Political Situation:

Political challengers also remained in the limelight during the year. Recent
electionshave been one of the most watched for in our history. Though the political
environment is likely to remain unstable for a while, we believe law and order
situation is the mostimportant conduit of its influence on the economic activity. As
far as the economicpolicies of different political parties are concerned, these are not
easily distinguishable.Privatizing, deregulation and focus on foreign investment are
the main pillars of economic policies of all the leading parties.
Technology:
The bank also continued its policy of upgrading technology to meet the challenges
of modern banking.During the year the bank achieved the distinction of having
successful completed themammoth project of changing of the core banking system
commenced in 2005 and fullymigrated to a modern centralized processing system
SYMBOLS acquired from areputable international vendor and being used by a large
number of banks in Europe,Asia, the Middle East, and Africa. With the successful
implementation of new centralizeddatabase system, the bank also achieved
remarkable progress in business process re-engineering, turnaround time
compliance by centralizing outward remittances, issuanceof payorders and draft,
account opening and credit administration.Together with a new centralized core
banking system, the bank is in the final stages of implementation of Oracle
Financials that will give it significant MIS flexibility, ease of operation and improved
internal controls.To address its need for modern technology based banking and for
managing a360degree view of its customers for better client service, the bank has
now embarkedupon implementing the world renowned Customer Relationship
Management (CRM)solution Siebels and a FULL FUNCTIONAL Contact Centre.The
bank has also initiated implementation of Oracle HRMS, a powerful humanresource
management system for efficient and improved human capital
managementframework in the bank. The bank with the assistance of independent
reputable professional consultants,prepared and implemented a detailed Business
Continuity Plan (BCP), Disaster Recovery Plan (DRP) and information System
Security policies for its new technologyplatform under the guidelines provided by
the State Bank OF Pakistan and ISO 1799/BS7799.2:2002