internship reporttahir aziz

7/30/2019 Internship Reporttahir Aziz

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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

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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



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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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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


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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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

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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


There are three major products that come under the funded credit line facility:

Current Finance

2

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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.


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



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

in structuring financing transactions with the mutual and hedge fund sectors;33


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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.

3

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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

internship reporttahir aziz

Documents