faheem hashmi roll no 42 bs commerce

7/30/2019 Faheem Hashmi Roll No 42 Bs Commerce

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2012

Muhammad Faheem Hashm

contact (0301-7656169)

Department of Commerce

Islamia University Bahawalp

11/21/2012

NATIONAL BANK OF PAKISTAN

INTERNSHIP REPORT


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Department of Commerce 2

Internship Report on,

National Bank of Pakistan

Submitted to:

Mr. FarrukhNaveed

Submitted by:

Mr. Muhammad Faheem

Roll # 42

From BS (Hons) (6th

Semester)

Session 2009-2013

Submitted on: November 21st

2012

Department of Commerce
http://www.nbp.com.pk/index.aspx


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EXECTIVE SUMMARY

I have completed my six weeks internship at National Bank of Pakistan. I tried my best

to gain something practically from this opportunity. This report starts from the

introduction ofword Banking, and then History of National Bank of Pakistan. History

of NBP shows that how it helps its Nation and Country in both war & peace.

Bank Mission statement & Vision shows its focus on overall performance of the bank and

quality of services and products.

After restructuring of the bank the objectives of the bank are changed. Now it has

objectives to overcome past mistakes, realize the real importance of customer so now it

has main objective to achieve customization.

A commercial bank has basic functions that are must be performed by them as a bank i.e.

Accept money as deposits.

Investing deposits to earn profit.

Miscellaneous functions.

Each branch of the bank is divided on the basis of these functions into different sections.

Deposit section opens different accounts of clients and maintains record of deposited

money from the customer & credited it into his account. It also maintains record of

payment to the customer when he presents cheque.

Advances section deals the customers who demand loans against required security.


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Remittance & collection section deals customers who want to transfer or collect their

money from/to other city.Foreign Exchange section deals customers who have foreign

account in the bank & deals exchange of foreign currencies.

Bank also provides facility of L.C to support export and import in the region.

SWOT analysis of National Bank of Pakistan shows that it has small number of strengths

and lot of weaknesses. The bank should give attention to this drawback. But bank has lot

of opportunities to improve its quality of services, and do efficient banking. Bank should

give proper attention to overcome its threats.


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ACKNOWLEDGEMENT

With the name of Allah who is the most beneficial & merciful. I am very thankful to

Allah for his unlimited blessings for me. I have completed this task with the help of my

Allah, my parents & my Teachers especially Mr. Farrukh Naveed (Incharge Internship).

I am very thankful to the staff members of NBP Branch for their cooperation & kindness,

especially I am thankful to Mr. Zia ulhaq (Branch Manager) MrDilshadHussainAbbasi

(Operatin Manager) MrTahir Sahib &Ghazali Sahib (Remittance&Clearience Dept)

Mian Saeed Sahib (pension Dept)) Tariq Mehmood Sahib(Credit Dept). Mr A.D Semab

Sahib (Public Relation, Maintaince)AsifZawar Sahib(Deposit Incharge) Waseem

Sahib(Cashier) Saeed Sb(Head Cashier) Akhtar Sahib(Deposit) Rizwan Sahib(Deposit) I

cannot forget their cooperation & kindness, many regards to them.

I have gain practical knowledge of Banking functions & their processes during my

internship. I have tries to get more & more information & knowledge about banking

from senior & experienced employers of NBP during my internship period.


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Who always prayed for my success and their love and

affection have always been a source of inspiration for me

Who always provide us knowledge and guidance that

become a successful way in our life.

I am very thankful to all my sweet friendswho always

help me and cooperate with me in all difficulties.


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PREFACE

Internship, a practical training, is an integral part of BS (Commerce) study.

For internship I was sent to National Bank of Pakistan Farid Gate Branch

Bahawalpur. It is a Six weeks training period in which I tried my best to get

complete knowledge and training in different sections of the branch. This

report contains the necessary information about the sections and functions of

NBP. This report is prepared in simple and understandable format so that

ordinary person can also take benefit from this report.


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TABLE OF CONTENTS

S.No INTRODUCTION Page No.1 HISTORY OF NBP 10

2 VISION 11

3 MISSION 12

4 CORE VALUES 13

5 GOAL 14

6 CORPORATE INFORMATION 15

7 OBJECTIVE OF NBP 16

8 FUNCTION OF NBP 17

9 F.GATE BRANCH STRUCTURE 18

10 DEPARTMENTS 19

11 DEPOSIT DEPARTMENT 20

12 ACCOUNT OPENING PROCEDURE 22

13 REMITTANCE DEPARTMENT 26

14 Govt.RECEIPT& PAYMENT DEPARTMENT 31

15 ESTABLISHMENT DEPARTMENT 33

16 CASH DEPARTMENT 38

17 DISPATCHES DEPARTMENT 41

18 ADVANCE DEPARTMENT 42

19 MAIN REQUIREMENTS FOR SANCTIONING LOAN 45

20 PRODUCT LINES & IMPORTANT BRANDS 47

21 ACCOUNT DEPARTMENT 52

22 FOREIGN EXCHANGE DEPARTMENT 53

23 INCOME STATEMENT 56

24 BALANCE SHEET 57

25 RATIO ANALYSIS 58

26 PROFITABILITY RATIOS 58

27 LIQUIDITY RATIOS 66

28 DEBT RATIOS 73

29 HORIZONTAL ANALYSIS OF BALANCE SHEET 77

30 HORIZONTAL ANALYSIS OF INCOME STATEMENT 88

31 VERTICAL ANALYSIS OF BALANCE SHEET 98

32 PEST ANALYSIS 108


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33 SWOT ANALYSIS 109

34 SUGGESTION & RECOMMENDATIONS 113

35 CONCLUSION 114

36 REFERENCE 115


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HISTORY OF NBP

National Bank of Pakistan was established as a semi-public commercial bank on

November 8, 1949 The primary objective of the bank was to purchase jute from the

growers in the East Pakistan and to perform the commercial banking functions in the

country. The bank is also authorized to act as an agent of State Bank of Pakistan and

operate treasury where State Bank does not have its own branches.The paid up capital of

National Bank is 4924.106 million rupees. This is 14 percent of the combined paid up

capital of the 18 listed commercial banks amounting to Rs.3.528 billion. Such a large

paid up capital places National Bank at the number one slot in the entire financial

sector.The bank maintained its position as the largest bank deposit holder in Pakistan.

The integration of corporate and investment banking efforts in enabling the bank to offer

wider products range besides making it a major player in debt and equity market. The

Bank has one joint venture in U.K. and one wholly owned subsidiary in Kazakhstan. The

U.K. Operations of the Bank were merged with that of United Bank Limited to form a

Joint Venture Bank namely Pakistan Investment Bank (PIB) incorporated in U.K. NBP

has 45% of share holding while the balance 55% is with UBL.Today the bank has 1428

branches and 84 regional offices in Pakistan and 24 overseas branches with 4

representative offices are working out side the country.The general superintendent and

direction of the affairs and business of the bank shall be entrusted to the Central Board

which may exercise all powers and things as may be exercised or done by the ordinance

expressly directed or required to be done by the bank in general meeting.


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Vision

To be recognized as a leader and a brand synonymous

With trust, highest standards of service quality, international

Best practices and social responsibility.


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Mission

NBP will aspire to the values that make NBP truly

the Nations Bank, by:

Institutionalizing a merit and performance culture

Creating a distinctive brand identity by providing the highest standards of services

Adopting the best international management practices

Maximizing stakeholders value

Discharging our responsibility as a good corporate citizen of Pakistan and in countries

where


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Core Values

Highest standards of Integrity

Institutionalizing team work and performance culture

Excellence in service

Advancement of skills for tomorrows challenges

Awareness of social and community responsibility

Value creation for all stakeholders


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Goal

To enhance profitability and maximization of NBP share

through increasing leverage of existing customers base

and diversified range of products


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Corporate Information

Board of Directors Audit Committee

QamarHussain President/ Chairman

Nazrat Bashir Director

Tariq Kirmani Director

HaniyaShahidNaseem Director

Tariq Kirmani Chairman

Nazrat Bashir Member

HaniyaShahidNaseem Member

Auditors Legal Advisor

AnjumAsimShahidRahmanChartered Accountants

KPMG TaseerHadi& CoChartered Accountants

Mandviwala&Zafar

Advocates & Legal Consultants

Registered & Head Office Registrar & Share Registration Office

NBP Building, I.I. Chundrigar Road,

Karachi, Pakistan

Central Depository Co. of Pakistan (CDC),

CDC House, 99-B, Block-B, S.M.C.H.S.,

Main Shara-e-Faisal, Karachi, Pakistan. 111-111-500

Website

www.nbp.com.pk


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OBJECTIVES OF NBP

The main objective of NBP

Maximize the deposits.

Give attractive return to its shareholders.

Maximize the market share.

Modernize the bank.

Export/import promotion.

Development of human resource.

Improvement in the quality of customer service.

Provide customers reliability and convenience.

The major objective of NBP is to handle the crises because when it came into being there

were jute crises in East Pakistan and it was assigned to handle those crises. At present the

main objective of NBP is to support the economy with the help of its financial policies

rather to maximize profit. It is objective of NBP to capture the deposits of the Govt. as

well as public. The National bank provides different types of loans to the industrial sector

to increase their business activity. It provides the different types of loans to assist the

formers on short-term basis.Other objectives of the bank are to promote agriculture &

business activities in the country, to dominate the financial market by excellence of

services & product, to emerge one of the top ranking bank of Pakistan, to promote trade

related activities in the global scenario, to strengthen relations with the financial market,

to position NBP as a bank of Choice in the customers mind & to get satisfaction of the

customers by meeting their expectations through market based solutions and products.


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FUNCTIONS OF NBP

The following are the services which are used by the Pakistani customers

Transfer of money

The bank accepts deposits from public and payback on demand

Issuing the letter of credit

Acquiring loans

Use it as media of exchange

ATM services in large cities

People receive pension, dividend, rent and interest through the banking services.

Buy and sell the securities through the services. The payment of insurance and

other expenses are also made through the banking system.

Bankers services can also be rendered to work as executor and trustee.

The bank is also collecting Zakat.

Dealing in foreign currency is another service that consumer are enjoying.

The security of the costly goods like Gold, other people enjoying the facility of

lockers.

Evening banking system of billing

Foreign currency account

Lockers facilities


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FARID GATE BRANCH STRUCTURE

Operation Manager

DilshadHussainAbbasi

Public Relation

A.D Semab

Remitance

GhazaliSb

Subincharge

MrRizwan

Clearing Officer

TahirMehmood

Pension

MianSaeed

Cashier

MrWaseem

Head Cashier

MrSaeed

Credit Officer

Tariq MehmoodSb

Deposit Incharge

AsifZawar

Branch Manager

Zia-ul-Rahman


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DEPARTMENTS

Deposit department

Bills and Remittance department

Govt. receipt & payment department

Establishment department

Cash department

Dispatch department

Advance department

Accounts department

Foreign exchange department

All types of cash transactions are deled under this section. Now we see the types of

accounts, which are opened in this section


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ACCOUNT OPENING PROCEDURE

The customer can open an account with the National Bank of Pakistan in the following

categories:-

Individually

Jointly

Sole proprietorship

Partnership

1.Individual AccountIn National Bank of Pakistan a person can open an account in Pakistani-rupee.

First of all they have to fill the account opening form provided by the bank. Then his

introduction is done before the branch manager. An existing account holder of the bank

or an officer of the bank who know him very well can do this introduction. A copy of his

identity card is must attached with his account opening form. If the account holder is

illiterate then he/she provides his/her three recent photographs to the branch.

2.Joint AccountIn open an account an account opening form given that branch, where he wants to

open his account. In that opening form he provides complete information about the

account holders. If any one or both of them are illiterate then they ask to provide the

photographs to the bank. Then the introduction of the person is done. A copy of their

identity card is must attached with his account opening form. He or she also states the

made of operation which is clearly written in their account opening form. In jointly mode

both the persons must sign the cheque. And for any kind of transaction they must dually


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signed the documents while the either any one of them can sign the cheque and withdraw

his money.

3.Sole ProprietorshipThe person who is the owner of a business can open an account in National Bank

of Pakistan after providing the following documents to the bank officer. Current

municipal license, commercial registration certificate and copy of identity card.

In some special cases when the officer of branch is doubtful about the authenticity

of the documents he can get additional documents for proper verification. The branch

manager studies all documents of the business. If he is satisfied then the account of the

party is opened with the bank. Normally these types of accounts maintained under

Current account system.

4.Partnership FirmsThe partnership firms can also open an account with the bank. But for this

purpose they have to provide the certain type of information to the bank. For this purpose

a form is provided to the account holder in which they provide the following information

to the concerned branch, name of the firm, name of parties, identity card of partners,

registration certificate of the firm.

Issuance of Cheque Book

National Bank of Pakistan issue cheque books. Size of cheque book is varies. It

contains 25 leaves to 100 leaves. The assistant writes the following information on the

title page of the cheque book and cheque book issuance register.


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Issuance date

Name of account holder

Account number

Type of account

After authentication by the authorized officer on the cheque book register, the cheque

book is handed over to the account holder.

Depositing of the Amount

Account holder can deposit the amount in cash or draft etc. in his account through

credit voucher. In N.B.P. two types of vouchers are used for this purpose.

Green and blue voucher which is used for Cash Receipts

Pink voucher, which is used for all Non Cash Receipts like drafts,

cheques, payment orders etc.

Encashment of Cheques

Issuance of Token:

After apparent tenure of cheque a token is issued to the account holder.

Verification of Signature

After affixing the two stamps i.e. Pay Cash and Signature Verified, a cheque is sent to the

accountant for the verification of signature from signature specimen card. After

authentication of signature and posting in his account the cheque is sent to the cash

department for the payment.

Payment of Cash

Cashier pays the amount to the token holder after getting back the token from customer.


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Deduction of Zakat

From the PLS Saving account Zakat is deducted at the rate of 2.5% annually on

the outstanding balance of account on the first day of every valuation date i.e. first day of

Ramadan. Minimum balance of the deduction of Zakat is fixed by the Central Zakat

Authority (CZA) before the valuation date.

Exemption from Zakat

The accounts of foreigners (including Muslims of other nations) and Pakistani

non-Muslims are exempted from the compulsory deduction of Zakat. The accounts of

followers of Fiqah-I-Jafria are also exempted from the deduction of Zakat after the

submission of affidavit on a legal stamp paper.

Closing of Account

There are many reasons for closing of an account. It is not a good indication for

the business of the bank. Some of the more common reasons are as follows:

Account holders own request

Death of the account holder

Closing of account due to bad conduct of account holder etc.

At the request of account holder the account is closed or as a result of improper

conduct of the accept holder or because of nil balance of the account. But bank before

closing the account first sends a letter to the account holder that his account will be

closed. So after fulfilling the legal requirements, it is marked of the accounts holders

number that the account has been closed.


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Short Credit (SC)

All the bills for remittance & collection from customer and bank outside the

city/country are recorded under this SC book. If bill is drawn on the book itself then it

passed along with covering schedule & advice directly by courier service to the

concerned branch on which is drawn for realization.

National Bank of Pakistan deals with the following type of remittances:-

Demand Draft (DD)

Mail Transfer (MT)

Telegraphic Transfer (TT)

Pay Order

Now we discuss all these in detail:-

Demand Draft (DD)

Demand draft is a written order given by the one branch of a bank on behalf of

customer to another branch of the same bank to a certain amount to the certain person.

PROCEDURE

1. A draft voucher is filled which contains the following information

Name of the parties involved

Date

Amount to be sent

Account number (if DD is crossed)

Branch name and code number

Name of the city

2. A credit voucher is filled in order to get the excise duty, exchange commission.


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3. The sender deposits the total amount of the two vouchers i.e. the debit and credit

vouchers.

4. Then the cashier sends the cash receipt voucher to the accounts department and

the account records the amount paid in his cash scroll.

5. Accountant gives the DD leaf along with the DD voucher to his assistant who

records the senders name, amount and receivers name. After writing all the

information in the DD register he gives it to the officer along with the DD for

authentication.

6. After authentication the DD is handed over to the sender and bank sends theadvice to the concerned branch. So when the party presents the DD in the

concerned branch its payment could be made.

Mail Transfer (MT)

It is the transfer of money from one branch to another branch of the same bank

through mail service. In mail transfer there is no need of advice as the amount is directly

credited to the receivers account.

PROCEDURE

1. First a voucher is filled in which the sender writes the amount to be sent, name,

account number of the receiving person with the branch name and date.

2. A credit voucher is filled in order to deduct exchange, postage charges and

withholding tax according to the amount of the mail transfer.

3. The sender deposits the total amount of the two vouchers in the cash department.


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4. The cashier gives the vouchers to the accountant after affixing received stamp and

writing the amount in red ink.

5. Then the accountant writes the amount paid in the cash scroll and gives the MT to

his assistant.

6. MT leaf is filled according to the information provided in credit voucher. He also

writes the same information in the MT register. Then he gives the MT leaf and

MT register to the officer for authentication.

7. He takes two signature of the sender on the counterfoil of the MT and counter foil

is handed over to the sender, at the end the MT along with the fan fold is sent to

the concerned branch through mail.

Telegraphic Transfer (TT)

This is the most urgent method of remitting the money from one place to another

place. This method is used when the sender desires to send urgently, in this case the

sender request the manager of the branch to issue TT.

PROCEDURE

For sending the TT the manager applies a test. In the test the manager uses a

coding technique. He writes his own code number, which is allotted, to him as the bank

branch code. After making all the conformation the concerned branch makes the payment

to the receiver. If the sender wants to convey the same message through telephone then

he has to pay the charges of telephone along with the TT charges. First the person deposit

the TT amount along with the charges through the credit voucher then his TT sent to the

relevant branch.


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Disbursement of Pension

National bank is fully authorized to disburse the pension to the Govt. and army retired

personnel.

PROCEDURE

For the distribution of pension the branch maintains the pension register. In order

to get the pension, first the pensioner submits his pension voucher with his pension book

that voucher sent to the cash department for the payment to the pensioner after posting

into his account.


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ESTABLISHMENT DEPARTMENT

In National Bank establishment department works for the maintenance of different type

of the expenses and for the provision of funds for different activities in the branch. The

manager of this department has two types of register.

1. Charges account register

2. Suspense accounts register

Charges Account Register

In the charges account register following accounts are maintained:

Basic Salary

This account deals with the salaries of the employees within that branch when

bank have to pay the salary of any employee the amount of salary is debited to the

charges account.

Allowances

Under this head different allowances are paid to employees. But these are

attached with salary and paid with the salary.

Provident Fund

It is deduction from the employees salaries, which is paid out at his retirement.

Medical Attendance

When some employee suffers from any disease the bank allocate fund for him and

this amount is debited to charges account of the patient.


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Honorarium to Staff

This is that types of funds, which are not part of salary, like bonus profit.

Staff Welfare

To improve the efficiency, the bank provides some special facilities and the fund

is provided from the welfare account. These funds are similar to honorarium fund.

Bonus

When the efficiency of employees increases and bank earn profit more then

expectation then bank gives extra bonus to the employees. The provision of bonus is done

through bonus account by debiting to the charges account.

Suspense Account Register

Some employee needs some advance amount for them. He can withdraw that

amount from suspense account, which is then adjusted, from his salary account. But the

bank provides funds in advance within some limits under this account.

Other Expenses of the Establishment Department

Traveling Expenses

In this account the transportation expenses of employees are maintain for

example, when a manager goes to attend the meeting in any other city or country his

expenses on transportation are paid from this account. Similarly when some one goes for

any official work to other branch or head office the traveling expenses are paid from this

account.


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Auditor Fee

When any team comes for the auditing of some branch then all of their expenses

are beard by active branch. Also bank paid them fix amount as fee. The funds for this

purpose provided from this account.

Rent

For paying the rent of building under the branch is running is paid from rent

account.

Residence

To pay the rent of employees residence, because they are given this facility some

rank. To allocate funds for this purpose rent account is used.

General Insurance

The property in the branch like cash, gold, prize bonds are insured the maximum

limit of insured property that is 5.00 millions. In case of any incident insurance company

will pay the damages.

Taxes

Tax on bank property like building and vehicles this account is debited.

Lighting and Power

To furnish the branch with lights and provides the branch air conditional

environment. The funds paid from this account.


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Telephone

Bank provides the facility to his officer to pay their telephone bills .

Pay of Security Guards

In national bank security are provided by some private companies. So to pay their

salaries the bank used this account. Withdebiting this account and crediting the security

companys account.

Depreciation of Bank Property

Under this account the depreciation of branch building, vehicles

and other machinery are treated. Annually 10% of any property is

considered depreciated.Repairs and Renovation Expenses

The expenses on repairing the building, furniture, power generator and

automobiles are paid from this account.

Postage, Telegrams and Stamps

The charges of dispatch section like expenses of dispatching all the mail and

expenses of telegram are paid through this account. The charges of postage and stamp

collected from customers are credited to current account and at the end of month this

amount is transferred to the postage telegram and stamp account to pay the expenses for

the next month.


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CASH DEPARTMENT

The cash department is that through which all the receipts and payments of bank are

made. Also the banks cash record remains with this department. There are two types of

books used in this department.

Cash Receipts Book

Cash Payment Book

Cash Receipt Book

In this cashier records the entry when some one comes to deposit some amount.

The clients come with pay in slips and the cashier the amount according to the pay in

slip, sort out the notes, put a signature, stamps it and record in his book. After stamping

the slip the cashier returns the pay in slip to the customer. Then customer goes to the

another bank officer, he again record this voucher into his cash scroll and returns one part

of the pay in slip to the customer and keeps the other part for the record.

Cash Payment Book

When some client comes to the branch to withdraw some amount from the

account, after getting the token from deposit section he goes to the cashier, cashier checks

his token and cheque which is referred to him from deposit section. The cashier makes to

him required payment and receives the token from the customer. After recording all the

cheques in his book he returned the cheques in to the deposit section.


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General Ledger

In this ledger the posting is done from the cashbook. With the help of this ledger

any discrepancy in balance of accounts can be easily found out.

General Ledger Abstract

It is like trial balance. In this ledger debit or credit balance of each balance of

each type of account is posted from the cash book. If total debit and credit is equal then it

means the clean cash book and general ledger is maintained correctly.


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DISPATCHES DEPARTMENT

In this department posting of every mail into the dispatches register. For this purpose

bank hire the services of different courier services to send the documents from one place

to another. Before the handing over the mail to the courier service clerk, the dispatch

section assistant notes the document in a register and issues a number, which is used to

maintain the proper records. After handing over to the courier service, now it is the

responsibility of the courier service company. In case of misplacement they have to pay

for the damages. Assistant of this department sort out the receiving mail and then sent to

the different sections.


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Non-Fund Base loans are those which given other than cash e.g. Guarantee, L.C,

Promissory Note etc.Banks run their business with the money of depositor, which is

repayable to them on demand. Banker is very conscious while using these funds. They

think thousands times before lending to the borrower. They must keep in mind the

following factors before advancing the loan.

1) CharacterThe first and most important factor considered in the credit analysis is character.

The credit character is base on the borrowers willingness to pay his obligation. The

willingness can be judged by the banker to see his family background, stability of

employment, personal habits, nature of business, previous record moral reputation,

importance of values to him etc.

2)CapitalThe asset of the consumer may be in form of horse motorcar, furniture etc. The

businessman may own assets in the form of new material, plant, machinery, building etc.

The bank should extend the loan in the proportion to the asset head by them. If the assets

of borrower are liquid, he may be giver large amount of credit. If assets are not liquid,

then less amount of credit may be given against the value of assets. Before landing the

loan the banker should examine the value of his business and its prospectus in future.

The banker should keep in his maid the owners participation in his business. The

banker should not provide loan more than capital.


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References (at least two)

Latest Financial statements.

Financing Agreement on a prescribed form.

Authority letter.

Trust Receipt.

Insurance of securities.

Securities

Before giving a loan to borrower a bank required a valuable security in three ways:

Hypothecation

Pledge

Mortgage

Hypothecation

In This type of security, immovable property is pledged by the bank & bank is required a

real value of that property for sanctioning a loan. Margin for this security is 50%. In

hypothecation bank does not interfere in the business of borrower.

Pledge

In Pledge the bank have 90% shares in business of the borrower. The bank has a

right to sold the production & interfere in business transactions. In this type of security

bank pledge the stock & raw material. The stock must be insured. Stock is controlled &

managed by the bank;borrower cannot use raw material & cannot sell its production

without the presence & permission of the agent of bank.


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Home Renovation *

Financing Amount Upto 15 Million

Financing Period 3 to 15 Years

Debt to Equity 80:20 (Maximum)

Purchase of Land and for Construction thereon*

Financing Amount Upto 35 Million

Financing Period 3 to 20 Years

Debt to Equity 80:20 (Maximum)

Re-Financing (Balance Transfer Facility (BTF)*

If you have a Home Finance Facility outstanding with another bank you can have it

transferred to NBP through a hassle-free process.

NBP Advance Salary Scheme

NBP Advance Salary , the leading personal loan product of the country, is maintaining its

inimitability ever since it was launched. This was only possible due to its swift growth

and remarkable loan disbursement of over 138 billion.

You can avail up to 20 net take home salaries with easy repayment installments. Its hassle

free acquisition with no prior formalities and easy availability in a short turn around

timeare attributed as the most distinguishing features of the product. The product is

offered countrywide


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National Bank Cash Gold Scheme

Rate of mark-up 15.50% p.a.

Facility of Rs. 20,000 against each 10 gms of net contents of gold

No maximum limits of cash

Repayment after one year

Roll over facility

Only gold ornaments acceptable

Weight and quality of gold to be determined by NBPs appointed schroffs

No penalty for early repayment.

National Bank Kisan Dost Scheme

Agriculture Farming Program

Competitive mark-up rate.

Quick & easy processing.

Provision of technical guidance to farmers at their doorstep.

Wide range offinancing schemes for farmers.

Finance facility up to Rs. 100,000/- for landless farmers on personal guarantee.

Financing available against Pass Book, Residential / Commercial property, Gold

ornaments and paper security.
http://www.nbp.com.pk/index.aspxhttp://www.nbp.com.pk/index.aspx


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NBP Karobar Schemevernment provides the balance markup to NBP on

monthly basis.

NBPS loan available for: Utility Store, Mobile General Store, Transport,

PCO/Tele-centers. National Bank of Pakistan providing financing under President

Karobar Scheme. The purpose of this scheme to reduce unemployment from the

country.

Main features are as under.

Age limit is 18-45 years.

Finance limit to Rs. 200,000/-.

Tenure of this loan 1-5 years.

Markup rates are variable. i.e. KIBOR +2% per annum. The customers will

pay 6% as long as go


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ACCOUNT DEPARTMENT

Accounts Section

This is the last section of the branch; whole days work is officially ended in this

section. Incharge of this section send information of whole days business in branch to

Main branch Multan via computer networking.

Computer operator retained a copy of that information in floppy for branch record daily.

He also reconciled all transactions with Head Office transactions received daily.

This section maintains its record in three books that are;

1. Cash Scroll

Daily transactions of cash are recorded in cash scroll at the end of each day. Total

cash received in the date is added up in opening balance (closing balance of previous

day) then cash payments are subtracted from it. End balance is recorded in computer &

mails it directly through networking to Multan IT section of NBP.

2. Transfer Scroll

All transfers inward & outward of the branch are recorded with all details of accounts in

transfer scroll. It is also mailed to Multan (IT) section of NBP daily at the end of day .

3.NBP General Account

General account is an account of each branch of the bank in its Head Office for

transactions among branches. All transactions among branches are through Head Office

by sending F-16 Frankfort that is reconciled at Head Office.


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Foreign Mail Transfer

The debtor can make the payment to the creditor in foreign currency by Foreign

Mail Transfer. The branches of NBP issue the order for the payment to the responding

branch by mail. After receiving the letter responding branch will make the payment to the

creditor.

Foreign Telegraphic Transfer

The debtor make the payment in his branch and his branch manager sends a

telegraphic message to the responding branch to make the payment to the ultimate client.

This is the quickest method to transfer the funds from one place to another place.


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Balance Sheet

ASSETS 2007 2008 2009 2010 201

Cash and balances with treasury banks 94,873,249 106,778,346 116,668,514 115,657,025 131,843,29

Balances with other banks 37,472,832 39,490,729 28,786,397 30,743,368 28,069,89

Lendings to financial institutions 21,464,600 17,139,081 19,683,526 23,051,171 44,360,72

Investments 210,787,868 171,204,890 217,596,037 301,078,498 319,527,25

Advances 340,677,100 413,076,390 475,338,439 478,886,755 527,109,20

Operating fixed assets 25,922,979 24,271,964 25,200,870 27,620,697 28,126,75

Deferred tax assets 3,203,565 3,064,459 6,954,228 7,973,08

Other Assets 30,994,965 44912236 59565027 54026725 66,469,884

762,193,593 820,077,201 945,903,269 1,038,018,467 1,153,480,10

LIABILITIES

Bills payable 7,061,902 10,219,061 10,621,169 8,006,631 9,104,71

Borrowings from financial institutions 10,886,063 40,044,291 44,828,138 19,657,207 26,371,67

Deposits and other accounts 591,907,435 625,349,269 726,513,013 832,134,054 927,415,13

Sub-ordinated loans _ _ _ _ _

Liabilities against assets subject to finance

lease 33,554 25,274 42,629 123,413 92,73

Deferred tax liabilities

net 5,097,831

Other Liabilities 30,869,154 39,988,101 42,455,768 46,798,330 5470143

645,855,939 715,625,996 824,460,717 906,719,635 1,017,685,691

NET ASSETS 116,337,654 104,451,205 121,442,552 131,298,832 135,794,409

REPRESENTED BY

Share capital 8,154,319 8,969,751 10,763,702 13,454,629 16,818,28

Reserves 15,772,124 20,476,863 23,395,059 25,129,425 26,206,50

Unappropriated Profit 45,344,188 53,567,323 62,346,594 67,103,611 69,712,11

69,270,631 83,013,937 96,505,355 105,687,665 112,736,90

Non Controlling Interest_

112,699 110,930 498,076 495,48

69,270,631 83,126,636 96,616,285 106,185,741 113,232,394

Surplus 47,067,023 21,324,569 24,826,267 25,113,091 22,562,01

Contigencies And Commitments 116,337,654 104,451,205 121,442,552 131,298,832 135,794,409


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Ratio Analysis

Ratio analysis enables the analyst to compare items on a single financial statement or to

examine the relationships between items on two financial statements. After calculating

ratios for each year's financial data, the analyst can then examine trends for the company

across years. Since ratios adjust for size, using this analytical tool facilitates

intercompany as well as intercompany comparisons. Ratios are often classified using the

following terms: profitability ratios (also known as operating ratios), liquidity ratios, and

solvency ratios. Profitability ratios are gauges of the company's operating success for a

given period of time. Liquidity ratios are measures of the short-term ability of the

company to pay its debts when they come due and to meet unexpected needs for cash.

Solvency ratios indicate the ability of the company to meet its long-term obligations on a

continuing basis and thus to survive over a long period of time. Financial ratios allow for

comparison:

Between companies

Between industries

Between different time periods for one company

Between a single company and its industry average

a) Profitability Ratios

The continued viability of any bank depends on its ability to earn an appropriate return on

its assets and capital. Good earning performance enables a bank to fund its operations,

remain competitive in the market and increase or decrease in market funds. Profitability

ratios relate profit to sales and investments. These ratios indicate the firms overall


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Effectiveness of operations and give us idea how well firm utilized its resources in

generating profit and shareholder value.

Gross Profit Margin Ratio

Gross profit margin ratio is used to assess the profitability of a Bank's core activities.

Gross profit margin indicates the relationship between gross profit and interest earned. A

high gross profit margin indicates that a Bank can make a reasonable profit.

Formula = Gross Profit / Interest earned (Revenue)

Analysis

The Year 2007 has been an outstanding year with the bank recording the highest profit in

its history i.e.(66.05%).The National Bank of Pakistans wide range of product offering,

large branch network and committed workforce are some of fundamental

Strengths that enabled NBP to achieve exceptional in a very competitive market. The

gross profit is (48.85%) in 2010.The lowest percentage among all years.

0

20

40

60

80

2007 2008 2009 2010 2011

Ratio %

Year 2007 2008 2009 2010 2011

Ratio % 66.5 60.95 49.5 48.85 49.29


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Net Profit Margin Ratio

Net profit margin measures the percentage of revenue remaining after all cost and

expenses, including interest and taxes have been deducted.

Formula = Net Profit after Taxes / Interest earned

Year 2007 2008 2009 2010 2011

Ratio % 37.63 25.42 23.21 19.85 18.50

Analysis

Net profit margin shows Negative trend till 2007to 2011 and was the highest in the same

year as it was (37.63%), the percentage is decreased in 2008 as it was (25.42%). The net

profit margin is on its lowest level at the end of 2011 as it indicates a percentage of

(18.50%). The primary reason of this decline is current global economic conditions and

current political crisis in Pakistan.

0

5

10

15

20

25

30

35

40

2007 2008 2009 2010 2011

Ratio %


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Assets Turnover

This ratio is useful to determine the amount of revenue that is generated from each Rupee

of assets. The Banks with low profit margins tend to have high asset turnover, those with

high profit margins have low asset turnover.

Formula = Revenue/ Total Assets

Year 2007 2008 2009 2010 2011Ratio 0.066 0.074 0.082 0.085 0.082

Analysis

The year 2007 represents a ratio of (0.066%), lowest among all years. The years 2009,

2011 indicates almost same percentage of (0.082%) on account of banks assets turnover.

The National Bank of Pakistans assets turnover in 2010 is (0.085%), peak ratio among

all years

0

0.05

0.1

2007 2008 2009 2010 2011

Ratio


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Return on Investment

This ratio indicates the profit earned by the bank on the resources employed.

Formula = Net income after taxes / Total Assets

Year 2007 2008 2009 2010 2011

Ratio 0.024 0.019 0.019 0.016 0.015

Analysis

There was an increase in the utilization of the resources in 2007. The year 2008 and 2009

have Almost same percentage ie.(0.019) 2008, (0.019) (2009). The ratio was decreased to

(0.016) 2009 and (0.015) 2011.

0

0.005

0.01

0.015

0.02

0.025

2007 2008 2009 2010 2011

Series 1

Column1

Column2


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Effective Tax Rate

This ratio is a measurement of a company's tax rate, which is calculated by comparing its

income tax expense to its pretax income. This amount will often differ from the

company's stated jurisdictional rate due to many accounting factors, including foreign

exchange provisions. This effective tax rate gives a good understanding of the tax rate the

company faces.

Formula = Income Tax expense/ Pretax Income

Analysis

The effective tax rate of National Bank of Pakistan was highest in the year 2007

(0.321%).

2008 tax rate has reduce to (0.032%) and from 2008 to 2011 is increasing trend in tax ie

2008 (0.032%), 2009 (0.184%), 2010 (0.280%), 2011 (0.321%).

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

2007 2008 2009 2010 2011

Ratio %

Year 2007 2008 2009 2010 2011

Ratio % 0.321 0.032 0.184 0.280 0.321


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b) Liquidity Ratios

Theliquidity position of a bank is like a reservoir. It may be adequate, although nearly

depleted, just before the start of the rainy season. Or it may be inadequate, although three

quarters full just before the summer drought.

Liquidity can be defined as:

The banks ability not only to meet possible deposit withdrawals but also to provide for

the legitimate needs of the economy as well

Current Ratio

Current ratio is a measure of the current adequacy of company's current assets to meet its

current obligations. It must be greater than 1. If it is less than 1, liabilities exceed current

assets. For every Rs.1 of liabilities, the company has a ratio amount of current assets

available. The concept behind this ratio is to ascertain whether a company's short-term

assets (cash, cash equivalents, marketable securities, receivables and inventory) are

readily available to pay off its short-term liabilities (notes payable, current portion of

term debt, payables, accrued expenses and taxes). In theory, the higher the current ratio,

the better.


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Cash Ratio

This ratio shows that the cash is enough for payment of current liabilities or not. This

ratio is obtained by dividing cash by current liabilities. For a bank this is the cash held by

the bank as a proportion of deposits in the bank.

Formula = Cash / Current Liabilities

Year 2007 2008 2009 2010 2011

Ratio 15.55 15.80 14.91 13.45 13.69

Analysis

The cash ratio of National Bank of Pakistan shows a mixed trend during five years of

operations. During all years, the ratio is satisfactory as per standards of this ratio. The

year 2008 (15.80), representing highest and 2010 (13.45) & 2011 (13.69), representing

lowest ratio in all five years.

12

12.5

13

13.5

14

14.5

15

15.5

16

2007 2008 2009 2010 2011

Ratio


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Advances to Deposit Ratio

It demonstrate the degree to which bank has already used up its available resources to

accommodate the credit needs of its customers.

Formula = Advances / Total Deposits

Year 2007 2008 2009 2010 2011

Ratio% 57.55 66.08 65.42 57.54 56.83

Analysis

This ratio, a comparison of funds generation and its funds mobilization, indicates the total

loans sanctioned by the bank in relation to total amount of money deposited with the

bank, stands highest in 2008 ( 66.08%) as compared with all year. This shows that the

bank has greater potential to advance additional loans. During all other years the ratio is

quiet satisfactory representing National Bank of Pakistans credit management decisions.

52

54

56

58

60

62

64

66

68

2007 2008 2009 2010 2011

Ratio%


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Due from Banks to Due to Banks

It shows the relationship between what the bank owes from other banks and what is due

to it.

Formula = Due from banks / Due to banks

Year 2007 2008 2009 2010 2011

Ratio% 197.17 42.33 43.90 117.26 168.21

Analysis

The ratio indicates decreasing trend till 2008 that is (42.33%).And increasing trend till

2011,ie 2009(43.90%), 2010 (117.26%), 2011(168.21%). The year 2008 represents the

lowest percentage of 42.33 on account of due from banks to due to banks.

0

50

100

150

200

2007 2008 2009 2010 2011

Ratio%


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c) Debt Ratios

These ratios give users a general idea of the company's overall debt load as well as its

mix of equity and debt. Debt ratios can be used to determine the overall level of financial

risk a company and its shareholders face. In general, the greater the amount of debt held

by a company the greater the financial risk of bankruptcy

The Debt to Equity Ratio

The debt-equity ratio compares a company's total liabilities to its total shareholders'

equity. This is a measurement of how much suppliers, lenders, creditors and obligors

have committed to the company versus what the shareholders have committed.

To a large degree, the debt-equity ratio provides another vantage point on a company's

leverage position, in this case, comparing total liabilities to shareholders' equity, as

opposed to total assets in the debt ratio. Similar to the debt ratio, a lower the percentage

means that a company is using less leverage and has a stronger equity position.

Formula = Total Liabilities/ Total Shareholders equity

Year 2007 2008 2009 2010 2011

Ratio 79.20 79.78 76.59 67.39 60.51

0

10

20

30

40

50

60

70

80

2007 2008 2009 2010 2011

Ratio


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Formula = Earnings before interest & Taxes / Interest expense

Year 2007 2008 2009 2010 2011

Ratio 2.94 2.17 1.93 1.92 1.82

Analysis

The amount of interest a Bank pays in relation to its revenue and earnings is

tremendously important. The National Bank of Pakistans interest coverage ratio is 1.82

times in the year 2011.

Horizontal Analysis

This technique is also known as comparative analysis. It is conducted by setting

consecutive balance sheet, income statement or statement of cash flow side-by-side and

reviewing changes in individual categories on a year-to-year or multiyear basis. The most

important item revealed by comparative financial statement analysis is trend. A

comparison of statements over several years reveals direction, speed and extent of a

trend(s). The horizontal financial statements analysis is done by restating amount of each

item or group of items as a percentage. Such percentages are calculated by selecting a

base year and assign a weight of 100 to the amount of each item in the base year

statement. Thereafter, the amounts of similar items or groups of items in prior or

0

0.5

1

1.5

2

2.5

3

2007 2008 2009 2010 2011

Ratio


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subsequent financial statements are expressed as a percentage of the base year amount.

The resulting figures are called index numbers or trend ratios.

Formula = Current Year amount / Base Year amount * 100

Horizontal analysis, whilst simple to execute and useful to a certain extent, has its

limitations. These limitations include:

Being highly dependent on the selection of base year and the period under

examination in the financial model.

Horizontal analysis provides little insight into why the trend occurred in a

financial model.


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Analysis

The National Bank of Pakistans Cash & balance with treasury banks shows aincreasing

trend till 2009. It was decreased by 1% in 2010 and again increased 17% in 2011. There

was a marginal increase in the year 2011. In 2011 the percentage is increased by 38.9%

as compare to base year.

Analysis

The Balances of National Bank of Pakistan with other banks shows aincreasing trend in

2008 (5.3%) as compare to base year. The percentage decreased in 2009 by (-24.2%),

2010 (-18%), 2011 (-26.1%)

100112.5 122.9 121.9

138.9

0

50

100

150

2007 2008 2009 2010 2011

Cash

100 105.3

76.8 82 74.9

0

20

40

60

80

100

120

2007 Base

Year

2008 2009 2010 2011

Balances with other banks


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Analysis

The lendings to financial institutions by National Bank of Pakistan. The lendings

decreased(21.2 %) in 2008. The year 2011 represents highest percentage of (106%)

among all years on account of lendings to financial institutions. The year 2010 and 2011

also shows an increase of (7.3 %) and (106.6%) as compare to base year.

Analysis

The investments made by National Bank of Pakistan fluctuate during all years. There was

decreased of (19 %) in 2008. The year 2009 indicates aincrease of (3.2%) in investments.

The year 2010 represents an increase of (42.8 %). The investments are increased (51.5 %)

in 2011 as compare to base year.

100 79.8 91.7107.3

206.6

050

100

150200250

2007 Base

Year

2008 2009 2010 2011

Lending's to financial insitutions

10081.2

103.2142.8 151.5

0

50

100

150

200

2007 Base

Year

2008 2009 2010 2011

Investments


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Analysis

The Inappropriate profit are Earnings of National Bank of Pakistan not paid out as

dividends but instead reinvested in the core business or used to pay off debt.

Inappropriate profit is part of shareholder equity. The banks Inappropriate profit is

increasing very sharply during all years as compare to base year, indicated banks strict

dividend payout policy and concern towards reinvestment options.

100 118.1137.4 147.9 153.7

0

50

100

150

200

2007 Base

Year

2008 2009 2010 2011

Unappropriated Profit


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Analysis

The National Bank of Pakistans surplus on revaluation of assets fluctuates and shows a

mixed trend during all years. It was decreased 54.7% in 2008 and 47.3% in 2009. The

year 2010 has 46.7% decreased form base year. The percentage is decreased by 52.1% in

2011 as compare to base year.

Analysis

The National Bank of Pakistans bills payable is showing a mix trend during all years.

The year 2010 is best for bank in terms of reduction in bills payable. The year 2009

represents a higher percentage of banks liability as it increase 50.4% as compare to base

year. The year 2011 also shows an increase in banks bills payable as it increases to

28.9% as compare to base year.

100

45.3 52.753.3 47.9

020

40

60

80

100

120

2007 Base

Year

2008 2009 2010 2011

Surplus on revaluation of assets

100144.7 150.4

113.3 128.9

0

50

100

150

200

2007 Base

Year

2008 2009 2010 2011

Bills Payable


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Analysis

The National Bank of Pakistans Liabilities against assets subject to finance lease were

fluctuate during all years, with the year 2008 (24.7% decrease) and 2009 (27% increase)

and the year 2010 (267.8% increase) & 2011 (176.3 % increase) shows an increasing

trend as compare to base year.

Analysis

The other liabilities of National Bank of Pakistan are increasing during all years and

show an increasing trend. The year 2008 indicates an increase of 29.5 % and 2009

indicates an increase of 37.5%. The other liabilities in the year 2010 represent an increase

of 51.6%. There was a sharp increase in 2011 as it indicates a percentage of 77.2%,

highest among all years

100 75.3 127

367.8276.3

0100200300400

2007 Base

Year

2008 2009 2010 2011

Liabilities against assets subject to finance

lease

100129.5 137.5

151.6177.2

0

50

100

150

200

2007 Base

Year

2008 2009 2010 2011

Other Liabilities


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Horizontal Analysis of Income Statement

Rupees in Millions

2007 2008 2009 2010 2011

Markup/return/interest earned 100 121 154 175 189

Markup/return/interest expensed 100 141 233 267 286

Net markup/interest income 100 111 115 129 140

Provisions against non-performing advances 100 225 236 148 131

provision for/(reversal of) diminution in the value

of investments 100 -923 -1618 -7341 -7797

provision against off balance sheet obligations Nil Nil Nil Nil Nil

bad debts written off directly 100 Nil Nil Nil Nil

100 233 250 211 198

Net markup/interest income after provisions 100 91 93 115 130

NON MARKUP/ INTEREST INCOME

Fee, Commission & brokerage income 100 117 132 142 146

Dividend income 100 88 58 34 49

Income form dealing in foreign currencies 100 386 298 212 307

Gain on sale & redemption of securities-net 100 17 196 107 102

Investments classified as held for trading 100 -5.34 -7.36 -21.05 110

Other income 100 852 375 1473 1726

Total non-markup/ Interest income 100 122 141 130 145

Total income ( Interest + non-Interest) 100 101 108 120 135

NON MARKUP/ INTERSET EXPENSES

Administration expenses 100 129 161 184 217

Other provisions written off 100 447 374 88 330

Other charges 100 3403 1876 694 804

Total non markup/ Interest expenses 100 137 165 184 219

PROFIT BEFORE

TAXATION 100 823 79 87 93

Taxation Current 100 142 111 118 111

Prior years 100 -0.46 -1057 -240 66

Deferred 100 1307 -316 -631 -335

100 84 45 76 93

PROFIT AFTER TAXATION 100 82 95 92 93

Unappropriated Profit brought forward 100 144 164 189 Nil

Transfer from surplus on revaluation of fixed

assets on account of incremental depreciation 100 334 318 302 Nil

Profit available for appropriation 100 121 138 75 35


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Analysis

The net markup/ interest income after provisions fluctuates and shows a mixed trend

during all years. It was decreased 9% (2008), 7% (2009) and 15% increase in 2010. The

income is increased 30% as compare to base year.

100 91 93115

130

0

50

100

150

2007 Base

Year

2008 2009 2010 2011

Net merkup/ Interest income after provisions


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Analysis

The other income of National Bank of Pakistan fluctuates during all years as it shows a

mixed trend. It was increased 752 % in 2008 and 275% in 2009 as compare to base year.

There was a sharp increase in 2011as it was increased to 1626% as compare to base year

and 1373%,in 2010increase as compareto base year.

Analysis

The Total non- markup/ Interest income of National Bank of Pakistan shows an

increasing trend till 2009. It was increased 22% in 2008 and 41% in 2009. The income is

decreased 30 % in 2010,. There was an increase of 45% in 2011, highest among all years.

100

852

375

14731726

05001000

15002000

2007 Base

Year

2008 2009 2010 2011

Other income

100

122141 130

145

0

50

100

150

200

2007 Base

Year

2008 2009 2010 2011

Total non markup/ Interest income


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Analysis

The total income of National Bank of Pakistan shows an increasing trend. It was

increased 1% in 2008 and 8% in 2009. The total income is increased 20% in 2010

and also increase very marginally in 2011(35%).

Analysis

The administration expense of National Bank of Pakistan is increased 29 % in 2008 and

61 % in 2009 as compare to base year. The year 2010 represents an increase of 84%. The

percentage is increased 117 % in 2011, highest among all years.

100 101 108120

135

0

50

100

150

2007 Base

Year

2008 2009 2010 2011

Total income ( Interest + non-Interest)

100129

161184

217

0

50

100

150

200

250

2007 Base

Year

2008 2009 2010 2011

Adminstration expenses


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Analysis

The Total non markup/ Interest expenses of National Bank of Pakistan shows an

increasing trend as compare to base year. It was increased 27%, 65% and 84% in the

years 2008, 2009 and 2010 respectively. The year 2011 represents peak percentage of

119%.

Analysis

The profit before taxation of National Bank of Pakistan fluctuates and shows a mixed

trend during all years. It was increased 723% in 2008 and decrease 21% in 2009. The

year 2008 represents highest percentage on account of profit before taxation as it was

increased by723%. The year 2010 indicates decrease of 13% as compare with base year

but it was decreased in 2011 by 7% as compare to base year.

100

137165

184219

0

50

100

150

200

250

2007 Base

Year

2008 2009 2010 2011

Total non markup/ Interest expenses

100

823

79 87 93

0

200

400

600

800

1000

2007Base

Year

2008 2009 2010 2011

Profit before Taxation


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Vertical Analysis

When using vertical analysis, the analyst calculates each item on a single financial

statement as a percentage of a total. The term vertical analysis applies because each year's

figures are listed vertically on a financial statement. The total used by the analyst on the

income statement is net sales revenue, while on the balance sheet it is total assets. This

approach to financial statement analysis, also known as component percentages, produces

common-size financial statements. Common-size balance sheets and income statements

can be more easily compared, whether across the years for a single company or across

different companies.

Vertical analysis is a technique for identifying relationship between items in the same

financial statement by expressing all amounts as the percentage of the total amount taken

as 100. In a balance sheet, for example, cash and other assets are shown as a percentage

of the total assets and, in an income statement, each expense is shown as a percentage of

the sales revenue.

In Vertical analysis, various components of the financial statements are standardized by

expressing them as a percentage of some bases.

Examples of common-sized statements include:

Components of the balance sheet expressed as a percentage of total assets

Components of the income statement expressed as a percentage of sales or

revenue


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Analysis

The other assets of National Bank of Pakistan fluctuate during all years. The year 2007

has a percentage of 4.07% and 5.47% (2008) and 6.29% (2009). 5.20% in (2010) 5.76%

in (2011)

Analysis

The share capital of National Bank of Pakistan shows increasing trend in all years. It was

1.06% in 2007 and shows an increasing trend of 1.09% in 2008. The percentage of share

capital is further increased in 2009 and shows 1.14%. There was aincrease in 2010

4.07

5.476.29

5.25.76

0

2

4

6

8

2007 2008 2009 2010 2011

Other Assets

1.06 1.09 1.141.3

1.46

0

0.5

1

1.5

2

2007 2008 2009 2010 2011

Share Capital


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Analysis

The surplus on revaluation of assets is fluctuating and shows a mix trend. It shows a

percentage of 6.18% in 2007. The year 2008 represents percentage of 2.6%, and it was

slight increase to 2.62% in 2009and in (2010) 2.41% and then decreased to 1.96% in

2011.

Analysis

The bills payable by National Bank of Pakistan indicates a percentage of 0.92% in 2007.

The percentage is increased in 2008 as it shows aincrease of 1.25%, and there is

decreasing trend in 2009, 2010 and 2011 as it shows percentage of 1.12%, 0.77%, 0.79%

respectively

6.18

2.6 2.62 2.411.96

0

2

4

6

8

2007 2008 2009 2010 2011

Surplus on revaluation of Assets

0.92

1.251.12

0.77 0.79

0

0.5

1

1.5

2007 2008 2009 2010 2011

Bills Payable


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Analysis

The Borrowings of National Bank of Pakistan shows a mixed trend in all years. The

percentage is 1.42% in 2007 with increase in 2008 shows a percentage of 4.88%. The

borrowings are decreased in 2009 shows a percentage of 4.74%. The year 2010

represents lowest percentage of 0.89% of banks borrowing among all years. There was

increase in banks borrowing in the year 2011 as it shows a percentage of 2.29%.

Analysis

The deposits and other accounts of National Bank of Pakistan decreased during 2008 and

2009 as (76.25%) and (76.81%) respectively. The year 2010 represents peak percentage

of 80.16%. The deposits are about (80.04%) in 2011.

1.42

4.88 4.74

0.89

2.29

0

1

2

3

4

5

6

2007 2008 2009 2010 2011

Borrowings

77.65

76.2576.81

80.16 80.4

74

76

78

80

82

2007 2008 2009 2010 2011

Deposits & other accounts


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Analysis

The other liabilities of National Bank of Pakistan fluctuate and show a mix trend in all

years. The percentage of other liabilities in 2007 is (4.05%). The year 2008 represents

percentage (4.88%) of banks other liabilities. The otherliabilities were increased in 2009

and 2010 shows a percentage of (4.49%) and (4.51%) respectively.

4.05

4.884.49 4.51 4.74

0

1

2

3

4

5

6

2007 2008 2009 2010 2011

Other liabilities


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SWOT ANALYSIS

STRENGTHS

The most important point of National bank is that it is agent of State bank of

Pakistan, where the State bank branches are not working National bank control its

function.

It is the oldest Bank established in having years of experience.

Only the NBP is authorized to advance loan against Gold. This function makes

the NBP able to earn profit on the Gold. This function becomes the major source

of income of NBP.

National bank of Pakistan is a government owned bank. This is the reason that the

Pakistani nation has complete trust over the bank that its deposits are fully

secured.

Government has providing facilities through National Bank of Pakistan to get the

knowledge of computer, for this purpose IT Centers have been set up at different

places where short courses of computer are taught.

It provides courteous services to its customers.

There are more than six million clients of National bank. Their customers are

served all over the Pakistan and abroad. Its branch network is one of the largest in

Pakistan.

National bank of Pakistan is enjoying the deposit of different government

organization like P.I.A., Pakistan Railway, WAPDA and Sui gas.


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When Govt. starts some scheme of loan to assist the public normally NBP is

authorized to implement it. For this it is provided with the funds from the Govt.

But the advances this loan to public he earns profit on its which increase his over

all income.

WEAKNESSES

The staff of National Bank of Pakistan is working partially on the bases manual

record system and computer record system. It should be computerized, after all

we have to adopt electronic media for IT revolution in future.

In National Bank of Pakistan the political involvement in bank affairs resulted in

lake of strategic decisions.

There are less customer oriented schemes are started by the Bank, i.e it acts like

selling oriented Bank and no promotions and incentives are offered to the general

public.

The human resource department of NBP is not performing its duties as well,

recruiting, training and development.

There are no bonuses and other cash prizes are given to employees for

motivational purposes against extra time on job.

The rate of the loans converted in to bad debts is high.

In National Bank of Pakistan, lake of adequate modern computerized techniques

that are emerging in Pakistan e.g. concept of online banking.


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SUGGESTIONS & RECOMMENDATIONS

More Foreign branches should be opened instead on relaying on local branches.

NBP has only four foreign branches their number should be increased

All the branches should be online so that customer can get quick services.

NBP should hire people whose education are related to banking fields instead of

hiring graduates by this standard of bank will increase.

In NBP branches work load high it should be divided equally

The equal employment opportunity especially in case of men and women

In NBP an effective recovery system should be adopted in order to low the

increasing bad debt.

NBP should increase its product line in order to compete with foreign banks.

The employees of NBP should have to change behavior so that to attract

customers.

They should be investing in car financing and other similar business.

NBP should provide ATM at extensive level.

To improve the productivity the payee of employees should be increased to

banking industry.

NBP should improve loaning and finance structure

The competent persons to enhance performance and quality of work should run all

these three segments separately.


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References

www.nbp.com

www.google.com

www.Scribd.com
http://www.nbp.com/http://www.nbp.com/http://www.google.com/http://www.google.com/http://www.scribd.com/http://www.scribd.com/http://www.google.com/http://www.nbp.com/

faheem hashmi roll no 42 bs commerce

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