

Free Internet Banking Services.

Facility of Supplementary Debit Cards.

Monthly returns on saving deposits.

Partial encashment facility for time deposits.

Automatic roll-over facility for time deposits.


27


INVESTMENT CERTIFICATES

Askari bank‟s investment certificates provide the added security, investment and monthly return

to the customers. These certificates are negotiable and transferable. These certificates are

available for a three month period and profit is

payable on a monthly basis through preprinted tear-

off coupons.

FEATURES DETAILS

Tenure Three months

Expected Rate of Return: First month 6% p.a

Second month 6.10% p.a

Third month 6.25% p.a

Important features Free issuance and free encashment

Account relationship with Askari Bank is not mandatory.

No penalty on pre-mature encashment

Negotiable and payable in Pakistan in Pak rupees only.

No purchasing limit.

Valid until encashed.

Encashable at all Askari Bank branches.

In case of loss / theft or damage, there is replacement /

refund to the original purchaser

Profit is payable on monthly basis through pre-printed

coupons

Encashment by third party.


28


RUPEE TRAVELER’S CHEQUE

Askari bank offers its customers a widely accepted

“rupee traveler cheque”, which eliminates all

financial risks while travelling. It is a safe and secure

way to make payments nationwide.

ISSUANCE Desirous customer will submit the Application Form

(duly filled/ signed) in any branch of Askari Bank Limited. After verification, branch will

forward the form to Investment Products Unit.

IPU will keep the record of the customer and system will automatically update that customer‟s

transaction.

ENCASHMENT Original purchaser will approach the nearest branch. Purchaser will sign RTC on the face and

branch will verify his signatures with the signature mentioned on CNIC before encashment of the

same.

FEATURES DETAILS

Eligibility Any Literate individual customer

Denominations Rs. 10,000/-

Validity Until encashed

Charges Refund processing charges are Rs. 1,000/- and

Issuance/Encashment are free

Documentation For Issuance/ Encashment

1. Original CNIC.

For Refund

1. Attested Copy of CNIC.

2. Application from original purchaser.

3. Purchase agreement (Form RTC 1).

4. Refund Application (Form 2-A).

5. Indemnity & Guarantee (Form 2B).

6. Lost Report Schedule (Form 2-C).

7. Voucher Copy for reissuance processing fee.

8. Copy of FIR( if lost amount is Rs. 50,000/- and above).


29


CORPORATE AND INVESTMENT BANKING

At Askari, we understand the unique business requirements of our corporate and institutional

clients, and accordingly the Bank‟s Corporate and Investment Banking Group (CIBG) strives to

meet their expectations and through provision of customized and relationship based banking

approach.

CORPORATE BANKING

Corporate banking works on a long term relationship based business model to provide a single

point within the bank for meeting all business requirements of its corporate and institutional

customers, including public sector enterprises, with the primary aim to enhancing customer

service.

Dedicated relationship managers for each of our corporate client ensure customer satisfaction,

which remains top priority. Askari bank‟s relationship oriented outlook focuses upon providing a

complete array of tailored financing solutions that are practical and cost effective, some of which

include:

Working Capital Facilities

Term Loans

Structured Trade Finance Facilities

Letters of Guarantee

Letters of Credit

Fund Transfers / Remittances

Bill Discounting

Export Financing

Receivable Discounting

INVESTMENT BANKING

The Investment Banking Division (IBD) at Askari focuses on origination and execution of a full

range of financial advisory and capital raising services to corporate and institutional clients as

well as actively managing the bank‟s proprietary investments in the local equity and debt capital

markets.


30


Whether your company is seeking to access the local or cross border syndications and debt

capital markets, project financing needs, advisory services related to M&A or the local equity

capital markets for raising capital, we are well positioned to provide due assistance. We can

create and tailor the right structured solutions for your business needs in order to enhance

shareholders‟ wealth and the market competitiveness

CONSUMER BANKING

Our consumer finance is focused on expanding target market and enhancing our portfolio

through new and improved initiatives and products. Special attention is being given to business

opportunities involving strategic alliances to earn sustainable returns, with greater emphasis on

secured form of consumer lending and an aim to increase product offerings while improving and

maintaining a quality of its risk asset portfolio.

Consumer Banking Services Division‟s products mainly comprise of:

Ask4 Car

It is a product for car financing for both new and used vehicles at affordable and competitive

mark-up, easy processing without any hidden cost.

A summary of the features of ASK4CAR is given

below:


31


FEATURES DETAILS

New Vehicles

Mark-up

18% p.a for 3 Years

19% p.a for 4 Years

20% p.a for 5 Years

Down payment Rs. 10,000/-

Charges Until encashed

Insurance Refund processing charges are Rs. 1,000/- and



1. Original CNIC.

For Refund








8. Copy of FIR (if lost amount is Rs. 50,000/- and above).

PERSONAL FINANCE

With unmatched financing features in terms of loan amount, payback period and most

affordable monthly installments, Askari Bank‟s personal finance makes sure that customer gets

the most out of his/her loan; the product tenure ranges from one to five years and is designed

primarily for salaried individuals.


32


FEATURES DETAILS

New Vehicles

Mark-up

18% p.a for 3 Years

19% p.a for 4 Years

20% p.a for 5 Years

Down payment Rs. 10,000/-

Charges Until encashed




1. Original CNIC.

For Refund








8. Copy of FIR (if lost amount is Rs. 50,000/- and above).

MORTGAGE FINANCE

Whether our customer plans to construct a house, buy a constructed house, or renovates

his/her house, Askari mortgage finance enables him/her to pursue their goal without any

problems. Mortgage is a premium home financing product for customers belonging to upper,

upper middle and middle income groups, residing in the urban areas of Pakistan.

Purchase of Plot + Construction.

Construction on Existing Plot.

Purchase of House/ Apartment.

Renovation of House/ Apartment.


33


VISA Debit Card

Askari Visa card enables customer access to

convenient banking services; now customers

can manage their accounts, withdraw cash,

make purchases and transfer your funds

through Askari Visa debit card, which also

offers the convenience of a credit card without the hassle of monthly bills and interest

charges. No minimum balance requirements for issuance or retention o VISA debit card. An

eligible can apply for the debit card i.e. Classic or Gold.

FEATURES DETAILS

Distinct Features

Cash withdrawal Limit is 50,000, Shopping Limit 200,000 &

Funds Transfer Limit 250,000.

Classic

Gold Cash withdrawal Limit is 100,000, Shopping Limit 250,000 &

Funds Transfer Limit 300,000

Eligibility Literate individual customer.

Having Pak Rupee checking account under the category of

Current, Saving, ASDA, Value Plus Accounts (Current &

Saving) Basic Banking Account and Smart Cash etc., with

credit balance and 'normal' status, may apply.

No minimum balance requirements for issuance or retention

of the VISA debit card. An eligible customer may apply for

any of the debit cards i.e. Classic or Gold.

A customer/staff is allowed to retain as many cards as

number of accounts and is allowed to link multiple accounts

with single debit card.

Multiple accounts of same customer, maintained at different

branches of Askari Bank, may also be linked with single

VISA Debit Card


34


MASTER CREDIT CARD

Askari bank offers a competitive suite of silver, gold and

platinum Master Credit cards focusing on providing

superior services, travel privileges, and shopping pleasures.

It also offers reward points and transactional alerts through

SMS as enhanced security feature.

FEATURES DETAILS

Eligibility Pakistani resident

Age

Basic Supplementary

Salaried: 21-61 years. Min 18 Yrs.- No Max Age limit.

SEB/SEP: 21- 65 years. Min 18 Yrs.- No Max Age limit.

AGRICULTURAL BANKING

The products and services for this category are

specially designed for Pakistan‟s crop farming, other

farming and rural business segment, which offer

improved and efficient delivery and control

mechanism for meeting increased demand for credit

by the farmers in easy, accessible and affordable

manner.

KISSAN EVER GREEN FINANCE

FEATURES DETAILS

Eligibility Pakistani individual

Security Mortgaged charge on agri land through Zari Pass Book.

Profit amount Profit on credit balances will be paid on half yearly basis as

declared by the bank on PLS savings accounts.


35


KISSAN TRACTOR FINANCE

FEATURES DETAILS

Tenure Yearly Basis

Markup The mark-up is charged for the actual days the finance is utilized



Benefits A special cheque book is issued to the farmer.

Automatic renewal upon adjustment of entire Principal amount

with mark-up once in a year.

The account is farmer friendly which benefits the farmers both

ways. If the account is in credit, it earns profit; otherwise it

provides instant finance, to the farmer for his agriculture needs.

FEATURES DETAILS

Tenure 5 years

Eligibility Pakistani individual

Benefits The farmer will have privilege of availing non-funded facility

at a reduced cost under this program on account of more

equity participation.

Good farmer bonus will be available to the borrower in case

the loan is repaid as per terms of sanction.

The farmer‟s life & tractor will be insured against

contingencies, which will provide comfort and piece of mind.

Priority in delivery of tractor will be given by manufacturer

as per arrangements with the bank


36


KISSAN LIVESTOCK DEVELOPMENT FINANCE

FEATURES DETAILS

Product type To purchase Milch Animals, Goats, Sheep, Poultry and

Fisheries without incurring extra expenditure because of

availability at his farm.

Eligibility Pakistani Resident (Owner Farmers).

Benefits

The program will provide regular day to day income to the

farmer to meet his own consumption and surplus to be

marketed.

This will revive / accelerate and supplement the income

generating capacity.

It will enhance the repayment capacity of the farmer.

KISSAN FARM MECHANIZATION FINANCE

FEATURES DETAILS

Product type Finance for farm equipment, trailer, thresher, drills & rotavators

etc.

Eligibility Pakistani Resident

Benefits

Under this program the farmer will get benefit of use of

modern agricultural tools, implements and equipments which

are cost and time effective.

Improves per acre yield of agri crops and quality of

agriculture produce to get good price in the market.

Helps to match / compete with international standards for

exportable agriculture produce.


37


KISSAN AABPASHI FINANCE

FEATURES DETAILS

Product type To finance installation of Tube-Wells (electric, diesel and solar

energy units) water management equipments and water channel

development etc.

Eligibility Pakistani Resident (owner of farm)

Benefits

Help farmers to make optimum use of limited water

resources.

To facilitate the farmer, to overcome the scarcity of water.

To develop mechanical water resources, sprinkler and drip

system etc.

To avoid traditional / inefficient modes of irrigation and

waste of available water.

To manage natural / available resources through water

management practices.

ISLAMIC BANKING

With the help of Shariah advisor and professional bankers, Askari Islamic Banking provides

Riba free and Shariah Complaint solutions to various customer segments through a modest

branch network in major cities of Pakistan. It offers following main products:

IJARAH VEHICLE FINANCE

Ijarah is a rental agreement, under which the usufructs of an asset are transferred to the client

on agreed terms and conditions. It is a Shariah

complaint mode of finance, adopted by Askari

Islamic Banking to meet the vehicle financing needs

of its Islamic customers.

In Ijarah, as Bank is the owner of the vehicle and only

transfers its usufruct to the customer, hence, customer

is responsible for any risks and liabilities attached to the usage of the vehicle, while risks

relating to ownership remain with the Bank throughout the Ijarah period.


38


DESCRIPTION RESPONSIBILITY

Expenses related to ownership Bank

Expenses related to use of asset Client

Risk associated with ownership Bank

Risks associated with use of asset Client

Third party liability in case of

accident

Client

HOME MUSHARAKAH

Askari Islamic Banking offers Shariah complaint home financing to purchase, construct,

improve and transfer of property under the concept of Diminishing Musharakah. This means

being able to cope with other financial commitment, while still having money left over for

extras and unexpected expenses.

FEATURES DETAILS

Askari Home Musharakah:

How it Works?

Joint ownership is created in the property between Bank

& Customer on the basis of the Musharakah Agreement.

Bank‟s share is divided into units and is given to the

client on rent.

Client promises to purchase Bank‟s share (units) over

the tenure of transaction.

Client purchases the units every month and will

eventually become the owner of the property.

Rental amount will be adjusted according to the bank‟s

share (units) remaining in the property.

FEATURES DETAILS

Askari Home Musharakah

Purchase

Askari Islamic Banking offers a convenient and easy way to

buy your own home, with a financing of 85% of the property

cost, upto Rs. 50 Million.


39


Features and Benefits Shariah compliant.

Prompt processing.

Competitive rentals.

Clubbing-of family income.

Maximum financing limit: Up to Rs. 50 million.

Financing tenure: 3 to 20 years.

Documentation/ legal/ valuation/ income est. charges

Eligibility

A Pakistani National

Earning at least two times more than your monthly Car Ijarah

rentals.

Between 21 to 65 years.

A permanent employment with atleast six months of service

with present employer.

A self employed individual with atleast 3 years of business

track record.

Income verification / documents required.

Documents required

Copy of CNIC.

Two Passport size colored photographs of applicant.

Copy of rental documents (if applicable).

Copy of last paid utility bills (Electricity/ Gas/ Telephone).

Bank statement last 6 months.

Personal information

Income Information

Original or certified copy of recent pay slip.

Employer‟s certificate including date of joining/current

designation/salary.

Bank statement of business-last one year.

Copy of management accounts (if applicable).

Business / Professional

Information 3 years proof of business (e.g. tax return / bank certificate).

Partnership deed (in case of partnership)


40


ALTERNATE DELIVERY CHANNELS

INTERNET(I.NET) BANKING

Askari‟s I.net banking assures convenient banking from the

comfort of your home. Customers no longer have to wait in

long and worrisome queues to request a financial

transaction, 24/7 balance inquiry, statement of accounts,

fund transfer, utility bills payment etc.

CALL CENTRE

Askari‟s call centre provides a single point of contact for all

of its customers, yet offer unique and individualized services

on real time information for its time-conscious customers; it

is operated 24/7 and service customers for providing

information of products and services, handling inquiries,

attending requests.

Following are the services available at call centre:

Balance Inquiries, Account Statements ( read out and fax)

Complaint handling for all sorts of complaints related to the bank.

Funds transfer from one account to the other.

Utility Bill payments for all utility companies listed with the Bank.

Credit Card related queries and information.

AUTOMATED TELLER MACHINE

Askari bank is a member of two electronic ATM inter-bank connectivity platforms i.e.

MNET and 1-limk. Through this shared network of online 5,319 ATMs including Askari

bank‟s 256 dedicated ATMs covering major cities in Pakistan supports the delivery channels

for customer service. It provides services of e-

banking and payment system products.


41


PRICE

PRICING STRATEGIES

The pricing strategies considered by Askari bank limited are:

One price strategy

Flexible price strategy

For Priority Customers many of the charges are waived in order to facilitate them and

provide them with high-class services.

The bank staffs in higher posts are also in a position to waive some charges in order to

oblige their customers.

So the pricing strategies are adaptable and stern depending upon the type of the customer.

The Bank offers deposits at competitive prices.

Pricing strategies used by Askari Bank vary among different products and services. However, the

ultimate aim of each strategy being applied is to achieve organizational goals. When a new

product or service is introduced in the market, Askari Bank‟s top management first takes into

account the marketing objective and only then the price for the new product or service is

formulated. The top management also sets price in accordance with the pricing objectives that

Askari Bank strives to achieve. The more clearer the company's objectives, the easier it is to set a

price.

PRICING OBJECTIVES

The pricing strategies of Askari Bank clarify the road map to achieve the following pricing

objectives:

Survival

Maximum current profit

Maximum market share

Maximum market skimming

Product quality leadership

STEPS TO SET A PRICE

Setting an appropriate price for the product/service is quite a challenge as it should be so devised

that it meets the expectations of both the customers and the bank. Askari commercial bank has

different product and services. Each has been designed to cater the needs of a particular target

market. Price is the only key which generates the revenue for the organization to achieve its

financial objective.


42


Askari bank charges price according to the nature, its demand and cost of product. Higher price

is charged for an innovative product while a competitive price is set for other products and

services that Askari bank offers.

The basic steps followed by Askari Bank while setting their price are:

SELECTING THE PRICING OBJECTIVE

DETERMINING THE CONSUMER'S DEMAND

ESTIMATING COST

ANALYZING COMPETITOR'S COST, PRICE AND OFFERS

SELECTING A PRICING METHOD

FINALIZING THE PRICE


43


PRICE AND PRICING STRATEGY OF SOME OF ASKARI BANK’S

PRODUCTS

PRODUCT &

SERVICE

STRATEGY DETAIL

ASKARI CAR FINANCE Competitive pricing

Prices are set at pace with

competitors

PERSONNEL FINANCE Discriminative pricing

Prices are different for army

and civilian customers

DEPOSIT MULTIPLIER Premium pricing Prices are artificially kept

higher so as to encourage

favorable customer

perceptions

ASKARI RUPEE

TRAVELER CHEQUE

Target pricing Prices are set so as to ensure

that a specific rate of return is

earned on the investment

AGRICULTURE

FINANCE

Product line pricing ---------

KISSAN TRACTOR

FINANCE

Cost-plus pricing Price = Cost of Production +

Margin of Profit.

ISLAMIC BANKING Competitive pricing

Prices are charged at pace

with that of competitors

ELECTRONIC BILL

PAYMENT SERVICES

Market-oriented Pricing Setting a price based upon

analysis and Research

compiled from the targeted

market.


44


An overview of the detail of pricing methodology for Askari Bank‟s products and services is

given below:

UTILITY BILLS (PTCL, WAPDA, SNGPL)

Askari bank‟s service charges are Rs 8 for the collection of utility bills on behalf of the

concerned authorities.

SAFE DEPOSIT LOCKERS

The price for this product varies on the basis of locker selected by the customer. The table below

presents a summary of how prices increase as does the size of locker

LOCKER SIZE PRICE CHARGED (Rs)

SMALL 1,200 p.a

MEDIUM 1,700 p.a

LARGE 3,000 p.a

EXTRA LARGE XL (16”x 16”) 3,750 p.a

Extra Large XXL(16”x31”) 6,000 p.a

AUTO FINANCE

Competitive pricing strategy is used and the price includes both cost and profit margin.

Processing Fee Rs.5, 000/- (Rs.2, 200/- non-refundable)

Premature Termination Charges Up to 6.5% of the outstanding loan amount

Balloon Payment 15% of the outstanding balance in a year subject to 3.25% charges on

the amount being paid

Cheque Return Charges Rs.600/-

Late Payment Charges Rs.600/-


45


AGRICULTURE BANKING

Processing Fee for following finances is 1% of the sanctioned facility amount.

Askari Kissan Evergreen Finance.

Askari Kissan Tractor Finance.

Askari Kissan Farm Mechanization.

Askari Kissan Livestock Development Finance

Askari Kissan Aabpashi Finance

Askari Kissan Transport Finance

Askari Kissan Farm Storage Finance

Askari Kissan Model Dairy Finance

Askari Kissan Gold Fish Finance.

Askari Kissan White Pearl Finance

Askari Kissan Murghban Finance

Askari Kissan Gulban Finance

Askari Kissan Samar Bahisht Finance

Asan Mali Sahulat.

Personal Finance

The prices for personal finance are different for civilian and army customers, the detail of which

is given below:

PROCESSING FEE FOR CIVILIANS

CLEAN - 1.20% of loan amount min. Rs.2, 750/- (Including legal & documentation

charges)

SECURED – 1.20% of loan amount max. Up to Rs.5, 500/- (Legal & documentation

charges at actual)

PROCESSING FEE FOR ARMED FORCES PERSONNEL


charges)

SECURED - 1.20% of loan amount max. Up to Rs.5, 500/- (Legal & documentation

charges at actual)


46


Smart Cash

The processing fee charged by Askari bank is:


charges)

SECURED - 1.20% of loan amount max. Up to Rs.5, 500/- (Legal & documentation

charges at actual)

Mortgage Finance

Following charges are to be paid by the Askari Bank‟s customers:

Processing Fee Rs.5, 500/- (Flat)

Enhancement Charges Rs.5, 500/- (Flat)

Late Payment Charges Rs.600/- per installment

Premature Termination Charges

A) In Case of Early Settlement by the Borrower Charges Will Be

Applicable in the following manner:

1st Year: Unto 6% on outstanding balance

2nd

Year: Up to 5% on outstanding balance

3rd

Year: onwards: Up to 4% on outstanding balance.

B) Up To 10% of the Outstanding Balance, In Case Of Balance

Balloon Payment allowed up to a maximum of 20% of the outstanding balance in a year

Additional balloon

Payment be up to 5.5% charges on the amount being paid

Balloon Payment Rs.250/- per cheque

Business Finance

Customers utilizing this product have to bear the following charges

Processing Fee Rs.5, 500/- (Flat)

Renewal Fee Rs.5, 500/- (Flat)

Enhancement Charges Rs.5, 500/- (Flat)


47


Cheque Return Charges Rs. 600/- (per cheque)

Late Payment Charges 21% of the overdue am

Premature Termination Charges Up to 6% of the limit.


48


PLACE

The map below shows how the network branch of Askari bank is distributed in different areas of

Pakistan along with their number in each of the cities.

MAIN OFFICES


49


Askari bank divides the geographical area of Pakistan into 3 regions namely:

NORTH REGION (Khyber Pakhtunkhwa & Jammu and Kashmir)

SOUTH REGION (Sindh and Balochistan)

CENTRAL REGION (Punjab)

City : Rawalpindi Region: North

CONTACT NUMBERS: Manager (ops)

9063198 / 9273177

Manager

9063200 / 9273178

FAX NO: 9273175 / 9273180 / 9273181 PABX NO. : 9063158

EMAIL: [email protected] BRANCH CODE: 0001

ADDRESS : Askari Bank Limited AWT Plaza Branch Rawalpindi

City : Karachi Region: South


021-32628711

Manager

021-32624714/ 021-32631178

FAX NO: 021-32625154 / 021-32631176 PABX NO. : 021-32630731-33


ADDRESS : Saima Trade Tower I.I.Chundrigar Road


50


City : Peshawar Region: North


091-5260439

Manager

091-5271653

FAX NO: 091-5276391 PABX NO. : 091-9212433-6


ADDRESS : Fakhar-e-Alam Road, Peshawar Cantt

City : Quetta Region: South

CONTACT NUMBERS:

Manager (ops)

081-3836051

Manager

081-2833333

FAX NO: 081-2845602 PABX NO. : 081-2843751-4


ADDRESS : M. A. Jinnah Road, Quetta.

City : Lahore Region: Central


042-99203633

Manager

042-99203081

FAX NO: 042-99203351 PABX NO. : 042-99203673-7


ADDRESS : 7-A, Shahrah-e-Aiwan-e-Tijarat


51


City : Islamabad Region: South


(051) 2271799

Manager

(051) 2871144

FAX NO: (051) 2271797 PABX NO. : (051) 2271794-6


ADDRESS : 24-D, Rasheed Plaza, Jinnah Avenue, Blue Area, P.O. Box 1499

City : Faisalabad Region: Central


041-9201003

Manager

041-9201001

FAX NO: 041-9201006 PABX NO. : 9201008-11


ADDRESS : University Road Faisalabad

City : Gujranwala Region: Central


055-9200859

Manager

055-9200857

FAX NO: 055-9200858 PABX NO. : 055-9200855-56


ADDRESS : Opposite General Bus Stand G.T Road Gujranwala


52


City : Multan Region: Central


061-9201388

Manager

061-9201399

FAX NO: 061-9201395 PABX NO. : 061-9201391-4


ADDRESS : 64-A, Abdali Road, Multan.

City : Bahawalpur Region: South


(062)-9255323

Manager

(062)-9255325

FAX NO: (062)-9255324 PABX NO. : (062)-9255322-4


ADDRESS : 1-Noor Mahal Road Bahawalpur


53


PROMOTION

Askari Bank uses a combination and coordination of promotional techniques to develop a unified

promotional strategy under the concept of “Integrated Marketing Communication”. Like many

other organizations, Askari Bank‟s promotional strategy is aimed at convincing customers to buy

its products and also to remain a loyal long-term customer.

Objective Of Promotional Strategies

The objective behind various promotional tools used by Askari Bank is to:

Create Product Awareness

Develop Potential Customer’s Interest

Provide Information

Stimulate Demand.

Reinforce The Brand

PROMOTIONAL STRATEGIES

Advertising

Askari Bank has been using non-personal, paid promotional advertisements often using mass

media outlets to deliver the marketer‟s message. Advertising in News Papers and Television is

used as a marketing tool by Askari Bank. However it is often used when a new product is

introduced.

Bill Board

Another source used by Askari Bank to convey its message is billboards, which are placed in the

main urban areas near the airports and high traffic areas.

Broachers:

The Bank publishes various brochures for the general guidance of the customers. These include

the Schedule of Bank Charges, VISA Card Information, and Savings & Term Deposit

Information, Pension account information etc.

Personal Selling:

Personal selling is also a norm at the Bank. The branch has well learned sales executives i.e.,

Business alumnae. Personal selling is used both for attracting individual and corporate clients.


54


Internet

Askari commercial bank use internet as a promotion tool to convey the message to the target

audience all the information related to product and service and the organization is available on

the internet

Social Marketing

ACBL has made generous contribution in the area of sport culture poverty woman & child care

health & medical science human development and scientific research ACBL sponsored

international squash tournaments were professional from all over the world participated Askari

commercial has also sponsored other sports tournament include Golf at both amateur and

professional level the bank has also contribute toward awareness program for AIDS water

conservation and blindness and has promoted the country 's cause on international forum by

cosponsoring the first interactive encyclopedia of Pakistan.

Public Relations

The most popular tool use by the banker and manger to increase their deposit crate awareness

and loyalty public relation s also tool of promotion.

Publicity

This type of promotion uses third-party sources, and particularly the news media, to offer a

favorable mention of the marketer‟s company or product without direct payment to the publisher

of the information. For example media cover any Tournament that is sponsored by ACBL.


55


CHAPTER # 4

FINANCIAL STATEMENT

ANALYSIS

HORIZONTAL ANALYSIS

VERTICAL ANALYSIS



56


BALANCE SHEET

ASSETS (Rs in millions) 2009 2010 2011

Cash and balances with treasury banks 19,386 22,565 26,168

Balance with other banks 8,364 3,785 6,235

Lending to other financial institutions 4,614 9,172 1,592

Investments 67,046 102,260 133,757

Advances 135,034 152,784 150,711

Operating fix assets 9,262 9,988 9,349

Other assets 10,621 14,190 15,945

TOTAL ASSETS 254,327 314,745 343,756

LIABILITIES

Bills payable 2,945 3,090 2,756

Borrowings 19,300 25,555 17,273

Deposits and other accounts 205,970 255,937 291,503

Subordinate loans 5,995 5,993 6,990

Deferred tax liabilities 334 86 83

Other liabilities 4,833 8,081 7,734

TOTAL LIABILITIES 239,378 298,740 325,980

Net assets 14,949 16,004 17,776

Share capital 5,073 6,427 7,070

Reserves 7,183 7,691 8,136

Unappropriated profit 886 702 1,302


57


Surplus on revaluation of assets net of tax 1,806 1,184 1,267

TOTAL CAPITAL 14,949 16,004 17,776

TOTAL LIABILITIES AND CAPITAL 254,327 314,745 343,756

INCOME STATEMENT

RUPEES IN MILLION 2009 2010 2011

Mark–up / return / interest earned 22,587 27,329 32,766

Mark–up / return / interest expensed 13,554 17,937 22,700

Net mark–up / interest income 9,033 9,392 10,067

Provision against non–performing loans and advances 2,324 2,319 1,630

Impairment loss on AFS investment 431 383 122

Provision for impairment in the value of investments 77 297 44

Net mark–up /interest income after provisions 6,118 6,328 8,236

Non mark–up/interest income

Fee, commission and brokerage income 1,308 1,271 1,194

Dividend income 163 210 289

Income from dealing in foreign currencies 538 731 772

Gain on sale of investments – net 144 213 307

Unrealized gain on revaluation of investments (2) - -

Other income 404 376 340

Total non–markup / interest income 2,555 2,800 2,903


58


Non mark–up/interest expenses:

Administrative expenses 6,996 7,813 8,639

Other charges 34 42 87

Total non–markup / interest expenses 7,030 7,855 8,726

Profit before taxation 1,642 1,273 2,413

Taxation – current

– prior years‟

– deferred

562

120

(147)

330

0

-

833

-

(48)

Profit after taxation 1,108 943 1,628

Basic / diluted earnings per share – Rupees 1.79 1.34 2.30


59


HORIZONTAL ANALYSIS

Balance Sheet

ASSETS (Rs in millions) 2009 (%) 2010 (%) 2011 (%)

Cash and balances with treasury banks 21 16 16

Balance with other banks 111 (55) 65

Lending to other financial institutions 3 99 (83)

Investments 88 53 31

Advances 5 13 (1)

Operating fix assets 12 8 (6)

Other assets 18 34 12

TOTAL ASSETS 23 24 9

LIABILITIES

Bills payable 14 5 (11)

Borrowings 27 32 (32)

Deposits and other accounts 23 24 14

Subordinate loans 100 0 17

Deferred tax liabilities 2471 (74) (3)

Other liabilities 2 67 (9)

TOTAL LIABILITIES 24 25 9

Net assets 15 7 11

Share capital 25 27 10

Reserves (6) 6 6


60


Unappropriated profit 170 (16) 86

Surplus on revaluation of assets net of tax 9 13 11

TOTAL CAPITAL 93 (34) 7

TOTAL LIABILITIES AND CAPITAL 15 7 11

PERCENTAGE GROWTH IN ASSETS AND LIABILITIES

The total assets have increased by 23% in 2009, 24 % in 2010 and 9% in 2011. This increase in

total assets from 2009 to 2010 is mainly attributed to

99% increase in “lending to financial institution”

13% increase in “advances”

34% increase in “other assets”

The meager increase in total assets by 9 % from 2010 to 2011 is the result of a moderate changes

in the following balance sheet accounts:

65% increase in “balances with other banks”

Decrease in “lending to financial statements”

12 % increase in “other assets”

On the other hand total liabilities have increased approximately in same ratio as to 24 % in 2009,

25% in 2010 and by 9% in 2011. The management focuses on the non-current assets. The current

liabilities have also increased with a greater proportion compare to long term liabilities.

SHARE CAPITAL RESERVE AND TOTAL OWNER EQUITY

Share capital has increased by 25% in 2009, 27 % increase in 2010 and 9 % increase in 2011 and

it shows an increase in the value of bank. Reserves have increased by 6% in the year 2010 and

2011 which is also good sign. The total owner‟s equity has decreased from 34% in 2010.

Whereas a drastic increase of 93% in 2011 has been a great come back.


61


Income Statement


Mark–up / return / interest earned 23 21 20

Mark–up / return / interest expensed 27 32 27

Net mark–up / interest income 17 4 7

Provision against non–performing loans and advances (39) 0 (30)

Impairment loss on AFS investment 100 (11) (68)

Provision for impairment in the value of investments 15015 286 (85)

Net mark–up /interest income after provisions 67 3 30


Fee, commission and brokerage income 4 (3) (6)

Dividend income (6) 29 38

Income from dealing in foreign currencies (38) 36 6


Unrealized gain on revaluation of investments (109) (82) (100)

Other income 18 (7) (10)

Total non–markup / interest income (6) 10 4


Administrative expenses 18 12 11

Other charges 213 24 104

Total non–markup / interest expenses 19 12 11

Profit before taxation 256 (22) 90


62


Markup Expenses

Markup expenses have increased from 17 %, 4%, and 7% in the year 2009, 2010 and 2011

respectively which shows the management ability to control financial cost. And is a healthy sign

for the bank‟s management.

Net Mark-Up Income/Gross Profit

The net markup income/gross profit reduced to 3% in 2010 from 67% in 2009 which is a

negative sign. Whereas in the year 2011, an increase of 30% shows a regain of net markup.

Non Markup/Non Interest Income

Total operating income has increased from 10% in 2010 which is regained after Askari Bank

showed a 6% decrease in 2009. On the other hand 4% increase was reported in the year 2012.

Net Income

Net income increased by 73% in 2011 which is a healthy sign for the bank. Whereas, 15 %

decrease was seen in the year 2010.


– prior years‟

– deferred

3138

(340)

(237)

(41)

(100)

(100)

153

-

(14039)

Profit after taxation 187 (15) 73


63


VERTICAL ANALYSIS

Balance Sheet

ASSETS (Rs in millions) 2009 (%) 2010 (%) 2011 (%)

Cash and balances with treasury banks 8 7 8

Balance with other banks 3 1 2

Lending to other financial institutions 2 3 0

Investments 26 32 39

Advances 53 49 44

Operating fix assets 4 3 3

Other assets 4 5 5

TOTAL ASSETS 100 100 100

LIABILITIES

Bills payable 1 1 1

Borrowings 8 9 5

Deposits and other accounts 86 86 89

Subordinate loans 3 2 2

Deferred tax liabilities 0 0 0

Other liabilities 2 3 2

TOTAL LIABILITIES 100 100 100

Net assets 6 5 5

Share capital 34 40 40

Reserves 48 48 46


64


Unappropriated profit 6 4 7

Surplus on revaluation of assets net of tax 7 7 12

TOTAL CAPITAL 100 100 100

VERTICAL ANALYSIS OF BALANCE SHEET

A vertical analysis of balance sheet of Askari Bank shows that the Bank has financed its fixed

assets more than the current assets. And the assets have been financed mostly be long term

liabilities and a little by capital which goes in the favor of owners.

PERCENTAGE GROWTH IN ASSETS AND LIABILITIES

Cash and cash Balances with other banks have decreased from 8% in 2009 to 7% in 2010 and

then increased by 8% in 2011. Investments have increased during 2009 to 2011 from 26% to

39% respectively. Advances decreased to 44% in 2011 from 53% in 2009. On the other hand

current liabilities have increased more than the long term liabilities. Bills payable remained

constant during the three years. Deposits have decreased from 89% in 2009 to 86% in 2010 and

2011.

SHARE CAPITAL RESERVE AND TOTAL OWNER EQUITY

Share capital was reported to constitute 40 % of owner‟s equity in 2009 and 2011 which is good

sign because it represents the increased profitability of the bank. However, it decreased to 34%

in 2011. Reserves have increased by 48 % in 2011 and 2010. The total owner‟s equity has

decreased from 7% in 2011 to 12% in 2009 which is not good as it represents the growth of the

bank.


65


Income statement


Mark–up / return / interest earned 100 100 100

Mark–up / return / interest expensed 60 66 69

Net mark–up / interest income 40 34 31

Provision against non–performing loans and advances 10 8 5

Impairment loss on AFS investment 2 1 0

Provision for impairment in the value of investments 0 1 0

Net mark–up /interest income after provisions 27 23 25


Fee, commission and brokerage income 6 5 4

Dividend income 1 1 1

Income from dealing in foreign currencies 2 3 2


Unrealized gain on revaluation of investments 0 0 0

Other income 2 1 1

Total non–markup / interest income 11 10 9


Administrative expenses 31 29 26

Other charges 0 0 0

Total non–markup / interest expenses 31 29 27


66


VERTICAL ANALYSIS INCOME STATEMENT

The vertical analysis of the income statement of Askari Commercial Bank Ltd shows that the

markup income is taken as 100% because it is the primary source and the real objective of the

operations of the bank.

MARKUP EXPENSES

Markup expenses have increased from 60% in 2009 to 69% in 2011 which is not a good sign.

NET MARK-UP INCOME/GROSS PROFIT

The net markup income/gross profit has reduced to 9% in 2011 from 10% in 2010 which is a

negative sign and it is due to no control over markup expenses. It was reported to be 11% in

2011.

NON MARKUP/NON INTEREST INCOME

Total operating income is 27% in 2011 and 29% in 2010 and 31% in 2009, which is a negative

sign.

NET INCOME

Net income of the bank has shown a 5 % increase in 2011 from 3% in 2010. Whereas, it was 5%

in 2009, the same as in year 2011.

Profit before taxation 7 5 7


– prior years‟

– deferred

2

1

(1)

1

-

0

3

-

0

Profit after taxation 5 3 5


67



LIQUIDITY RATIOS

Liquidity ratios attempt to measure a company's ability to pay off its short-term debt obligations.

This is done by comparing a company's most liquid assets (or, those that can be easily converted

to cash), to its short-term liabilities. They show the number of times the short term debt

obligations are covered by the cash and liquid assets. If the value is greater than 1, it means the

short term obligations are fully covered.

CURRENT RATIO

The current ratio is a popular financial ratio used to test a company's liquidity by deriving the

proportion of current assets available to cover current liabilities. The concept behind this ratio is

to ascertain whether a company's short-term assets (cash, cash equivalents, marketable

securities, receivables and inventory) are readily available to pay off its short-term liabilities

(notes payable, current portion of term debt, payables, accrued expenses and taxes). In theory,

the higher the current ratio, the better.

Current Ratio =

Current assets

Current liabilities

Ratio 2009 2010 2011

Current assets (Rs. in „000) 206,901,500 203,336,207 254,582,770

Current liabilities (Rs. in „000) 167,871,813 206,743,943 136,886,195

Current ratio 1.23 0.98 1.86

INTERPRETATION:

2009: For every Re.1 in current liability, Askari bank has Re.1.23 in its current assets.




68


TIME SERIES ANALYSIS:

The greater the value of this ratio, the more capable the firm is to payback its short term

obligations.

In the year 2010, current ratio decreased by 0.25 in comparison to the year 2009. This shows a

decrease in the Askari bank‟s liquidity which is contributed by the following changes in currents

assets: a moderate increase in “cash and balances with other treasury banks”. While the portion

of currents liabilities showed a significant increase decrease in “balances with other banks”, a

high increase in “bills payable” and “borrowings”.

Current ratio showed an increase of 0.88 in the year 2011 in relation to the year 2010. This

improvement in the bank‟s liquidity and hence solvency is due to a significant increase in the

current assets portion of “cash and balances with treasury banks”, “balances with other banks”,

investments” whereas the current liabilities were decreased due to “bills payable”,

“borrowings”, “deferred tax liabilities”.

0

0.5

1

1.5

2

2.5

2009 2010 2011

CURRENT RATIO

RATIOS


69


QUICK RATIO

The quick ratio is a measure of a company's ability to meet its short-term obligations using its

most liquid assets (near cash or quick assets). Quick assets include those current assets that

presumably can be quickly converted to cash at close to their book values. The ratio tells

creditors how much of the company's short term debt can be met by selling all the company's

liquid assets at very short notice.

We calculate this ratio as under:-

Quick ratio =

Current assets – inventory

Current liabilities

Ratio 2009 2010 2011

Quick assets (Rs. in „000) 206,002,395 202,109,923 253,128,226


Quick ratio 1.23 0.97 1.85

INTERPRETATION:

2009: For every Re.1 in current liability, the company has Re.1.23 in its current assets

(excluding prepaid expenses.).


(excluding prepaid expenses).


(excluding prepaid expenses).


70



In the year 2010, quick ratio decreased by an amount of Rs.0.26 in comparison to the previous

year. This decrease is attributed to moderate increase in “advances”, “cash and balances with

other treasury banks”, “balances with other banks” thereby leading to a moderate increase in the

bank‟s quick assets. While the portion of currents liabilities showed a significant increase

decrease in “balances with other banks”, a high increase in “bills payable” and “borrowings”.

The year 2011 showed an increase of Rs.0.88 in the quick ratio. So, Askari bank has been able to

best meet its short-term obligation in the year 2011 with its most liquid assets. This significant

improvement in the quick ratio in the year 2011 is attributable to the following changes in quick

assets: a very moderate decrease in “advances”, a high increase in other quick assets. The current

liabilities, on the other hand, significantly decreased mainly due to a considerable decrease in

“borrowings” and “bills payable”.

0

0.5

1

1.5

2

2009 2010 2011

QUICK RATIO

RATIOS


71


WORKING CAPITAL

Working capital is the amount by which the value of a company's current assets exceeds its

current liabilities. Working capital measures how much in liquid assets a company has available

to build its business. The number can be positive or negative, depending on how much debt the

company is carrying. In general, companies that have a lot of working capital will be more

successful since they can expand and improve their operations. Companies with negative

working capital may lack the funds necessary for growth. We calculate it as under:

Ratio 2009 2010 2011

Current assets (Rs. in „000) 206,901,500 203,336,207 254,582,770


Working capital 39,029,687 (3,407,736) 117,696,575

INTERPRETATION:

2009: Askari has been able to pay off its short term liabilities.

2010: Askari has been not able to pay off its short term liabilities.

2011: Askari has been able to pay off its short term liabilities.

Working capital

=

Current assets - current liabilities

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72



Positive working capital in the year 2009 and 2011 means that the Askari is able to pay off its

short-term liabilities. Negative working capital in the year 2010 means that Askari currently is

unable to meet its short-term liabilities with its current assets.

The positive figures of 2009 and 2011 are mainly due to high increase in the quick assets portion

of the current assets, particularly in the year 20011. But in the year 2010, quick assets decreased

moderately, leading to a decrease in current assets. But the current liabilities increased

immensely, causing current liabilities to exceed current assets.

-20,000,000

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

2009 2010 2011

WORKING CAPITAL

RATIOS


73


TOTAL CAPITALIZATION RATIO

Total capitalization ratio indicates the leverage/debt component of a firm. It also tests the

soundness of capital structure of a company. Higher share of share holder‟s equity in the Capital

Structure shows the better solvency position of a company. This ratio supports the company

growth and operations. A low equity share will be risk for the creditors of the company. We

calculate this ratio as under:-

Total capitalization ratio

=

Long term debt

Long term debt + Stockholder’s

equity

Ratio 2009 2010 2011

Long term debt (Rs. in „000) 71,506,561 91,996,467 189,093,845

Long term debt + stockholder‟s equity

(Rs. in „000)

84,649,249 106,817,045 205,602,627

Total capitalization ratio 84% 86% 92%

INTERPRETATION:

2009: The bank‟s long term debt constituents 84% of the capital structure.

2010: The bank‟s long term debt constituents 86 % of the capital structure.

2011: The bank‟s long term debt constituents 92% of the capital structure.


74



Ideally, a lower total capitalization ratio depicts a better liquidity position. Higher the ratio

means higher portion of debt comprises of long term credit financing than equity financing.

The bank total capitalization ratio increases from 2009 to 2010 but declines in 2011. It means

that each year the bank had higher risks and chances of bankruptcy. In the years 2009, 2010 and

2011, long term debt and stockholders‟ equity have shown a remarkable increase in each

subsequent year. This shows that ABL prefers debt financing over equity financing in maintain

its capital structure.

0

0.2

0.4

0.6

0.8

1

1.2

2009 2010 2011

TOTAL CAPITALIZATION RATIO

RATIOS


75


ACTIVITY RATIO

An activity ratio is a metric which determines the ability of a company to convert its balance

sheet accounts into revenue. Activity ratios measure company sales per another asset account.

Activity ratios measure the efficiency of the company in using its resources. Since most

companies invest heavily in accounts receivable or inventory, these accounts are used in the

denominator of the most popular activity ratios. Activity ratios are critical in evaluating a

company's fundamentals because, in addition to expressing how well a company generates

revenue, activity ratios also indicate how well the company is being managed.

TOTAL ASSETS TURNOVER RATIO

Asset turnover measures a firm's efficiency at using its assets in generating sales or revenue - the

higher the number the better. It also indicates pricing strategy: companies with low profit

margins tend to have high asset turnover, while those with high profit margins have low asset

turnover. This ratio is calculated as:

Total asset turnover

=

Sales

Total assets

Ratio 2009 2010 2011

Net sales (Rs. in „000) 22,586,736 27,328,908 32,766,351

Total asset (Rs. in „000) 254,327,446 314,744,552 343,756,306

Total assets turnover 0.089 0.087 0.095

INTERPRETATION:

2009: Askari bank turned over its assets 0.089 times.




76



In the year 2010, a very minor decrease of .002 was seen in the total asset turnover of Askari

bank than the previous year. This decrease in asset turnover is explained by the ratio in which the

total assets and net sales increased in the year 2010. Net sales increased by 21% whereas the total

assets increased by 24%. This increase in total assets has been contributed by “investments”.

Total asset turnover increased from 0.087 to 0.095 in the year 2010 and 2011 respectively. This

immense increase is the result of great increase in the total asset account titles “investments” and

“advances”. Net sales also increased in a high proportion in the year 2011 leading to an efficient

management of assets.

0.08

0.085

0.09

0.095

0.1

2009 2010 2011

TOTAL ASSETS TURNOVER RATIO

RATIOS


77


FIXED ASSET TURNOVER RATIO

Fixed asset turnover ratio compares the sales revenue a company to its fixed assets. This ratio

indicates the productivity of fixed assets in generating revenues. If a company has a high fixed

asset turnover ratio, it shows that the company is efficient at managing its fixed assets. Fixed

assets are important because they usually represent the largest component of total assets.

An increasing trend in fixed assets turnover ratio is desirable because it means that the company

has less money tied up in fixed assets for each unit of sales. A declining trend in fixed asset

turnover may mean that the company is over investing in the property, plant and equipment. This

ratio is calculated as:

Fixed asset turnover

=

Sales

Total fixed assets

Ratio 2009 2010 2011

Net sales (Rs. in „000) 22,586,736 27,328,908 32,766,351

Fixed assets (Rs. in „000) 9,261,609 9,987,963 9,348,815

Fixed assets turnover 2.44 2.74 3.5

INTERPRETATION:

2009: Askari bank turned over its fixed assets 2.24 times.




78



An increasing trend can be seen in the fixed asset turnover ratio. A higher fixed-asset turnover

ratio shows that the bank has been more effective in using the investment in fixed assets to

generate revenues as ABL has been able to maintain its fixed assets to a figure of approximately

9,000,000 but net sales figures raised each year.

0

1

2

3

4

2009 2010 2011

FIXED ASSET TURNOVER

RATIOS


79


DEBT RATIOS

A ratio that indicates what proportion of debt a company has relative to its assets or equity. The

measure gives an idea to the leverage of the company along with the potential risks the company

faces in terms of its debt-load. A debt ratio of greater than 1 indicates that a company has more

debt than assets/equity; meanwhile, a debt ratio of less than 1 indicates that a company has more

assets than debt/equity. Used in conjunction with other measures of financial health, the debt

ratio can help investors determine a company's level of risk.

DEBT ASSET RATIO

The debt/asset ratio shows the proportion of a company's assets which are financed through debt.

If the ratio is less than one, most of the company's assets are financed through equity. If the ratio

is greater than one, most of the company's assets are financed through debt. Companies with high

debt/asset ratios are said to be "highly leveraged," and could be in danger if creditors start to

demand repayment of debt. It is calculated by using the formula:

Debt asset ratio =

Total debt

Total assets

Ratio 2009 2010 2011

Total liabilities (Rs. in „000) 239,378,374 298,740,410 325,980,040

Total assets (Rs. in „000) 254,327,446 314,744,552 343,756,306

Debt asset ratio 0.94 0.95 0.95

INTERPRETATION:

2009: Askari has financed 94% of its assets with debts.




80



A debt ratio of greater than 1 indicates that a company has more debt than assets and a debt ratio

of less than 1 indicates that a company has more assets than debt. ABL has been maintaining a

debt ratio of less than 1 over the three years which shows that ABL has more assets than debt

which is satisfactory indicating that the company is less leveraged.

0.935

0.94

0.945

0.95

0.955

2009 2010 2011

DEBT ASSET RATIO

RATIOS


81


DEBT EQUITY RATIO

The debt-to-equity ratio is a measure of the relationship between the capital contributed by

creditors and the capital contributed by shareholders. Debt-to-equity ratio is the key financial

ratio and is used as a standard for judging a company's financial standing. It is also a measure of

a company's ability to repay its obligations. When examining the health of a company, it is

critical to pay attention to the debt/equity ratio. If the ratio is increasing, the company is being

financed by creditors rather than from its own financial sources which may be a dangerous trend.

Lenders and investors usually prefer low debt-to-equity ratios because their interests are better

protected in the event of a business decline. Thus, companies with high debt-to-equity ratios may

not be able to attract additional lending capital. Formula for this ratio is as under:

Debt equity ratio =

Total debt

Total stockholder’s equity

Ratio 2009 2010 2011

Total liabilities (Rs. in „000) 239,378,374 298,740,410 325,980,040

Total stockholder‟s equity (Rs. in

„000)

13,142,688 14,820,578 16,508,782

Debt equity ratio 18.21 20.16 19.75

INTERPRETATION:

2009: Askari bank has Rs.18.21 in debt for every Rs. 1 of stockholder‟s equity.




82



It gives a comparison of how much of the business was financed by owner's equity and how

much was financed through debt or liabilities. Debt-equity ratio rose from 18.21 in 2009 to 20.16

in the year 2010. However, it decreases to 19.75 in 2011.

In 2010, total liabilities increased significantly due to increase in “bills payable”, “borrowings”

while a moderate increase was seen in these accounts in 2011. Total equity, on the other hand,

increased immensely in each year. If a lot of debt is used to finance increased operations (high debt to

equity), the company could potentially generate more earnings than it would have without this outside

financing. If this were to increase earnings by a greater amount than the debt cost (interest), then the

shareholders benefit as more earnings are being spread among the same amount of shareholders.

However, the cost of this debt financing may outweigh the return that the company generates on the debt

through investment and business activities and become too much for the company to handle. This can

lead to bankruptcy, which would leave shareholders with nothing.

17

18

19

20

21

2009 2010 2011

DEBT EQUITY RATIO

RATIOS


83


TIMES INTEREST EARNED RATIO

The times interest earned ratio indicates the extent of which earnings are available to meet

interest payments. Higher value of times interest earned ratio is favorable meaning greater ability

of a business to repay its interest and debt. Lower values are unfavorable. In general, times

interest earned of 1.5 or below is unsafe. A ratio of 1.00 means that income before interest and

tax of the business is just enough to pay off its interest expense. That is why times interest earned

ratio is of special importance to creditors. They can compare the debt repayment ability of

similar companies using this ratio. Other things equal, a creditor should lend to a company with

high times interest earned ratio. It is also beneficial to create a trend of values of times interest

earned. Its formula is as under:

Time interest earned ratio =

Net income + interest

Interest

Ratio 2009 2010 2011

EBIT (Rs. in „000) 15,186,033 19,209,752 25,112,334

Interest expense (Rs. in „000) 13,554,078 17,936,616 22,699,583

Times interest earned ratio 1.12 1.07 1.11

INTERPRETATION:

2009: Askari bank has earned 1.12 times its interest charges.




84



A lower times interest earned ratio means fewer earnings are available to meet interest payments.

This ratio decreased in the year 2010 by 0.05 whereas an increase of 0.04 was reported in the

year 2011. Although Askari bank was able to pay its interest obligation in these years but the

bank‟s ability to continue to service its debt is not satisfactory.

1.04

1.06

1.08

1.1

1.12

1.14

2009 2010 2011

TIMES INTEREST EARNED RATIO

RATIOS


85


PROFITABILITY RATIOS

A class of financial metrics that are used to assess a business's ability to generate earnings as

compared to its expenses and other relevant costs incurred during a specific period of time. For

most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a

previous period is indicative that the company is doing well. Profitability ratios are useful in

fundamental analysis which investigates the financial health of companies.

NET PROFIT MARGIN

Net profit margin is the percentage of revenue remaining after all operating expenses, interest,

taxes and preferred stock dividends (but not common stock dividends) have been deducted from

a company's total revenue.

Net profit margin is one of the most closely followed numbers in finance. Shareholders look at

net profit margin closely because it shows how good a company is at converting revenue into

profits available for shareholders. It is calculated as under:

Net Profit Margin =

Net income × 100

Sales

Ratio 2009 2010 2011

Net income (Rs. in „000) 1,097,507 943,177 1,627,698

Net sales (Rs. in „000) 22,586,736 27,328,908 32,766,351

Net profit margin 4.86% 3.45% 4.97%

INTERPRETATION:

2009: 4.86 % of each dollar earned by Askari bank is translated into profits.




86



In the year 2010, net profit decreased by 1.41 % as the net income decreased although sales

showed an increase in the corresponding year. Whereas an increase of 1.52% was recorded in the

year 2011 probably because the net income increased.

Askari bank has been most efficient in 2011 as it has been earning higher margin in the 2011

than in 2010 and 2009. So ICI has been most effective in 2011 in converting revenue into actual

profits.

Changes in net profit margin are endlessly scrutinized. In general, when a company's net profit

margin is declining over time, a myriad of problems could be to blame, ranging from decreasing

sales to poor customer experience to inadequate expense management.

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

2009 2010 2011

NET PROFIT MARGIN

RATIOS


87


RETURN ON EQUITY

The amount of net income returned as a percentage of shareholders equity. Return on

equity measures a corporation's profitability by revealing how much profit a company

generates with the money shareholders have invested.

ROE is more than a measure of profit; it's a measure of efficiency. A rising ROE suggests that a

company is increasing its ability to generate profit without needing as much capital. It also

indicates how well a company's management is deploying the shareholders' capital. The higher

the ROE, the better. ROE is expressed as a percentage and calculated as:

Ratio 2009 2010 2011

Net income (Rs. in „000) 1,097,507 943,177 1,627,698

Total equity (Rs. in „000) 13,554,078 14,820,578 16,508,782

Return on equity 8.1% 6.36% 9.85%

INTERPRETATION:

2009: 8.1% of earnings result from each dollar of equity.



ROE =

Net income × 100

Common stock equity


88



This ratio is useful for comparing the profitability of the company to that of other firms in the

same industry. In year 2009 ROE goes to 8.1% and in 2010 it goes down to 6.39% as the net

profit decreases whereas total equity increases. Whereas in the year 2011, ROE increases to

9.85% . During the period 2009-2010, “share capital” increased significantly while a slight

decrease in “unappropriate profit” caused only a slight increase in total equity of ABL. Net

Income of ABL stunted to a great extent mainly due to increase in “profit before taxation”.

In the year 2011, a high increase “share capital” and “unappropriate profit” led to an increase in

total equity. The reason for increase in ROE during 2011 is the evident from the remarkable

increase in net sales from Rs.943, 177 (2010) to 1,627,698 (2011).

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

2009 2010 2011

RETURN ON EQUITY

RATIOS


89


GROSS PROFIT MARGIN

A financial metric used to assess a firm's financial health by revealing the proportion of money left over

from revenues after accounting for the cost of goods sold. Gross profit margin serves as the source for

paying additional expenses and future savings.

Gross profit margin is a key measure of profitability by which investors and analysts compare similar

companies and companies to their overall industry. The metric is an indication of the financial success

and viability of a particular product or service. The higher the percentage, the more the company retains

on each dollar of sales to service its other costs and obligations.

Gross profit margin =

Gross profit ×100

Net Sales

Ratio 2009 2010 2011

Gross profit (Rs. in „000) 9,032,658 9,392,292 10,066,768

Net sales (Rs. in „000) 22,586,736 27,328,908 32,766,351

Gross profit margin 39.9% 34% 30.7%

INTERPRETATION:

2009: 39.9% of each sales rupee remained after Askari bank had paid for its market offerings.

2010: 34% of each sales rupee remained after Askari bank had paid for its market offerings.

2011: 30.7% of each sales rupee remained after Askari bank had paid for its market offerings.


90



GPM falls from 39.9% to 34% indicating a decrease of 5.9% during the period 2009-2010. Net

sales showed a moderate increase whereas gross profit increased moderately. This depicts a high

increase in interest expense as well leading to lower profit margins.

This ratio further decreased to 30.7%. Even though net sales and gross profit margin increased

sufficiently during the period but the increase in interest is far higher. Interest expense has

increased due to the mounting figures in “borrowings” under total liabilities.

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

2009 2010 2011

GROSS PROFIT MARGIN

RATIOS


91


RETURN ON ASSETS

Return on assets measures the amount of profit the company generates as a percentage of the

value of its total assets. The profit percentage of assets varies by industry, but in general, the

higher the ROA the better. Falling ROA is almost always a problem, but investors and analysts

should bear in mind that the ROA does not account for outstanding liabilities and may indicate a

higher profit level than actually derived.

ROA =

Net income × 100

Total Assets

Ratio 2009 2010 2011

Net income (Rs. in „000) 1,097,507 1,273,136 2,412,751


Return on assets 0.43% 0.40% 0.70%

INTERPRETATION:

2009: 0.43% of earnings result from each dollar of assets that Askari bank controls.




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This ratio should be only used to compare companies in the same industry. The reason for this is

that some industries are more asset-insensitive while some industries are less asset-insensitive.

The higher ROA ratio indicates that the company is earning more money on less investment.

The ROA of ABL has decreased to 0.40% in 2010 from 0.43% in 2009. However, ROA greatly

rises in the year 2011 with a ratio of 0.70% which depicts that profitability of ABL increased

during the year as ABL employed more of its assets, specifically “investments”, and “a high

return on fixed assets” contributed to the increases in net sales and thus EBIT. All these events

caused the net income to increase by almost twice its amount in 2010.

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

2009 2010 2011

RETURN ON ASSETS

RATIOS


93


MARKET RATIOS

Market ratios measure investor response to owning a company's stock and also the cost of

issuing stock. These are concerned with the return on investment for shareholders, and with the

relationship between return and the value of an investment in company‟s shares.

EANRING PER SHARE

The term earnings per share (EPS) represents the portion of a company's earnings, net of taxes

and preferred stock dividends, that is allocated to each share of common stock. Because the

number of shares outstanding can fluctuate, a weighted average is typically used.

EPS =

Earnings available for common

stockholders

Total shares outstanding

Ratio 2009 2010 2011

Earnings available to common

stockholders (Rs. in „000)

1,097,507 943,177 1,627,698

Total shares outstanding 507,346,635 642,743,940 707,018,334

Earnings Per Share (Rs.) 2.16 1.48 2.3

INTERPRETATION:

2009: Askari Bank earns Rs. 2.16 on each outstanding share of common stock.

2010: Askari Bank earns Rs. 1.48 on each outstanding share of common stock



94



The EPS for the year ended December 31, 2010 was Rs.1.48, against the previous year‟s Rs.2.16.

And the EPS for year 2011 was Rs. 2.3 which depicts that ABL‟s earnings on each outstanding

share were highest in 2011 in comparison to the previous years. The improvements primarily due

to reduction in provision / write-off against NPLs during the year 2011.

0

0.5

1

1.5

2

2.5

2009 2010 2011

EARNINGS PER SHARE

RATIOS


95


DIVIDEND PER SHARE

The total amount a publicly-traded company pays in ordinary dividends over a given period of

time divided by the average number of shares outstanding. Dividends per share give a potential

investor an idea of how much he/she will receive in dividends if he/she buys a given stock.

Ratio 2009 2010 2011

Dividend paid (Rs. in „000) 825 293 219

Total shares outstanding 507,346,635 642,743,940 707,018,334

Dividend Per Share (Rs.) 0.0016 0.00046 0.00031

INTERPRETATION:

2009: Askari bank paid Rs. 2.16 on each outstanding share of common stock.



DPS =

Total dividend paid

Total shares outstanding


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The Dividend per Share figure is used by investors and analysts as an indicator of a company's

financial health and profitability. The DPS in 2009 is Rs. 0.016 that reflects shareholder have or

will receive Rs. 0.016 for each share they own. DPS decreased to Rs. 0.00046 n the year 2010

and decreased to 0.00031 in the year 2011. Decreasing dividends is a negative signal to the

market so this ratio needs sufficient improvement.

0

0.0005

0.001

0.0015

0.002

2009 2010 2011

DIVIDEND PER SHARE

RATIOS


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PRICE-EARNING RATIO

The price-to-earnings ratio (P/E) is a valuation method used to compare a company‟s current

share price to its per-share earnings. The price-to-earnings ratio is a powerful, but limited tool.

For investors, it allows a very quick snapshot of the company‟s finances without getting bogged

down in the details of an accounting report.

Ratio 2009 2010 2011

Market price per share of common

shares (Rs)

27.30 17.69 10.03

EPS (Rs.) 2.18 1.48 2.30

Price- Earnings Ratio 12.52 11.5 4.36

INTERPRETATION:

2009: The investors are willing to pay Rs. 12.52 for each of Rs. 1 earning.



E/P =

Market price per share

EPS


98



Investors were paying Rs. 1.02 less in 2010 than in 2009 for a share compared to the earnings of

Askari bank that it generates per share because the market per share decreased in the year 2010

and so did the EPS.

Similarly, investors paid Rs. 7.14 less in the year 2011 than in 2010 due a huge downfall in the

market price and EPS.

0

2

4

6

8

10

12

14

2009 2010 2011

PRICE-EARNINGS RATI0

RATIOS


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DUPONT ANALYSIS

DuPont analysis examines the return on equity (ROE) analyzing profit margin, total asset

turnover, and financial leverage. The DuPont Analysis is important determines what is driving a

company's ROE; Profit margin shows the operating efficiency, asset turnover shows the asset use

efficiency, and leverage factor shows how much leverage is being used.

The method goes beyond profit margin to understand how efficiently a company's assets

generate sales or cash and how well a company uses debt to produce incremental returns. Using

these three factors, a DuPont analysis allows analysts to dissect a company, efficiently determine

where the company is weak and strong and quickly know what areas of the business to look at

(i.e., inventory management, debt structure, margins) for more answers. The measure is still

broad, however, and is not a substitute for detailed analysis.

Ratio 2009 2010 2011

Net income (Rs. in „000) 1,097,507 943,177 1,627,698


DuPont analysis 0.43% 0.30% 0.47%

http://www.investinganswers.com/financial-dictionary/financial-statement-analysis/margin-82

http://www.investinganswers.com/financial-dictionary/financial-statement-analysis/margin-82


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The DuPont analysis looks uses both the income statement as well as the balance sheet to

perform the examination. As a result, major asset purchases, acquisitions, or other significant

changes can distort the ROE calculation. Many analysts use average assets and shareholders'

equity to mitigate this distortion, although that approach assumes the balance sheet changes

occurred steadily over the course of the year, which may not be accurate either

ROA DuPont in the year 2009 was 0.43%, which decreased to 0.30% in 2010 and in 2011, the

ratio increased to 0.47%. Since the bank‟s net profit margin is in good position, its total assets

turnover ratio is low thus resulting in a low return on assets.

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

2009 2010 2011

DUPONT ANALYSIS

RATIOS


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RATIOS FOR BANKS

EARNING ASSETS TO TOTAL ASSETS

Earning asset is an asset that produces money for a company without any work needing to be

done. Earning assets include such things as stocks, bonds, certificates of deposit, and generally

anything that earns interest or dividends. Earning assets total asset ratio is the ratio between the

assets which generate income for the business to total assets owned by the business. The formula

for calculating this ratio is:

Earning assets to total assets =

Earning assets

Total assets

Ratio 2009 2010 2011

Earning assets (Rs. in „000) 161,967,407 151,267,791 216,059,094


Earning assets to total assets 64% 48% 63%

INTERPRETATION:

2009: 64% of the total assets that ABL controls are earning assets.




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It is the ratio between the assets which generate income for the business to total assets owned by

the business. Increase in the ratio depicts strength and good performance of the bank.

The earning assets to total assets ratio computed for the years 2009, 2010, 2011 is 64%, 48%,

63% respectively. Earning assets of ABL are “investments” and “advances” (current portion

only). The 16% increase in the period 2009-2010 is attributed to the increase in “investment” and

“advances”, which increased earning assets of ABL by 6%. The total assets, on the other hand,

increased by 24% in the same period due to massive increase in account “lending to other

financial institutions”. This gap in the proportion in which both the account titles increased led to

a decrease in the earning assets to total assets ratio.

However, the bank‟s management efficiency to utilize its assets increased during the period

2010-2011 as reflected by the 15% increase in the earning assets to total assets ratio. The credit

for this huge increase in this ratio goes to 30% increase in “earning assets” in comparison to only

8% increase in the “total assets”.

0%

10%

20%

30%

40%

50%

60%

70%

2009 2010 2011

EARNING ASSETS TO TOTAL ASSETS

RATIOS


103


RETURN ON EARNING ASSETS

This ratio measures the profitability situation of the bank in terms of the earnings assets

employed by the bank instead of the total assets. Higher the value of this ratio, better the entity in

generating return on the earning assets employed or utilized in sales. This ratio measures what

percentage of earnings result from each dollar of earning assets the bank controls.

We calculate this ratio as under:-

Return on earning assets

=

Net income

Earning asset

Ratio 2009 2010 2011

Net income (Rs. in „000) 1,097,507 1,273,136 2,412,751


Return on earning assets 0.68% 0.84% 1.12%

INTERPRETATION:

2009: 0.68% of earnings result from each dollar of earning assets that Askari bank controls.




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In the year 2010, ABL was able to generate 0.84% earnings from its earnings assets employed in

its business operations which has improved sufficiently from the previous year‟s 0.68%. Earning

assets were increased by 6% while the net income increased by 14%, which is twice more than

the increase in earning assets. This ratio further increased to 1.12 %, an increase of 0.28% than

the previous year. The ratio has increased due to a slight increase of 15% in the total earning

assets in relation to a massive increase in net income by 89.5 % , which is a healthy sign for the

bank as the ratio between the growing percentage of the two accounts in huge. In short, the

increasing trend in the return on earning assets ratio shows the efficiency of ABL‟s management

in translating its earning assets to earnings with each successive year.

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

2009 2010 2011

RETURN ON EARNING ASSETS

RATIOS


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INTEREST MARGIN TO EARNING ASSETS

Also known as net interest margin, it is the ratio of net interest income to invested earning assets.

This ratio provides an indication of management‟s ability to control the spread between interest

income and interest expense. This ratio makes use of “interest margin” which is calculated by

deducting the banks “interest earned” from its “interest expense”. So this ratio takes into account

three aspects: the “interest income” generated by the bank, “interest expense” paid by the bank to

its lenders or creditors and “earning assets” employed by the bank in its business operations. We

calculate it as under:

Interest margin to earning assets =

Interest margin

Earning assets

Ratio 2009 2010 2011

Interest margins (Rs. in „000) 9,032,658 9,392,292 10,066,768


Interest margin to earning assets 5.58% 6.2% 4.66%

INTERPRETATION:

2009: ABL has earned 5.58% more money after paying interest expenses than was earned from

earning assets that it controls.






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A positive interest margin to earning assets means the investment strategy pays more interest

than it costs. The net Interest margin can be expressed as a performance metric that examines the

success of a firm‟s investment decisions as contrasted to its debt situations. A negative Net

Interest Margin indicates that the firm was unable to make an optimal decision, as interest

expenses were higher than the amount of returns produced by investments.

During the time period 2009-2010, total liabilities increased significantly by 20% due to large

increase in “borrowings” and “bills payable”. Moreover, interest expense increased by 24 % as a

result of huge increase in total liabilities. Earning assets increased by 6% only and hence the

interest margin to earning assets rose from 5.58% to 6.2%.

Considering the time period 2010-2011, total liabilities increased moderately by 8% where a

decrease in the “borrowings” and “bills payable” could be seen. Moreover, interest expense

increased by 7.6 % as a result of increase in total liabilities. Earning assets increased by 15% and

hence the interest margin to earning assets falls from 6.2% to 4.66%. This decrease is explained

by the gap between growth rates of the two accounts: “interest expense” and “earning assets”.

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

2009 2010 2011

INTEREST MARGIN TO EARNING ASSETS

RATIOS


107


EQUITY CAPITAL TO TOTAL ASSETS

The equity capital to total assets ratio is one of the standard formulas used to ascertain the overall

financial stability of a company. It is a ratio used to help determine how much shareholders

would receive in the event of a company-wide liquidation. The ratio, expressed as a percentage,

is calculated by dividing total shareholders' equity by total assets of the firm, and it represents the

amount of assets on which shareholders have a residual claim. The figures used to calculate the

ratio are taken from the company's balance sheet.

A company that has relatively few assets that are completely owned and controlled by the

company, but has outstanding debt that is equal to or exceeds the worth of the assets, would not

be considered a good investment. At the same time, a company with a strong body of assets and

relatively little debt may be a very good investment. However, it is important to note that low

debt and strong assets may also indicate a company that is very conservative and may be

opposed to growth strategies. We calculate this ratio as under:-

Equity capital to total assets

=

Total equity

Total assets

Ratio 2009 2010 2011

Total equity (Rs. in „000) 13,142,688 14,820,578 16,508,782


Equity capital to total assets 5.17% 4.70% 4.8%

INTERPRETATION:

2009: In the event of liquidation, all shareholders of ABL would receive 5.17% of total assets.




108



The decrease in equity to capital ratio from 5.17% to 4.7% for the years 2009 and 2010

respectively is attributed to the 19% increase in “total assets” and 11% increase in “total equity”

leading to lower cushion available for stockholders of ABL in the event of liquidation. The

increase in both the balance sheet accounts is connected to the significant increase in “cash and

balance with treasury banks”, “investments” and “share capital”.

The slight increase in equity to capital ratio from 4.7% to 4.8% for the years 2010 and 2011

respectively is attributed to the 8.4% moderate increase in “total assets” and 10% increase in

“total equity” leading to a slightly higher cushion available for stockholders of ABL in the event

of liquidation. The increase in both the balance sheet accounts is connected to the significant

increase in “cash and balance with treasury banks”, “cash and balances with other banks”,

“investments” and “share capital”.

4.40%4.50%4.60%4.70%4.80%4.90%5.00%5.10%5.20%5.30%

2009 2010 2011

EQUITY CAPITAL TO TOTAL ASSETS

RATIOS


109


SUMMARY

LIQUIDITY RATIOS

ABL was best able to meet its short term obligations in the order: 2011, 2009, and 2010.

Although ABL holds a strong liquidity position but 2011 proved to be the best year in terms of

ability ABL to pay off its obligations as they come due.

ACTIVITY RATIOS

ABL has been more efficient in the year 2011 than in 2009 and 2010 in translating its resources

in to revenues. ABL has managed its fixed assets most efficiently in 2011 although “net income”

has increased each year but the growth rate of the net income and “total assets” has been huge in

the year 2011 in comparison to the last 2 years. Another reason was that ABL stepped in to I-

banking which greatly increased its sales along with the increase in sales contributed by

additional working hours in some of the branches in ABL.

DEBT RATIOS

ABL‟s debt ratio depicts that the year 2011 was the best in terms of proportion of debt financing

used to generate profits, whereas this proportion is decreases in 2010 than in 2009. And the

increasing trend in times interest ratio also shows lower solvency risk for ABL in each

subsequent year.

PROFITABILITY RATIOS

2011 proved to be the best year in terms of the ABL‟s ability to convert its various balance sheet

accounts into profits. This shows that in the year 2011, ABL has been better able to control its

earning assets, anticipating new technologies and better implementation of sales strategies.

MARKET RATIOS

Market value of ABL as computed against current share price has shown a remarkable increasing

trend depicting that ABL is generating more earnings in each successive year on each of its

outstanding shares. However, the dividend per share shows a decreasing trend which reflects that

ABL has retained most of its earnings to reinvest in the business.

BANK RATIOS

ABL has been impressively successful in managing its earning assets each year, however, 2011

shows the best results. As ABL prefers debt financing over equity financing so the proportion of

equity in financing total assets has decreased each year. Moreover, as liabilities have increased

each year so has the interest margin.


110


CHAPTER # 5

SWOT ANALYSIS

STRENGHTS

WEAKNESSES

OPPURTUNITIES

THREATS


111


SWOT ANALYSIS

SWOT analysis is one of the most expedient technique or tool used in the Strategic

Management process for conducting the situation analysis of an organization. The proper

analysis of the firm is given in the form of Strengths, Weaknesses, Opportunities and Threats

(SWOT) the company presently facing or can be forecasted for the future. It is a common

approach to make assessments in terms of internal and external environment of the organization,

and to formulate strategies analyzing its internal strengths and weakness, external opportunities

and threats, coming up is the SWOT analysis for the ABL. Such an analysis is very important for

the management in retaining the strength, overcoming the weaknesses, capitalizing over the

emerging market opportunities, and carving ways to successfully tackle with the threats and

ultimately converting them in the strengths for the organization.

STRENGTHS

First we analyze the strengths of ABL that are as follows:

COMPUTERIZATION The main strength of ABL Limited is that all of its branches are fully computerized and they

have latest software’s available to keep the records of their customers account and other

important information up-to-date. It reduces manual work and provides good customer services.

WELL-KNITTED BRANCH NETWORK

ABL has a well-knitted and adequately equipped branch networking system that efficiently

covers both the domestic and international markets. ABL has the largest branch networking in

Pakistan comprising of 245 branches/sub branches.

LARGEST PRIVATE BANK

ABL is one of the largest private banks with deposit base of Rs.167.68 billion/- showing

constant growth over the period 1999 till day and with many online branches in major cities of

Pakistan.

CUSTOMER’S FEEDBACK

Customers are allowed to give suggestions regarding banking services. If there is any complaint

by the customer the bank authorities investigates the reasons for complaint.

Complaint monitoring system is excellent at ABL that shows bank values more to its customers.

INTERNATIONAL MARKETS

ACBL is actively participating in international markets and has recently introduced credit cards

in UAE, Bahrain and Qatar, being backed by 24 hours call center out of UAE.

THE ABL ATM SWITCH-NET


112


I.T group of ABL has been able to create the largest network for secure electronic financial

transactions in Pakistan.

INFORMATION SYSTEM

ABL has also invested heavily in information technology resources, which has now allowed

bank to develop one of the most comprehensive and advanced system available. With the help of

this system ABL has now achieved an “online” status via real time facilities and features

available through nationwide network. With the team of highly qualified professionals, ABL is

able to use its real time system resources to provide customers with comprehensive account of

their transaction on a daily basis. ABL is one of those few banks who are reaping the benefits of

electronic transaction.

LEADERSHIP IN ATM’S

With over 5,319 online ATMs network ABL is again an undoubted industry leader with

connectivity extended to above than twenty five cities of Pakistan. ABL ATMs not only serve 24

hours cash convenience but also improve on the counter services and turnaround time at cash

counters.

WORLDWIDE MASTER CARD

The ABL ATMS Master Card has become a global service furthering the convenience to the

customers. Traveling customers can access their accounts from a large number of internationally

deployed ATMs and point of sale unit.

STRONG REPUTE

ABL is a subsidiary of ARMY WELFAE TRUST (AWT) so it has a strong army background and it

definitely adds to its prestige and provides it an edge over the competitors.

EASY ACCESS

ABL has a widespread network providing easy access to its customers where ever they are. ABL

has a network of 245 branches extended throughout Pakistan. ABL branches are located in the

commercial area, so that the customers face no problems in reaching to the bank.

TRANSPIRANCY OF ACCOUNTS

ABL has won several national awards in recognition to the transparency with which it presents

its annual reports. The annual financial statement are prepared by the bank in accordance with

the international accounting standard and are also published quarterly and half yearly accounts to

provide information to their stakeholders for taking well informed decisions.


113


INCORPORATING NEW IT PRACTICES

ABL management is quite prepared to adopt the latest advancements in technology resulting in

revolution in the banking operations such as check clearing process, computer based teller

equipment and electronic funds transfers among the others.

PHONE BANKING SERVICE

In order to save their customers‟ time, ABL provides the good Phone banking service that is

very attractive especially for those customers who don‟t have time to personally visit to the bank.

SOCIAL RESPONSIBILITY

The organizations showing concern for the people, ethics, and environment enjoy good public

reputation and are able to reap the benefits in the long run. ABL management is quite sensitive to

this issue.

PERSONALIZED SERVICES

ABL offers personalized services of the staff to the employees. The management of the bank

believes in customer oriented banking rather than the product oriented banking. The products

and services designed by the bank are specifically tailored to the individual needs of its

customers.

CUSTOMER ORIENTED BANKING

ABL‟s vision is “to be the bank of first choice.” In order to achieve its vision, ABL offers the

very highest levels of personalized banking to match customer‟s unique status. The priority

banking centers of the bank offer an unmatched where the customer receives highly privileged

services in a highly elegant environment. It gives the chance of experiencing new standards in

banking. Designed especially for those who appreciate only the finest things in life.

INTERNET BANKING

ABL is the first bank to introduce i-banking which provides convenience to our customers by

enabling them to gain access to their account and carry out any transaction sitting at home.

MOBILE ATM BUS SERVICE

ABL has launched its Mobile ATM Bus Service, which is the Pakistan‟s First Mobile ATM Bus

Service. No other bank has taken initiative of mobile ATM Bus yet.


114


WEAKNESSES The weaknesses of ABL are listed as:

IRREVOCABLE DEBTS

Due to risks such as political economy and legal the bank has suffered losses the main reason

was piling up to of large amount of irrevocable debts.

TRADITIONAL WAYS OF RECORDING TRANSACTIONS

The bank has still some of the traditional ways of operations in this advanced technological

environment. ABL has use computerized accounting system but, still the bankers use to make

their entries in the accounting register also. For example account opening registers, manual

checking of vouchers.

INDIVIDUAL DIFFERENCES

In Askari Bank the individual difference has strong impact on the organization‟s performance

due to wrong criteria of selection of employees. So with the passage of time individual

differences start increasing which undermine the goodwill of the organization.

LACK OF PROPER EQUIPMENT AND PROCEDURES

No availability of sophisticated equipment‟s in branches and lengthy credit processing and

documentation procedures.

POOR MARKETING CAMPAIGN

Bank‟s marketing department is not very strong. Accumulated losses pushed the bank to cut

down its promotional activities in order to reduce expenses for last few years.

The advertising media used by Askari bank for publicity include mostly newspapers and

journals. But the most powerful and effective media is of television through which people in

Pakistan as well as outside Pakistan can have instant information about new products and

developments of ABL.

JOB ROTOTATION

The employees of ABL are constantly subjected to job rotation. It keeps back from gaining

complete know-how about a particular department.

CENTRALIZED MANAGEMENT PRACTICES

The management system in ABL is quite centralized leaving all the decision-making activities

to the upper management only. Employee empowerment is also over looked due to such

management policy. I personally observed that delay occurred in the operations of the employees

only due to the fact that they had not got any instructions from the head office.


115


LACK OF TRAINING PROGRAMS

There is no specific training program arranged for the new recruiters. They have to learn based

on their observations and also their mistakes. It takes a bit time for the fresh one to learn the

banking the result is huge amount of blunders, mistakes etc. resulting in monetary and non-

monetary losses for the bank. There is pressure not only on the new learner but also on the

person placed upon with this responsibility.

LOW JOB SATISFACTION

Understanding and the effective management of the human resources is the most difficult

challenge faced not only by the bank but by all the organizations. Even though the people have

been sacrificed in the new organizational developments, it is becoming clear that the true lasting

competitive advantage comes through human resources and how they are managed. ABL seems

to not focusing on this highly critical issue as the job satisfaction level of the employees working

at ABL, was quite low.

OPPORTUNITIES

These are positive external environmental factors affecting the ABL:

EXPANSION OPPURTUNITIES

ABL growing business requires further expansion of branch network which would, in return,

open great opportunities for ABL for the expansion of its business. ABL can also extend its

network in other countries. Increasing the product range to fulfill customer requirements and

ATM network, ABL can expand its 24 hours cash facilities to other cities of the country in order

to meet growing market demand.

ABL as a largest Pvt. Bank can also increase its market share by producing good, market

oriented and customer needs satisfying products.

NEW MODES OF BANKING SERVICES

Askari Bank is now looking into new ways of providing banking services to its customers. New

concept of mobile banking has been introduced by the bank, which will prove to be remarkable

success in the field of consumer banking.

OPPORTUNITIES IN LOAN BUSINESS

Askari bank is an active player in the loan business. Its strength in loaning stems from its ability

to forge strong relationships not only with borrowers but also with bank investors. Bank can

capture more markets by introducing new products for business community, as it is the only

group, which can contribute more towards increasing the assets of the bank.


116


FOREIGN REMITTAMCES AND TRADE

Foreign remittances are another area as present worldwide control system over transfer of

currencies through illegal channels has facilitated the area for the banks. Foreign Trade is the

focus of quite a lot banks. It has become an ideal bank for the importers and exporters but still a

lot of opportunities are yet to be discovered.

RECRUITING PROFESSIONALS

There is a large pool of free MBA graduates who can be hired to achieve professionalism on its

organizational culture.

TARGETTING THE COMPUTER LITERATE SEGMENT

Now computer literacy rate is increasing and its really big opportunity for Askari Bank that

when public will have more knowledge about computers than they will be more attractive to the

innovative products of Askari bank.

GROWING DEMAND IN LEASING BUSNESS

Increasing need and potential of leasing in Pakistan provide ABL an opportunity to utilize its

skills and efficiencies in leasing business as well.

TECHNOLOGICAL ADVANCEMENTS

IT has become the future of many organizations in this 21st century. ABL also has an opportunity

to expend its new technological advancement like, Tele banking and Internet banking facilities in

order to serve the customers more efficiently.

FOREIGN INVESTMENT

Due to efficient and experienced management group, ABL can also improve well and expend its

foreign operation successfully. It is external opportunity for Askari commercial bank to avail it

and take a competitive edge and create a strong identity worldwide.

BRANCHES IN REMOTE AREAS

ABL can expand its market segmentation geographically by extending its banking services to

remote areas where the banking needs of people have not been previously met.

OFFERING ISLAMIC BANKING IN ALL BRANCHES

Currently, ABL entertains Islamic Banking in only a few of its branches. By offering its Islamic

Banking services in all of its branches, ABL can definitely have an edge over its competitors.


117


INCREASING CUSTOMER DEPOSITS

It is opportunity for Askari commercial bank to steady increase customer deposit by adopting

new marketing and promotion scheme and lunch new scheme for their customer.

USE OF ATM AS A CREDIT CARD

It can be an opportunity for ABL to introduce ATM also as a credit card which will invite a

different segment and which will improve profitability. They can also cut costs in this way.

E-BANKING

ABL should emphasize on E - Banking. In which Bank can design a universal account like other

foreign banks, to enhance online facilities.

TARGETTING ILLITERATE SEGMENT

Illiterate people are also an opportunity for ABL in regarding this service. ABL can

s e r v e t h es e p eo p l e b y g i v in g ins t ru c t io ns i n Au d io an d in U r du . Th e y can

a l so h av e instructions written in Urdu on card or even they can have a display in

Urdu. This way they can increase their target market, market share and profitability.

THREATS

POLITICAL INSTABILITY

Political instability is also threat for the bank because instability leads to lower business. The

same situation is prevailing in Pakistan.

INFLATION

In our county, the rate of inflation is increasing along with the unemployment. So due to increase

in price of the products, the savings of the nation is decreasing with passage of time. So it is

threat for the banking sector. In the future, the deposits of the bank will decrease.

COMPETITION BY FOREGN BANKS

Increase in competition due to increasing number of foreign banks offering highly specialized

and attractive services.

CHANGING TRENDS IN IT


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Growing global technological advancements and adaptation of modern style of management in

banking sector.

PROMTIONAL ACTIVITIES OF COMPETITORS

Extensive promotional campaigns run by competitors are another threat for ABL.

COMPETITION BY LOCAL BANKS

As the ABL leading in the domestic commercial banking sector in Pakistan, as such there are no

close competitors of ABL but every commercial bank is the competitor for each other. But

mainly these are Habib Bank Limited, Bank Al-Falah, MCB etc. they are threats for ABL. At

any time they can capture the clients of ABL by providing any benefit more than that.

LOW ATTRACTION FOR INVESTORS

As the banking procedures are complicated that is why general public takes interest into other

options of investments like in shares of companies and in Term Finance Certificates.Being a

commercial bank, ABL faces considerable competition in attracting deposits from individuals or

small investors.

HIGH EMPLOYEES TURNOVER

Employee satisfaction level is very low in ABL due to stiff managerial policies. Thus, its

employees shift to other organizations whenever they get an opportunity resulting in high

turnover which is not a healthy sign for the bank. If this continues in the long run, then ABL

may lose its repute.

RECRUITMENT PROCEDURES

ABL high employee turnover creates a need for fresh recruitment. Recruitment is a quite

expensive, time-consuming and complicated procedure.

HIGH CHARGES

The charges of the services that the bank receives from the customers are higher than their

competitors. So it loses many customers for this reason. The schedules of charges indicate that

the fees charged by the bank on the various services it provides are extremely high. It may result

in decrease in the number of its existing customers.

LESS EXPERIENCED STAFF

ABL is short of experienced and well trained staff owing to high turnover. Majority of the staff

working in the bank branches is quite young and inexperienced. If the bank fails to bring down


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its high employees turnover, then it would be lacking the most important resources of any

organization i.e. the experienced staff.

EXPENSE BASE

The expense base will be a major threat to the ATM because it will impact the need to spend in

order to modernize ABL‟s customer interface. Expenditure has to be incurred on Branch

rationalization and computerization. This expenditure is essential, given poor infra structure at

Branch level resulting from years of underinvestment. Because 90million is sufficient money to

invest to open an ATM there should be a strong expense base to support the expansion of ATM.

LEGAL REGULATION

Frequent change in government policies creates new challenges for the top management. ABL

also faces such threats particularly when policies regarding taxation are subjected to changes.

It is always threat for commercial banks. Because SBP is the role authority of Government,

which monitors all commercial banks affairs, whenever it feels any regulation, it imposes

without consideration of commercial banks plans etc.

The SWOT analysis is a mirror image of the banks present conditions. The management

can elaborate strategic plans for capitalizing the available opportunities. ABL is continuously

introducing new innovative products so as to cope with changing environment. It has a

diversifiable culture. It has been leader of introducing many new ideas, products which are

earning a lot for the bank and this struggle is still continuous with same acceleration. No bank

has given such a comprehensive motive so if we want to look at the future of Askari bank they

are going to touch new horizons of technology.


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CHAPTER # 6

TRAINING PROGRAM

DEPARTMENTAL DETAIL

ACTIVITIES OF THE INTERN


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Departmental Detail

GENERAL BANKING DEPARTMENT

Account opening

Remittance Department

Cash Department

Clearing Department

PRIVILEGE BANKING DEPARTMENT

Online banking

Lockers

FOREIGN EXCHANGE DEPARTMENT

Import Department

Export Department

Foreign Currency Department

CREDIT DEPARTMENT

ACCOUNTS DEPARTMENT

IT DEPARTMENT


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ACCOUNT OPENING DEPARTMENT

FUNCTIONS

Providing account opening form according to the customer's requirements,

Guide the customer about the requirements of the account opening and form filling

Check the forms whether they are correctly completed or not

Preparing checklist

Stamping on the form

Maintaining account opening register

Pasting of forms in register after release from general banking in charge

Issuance of cheque books

Issuance of accounts maintenance certificate

Closure of account

Verification of signature in case of cheque presented before releasing of account opening

from SS card is not yet scanned

ACCOUNT OF GENERAL CUSTOMERS

Minor account

Illiterate person account

Individual account

Joint Account

ACCOUNTS OF SPECIAL CUSTOMER

Sole Proprietorship Account

Partnership Account

Limited Company‟s Account

Agent‟s Account

Joint Stock Company Account

Agency Account

Clubs, Societies /Association Accounts Trusts Local Bodies Etc.

Executor‟s & Administrator‟s Account


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TYPES OF ACCOUNTS

The customer can open his bank account in order to deposit or withdraw amount. The bank offers

different types of accounts which are as follow:

Current account (CD) Code: 0101

Saving account (PLS) Code: 0110

Askari special deposit account (ASDA) Code: 1165

Basic banking account (BBA) Code: 01021

ACCOUNT OPENING PROCEDURE

The general procedure of account opening is same but the document required to open the account

is different according to type of account. Information at the time of opening of account, the bank

officer must assure that customer has the following characteristics:

The customer must have the age of majority, it means he must be the age of 18 according

to law.

The customer must be of sound mind.

The customer must not be insolvent and bankrupt.

The customer must not be debarred under any law from entering into any contract.

Also the bank officer must take proper information from the customer about his means,

line and place of business.

1) Account Opening Form (AOF)

The bank officer must assure that the customer fills each and every column of account opening

form correctly with all necessary details. The specific information about the business or

occupation of the customer is recorded in the form.

2) Introduction of Accounts

It is a most important column of AOF. Without the proper introduction, the new account cannot

be opened. The bank officer consider following precaution in this respect.

The introducer should come with the prospective customer to the bank so there will be no

doubt about the identity of customer.

If the introducer does not come then bank officer must take extreme care about his

signature verification.

Introducer having doubtful dealing with the bank should be discreetly declined.

Current account holders can be introducer of both types of deposits but saving bank

account holder cannot be the introducer of current account holder. But in exceptional


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cases they can introduce when saving account holder maintain substantial balance and

they are old and operative accounts.

The staff member can become introducer if they personally known to the prospective

customer.

3) National Identity Card

The bank officer check that number of national identity card is correctly recorded in the AOF

and a copy of national identity card is kept in record by the bank.

4) Specimen Signature Card (SS CARD)

The bank officer takes signature of customer on AOF and specimen signature card. Latterly,

this card is scanned in the computer and whenever customer makes any transaction in this

account then his signature is verified by it.

5) Undertaking Forms

There is different type of undertaking which are taken by the bank at the time of opening the

account, two of them are:

Sign differ form

Vernacular form

6) Sign Differ Form

This form was filled by the client at the time of opening the account, if the initial which was

made on the computerized identity card is different from the one which is made on the account

opening form. This is actually the declaration which is given by the client that the client used

different signature for operating account from the one that was made on CNIC.

7) Vernacular Form

This form was filled by the customer, if the client used the thumb impression in order to operate

account and also in case if the initials was shaky, mean there is slightly difference every time in

signature. This is also the sort of undertaking which was taken by the bank in order to protect

itself. It was clearly mentioned on this that in such cases if any fraud occurs than banker is not

responsible for this.

8) Letter of Thanks

After the opening of account, the bank sends this letter to the account holder address. There are

different purpose of this letter, some of them are

To create goodwill

To make sure that all the problems are solved efficiently and effectively


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The most basic purpose is to verify the account holder address, the bank send this letter

to the account holder address and if the result was not accurate the letter was again

received by the bank and then again verify the address from the account holder and again

send till that the account holder not receive that letter. The bank is not issued the cheque

book till the address was not verified.

9) Issuance of Cheque Book

The customer fills the “Form A” for issuance of cheque books along with the AOF. The

requisition slip is duly signed then bank officer enters cheque book series on it. The officer

enters the issuance of cheque book in register. To minimize the misappropriation bank stamps

the account number on each leaf of cheque book. Bank Charges Rs.2 per leaf. ACBL issue 25 t0

100 leaves cheque books. If cheque book is lost then customer fill the “From B” for resonance

of cheque book. Bank Charge Rs.100 for resonance.

ACCOUNTS NOT IN USE

The following accounts are considered as “accounts not in use” by Askari bank and the account

holder is not allowed to carry out any transaction unless and until some legal procedure is

followed:

1) Inoperative Accounts

Accounts which are not in use for 1 year are considered as operative accounts.

2) Dormant Accounts

Accounts which are not in use for 6 months are considered as dormant accounts

3) Inactive Account

If there is no transaction in any account within 6 months then account will become inactive. Now

the account will be active only by crediting some amount.

CLOSURE OF ACCOUNT

In order to close the account, the account holder needs to fulfill the form by the name of “closure

of account”. With this form the client also need to give back his cheque book that he holds due to

his account. After collecting the cheque book and verifying all the things, the bank cancel the

cheque numbers and close the customer account on his request. The bank will charge Rs.100 for

closure and remaining balance in the applicant‟s account will be paid to account holder.


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REMITTANCE DEPARTMENT

The remittance department deals with the transfer of money from one place to another. This

department deals with the local currency transfer only. ACBL provides these services to both

customers & non-customers

FUNCTIONS

Managing issuance of demand drafts

Pay orders

Travelers cheque

Mail transfer

Managing Call deposit receipts CDR

Intercity clearing

Outward bills for collection (OBC)

Credit card advance

Cancellation of pay order & demand draft

INSTRUMENTS OF THE REMITTANCES DEPARTMENTS

4) DEMAND DRAFT

“A demand draft is an instrument, which is drawn by one bank upon another bank for a specific

sum of money payable on demand.” It is made by the bank and given to the purchaser against cash

or cheque. If two banks are involved, then one bank sends a DD to another bank. But in customer -

Bank case the customer sends his DD to the receiver. Charges of DD are taken from the system

according to the amount. The following transaction is recorded in recognition to demand draft:

Customer’s a/c………………………..Dr

DD during day……………………………….Cr

DD during day…………………………Dr

M.O…………………………………………..Cr

5) PAY ORDER

Pay order issued from one branch only be payable from the same branch. It is normally issued

for payment in the same city.

Fill the application form.

Issue pay order after recovering cheques.

Do necessary vouchering.


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Make entry in PO issue register.

All pay order shall be crossed" payees account only".

Amount Charges

Up to 1million Rs.65 (for admission fee Rs.25)

Above 1million Nil

PO Issue

Entries in the Askari Bank‟s system:

Customer’s a/c………………………Dr

PO during day…………………………Cr

At day end:

PO during day………………………..Dr

B/P……………………………………...Cr

After presentation:

B/P……………………………………..Dr

M.O……………………………………..Cr

6) INTERCITY CLEARING

In intercity clearing, clearing between cities are done. For example in Karachi, branch of Askari

bank exists, ASKARI branch Lahore sends the cheque through NIFT to main branch which will

further sends to Askari bank Karachi branch for clearing and at the same process they send back

the advice. If it returns, Rs.65 will be charged.

7) OUTWARD BILLS FOR COLLECTION

If in any city, Askari branch doesn‟t exist, then Askari Bank stamps „OBC‟ and directly sends it

to that bank‟s branch for clearing.

8) CALL DEPOST RECEIPT

CDRs are used for the purpose of tendor notice, zakat deduction, taking part in the bidding, for

getting Govt. tendor in favor of customer „name. In this process, payment is secured and if

approved then lodged in clearing.


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For participating in the bidding process, deposit Rs. 5,000 and the following entries

will be passed:

Customer’s A/c…………………………Dr

CDR………………………………………...Cr

On approval of contractor’ request

CDR……………………………………..Dr

M.O………………………………………….Cr

On rejection of CDR

CDR………………………………………Dr

Customer’s A/c…………………………….Cr

9) TRAVELERS CHEQUES

Askari traveler‟s cheques are a valuable financial service of ACBL. They are issued to settle all

your business transaction and customer can travel without any pocket load. It is safest substitute

for cash, easily refundable in case of theft and loss. Askari bank issues the traveler cheques

denomination of Rs. 10,000.

Askari traveler cheques are issued against cash cheque or debit to customer account. It is

issued on purchase agreement form and 3 copies are prepared. One is sent to head office, the

second one for record of bank and third one for the custom. No service charges are taken on it.

Any branch of ACBL can make payment of Askari traveler cheque. It can be drawn by another

bank through collection. It can be encased form the issuing branch but not on issuing date. If

these cheques are enchased within seven days then customer will receive 0.2% commission.

CASH DEPARTMENT

All physical movement of cash in the bank is made through the cash department. Normally cash

department performs following functions:

Receipt

Payments

Act according to any standing instructions

Transfer of funds from one account to another

Handling of ATM

Verification of signatures

Posting

Handling of prize bonds


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CLEARING DEPARTMENT

Bank collects payment of cheques on behalf of its customer within city.

FUNCTIONS

Accepting transfer delivery and clearing cheques.

Arranging receipt of cheques payment.

Posting of clearing cheques in the system

Maintaining register for inward and outward clearing cheques

Prepare the return summary

Charges for returns

Amount collections on drawn checks for members and sub-members of local clearing

house

Inward Clearing

Cheques and other negotiable instruments (PO, CDR, dividend warrants etc.) drawn on Askari

Bank township branch, lhr, sent by other banks, constitute the inward clearing of ACBL. Other

points to remember in inward clearing:

We are paying amount of cheque

Customer‟s Account will be debited

In case of return charges will be Rs. 250

After having all the stamps and dates of Cheques confirmed, the following entries will be passed

in the system:

Customer account………….Dr

Suspense clearing a/c …………………..Cr

At day end when returns are received:

Suspense clearing a/c……….. ………..Dr

M.O…………………………………………. Cr

OUTWARD CLEARING

When Cheques are drawn upon other banks of the same city (as Lahore) are presented in Askari

Bank to deposit them in the respective payee‟s accounts, these instruments are lodged in outward

clearing of Askari Bank.


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Other points to remember in outward clearing:

Askari bank receives payment of cheque

Customer‟ account will be credited

In case of return charges will be Rs. 50. Return memo will be attached with cheque.

The following entries will be passed in the system for outward clearing:

Suspense clearing A/c……………… Dr

Customer A/c…………………………….. Cr

At day end:

M.O A/c…………………………. Dr

Suspense clearing A/c…………………… Cr

PREVILDGE BANKING DEPARTMENT

ONLINE BANKING

Online banking means that if a person is sitting in one city like Lahore can easily transfer/deposit

and withdraw his fund from any other branch of Askari Bank in any city or location. For this

purpose the person needs to complete the online funds transfer slip, which includes the

information of that person and the account to which the transaction is made.

If the funds are transfer with in a city no extra charges are made but in case of out of city some

charges are applied like:

Case Charges (Rs)

Cash deposit 320

Cash withdraw 120

Funds transfer 185

LOCKERS

Askari bank offers locker facility to its customers. The application form was filled by the

customer as well as specimen signature card (S.S) need to be filled. While fulfilling the form,

there are three options regarding the operating of locker, these are


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Anyone can operate

Jointly

Either or survivor

In order to get a locker the bank gives two options

On Rent

Purchase

Rent

If the person wants to get an account on rent the security fees which need to be deposited is

Rs.1175 which is refundable. The monthly charges for different lockers have already been

mentioned in the product section.

On rent the entry which is passed by the bank is:

Customer’s A/c for rent…………………………Dr.

Customer account key deposit…………………Dr.

Key deposit………………………………………Cr.

Rent…………………………………………………Cr.

On purchase the entry passed by the bank is:

Customer’s A/c……………………………..........Dr.

Key deposit…………………………………..Cr.

FOREIGN EXCHANGE/FOREIGN TRADE DEPARTMENT

Foreign Exchange Department works like the general bank departments with the difference that it

deals in foreign currency.

FUNCTIONS

Foreign remittances.

Foreign currency accounts

Non-resident accounts maintenance

Foreign bills for collection(FBC)

Foreign telegraphic transfer(FDD)


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FOREIGN CURRENCY ACCOUNT

A depositor can open account in US dollar, pond, Japanese Yen and Euro with nominated

branches. For opening of account a form is provided to the person/party, introduction of the new

account holder or by the officer of the bank. Procedure of opening foreign currency accounts is

same as other accounts. No zakat is deducted on these accounts, no income tax deductions; no

wealth tax deduction will be there.

FOREIGN REMITTANCE

The procedure of foreign remittance is same as in local remittance. The only difference is that it

deals in foreign currency.

Most of the times, following modes are used in foreign remittance.

Foreign Demand Draft (FDD)

Foreign Telegraph Transfer (FTT)

FOREIGN DEMAND DRAFT

When bank receive foreign demand draft then bank will debit to unsupervised account of the

customer and credit to treasury bank because all the foreign currency accounts are maintained in

treasury, the bank will send debit advice to treasury. In return, treasury will send the credit

advice and branch officer will debit the treasury and credit to customer account.

FOREIGN TELEGRAPH TRANSFER

When a customer wants to transfer funds to foreign country through telegraph transfer then he

will deposit the amount.

LETTER OF CREDIT (L/C)

Letter of credit is a commitment by the buyer bank to make the payment to the exporter bank that

it assumes the responsibility of payment if the goods are according to terms & conditions.

PARTIES INVOLVED

Importer/buyer/opener

Exporter/seller/beneficiary

Importer bank/ issuing banks


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Exporter bank/advising bank/negotiating bank

TYPES OF L/C

1) IRREVOCABLE L/C

Under this L/C, amendments or cancellation of L/C can be done with the mutual consent of all

the parties involved.

2) CONFIRMED L/C

A letter which is confirmed by the exporter bank, where it takes the liability of making the

payment without consulting the importer bank.

3) SIGHT L/C

In this type of L/C, on spot payment is made as the importer bank receives the bill of lading from

the exporter.

4) USANCE L/C

In this L/C, time period is involved. The importer bank will make payment at defined days after

the shipment. The shipment period may be 60, 90 or 120 days.

PROCEDURE FOR OPENING OF L/C

CUSTOMER REQUESTS FOR OPENING L/C

REQUEST LETTER + INSURANCE + PERFORMA INVOICE+IB8+CERTIFICATE OF IMPORT OF GOODS

BANK-RISK ANALYSIS & CREDIT HISTORY OF IMPORTER

APPROVAL BY THE BANK/AREA/REGION/H.O (WITHIN THEIR LIMITS)

RCAD + CFTU


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RCAD (Regional credit administration department)

It feeds the limit.

CFTU (centralized foreign trade unit)

It controls the transmission of L/C. Calculate margin, commission and mark up on L/C.

L/C LODGEMENT

L/C is registered in the PAD.

Customer’s liability………………………Dr.

To bank’s liability…………………………….Cr

PERFORMA INVOICE

It is the document which is sent by the exporter to the importer about the description of the goods

like quality, quantity and price of goods.

INDENT FORM

The agent (for e.g., USA parent company and its agent in PAKISTAN) authorizes on behalf of

its parent company that the goods have been received.

IB8

It‟s the application of irrevocable L/C. it‟s the legal document which contains terms & conditions

of the opening of L/C. It contains the details of country of origin. Amount, date of initiation, date

of expiry and the name of the insurance company. Bath parties signed on it.

COUTRY OF ORIGIN

It contains the information about who has manufactured the goods, country of manufacture. It

tells about in which country goods are ready for sale.

I-FORM/IMPORT FORM

It‟s the statistical form which will be submitted to SBP by the bank about the imported goods.

CREDIT REPORT

The report required by the importer from the exporter for 1.5m or above transaction.

SWIFT (society for worldwide interbank financial telecommunication)


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Its software that generates messages which is send to the exporter. It‟s a network that exchanges

messages in a more secure way and not hold accounts for its customers nor facilitate fund

transfer but sends payment orders between banks and other financial institution.

HS CODE (Harmonized system code)

Different codes for every requirement of L/C which is worldwide used and accepted.

CREDIT LIMIT

The limit which is set by the

bank‟s policy

Restriction by the SBP on foreign currency.

TRANSPORTATION DOCUMENT

There are four types of documents.

Bill of lading

Airway bill

Truck receipt

Rail receipt

FORMAT OF L/C

Instruction

Mode of transmission

Name & address of applicant and beneficiary

Total amount with destination

Advising bank

Partial shipment allowed/ not allowed

Transshipment allowed/ not allowed

LATEST SHIPMENT DATE AND EXPIRY DATE

Place of shipment

Destination

Tenor

Description of goods (ref. Performa invoice/ indent form)

Documents required

Commercial invoice

Certifying country of origin


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MODE OF TRANSMISSION BY SEA/AIR

Marine insurance company

COVER NOTE, DATE OF EXPIRY

Packing list required

Any additional condition

HS code

TIME ALLOWED FOR PREPARATION OF DOCUMENTS

Instructions regarding bank charges by opener/beneficiary

Signature of customer

% margin

Approval of manager

Account no. of customer/ phone no.

Signature of witnesses

Reimbursing bank/ negotiating bank/advising bank

Details of charges

Signature at the start and at the end

ENTERIES IN LODGEMENT

After the completion of L/C, The following entries will be passed.

Bank’s liability……………………………..Dr.

To customer liability………………………..Cr.

CREDIT DEPARTMENT

Credit department performs two basic functions:

Credit Administration

Credit Appraisal

CREDIT ADMINISTRATION

The credit department takes the decision about credit sanction after the risk analysis and collects

the extended loans at the maturity of loan.


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CREDIT APPRAISAL

The credit department reviews their credit policies and all credit proposals. Also credit officer

report all the data of his activities to credit division Karachi. Credit division reviews their

policies after every six month in the light of this data and also sends the data to State Bank of

Pakistan (SBP) to review its policies.

Askari Commercial Bank provides two types of loan that are:

Funded Facility

Non Funded Facility

A. FUNDED FACILITY

In this type of finance, bank actually deploys its funds and mark up is charged on it. ACBL

provide the following types of fund-based loan.

Running finance

Cash finance

Term finance

Staff finance

Trade finance

Finance against packing credit

Post Shipment Finances

I. Running Finance

It is used to meet the running requirement of the capital. It‟s the short term finance normally used

for a period 1 year in which payment is made at the end of the period. In running finance, Bank

transfers a particular amount of loan in customer‟s account from where he withdraws the amount

as needed. Markup is charged only on the amount withdrawn not on the whole amount of loan.

R.F is used for the purpose of A/R, purchase of raw material, Salaries payable, utility bills

payable, Administration expenses, Maintenance, Packaging etc.

II. Cash Finance

Cash finance is like a running finance but it is extended against the pledged security like

inventory or stock and 25% cash margin is also charged. The pledged stock is also insured from

any insurance company and the customer also pays all the insurance and any other security

expenses. Mark up is charged over the full loan amount and for whole time period of maturity.

III. Term Finance


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The finance in which Mark up is charged on the overall amount of loan whether utilized or not.

It‟s a long term finance normally used for a period of 3-5yrs.Personal guarantee is required in it.

Loan will be issued to the person having 25,000 or above salary. Installment basis pay back.

CATEGORIES OF TERM FINANCE

Financing

Leasing

FINANCING

Title/ownership with the customer

Bank will pay the amount to customer and customer will purchase the machinery

LEASING

Ownership/ title with the bank.

Bank will purchase the car

20% markup charged on the principle amount.

Bank-customer account no. required.

Tax benefit to customer

IV. Staff Finance

This facility is provided for the staff of ACBL. The purpose is welfare of the employees. SBP

specify the credit limit for the staff of bank. The mark up rate is less than commercial rate. Trade

finance is provided for short time period so it is most suitable for bank. These generate more

income for the bank due to greater revolution of money.

V. Trade Finance

Trade finance is of money. Trade finances are of two types:

Import related finance

Export related finance

IMPORT RELATED FINANCE

There are three types of import related finance

Payment against document

Finance against imported merchandize

Finance against trust receipt

PAYMENT AGAINST DOCUMENT (PAD)


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When the bank receives bill of lading and other commercial document from the exporter then

bank will pay to reimbursing bank of exporter. If the customer will not receive the document

within 7 days then bank issue a letter to the importer and now letter of credit (LC) is converted

into absolute liability. The bank gives the credit period to the importer to make the payment

which is 90 or 120 days. And now bank will charge the mark up and import service charges from

the importer. The reimbursing bank will send all the documents to ACBL and not directly to the

importer.

FINANCE AGAINST IMPORTED MERCHANDIZE (FIM)

When the importer has no funds to import merchandize then he request the bank letter of credit

along with the finance. In PDA the bank is only responsible to make payment but in FIM bank

makes payment from its own funds these types of finances have specified rate of mark up and

time period. All the value-added expenses like excise duty, port charges etc are charged by the

customer as cash security margin.

FINANCE AGAINST PACKING CREDIT

Finance against packing credit is extended for the preparation of goods when the exporter has

confirmed letter of credit from the importer. To improve the economy of Pakistan and to improve

the export, SBP introduce special export finance schemes to the exporter at cheaper mark up rate

and also offer export rebates. It is of two types:

1) Pre Shipment Finance Part I

Pre shipment finance part I is extended for one year. Funds of SBP are involved in this finance.

When this finance is extended then bank will debit the SBP account and credit to customer

account. Rate of mark up is 2% from which 1 are for SBP and the bank charges 1%.

2) Pre Shipment Finance Part 2

This facility is for existing exporter. In this way exporter can avail half of the limit of total export

business transacted last year. If the credit history of exporter is satisfactory then this credit limit

can be increased.

POST SHIPMENT FINANCES

This loan facility is provided to exporter after the shipment. Post shipment finance is for different

purposes like when the exporter does not have finance to the payment of credit raw material.

B. NON-FUNDED FACILITY


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In this finance, no cash is involved. It is only a commitment. It is an obligation of bank and if the

customer declares default then bank is liable to make payment. The bank charges commission in

these finances in respect of markup. This facility is provided against the cash margin and

mortgage of property because bank has risk in this type of finances.

Letter Of Guarantee (LG)

Letter Of Credit (LC)

LETTER OF GUARANTEE (LG)

Letter of guarantee is contingency liabilities of bank because the funds are not actually

involved in it. So they are classified as off balance sheet items. Letter of guaranty is mostly

given in case of contract. 25% cash margin is charged and also some collateral is taken.

Three beneficiaries of this non-fund based finance are:

Government

Financial Institutions

Others

BID BOUND

When the contractor has no funds for the bid of contract then he requests the bank to issue the

guarantee letter. This type of guarantee is called bid bounds guarantee and now contractor will

quote the rate in tender against this guarantee.

ADVANCE PAYMENT GUARANTEE

If the bid is accepted and beneficiary want to make the advance payment to the contractor because

the contractor is away the contract and beneficiary requires guarantee of bank from the contractor.

If bank gives the guarantee of contractor for advance payment then it is called advance payment

guarantee. The contractor is adjusted this liability by the running bill.

PERFORMANCE BOUND

When the bid is accepted then bank will give guarantee that contractor will perform the task

assigned within the specific period of time.

MAINTENANCE BOUND GUARANTEE

This guarantee is issued for the maintenance of work performed by the contractor, so it is called

maintenance bound guarantee.


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SHIPPING GUARANTEE

This type of guarantee is very rare and issued against 100% cash margin. When the shipment is at

port but has not any document then bank issue guarantee in favor of Shipment Company only for 2

days.

OTHER GUARANTEE

If the bank issue any guarantee other than above likes to cove the credit sale, then it is classified as

other guarantee.

ACCOUNTS DEPARTMENT

FUNCTIONS

Daily activity checking

Physical checking of cheques and deposit slips

Reconciliation of cheques with ledger

Preparation of statement of affairs

Weekly schedule program

Budgeting

IT DEPARTMENT

FUNCTIONS

Managing day to day cash transaction in computer

Maintaining customers‟ accounts in computer

Receiving all mails from Head Office

Fax

Keeping ATM in working condition

Printing daily reports

Receiving IBCA


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DETAIL DESCRIPTION OF THE SKILLS ACQUIRED DURING

INTERNSHIP

Working as an internee in Askari Bank, I learned different aspects of banking which enhanced

my knowledge base and confidence all the more. I did my internship at ASKARI BANK,

TUFAIL ROAD BRANCH, which is considered to be one of the busiest branches of Askari

Bank‟s network.

I worked in the branch for 6 weeks and each week I was shifted to a new department so that I

had an insight of all the 6 departments.

WEEK 1: ACCOUNTS DEPARTMENT

I started with the accounts department. Mr. Saleem was the in charge officer. He guided me

about the functions performed in accounts.

I learnt about how to differentiate among cheques. He assigned me the duty of sorting out of all

types of cheques in descending order. I made separate head of current deposits (CDR), saving

account (PLS), Askari Special account (ASDA), basic banking account (BBA), Value Plus and

Foreign Currency (FCY) according to their account codes and then arranged them in descending

order. He gave me an M.O (Main Office) sheet that includes all entries related to head office or

inter branch transfer (IBT). All amounts in a specific ledger of specific account should be known

to accounts in charge. Some amounts in transfer section relates to IBT so they are checked in

M.O sheet.

Account codes are as follows:

Current A/c 01010

Saving A/c 01100

BBA A/c 01021

ASDA 01165

Value Plus 01032

FCY 0213

EXAMPLE


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ACCOUNT NUMBER: 0056-01-165-0001-3

0056 = Branch Code

01 = Currency Code

165 = ASDA Account

0001 = Account Number of the ASDA Account Holder

MODES OF POSTING

There are 3 modes of posting in the ledger, namely:

Cash

Cash includes ATM entries and cheques in cash payments.

Clearing

Clearing includes cheques that branch received from NIFT.

Transfer

Transfer includes transfer of amount from one branch to another or inters branch transfer.

WEEK 2: ACCCOUNT OPENING DEPARTMENT

In the Account Opening Department, Ms Sadia Hassan was the in charge. Firstly, I had gone

through different types of the accounts and the operation of different accounts. I had opened

accounts of so many people myself and helped them fill in the required forms. There are

different requirements for different account. I performed the following activities:

Providing account opening form according to the customer‟s requirements (single, joint,

partnership etc)

Guide the customer about the requirements of the account opening and form filling,

Check the forms whether they are correctly completed or not,

Preparing checklist and Stamping on the form,

Maintaining account opening register,

To get the Verification of signature in case of cheque presented before releasing of

account opening from SS card is not yet scanned.

I also received requisition slips, got the signatures verified and issued a slip to be shown at the

time of receiving the cheque book. The requesting date along with the account holder‟s name

was to be entered in the register. The cheque books are available to the customer after 5 working

days.


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Apart from that I was assigned the responsibility of writing account holder‟s name and account

number on the cheque books to be delivered to the customers. And then sort them by the date

when they were applied for.

When these cheque books were demanded, I checked for the date when the cheque cook was

requested for through a database in the computer. Then I took the cheque book out of the drawer

and made entries in the same register as used earlier to enter the date of receiving the cheque

book and the signatures of the receiver. In case the receiver was not the account holder himself,

an undertaking form had to be filled by the account holder himself along with his signatures. So I

provided the form to such customers and then got the signatures verified as well before the

cheque book could be issued.

WEEK 3: CLEARING DEPARTMENT

In Askari bank Mr. Fiaz Aslam was in charge of this section. I learnt following activities while

working in that section. When cheque or other instrument is drawn on Askari Bank which is of

the other bank, it comes in the clearing department. I was assigned the duty to receive cheques

from the customers and while doing so, the following points had to be remembered while

checking a cheque for clearing:

Date

Amount in words & Figure

Clearing stamp with today‟s date

Payee‟s account credited stamp

Within city cheque

There are two types of clearing.

1. I/W (Inward clearing)

2. O/W (Outward clearing)

REASONS FOR REJECTING A CHEQUE

Some cheques were rejected as they did not meet certain criteria. For such cheques I had to fill

form on which I wrote the cheque number and certain other details mentioned on the cheque

along with selecting the reason for rejected the clearance of cheque mentioned in the form. The

following can be the reasons for returning a cheque:

1) Effects not yet clear: please present again.

2) Not arrange for.

3) Payee‟s endorsement required.


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4) Payee‟s endorsement irregular.

5) Refer to drawer.

6) Drawer‟s signature differs.

7) Payee‟s endorsement requires bank‟s guarantee.

8) Alternation requires full signature

9) Cheque is post-dated/stale/ mutilate.(wear and tear)

10) Amount in words and figure differs.

11) Cross cheque must be presented through a bank.

12) Payment stops by the drawer.

13) Payees separate discharge to the bank required.

14) Payees discharge on revenue stamps requires.

15) Not drawn on us.

16) Account close.

17) Insufficient balance

I then had to get a photocopy of both the rejected cheque and the rejection form filled by me,

enter the details in a rejection cheque. Paste the photocopy in the register while the original

documents were maintained in a separate file which had to be returned to the customer later on.

CLEARING STAMPS

Clearing stamp

It has two parts one is crossing part and other is clearing part.

Crossing part shows that cheque is the ownership of bank. Clearing part shows that everything is

clear and bank has collected payment on behalf of customer.

Payee’s A/c Credited

This stamp will be stamped on individuals and companies accounts only but if cheque is in the

favor of some bank like Askari bank then stamp will be of “cash received”.

I entered the amount, account no. and Drawer‟s bank in outward return register and to get the

signatures of the customer at the time he collects his cheque from the bank.

WEEK 4: CREDIT DEPARTMENT

Ms. ASMA was my supervisor in this department and she guided me through the procedure that

Askari bank follows before extending loan to a requesting party. I helped receive her different

signatures from the higher officials of the branch. I assisted her in preparing different statements

for the credit department which then had to be forwarded to the main branch.


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WEEK 5: FOREIGN EXCHANGE DEPARTMENT

In fifth week, I worked in Foreign Exchange Department. They told me brief introduction about

import and Export. Necessary Requirement about the Letter of Credit .What Documents are

required for Import and Export. I worked under the supervision of Ms. Nadia. She taught me the

procedure that Askari Bank has to follow to TT payments (telegraphic transfer on money) to

overseas bank as requested by a customer of Askari Bank. I helped her fill in the TT form and

enter it in a register.

WEEK 6: IT DEPARTMENT AND REMITTANCES DEPARTMENT

I spent three days of my last week in IT department where Mr. Adnan Butt gave me an overview

of how the intranet of Askari Bank works, how passwords for Askari bank‟s employees are

created, how the database of the branch is linked to main branch etc.

I spent my last three days in the remittances department. Mr. Usman was my supervisor. Nearly

six to ten draft issued daily from this department. Here I knew how the amount transfers and

what the procedure is.

I helped the supervisor in following activities:

Collection of remittances forms

Guiding the customers

Filling the forms.

I was not allowed to do the signatures for final clearance of the instruments.


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CHAPTER # 7

PROBLEMS AND

RECOMMENDATIONS


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Recommendations

Doing internship at Askari Bank was an interesting ,gaining ,grooming and ever

remembering experience .The highly cooperative staff , variety of tasks ,

dealing and communication with customers and documentation were some of

tasks that made me to gain a lot. Though there every activity was at its

elegance, but I am here giving some suggestions that in my thinking will be

beneficial for the bank.

GENERALIZATION OF PROCEDURES

The procedure for opening an account should be simplified. The account opening form should be

self-explanatory and Urdu version of the form must also be made available since the fact cannot

be ignored that many people do not have a good understanding of English.

DECENTRALIZATION

Delegating powers to the department in-charges up to the possible extent will most certainly

reduce the workload on the managers and they would be able to perform well by taking quick

remedial actions where necessary. Besides, the spare time will be spent dealing with matters of

more important nature.

There is a high degree of centralization in Askari Bank. It should be bit flexible as here in this

branch, I have seen many simple cases where many matters get late or pending because the case

is being sent to higher authorities for approval.

HUMAN RESOURCE DEPARTMENT

Askari Bank does not have a human resource department. The importance of manpower cannot

be denied in any organization. In case of banks it is the most valuable asset, because the bank is

most sensitive organization and to be in harmony with this sensitivity, need for proper human

resource is felt badly.

BASIS FOR PROMOTION

A sizeable promotion of the officers of ABL, are promoted in without test and interviews of

officers cadre. The promotion policy must be too tight and transparent that no one may have the

chance to promote on criteria other than required qualification, experience and performance. As

for present excess staff, those not found up to the required criteria may be given GHS etc.

DEVELOPMENT OF MANAGERIAL LEADERSHIP

In services industries like banks the need of managerial skill is much more important. It makes

positive contribution towards effective results. Without development of managerial leadership,

the effective utilization of the human resource will be impossible. ABL should also focus on this


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area and should avoid deficiencies in managerial leadership by applying modern style of

management.

MANAGEMENT CHANCES ON MERIT

In ABL, though vary rare fresh recruitment are made, and the bank faces saturation in personnel,

now clipping will be more helpful. The downsizing will leave the ABL with the staff, to be

retained on the basis of ultimate meritocracy with zero tolerance of incompetence. Now in this

remaining workforce, a cultural change right from the top management down to the frontline,

that better suits to present day needs of banking environment could be included through proper

discipline and training.

COMPUTER TRAINING PROGRAMS

The present conventional and orthodox training programs need to be made more comprehensive

and reinforce with inclusion of computer training process. Training programs should rather be

held on a periodic basis so to enhance the computer skills of their employees as all the banking

system of the current era is computerized.

CHANGE IN CURRENT APPRAISAL SYSTEM

To present performance appraisal system is good. However, it needs to be implemented in true

sense. The drawbacks that are obvious like nepotism and favoritism etc., needs to root out and

the culture of ultimate meritocracy in appraising needs be inculcated. The current appraisal

system does not add to the employee satisfaction level. So this demands a change to be

introduced in the appraisal system of Askari bank.

ADMINISTRATIVE REFORMS

Fast resolving of loan default cases is must.

The bank should plan to enhance its ATMs and Internet Banking Services with new

features like inter-branch funds transfer, and the payment of utility bills.

The future focus of the ABL should be to improve the automation of the accounting

processes and enhance the quality and effectiveness of MIS.

The ABL should increase press coverage and advertising to create effectively market it‟s

corporate as well as product/Brand image.

The marketing policies and strategies must be clearly written and communicated to all the

staff members. The Branch Managers must make the use of the staff in pursing the

organizational objectives.

The Bank must reshape its portfolio of business by investing in higher growth areas,

extending and developing its core competencies and moving out of week and non-core

segment.


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OPENING BRANCHES IN REMOTE AREAS

Pakistan is an agricultural country and most of its population lives in villages and rural areas.

However contrary to this fact, almost all of the branches of Askari bank are in urban areas.

Bank‟s management should pay serious attention to this .Though bank is offering special

services in agriculture but clients has to travel far to urban areas to access its services. So there

are many chances that such customers turn to some other bank.

DEVELOP A STRONG MARKETING STRATEGY

Today is the era of electronic media and advertising play a major role in the success and worth

building of any organization. Askari bank‟s management should pay some attention at this side

as well .By giving consistent advertisements in electronic as well as print media to aware, retain,

attract and appeal people. Askari Bank is lagging far behind in this area while its competitors

have invested heavy amounts of their funds so as to increase their customer base.

JOB ROTAION – AN EXPERIENCE HURDLE

Job rotation from one job to another is a big hurdle in the way of getting experience. Employees

have known how about how to work but not master in one work.

INTRODUCING NEW OR MODIFYING EXISTING PRODUCTS

The bank may choose to make its existing products distinctive or to introduce new products. It is

often easier to benefit from adverse changes made by other banks than to attract customers by

innovations.


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CHAPTER # 8

ANNEXTURE


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Annual report ASKARI BANK 2010-2011, 2009-2010

Account opening forms

Deposit slips

OBC

Bundle covers

Brochures

Vouchers

www.askaribank.com.pk

www.awt.com.pk

www.brecorder.com

http://www.onepakistan.com/finance/news/

http://www.pakistanbizbuzz.com/articles/business/

http://www.ibp.org.pk/

http://www.askaribank.com.pk/

http://www.awt.com.pk/

http://www.brecorder.com/

http://www.onepakistan.com/finance/news/

http://www.pakistanbizbuzz.com/articles/business/

http://www.ibp.org.pk/