city bank pakistan

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Executive Summary

From since 1963, Citibank serving its customers by providing them quality products andservices which are designed in a way that fulfills customers needs and requirementsconveniently. In service from last 44 years, Citibank operates in Pakistan through its

seven branches located in five major cities Karachi (3), Islamabad (1), Rawalpindi (1),Lahore (1), and Faisalabad (1). The banks head office is in Karachi.

Bank carry out its operation through many departments such as operations department,collection department, citiphone services, merchants, and CIU. Operation departmentconsist of card operations and banking operations and handles the receipts and paymentof cheques with help of NIFT. Collection department consist of front end, mid range, andhard core and responsible to ensure the payment from the customers. Citiphone is a 24-hours service and handles the flow of the traffic of customers different queriesregarding the bank products and services and also process the problem of the customers.Merchant department deals with POS, responsible to increase the outlets for Citi credit

cards, receipts and payments to these merchants, and maintaining the good relationshipwith merchants. CIU or credit initiating unit verify all the applications received by bankfor its products.

Citibank is the multinational organization with multi-skills and multi-culture peoples.Bank is well aware of that by investing in its people is the only way of obtaining thedesired results. To take care of its employees bank has complete HR department inKarachi and Lahore. HR activities include recruitment, selection, performance appraisal,and performance based incentive system etc.

In the present scenario of hard economic conditions and tough competition bank still able

to earn profit after tax of Rs. 1064 million. Banks assets, deposits, advances, and equityare Rs.62148 million, Rs. 40838 million, Rs.25657 million, and Rs.6826 millionrespectively in 2002.

Citibank offers the wide range of products and services such as credit card (gold, silver,and co-branding) loans (personal and home loans), car financing, and banking (citigold,local currency account, and foreign currency account).

The major competitors of Citibank are SCB and ABN Amro. Bank operates successfullywith limited number of branches is only due to the advance technology used by the banki-e database communication system.

In short, Citibank is serving Pakistani customers from since 1963 successfully and provenitself as the most prestigious and successful bank in the industry with its unique productsand services.

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Chapter: No: 1

OVER VIEW OF THE ORGANIZATION

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Introduction:

Citigroup Inc. is a diversified global financial services holding company whose businesses provide a broad range of financial services to consumer and corporatecustomers with some 200 million customer accounts in six continents and more than 100countries and territories, dates back to the history of Citibank, which began in 1812;Travelers, since 1864; Smith Barney, founded in 1873; and Banamex, which was formedin 1884 as a result of the merger of Banco Nacional Mexicano and Banco MercantilMexicano.

Other major brand names under Citigroup's trademark red umbrella include Citi Cards,CitiFinancial, CitiMortgage, CitiInsurance, Primerica, Diners Club, Citigroup GlobalCorporate and Investment Bank, Citigroup Asset Management, The Citigroup PrivateBank and CitiCapital. Below are brief descriptions of many of the most significantbusiness activities.

Vision:

To be a unique global bank and the leading regional consumer bank across Asia Pacificand Middle East dedicated to our customers, financially strong, consistent committed tothe staff and their development, and delivering sustained superior performance.

Citigroup Global Consumer Group:

The Citigroup Global Consumer Group businesses comprise the financial service sector'smost diverse consumer product offerings - banking services, credit cards, loans andinsurance. It also offers industry-leading advanced technology, a strong worldwidepresence and a powerful global franchise in Citibank.

Citigroup Global Investment Management:

Citigroup Asset Management provides investment management and related services to a broad spectrum of clients around the world, from beginning investors to wealthyindividuals to large institutions, both public and private. It boasts one of the mostimpressive research teams on Wall Street and some of the most well-known brands inmoney management - Smith Barney, Salomon Brothers and Citibank. The CitigroupPrivate Bank offers boutique service to its clientele while, at the same time, being backedby the full power of Citigroup. With offices in 59 cities around the world, it is one of theworld's most global private banks. Global Retirement Services provides for the retirementand pension needs of clients around the world.

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Citigroup International:

Citigroup, principally through Citibank, has a long and unrivaled history as a provider offinancial services throughout the world. Its global footprint includes more than 100countries in North and South America; Asia and the Pacific; Western, Central, and

Eastern Europe; the Middle East; and Africa. It offers customers personal service and theadvantages of a local bank, while its global platform allows introducing a continuousstream of new and innovative products quickly and more cost-effectively thancompetitors.

Its banking, lending, investment and insurance services serve the needs of individualconsumers. Citibank is the leading provider of credit and charge cards, such asMasterCard, VISA, and private label throughout the emerging markets, and it has one ofthe largest networks of ATMs. Its full range of financial services products serve the needsof small and large corporations, governments, and institutional and individual investors,including a full range of treasury, foreign exchange, and financial advisory services.

Citibank in Pakistan:

Citigroup started its activities in Pakistan in July 22, 1961 by establishing Citibank inKarachi. Now it operates in 6-major cities of Pakistan such as Karachi (2 branches),Lahore (1 branch), Faisalabad (1 branch), Islamabad, (1 branch) and, Rawalpindi (1branch) with its seven branches. Citibank Islamabad involves in:

Corporate banking

Consumer banking.

Consumer banking:

In consumer banking Citibank operates in following

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City Phone Services:

24 hour, 7 days a week, 365 days a year, Access information, give instructions or register

customers complaints with the utmost confidence, complete security and totalconfidentiality over the telephone. Customers can use the option of Self Service Bankingor get assistance from efficient Citiphone Bankers.

Car Financing:

With the increasing demands of everyday life, vehicle ownership has shifted from a mereluxury to a vital necessity. However, exorbitant car prices make cash purchasingunaffordable. With the widest range of car loan packages in the market, Citibank CarFinancing enables the customer to get the car of his dreams in affordable and convenientinstallments. Citibank is the market leader in the Car Financing market. Citibank provides

flexibility of choice, real value and a premium brand name along with a host of valueadditions to its Car Financing customers.

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Home Loans:

Citibank is offering the widest range of Home Loans Products in the market. Frompurchasing a home to furnishing it, from acquiring business assets to financing your

children's education abroad, and from purchasing that perfect plot to constructing theideal home, Citibank will provide the best possible solution for customer needs. And thatis not all bank will also structure the loan to suit ones cash flows in order to minimizethe paid mark-up.

Banking:

In banking Citibank offers following three types of accounts:

Citibank Karobar

Citibank Rupee Saving Account

Citibank Rupee Time Deposit: There is two types of time deposits withvarious tenors and profit payment options They are

* Citibank Premium Profit

* Citibank Sarmaya Plus

Citibank Credit Cards:

Citibank offers a wide range of Credit Cards, including Silver, Gold, Co-brand cards andexclusive Shaheen Card for Air Force Personals. Following are some features andbenefits related to the Citibank credit cards.

Credit Shield

Photo Card

24-Hours Banking Service

Fraud Early Warning Service

Supplementary Card

Zero Liability On lost Card

Flexible Repayment

Travel Accident Insurance

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Corporate banking:

The Corporate Banking Group at Citibank in Pakistan is committed to providing itsclients the highest level of service possible. Recognized as a leader and a trendsetter in

the financial markets, the Corporate Bank strives to achieve Citibank's global objective ofcustomer satisfaction and quality through a well- diversified product offering and a teamof highly professional Relationship Managers. The Corporate Bank manages a highquality asset portfolio being an active player in many sectors including textile, sugar,leather, pharmaceutical, fertilizer, petrochemical, power, aviation, automotive,telecommunications, oil and gas distribution and fast moving consumer goods industries.Banks client companies include leading multinational corporations, top tier localcorporate organizations and public sector entities. Citibank has been instrumental inbringing together local companies with international players in several Joint Ventures.This has been possible because of Citibank's Global Relationship, communication systemand transnational network.

In corporate banking Citibank operates in following:

Cash Management

Corporate banking

Treasury

Financial and security services

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Chapter: No: 2

banks Analysis

Operational Analysis

Human Resource Assessment

Financial Analysis

Marketing Analysis

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Operational Analysis

Collection Department

Operations Department

Sales Department

Credit Initiating Unit (CIU)

Citiphone Services

Merchants Department

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Collection Department

Collection department as its name indicates provides its services for the collection ofcredit card payment. Sufficient numbers of employees called Collection Officers (C.O)collect the payments by remembering the card members their due dates through telephonecalls. We can categorize the collection officers in to Tele Callers (T.C) and FieldCoordinators (F.C). Tele callers made the daily calls to the card members assigns tohim/her while field coordinators assist tele callers in order to support the collectionprocess. In order to work efficiently collection department works through three sections i-e front end, mid range, and hard core.

Front End:

Front End section deals with the accounts which are 30-60 days past due (dpd)

Mid Range:Mid Range section deals with the accounts which are 60-120 dpd.

Hard Core:Hard Core section deals with the accounts which are 120-180 dpd.

After this the account is transfer to Recover Department for legal proceedings.

Departmental Structure:The authority hierarchy of collection department is attached with the report as AppendixB.

Other Functions:Besides collection of the card payment this department performs various other functionssuch as processing and handling of return cheques related to the cards, processes returnbilling statements, dispatching cancellation advises etc.

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Sales Department

This department is responsible to for bringing the new business for the bank. Thisdepartment deals in all the consumer products of bank such as credit card, loans,accounts, and mortgage, etc.

Departmental Structure:

TSO = Tele Sales Officers BRO = Business Relation Officers

TSO contact the potential customers through phone and try to convince him to becomethe banks respected customer. BRO assists TSO in the field visits.

ManagerManager

CoordinatorCoordinator

TSOTSOTSOTSO TSOTSO

BROBRO

BROBRO BROBRO

BROBRO BROBRO BROBRO

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Credit Initiating Unit (CIU)

The functions of this department includes the verifications of all applications received forthe request of banks different products such as credit card, personal loan, auto loan, andmortgage etc. The authorized officers of the bank verify the eligible applicants (based onincome calculation) information through phone and by personal field visits and note thatverifications on both computer and on Authentication Report. For phone verificationInternal Authentication Report (attached as Appendix C) is used and ExternalAuthentication Report is used for the field visits. After the proper verifications all rightapplications send to the Karachi Head Office of further processing with Authenticationreports because all the acceptance of applications are approved in the head office. Thenthe product is send to the successful applicants. Therefore, this department also processesthe returned products which are returned due to any reasons.


ManagerManager

SupervisorSupervisor SupervisorSupervisor

Authentication OfficerAuthentication Officer Authentication OfficerAuthentication Officer Authentication OfficerAuthentication Officer Authentication OfficAuthentication Office

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Citiphone Services

This department handles the flow of the traffic of customers different queries regarding

the products of bank and also processes the problems of respected customers. As theofficers of this department has to answer any kind of query regarding banks wholeproduct line therefore the officers so called Production Officers(P O) must completelyaware of the products and their relating matters. Besides, answering the queries ofcustomers this department also handles the On Line Banking through Citi onlineBankers (COB). Citi online banking allows customers to make different transactionsonline such as utility bills payment, credit card payment, and etc. some general queriesare procedure and requirements of account opening, request for the balance statement,request for the card billing statement and new cheques book, and ATM requests, etc. Thisdepartment also notes down the different problems of the clients and passes it to theconcerned department.


COB = Citi Online Bankers P O = Production Officers

ManagerManager

SupervisorSupervisor

COBCOBCOBCOB COBCOB

P OP O

P OP O

P OP O

P OP O

P OP O

P OP O

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Merchants Department

This department deals with all the matters relating to the merchants (all those placeswhere citi credit card is accepted consider as merchant). The function of this departmentincludes enhancing the merchants and banks relationship by increasing the number ofmerchants, processes their claims regarding payment of credit cards, and handling andprocessing of any dispute in amount of payment. The MRO Merchant Relation Officercollects the sales slip on daily basis from POS Point of Sale and forwarded these slip tocard operation department for making of payments draft after recording on the sheet.Then, on next day these drafts are transferred to the respected merchants after gettingtheir signatures on receiving sheets. Besides all this routine work this department alsorecorded the disputes on concerned form and forwarded to the head office for furtherprocessing. Increasing and making request to install the POS terminals both manual andelectronic are also the responsibility of this department.


ManagerManager

CoordinatorCoordinator

MROMROMROMRO MROMRO

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Human Resource Assessment

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WE VALUE A WORKPLACE WHERE

Bureaucracy is discouraged, entrepreneurial thinking is fostered, and decision-

making is streamlined by an open-door management style.

Diversity is embraced, particularly in light of our globality. Employees think andact like owners because they are owners.

Mistakes are tolerated, admitted, and addressed before they become realproblems.

People are promoted on their merits rather than on their tenure, and rewarded fortheir performance within the context of what they can personally control orinfluence.

People treat each other with mutual respect and dignity. People truly feel that, nomatter how large we grow, each and every one of us can make a difference.

WE VALUE PEOPLE WHO

Take the company personally, they care about each other, the quality of our products and services, and above all, their value to our customers and

shareholders are committed to a strong work ethic and are constantly striving toexcel in serving their customers,

Are more interested in team work than in internal politics, lead by example,giving credit to others for success and assuming personal responsibility forfailure,

Have a sense of urgency and excitement, demonstrate candor, insight, andcreativity, and thrive in an environment of change, challenge, and competition aretop performers and

Are committed to excellence in whatever they do. (Annual Report)

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Human Resource Activities:

HRM practices have shown to be the backbone of any company. Citibank considers itsemployees as its real assets and believes that without investing in human resource itssuccess is not possible in this competitive era. Human resource department of the bank isin its head office. Banks HR department is practicing all the important activities of HRthat includes the following:

Recruitment

Selection

Orientation, Placement, and Separation

Training and Development

Performance Appraisal

Safety Security and Health

Incentive system

Following are the banks human resource activities:

Recruitment

As bank believes that survival in this tough competitive environment is only possiblewith the team which is fit in all aspects. Bank also knows that it has competitive edgeover its competitors only because of its perfect blend of skills which its employee possesses. Thus, to ensure its survival and competitive edge bank give properconcentration at the initial stage of recruitment, so that only bright, energetic, and

enthusiastic peoples are recruited which match with banks requirements. For recruitmentpurpose bank uses both internal and external recruitment channels.

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Recruitment

Internal

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Internal Recruitment:

Whenever there is internal job opening, employees are informed about openings andrequired qualifications by posting the notice on the notice board or white board almostin every department. These jobs are also available on banks intranet. Then interested andqualified employees are report through self nomination or supervisor to HR department.

External Recruitment:

Mostly bank used employee referrals as an external recruitment channel. It depends onthe nature of job opening bank also uses Write-ins and advertisement to attract thecapable pool of peoples.

Selection

After recruiting the pool of capable recruiters by HRD, for contractual hiring the managerand supervisor of concerned department take the initial interview and then person ishired on probation period of 3-month and then final induction is decide by the regional

manger. Here one thing is important to mention that bank has made contract with thirdparty (Nexus Resources and Credit & Commerce) for the recruitment of contractualemployees. Then later on, if any permanent post is vacant then the one of the seniorcontractual employee is promoted to fill that post. For this, contractual employee has to pass the series of hiring steps such as valid written test related to employee jobknowledge, interview, and medical evaluation etc in Lahore branch of bank.

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Orientation, Placement & Separation:

Orientation:

As such there is no formal kind of orientation for the new employee in Citibank. In bankorientation of the new employee is assignment of buddy. In buddy system senioremployee is asked to show the newcomer around, introductions for the supervisors, andanswer the questions. During this orientation period department manual (which containthe details of functions, responsibilities of all designations in department, way of workingand also contains the is or is not) is given to the new employee so that he can get theinitial idea about the department working, his/ her job nature, authority and etc. Later on,

any deficiency is covered by the banks efficient training and presentation program.

Placement:

As far as placement is concerned, the employees are promoted/ demoted only on the basisof their performance. The performance of employee is measured by the both at supervisorlevel and at manager level. In order to encourage employees promotions are only onmerit basis. Instead of transferring between different departments the tasks are assignedto different employees on rotation basis. Although there is no restriction on interdepartmental transfer.

Separation

Under the head of separation bank offers temporary leaves, attrition, and termination.

Leaves: are allowed as per contract.

Attritions: It is the normal separation of employee by voluntary resignation, retirementand death.

Termination: Bank strictly discourages the termination but it takes place only on the

disciplinary grounds (late coming) after issuing three memos (waning letters). In caseof termination bank gives one month salary to the terminated employee as severancepay.

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TRAINING & DEVELOPMENT

Bank knows well that only by providing the efficient training and development programits employees can able to meet with the ever changing market environment and customersrequirements. The bank employees can able to satisfy the customers in all aspects, only ifthey completely aware about the products and services offered by bank and relatingmatters, so for this purpose bank concentrated on intensive training program by:

On Job Training (OJT):

Bank provides its employees OJT so that they can understand the nature of job in realisticway. Moreover this provides employees opportunity to enhance their job knowledge.

Off Job Training:

In order to make its employee more efficient bank also has the off job training for theemployees. This off job training is arranged by the bank mostly in the business hall ofMarriot hotel Isb. This is mandatory for all employees to attend these programs. Thetopic covers are mostly relating to the management, security, and etc. such as leadership,information security, effective business communication etc. By providing off the job

training bank offers the opportunity of grooming to its employees.

Lecture & Video Presentations:

Besides all these, at department level there is also arrangement of training throughlectures and presentations by the senior employees. Senior employee has to givepresentation relating to the department functions, its processes and disciplinary rules etc.This type of presentations held at departmental level at least thrice time in the month. Thetiming, topic and name of the employee is written on the white board, as the Saturday isthe half working day therefore mostly this type of practices held on Saturday after 2:00p.m.

Training Evaluation:

After attending any kind of training session there is proper system of training evaluation.The participants have to fill the training evaluation form (Appendix D). This practicehelps bank to make the match with changing needs.

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PRFORMANCE APRAISALS (PA)

In Citibank performance appraisal is critical activity in order to measure the employeesperformance against job related performance standards. Employees received properfeedback on regularly basis in order to improve their performance. Employee

performance is measured at departmental level by the combined effort of supervisors andmanagers. As bank officer has to record all its activity relating to the job on the computerand update this on daily basis therefore, standards are established according to the job.

For example, in collection department there are separate performance standards for F.E,M.R, and for H.C. As tele callers have to contact the customers therefore the minimumnumber of calls is set as performance standard with sufficient percentage of promises to pay. Same way number of visits with sufficient number of successes is set asperformance standard for field coordinators. Feed back is provided to all officers on dailybasis, on weekly basis, and finally on monthly basis in the shape of summary of accountsand amount. These standards are revised on monthly basis as per requirement. Thus, each

employee performance is measured according to the related standards. Other elementsalso contribute in the PA process such as accuracy with which transactions are recordedwith activity codes, employee behavior and attitude during the interaction with customersetc.

SAFETY SECURITY, & HEALTH:

Citibank believes that only the employees who are satisfied in all aspects are theproductive employees. Therefore, Citibank provide safe, secure, and healthy working

environment to its employees. Bank provides free medical to all its permanentsemployees and their families. For this purpose two hospitals i-e Al-shifa and Ali hospitalsare on its panel. Bank also provides life insurance and accident insurance to all itsemployees especially to the field staffs. Filter water is supplied to all departments by theAVA Company because there is no compromise on health. As the Citibank is Americanbase bank therefore in these critical conditions there is an effective security arrangementboth internally and externally.

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INCETIVE SYSTEMS

In order to motivate its employees Citibank uses both psychological components suchas:

achievement certificates,

monthly breakfast,

quarterly trip,

annual dinner

excellent performance monthly reward (monetary)

bonus based on performance

allowances(travel, petrol and maintenance

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Financial Analysis

The place that makes managing your money as easy as

spending it.

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Source: Banking Survey 2006

Citibank

CONSLIDATED BALANCE SHEET

As on 31ST DECEMBER 2006

As at December 31,2006 $Millions

ASSETS

Cash & balances at central banks 15220

Investment 11280

Financial Institutions 7993

Corporate and Consumers 25657

Operating Fixed Assets 319Other Assets 1679

TOTAL ASSETS 62148

Liabilities

Bills Payables 435

Borrowing 11002

Deposits 40838

Equity 6826

Other Liability 3047

Total Liabilities 62148

Citibank

Income Statement

As on 31ST DECEMBER 2006

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FINANCIAL REVIEW OF COMPANY:

Due to 9/11 world economy has suffered a great recession during the period of last twoyears, despite of all this Citibank continuous its way to progress in year 2006 the

financial review of the bank is as follow:

Total assets of the bank are increased to Rs.62148 million in year 2006from Rs.61575million in 2006.Thus, bank holds 2nd ranking position amongst foreign banks as far asassets are concerned.

Profit after tax increased to Rs.2288 million in 2006from Rs. 1827 million. For this, bankranks 2nd by dropping from 1st position which is now hold by the SCG. Bank earned 1064million profits after tax in current year.

Bank still hold the 1st rank in return on total asset by showing the increase of .7% from

3% in 2005to 3.7% in 2007.

Banks advances are decreased by 5.4% from 27119 million to 25657 million in 2006which is 21% of the total advances (123888 million) of all the foreign banks.

Deposits are decreased by 1.6% from 41506 million to 40838 million in 2006 which is23% of the total deposits (167678 million) of all foreign banks.

Source Rs.(mln)

Spread 2648

+Non-Funded Revenue 1502

Operating Income 4150

Operating Expenses (1708)

Provisions / (Reversals) (154)Profit before tax 2288

Taxation (1224)

Profit after Tax 1064

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Investment in securities increased to 11230 million from 6749 million.

Income from dealing in foreign currencies increased to 359 million in 2006 from 222million in 2005.

Banks return on equity is increased by 1.4% from 18% in 2005to 19.4% in 2006 Equityof the bank is also increased from 5535 million to 6826 million.

Spread of the bank also showed the increase of 0.3% from 5% to 5.3%.

Banks non funded revenue to operating income ratio increased from 32.6% to 33.6%showing the increase of 1.00%. With this increase, bank ranking is improved to position5 in 2006 against its position in 2005.

Operating cost to operating income ratio is decreased by 8.3% from 46.5% in 2005 to38.2% in 2006While banks operating income is increased to 4467 million from 3554

million in 2005and banks operating cost is increased to 1708 million from 1652 millionin 2005.

Staff cost to operating cost ratio increased by 1.7% from 52.1% in 2005to 53.8% in 2006Banks increased its staff to 637 from 605 in 2005 increases its staff cost by 57 millionfrom 861 million in 2005to 918 million in 2006.

Bank decreases its executive staff from 87 in 2005to 74 in 2006which decreases theexecutive remuneration from 19.1320 million to 17.8946 million in 2006.On the otherhand remuneration per executive is increased to 2.4 million from 2.2 million in2005.CEO remuneration is also increased to 18.327 from 16.867 in 2005.

Banks avg. advance to avg. deposit ratio is decreased by 0.9% from 64% to 63.1% in2005which decline banks ranking for this ratio from 5 to 7 in 2006.

Banks foreign currency deposits to total deposits ratio is also decreased from 36% in2005to 28.2% in 2006showing the decrease in foreign currency deposits by 7.8%.

While non-performing advances to gross advances ratio remains same in 2006i-e 3.5%.

Citibanks credit exposure in textile sector is increased by 0.6% from 23.8% to 24.4% in2006out of total advances. Credit exposure in chemical and pharmaceutical sector isdecreased by 0.7% from 13.4% to 11.7% out of total advances in 2006 Credit exposure togovt. and public sector is showing the tremendous decrease of 6.7% from 10.1% to 3.4%in 2006out of total advances.

Credit rating of the Citibank

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Note:

All these financial information are extracted from balance sheet, income statement, andfrom banking survey of Pakistan 2006.

Marketing Analysis

The Citibank has efficient marketing process that includes broachers, leaflets, contactingcustomers through phone and personal visits. As the bank leads in the credit card so, thestatement is the powerful tool used by the bank for marketing purpose. Because ofselected target market as such there is no TVCs by the Citibank. Citibank prefer onlineinternet advertisement. The main emphasis of bank is to retain the existing customers byoffering the different promotional campaigns.

4-Ps of Citibank:

(a) Product:

Citibank offers a variety of quality product to its respected customers involved both thecorporate and individual consumers. Instead of satisfying the customers the mainemphasis is on delighting them.

Firms Short Term Long TermStandard & Poors A-1+ AAMoodys P-1 Aa1Fitch IBCA F1+ AA

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Credit Cards

Citibank offers a wide range of credit cards including silver, gold, and co-brands cards.

Citibank Gold Credit Card :

The Citibank Gold Credit Card is specially designed for exclusive life style and specialneeds of the customers. As a Gold Credit Card member customer enjoys a higher CreditLimit and a preferred status throughout the world.

Eligibility:

Individual with monthly income of RS 50,000 or more having a Pakistani citizenship is

eligible for Citibank gold card.

Citibank Silver Credit Card:

The Citibank Silver Credit Card brings the convenience and financial flexibility acustomer can expect from the World's No. 1 Credit Card. The Silver Card is a trulyinternational Credit Card offering unmatched features and benefits and complete peace ofmind.

ProductProduct

ConsumerBanking

ConsumerBanking

Credit cardsCredit cards Home loansHome loans Car financingCar financing BankingBanking

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Eligibility:

Individual with monthly income of RS 16,000 or more (Rs.12, 000 for selected corporateemployees) having a Pakistani citizenship is eligible for Citibank silver card.

Co-Brands cards:

Includes Caltex- Citibank card, Paktel-Citibank card, and Shaheen- Citibank credit cards.

Caltex-Citibank Credit Card:

Gear up for more discounts and benefits with Caltex-Citibank Credit Card. Caltex Co-brand cardhave all the great features of Citibank Credit Card with following extra benefits.

Discount Coupons worth Rs.1, 050 on Caltex lubricants and car wash. Car Financing Insurance Plan on easy installments at no mark up. CNG KITS with installation from Caltex through Smart Installment Plan(SIP) 10% discount on car accessories at selected outlets country wide Vehicle Tracking Device C-Trackon easy installments Spend on Caltex-Citibank Credit Card and earn Rewards points. Get Supplementary Card absolutely free.

Paktel-Citibank Credit Card:

The Paktel-Citibank Credit Card has all the privileges of a Citibank Credit Card plusexclusive benefits in the form of discounted Paktel packages, especially designed forPaktel-Citibank Credit Card members. The special Paktel-Citibank Credit Card package

entitles:

No joining fee on Credit Card Security deposit waiver worth Rs. 3,000 on local access. Free airtime worth Rs. 2,000 for the first year. Up to 10% discount on all existing Paktel packages. Up to three Supplementary Cards absolutely free.

Citibank-Shaheen Credit Card:

The Citibank-Shaheen Credit Card is the first Affinity Card in Pakistan, offeredexclusively to Pakistan Air force and Shaheen Foundation personnel. Out of every rupee

spent on a Citibank-Shaheen Credit Card, Citibank will contribute a percentage toShaheen Foundation and to the welfare of Air force personnel.

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Home Loans

Citibank is offering the widest range of Home Loans Products in the market. Frompurchasing a home to furnishing it, from acquiring business assets to financing yourchildren's education abroad, and from purchasing that perfect plot to constructing theideal home, bank provides the best possible solution for customers needs by structuringthe loan to suit customers cash flows, which results in low markup.

Features:

Highest Loan Amounts:

Customers can avail a loan from Rs. 3 lacs to Rs. 50 lacs to purchase the perfecthome.

Easy Monthly Installments:

Customers can pay back the loan in easy and affordable monthly installments spread

over 3 to 15 years.

High Loan to Values:

Citibank finances up to 70% of the loan against the value of the property.

Free Pre-Approved Credit Card:

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As a special offer for its valued customers, with every home loan that is booked, youget apre-approved Credit Cardabsolutely free for the 1st year.

Pricing:

Customers can choose the mark-up rate that suits them best. Bank offer two differentkinds of mark-up rates the Adjustable Rate and the Stable Rate.

Flexible Payments:

Citibank Home Loans gives customers the unique option of reducing their principalbalance through partial and full pre-payments or through the step-up payment plan fora nominal fee. This will allow customers to reduce the overall mark-up costs as andwhen they access to additional funds.

Clubbing of Spouses income:

To avail the facility of obtaining a higher loan amount, Citibank Home Loans offercustomers the option of adding spouses income to arrive at the maximum loan amount.

Minimum Processing Fees:

Bank offers home loan at a minimal processing fee. Banks panels of experts take care of

legal and appraisal formalities. They strive to ensure that the property customers arepurchasing is at the right price and has proper documentation.

Quick Processing Time:

For the convenience of customers relationship mangers make the process of obtaining aloan hassle free and easy. Bank will disburse loan within 15 days subject to the fact thatcustomer submit all the relevant documents on time.

Eligibility:

Age between 21 to 65 years. Pakistani resident residing and working in Karachi, Rawalpindi, Islamabad.

Regular monthly income from salary or a business.

Must be a tax payer

Employment criteria as per follows

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http://citibank.com/pakistan/consumer/products/homeloan/preapp.htmhttp://citibank.com/pakistan/consumer/products/homeloan/preapp.htmhttp://citibank.com/pakistan/consumer/products/homeloan/adjrtcn.htmhttp://citibank.com/pakistan/consumer/products/homeloan/stblrtcn.htmhttp://citibank.com/pakistan/consumer/products/homeloan/prgd.htmhttp://citibank.com/pakistan/consumer/products/homeloan/preapp.htmhttp://citibank.com/pakistan/consumer/products/homeloan/adjrtcn.htmhttp://citibank.com/pakistan/consumer/products/homeloan/stblrtcn.htmhttp://citibank.com/pakistan/consumer/products/homeloan/prgd.htm


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Car Financing

With the increasing demands of everyday life, vehicle ownership has shifted from a mere

luxury to a vital necessity. However, exorbitant car prices make cash purchasingunaffordable. With the widest range of car loan packages in the market, Citibank CarFinancing enables the customer to get the car of his/her dreams in affordable andconvenient installments. Citibank is the market leader in the Car Financing market.Citibank provides flexibility of choice, real value and a premium brand name along witha host of value additions to its Car Financing customers.

Benefits:

Segment Employment Criteria

Citibank approved companyemployee

Confirmed employee

Other Salaried employee Minimum 2 years of employmentand confirmed

Self-Employed Businessmen Minimum 5 years in business

Self-Employed Professionals(Doctor, Chartered accountant,Engineer or Architect)

Minimum 3 years inpractice/employment

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24-hours access to Citiphone Banking.

Wide range of dealership network.

Value added comprehensive insurance at competitive rates.

Quick processing time

Pre-approved Credit Card.

Eligibility:

At least 21 years of age at the time of financing and will be less than 65 years or

(retirement age) before full repayment. Pakistani national residing in Karachi, Lahore, Rawalpindi, Islamabad or

Faisalabad Maximum age of the car at loan maturity should not exceed 8 years.

Banking:

Citibank offers a wide range of accounts under this head of banking. These accounts are

mainly categorized in three categories i-e

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Citi Gold:

Citi Gold, a preferential service encompasses the facilities of banking, borrowing andinvesting all in an exclusive, private and comfortable environment, providing customerswhat they deserve.the best. As a Citi Gold member, Citi Gold Card differentiatecustomer and gives them the status of very special customer and is the key to recognitionas banks first class customer in Pakistan to experience the unmatched facilities of CitiGold.

Minimum Balance:

Customer has to maintain the balance of Rs. 2000,000 or $ 100,000 or its equivalent inforeign currencies in his/her account.

Benefits:

Dedicated Citi Gold Executive (Personal Banker).

Exclusive Premises

Higher Withdrawal Limit up to Rs. 40000 per day.

No charge for banking services.

Privilege of obtaining advances against deposits at preferential mark-up rates.

Exclusive discount on various outlets.

Valet safe car parking.

Foreign Currency Account:

Citibank offer two kinds of foreign currency account:

BankingBanking

Citi GoldCiti Gold Foreign Currency DepositsForeign Currency DepositsLocal Currency DepositsLocal Currency Deposits

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Foreign Currency Saving Account:

Open this account with $ 5000 only. Account holder can access his/her funds throughfree citi international card. Citi gold member can with draw amount equal to Rs. 40000per day while other customers withdraw amount equal to Rs. 20000 per day.

Foreign Currency Term Deposits:

Open this account with $ 5000 only and earn competitive interest for 6-monts and 1-yeartenure. There is a benefit of obtaining loan against deposits and option of automaticrenewal on rates prevailing at maturity.

Eligibility:

Resident and Non-Resident Pakistanis.

Local and foreign companies (except banks and financial institutions).

Foreign nationals residing in Pakistan.

Local Currency Deposits:

Citibank offers three types of accounts under this category:

Karobar Account:

Customers can conveniently demand drafts and manager cheques, utility bills payment

only through one phone call. In addition, account holder has country access to theKarobar account through ATM network.

Rupee Saving Account:

Open this account only with Rs. 100,000 and earn the profit on daily balance which iscredited bi- annually. Account holder can demand TT, pay orders through phone. Thisaccount has special feature of inter-branch access.

Rupee Time Deposits:

Citibank has two types of time deposits on the basis of tenors and profit payment options.

Citibank premium profit

Citibank Sarmaya Plus

Eligibility:

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Resident and Non-Resident Pakistanis.

Local and foreign companies (except banks and financial institutions).

Foreign nationals residing in Pakistan.

(b) Price:

Banks major earning is from markup, interest, penalty charges, over limit charges, andservices fee etc. For example, bank can earn 3% per month on credit card, Rs. 600 overlimit charges. These interest and service charges varies from product to product.

(c) Place:

Banks head office is in America and it flourishes its business in all over the worldthrough its global network of offices in 6- continents and more than 100 countries. InPakistan, banks control its operation through 7- branches situated in five major citiesKarachi, Lahore, Islamabad, Rawalpindi, and Faisalabad.

(d) Promotion:

As bank hold the strong brand image there fore there is no TVCs in Pakistan but bankmostly promote its product through:

Billboards

Brochures

Newspaper

Beside all this, bank introduces different promotion schemes time to time withcollaboration of other companies such as smart installation plan (SIP), specialdiscount in various outlets, and reward point schemes. One of the most powerfulmedium which is used by the bank for promotion is its credit card statement.

Chapter: No: 3

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Environmental Analysis

SWOT Analysis

Industry and Market Analysis

Competitors Analysis

Technological Analysis

Corporate Citizenship

SWOT Analysis:

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Strengths:

Brand Image

Efficient workforce

Globality

Technological edge

Weaknesses:

Limited branch network

High turnover of contractual employees

No TVCs resulting in unawareness regarding products

High charges as compared to others

Opportunities:

Plastic money

Other modern products to attract the potential customers

Threats:

Low interest rate prevailing in the country

Competitors

Extremist as it is the American bank

Govt. polices

Industry and Market Analysis

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Considerably low rates of lending, large liquidity with the banking system, fiercecompetition among the banks and lower remuneration on government securities havepushed the financial institutions towards new avenues such as, consumer financing,mortgage lending, personal loans, SMEs and agriculture financing.

Consolidation and mergers in the financial sector continued, together with theprivatization of state owned enterprises. The main development in the banking sector wasthe remarkable growth in deposits and substantial increase in foreign currency loans.Although the banks were allowed to give credit in foreign currency (for trade relatedactivities), in 2002 banks have extended large volumes of foreign currency loans.Borrowing in dollars has become increasingly attractive in view of the lower rates(between 2 to 5 percent) and future expectations of a stable rupee.

During this year, the monetary policy of SBP was eased, reflected by the lowering of thediscount rate from 10 to 7.5 percent. The yield on benchmark Treasury Bills rates were

also lowered to an all time low, which resultantly dropped the weighted average lendingrates. While banks were anxious to lock in their funds in govt. papers, anticipating furtherinterest rate cuts, the govt. used this opportunity to retire its more inflationary debt fromSBP and borrowed afresh from scheduled banks.

In order to protect the interest of depositors of banks, SBP requires the banks to maintainthe risk based capital at not less than 8 percent of risk weighted assets. The deadline forthe maintenance of Rupees 1 billion paid-up capital of banks expired on 31 December2002. Most banks issued both right and bonus shares, to meet the requirement.

Banks performance can be assessed by the level and security of non-performing assets.The quantum of Non Performing Loans (NPLs) has remained an area of concern for ourbanking industry in the previous years. In the recent past, the establishment of Corporateand Industrial Restructuring Corporation (CIRC) and the promulgation of the FinancialInstitutions Recovery Ordinance 2001 have shown the prospects of recovery for thesebanks. During 2002, SBP issued guidelines for write off of non-performing loans, whichwill show positive signs in the days to come. The NPLs have decreased as compared tothe previous years, due to larger recoveries and transfer of bad loans to CIRC.

Bulk of advances extended by scheduled banks is for working capital financing,therefore, of self-liquidating nature. Local banks made a significant credit expansion with35.8 percent increase in 2002. Largest increase was recorded in Saudi Pak of 125.2percent. A closer look at the financials reveals that the major portion of this increase isbooked in short term.

The overall banking industry flushed with liquidity and in the absence of investmentavenues the banks to invest these funds in treasury bills, PIBs, TFCs etc. Significantlyhigher growths in deposits, compared to advances were one of the prime factors behindthe decline in advances to deposit during the current year. Another main reason for higherliquidity was Rupee interventions by SBP in respect of foreign currency purchases. The

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consequent fall in interest rates of PIBs; have started to lower the profits of these banks,which was off set through large volumes transacted and held during the year. The TFCsbecame the favorite scrip, as these offered handsome returns which prompted the banksto invest heavily in these securities.

Strong earnings and profitability profile of banks reflect the ability to support present andfuture operations. More specifically, this determines the capacity to absorb losses, financeits expansion, pay dividends and build up an adequate level of capital. Although differentindicators are used to serve the purpose, the best and the most widely used indicators arefunded revenue, non-funded revenue, profit-before tax and return on equity. The averagereturn on equity was 23.8 percent for the foreign banks as compared to 14.5 percent lastyear. Major reason among others is attributable to the significant increase in the securitiesrevaluation surplus.

Sound management is one of the most important factors behind financial institutionsperformance. Indicators of quality of management, however, are primarily applicable to

individual institutions and cannot be easily aggregated across the sector. Furthermore,given the qualitative nature of management, it is difficult to judge its soundness just bylooking at financial statements of the banks. Nevertheless, operating costs to operatingincome, provisions to operating income and staff cost to operating cost ratios help ingauging the managing quality of the banking institutions. The staff costs in nationalizedbanks have showed an increase of Rupees 2.5 billion compared to 2001. This suddenupsurge was due to the fact that till 2001 the charge for benevolent fund was on actualpayment basis whereas this year due to adoption of International Accounting Standard-19: Employee Benefits, a charge of Rupees 832 million has been accounted for on thebasis of actuarial valuation.

MAJOR PRODUCT LINES AND MARKET SEGMENTS:

Major products and services offered by the bank are as follows:

Credit Cards:

In credit cards Citibank offers following three types of cards:

Gold Card

Silver Card

Co-Brands Card (Paktel, Caltex, and Shaheen).

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Loans:

Home Loan

Personal Loan

Car Financing:

Used car financing

New car financing

Banking:

Citi Gold

Local Currency Account (Karobar, saving, TD).

Foreign Currency Account (saving, TD).

Others:

E-card

Overdraft

ATM card

ProductProduct

ConsumerBanking

ConsumerBanking

Credit cardsCredit cards LoansLoans Car financingCar financing BankingBanking OthersOthers

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Competitor Analysis

Following review of the nine foreign banks operating in Pakistan clears that Citibank isfacing the hard time from two banks i-e Standard Chartered and ABN Amro.

PROVISIONS:

Provisioning against non-performing loans affect the profitability of banks directly. Asfar as provisions are concerned, Citibank made the highest provision amounting to Rs154 million followed by AGZ bank, ABN Amro, and HSBC RS.40 million, 16 millionand 10 million respectively. SCB and MB have written back the provisions this yearamounting to RS 49 million and Rs. 49 million respectively.

DEPOSITS:

SCG with total deposits of Rs 57,804 million controls 33.43% per cent of the totaldeposits (172,867 million) made by all foreign banks, followed by Citibank and ABNAmro with 40,838 million or 23.62% and 34,696 million or 20% respectively. Out of theremaining banks only the AGZ bank has more than 10% share in deposits i-e11.68%.While AGZ registered the highest growth in deposit of 20.8 percent, the banksexperiencing major decline in deposits were CA bank (47.1%) and Deutsche Bank(32.4%). Citibank also reported the decline in deposits by (1.6%).

ADVANCES:

Six banks out of 9 have registered decline in advances. Citibank also reported decline inadvances by (5.4%). The banks registering the growth in advances are AGZ, SCB, andABN Amro by 28.4%, 10.9%, and 5.4% respectively.

PROFIT BEFORE TAX:

However, when one looks at the profit before tax figures of these banks, SCB has earnedthe highest profit amounting to Rs 2594 million, followed by Citibank and ABN Amroamounting to Rs.2288 million and Rs. 1307 million.

ASSETS:

SCB ranked 1st

according to the banking survey of Pakistan with highest value of assetsamounting to Rs. 82498cmillion, followed by the Citibank and ABN Amro with theassets amounting to Rs. 62148 million and 45,722 million respectively.

RETURN ON ASSETS:

One of the criteria for evaluating the performance of commercial banks is return onaverage earning assets. On the basis of this, Citibank emerged to be the best for the year

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2002. It improved from 3% to 3.7% followed by the MB, SCB, and ABN Amro with3.5%, 3.1%, and 2.9% respectively.

RETURN ON EQUITY:

Return on average equity is important for the head offices of these banks. Citibank hasthe largest equity of Rs 6826 million followed by SCB Rs.6312 million and ABN AmroRs.3140 million.

The ROE of the foreign banks for the two years 2005 and 2006 AGZ emerges the bestbank as far as REO is concerned with 39.1%, followed by the ABN Amro, SCB, andCitibank with 34.5%, 28%, and 19.4% respectively.

MARKET SHARE:

Overall market share of foreign banks as per economic survey of Pakistan is 2.5% but the

banks are claiming different shares. It is difficult for researchers to know the actualmarket share.

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Technology Analysis

The computer technology plays important role almost in every sector of business. Itcompletely change the traditional way of working. Thus, computer technology also playsa vital rule in banking industry and now banks are competing through technology becausethey took edge on others by providing efficient services through the adoption oftechnology; that includes ATMs, Swift transfers, Online banking, Phone banking, onlineprocessing of applications and etc. Technological advancement is life for foreign banksbecause this is the only way of survival for foreign banks due to the limited branchnetworks.

Technology Used:

The database communication system is used in the Citibank for daily operations which isdirectly run, control and supervised by the Citibank Asia Pacific headquarter inSingapore. However there is proper technology department to look after the maintenanceof all the systems and responsible for the smooth working.

Innovation:As all the banks aware well of the magic of technology therefore, in order to retain thecompetitive edge bank always need to be innovative. To be the leader in innovation soonCitibank provides its clients online access to his/her account by introducing the MyCITI account. Through this, client can access their account through their computers orlap tap and check the current situation etc.

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Corporate Citizenship

As well as being involved with business activities in the country, Citibank also believesin supporting and being involved with the community. Performing for communitiesstrongly supports all other aspects of business strategy. It improves the business climatefor bank and customers, and adds to reputation as an employer of choice around theworld

The Lady Duffer in Hospital Project.

Lady Duffer in is a charity hospital, catering to women and children. Citibank Pakistanhas undertaken three-year support program for fund raising which will help the hospitalto put together an endowment for running expenses. The Bank is providing Lady Dufferin Hospital its marketing expertise and access to its customer base for fund raisingcampaigns. The first of the fund raising campaigns was a Flyer sent out to banks Karachicustomer base generating Rs. 200,000 worth of donations. The Bank has committed tomatch the customer donations up to a maximum of Rs. 500,000.

LUMS:

Citibank had earlier pledged a donation of $ 100,000 i.e. over Rs. 40 lacs, to be paid overthree years towards assisting LUMS with the funding of their Students Aid Programme.

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Chapter: No: 4

Personal Observation and Recommendations

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BRIEF ON THE DEPARTMENT WORKED IN/ TASKS

PERFOMED / CONTRIBUTION MADE DURING

INTERNSHIP

I spend whole of my six week internship period in the collection department whichconsist of Front End, Mid Range, and Hard Core. Following is the detail of my workingin these sections:

Front End

Making the low risk calls, the main purpose of which is to reminder the cardcustomers about their dues.

Also I make the updation of records by using the different activity codes.

Verification of cash book of TCs and FCs

Check the cash entry that it is properly made in the cash register. Receiving return cheques from cards operation.

Recording the entry of these cheques in the return cheques register.

Also make entry in the computer.

Inform card member about the return cheques.

Filing cheques in safe files.

In case, if cheque is received back by the client again update the system aboutreversal.

Passed the client instruction to respective department.

Verification of the field visit sheet and also check visits updation in system.

Mid Range

Handling of return cheques.

Handling of return mails (statements).

Incase of change in address update in system.

Visited clients with FCs.

Filling of cash slips in MIS.

Hard Core

Printing of cancellation advice. Dispatching of cancellation advice.

Handling of return cheques.

Maintaining the records of accounts transfer for legal proceeding.

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IDENTIFICATION OF MAIN PROBLEMS:

Citibank is well organized bank and operate efficiently in this competitive environmentso; it is difficult for me to identify only one main problem. But nothing is perfect in thisworld there is always a room for improvement. According to my limited knowledgeimprovement can be made in following areas:

Behavioral problems among permanent and contractual employees.

Job security.

Lack of participation from the employees

As major commission is performance based therefore employee can do everythingto get their commission.

Senior employees ask juniors for their personal work during the office hours.

Break down of system also disturb the banking operation.

As there is performance base incentive system employees are under pressure(stress) to perform best. In case of failure their earning will be affected.

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CONCLUSION:

Citibank is one of the oldest foreign banks operated in Pakistan from last 44 years proveitself as the best and most prestigious bank in the banking industry. Due to low interestrate prevailing in the economy bank shifted its emphasis towards consumer banking.Bank has the effective advance technology which enhances its efficiency of operations.This technology also provides bank competitive edge over its competitors.

Bank serves its customers by providing a wide range of quality products and servicessuch as credit card, loans, car financing, e-card, banking accounts. Hospitality andpersonal banking is the distinct feature which prominent it among its competitors.

Bank considers its employee as the real assets and no hesitate to invest in human capital.Bank has the efficient and competitive work force due to which it retains its position inthe market. Bank cares for its employee not only by providing attractive compensationbut also take the personal care of its employees.

In short, Citibank is the multinational bank with diversified strategies of delighting itscustomers by providing the modern globally accepted products and services which suitstheir financial needs conveniently.

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RECOMMENDATIONS:

Permanent employees should treated contractual employees as a colleague andalso give them professional respect.

Job security should be provided to enhance the employee satisfaction.

In case of bad performance causes should be considered in order compensate theemployee.

Senior employee shouldnt ask juniors for their personal work. Seniormanagement should discourage this practice.

Stress management course should be added in the presentation course ofemployees.

Steps should be taken to ensure the regular and efficient work of systems.

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References:

Banking Survey of Pakistan 2006

http://www.sbp.org.pk

State Bank Statistical Data 2006

http://www.citibank.com

http://www.citigroup.com

city bank pakistan

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