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INTERNSHIP REPORT ON
Submitted To:The Chairman
Department of Business Administration,
Allama Iqbal Open University,
Islamabad, Pakistan.
Submitted by:
Tahir Aziz
Mailing Address:
House No.1284, Street No.32 G-9/4
Islamabad.IN THE NAME OF ALLAH, THE MOST GRACIOUS, THE MERCIFUL
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DEDICATED
TO My PARENTS
WHO ALWAYS
LOVED ME
& all those who have a softcorner for me in their hearts
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ACKNOWLEDGEMENT
All gratitude and thanks to almighty ALLAH the gracious, the most merciful and
beneficent who gave me courage to undertake and complete this task. I am very
much obliged to my ever caring and loving parents whose prayers have enabled to
reach this stage, my teachers and Bank Alfalah staff, who gave me lot of
information and guidance in making this report.
I visited the different offices of this company for about three months and this
research enabled me to draw a line of distinction between theory and practical.
The procedure in theory and practical is the same but we can not learn theory
without practice and practice without theory is also blind.
I am highly indebted to my parents for their constant direction and
encouragement in all phases of MBA and also during my project work. They
devoted numerous hour from their busy schedule for my help. It was only due
to their endless helps and support that I am able to complete this project and
also my MBA program.
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The last acknowledgement goes to Mr. Mosawer Hussan Branch Manager,
Mr.Atif Shehzad Relationship Officer in Bank Alfalah assisted valuable and
worthless ideas to compile this project.
1 EXECTIVE SUMMARY 7
2 OBJECTIVES OF STUDYING OF ORGANIZATION 10
2.1 OVERVIEW 10
2.2 OBJECTIVES THAT I WANT TO ACHIEVE 102.3 DEPARTMENTS THAT I WORKED DURING MY INTERNSHIP 11
3 OVERVIEW OF THE ORGANIZATION 12
3.1 BREIF HISTORY OF THE ORGANAZATION
133.2 NATURE OF THE ORGANIZATION
143.2.1 TYPESOFBUSINESSACTIVITIES
15
3.3 BUSINESS VOLUME IN TERMS OF REVENUE, DEPOSITS, ADVANCES,
INVESTMENTS 17
3.3.1 Financial performance 18
Operational result
Balance sheet result
3.4 NUMBER OF EMPLOYEES 22
3.5 PRODUCT LINE 22
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4 ORGANIZATIONAL STRUCTURE 30
4.1 OVERALL ALL STRUCTURE OF THE ORGANIZATION 30
4.2 STRURE OF THE ORGANIZATIION 32
4.3 STRUCTURE AND FUNCTION OF THE ACCOUNT DEPARTMENT 324.4 FINANCE AND ACCOUNTING OPERATIONS 35
4.5 ROLE OF FINANCIAL MANAGER IN ESTABLISHING RELATIONSHIP 36
4.6 USE OF ELECTRONIC DATA IN DECISION MAKING 37
5 FINANCIAL ANALYSIS 40
5.1 FIVE YEAR BALANCE SHEET IN SINGLE TABLE 41
5.2 FIVE YEAR PROFIT AND LOSS STATEMENT IN SINGLE TABLE 425.3 RATIOS ANALYSIS 43
5.4 COMPITITORS ANALYSIS 44
6 WEAKNESSES OF THE ORGANIZATION WITH MAIN FOCUS ON FINANCIAL
MANAGEMENT 49
6.1 TECHNICAL ANNOUNCEMENT 49
6.2 TRAINING AND DEVELOPMENT 50
6.3 JOB ADVANCEMENT 506.4 LACK OF EMPLOYEES IN SOME DEPARTMENTS 50
6.5 NEW PRODUCT INTRODUCTION 506.6 PPIORITY BANKING 516.7 AMENTIES AT BARANCH 51
8.8 INCENTIVE SCHEMES 51
7 CONCLUSION 52
8 RECOMMENDATIONS 53
8.1 TECHNOLOGICAL ADVANCEMENTS 53
8.2 WORKSHOPS AND COUNSELING 54
8.3 INCENTIVES 548.4 PRIORITY BANKING AND BUSINESS DEVELOPMENT DEPARTMENT 558.5 INNOVATIVE PRODUCTS 55
8.6 PLCEMENTS OF EMPLOYEES 558.7 AMENTIES IN BARANCH 56
9 APPENDEX 57
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Table 2: PROFIT COMPARISION FOR 2007 & 2008...18
Figure 2: PROFIT FIGURES FOR THE PAST FIVE YEARS.......19
Figure 3: ADVANCES AND DEPOSITS FOR THE YEAR 2003-2008..20
Table 3: EPS FOR THE PERIOD 2002-2008..21
Figure 5: TOTAL NUMBER OF EMPLOYEES FOR THE PERIOD 2002-2008.22
Table 10: PROFIT PAID ON ROYAL PROFIT ACCOUNT..24
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Executive SummaryThe banking structure in Pakistan comprises of the following types, State Bank ofPakistan, Commercial Bank of Pakistan; Exchange Banks, Saving banks, Cooperativebanks, specialized credit institutions. The state bank of Pakistan is the Central bank of thecountry and was established on July 01, 1948. The network of bank branches now coversa very large segment of national economy. The State Bank of Pakistan issues the sharesof these periodically. Bank employees and other common peoples can also purchasethese shares and earn profit.
To open an account the customer has to meet the general banking manager with an
introducer. The procedure begins with the punching of account opening form to thecustomer file i.e. customers master file. Before closing any account, bank send letter tothe account hold for informing him that his account is going to be closed. There is needan approval form higher authority to close any account. Current deposits are those whichare payable to bank whenever demanded by the customer. Bank does not pay any profiton current deposits. The following are the financial products/services of PLS Account,Saving Account, Term deposit and Foreign currency accounts.
In remittance department like any other BANK AL-FALAH also have instruments fortransferring of money, Telegraphic Transfer, Mail Transfer. In cash department both
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deposits and withdrawals go side by side. This department works under the CD In chargeand deals with cash deposits and payments. This department maintains the followingsheets, books, and ledger of account cash received voucher sheet.
Cash paid voucher sheet, Paying-in-slip, Cheque Book, Cash balance book. The clearing
in Karachi at BANK AL-FALAH or other banks is being done through NIFT (NationalInstitute of Facilitation Technology).
Bank provides this facility to the people who need advance money to meet theirrequirement. Party dealing with other banks financial condition of borrower business andas a first step credit proposal is being made. BANK AL-FALAH provides advances, whichare two types. Secured Advances, Unsecured Advances. BANK AL-FALAH usuallyclassified advances in to following types Commercial Advances, Corporate/SMEs
Advances, Agricultural Advances. Commercial Advances are of following types DemandFinance, Cash Finance, Export Refinance Part I (Pre Shipment) & others. Banks
Agriculture division deals with the agriculture advances. Bank provides the Agriculture
Advances in order to enhance and support the agriculture sector of the country. FarmCredit & Non Farm Credit.
In foreign exchange, BANK AL-FALAH is dealing Foreign Currency Accounts,Foreign Remittances, and Foreign Bills for Collection, Imports & Exports
Foreign currency accounts & the foreign currency department deals with thefollowing types of accounts, Current account, Saving bank account, Term deposit.Foreign accounts are convertible on floating rate available to the bank. Letter OfCredit facility is being provided by BANK AL-FALAH in foreign exchange.
2.1 Overview
After the completion of degree MBA (banking & finance) I want to enter and
check the practical work according to my specialization. For that purpose I
selected the banking sector because I have done specialization in banking andfinance.
Second and next main objective of studying organization; I want to enter in
practical field and want to learn that which discipline is required for leading a
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successful future life. I think I am very lucky person that I selected a Bank
Alfalah as my learning organization
2.2 Objectives that I want to achieve
Objectives that I want to achieve by studying the organization are as follows:
First of all I want to check the practical work according to my degree
specialization. During my internship in Bank Alfalah G-9 markaz I have
learnt that how to use the knowledge in practical field.
Secondly I want to learn that how to mange an organization and how to
mange the finance for a financial organization, as my degree is related to
Financial Management and Banking and Finance.
Customers dealing is another major objective that I want to achieve.
During my internship I learnt that how to deal with customer.
Financial institution is a place where every type of businessmen visit, so
during my internship in Bank Alfalah I met with many businessmen and
learnt that how different businesses run.
And another main objective that I want to achieve that how an
organization consist with different departments and how different
functions are done in different departments of an organization.
2.3 Departments that I worked during my internship
I did my internship at Bank Alfalah G-9 Markaz, for a total duration of eight
weeks and the departments that I worked during this time are as follows:
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Accounts Opening
Operations
Accounts
Home Finance
Credits
Car Financing
About my Internship
I did my eight weeks internship at Bank Alfalah G-9 Markaz Branch and
worked in account opening department, operations department, accounts
department, home loans department, car finance department and credits
department.
Some of the work that I did in these departments included collecting cheques,
filling account opening forms, activity checking and making a borrowers basic
fact sheet.
Although there were no such big problems found in the working of Bank
Alfalah, there were some problems in training of the employees, incentive
schemes and product innovation.
Some of the recommendations include workshops for employees, job rotation,
teams work to find innovative products and scholarship programs for
employees.
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Lastly Bank Alfalah has seen a rapid growth in its activities by introducing a
range of products and services and showing its presence in the country by
opening new branches and in future should keep this momentum and always
strive to become the best.
The bank Al-Falah limited
Bank Alfalah Limited was incorporated on June 21st, 1992 as a public limited company under theCompanies Ordinance 1984. Its banking operations commenced from November 1st ,1997. The bank isengaged in commercial banking and related services as defined in the Banking companies ordinance,1962. The Bank is currently operating through 195 branches in 74 cities, with the registered office at
B.A.Building, I.I.Chundrigar, Karachi.
Since its inception, as the new identity of H.C.E.B after the privatization in 1997, the management ofthe bank has implemented strategies and policies to carve a distinct position for the bank in the market
place.
Strengthened with the banking of the Abu Dhabi Group and driven by the strategic goals set out by its
board of management, the Bank has invested in revolutionary technology to have an extensive range ofproducts and services.
This facilitates our commitment to a culture of innovation and seeks out synergies with clients and
service providers to ensure uninterrupted services to its customers. We perceive the requirements ofour customers and match them with quality products and service solutions. During the past five years,we have emerged as one of the foremost financial institution in the region endeavoring to meet theneeds of tomorrow today.
Vision
To be the premier organization operating locally & internationality that provides the complete range offinancial services to all segments under one roof.
Mission
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To develop & deliver the most innovative products, manage customer experience, deliver qualityservices that contributes to brand strength, establishes a competitive advantage and enhances
profitability, thus providing value to the stakeholders of the bank.
3.2 Nature of the organization
Bank Alfalah is a financial institution operating locally & internationality that
provides the complete range of financial services to all segments under one
roof.
Bank Alfalah Limited (Bank Alfalah) is a Pakistan based bank, engaged in
banking and financial services. The bank through its subsidiaries provides
retail, commercial banking and corporate finance products and services in the
Asia Pacific, Pakistan and the Middle East. It provides services such as lending
loans and accepting deposits, finance leasing, credit cards and money transfer
services. It also offers advances to business, trade, industry and agriculture. The
bank offers services through its network of 274 branches and 236 state of the art
ATMs. It has Conventional Branches, Overseas Branches, Sales and Service
Centers, ATM machines and Islamic Banking-Branches.
Global Markets Directs Bank Alfalah Limited - Financial Analysis Review is
an in-depth business, financial analysis of Bank Alfalah Limited. The report
provides a comprehensive insight into the company, including business
structure and operations, executive biographies and key competitors. The
hallmark of the report is the detailed financial ratios of the company
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To develop & deliver the most innovative products, manage customer
experience, deliver quality services that contributes to brand strength,
establishes a competitive advantage and enhances profitability, thus providing
value to the stakeholders of the bank.
3.2.1 Types of business activities
Holder of public money
Collecting deposits from customers and giving them interest
Business loans
Short term loans to business firms
Working capital loans
In term construction financing
Security dealer financing
Retailer financing
Assets based financing
Syndicated loans
Long term business loans
Term business loans
The revolving credit financing
Long term project loans
Loans to support acquisition of the business funds
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Consumer loans
Personal loans
Car financing
Home financing
Investments
Government securities
Stock exchange
Pakistan investments bonds
Shares
Agent for import and export
Safeguarding customers valuable
3.3 Business volume in terms of revenue, deposits,advances, investments
2004 2005 2006 2007 2008
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OPERATIONAL RESULTS
Total income 7,140 14,515 24,416 31,822 36,292
Operating Expenses 2,679 4,344 5,918 8,289 10,623
Profit before income tax & provision 2,026 2,966 3,264 6,906 3,831
Profit before Income Tax 1,654 2,563 2,566 4,536 1,795
Profit after Taxation 1,092 1,702 1,763 3,130 1,301
BALANCE SHEET
Shareholders equity 4,369 6,738 10,573 13,767 14,609
Total assets 154,835 248,314 275,686 328,895 348,991
Advances - net of provision 88,931 118,864 149,999 171,199 192,671
Investments - net provision 35,503 57,416 56,502 88,492 75,973
Deposits and other accounts 129,715 222,345 239,509 273,174 300,733
OTHERS
Import 78,472 116,210 119,937 184,305 190,289
EXPORT 71,847 71,847 70,844 79,090 93,406
RATIOS
Capital Adequacy % 8.16 8.66 9.48 9.85 8.03
Profit before Tax ratio(PBT/Gross mark up income) % 29.43 20.93 12.11 17.59 5.78
Gross spread ratio(net mark up income) % 56.69 41.17 28.12 35.54 34.51
Income/ Expense ratio Time 2.67 3.34 4.13 3.48 3.42
Return on average Equity % 26.89 30.65 20.37 25.72 9.17
Return on average Assets % 0.86 0.84 0.67 1.04 0.38
Advances/ Deposits ratio % 12 15%
Cash Dividend % 25 33.33 30 23%
Stock Dividend Rs. 17.48 22.46 21.15 21.18 18027
Book value p share excluding revenue Rs. 21.05 24.88 24.48 24.95 21.32
Basic Earning per share Rs. 3.9 3.92 2.91 3.92 1.63
No. of Employees(other than outsourced) No. 3,352 5,218 6,543 7,371 7,584
3.3.1 Financial performance
No company can remain in business if it cannot sustain and grow its profits and
banks are no exemption. If Bank Alfalah wants to become a premier banking
institution and to satisfy its customers, it itself needs to become a profitable
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organization, that not only has growth in profits, increase its assets but also
provide its shareholders with the maximum return so that they are also satisfied.
Oerational Result
Table 1: Profit Comparison for 2007 & 2008
Description 2007 2008
Rupees in000
Profit before provisions and taxes 6,906 3,831
Provisions (2,370) (2,036)
Profit before taxation 4,536 1,795
Taxation (1,406) (494)
Profit after taxations 3,130 1,301Earning per share Rs. 3.92 Rs 1.63
Source: Bank Alfalah Annual Report 2008
Profit after taxation for the year 2008 is Rs 1,301,000, which is increased, and
earning per share a ratio that is closely looked over by the shareholders of a
company decreased from Rs. 3.92 to Rs. 1.63. The major reason for this
decrease in this ratio is mainly the dencrease in profits before taxation, decrease
in provisions and finally, the increase in share capital of Rs. 1 million from the
past year.
Figure 1: Profit figures for the past five years (in million)
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0
500
1000
1500
2000
2500
3000
3500
2004 2005 2006 2007 2008
Profits after taxation
Source: Bank Alfalah Annual Report 2008
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As shown in Figure 2, profits for Bank Alfalah has grown from 2004 to 2007,
after which they declined, however they have again shown an upward trend in
running year.
Balance Sheet Results
The total assets for 2008, amounted to Rs.348,991, (000), advances of the
bank, which include the loan and other services that the bank receives interest
on, had the greatest share of Rs. 192,671, (000), followed by investments made
by the bank, for Rs. 75,973, (000).
The total liabilities for the year 2006 amounted to Rs. 331,946,(000), of which
deposits and other accounts amount to Rs. 300,733, (000). This is 91% of the
total liabilities for Bank Alfalah.
Figure 2: Advances and Deposits for the year 2003-2008
3.4 Number of Employees by giving designation
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0
50000
100000
150000
200000
250000
300000
350000
2003 2004 2005 2006 2007 2008
Years
Advances and Deposits for the Year 2003-2008
(figures in million)
advances
deposits
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Source: Bank Alfalah Annual Report 2008
The above figure again shows that fact that both advances and deposits have
been increasing at a steady rate over the past six years, which not only shows
excellent policies of the top management but also the immense confidence of
the customers that not only deposit money but also take advances from the bank
itself.
The immense confidence of the customers and its shareholders has also seen arise in the stock price of the companys share at the Karachi Stock Exchange.
The stock price had rise for some period, after which it fell, but again it rose,
which again shows the confidence of investors in the company.
Table 2: EPS for the period 2002-2008
Source: Bank Alfalah Annual Report 2008
Ratio Analysis
Some of the ratios calculated for Bank Alfalah are as follows:
Income/Expense Ratio: The income to expense ratio is 3.42 in 2008, which
decrease from 3.84 in 2007 and is thus very favorable as now Bank Alfalah hasmore income to pay off its expenses from.
Advances/Deposits Ratio: This ratio was 64.07% in 2008, a rise of 2.60%
from the previous year. This ratio shows that for every 100 deposits for Bank
Alfalah, a liability, there are 64.07 advances, an asset for Bank Alfalah. As this
Year
200
2 2003 2004 2005 2006 2007 2008
EPS (in
Rs) 2.23 8.49 3.90 3.92 3.91 3.92 1.63
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ratio has increased, it shows that Bank Alfalah now as more capacity to pay off
its total deposits from the advances it gives out.
Return on Total Assets: This ratio measures the extent to which total assets of
the bank were used to generate income available for common stockholders.
This ratio was 0.38% in 2008, which was a decrease from 1.04% from the
previous year and is mainly due to the fact there was a small increase in profits
as compared to the total assets.
Return on Total Equity: This ratio like the ROA previously calculated is a
debt management ratio and is calculated by dividing the net income available
for common stockholders by the common stockholders equity. This ratio was
9.17% in 2008, which decreased from 25.72% in 2007. The decrease in this
ratio is mainly due to two reasons: firstly there was a small increase in the
earnings available for common stockholders and secondly there was an increase
in common stockholders equity in 2008.
3.4 Number of Employees
Figure 3: Total Number of Employees for the period 2002-2008
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Total Number of Employees for the perid 2002-2008
15042133
3352
5218
6543
73717584
0
1000
2000
3000
4000
5000
6000
7000
8000
2002
2003
2004
2005
2006
2007
2008
Years
NoofEmployees
total number of employees
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Source: Bank Alfalah Annual Report 2008
3.5 Product Line
Banking Sector has a wide variety of products that cater to the financial need of
the masses; some of the major products that a bank provides to its customers
and is mostly used by the banks customers are as follows:
Checking Accounts
Car Financing
Home Loans
Credit Cards
Funded and Unfunded Loans
3.5.1 Checking Accounts
There are the main types of checking accounting that banks provide:
Basic Banking Account (BBA)
Current Account
Profit & Loss Account (Pls A/c)
Royal profit account
Kifayat account
Mahana amdan account
Basic Banking Account (BBA)
These accounts have no minimum balance requirement and can be opened by
just Rs. 10001. A customer with a BBA, does receives an ATM card but the
account cannot be turned to an Online Account. The segment that this account
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is targeted is towards the salaried individuals that have just started their
professional careers, students or any other individual that may want to open an
account with a small amount of money.
Current Account
Current accounts are another type of account that banks offer, this account does
not provide any profit on it and neither zakat is deducted on this account. This
account can be turned into an Online Account and its customers also receive
an ATM card. The major segments of this account are sole proprietors,
partnerships, companies (both private& public) and any other individual that
wants to open their account and not earn profit or pay zakat on their balances.
Profit & Loss Account
Profit and loss accounts are one of the basic accounts that give interest to its
customers deposits. These accounts pay interest annually and zakat is also
deducted on these accounts. ATM card are also provided to these
accountholders. The main segment targeting these accountholders are people
that want to save money which might include household etc. This account does
not target companies however.
Royal Profit Account
Royal profit accounts are opened with a minimum balance requirement of Rs
50,000. The basic aim of this account is that the higher the balance the higher
the return, as profit is credited on a monthly basis. The profit paid to account
holders is as follows:
Table 3: Profits paid on Royal Profit Account
Amount Profit pa.
From Rs.50,000 to 999,999 2.50%
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From Rs.1,000,000 to 4,999,999 3.50%
Rs.5,000,000 and above Negotiable
Source: Bank Alfalah I-8 Markaz
Kifayat Account
Kifayat account is another saving account product that can be opened with a
minimum balance requirement of Rs 10,000, with a maximum limit of Rs 1
million. Profit is calculated on a monthly basis, while it is credited on quarterly
basis. Bank Alfalah pays 7% pa interest on Kifayat Account.
Mahana Amdan AccountMahana Amdan account is Term Deposit Receipt (TDR) for three years that can
be opened with a minimum balance requirement of Rs 100,000, with a
maximum limit of Rs 15 million. Profits are paid at 10% pa, credited on a
monthly basis. Other features of this account include free personal accident
insurance and automatic renewal for another 3 years, after the expiry of original
period.
Alfalah Education
Alfalah education is a one year TDR that can be purchased by people having
school going childrens. A person can purchase a unit for Rs 100.000, with a
maximum of 3 years. This TDR pays 7%, paid at maturity and gives an
additional advantage of giving monthly school fee of the childrens if the
breadwinner of the family dies.
3.5.2 Car financing
Car financing facility is a very popular facility with all bank customers as it
facilitates them to pay for their car over a period of time (1-5 yrs). Today banks
provide additional facilities of insurance and tracking devices in cars as well.
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The main segments of people to whom this service is targeted are salaried
individuals, businessmen and other individuals with a high disposable income.
3.5.3 Home Loans
A home loan is a product that eases the way how a banks customers purchase
their home. Home loans provide the facility to purchase a new home, construct
a new home or renovate a current home. Home loans are a long term loan and
the main segments of population targeted include high paid salaried individuals
and businessmen that are below the age of 65 and some banks even provide
home loans to Pakistanis living abroad.
3.5.4 Credit Cards
Credit Cards are todays one of the most selling product that banks offer. There
are three major types of credit cards:
Table 4: Types of credit cards and their market segments
Credit Card Market Segment
2
Silver Salaried and self employed individuals starting their
careers
Gold Salaried individuals or self employed individuals
with high income
Platinum For exclusive customers of the bank with hugedeposits or very high income
Funded Credit Line Facility
Unfunded Credit Line Facility
Funded Credit Line Facility
There are three major products that come under the funded credit line facility:
Current Finance
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Karobar Finance
Milkiat Finance
Current Finance
Current Finance is a short term facility mainly provided to companies. It
provides the customers with the funds over a period of time, mainly one year.
The main advantage of the current finance facility is that markup is only
charged on the utilized part of the finance facility and is mainly used by
companies for their working capital management.
The bank to provide this facility keeps a security; mainly a mortgaged property
and can provide 60% of its assessed value as funds.
Karobar Finance
Alfalah Karobar Finance is another short term facility that is only provided to
individuals and sole proprietors. This facility also has one year validity with
markup charged on the amount used.
This facility again provides individuals to maintain their working capital
management and is again given to individuals for a security. The conditions for
current finance and karobar finance are same with one big difference, which is
that in karobar finance, the individual has to clear all his balance in his account,
once in a year.
Milkiat Finance
Alfalah Milkiat Finance is a long term facility that is provided to SMEs and
there are four main types of facilities provided:
Acquisition of rented commercial/industrial property
Construction on an owned commercial/industrial plot
Purchase of a commercial/industrial property
Renovation of owned commercial property
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Some of the features of Milkiat finance are as follows:
Tenure of 2-12 years except for renovation, which is for 2-4 years
Mark up of (KIBOR+4%)
Financing from Rs 0.5 million to Rs 20 million, renovation financing up
to 3.5 million
Eligibility age should be less than 65, with 3 years of existing business
Procedure for Milkiat Finance
All documents are gathered from the customer, and then they are sent to the
CIB, which sends a CCIR to the bank. Other forms of verification also take
place in this process. Later a valuation is done of the property to see how much
financing can be provided.
After the valuation process is complete, a CLP is made by the bank, which with
other documents is sent for approval to the area office.
When the area office approves the application, the customer is called into the
bank to give the security papers to the bank and also gets all legal documents
are signed and the money is transferred to the bank.
Unfunded Credit Line Facility
There are two types of unfunded credit line facility, which are as follows:
Letter of Credit (LC)
Letter of Guarantee (LG)
Letter of Credits
A letter of credit is a written undertaking by a bank (issuing bank) given at the
request and accordance of a buyer (the applicant) to the seller (the beneficiary)
to a fact payment up to a stated amount of money within prescribed time limit25
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provided that the terms and conditions are complied with. Letter of Credits
issued in the international trade business.
There are two types of Letter of Credits:
Usance
Sight
Usance
Usance LC is a form of LC, whereby the bank engages to honor the beneficiary
usance draft on an acceptance that the items are in accordance with the
conditions. Payment is made against acceptance.Sight LC
Theses are letter of credit where the bank engages to honor the beneficiarys
sight draft upon presentation provided that the documents are in accordance
with the conditions of the L/C. This is a more safe form of letter of credit as
payment is made against the documents.
Letter of GuaranteesLetter of guarantees is a guarantee that the bank gives to an organization on
behalf of the bank. Letter of Guarantees are mainly used when a tender for a
specific job is filled by a customer. There are three main types of LGs:
Bid Bond: Bid Bond are filled at the time of filling out the tender and states
that if the company is given the tender, it will start working on it and will not
walk away
Performance Bonds: Performance Bonds are issued to the beneficiary, to
guarantee him that the applicant of the tender will perform the contract under a
specific period of time. Performance bonds are issued after the tender is
approved of the applicant.
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Mobilization against LG (MALG): This is a guarantee that the bank gives
when the beneficiary (the firm that issued the tender) that pays an advance of
tender to the applicant (the firm that gets the tender), that he will return that
advance amount.
4. 1 Overall structure of the organization
Board of Directors:
H.E. Sheikh Hamdan Bin Mubarak Al Nahayan
Mr. Mohammad Saleem Akhtar
Mr. Abdulla Nasser Hawalileel Al-Mansoori
Mr. Abdulla Khalil Al Mutawa
Mr. Ikram Ul-Majeed Sehgal
Mr. Khalid Mana Saeed Al Otaiba
Mr. Nadeem Iqbal Sheikh
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Now 12 years after being incorporated, Bank Alfalah has emerged as one of the
foremost financial institution in the region, endeavoring to meet the needs of
tomorrow today, operating through 282 branches in more then 75 cities nation
wide, with total employees exceeding 6000. Bank Alfalah also expanded its
network internationally by opening branches in Afghanistan, Bangladesh and
Bahrain to further improve its image as a premier banking institution.
Board of Directors
President
CEO
Vice presidentVice President Financing
Vice President
Marketing
Treasure Controller
Capital budgeting
Cash management
Commercial banking & investment
banking relationshipCredit management
Dividend disbursementFinancial analysis & planning
Investors relations
Pensions managementInsurance risk management
Tax analysis and planning
Cost accounting
Cost managementData processing
General ledger
Government reportingInternal control
Preparing financial statements
Preparing budgetsPreparing fore costs
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4.2 Structure of the branch
4.3 Structure & functions of the Accounts
department
Following is the structure and functions of the Accounts department at Bank
Alfalah G-9 Markaz.
Accounts Opening department
Clearing department
Credits department
Home Finance department
Car Financing department
4.3.1 Accounts Opening Department
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Accounts opening department is one of the departments that come under the
retail/general banking facilities provided by Bank Alfalah G-9 Markaz. Atif
shahzad is account opening officer in Bank Alfalah G-9 Markaz.
4.3.2 Clearing department
The clearing department is responsible for the clearing of all cheques that the
bank receives daily and the different types of clearing cheques that come in the
bank are:
Inward Clearing
Outward Clearing
Online Clearing
Outward Bills for Collection
Farhan Mehdi is a clearing officer in Bank Alfalah officer in G-9 Markaz.
4.3.3 Credit department
The credit departments of Bank Alfalah work with both SMEs and corporate
clients. There are two major categories of credit line facilities that Bank Alfalah
provide to its customers
Funded Credit Line Facility
Unfunded Credit Line Facility
Raza Hussain is a credit officer in Bank Alfalah officer in G-9 Markaz.
4.3.4 Home Finance department
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Bank Alfalah has introduced home loans as part of their consumer banking and
some of the products that come under home finance are:
Buy your Home
Build your Home
Renovate your Home
Start it Together
Easy Transfer
Zamin Ali Sherazi is a Home finance dealing officerinBank Alfalah officer in
G-9 Markaz.
4.3.4 Car Finance department
Car financing has become one of the most selling financial products of almost
all banks. People prefer getting their cars financed rather than paying upfront
because it is convenient and lessens the burden of paying a huge sum of money
upfront. Some of the features of Bank Alfalah Car Financing are:
Tenure of 1-5 years
Minimum down payment- starting from 10% of car value
5 % extra at time of pre-mature payment.
Insurance facility from three different insurance companies
Tracking devices with all Suzuki Mehran and all Toyota Models
Fixed mark up rates
Co borrowers facility
Zamin Ali Sherazi is a Car finance dealing officer in Bank Alfalah officer in G-
9 Markaz.
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4.4 Finance and Accounting Operations
Accounts department is a backend department at Bank Alfalah G-9 Markaz that
performs the following Accounting Operation:
Reports
It generates reports like Statement of Account Activity (a report on the
activity of all accounts at Bank Alfalah G-9 Markaz), Statement of Affairs
(a report on the assets and liabilities of Bank Alfalah G-9 Markaz),
Statement of Foreign Exchange (a report on the foreign exchange
currencies at the bank) and Statement of Profit & Loss (a report on the
income and expenditures of Bank Alfalah G-9 Markaz).
These reports can be generated at daily, weekly, monthly, quarterly or yearly
basis as required by the bank.
Income and Expense
The department also needs to calculate the revenues and expenses, control
expenditure and forecast profits every month.
Budget
Formulation of yearly budgets & targets in consultation with the branch
manager is also done by the accounts department.
Activity Checking
Daily activity checking and monitoring is done by the accounts department
of the whole bank
Storage of Records
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Accounts Department also has the duty to store vouchers and system
generated reports.
Payments
The accounts department is responsible to pay vendors on behalf of the bank
with authorization from the branch manager. It also has to amortize large
payments and calculate depreciation of branch assets.
4.5 The role of Financial managers in establishing
relationship
This is a senior role and the Relationship Manager will manage a portfolio of
complex borrowing corporate clients as well as being the primary point of
contact for the banks relationships with the Hedge Fund Sector. The role will
report to the Head of Corporate Banking.
The ideal candidate will maximize opportunities to strengthen and leverage
existing relationships as well as continue to maintain and ensure high levels of
customer satisfaction and retention all the while generating new
recommendations. The successful candidate will be experienced in developing
growth plans and expanding the divisions borrowing and non-borrowing
relationships within the hedge fund sector.
Strong working knowledge of commercial banking products, loan agreements,
security and other credit requirements, particularly with respect to the mutual
and hedge fund sectors is preferred.
Essential qualifications include at least 10 years banking experience with at
least 5 years in a direct commercial customer contact role: in depth experience
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experience in structuring financing transactions with the property sector will be
considered an asset. Financial manger in establishing relationship always give
priority of his organization these benefits:
Maximization of profit.
Earning per share maximization.
Increase of sale
Welfare
Reduce in cost
Maximization of shareholders wealth.
Use of Electronic data in decision-making
In todays contemporary business, critical and timely decision making is a must
and important too. Todays bank use sophisticated softwares that not only help
in operations but also improves decision making by providing different reports,which can produced at different periods of time, that can help employees at
every level of the banks administration.
4.6.1 Technical Methods that Affect the Industry
The banking industry of Pakistan is at the forefront of modernizing its daily
operations by introducing the latest technologies in its operations. Some of the
technical methods that are used and affect the banking industry are as follows:
Advanced technological products and services
Automation of operational tasks
Decision making tools
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Advanced technological products and services
Automatic Teller Machines (ATM) and ATM cards have been the biggest
innovations that have simply changed the way people today are now making
their personal transaction. With ATM cards, people can take out money from
their accounts at any time, from any bank that they want to, at their
convenience.
ATM cardholders can take money out of their accounts, from any 1 link
network ATM, the largest ATM network of the country. Other ATM networks
include Mnet and Cirrus. Today all banks are members of 1 link, while
most of them are members of Mnet and Cirus.
Internet Banking is another major technological product introduced by different
banks of Pakistan. With the help of internet banking, customers with the
convenience of their own personal computers can transfer money from their
accounts, view their balances and a lot more.
SMS and Phone Banking is another major advancement in the products and
services introduced by banks. Telephone banking can be done 24/7, with the
help of banking assistants, while SMS banking can be done at the customers
convenience.
Automation of operational tasks
Technical advancements have also impacted the daily operations of banks in
Pakistan. Online transfer of money between branches has increased the
efficiency of exchange of money between different account holders of the same
bank.
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Simple tasks such as balance inquiry and bank statements have become as easy
as a click of a button with highly sophisticated information systems.
All banks today have their own information systems that they can use in almost
all departments like clearing, account opening, car leasing and remittances.
4.6.2 Innovation
Innovation is a must in modern times, as it will help banks to compete in
todays highly technologically advanced industry. Some of the innovations that
the banking industry is looking forward are:
More advanced means of connectivity between branches through better
and advanced software and hardware to maintain connections with banks
in remote areas and during natural calamities in Pakistan. These might
include better connection through WiFi or WiMax, both new
technologies.
More advanced information systems in banks that are more secured than
before to eliminate any chances of fraud and which are even more user
friendly to help employees to use them not only to make critical decisions
but also satisfy customer need in a more timely manner.
Advancements in online transfer from inter branch to an even more
helpful inter bank transfers.
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Automation of simple operations task that will not only improve
efficiency but also reduce costs like stationery and courier services, like
automation of check books etc.
All banks in Pakistan starting internet, mobile and telephone banking in
its operations.
No company can remain in business if it cannot sustain and grow its profits and
banks are no exemption. If Bank Alfalah wants to become a premier bankinginstitution and to satisfy its customers, it itself needs to become a profitable
organization, that not only has growth in profits, increase its assets but also
provide its shareholders with the maximum return so that they are also satisfied.
5.1 Five year balance sheet
BALANCE SHEET2004 2005 2006 2007
2008
(Rupees in 000)
ASSETS
Cash & balances with treasury banks
Balances with other banks
Lending to financial institutions
Investments
Advances
Fixed assets
Deferred tax assets
27,859,360
12,731,952
12,456,653
56,502,210
149,999,325
10,502,990
-
5,633,051
29,436,378
18,380,738
3,452,059
8,8491,564
171,198,992
11,922,324
-
6,013,097
32,687,335
21,581,043
3,315,500
75,9732,38
192,671,169
13,773,293
-
8,989,186
24,789,070
9,713,369
27,050,493
57,416,255
118,864,010
6,620,067
-
3,851,529
19,708,518
3,183,957
-
35,503,196
83,931,400
4,280,504
-
3,226,959
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Other assets
154,834,534 248,313,793 275,685,541 328,895,152 348,990,764
LIABILITIES
Bills Payable
BorrowingsDeposits & other accounts
Sub- Ordinated loans
Lia against asset subj to finance lease
Deferred tax liabilities
Other liabilities
149,655,669 240,849,667 263,443,596 312,675,308 331,946,025NET ASSETS 5,261,484 7,464,126 12,241,945 16,219,844 17,044,739
PRESENTED BY
Share capitalReserve
Un appropriated profit
Surplus on revaluation of assets-net of Tax
12241945 7,464,126 12,241,945 16,219,844 17,044,739
CONTINGENCIES AND COMMITMENTThe annexed notes 1 to 44 and Annexures I and ll from an integral part of these financialstatements
3,091,135
8,394,130
239,509,3913,222,106
-
1,921,338
7,305,496
4,138,243
21,230,697
273,173,8413,220,858
-
1,379,809
9,531,860
3,452,031
13,690,222
300,732,8582,571,169
-
208,465
11,291,280
3,733,124
5,844,389
222,345,0673,223,355
-
484,066
5,219,666
2,233,671
12,723,830
129,714,8911,899,480
-
275,834
2,275,344
5,000,000
2,749,533
2,823,07210,572,605
1,669,340
6,500,000
2,414,833
4,851,84013,766,673
2,453,171
7,995,000
3,166,056
3,447,46714,608,52
2,436,216
3,000,300
1,851,218
1,886,8457,464,124
6,738,063
2,500,000
1,008,772
860,300
6,387,372
4,369,072
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5.2 Five year profit and loss statement
PROFIT AND LOSS STATEMENT
2005 2006
2007 2008
(Rupees in 000)
Mark-up / return / interest earned
Mark-up / return / interest expensed
Net mark-up / return / interest income
Provision against loans and advances
Provision for diminution in the value of investments
Bad debts written off directly
Net mark-up /interest income after provisions
Non mark-up / interest income
Fee, commission and brokerage income
Dividend income
Income from dealing in foreign currencies
Gain on sale of securites
Unrealized loss on revaluation of investments
Classified as held for trading
Other income
Total non-markup / interest income
Non mark-up / interest expense
Administrative expenses
Provision against off-balance sheet obligations
Other charges
Total non-markup / interest expenses
Extra ordinary / unusual items
Profit before taxation
Taxation
- Current
- Prior
- Deferred
Profit after taxation
Unappropriated profit brought forward
Transferred from surplus on revaluation of
fixed assets-net of tax
Profit available for appropriation
25,783,871
16,620,963
9,162,908
2,370,867
5,844
2,376,711
6,786,197
2,429,599
64,722474,510
2,059,793
(21,530)
1,031,372
6,038,46612,824,663
8,272,587
6,959
9,5658,289,1114,535,552
-4,535,552
1,726,810
-
(321,487)
1,405,323
3,130,229
2,823,072
24,585
5,977,886
3.92
31,046,583
20,331,19410,715,389
2,035,997
1,479,062
28,298
3,543,357
7,172,032
2,539,321
300,943
914,845
424,220
(181,571)
1,247,669
5,245,42712,417,459
10,471,399
28,582
122,758
10,622,7391,794,720
-1,794,720
1,730,051
(221,797)
(1,014,835)
493,419
1,301,301
4,851,840
24,586
6,177,727
1.63
12,246,811
7,204,9925,041,819
(402,298)
-
(512)
(402,810)4,639,009
1,158,747
52,014
290,091
239,551
23,163
504,967
2,268,5336,907,542
4,313,023
10,125
21,1044,344,252
2,563,290
-2,563,290
592,635
1,037
267,524
861,1961,702,094
860,300
24,8702,587,264
3.92
21,191,470
15,232,8865,958,584
(697,690)
-
(1,537)
(699,227)5,259,357
1,804,998
37,393
386,997
180,751
(27,599)
842,099
3,224,6398,483,996
5,874,745
-
43,3065,918,051
2,565,945
-2,565,945
476,226
(100,874)
427,902
803,2541,762,691
1,886,845
26,0743,675,610
(Rupees)
3.86
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Basic/ Diluted earnings per share
The annexed notes 1 to 44 and Annexures I an ll from an integral part of these financial statements.
5.3 Ratios Analysis
2004 2005 2006 2007 2008
RATIOS
Capital Adequacy % 8.16 8.66 9.48 9.85 8.03
Profit before Tax ratio(PBT/Gross mark up income) % 29.43 20.93 12.11 17.59 5.78
Gross spread ratio(net mark up income) % 56.69 41.17 28.12 35.54 34.51
Income/ Expense ratio Time 2.67 3.34 4.13 3.48 3.42
Return on average Equity % 26.89 30.65 20.37 25.72 9.17
Return on average Assets % 0.86 0.84 0.67 1.04 0.38
Advances/ Deposits ratio % 12 15%
Cash Dividend % 25 33.33 30 23%
Stock Dividend Rs. 17.48 22.46 21.15 21.18 18027
Book value p share excluding revenue Rs. 21.05 24.88 24.48 24.95 21.32Basic Earning per share Rs. 3.9 3.92 2.91 3.92 1.63
Some of the ratios calculated for Bank Alfalah are as follows:
Income/Expense Ratio: The income to expense ratio is 3.42 in 2008, which
decrease from 3.84 in 2007 and is thus very favorable as now Bank Alfalah has
more income to pay off its expenses from.
Advances/Deposits Ratio: This ratio was 64.07% in 2008, a rise of 2.60%
from the previous year. This ratio shows that for every 100 deposits for Bank
Alfalah, a liability, there are 64.07 advances, an asset for Bank Alfalah. As this
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ratio has increased, it shows that Bank Alfalah now as more capacity to pay off
its total deposits from the advances it gives out.
Return on Total Equity: This ratio like the ROA previously calculated is a
debt management ratio and is calculated by dividing the net income available
for common stockholders by the common stockholders equity.
Description 2004 2005 2006 2007 2008
Rupees in000
Profit before provisions and taxes 2,026 2,965,58
8
3,263,63
5
6,906 3,831
Provisions (372) (402,298) (697,960) (2,370) (2,036)
Profit before taxation 1,654 2,563,290
2,565,945
4,536 1,795
Taxation 562 (861,196) (803,245) (1,406) (494)
Profit after taxations 1092 1,702,09
4
1,762,69
1
3,130 1,301
Earning per share Rs 3.90 Rs. 3.92 Rs 3.86 Rs. 3.92 Rs 1.63
Profit after taxation for the year 2008 is Rs 1,301,000, which is increased, and
earning per share a ratio that is closely looked over by the shareholders of a
company decreased from Rs. 3.92 to Rs. 1.63. The major reason for this
decrease in this ratio is mainly the dencrease in profits before taxation, decrease
in provisions and finally, the increase in share capital of Rs. 1 million from the
past year.
5.4 Competitor Analysis
The growth in the banking industry of Pakistan has led to an increase in the
number of banks both domestic and international to be established and create a
competitive industry. For Bank Alfalah its competitors come in the form of both
domestic and international commercial banks established in Pakistan.
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CASH AND BALAMCES WITH TREASURY BANKS
In Hand
Local currency (including in transit)
Foreign currency ( including in transit)
With state bank of Pakistan in
Local currency current accountForeign currency current account
Foreign currency deposit account
With other central banks in
Foreign currency current accountForeign currency deposit account
With national bank of Pakistan in
Local currency current account
National prize bond
27,859,360 29,436,378 32,687,335
The local currency current account is maintained with the state bank of Pakistan
(SBP) as per the requirements of section 36 of the state bank of Pakistan Act,
1956. this section requires banking companies to maintain a local currency cash
reserve in the current account opened with the SBP at a sum not less than such
percentage of its time and demand liabilities in Pakistan as may be prescribed
by SBP.
42
2006 2007 2008
Ru ees in 000
3387226
1469879
16077606393560
2318183
1515185
986359
1151358
14034
4797473
1837649
165667991036674
929357
1413622
1509628
1323806
21370
6335731
2999128
113921411399973
3605236
2108534
2240700
2590762
15130
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As per BSD circular No. 9 dated 03 December, 2007, cash reserve of 5% is
required to be maintained with State Bank of Pakistan on deposits held under
the new foreign currency account scheme (FE-25 deposits).
However Bank Alfalah feels that its major competitors are as follows:
United Bank Limited (UBL)
MCB Bank
Citibank
Askari Bank
As far as UBL is concerned, Bank Alfalah feels that it is a competitor because
UBL itself is a sister company of Bank Alfalah as the Abu Dhabi Group has
stake in UBL and so there is always a comparison between them.
Furthermore, Askari Bank is a competitor because of the fact that the product
and services that it offers is fairly similar to that of Bank Alfalah and its markup
rates are similar as well. MCB, after being privatized has also introduced a wide
variety of services and with its large number of account holders, it is also a big
competitor.
Citibank is a foreign bank that has been established in Pakistan for a long
period of time and has introduced a number of first class services and as Bank
Alfalah is also competing in the services industry, it needs to benchmark its
product and services to a bank with a stature to that of Citibank.
United Bank Limited
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UBL was established in 1959, to provide banking facilities to the nation, after
its nationalization in 1971, the bank became an inefficient enterprise, however
after its privatization in 2000; the whole face of UBL has been changed.
Today UBL stands on a solid network of more than 1000 branches nationwide
and 15 overseas branches and with an experience of 46 years its main goal is to
become the leading bank of Pakistan.
To achieve its goal, UBL has introduced innovative products in the banking
sector to facilitate the general public. It was one of the very first banks to
introduce internet and SMS banking to its customers. It has divided its banking
into three divisions, each having customized products to satisfy the needs of
that particular division:
Consumer: for individual customers
Commercial: for small and medium enterprises
Corporate: for large national and multinational companies
These strategies have helped UBL to raise its image in the banking sector. Its
long term credit rating is AA+3.
MCB Bank
In 1974, MCB was nationalized along with all other private sector banks. This
led to deterioration in the quality of the Banks loan portfolio and service
quality. Eventually, MCB was privatized in 1991. The vision of MCB
isChallenging and Changing the Way you Bank.
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The main strategies of the bank have concentrated on growth through
improving service quality, investment in technology and people, utilizing its
extensive branch network, developing a large and stable deposit base and
managing its non-performing loans via improved risk management processes.
In 2006, MCB Bank was awarded the Euromoney Award for the best bank in
Pakistan, which shows its commitment of changing the way you bank.
Askari Bank
Askari Commercial Bank was established in 1992, with the vision of
maintaining excellent standards of banking quality and service, so as to serve its
customers better. With time Askari Bank has also changed its identity, changing
its name to a shorter Askari Bank, a new logo and a new slogan Ask Us.
Askari Bank has a wide variety of product and services that cater to need of all
type of customers. It also developed a wide variety of products for the Ksaans
or farmers of Pakistan, a segment of Pakistanis neglected by the baking sector
of Pakistan. Askari bank was also the first bank in Pakistan to introduce ATM
machines on a third party basis.
Askari Banks long term rating of AA+ by Pakistan Credit Rating Agency
Limited (PACRA) also shows its commitment of developing excellent standard
of products and services for its customers.
Citi Bank
Citi Bank was established in Pakistan in 1990 and since then has been using its
international roots and knowledge to make a name in the Pakistani banking
sector. Its main vision is to provide right financial solutions - every time, all the
time and to fulfill their vision Citi Bank has used its ability to identify market
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needs and develop products which are unique in concept and fulfill customer
requirements. Every customer is served by a versatile team of relationship
managers who ensure in-depth knowledge of trends and opportunities while
synchronizing their financial activities.
Some of the innovative products introduced by Citi Bank or the very first time
in the Pakistani Banking sector are as follows:
The main vision of Bank Alfalah is to become a premier banking institution in
not only Pakistan but also abroad. In achieving this mission, Bank Alfalah has
been successful by increasing its revenues, deposit base and branches in
Pakistan. Although there are no major problems at Bank Alfalah, the problem
observe as follow:
6.1 Technological Advancements
Bank Alfalah has equipped its branches with all major IT tools being used in
the industry like ATMs, fax machines, photocopiers, printers, latest computers
and a good connectivity architecture, however it has been observed that when
its time to work, there are many failures seen in the different devices used by
Bank Alfalah, especially its connectivity architecture and remains offline withthe main server, that creates problems for the customers.
6.2 Training & Development
There are effective training centers of Bank Alfalah at Karachi and Lahore. For
Bank Alfalah G-9 Markaz, it employees get to train at the Lahore center. The
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problem with training and development is that it is only available for the
officers of the bank and not for the lower staff members.
6.3 Job AdvancementsThere is no job advancements procedure for lower staff members or junior
executives that have joined recently at Bank Alfalah. The main problem that
was observed was that the lower staff should be trained about the operations of
the bank and also the junior executives should be given promotions by defining
the criterias like performance etc.
6.4 Lack of Employees in some Departments
Although Bank Alfalah is a very good employer of talented professionals at
different branches, however, it was observed that there were some departments
in the bank that lacked the number of professionals in it that resulted in
efficiencies in that department.
6.5 New Products Introduction
Bank Alfalah has a wide variety of financial products to cater to the needs of its
competitors; nonetheless the main problem seen is that it is not introducing
innovative products like other banks in Pakistan, for example Standard
Chartered Bank introduced a self depositing machine, a machine that can be
used by consumers to deposit money at any time of the day.
6.6 Priority Banking
Bank Alfalah does not have any priority banking department that can cater to
the need to high end customer. At Bank Alfalah G-9 Markaz, there were no
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large companys accounts mainly because there was no department to develop
relationships with large customers.
6.7 Amenities at BranchProviding amenities like a separate room for prayers because currently the
employees pray in the conference room of the branch. Also separate rooms
should be made for the account department for sorting of vouchers as it is also
done in the conference room.
6.8 Incentive Schemes
There are no incentive schemes for employees of Bank Alfalah like scholarship
schemes for employees that want to pursue higher education. Bank Alfalah
although gives a number of incentives to its employees, like personal loans at
nominal markup but they are only provided to employees that are in higher
ranks. Education fees are also returned by Bank Alfalah to its employees, after
the have finished their studies
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The economy of the country is booming and with the investment favorable
policies and their smooth implementation, the role of banks in todays economy
have become an important one.
The banking industry is also reaping the fruits of this economic boom by
growing rapidly over the past few years. There are a number of mergers
happening in the economy with foreign investments coming into the banking
sector.
It has been ten years since the establishment of Bank Alfalah, and since its
establishment it has aimed to become the leading bank of Pakistan by that
provides outstanding services to its customers.
The bank has seen phenomenal growth in the past few years by opening more
branches in the country, increasing the deposit base, while also increasing the
assets and profits of the bank.
The services that Bank Alfalah provides have a great market penetration not
only because of their features but also the profit and markup rates that they
charge. Also the products that Bank Alfalah provides cater to sector of the
economy.
The top management of the bank is always developing strategies that cope with
unexpected challenges to deliver products and services more efficiently
Furthermore, as the bank is growing, the number of employees at Bank Alfalah
are increasing, which shows that Bank Alfalah is being considered as a an
employer, that provides its employees with a challenging environment to work
in, where they can harness their full potential and shows confidence as an
employer by the employees of the bank.
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Lastly to become the leading bank of Pakistan, Bank Alfalah has to benchmark
its services to its major competitors in the industry or the market leader in the
industry and provide a continuous mean of improvement in its existing products
and services, while introducing new ones to the industry.
In the last section, I would like to give some recommendations and is hoped that
if they are implemented will bring benefits to Bank Alfalah.
Some of the recommendations that I would recommend to some of the
problems discussed in the above section, that might increase the efficiency of
both the operations and employees of Bank Alfalah are as follows
8.1 Technological Advancements
Bank Alfalah should develop a modern connectivity architecture to effectively
maintain an online connection of the branch with other branches and also the
ATM link, which may include using modern technologies like fiber cables,
routers etc. Also backup links should also be developed,
Also a proper IT department should be established in all branches, with
professional having the knowledge to maintain a secured connection with other
banks. Also scheduled backups of data should be done with in the bank.
8.2 Workshops and Counseling
Work shop programs should be conducted in every city, rather than just two
centers, for all Bank Alfalah employees. These workshops should relate to all
aspects of banking and may also be conducted with other banks as a joint
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Also as parts of the human resource training, counseling programs should be
started for junior executives or new entrants into the bank, introducing them to
their prospects in this industry.
The lower staff employed at Bank Alfalah should also be given a chance to
succeed in life by training them in different simple jobs at the bank, which my
include sorting of cheques, phone banking etc.
8.3 Incentives
Incentive schemes should be developed for the employees that can help
motivate them, which might include:
Personal loans and car financing facilities for all ranks of employees.
Scholarship programs for all employees.
Introducing employee awards at branch and regional levels.
Job rotation programs to enhance the skills of employees.
8.4 Priority Banking and Business DevelopmentDepartment
There is no priority banking department at Bank Alfalah, like that of other bank.
A priority banking department should be developed so as to give even more
exclusive and customized services to high end customers with large deposit
accounts. Also Business Development Department should be developed in all
branches, so that they can actively find prospect customers to take up products
from Bank Alfalah.
8.5 Innovative Products
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New and innovative products should be introduced by Bank Alfalah, like other
bank such as Citibank and Standard Chartered Bank develops for their
customer. For this purpose, special teams should be developed that include
professional from all departments of the banks to come with ideas. This process
will increase the number of ideas generated and even produce innovative
products for the bank that might give them the edge.
8.6 Placements of Employees
There are some departments in the bank that do not have enough employees,
while some have more than needed. All this creates inefficiencies and so theoperations manager should look at the department of the branch and see where
inefficiencies lie, in consultation of with the heads of the departments and hire
individuals where there are less employees or rotate employees from other
departments.
8.7 Amenities in Branch
There should be a prayer room developed in all branches as many employees
want to pray, but do not have the proper place to do it. Also work like sorting,
which takes up a lot of space should be done in a separate place and amenities
like television and internet connection should be placed in the common room,
so as to give employees a relaxing environment when they have a break.
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Web Resources
Bank Alfalah (www.bankalfalah.com)
The Daily Times Newspaper (www.dailytimes.com.pk)
Wikipedia (www.wikipedia.com)
RBS Pakistan (www.abnamro.com.pk)
United Bank Limited (www.ubl.com.pk)
State Bank of Pakistan (www.sbp.org.pk)
Askari Bank (www.askaribank.com.pk)
MCB Bank (www.mcb.com.pk)
Citibank (www.citibank.com/pakistan)
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Reports
Annual Report Bank Alfalah 2008
Annual Report Bank Alfalah 2007
Banking Statistics of Pakistan 2008