umair shaukat final report
DESCRIPTION
final report internship in bankTRANSCRIPT
THE BANK OF PUNJAB
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BANK OF PUNJAB
(PASSION REBORN)
THE BANK OF PUNJAB
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Internship report submitted to the Department of
Management Sciences, COMSATS Institute of Information
Technology, Wah campus, in fulfillment of the requirement
for the degree of Bachelors in Business Studies.
THE BANK OF PUNJAB
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Internship Report
(2014)
Internship Report
Bachelors in Business Studies program
Name: Umair Shaukat
Reg. #: FA13-BBS-011
Specialization: Finance
Telephone: 0312-5337918
E-mail: [email protected]
Institution: COMSATS Institute of Information Technology
Company Name: BANK OF PUNJAB (TAXILA BRANCH)
Main Telephone #‟s: 051-4545148, 9, 4542150
Postal Address: Chock Sarai Kala, G T Road, Taxila
Supervisor Name: Faheem Nazeer
Telephone Number: 0321-5091872
Start Date for Internship: 02 -July- 2014
End Date for Internship: 30 -August- 2014
Report Date: 11-December-2014
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EVALUATION
Umair Shaukat
Completed Internship at
Bank of Punjab
Internship report submitted for the final Evaluation in Partial Fulfillment of
the requirements for the Degree of
Bachelors of Business Studies
It is certified that, the internship report and the work contained in it
conforms to all the standards set by the institute for the evaluation of any
such work.
1. ____________________________________________
2. ____________________________________________
3. ____________________________________________
4. ____________________________________________
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ACKNOWLEDGEMENTS
All Praises to Almighty Allah (The most merciful the most beneficial), who helped me to
complete my Internship program and the report in spite of various difficulties. I would
also like to acknowledge my debts to those officers of Bank of Punjab who have been
extremely helpful for me.
My gratitude to Mr. Faheem-Bin-Saleem, He has been a permanent source of
encouragement and guidance. His helpful nature did not restrict me to the premises to the
branch but extended to any place and any matter I needed his support on.
Moreover, I would also acknowledge my debt to Mr. Faheem Nazeer, Mr. Nasir, Mr.
Faizan, Mr. Javaid Ahmad, Ms. Samina BiBi, Mr. Habib-ullah chudary, and Mr. Abdul
Rasheed for the helpful hand they extended towards me at any time.
In short, I would always be thankful to all the managers and officers, for their courteous
and compassionate treatment given to me.
Thanks to all…
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PREFACE
For a Business Graduate the understanding and memorizing of some concepts during a
degree is not only the knowledge enough for him but its practical implementation or
observation of practical implementation makes it almost a complete knowledge.
The same kind of responsibility was assigned to me by my institution, COMSATS
institute of information technology as I am student of BBS of this institution and I was
assigned to do internship as pre-requisite of my degree and to enhance my practical skills
in the running business environment of any organization. The objective of this internship
program is to expose my self into the practical atmosphere where i can observe, analyze
and even practice the application of the professional knowledge that I have acquired
during the course of studies. For this I got a chance to do internship in Bank of Punjab
(BOP) which proved to be very beneficial for me.
After the completion of internship program, internship report has been prepared just in
accordance with the practical exposure.
Umair Shaukat
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EXECUTIVE SUMMARY
CHAPTER 1 :-
INTRODUCTION AND BACKGROUND OF BANK OF PUNJAB
1.1 Introduction of Bank of Punjab
1.2 History of banking in Pakistan
1.3 History of Bank of Punjab
1.4 Present status of Bank of Punjab
1.5 Core Philosophies of Bank of Punjab
1.6 Vision, Mission & Objectives
CHAPTER 2 :-
MANAGEMENT SYSTEM OF BANK OF PUNJAB
2.1 Hierarchy of Bank of Punjab
2.2 Introduction of Taxila, Branch
2.3 Personnel in various sections
2.4 Managing the organization
2.5 Internship policy
CHAPTER 3 :-
PRODUCTS AND SERVICES OFFERED
3.1 Products
3.2 Services
CHAPTER 4 :-
CONTENTS
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INTERNSHIP PROGRAMME AT BANK OF PUNJAB, TAXILA
BRANCH
4.1 Customer Services
4.2 Account Opening
CHAPTER 5 :-
FINANCIAL ANALYSIS OF BANK OF PUNJAB
5.1 Ratio Analysis
5.2 Horizontal Analysis
5.3 Vertical Analysis
CHAPTER 6 :-
SWOT ANALYSIS AND PEST
6.1 Strengths and Weaknesses
6.2 Opportunities and Threats
CHAPTER 7 :-
CONCLUSION AND RECOMMENDATIONS
7.1 Conclusion
7.2 Recommendations
BIBLIOGRAPHY
APPENDIX
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EXECUTIVE SUMMARY
Banks do play a central role in the development process. They being the channels,
through which the savings of the society pass from savers to investors, transform surplus
resources into productive investments. Bank of Punjab being the same but one of the
government banks of Pakistan.
My internship report on the bank of the Punjab consists on various dimensions, which I
have learned through my observation, interviewing the bank officers and customers
during the internship period. For more accurate and up to date data, I took help from the
internet as the websites used are mentioned in Bibliography.
This report includes the background information of the bank, its emergence through
different phases, its present status and the vision and mission with core philosophies
adopted by bank of Punjab. This study mainly relates the commercial banking rather than
the Islamic banking of Bank of Punjab. By studying the Annual statement of BOP, I have
done the financial calculations and then by examining the most related reasons going
around for changing trends in calculations, i have done the financial analysis to my best
understandings. Finally, the conclusion and recommendations are given at the end as per
my best knowledge and understandings of Bank of Punjab.
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CHAPTER 1 :-
INTRODUCTION AND BACKGROUND OF BANK OF THE PUNJAB
History of banking:
Pakistan came into being on 14th August, 1947; sufficient banking services were
available in the areas forming Pakistan. Out of the total branches of the nearly3,500 in the
undivided India, as many as about 1,500 branches were existing in theseareas.It was
agreed between the two countries that reserve bank of India shall continue to function in
the Pakistan territory until 30th September 1948 and that Indian notes would continue to
be legal tender at Pakistan until 30th September 1948.Unfortunately, relationship
between the two countries became most strained immediately after independence;
banking was mostly in the lands of Hindus who immediately started transferring their
offices and assets into India. As a result most of the banks in Pakistan were closed down
and even those which were open were not doing any effective business. The number of
banking office in Pakistan came down to about 200 on 30thJune 1948. Branches of some
European banks were also functioning in a limited manner, financing in export of crops,
and their number was limited to about 20.It was only the Habib bank, which transferred
its office from Bombay to Karachi Austral Asia bank was another bank, which was in
existence in the Pakistan territory at the time of independence. Despite of best efforts on
the part of government of Pakistan, no heady way could be made on this behalf and
reserve bank of India was in no mood to help the new country. Imperial bank of India,
agent of the reserve bank of India also started closing down its branches in Pakistan.
Reserve bank also refused to advance money to Pakistan to make essential payments such
as salaries etc., also Pakistan‟s share of Rs.75 billion in cash Balance was with held by
bank, causing hardships to the newly born state. In view of these hopeless state affairs it
was agreed between the two countries that reserve bank would serve as monetary
authority in Pakistan only up to 30th June 1948.
1.1 INTRODUCTION OF BANK OF PUNJAB
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1.2 HISTORY OF BANK OF PUNJAB
The Bank of Punjab was established in 1989 and was given the status of scheduled bank
in 1994. The Bank of Punjab is working as a scheduled commercial bank with a network
of almost 273 branches at all over major locations in the Punjab. The Bank provides all
types of banking services such as Deposits in Local Currency and client foreign currency,
remittances, and advances to business, trade, industry and agriculture. The Bank of
Punjab has indeed entered a new era of science to the nation under experience and
professional hands of its management. The Bank of Punjab plays a vital role in the
national economy through mobilization of hitherto untapped local resources, promoting
savings and providing funds for investments. The bank offers attractive rates of profit on
all deposits, opening of foreign currency accounts and handling of foreign exchange
business for example imports, exports and remittances, financing, trade and industry for
working capital requirements and money market operations. The lending policy of bank
is not only cautious and constructive but also based on principles of prudent lending with
maximum emphasis on security. The Bank provides all types of banking services such as
Deposit in Local Currency, Client Deposit in Foreign Currency, Remittances, Advances
to Business, Trade, Industry and Agriculture A wholly owned subsidiary of BOP First
Punjab Modaraba (FPM) was established in 1992 and is being managed by Punjab
Modaraba Services (Pvt) Ltd , a wholly owed subsidiary of The Bank of Punjab. Lending
under Islamic mode of finance, main vehicles are Morabaha, Ijarah &Musharaka to
encompass requirements of corporate, commercial and individual customers. Liability
generation through COM‟s (Certificate of Musharika) offers attractive returns to
individuals and institutional depositors for fixed tenure instruments. FPM is working to
introduce new and innovative products to enhance its range of services
AWARDS OF BANK OF PUNJAB
Excellence Award by the Central Board of Revenue
The Central Board of Revenue presented "Excellence Award" to the Bank of Punjab in
recognition of the contribution made by the bank towards Government exchequer.
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3rd Kissan Time Awards
In recognition of Bank's contribution in development and growth of agricultural sector,
the Bank honored with "Top Bank for Agriculture Loans" and "Best Bank Crop
Insurance" under 3rd Kissan Time Awards year 2006.
Best Corporate Report Award
Annual Report of the Bank for the year 2005 won 5th position for "The Best Corporate
Report Award" for the financial sector, adjudicated jointly by the Institute of Chartered
Accountants of Pakistan and the Institute of Cost and Management Accountants of
Pakistan.
16th Bolan Excellence Award
The Bank was awarded Best Bank Award under 15th Bolan Excellence Awards
distributed in 2006.
Achievement Award
The Lahore Chamber of Commerce & Industry (LCCI) awarded the Bank "LCCI
Achievement Award" 2006.
The Bank of Punjab
MAJOR CUSTOMERS OF BOP
Some of the major customers of Bank of Punjab are:
Educational Institutes
Agriculturists
Pakistan Telecommunication Private Limited
WAPDA
Pharmaceutical Companies
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WASA
MDA
1.3 PRESENT STATUS OF BANK OF PUNJAB
The current financial position of the Bank truly reflects the sign of improvement in the
financial health of the institution. The Management continued to focus on enhancing the
deposit base of the Bank with growth in the low cost deposits. Besides revamping
existing product lines, new products have been introduced by the bank to achieve the
desired objective of procuring low cost deposits. The Deposit base has pursued a
consistent growth pattern and has increased significantly from Rs. 266.1 Billion to Rs.
306.6 Billion at close of the year 2013. Our focus on CASA deposits has resulted in
procurement of low cost deposit; showing an increase of Rs.40.5 Billion over December
2012. Similarly, Advances have increased to Rs. 183.0 Billion showing an increase of Rs.
7.0 Billion over the preceding year. Our Investments portfolio has also increased
significantly with major concentration in government securities.
Branch Network
The Bank continued the strategy of growth and to extend the outreach to every corner of
the country, 28 new branches were opened during the year 2013 making the overall
branch network 334 with most of the branches opened in traditionally neglected areas to
provide banking services and to capitalize on market potential. The bank strived for
improving its ATMs network by increasing the number to 166, just to provide 24/7
banking services to the customers.
Lahore Central-I Region
Multan Region
Lahore Central-II Region
Faisalabad Region
Lahore North Region
Gujranwala Region
Lahore South Region
Gujrat Region
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Peshawar Region
Bahawalpur Region
Islamabad Region
D.G. Khan Region
Rawalpindi Region
Jhelum Region
Sialkot Region
Sheikhupura Region
Vehari Region
Sahiwal Region
Jhang Region
Sargodha Region
Karachi Region
Credit Ratings
Credit rating by PACRA (Pakistan Credit Rating Agency) rated bank of Punjab is AA –
Long Term and A1 Short Term. Both ratings are investment grade and denote very high
credit quality and very low expectation of credit risk.
Strategic Focus
The Bank continued the strategy of growth and to extend the outreach to every corner of
the country, 28 new branches were opened during the year 2013 making the overall
branch network 334 with most of the branches opened in traditionally neglected areas to
provide banking services and to capitalize on market potential. The bank strived for
improving its ATMs network by increasing the number to 166, just to provide 24/7
banking services to the customers.
During the year 2013, The Bank of Punjab entered into a new era by introducing Islamic
Banking Operations. Now, BOP has 7 fully functional online Islamic Banking Branches,
offering a range of Shariah Compliant products and services to its clients. Besides
THE BANK OF PUNJAB
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offering deposits products, the Bank has also started financing under Murabaha,
Diminishing Musharaka and Ijarah.
Future Outlook
The bank will continue to invest in banking innovations, which include Islamic Banking,
Leasing, Home Loan and other areas of Product development to provide higher levels of
service and value to the clients. With these developments Bank of the Punjab will
continue to embark on its strategy of network enhancement and deposit mobilization.
1.4 CORE PHILOSOPHIES OF BANK OF PUNJAB
To succeed in today‟s volatile, interconnected and highly competitive markets, banks
need rapid access to timely information, flexible financial solutions and their alert
execution. Bank of the Punjab follows the core philosophy of satisfying its customers
through effective branch network, efficient human resource and economical products.
Some of the Fundamental Philosophies followed at the bank are:
Excellence in Service
Quality Performance
Product Innovations
Our Customer
As our first priority.
Profitability
For the prosperity of our stakeholders that allows us to constantly
invest, improve and succeed.
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Corporate Social Responsibility
To Enrich the Lives of community where we operate
Recognition and Reward
For the talented and high performing employees
Excellence
In every thing we do.
Integrity
In all our dealings.
Respect
For our customers and each other.
1.5 VISSION, MISSION AND OBJECTIVES
Vision Statement
“To be customer focused bank with service excellence..”
Mission Statement
“To exceed the expectation of our stakeholders by leveraging our relationship
with the Government of Punjab and delivering a complete range of
professional solutions with a focus on programmed driven products and
services in the agriculture and middle tier markets through a motivated team”
Objectives of Bank of Punjab
“To please their customers by fulfilling the financial needs as best as possible,
they believe in placing the client at the center of business and all of the
products and services.”
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To get maximum share of the market
To price the products optimally
To expand more the network of branches in several other cities of Pakistan
To reinforce a corporate culture that fosters learning, creativity and flexibility.
To invest further in banking innovations which include Islamic banking, SME,
Home Loans and other areas of product development to provide higher levels of services
and value to the clients.
CHAPTER 2 :-
MANAGEMENT SYSTEM OF BANK OF PUNJAB
2.1 HIERARCHY OF BANK OF PUNJAB
The Management Management refers to the universal process of effectively and efficiently getting activities
completed with and through other people. It is a process by which certain basic functions,
which are planning, organizing, leading and controlling, are performed to achieve the
desired objectives of the organization.
Board of Directors
At the top of the human resource hierarchy sits the Board of Directors and Executive
Committee. The most important task of this level of management is strategic planning,
determining the goals and objectives and to formulate the policies.
Top Management
Top management mostly involves strategy formulation, technical planning, determining
how to best get the job done and control. Chief Managers and Branch Managers are
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included in this level. They define and interpret the objectives and vision and then
formulate policies for their completion.
Middle Management, Supervisors and Employees
Departmental heads constitute this level of management at Bank of Punjab. They are
directly responsible for planning and controlling the activities of officers. Finally, the
employee‟s activities are monitored and controlled according to the desired objectives.
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ORGANIZATIONAL HIERARCHY
The Chairmen
BOARD OF DIRECTORS
CHIEF EXECUTIVE OFFICER
Executive Committee
Area Manager
(North)
Area Manager
(South)
EXECUTIVE INCHARGES
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2.2 BOARD OF DIRECTORS
Name Designation
Mr. Abdul Ghafoor Mirza Chairman
Mr. Naeemuddin Khan President & CEO
Mr. Javaid Aslam Director
Mr. Muhammad Jehanzeb Khan Secretary Finance/
Director
Mr. Tariq Mahmood Pasha Director
Khawaja Farooq Saeed Director
Syed Maratib Ali Director
Mr. Saeed Anwar Director
Dr. Umar Saif Director
Mr. Omar Saeed Director
Mr. Raza Saeed Secretary to the Board
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2.3 THE CORE GROUP
Executive Committee
Mr. Naeem Ud Din Khan President & CEO
Mr. Khalid Siddiq Tirmizey Deputy CEO
Mr. Sajjad Hussain Group Head, Special Projects
Shahid Waqar Mahmood Group Head Retail Banking
Mr. Moghis Rafiuddin Bokhari Group Head, HR
Mr. Ijaz Ur Rehman Qureshi Group Head Audit and Risk review
Mr. Mahboob ul Hassan Group Head Special Asset
Mr. Irfanuddin GroupHeadoperations
Mr. Tariq Maqbool Chief Risk Officer
Corporate Information
Mr. Hamid Ashraf Company Secretary
Mr. Nadeem Amir Chief Financial Officer
Audit General of Pakistan Auditors
BOP tower, Head Office
Main Boulevard Gulberg, Lahore.
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2.4 INTRODUCTION OF BANK OF PUNJAB TEXILA BRANCH.
Now days Mr Faheem-bin-Saleem is operating the branch as a branch Manager.
The Branch code is “0164”.
There are 09 employees in Bank of Punjab Taxila Branch,
Bank of Punjab Taxila branch is providing up to-date facilities. If we analyze its
performance than we will find following major achievement.
Highest Car Financing and home financing in the area of Taxila.
These two achievements have been attained just in a short interval.
In Taxila branch bank of Punjab there exists bureaucracy I that means there exists
Division of labor (jobs are broken down into routine well define tasks)
Authority hierarchy (position organized with a clear chain of command)
Formal Selection
Formal rules and regulations
Career orientation (Manager are career professional not owner of units they manage)
The organization structure and have following characteristics:
High Specializations.
Rigid departmentalization
Clear chain of command
Narrow span of control
Centralization
High Formalization
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2.5 PERSONNEL IN VARIOUS SECTIONS
Names, Designations of Officers at
BOP Taxila Branch
Name Designation
1 Mr. Abdul Rasheed AVP
2 Mr. Faheem-Bin-Saleem Branch Manager
3 Mr. Faheem Nazeer Manager Operations
4 Mr.Habib-Ullah-Ch Manager Operations
5 Mr. Nasir OG-II
6 Mr. Faizan Hussain OG-II
7 Ms. Samina BiBi Incharge Accounts
8 Mr. Javaid Casher
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2.6 MANAGING THE ORGANIZATION
Management Style Management must have to adopt some administrative style to get all the activities to be
done effectively and efficiently. As far as the management styles at BOP Taxila Branch,
are concerned, there is some centralization and decentralization to some extent.
Administrative style of Branch Manager Mr. Faheem bin Saleem is authoritative. His
authoritative style was the requirement of administration. For the implementation of
strategies and getting all the activities to be done properly with an organized
environment, unity of command was the requirement of the time. In his absence, I
observed the environment of uncertainty and deregulation in the bank.
But the scenario was different in case of departmental heads. In Cash department, powers
were delegated at low levels. Employees were allowed to organized and take necessary
actions to accomplish their work properly. However there used to be a proper monitoring
of work of each employee.
Impact of Management Style on Employees The management styles have great impact on the employee motivation and morale and
productivity.
MMoottiivvaattiioonn:: The term motive implies action to satisfy a need. Motivation can be defined
as a willingness to expend energy to achieve a goal or a reward. The management styles
adopted by the bank affect greatly, and employees are motivated in order to enhance their
performance and achieve the derived goals.
MMoorraallee aanndd PPrroodduuccttiivviittyy:: The employees of the bank possess high morale, and thus
exhibit high productivity. The employees are happy and productive workers. Job attitudes
and morale are quite positive for two reasons. Firstly employees gain social Satisfaction
from interactions at the work place. Working conditions and supervision are good;
secondly high morale results from high motivation to produce
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2.7 INTERNSHIP POLICY
Bank of Punjab offers internship positions to eligible students from well known
educational institutions. Branches/Offices of Bank may offer internship positions to
presentable and responsible looking candidates who fulfill the eligibility criteria.
Major objectives of offering these positions are:
To provide practical training to students.
To evaluate fresh interns as a potential source of future hiring.
General Provisions
(I) Duration of Internship
Up to maximum of two month
(II) Eligibility
Candidates for internships should be graduates or should be studying
For a graduate degree.
(III) Monthly Stipend
A stipend of Rs. 1,000/- per month shall be paid to interns upon
Completion of the internship period. Non-graduate student if accepted
for internship will not be eligible for any stipend.
(IV) Issuing Internship certificate
Internship Certificate is an official document and may only is issued under
the signatures of Branch Head or authorized officers. Copies of Internship
Evaluation Form and Internship Certificate should be retained in Branch/Unit
files for future reference.
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CHAPTER 3 :-
PRODUCTS AND SERVICES OFFERED
3.1 PRODUCTS
Bank of Punjab offers the following products to its customers.
1. Deposits
Current Account
P/L and Saving Account
Individual Account
Joint Account
Partnership Account
Limited Company Account
Clubs, Society, Association, or Trust Account
SNTD
TDR
Foreign Currency Deposit
Basic Banking Account
2. Remittances
Remittance is a major function of the bank. It is the transfer of money from one place to
another place. The need for remittance is commonly felt in commercial life particularly
and in everyday life generally. By proving this service to the customers the Bank of
Punjab earns a lot of income in the form of service charges
Demand Draft (DD)
Mail Transfer (MT)
Telegraphic Transfer (TT)
Pay Order
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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)
2. A credit voucher is filled in order to get the excise duty and exchange commission.
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 sender‟s name, amount and receiver‟s 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 the advice to
the concerned branch. So when the party presents the DD in the concerned branch its
payment could be made.
PARTIES INVOLVED
The following parties are involved in demand draft;
1) Purchaser or Sender The purchaser is the person who sends the money to a particular
person payable ate certain branch.
2) Issuing or Drawing Branch The branch from where the demand draft is issued to
another branch of the same bank.
3) Drawer Branch in which the draft has drawn and called upon to pay the amount.
4) Payee the person who is entitled to receive the amount after presenting the demand
drafting the drawer branch.
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MAIL TRANSFER
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 indirectly credited
to the receiver‟s account.
PROCEDURE
1) First a voucher is filled in whish 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 according to the
amount of the mail transfer.
3) The sender deposits the total amount in the cash department.
4) The cash officer gives the vouchers to the officer after affixing received cash stamp
and writing the amount in red ink.
5) Then the officer 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.
TELEGRAPHIC TRANSFER
This is the most urgent method of remitting the money from one place toanother place.
This method is used when the sender desires to send urgently, in thiscase the sender
request the manager of the branch to issue TT.
PROCEDURE
For sending the TT the manager and officer apply a test. In the test themanager and
officer uses a coding technique. They write their own code numbers,which is allotted, to
them as the bank branch code. After making all the conformationthe concerned branch
makes the payment to the receiver. If the sender wants toconvey the same message
through telephone then he has to pay the charges of telephone along with the TT charges.
First the person deposits the TT amount along with the charges through the credit
voucher then his TT sent to the relevant branch.
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PAY ORDER
A pay order is a written order issued by the bank on its own branch, drawn upon and
payable by itself to pay a specified sum of money to the person. The purpose of a pay
order is to transfer the fund from one place to another. It is usually not issued in favor of
the parties of other cities. Usually the pay order is issued for the local transfer of money
from one person to another or from the person to any other department. It is used for
different purposes. The purpose may be the repairs of the branch or renovation of the
branch.
PROCEDURE
The procedure of a pay order varies with the nature of the purpose. If the work is of huge
amount then first the manager writes a letter to the Zonal Chief in order
toget sanction of the work. Then the advertisement of the work is given in thenewspaper
in order to invite the contractors. But if the work is small then the branch
managerhasdiscretionary power to select the party whose rate is lowest. After finishing
the work the contractor submits the bill of work on his stamp pad. Then the bank issues a
pay order, against the pay order the contactor gets the amount from the issuing branch
3. Lockers
4. ATM cards
Master
Golden
5. Financing Services
o Consumer Finance
o Demand Finance
o Quick Cash Loan
o General Purpose Loan
o Agriculture Loan
I. Consumer Finance
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In consumer finance Gov. Employs, business man, Gov. Semi employ can take house
hold product
2. Demand Finance
A Customer having 17 scales can avail this loan up to 25 basic salaries
3. Quick Cash Loan
Quick cash loan can avail up to 15 salaries
4. General Purpose Loan
General Purpose Loan can also avail from BOP.
5. Agriculture Loans
Loans are provided to agriculture sector.
There are many agriculture promotion schemes provided by BOP.
Kisan dost running finance facility
Kisan dost leasing finance facility
Kisan dost Cold storage finance facility
Kisan dost Green house financing scheme
Green Tractor Lease Finance Scheme
Agri Finance Branches
Agricultural Finance Scheme
Kisan Dost Tractor Scheme
Second Hand Tractor Lease Finance Scheme
Kisan Dost Aabiari Scheme
Kissan Dost Mechanization Support Scheme
Kissan Dost Farm Transport Scheme
Kissan Dost Eslah-E-Arazi Scheme
Kissan Dost Live Stock Development Scheme
Livestock Breed Improvement Trough VVW
Kissan Dost Commercial Agro Services
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Kissan Dost Agri Mall Finance Scheme
Corporate Farming Finance Scheme
Commercial Lease Finance Tractor Scheme
Demand Finance-Sheds Construction and Civil Works
3.2 SERVICES 1. ATM facility.
2. On-line banking.
3. E-banking.
4. Debit Card.
5. Consumer Financing.
6. Agricultural Financing.
7. Corporate Financing.
8. Commission free remittance.
9. Zarco exchange remittance.
10. Collection of utility bills.
11. Lockers Facility.
12. Download scheduled of charge.
13. Download account opening form.
14. UAE exchange payments.
1. Online Banking
Today the competition is based on the innovation. The one who brings a product or
service prior to its competitors gets an edge. The role of technology is very important as
far as the innovation is concerned. The Bank of Punjab proudly offers the online banking
facility to its customers. It is our commitment to provide the latest technology based
services to our customers. Online banking is one of the many services that we are going
to introduce.
2. E-banking
Not only online banking, but also through E-banking you can avail a wide range of
services by just staying at your office or home. BOP is planning to introduce Mobile
banking facilities to its customers in near future.
3. Debit card
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4. In our endeavor to provide you versatile banking options to fulfill your financial
needs, , a Debit Card which gives you unlimited access to your current / savings account
with a simple swipe at millions of retail shops and ATMs worldwide. The BOP ATM
debit comes with a host of conveniences and benefits combined with the wide reach of
Visa Network.
5. E-Banking
BOP is also going to introduce e-banking to facilitate its valued customers.
6. Consumer Financing
In consumer finance Gov. employ, business man, Gov. semi employ can take house hold
product
7. Agricultural Financing.
Loans are provided to agriculture sector.
There are many agriculture promotion schemes provided by BOP.
Kisan dost running finance facility
Kisan dost leasing finance facility
Kisan dost Cold storage finance facility
Kisan dost Green house financing scheme
Green Tractor Lease Finance Scheme
Agri Finance Branches
Agricultural Finance Scheme
Kisan Dost Tractor Scheme
Second Hand Tractor Lease Finance Scheme
Kisan Dost Aabiari Scheme
Kissan Dost Mechanization Support Scheme
Kissan Dost Farm Transport Scheme
Kissan Dost Eslah-E-Arazi Scheme
Kissan Dost Live Stock Development Scheme
Livestock Breed Improvement Trough VVW
Kissan Dost Commercial Agro Services
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Kissan Dost Agri Mall Finance Scheme
Corporate Farming Finance Scheme
Commercial Lease Finance Tractor Scheme
Demand Finance-Sheds Construction and Civil Works
8. Collection of utility bills
Customers can pay their utility bills e.g. electricity, water gas, telephone, mobile, at any
of our 272 branches across Pakistan. For your convenience bills are collected on all
working days from 9:00 am to 5:00 pm (Monday to Friday) Non stop Banking and from
9:00 am to 1:30 pm on Saturday. You can also pay your bills by availing our drop box
facility. Just drop your Cheque along with bill at your branch and collect the receipt in
the evening, avoid the hustle of standing in queues and save your precious time.
Electricity
Gas
Water
Property
Telephone
9. Lockers Facility
BOP Provide Lockers Facility to customers
Discover peace of mind, enjoy personalized service and operate your locker in friendly
and pleasant environment at The Bank of Punjab.
Types
Small
Medium
Large
Extra large
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These are the other services provided by the BOP.
ATM Facility
On-Line Banking
Demand Drafts
Letter of Credit
Pay Order
Mail Transfer
Debit Card
ATM Facility
Through the ATM‟s Customers have access to the various services such as withdrawal,
balance enquiry and mini statement? Complete security is ensured because access to the
account is only possible by entering a four digit personal identification number (PIN)
known only to the account holder. Cash withdrawal limits up to Rs.20, 000 per day.
Annual charges of ATM is Rs.250/- per card.
On-Line Banking
BOP is currently offering window-based online banking to its customers, which gives
access to information on their accounts and the liability to act on the latest information
received over the net.
Demand Drafts
BOP provides safe, speedy and reliable way to transfer money at vary reasonable rates.
Any person whether an account holder of the bank or not, can purchase a Demand Draft
from a bank branch
Letter of Credit
BOP is offering its business customers the widest range of option in the area of money
transfer. BOP‟s letter of credit service is with competitive rates, security, and ease of
transaction, BOP Letter of credit is the best way to do the business transactions.
Pay Order
BOP provides transfer of money using different facilities. Its pay orders are asecure and
easy way to move the money from one place to another. The charges for this service are
extremely competitive.
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Mail Transfer
Moves money safely and quickly from BOP Mail Transfer service. The rates for this
service is quiet impressive as compare to the market.
DEBIT CARD
BOP Apna Cash Card is an ATM plus Debit Card.1. The front of the card will have the
following matter on it:
Card Holder‟s Name
International Bin Number (6 Digits - XXXXXX)
Magnetic Strip
Signature Panel
Conditions of Usage
M-Net and M-Net logo
LIMITATIONS
Any non-personal account i.e. Companies, Organizations, Trust Account, Government
account and Collection account etc.
Dormant, inoperative, blocked or restricted accounts.
Accounts with “NIL” balance.
Term Deposit Accounts.
NIDF Accounts. (Non Interest Demand Finance Accounts)
Accounts requiring thumb / photo for operation (illiterate accounts) · ATM/Debit cards
can only be issued on local currency accounts.
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CHAPTER 4 :-
INTERNSHIP PROGRAMME AT BANK OF PUNJAB,
TAXILA BRANCH
My Internship in Bank of Punjab, Taxila branch from July 02, 2014 to August 30, 2014
was a great source of learning‟s for me. After having a short discussion, operations
manager sent me to the Credit Department, there i worked for two weeks. Although I
didn‟t work in all sections of credit department but as having short period of internship I
requested to send me to another department.so the next department where I work is
Remittance Department. Thereafter i was transferred to customer services and in my last
week of internship I was transferred to Account opening department. During this whole
session i learnt how to deal with customers effectively and the most important documents
needed and used by different departments for different product/service offerings.
4.1 CREDIT ADMINISTRATION
On the very first day of internship, I was advised by Mr. Faheem Nazeer (The Operations
Manager) that I should start my session from the Credits Department I remained there for
approximately two weeks.
Credit department is one of those core departments that are helping BOP Taxila branch to
earn huge revenues. I was very much pleased to hear this as I had a great desire to work
and learn something regarding Credits. In this department I have done work in personal
loans and Home finance.
So, I was sent to Mr. Faheem Bin Nazeer, Manager, who is a very nice and
helpful hand for me. I was then advised by Mr. Faheem to work with Mr. Faizan Husain.
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CUSTOMER FINANCE
The Bank of Punjab Taxila provides the customer finance facility to Gov. employ,
business man, Gov. semi employ can take house hold product This facility is provided
only by Bank of Punjab Taxila branch and generate too much revenue.
Following steps must be taken while giving a loan facility
Application form filled by the client, requesting for loan.
Attestation of copy of ID card.
Consumer credit information report taken form state bank of Pakistan.
Credit line proposal which contain detailed information about the individual.
Approval of case from Area office for the loan.
Undertaking of institute and personal guarantee that the money is pay back by the
individual.
Insurance of individual.
Department Letter for transfer of salary to Bank of Punjab Taxila .
Letter of installment tells in how many installments the loan will be recovered.
Amortization schedule provide information about number of installments in
which the principal amount and interest payment is recovered.
Cheque containing the signature of individual.
HOME FINANCE
After one and a half week .I was moved to Home finance department. Mr. Faheem is
incharge of Hone finance as well as Customer relationship Manager. Mr. Faheem Nazeer
incharge of agri finance but supporting in Home finance also. From these both officers I
learnt much about this department.
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In Home finance what I have learnt is as follow
Home Loan is specially designed for those who want to
To purchase a new house
To renovate the existing house
To construct a house
Procedure for Home Finance.
Home loan for the above mentioned three activities following steps must be taken
Find out the maximum limit of loan available
Gross Monthly Income (GMI) more than 20,000 Rs.
Gross Monthly Income(attested by HR if salaried) *40
Amount of Installments doesn‟t exceed 40% of GMI.
Maximum Tenor =20 years
Minimum Tenor =03 years
Penalty for late installment Rs 500 each.
Application form filled by the client, requesting for loan.
Legal opinion of high court Advocate for mortgage of property.
Valuation of property taken as a mortgage.
Income documents.
Consumer credit information report taken form state bank of Pakistan.
Credit line proposal which contain detailed information about the individual.
Approval of case from Area office if the loan is greater than 6millions
approval from Country Manager.
Insurance of property.
For the construction of home the legal document of the property is required for the
purpose of mortgage and the Bill of quantity is also required, which is divided into cost
of floor, walls, roofs, electricity.
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In case of loan required to purchase a new house the sale deed is needed by the bank and
the ownership of newly purchased home must be in the name of bank until the whole loan
payment is made.
Documentation of Home Finance.
Copy of CNIC.
Recent photographs.
Copies of recent bank statements.
Copies of last 6months credit card bills.
Application form completely filled in & signed.
Copy of income tax return.
Property insurance covering status.
Bill of quantity for construction of home.
Estimation of renovation provided.
CIB report.
Copies of the documents of the property being mortgaged.
Copies of the agreement of sale.
National tax number.
Lawyer‟s opinion.
Valuation report of property.
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4.2 CUSTOMER SERVICES
Here my job was to help the customers to save there time and solve their problem if any.
Here my major responsibility was to solve query of the customers if any, to help new
customers to fill slips.
Here I have learnt about customer
Relationship management
Slips
Cash Deposit
Cheque deposit
Online Transfer
Credit Card
Fax
Phone Exchange
4.3 ACCOUNT OPENING
The last week of my internship i was moved to account opening. This department was
headed by the Miss Samina BiBi. I really enjoyed my stay at this department as I got to
interact with the customers directly for the first time. During my stay at this department I
got to fill the forms of individuals who wanted to get their accounts opened at BOP, fill
the cheque and deposit slips of customers who were not literate enough or needed
instructions,
OPENING A NEW ACCOUNT
Types of accounts
The types of accounts, which can be opened by a customer, are as under:
Individual (Single or in joint Names)
Sole Proprietor Ship
Partner Ship
Corporate
Trust / Charitable Organization / Association Accounts
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The account can be of one of the following nature:
Current account
PLS Saving account
Basic Banking Account
Munafa hi munafa Account
Tijarat accounts
Gharayloo account
Senior Citizen Schemes
Current Accounts Following are the main features of current account:
Non interest bearing checking account.
Minimum account opening requirement of Rs. 1000 only
Free debit card can be used to withdraw cash and make purchases at
thousands of outlets across Pakistan which provides access to funds 24
hours a day.
No restriction on number of withdrawals and on number of deposit
If the account holder fails to maintain a minimum BOP of Rs. 10000 in a
month then services charges of Rs. 50 per month are deducted.
For online funds transfer service charges of Rs. 50 plus withholding tax
are debited in the current account holder‟s account.
PLS Saving Accounts The features of saving account are as follows:
Profit & Loss Sharing Saving Bank Account.
Minimum account opening requirement of Rs. 500 only.
No restriction on number of withdrawals and number of deposits.
PLS saving account is subject to zakat deduction. On 1st of Ramadan zakat
is deducted from the account.
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Free debit card can be used to withdraw cash and make purchases at
thousands of outlets across Pakistan which provides access to funds 24
hours a day.
Services charges on online funds transfer are Rs. 100 plus withholding tax.
MUNAFA HI MUNAFA This a/c is open with minimum amount of 01 lake. On this a/c profit is monthly
basis and profit will be credits in you‟re a/c automatically
Basic Banking Account It has the following characteristics:
Initial deposit for account opening is Rs. 1,000 with no minimum BOP
requirement.
Non interest bearing checking account.
Maximum 2 deposits & 2 withdrawals through cheque are allowed.
Free debit card can be used to withdraw cash and make purchases at
thousands of outlets across Pakistan which provides access to funds 24
hours a day.
No restriction on ATM withdrawal.
ZIADA MUNAFA SAVING ACCOUNT This a/c is open with minimum amount of 01 lake. On this a/c profit is monthly basis and
profit will be credits in you‟re a/c automatically
Ziada Munafa Saving Account is high yield account. This is for those clients who want a
good return on their investment. The characteristics of Ziada Munafa Saving Account
are:
Any Pakistani resident over the age of 18 can open this account. This
account is for individual/joint customers only. Other customers like
companies, corporate etc are not eligible for opening of this account.
Minimum BOP requirement for opening this account is Rs. 10,000/- with
a maximum of Rs.1, 000,000/-
There is no restriction on deposit transactions.
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ACCOUNT OPENING REQUIRMENT
Earlier in this chapter i have mentioned the types of account and a brief description of
different types of account. As there are different parties who can open an account, so the
account opening requirements varies from one type of account to another. However some
generalization can be made in account opening.
FOR BUSINESS CONCERNS
In case of account opened by a business concern there are some documents that are
needed to be attached with the account opening form. The details of these documents are
given below.
Limited Company:
Copy of certificate of incorporation.
Memorandum of Association.
List of Director‟s.
Certificate of Commencement of Business.
Copies of NIC of Director‟s.
Partnership:
Partnership deed certified copy
NIC photocopies of all partners.
Partnership mandate for account signed by all the partners.
A letter duly signed by all the partners containing the operating
instructions of the account also has to be taken.
Sole Proprietorship / Individual:
NIC/ Passport photocopy
Letter from Proprietor confirming “sole proprietorship”
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FINANCIAL ANALYSIS
To analyze the financial position of BOP, different tools are use, which includes Ratio
Analysis, Common size Analysis of the last five years. Importance of Financial Analysis
IMPORTANCE OF FINANCIAL ANALYSIS
Financial analysis involves the use of various financial statements. These statements do
several things. First the balance sheet and the second is income statement. The balance
sheet summarizes the assets, liabilities, and owner‟s equity of a business at a point in
time, while the income statement summarizes revenues and expenses of a firm over a
particular period of time. A conceptual framework for financial analysis provides the
analyst with an interlocking means for structuring the analysis.
CHAPTER 5 :-
5.1 RATIO ANALYSIS
(5.1.1) PROFITABILITY RATIOS
(1) Net profit margin = (Net profit / Interest earned) *100
2013 2012 2011 2010 2009
7.90% 7.07% 14.20% -222.0% -645.0%
INTERPRETATION:
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This ratio provides a primary appraisal of net profits related to investment. As this years
ratio much stronger than previous years so whether the markup went high or the
customers increased, so first reason is true. Hence earnings increased as mark up has
increased.
(2) Return on Deposits = (Net profit/Total deposits) *100
INTERPRETATION:
Bank of Punjab has received more deposits as well the increased markup, hence profit
has increased more rapidly as compared to deposits.
(3) Return on Advances = (Net profit/Total advances) *100
INTERPRETATION:
This ratio shows how much profit the bank is earning from the total advances given for
earnings. Profit has been earned upon advances but as compared to previous years there
is a slight increase in profits with respect to advances but in 2013 it is a decrease.
2013 2012 2011 2010 2009
0.62% 0.65% 0.12% -1.94% -5.28%
2013 2012 2011 2010 2009
1.12% 1.16% 0.023% -3.0% -8.32%
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(4) Return on Investment = (Net profit after tax/ Investment)
INTERPRETATION:
The ROI shows how profitable a company's assets are in generating revenue.
I.e. how many rupees of earnings they derive from each rupee of assets. This ratio for
Bank of Punjab is high of this year because of higher profits earned this year by the bank.
Return on Equity = (Net profit after taxes/ Shareholders equity) *100
INTERPRETATION:
ROE measures the rate of return on the owner‟s equity of the common stock. It measures
a firm's efficiency at generating profits from every rupee of net assets, and shows how
well a company uses investment rupees to generate earnings growth. As we can see that
this year the equity of the shareholders has been utilized efficiently as compared to
previous years.
2013 2012 2011 2010 2009
0.0142 0.0134 0.0003 0.0717 0.174
2013 2012 2011 2010 2009
14.2% 14.1% 2.7% -11.20% -16.40%
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(5.1.2) LEVERAGE RATIOS
(1) Debt to equity = (total debt / Shareholders equity)
INTERPRETATION:
This ratio shows the capital structure of the firm that how leveraged is the firm. This year
it is a green signal as debt ratio has been decreased.
(2) Debt to Total Assets ratio = Total Debts / Total Assets
INTERPRETATION:
This ratio is a measure of debts of a company as compared to its total assets. As banks
deal in debts so if bank‟s increase with the passage of time, its advances should also
increase in parallel. This ratio for bank of Punjab has been quite consistent over the years
and quite equal to it s total assets. If these debts are increasing then these should be
properly utilized so that total assets can also be increased in parallel. But the management
should try to decrease this ratio in upcoming years.
2013 2012 2011 2010 2009
25.20 25.84 25.34 62.47 34.31
2013 2012 2011 2010 2009
0.96 0.96 0.96 0.98 0.97
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(5.1.3) CAPITALIZATION RATIOS
Cash dividend to net income= Cash Dividend / Net income
INTERPRETATION:
This ratio shows the portion of the profit or net income paid to the shareholders in the
form of cash dividend. As the net income of 2013 has increased but ratio has decreased,
the main reason is that this year bank has issued stock dividend to shareholders instead of
cash dividend.
(5.1.4) ASSET EFFICIENCY RATIOS
Assets turn over= Market income / Total Assets
INTERPRETATION:
2013 2012 2011 2010 2009
0.0718 0.12 0.97 -0.099 0.091
2013 2012 2011 2010 2009
0.068 0.074 0.073 0.079 0.072
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This is the ratio, which uncovers management's ability to function in competitive
situations while not excluding intangible assets. This ratio also shows that whether the
firm is using its resources well or not. Bank of Punjab has been utilizing its resources
well as compared to the previous years but in 2013 it become low.
(5.1.5) ASSET EFFICIENCY RATIOS
Stockholders equity to total liability= Shareholders equity/Total liability
INTERPRETATION:
This ratio shows the comparison of equity to total liabilities. This year increase in ratio
shows more utilization of equity.
(5.1.5) OTHER BANKING RATIOS
(1) Advances to deposit ratio = Total advances/ Total deposits
2013 2012 2011 2010 2009
0.039 0.038 0.039 0.016 0.029
2013 2012 2011 2010 2009
0.51 0.56 0.53 0.58 0.63
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INTERPRETATION:
This ratio shows the outflow versus the inflow of cash in the form of advances and
deposits respectively. As the ratio has slight change due to increase in deposit but in 2013
it slightly decreases.
(2) Cash Ratio = (Cash &Balances with treasury banks+
Balances with other banks) / Deposits
INTERPRETATION:
This ratio shows comparison of how much our cash is deposited against deposits of
others in our bank. In 2007 our deposits were higher than our clients.
(3)Cash Reserve Ratio = Cash &balance with treasury banks/deposits
INTERPRETATION:
This ratio indicates the reserve which a bank has maintained against the deposits of others
(customers). The reserve for deposits has increased as compared to previous year.
2013 2012 2011 2010 2009
0.091 0.076 0.085 0.085 0.079
2013 2012 2011 2010 2009
0.077 0.065 0.53 0.070 0.068
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5.2 HORIZONTAL ANALYSIS
Horizontal analysis is a technique for evaluating a series of financial data over a period of
time to determine the amount and percentage increase OR decrease that has taken place.
Actually this analysis shows the trend in performance and position of the company over
the number of years which makes it easy to understand and compare the performance of
the concern.
I have used the financial statement data years 2009-2013 and compared the each item of
the financial statements and showed the Bank‟s trend from one year to another.
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Horizontal Analysis
BANK OF PUNJAB
Balance Sheets
Balance sheet 2013 2012 2011 2010 2009
Assets
cash and balance with treasury banks 182.62 132.62 128.02 107.87 100
balance with other banks 195.14 14.19 165.03 149.89 100
lending‟s to financial institutions 1082.76 148.35 706.88 693.81 100
investments 214.03 223.66 159.68 97.3 100
advances 129.63 123.3 104.78 99.58 100
operating fixed asset 102.55 101.35 104.97 103.13 100
differed fixed assets-net 105.92 109.64 116.49 117.97 100
other assets 274.22 251.02 278.16 168.46 100
162.8 153.31 129.66 106.14 100
Liabilities
bills payables 172.03 171.39 97.14 66.36 100
borrowings 162.41 318.26 177.8 82.1 100
deposits and other accounts 160.62 139.4 124.65 109.07 100
sub ordinated loans 0 0 0 0 0
liabilities against assets subject to financial
lease
11.99 18.09 39.34 69.76 100
deferred tax liabilities 0 0 0 0 0
other liabilities 177.54 159.47 138.49 111.12 100
161.15 151.9 128.41 121.39 100
Presented by
share capital 199.53 100 100 100 100
discount on issue of shares -43.91 220.8 356.09 374.22 100
reserves -14.03 116.14 129.23 131.35 100
accumulated losses 249.98 138.97 154.68 -15.76 100
85.67 2635.54 2635.54 1550.32 100
share deposited money 228.66 195.5 182.59 52.63 100
surplus on revaluation of assets -net of tax 140.23 254.01 98.83 111.78 100
219.36 201.65 173.78 58.84 100
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Horizontal Analysis BANK OF PUNJAB
INCOME STATMENT
PROFIT AND LOSS ACCOUNT 2013 2012 2011 2010 2009
Markup/returned/interest earned 154.88 157.68 132.23 116.48 100
Markup/returned/interest expense 106.24 118.40 110.78 98.84 100
Net mark up /interest income 118.72 63.26 -11.57 -17.27 100
Provision against non-performing loans
and advances-net
-7.28 -10.45 -34.24 6.06 100
Provision for diminutions in the value of
investments-net
2.30 22.55 60.33 289.55 100
Bad debts written off directly 0.00 0.00 0.00 0.00 0
-6.38 -7.35 -25.38 32.63 100
Net Markup/returned/interest earned -34.36 -21.28 -16.17 28.80 100
Non Mark-up / Interest Income
Fee, commission and brokerage income 118.03 116.04 110.25 85.60 100
Dividends income 14.93 24.00 31.16 43.88 100
Income from dealing in foreign currencies 59.55 65.83 64.66 54.32 100
(Loss)/gain on sale and redemption of
securities
-1120.33 -1166.97 -265.64 -236.08 100
Unrealized loss on revaluation of
investments
classified as held for trading 360.10 -722.55 451.22 -1510.48 100
Other income 221.55 112.98 95.29 91.23 100
162.12 143.81 89.68 83.63 100
Total non markup/interest
income
-72.73 -53.52 -36.85 17.83 100
Non Mark-up / Interest expense
Administrative Expenses 171.29 146.06 130.31 113.06 100
Provision against Other assets 0.00 0.00 0.00 0.00 0
Provision against off balance sheet item 0.00 0.00 0.00 0.00 0
other charges 5934.89 -5112.09 25.82 202.14 100
173.89 150.22 0.00 0.00 100
Total Non Mark-up / Interest expense -20.68 -10.52 -25.81 -29.01 100
Extra ordinary/unusual items 0.00 0.00 0.00 0.00 0
Gain/Loss Before Taxation -20.77 -10.56 -3.28 43.25 100
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Taxation -current
-prior years 0.00 -921.09 0.01 1.86 100
-deferred -17.91 -8.07 -3.99 49.21 100
-24.70 5.34 -4.06 50.07 100
Gain/Loss After Taxation -18.97 -17.28 -2.92 40.09 100
(accumulated loss)/unappropriated profit
brought forward
166.05 184.77 187.79 135.06 100
Transfer to reserve for issuance of bonus share
Reversal of excess management fee accrued last year
Transfer from statutory reserve to
accumulated loss
-13.39 -11.29 -2.40 0.00 100
Transfer from general reserve to
accumulated loss
0.19 0.00 0.00 0.00 100
Transfer from surplus on revaluation of
fixed assets-net of tax
-1046.20 0.00 90.24 95.00 100
4754.69 5222.61 5217.76 3736.40 100
accumulated loss carried forward 10870.64 12286.17 13670.85 13894.63 100
Basic loss/earning per share (after tax) -11.71 -14.12 -2.81 38.44 100
Diluted loss earning per share ( after tax) -11.71 -14.12 -2.81 38.44 100
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5.3 VERTICAL ANALYSIS
Vertical analysis is that analysis in which each items within the financial statement so the
each item of company is expressed in terms of a percentage of a base amount. This helps
in analyzing whether each of those particular items of the company has how much
percentage of their total value in continuous years.
For the purpose of analysis and comparison current year data shown in percentage is
compared with the data in percentage of the last year. One can easily judge the favorable
and unfavorable changes in two year‟s financial statements.
I have used the three years financial statement data, i.e. years 2009-2013 and compared
the each item of the financial statements and showed the Bank‟s trend from one year to
another.
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VERTICLE ANALYSIS
BANK OF PUNJAB
BALANCE SHEET
Balance sheet 2013 2012 2011 2010 2009
Assets
cash and balance with treasury banks 7% 5% 6% 6% 6%
balance with other banks 1% 0% 1% 1% 1%
lending‟s to financial institutions 3% 0% 3% 3% 0%
investments 35% 39% 33% 25% 27%
advances 45% 45% 45% 53% 56%
operating fixed asset 1% 1% 1% 2% 2%
differed fixed assets-net 4% 4% 5% 6% 6%
other assets 4% 4% 6% 4% 3%
100% 100% 100% 100% 100%
Liabilities
bills payables 11% 12% 8% 16% 14%
borrowings 169% 361% 234% 319% 229%
deposits and other accounts 2278% 2151% 2231% 5767% 3111%
sub ordinated loans 0% 0% 0% 0% 0%
liabilities against assets subject to financial lease 0% 0% 0% 0% 0%
deferred tax liabilities 0% 0% 0% 0% 0%
other liabilities 62% 61% 61% 145% 77%
2521% 2585% 2535% 7078% 3431%
Presented by 0% 0% 0% 0% 0%
share capital 78% 43% 50% 146% 86%
discount on issue of shares -2% 10% 18% 56% 9%
reserves 11% -103% -133% -399% -179%
accumulated losses -84% -51% -65% 20% -74%
4% 137% 159% 277% 11%
share deposited money 93% 87% 94% 80% 89%
0% 0% 0% 0% 0%
surplus on revaluation of assets -net of tax 7% 13% 6% 20% 11%
100% 100% 100% 100% 100%
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VERTICLE ANALYSIS
BANK OF PUNJAB
INCOME STATMENTS
PROFIT AND LOSS ACCOUNT 2013 2012 2011 2010 2009
Markup/returned/Interest earned 100% 100% 100% 100% 100%
Markup/returned/Interest expense 83% 91% 102% 103% 122%
Net mark up /Interest income 17% 9% -2% -3% 22%
Provision against non-performing loans and
advances-net
-3% -4% -15% 3% 59%
Provision for diminutions in the value of
investments-net
0% 1% 3% 15% 6%
Bad debts written off directly 0% 0% 0% 0% 0%
-3% -3% -13% 18% 65%
Net Markup/returned/Interest earned 19% 12% 11% -21% -87%
Non Mark-up / Interest Income 0% 0% 0% 0% 0%
Fee, commission and brokerage income 3% 3% 4% 3% 4%
Dividends income 1% 1% 1% 2% 6%
Income from dealing in foreign currencies 1% 1% 1% 1% 2%
(Loss)/gain on sale and redemption of securities 6% 6% 2% 2% -1%
Unrealized loss on revaluation of investments 0% 0% 0% 0% 0%
classified as held for trading 0% 0% 0% 0% 0%
Other income 5% 2% 2% 3% 3%
15% 13% 10% 10% 14%
Total non markup/interest income 34% 25% 20% -11% -73%
Non Mark-up / Interest Expense
Administrative Expenses 21% 18% 19% 19% 19%
Provision against Other assets 0% 1% 0% 0% 0%
Provision against off balance sheet item 0% 0% -1% 4% 0%
other charges 0% 0% 0% 0% 0%
22% 19% 0% 0% 19%
Total Non Mark-up / Interest expense 12% 6% 18% 23% -92%
0% 0% 0% 0% 0%
Extra ordinary/unusual items 0% 0% 0% 0% 0%
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Gain/Loss Before Taxation 12% 6% 2% -34% -92%
Taxation -current 1% 1% 0% 0% 0%
-prior years 0% -3% 0% 0% 1%
-deferred 3% 1% 1% -12% -28%
4% -1% 1% -12% -28%
Gain/Loss After Taxation 8% 7% 1% -22% -65%
(accumulated loss)/unappropriated profit brought
forward
-53% -57% -70% -57% -49%
Transfer to reserve for issuance of bonus share 0% 0% 0% 0% 0%
Reversal of excess management fee accrued last
year
0% 0% 0% 0% 0%
Transfer from statutory reserve to accumulated loss -2% -1% 0% 0% 19%
Transfer from general reserve to accumulated loss 0% 0% 0% 0% 29%
Transfer from surplus on revaluation of fixed
assets-net of tax
0% 0% 0% 0% 0%
-54% -59% -70% -57% -2%
accumulated loss carried forward -47% -52% -69% -79% -1%
Basic loss/earning per share (after tax) 0% 0% 0% 0% 0%
Diluted loss earning per share ( after tax) 0% 0% 0% 0% 0%
CHAPTER 6 :-
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SWOT ANALYSIS
SWOT analysis is an acronym that stands for strengths, weakness, opportunities, and
threats SWOT analysis is careful evaluation of an organization‟s internal strengths and
weakness as well as its environment opportunities and threats.“SWOT analysis is a
situational which includes strengths, weaknesses, opportunities and threats that affect
organizational performance. ”The overall evaluation of a company strengths, weaknesses,
opportunities and threats is called SWOT analysis In SWOT analysis the best strategies
accomplish an organization‟s mission by:
Exploiting an organizations opportunities and strength.
Neutralizing it threats.
Avoiding or correcting its weakness.
SWOT analysis is one of the most important steps in formulating strategy using the
organization mission as a context; managers assess internal strengths distinctive
competencies and weakness and external opportunities and threats. The goal is to then
develop good strategies and exploit opportunities and strengths neutralize threats and
avoid weaknesses
STRENGTH
The Bank officers of BOP are considered as one of the most able professionals in the
banking world. However, they have added some local flavor in accordance with their
targeted segmented. In my observation that they interact with their clients as if they are
their personal friends and discuss about their problems as their own.
As a result of the compassionate and personalized services of the officers, the
clients‟ perception for BOP is very high. They have trust and feel themselves to
be secure while dealing with BOP.
BOP has opened all its branches at commercial areas so that the customers or
clients face no problems in reaching to the bank.
BOP has got a reliable and easy to use internal computer system. Every
information regarding the transactions in customers‟ deposits has been
computerized. Data are properly maintained.
Good security system
Not excellent but good facilities are given to employees
WEAKNESSES
Lack of proper internal controls is one of the major weaknesses of BOP. It is also pointed
by the auditor in his review.
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BOP has formulized a lot of products and services for its customers, even more
than other commercial banks, but any advertisement on electronic media has not
been seen.
I observed during my internship that some of the employees were burdened with
over work. So I think that the work should be distributed according to their post
and capabilities.
Biased selection of employees
OPPORTUNITIES
Satisfy dynamic consumer needs, BOP has made significant in roads in its entire service
spectrum. A lot of products have been introduced especially in Retail Banking
(Agriculture side) and people are increasingly becoming loyal to the bank and because of
feasible transactions. Optimum pricing and branding strategies of the bank are helping to
make customer feel secure and convenient.
All the opportunities of the 21st century are to be availed in the information
technology. Information technology is the future of this dynamic world. Therefore
BOP should emphasize much on IT, especially on E-Banking. Bank can design
universal account like other foreign banks, to enhance online facilities.
BOP has introduced a number of financial schemes including special „Deposit
Accounts‟. These accounts have their unique features. Therefore, with the
commencement of new schemes there can even be a greater increase in its
deposits
THREATS
Despite the difficult circumstances that confronted the banking sector in particular and
the country in general, BOP has been still highly profitable. But, the facts can‟t be denied
and there might be an adverse impact of such situation.
BOP is facing a strong competition by its competitors, Business of all
these Banks are growing at very high pace.
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CHAPTER 7 :-
CONCLUSION AND RECOMMENDATIONS
7.1 CONCLUSION
By analyzing the financial statements of the bank, I came across to know that it is one of
the most growing banks in the subcontinent. Now they should carry on with the present
management which too k it from one of the ordinary bank to this level. No doubt
professionalism and internal controls of the bank are one of the major issues which may
results some major losses to the bank. Bias in hiring‟s and between colleagues should be
removed.
RECOMMENDATIONS:-
SUGGESTIONS FOR REMOVING WEAKNESSES
INTERNAL CONTROL
To me the major and the most important flaw in the BOP is lack of internal controls and
inter communication between different branches of the bank. As far as financial aspect is
concerned there is no proper system is configured that‟s why there is always a risk of big
frauds with in the bank. I during my internship also pointed out that point but no one
bothered. To me the bank should install some proper resource planning and controlling
systems like other banks do i.e., oracle financials etc.
I. PROFESSIONAL TRAINING
BOP staff lacks professionalism. They lack the necessary training to do the job efficiently
and properly. Although staff colleges are in all major cities of the Punjab but they are not
performing well. For this purpose these staff colleges should be reorganized and their
syllabus should be made in such a way which can help the employee understand the ever-
changing global economic scenario. Banking council of Pakistan should also initiate
some programs to equip the staff with much needed professional training.
II. DELEGATION OF AUTHORITY
Employees of the bank should be given a task and authority and they should be asked for
their responsibility. The sense responsibility in employees mind is one of the most
important factors in the success of any organization.
III. PERFORMANCE APPRAISAL
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During Internship I felt that there is no or very less appraisal of any ones cool
performance. The manager should strictly monitor the performance of every staff
member. All of them should be awarded according to their performance and result in the
shape of bonuses to motivate and incites them to work more efficiently.
IV. TRANSFERS
Transfer is not properly carried out. Some of the employees are continually serving at the
same post. They are simply rotated at the same branch. Therefore it is recommended that
evenly rotation of every employee should take place after every three years in different
braches of the bank
V. NEED OF QUALIFIED STAFF
Required, qualified staff should be provided to branch in order to improve the functioning
of the branch. Especially a telephone operator should be appointed
VI. CREDIT CARD FACILITY
BOP should start its operation in credit card. These cards are very helpful for the ordinary
customer in general and the business people in particular. To make it mores secure and to
eliminate the misuse of it, the management is required to keep proper security against the
card.
VII. SHOULD BE AGGRESSIVE IN CREDIT POLICY
As mentioned earlier, BOP is very conservative in advances and loans policy. It reduces
the investment opportunities. Also loans should be given to the small businessmen and
the other businesses on large scale like in agriculture sector at the low mark-up rate. It
should adopt flexible credit policy while giving credit to the agriculture sector.
VIII. TECHNOLOGICAL IMPROVEMENT
I would like to suggest that at least all the main branches of BOP should be fully
computerized in order to expedite the dealing process among bankers and their
customers. Every department should be provided a computer with adequate training
(especially Advances, Deposits and Foreign Exchange departments). Daily records
should be entered directly into these computers, (instead entering the overall daily
transactions after the banking hours). It will not only reduce transaction time, will
increase accuracy but will also be efficient as well. Not only it will be economical but
will also reduce the extra burden of work of the bank. It will also help in reducing the use
of excessive paper work.
IX. STAFF RELATIOSHIP
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63
Good relationship among staff member leads to the peak performances in any
organization. I observed that the staff relationship was normal other wise but sometime I
noticed that there exists little conformity among the staff members. Another syndrome
from which the staff suffered was that all of them considered them selves more important
than others.
X. FAVOURITISM & NIPOTISM
In the branch during my internship I saw that when some of the employees are transfer to
other places, due to their relation with influential people and with top management they
can cancel their transfer in few weeks, when they are unsatisfied at that place. So I
suggest that in the organization there should be no favoritism, nepotism and politics and
their transfer and promotion should be made on merit and according to the rules and
regulations of the bank and provided favorable environment to the employee to show
their performances.
XI. MARKETING POLICY
The branch should adopt various marketing strategy and promotion strategy to promote
the bank and its product. The most important in my opinion is personal marketing; it is
the most effective of all when you think in term of branch level. But on the whole
organization level, they should arrange the seminar with in the bank and outside the bank.
They should do more advertising through newspaper and media and through channel of
personal contacts.
XII. AVOIDING BAD DEBTS
Great care should be taking while extending the loan. Loans should be awarded against
reasonable securities, where market value should be equal to the loan granted. Policies
should be crafted in a way to ensure that no loan is extended on political pressure. SBP
regulation for loan approval should be strictly followed.
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BIBLIOGRAPHY
Interviews conducted from
Mr. Faheem Bin Saleem Manager BOP Taxila
Mr. Faheem Nazeer Manager operations BOP Taxila
Mr.Habibullah CH Manager operations BOP Taxila
Bank of Punjab annual reports
www.bop.com.pk
www.Google.com
www.wikipedia.com
www.brecorder.com
www.sbp.org.pk
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APPENDIX
STATEMENTS OF FINANCIAL POSITION
Balance sheet 2013 2012 2011 2010 2009
Assets
cash and balance with treasury banks 23820864 17298251 16698333 14069601 13043705
balance with other banks 4265296 310170 3607107 3276234 2185782
lending‟s to financial institutions 11407448 1562946 7447375 7309587 1053550
investments 123973891 129552004 92492813 56359404 57923172
advances 157239598 149565885 127107501 120796694 121303368
operating fixed asset 3514801 3473491 3597483 3534660 3427267
differed fixed assets-net 12627352 13070614 13886769 14063694 11921146
other assets 15825007 14486073 16052311 9721900 5770905
352674257 332110474 280889692 229931774 216628895
Liabilities
bills payables 1506335 1500709 850569 581100 875618
borrowings 22802482 44683826 24963566 11526783 14040014
deposits and other accounts 306560694 266055761 237896692 208176902 190858087
sub ordinated loans 0 0 0 0 0
liabilities against assets subject to
financial lease
2386 3601 7831 13887 19907
deferred tax liabilities 0 0 0 0 0
other liabilities 8345203 7495928 6510013 5223152 4700569
339217100 319739825 270288671 255521824 210494195
Presented by
share capital 10551132 5287974 5287974 5287974 5287974
discount on issue of shares -236158 1187433 1914956 2012492 537779
reserves 1539659 -12743218 -14179410 -14411509 -10972082
accumulated losses -11275026 -6267811 -6976480 711043 -4510329
552607 17000000 17000000 10000000 645029
share deposited money 12552607 10732189 10023520 2888957 5489671
surplus on revaluation of assets -net 904550 1638460 637501 720993 645029
13457157 12370649 10661021 3609950 6134700
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INCOME STATMENTS
PROFIT AND LOSS ACCOUNT 2013 2012 2011 2010 2009
Markup/returned/interest earned 24223658 24662361 20682061 18217583 15640701
Markup/returned/interest expense 20208687 22522918 21073271 18801642 19022494
Net mark up /interest income 4014971 2139443 -391210 -584059 3381793
Provision against non-performing
loans and advances-net
-673081 -965430 -3164234 559604 9241653
Provision for diminutions in the value
of investments-net
21940 215502 576597 2767341 955744
Bad debts written off directly 241 0 0 0
-650900 -749928 -2587637 3326945 10197397
Net Markup/returned/interest earned 4665871 2889371 2196427 -3911004 -13579190
Non Mark-up / Interest Income
Fee, commission and brokerage income 775622 762490 724499 562469 657114
Dividends income 137512 220985 286975 404111 920943
Income from dealing in foreign
currencies
147417 162980 160089 134488 247570
(Loss)/gain on sale and redemption of
securities
1391874 1449814 330025 293303 -124238
Unrealized loss on revaluation of investments
classified as held for trading -4296 8620 -5383 18020 -1193
Other income 1148797 585856 494103 473055 518533
3596926 3190745 1989708 1855446 2218749
Total non markup/interest
income
8262797 6080116 4186135 -2025558 -11360441
Non Mark-up / Interest expense
Administrative Expenses 5204409 4437680 3959217 3435049 3038357
Provision against Other assets 32945 168419 1121 0 0
Provision against off balance sheet item 325 0 -244111 740000 0
other charges 47123 -40590 205 1605 794
5284802 4565509 3039151
Total Non Mark-up / Interest expense 2977995 1514607 3716432 4176654 -14399592
Extra ordinary/unusual items 0 0 0 0 0
Gain/Loss Before Taxation 2977995 1514607 469703 -6202212 -14339592
Taxation -current 278239 139284 0 0 0
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67
-prior years 0 -722971 5 1461 78491
-deferred 785036 353738 174774 -2157119 -4383406
1063275 -229949 174779 -2155658 -4304915
Gain/Loss After Taxation 1914720 1744556 294924 -4046554 -10094677
(accumulated loss)/unappropriated
profit brought forward
-12743218 -14179410 -14411509 -10364955 -7674257
Transfer to reserve for issuance of
bonus share
10352 11604 0 0 0
Reversal of excess management fee
accrued last year
814 6801 0 0 0
Transfer from statutory reserve to
accumulated loss
-387601 -326769 -69595 0 2894000
Transfer from general reserve to
accumulated loss
8391 0 0 0 4495350
Transfer from surplus on revaluation
of fixed assets-net of tax
-78486 0 6770 7127 7502
-13189746 -14487774 -14474334 -10364955 -277405
accumulated loss carried forward -11275026 -12743218 -14179410 -14411509 -103720
Basic loss/earning per share (after tax) 2.33 2.81 0.56 -7.65 -19.9
Diluted loss earning per share ( after
tax)
2.33 2.81 0.56 -7.65 -19.9
Balance sheet 2013 2012 2011 2010 2009
Assets
cash and balance with treasury banks 23820864 17298251 16698333 14069601 13043705
balance with other banks 4265296 310170 3607107 3276234 2185782
lending‟s to financial institutions 11407448 1562946 7447375 7309587 1053550
investments 123973891 129552004 92492813 56359404 57923172
advances 157239598 149565885 127107501 120796694 121303368
operating fixed asset 3514801 3473491 3597483 3534660 3427267
differed fixed assets-net 12627352 13070614 13886769 14063694 11921146
other assets 15825007 14486073 16052311 9721900 5770905
352674257 332110474 280889692 229931774 216628895
Liabilities
bills payables 1506335 1500709 850569 581100 875618
borrowings 22802482 44683826 24963566 11526783 14040014
deposits and other accounts 306560694 266055761 237896692 208176902 190858087
sub ordinated loans 0 0 0 0 0
liabilities against assets subject to 2386 3601 7831 13887 19907
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68
financial lease
deferred tax liabilities 0 0 0 0 0
other liabilities 8345203 7495928 6510013 5223152 4700569
339217100 319739825 270288671 255521824 210494195
Presented by
share capital 10551132 5287974 5287974 5287974 5287974
discount on issue of shares -236158 1187433 1914956 2012492 537779
reserves 1539659 -12743218 -14179410 -14411509 -10972082
accumulated losses -11275026 -6267811 -6976480 711043 -4510329
552607 17000000 17000000 10000000 645029
share deposited money 12552607 10732189 10023520 2888957 5489671
surplus on revaluation of assets -net of
tax
904550 1638460 637501 720993 645029
13457157 12370649 10661021 3609950 6134700
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