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CHAPTR 1

INTRODUCTION OF STUDY
Starting with th nam of Allah, I am going to writ my intrnship rport as part of th
acadmic rquirmnt for th compltion of four yars study in Bachlor of Businss
Administration. Thrfor, w th studnts of anagmnt Scincs ar rquird to undrgo
an intrnship program for th priod of 8 wks as an intrn in an organization. This
intrnship hlps m to gain th practical knowldg of working nvironmnt of th banking
sctor of Pakistan.

1.1

BACKGROUND OF STUDY

This Intrnship rport is aimd at studying and analyzing National Bank of Pakistan (NBP)
in gnral and its branch offic at andian, Abbottabad in particular. Th main purpos of th
intrnship is to prpar and submit a rport as a partial fulfillmnt for th award of BBA
(Financ) dgr in financ from COSATS, Abbottabad

1.2 Objctivs of study


As part of th acadmic rquirmnt for complting BBA (Financ) studnts ar rquird to
undrgo ight Wks of intrnship with an organization. Th intrnship is to srv th
purpos of acquainting th studnts with th practic of knowldg of th disciplin of
banking administration.

To undrstand th various oprations of th bank and work in diffrnt


dpartmnts.

1.3

To analyss th financial and oprational prformanc of NBP.

To study th organizational managmnt structur.

To mak possibl rcommndation in th light of analyss.

To study th working nvironmnt of th organization.

To apply th knowldg gaind in practical fild.

SCOP OF STUDY

Th tim duration of two months is insufficint for conducting complt study and
obsrvation of a larg bank. Bing a studnt spcializing in financ, th focus of this study is
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on its financial aspcts including th financial halth of th bank and its comparison with
prvious yars prformanc. Som of th problms facd by th bank hav bn idntifid
and som rcommndations hav bn suggstd to ovrcom ths problms and to improv
th prvailing financial condition of th bank.

1.4

LIMITATIONS OF TH WORK

Thr ar som limitations which intrn had to fac during th intrnship program, which
ar dscribd as undr:
Th priod of two months was too short to proprly undrstand and analyz all th oprations
of bank.
Staff mmbrs avoidd to giv all information du to th mattr of scrcy. So it was vry
difficult to collct th rlvant information and to larn accordingly.
anagr and othr staff mmbrs hav busy schdul du to this rason it was a grat
problm for thm to spnd tim with intrn, so it is not asy to larn or to gain knowldg
from thm.
Som of th data was confidntial and that was not mad availabl to m.

1.5

BNFITS OF TH STUDY

An intrnship grooms a prson prsonally, acadmically and profssionally. At th nd of


intrnship, on gts a crtificat, which acknowldgs his work for that spcific company.
This adds to his xprinc, an intrnship is a grat opportunity to improv intrprsonal
skills. Practical also provids th opportunity to gain slf-confidnc. orovr, it Figur out
what ons strngths ar and also a good tim to idntify ons waknss so that h can
improv thm.

1.6

RSARCH MTHODOLOGY

National bank of Pakistan is on of th lading and stablishs banks of th country. It has a


larg stup of dpartmnts and a big organizational structur. Whil working in a andian
branch Abbottabad of th bank, it is not possibl to thoroughly covr all th aras of th bank,
as it rquirs mor tim and two months ar in no way sufficint to do so. Diffrnt tools and
tchniqus wr usd to gathr rlvant information for writing th rport. Scondly, journals
2

from rgional had quartr and staff collg was also rviwd which gav vry usful
information about th functioning of th bank. I also visitd th national bank of Pakistans
official wb sit, which gav vry usful information about th srvics providd by th bank.
1.6.1

Th major sourcs for Primary data includs

Prsonal obsrvation
Prsonal obsrvations during th intrnship priod

Intrviws of managmnt
Short intrviws of th banks managmnt

Discussion with staff mmbrs

1.6.2

Th major sourcs for Scondary data includs

Annual rports of Bank


Annual rports of th last thr yars

Books
Rlvant cours books

Intrnt
Official wb sit of NBP and som othr rlvant sits mntiond in th rfrncs

1.7

SCHM OF RPORT

This intrnship rport is dividd into four chaptrs, which ar:


Chaptr 1 includs background, purpos of study, Scop of study, som limitations, mrits,
and schm of this Rport.
Chaptr 2 includs background and history of banking in Pakistan as wll as Introduction to
NBP, andian branch Abbottabad.
Chaptr 3 includs th job dscription i. activitis during my intrnship priod, financial
statmnt, Products, and srvics offrd by NBP to its valud customrs.
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Chaptr 4 includs som of th conclusion and som of th rcommndations.

CHAPTR 2
INTRODUCTION TO ORGANIZATION (NBP)
NBP contains its position as Pakistan's prmir bank dtrmind to st highr standards of
achivmnts. It is th major businss partnr for th Govrnmnt of Pakistan with spcial
mphasis on fostring Pakistan's conomic growth through aggrssiv and balancd lnding
policis, tchnologically orintd products and srvics offrd through its larg ntwork of
branchs locally, intrnationally and rprsntativ offics.

2.1 Thy aim to b an organization that is foundd on

Growth through cration of sustainabl rlationships with our customrs.

Prudnc to guid our businss conduct.

A national prsnc with a history of contribution to our communitis.

Thy shall work to

t xpctations through arkt-basd solutions and products.

Rward ntrprnurial fforts.

Crat valu for all stakholdrs.

2.1.1 Thy aim to b Popl who

Car about rlationships.

Lad through th strngth of our commitmnt and willingnss to xcl.

Practic intgrity, honsty and hard work. W bliv that ths ar masurs of tru
succss.

2.1.2 Thy hav confidnc that tomorrow thy will b

Ladrs in industry.
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An organization will tak th trust of S&h.

2.1.3 Evaluation of Banking / Industry in Pakistan


At th tim of indpndnc in 1947, Pakistans commrcial banking facilitis wr almost
jammd according to a plan in th whol sub continnt spcially in th uslim majority
aras. Pakistans banking and Industrial sctors wr in vry poor conditions. Banks largly
dpnd for thir growth and dvlopmnt on industrial sctor but at th tim of indpndnc,
Pakistan had patriotically on industry xcpt a fw txtil mills and only product food grains
and agricultural raw matrials, most of th industris wr situat in Hindu majority ara now
calld India.

A numbr of banks closd thir branchs with th rsult that only 81 branchs
rmaind opn on 30th Jun 1948 out of 487. Th had offics wr in India and most of thir
mploys wr Hindu, and thy fld to India. Imprial Bank of India, Which was conducting
govrnmnt rcipts and paymnts, closd down most of its branchs thus blocking th funds
ndd by th govrnmnt?
Th country was in troubl and ndd most of th gnral commrcial banking and
crdit facilitis. This nd was a littl bit satisfid with th transfrring of th had offr of
th HBL. To Karachi on 7 th, August 1947. This bank playing a grat rol in th nxt yar in
th conomic dvlopmnt of Pakistan as th Habib Bank was also nw in th nw country it
was askd to opn mor branchs at nw plac this was a difficult tim fo H.B.L to opn
thir branchs in diffrnt placs.
In viw of th abov mntiond circumstancs and in ordr to rhabilit th banking
in Pakistan without furthr dlay, on th rcommndations of an committ it was dcidd to
stablish as arly as possibl a cntral bank to control th banning and currncy in Pakistan.
Accordingly stat bank of Pakistan was Pakistan was inauguratd by Quaid--Azam
uhammad Ali Jinnah on 1st July 1948. This bank lost on tim in mting th national
rquirmnts of banking, currncy and took following rmdial masurs. Rqustd
Govrnmnt of stat a nw bank of nation wid srvics accordingly National Bank of
Pakistan was formd in 1949 which opnd many branchs and in 1952 took ovr th
5

mpror Bank of India. It will draw Indian Currncy nots of Rs: 125 cror from Gnral
Circulation and snd ths for rcovry to rsrv Bank of India.

2.2 Historical Introduction to th organization (National Bank of


Pakistan)
National Bank of Pakistan maintains its position as Pakistan's prmir bank, dtrmind to st
highr standards of achivmnts. It is th major businss partnr for th Govrnmnt of
Pakistan with spcial mphasis on fostring Pakistan's conomic growth through aggrssiv
and balancd lnding policis, tchnologically orintd products and srvics offrd through
its nation wid branchs.

2.2.1 History of NBP


National bank was stablish in Novmbr 09, 1949 undr NBP ,ordinanc 1949, in ordr to
handl th criss condition which was dvlop aftr Dadlock with India and th dvaluation
of Indian Rup in 1949. Th bank provd all typ of banking srvics to th govrnmnt in
gnral public. It works as agnt of snt ral bank bcaus th SBP dos not has its own
branchs.
Th bank schdul commrcial bank and its principally ngagd in th businss of banking as
dfind in th banking company's ordinanc 1962. National Bank of Pakistan was basically
stablishd for rducing th difficultis of ast Pakistan farmrs ngagd in jut and patns
aftr mass migration of community

from ast and wst Pakistan in India. Th bank

commncd its opration in Novmbr 20.1949 at six cntrs of jut in th thn East
Pakistan. Lahor and Karachi officrs wr opnd subsquntly in Dcmbr 1949. Bfor
rstructuring in 2002, national Bank of Pakistan with its had offic at Karachi oprats
through 9 rgional hadquartrs at Lahor, Karachi Hydrabad, Qutta, Pshawar, ultan,
uzafrabad, Fasilabad and Islamabad.
Th bank was incorporatd with authorizd capital of 60 millions .in 960 this amount was
rdactd to th 30 millions banks issud 15 millions of which 25% was subscribd by th
govrnmnt and th balanc was offrd to th gnral public .shars to th public whr
issud in 1950 and whr quickly takn up. In 190 banks ordinanc was amndd so that it
tak ordinarily commrcial banking businss. On janvry-01-1974 national bank along with
thirtn othrs commotional banks whr nationalizd undr th promulgation of
6

nationalization act 1974 and th shars not hld by th govrnmnt whr rquird aftr
compnsation thm.
Th priod 1990s witnssd financial rfrs and th national bank also in coopratd th
chang in its working and offrd nw srvics and products to its clints .at prsnt th bank
is playing vry important rol in financing th trad .commrc ,agricultural and important
concrns and contributing th bst to word making th country prosprous. Th improv its
costumr focus rdactd dcision making layrs rstructurd its ntir command and control
systm in businss and oprational sphrs zons and audit offics in th yar 2002 and
liminatd th total numbrs of rgions in hands from 9 to 29 across th country .anw matrix
structur has bn introducd with th objctiv to sparat th offic and th bank offics .to
improv th good govrnanc and nhanc th intrnal control.

Opration group

corporat and invstmnt banking group

spcial assts managmnt group

commrcial and rtail banking group

audit and inspction group

ovrsas Coordination and anagmnt Group

Risk anagmnt Group

National Bank of Pakistan is known as th prmir commrcial institution of Pakistan


provid th larg divrsifid customr bas of 9.009 millions, which is th biggst figur, in
th country and conduct th businss function of stat bank of Pakistan in addition to
provision of othr financial and allid srvics such as dposit banking financing and crdit
rmittanc facilitis collction govrnmnt rcipts and paymnts. sal and purchas of
govrnmnt scuritis, Bands and othr crtificats, Forign xchang businss, Saf custody,
Saf dpositd srvics and saf dposit, Lockrs, Hajji facilitis Utility bills, Invstmnt
advic and othr srvics, Spcial dposits products / Schms, pak rup travlrs choos,
Nw product.

2.2.2 Crdit Rating

NBP njoys th highst rating of AAA in th industry assignd by /s JCR-VIS Crdit


Rating Company. Th ratings assignd to NBP ar primarily drivn by th banks rol in th
national conomy as an agnt of th Stat Bank of Pakistan and as a bank to th Govrnmnt
of Pakistan. Additionally, ratings also driv strngth from th banks consistntly high
capitalization lvls, and nationwid accss that has nabld it to scur a cost ffctiv and
divrsifid dposit bas.

2.2.3 Prsnt status


National Bank of Pakistan has a ntwork of 1,352 domstic branch and 19,204
mploys for subsidiaris, 23. Ovrsa branchs, 4 rparativ offics, 1 joint vntur and
subsidiary (ovrsas) all th world th local branchs ar controlld through 29 rgional
offics and ovrsas ar managd through 4 ovrsas rgional offics. It is th largst
contributory agnt of govrnmnt rquirmnt. NBP provid wid rang of srvics and
including collction of taxs and dlivris of salaris, prson to public sctor mploys. It
has lowst rat on xports and othr borrowings.
National bank of Pakistan, ovrsas opration compriss 18 ovrsas branchs, 5
rprsntativ offics, on intrnational subsidiary bank of NBP in Amatory and on joint
vntur with th Unitd Kingdom. NBP with its commitmnt to invst in dvlopmnt of th
banks I.T infrastructur hav now dvlopd on lin branchs with modrn by highly
profssional bankrs. NBP has launchd an ambitious businss rprocssing programmd to
mak th bank mor attractiv with th vntual aim of privatization. Th largst bank in th
country with a customr bas 9.00 billion in poisd for tak off.

2.3 Organizational structur of NBP

Prsidnt and chairman

Prsidnt Scrtariat
Board of Dirctor

Corporat and invstmnt banking


Group
Commrcial and rtail Banking Group

Oprations Group

Audit & inspction group

Complianc group

Financial control division

Employs bnfit, Disbursmnts and


trust
Spcial assist anagmnt group

Organization dvlopmnt and training


group
Ovrsas coordination and managmnt
group
Information tchnology group

Risk managmnt group


Human
rsourcs
managmnt
Trasury
managmnt
groupand
Admin Group

2.3.1

Oprational Group

Opration Group

Customr
srvics
and govt
businss
Trasury
sttlmnt

Logistic
support
and
scurity
Intr Branch
Rconciliatio
n
(IBR)

Constructio
n and
aintnan
c

Sourc: Annual Rport 2014

2.3.2

Audit and Inspction Group


Farrukh Qayyum
(Chairman)
Rana
Assad
Amin
(mbr

Dr.
Shujahat
Ali
(mbr

Tariq
Kirmani
(mbr
)

Ernst & Young Ford Rhods Sidat Hydr &


Co
KPG Tasr Hadi & co
(Auditors)
andiwala & Zafar
Advocat & Lgal
Consultant

Sourc: Annual Rport 2014

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2.4

Snior anagmnt

Qamar Hussain

Prsidnt

Dr. Asif A. Brohi

SEVP & Group Chif, Commrcial & Rtail


Banking Group

Shahid Anwar Khan

SEVP & Group Chif, Crdit anagmnt


Group.

Dr. Asif A. Brohi

SEVP & Group Chif, Oprations Group.

Dr. irza Ibrar Baig

EVP & Group Chif, Training & Organization


Dvlopmnt Group

Naushrwan Adil

SEVP & Group Chif, Oprations Group

Zia Ullah Khan

SEVP & Group Chif Assts Rcovry


Group and Divisional Had, Islamic Banking
Division.

Tariq Jamali

SEVP & Group Chif, Complianc Group

Nadm A. Ilyas

SEVP & Group Chif, Corporat & Invstmnt


Banking Group & PSO to Prsidnt

uhammad Nusrat Vohra

SEVP & Group Chif, Trasury anagmnt


Group

Khalid Bin Shahn

SEVP & Group Chif, Global Hom

anagmnt Group

Rmittanc

Imam Bakhsh Baloch

SEVP & Group Chif, Audit & Inspction


Group.

Tahira Raza

SEVP & Group Chif, Risk anagmnt


Group

ahmood Siddiqu

EVP & CIO, IT Division

11

Aamir Abbasi

SVP & Divisional Had, Corporat


Communication Division

S.. Ali Zamin

SVP, Scrtary Board of Dirctors & Scrtary


Crdit Committs

Kashif Aziz

SVP, Had PO

uhammad Nam Ansari

VP / Scrtary Oprations Committ

2.4.1

Snior anagmnt For Ovrsas Opration

Zubair Ahmd
SEVP & Rgional Chif Excutiv, iddl East, Africa & South Asia Rgion

. Rafiq Bngali
SEVP & Rgional Chif Excutiv, Amricas Rgion
Khawar Sad
EVP & Rgional Chif Excutiv, Cationntral Asian Rpublics Rgion
uhammad Hanif Khan
SVP & Coordinator, Afghan Oprations

2.5 Vision and ission Statmnts

To b rcognizd as a ladr and a brand synonymous with trust, highst standards of


srvic quality, intrnational bst practics and social rsponsibility.

2.5.1 ission
NBP will aspir to th valus that mak NBP truly th Nation's Bank by:
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Institutionalizing a mrit and prformanc cultur.

Crating a distinctiv brand idntity by providing th highst standards of srvics.

Adopting th bst intrnational managmnt practics.

aximizing stak holdrs valu.

2.6 Objctivs of National Bank of Pakistan

Prim objctivs of National Bank of Pakistan ar tainting distinguishing brand

idntity,

attaining quality financial prformanc, achiving acknowldgmnt in th markt in trms of


quality and prformanc.

National Bank of Pakistan also aims at providing assistanc to farmrs, so that thy can
utiliz thir funds ffctivly to gt th bst rsult.

By charging intrst on loans providd to th privat sctor and businss community.

2.7 Cor Valus


W aim to b an organization that is foundd on

Growth through cration of sustainabl rlationships with our customrs.

Prudnc to guid our businss conduct.

A national prsnc with a history of contribution to our communitis.

2.7.1 Shall work to

t xpctations through arkt-basd solutions and products.

Rward ntrprnurial fforts.

2.7.2 W aim to b popl who


13

Car about rlationships.

Lad through th strngth of our commitmnt and willingnss to xcl.

Practic intgrity, honsty and hard work. W bliv that ths ar masurs of tru
succss.

2.7.3 W hav confidnc that tomorrow w will b

Ladrs in our industry.

An organization taining th trust of stakholdrs.


An innovativ, crativ and dynamic institution rsponding to th changing nds of th
intrnal

and xtrnal nvironmnt

2.8 Intrnal Structur of Bank Branch


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CHART

RRC

RBC

Cad.

ROC

anagr

Officr

RCC

Oprating
anagr

Complain
Officr

Dposit Sctor

Rmittanc

Govt. Sction

Accountant

Forign
Exchang

Crdit
Dptt:

Sourc: Slf ad

2.8.1 Board of dirctors

Chif
Cashir

r. unr Kamal
Chairman
15

r. Syd Ahmd Iqbal Ashraf


Prsidnt
r. Farrakh Qayyum
Dirctor
r. Rana Assad Amin
Dirctor

r. Tariq Kirmani
Dirctor
r. Shahid Aziz Siddiqi
Dirctor
r. Iftikhar A. Allawala
Dirctor
r. uhammad Nam
Dirctor
r. Syd uhammad Ali Zamin
EVP, Scrtary Board of Dirctors

2.8.1 LOCATION
Th Location of th Bank Branch is andian Abbottabad.

2.8.2 OVERVIEW
Th building of NBP Nawan Shhr branch Abbottabad consist of singl floors .Th building
of NBP Nawan Shhr branch Abbottabad givs a plasant look as it is a wll furnishd and
dcoratd by frsh flowrs both insid and outsid th bank. Thr is sparat parking plac
16

for staff mmbrs and also for gnral public which is hlpful in rducing traffic on road
unlik othr banks. Insid th bank thr is a hall and on on sid is th managrs offic. In
th hall thr is sparat sating facility for mals and fmals customrs. In th hall all th
officrs of diffrnt dpartmnts has thir tabls. Th sating arrangmnt of all officrs is
sam dspit thir dsignation. Only cash dpartmnt and govrnmnt sction is sparatd.
Th facility of gnrator is also providd to th branch.

2.8.3 Numbr of Employs


In NBP Nawan Shhr branch Abbottabad th mploys ar vry xprincd. Thy ar vry
loyal and committd to thir jobs. Thy ar also vry much cooprativ with thir collgs if
anyon of thm fac any problm in his work thy nvr hsitat to hlp him. Numbr of
Employs currntly working thr is 11.

17

CHAPTR 3
JOB DSCRIPTION

3.1 PLAN OF Y INTRNSHIP


Firstly I startd my intrnship in NBP andian Branch. ajor dpartmnts in NBP andian
branch ar financ dpartmnt loan dpartmnt human rsourc dpartmnt .t.c.
Th gnral division in branch is as follows cash dpartmnt, dposits dpartmnt advancs
and crdit dpartmnt, rmittanc dpartmnt, forign xchang dpartmnt, IT dpartmnt
but I am working in financial human rsourcs dpartmnt only .NBP andian branch
working nvironmnt ar vry comfortabl managmnt ar vry cooprativ .most of tim
my intrnship priod was in NBP andian branch .thy ar vry cooprativ hlp full,
managmnt ar so gntl, thy provid vry guidlin about working to mak things
bttr .i am working undr sir ZAKAB .and h is vry cooprativ prson. my intrnship is
projct bas.

NBP bliv in crating maximum conomic valu for our clints and sharholdrs whil
maintain th highst human valus and principl. NBP is on of th lading banks in
Pakistan. As on of th largst and oldst banking corporations in th country .th cultur of
NBP is strong and mploys ar profssional committd to thir work.
Bank is continuously focusing on dvloping a nw and innovativ product to attract thir
targt markt. Strong customr rlationship. Assts utilization is vry good .it has largst
AT ntwork in Pakistan.
I join NBP for intrnship in NBP andian branch I workd in rcord kping dpartmnt,
rmittanc dpartmnt offic I workd in dpartmnt.

3.2 Prsonal objctivs

18

During my intrnship in th NBP limitd, I rally njoyd to work with th staff of branch,
NBP HR and financ dpartmnt in andian, Abbottabad. It was almost impossibl to
work in all th dpartmnts within that limitd tim. But on my rqust th staff of branch
providd m th opportunity to work in th diffrnt dpartmnts within that limitd tim.
But on my rqust, th staff of th branch providd m th opportunity to work in th
diffrnt dpartmnt for th sak of practical knowldg .for providing m th grat
nvironmnt to work in diffrnt dpartmnt & sats and larnt th followings.

I workd as an intrn in NBP andian human and financ dpartmnt .th main
objctivs to work in NBP wr:

To gt som xprinc in working with wll rputd organization.

To gain knowldg about th profssional nvironmnt of th bank.

To know about th tchnology utilizd in th banks,

To dal and mang with th situation of strss.

To know about th documntation procss of mploy of th bank

Purpos of intrnship

Intrnship is th capston xprinc that provids m with hands on, ral world
xprinc in a work stting. Idally, intrnship will nabl intrns to:

Intgrat and us my knowldg and skills from th classroom,

Discovr whr furthr comptnc is ndd,

Tak stps to gain that comptnc undr ducational suprvision ,and

Bcom bttr acquaintd with th typs of work stting in which such comptnc
can b applid.

3.3 TASKS PRFORMD DURING INTRNSHIP


3.3.1 Inquiry of mploy fils
During my intrnship, I was assignd a spcial projct chcking mploys fils and to chck
thir qualification and thir dgrs and rport it to th concrnd officrs to chck it from th
concrnd board or univrsity. Th purpos of this task was to chck th authnticity and
validity of th dgrs.

19

During this projct, I chckd all th mploys fils assignd to m and chckd thir
rlvant documnts and rportd to th concrnd officr.

3.3.2 Documntation
I was handd ovr th duty of documntation of appointmnt lttrs of nwly hird
mploys and to arrang thm in squntial ordr aftr chcking th lttrs and documnts.
3.3.3 Salary sction
I workd in salary sction, which is working undr HR dpartmnt of th bank .this sction is
rsponsibl for maintaining th rcords of mploys rgarding all typ if paymnts including
loans and bnfits. I larnt th procss of paymnt of salary, loans, bnfits and providnt
fund. In this dpartmnt I larnt th procdur of paymnt to mploys and larnt all th
ruls rgarding xpnss of th bank Calculation of mploys, turnovr:
During my intrnship, I prformd a spcial task with HR dpartmnt of calculating
mploys Turnovr and th rason for turnovr of th bank, for dcision making for highr
managmnt.
3.3.4 ID card
I prformd my duty in mploy, ID card sction, whr I compltd th ID card composing
procss aftr chcking mploys information, subsquntly comparing it from banks
rcord .i dalt with approximatly 4000 mploy cass. Th forum rlatd to mploys of
diffrnt citis of Pakistan.
3.3.5Arrangmnt of mploys, fils in th vault
I prformd duty in th fils stor whr I was rsponsibl for arranging mploy fils in
ordr with rspct to mploy.
3.3.6 Data ntry of blood rlation forums
I ntrd th data of blood rlativs of th mploys and th forum rang up to 7000
approximatly .this task was projct basd.

20

3.4 FINANCIAL ANALYSIS


Financial analysis, though varying according to th particular intrsts of th analyst, always
involvs th us of various financial statmnts primarily th balanc sht and incom
statmnt. Th balanc sht summarizs th assts, liabilitis, and ownrs quity of a
businss at a point in tim, and th incom statmnt summarizs rvnus and xpnss of
th ovr a particular priod of tim. A concptual framwork for financial analysis provids
th analyst with an intrlocking mans for structuring th financing.
National Bank Limitd
Balanc Sht
As at Jun 30, 2014
Assts
2014
Cash and Balanc with SBP and othr

2013

cntral banks

29728764

28582626

Balanc with othr banks

5501077

355234

lnding to financial institutions

90766297

7442732

Invstmnt

114089252

151613933

Advancs

175711942

127622868

Oprating Fixd Assts

6273239

5594914

Dffrd fixd Assts

530564

130939

Othr Assts
Total Assts

14804823
437405958

5182385
329724631

Bills payabl

5619826

1437639

Borrowing

15465418

50250684

Dposit unit and Account

380421569

1037784947

Dffrd tax liabilitis

Othr liabilitis

12021378

53628666

Liabilitis

subordinatd loans
liabilitis against

assts

subjct to

financ las

21

Total

413528191

1158061555

Shar Capital

23877767

18500114

Rsrvs

10027379

28818528

Unappropriatd profit

7276191

68715995

Surplus on rvaluation of assts

56412120

35243113

Total Liabilitis

159953035

15127750

3.5 VERTICLE ANALYSIS OF BALANCE SHEET


National Bank of Pakistan
Balanc Sht
As at Jun 30, 2014

Assts

2013-

2012-

2014

2013

290,086,15
174,57,523
526,530,41
663,068,742
118,248,691,8
554,036,48
554,036,48
296,774,062,5

12.4%
4.91%
2.81%
27.6%
44.6%
3.4%

12.3%
6.39%
3.62%
22.0%
49.7%
1.52%

4.06%

4.26%

63,513,271,1

100

100

0.92%
1.42%
77.6%

1.66%
1.84%
79.0%

0.004

0.0020

4%
0.66%
4.05%

%
0.37%
3.69%

2013-2014

2012-2013

othr cntral banks


Balanc with othr banks
lnding to financial institutions
Invstmnt
Advancs
Oprating Fixd Assts
Dffrd fixd Assts
Othr Assts

161,767,165
318,870,653
357,812,66
873,370,008
123,562,271
651,752,62
210,597,5
972,336,55

Total Assts

762,193,593

Cash and Balanc with SBP and

Liabilitis
2013-2014
Bills payabl
7,061,902
Borrowing
10,886,063
Dposit unit and Account
591,907,435
subordinatd loans
liabilitis against assts subjct to

2012-2013
10,605,663
11,704,079
50,187,224,3
-

financ las
Dffrd tax liabilitis
othr liabilitis

13,235
23,870,73
23,496,910

33,554
5,097,831
30,869,154

22

Total

645,855,939

55,317,859,3

Shar Capital

8 ,154,319

7 ,090,712

1.06%

1.11%

Rsrvs

1 5,772,124

1 3,879,260

2.06%

2.18%

Unappropriatd profit

4 5,344,188

3 2,074,677

5.94%

5.05%

Surplus on rvaluation of assts

4 7,067,023

2 8,909,469

6.17%

4.55%

Total Liabilitis

762,193,593

63,513,271,1

100%

100%

INTERPRETATION:
On vrtically analyzing assts sid of balanc sht w s that cash balanc portion is
slightly high and it should b rducd. Bank should lnd mor to financial institutions to
gnrat intrst incom, othr assts should also b rducd and must b utilizd in arning
assts. On liabilitis sid Shar capital portion of total liabilitis is vry low it should b up to
th mark and bank should mak ffort to dcras xtrnal funds as possibl.

3.6 HORIZONTAL ANALYSIS OF BALANCE SHEET


National Bank of Pakistan
Balanc Sht
As at Jun 30, 2014
Assts

2013-2014

2012-2013

Cash and Balanc with SBP and 94,873,249

78,625,227

2013-

2012-

2014
120%

2013
100%
23

othr cntral banks


Balanc with othr banks

37,472,832

40,641,679

92.2%

100%

lnding to financial institutions


Invstmnt

21,464,600
210,787,868

23,012,732
139,946,995

93.2%
150%

100%
100%

Advancs
Oprating Fixd Assts

340,677,100
25,922,979

316,110,406
96,819,74

108%
267%

100%
100%

Dffrd fixd Assts


Othr Assts

30,994,965

27,113,932

114.31

100%

Total Assts

762,193,593

63,513,271,1

120%

100%

2013-2014

Liabilitis
Bills payabl
7,061,902
Borrowing
10,886,063
Dposit unit and Account
591,907,435
subordinatd loans
liabilitis against assts subjct to

2012-2013
10,605,663
11,704,079
50,187,224,3
-

2013-

2012-

2014
66.5%
93%
117.9%

2013
100%
100%
100%

100%
100%
100%

financ las
Dffrd tax liabilitis
othr liabilitis

33,554
5,097,831
30,869,154

13,235
23,870,73
23,496,910

253.5%
213.5%
131%

Total dbt

645,855,939

55,317,859,3

116.7% 100%

Shar Capital

8 ,154,319

7 ,090,712

115%

100%

Rsrvs

1 5,772,124

1 3,879,260

113.6%

100%

Unappropriatd profit

4 5,344,188

3 2,074,677

141.3%

100%

Surplus on rvaluation of assts

4 7,067,023

2 8,909,469

162.8%

100%

Total Liabilitis

762,193,593

63,513,271,1

120%

100%

INTERPRETATION:
As compard to 2012-13, 20% hav bn incrasd in both assts and liabilitis in 201314which is bcaus of mor invstmnts and on th liability sid also 20% incrasd bcaus
of incras in Dposits and Shar capital. Bank should mak ffort to improv this ratio by
gnrating funds intrnally and making mor invstmnts.

3.7 PROFIT & LOSS ACCOUNT


24

National Bank of Pakistan


Profit and Loss Account.
As at Jun30, 2014
(Rups in 000)
Absolut

Particulars

2013-2014

2012-2013

ark-up/rturn/intrst arnd
ark-up/rturn/intrst xpnsd
Nt markup/intrst incom
provision against loans and

50,569,481
16,940,011
33,629,470
4,723,084

44,100,934
13,947,218
30,153,716
3,075,723

64,685,47
29,927,93
34,757,54
16,473,61

(709,461)

(74,970,9)

5,284
2,371,546
27,782,170

34,615
23,511,89

advancs
provision for diminution in th (40,248)
valu of invstmnt
Bd dbts
ark-up incom aftr provisions
NON
ARKUP/INTEREST

39,899
4,722,735
28,906,735

chang

11,245,65

INCOE

3.8 Ratio Analysis


1. CURRNT RATIO= CURRNT ASSTS /CURRNT LIABILITY

2013-2014

2012-2013

120085131/17947965 =6.69

142279638/22309742 =6.37

COENTS: Currnt ratio shows that bank has improvd its liquidity. Thr is a slight diffrnc in
both yars which can b improvd by having a strong control ovr rcivabls and
rducing th oprating cycl.

2. Nt profit ratio = nt incom/markup arnd *100

25

2013-2014

2012-2013

19,033,773/33,629,470 =0.56

17,022,346/30,153,71=0.56

COENTS: 2: Nt profit margin rmaind sanm for both priods .This ratio can b improvd by
lowring th intrst xpnss and administrativ xpnss which impacts highly on
th profit margins.

3. Earning asst to total asst= arning asst / Total asst

2013-2014

2012-2013

172929568 / 762193593 = 0.751

479070133/635132711 = 0.754

COENTS: 3: This ratio shows ngativ trnd. Earning assts of should b incrasd through
mor invstmnts, lnding and advancs and by not allowing cash to rmain idl at
bank.
4.Rturn on Earning asst= Nt Incom/ Earning asst
2013

2012

36363570/572929568 = 0.634

30657493/479070133 = 0.639

COENTS: 4: This ratio also shows a slightly ngativ trnd .It can b improvd by lowring th
intrst xpnss and administrativ xpnss which will improv th nt incom.

4. Intrst argin to Earning asst= Intrst argin / Earning Asst

2013-2014

2012-2013

26

33629470 / 572929568 = 0.0586

30153716/479070133 =.0629

COENTS: 5: This ratio shows ngativ trnd. It can b Improvd by incrasing intrst margin
and lowring th intrst and administrativ xpnss.

5. Intrst argin to Earning asst= Intrst argin / Earning Asst

2013-2014
33629470 / 572929568 = 0.0586
COENTS: -

2012-2013
30153716/479070133 =.0629

6: This ratio shows that as compard to 2009 ratio of dbt to total assts has bn
rducd for bank. It can b improvd by not making dbt financing as possibl as thy
can.
6. Dbt to total assts ratio = total dbt/total assts

2013-2014

2012-2013

645855939/762193593 =0.847

553178593/63513271= 0.870

COENTS:
7: Favorabl trnd found in this ratio. Dposits should b incrasd to gnrat mor
incom.
8.Loan to Dposit= Loan / Dposit
2013-2014

2012-2013

340677100/595907435 = 0.575

316110406/501872243 = .6298

COENTS: -8: This ratio suggsts that bank has incrasd intrnal sourc of

27

funds as compard to th outsidrs which is a good sing.

28

CHAPTR 4
CONCLUSION AND RCOMMNDATIONS
4.1

CONCLUSION

I will brifly xplain my intrnship in National Bank of Pakistan, andian branch


Abbottabad. NBP has vry strong ntwork thr ar many opportunitis availabl for
qualifid prsons, thy can join it for long-trm carr, and Ovrall working nvironmnt of
NBP is vry comfortabl. Furthrmor, anagmnt of andian branch Abbottabad
concntrats on its mploys and considrs thm as th Asst of bank. Bhavior of branch
managr is vry polit and th whol managmnt focuss on th individuals carr and thir
growth.
I found my intrnship at NBP to b a vry knowldgabl xprinc and training was vry
much bnficial for m, bcaus it hlpd m to b awar of a ral lif working nvironmnt,
As far as my larning is concrnd; all th mploys at branch wr vry much cooprativ.
Rlatd to this, managmnt of this branch hlpd m to undrstand th procdurs of a bank
to possibl xtnt; thir good bhavior also gav m mor confidnc to larn mor about th
banking oprations and to ask if I hav found any qury in my mind.
I had mad an honst ffort to prsnt th working & oprations of NBP, spcifically to
andian branch Abbottabad in simplst way. orovr, I fl plasd that I hav rally
larnd a lot during two months & njoyd working with xprincd cooprativ &
intllignt staff.

4.2

RCOMMNDATIONS

National bank of Pakistan is an ffctivly oprating and profit making organization and
carrying out its activitis undr a spcifid systm of procdurs. Ths procdurs and
rgulations changs with th passag of tim. Th stat bank of Pakistan, which is th main
rgulatory body, provids all th procdurs and information to nsur th ffctiv
oprations of th commrcial banks.

Th man rgulatory body is stat bank of Pakistan,

which provid th policy guid lins and nsur that th mony markt oprat on sound

29

profssional bass. Whil th had offics spcifis th whol procdur of functions and
oprations.
Hr som suggstions ar rcommndd, which can incras th fficincy of th workrs
and as wll as th prformanc of th NBP.
Rcommndations ar givn in th following,
4.5.1) Profssional Training:
Th staff mmbrs do not hav th strong profssional background. Thy do not hav modrn
tchniqus and knowldg rgarding th bank procdurs.
Although staff training collgs ar working in all major citis but thy ar not prforming
wll. For this purpos ths staff collgs should b rorganizd and thir syllabus should b
mad in such a way to hlp th mploy undrstand th vr-changing conomic conditions.
Banking council, of Pakistan should also initiat som programs to quip th staff with much
ndd profssional knowldg.
4.5.2) Dlgation of Authority:
To mak th nvironmnt of th work plac mor cohsiv propr authority dlgation is
rquird in th bank. Staff mmbrs of th bank should b givn a task and authority and h
or sh should b ask for thir rsponsibility. In this way no on can put th blam of thir
mistak on othrs.
4.5.3) Prformanc Appraisal:
Th managr should strictly monitor th prformanc of vry staff mmbr. All of thm
should b awardd according to thir prformanc. Spcial bouncs and incntivs should b
givn to motivat thm.
4.5.4) On Th Job Training:
On th job training should b carrid out by th managmnt to mak thir staff bttr
concrning th global changing conomic nvironmnt. For ths purpos sminars,
confrncs and dbats should b organizd.
4.5.5) Transfr:
30

Transfr is not proprly carrid out. Som of th mploys ar continually srving at th


sam post. Thy ar simply rotatd at th sam branch.
Thrfor it is rcommndd that rotation of vry mploy should tak plac in vry thr
yars in diffrnt branchs of th bank.
4.5.6) Changs in Policis:
Thr should not b any abrupt polics by th uppr managmnt, as this practic damag th
customr confidnc in th bank. Policis should b mad in such a mannr that any nw
govrnmnt could not altr it.
4.5.7) Qualifid Staff:
Rquird qualifid staff should b providd to branch in ordr to improv th functioning of
th branch. Espcially a tlphon oprator should b appointd. Numbr of popl should
also incras in ordr to facilitat th work smoothly.
4.5.8) Availability of computrs:
ost of th work in Baffa branch is carrid out manually. Thrfor it is vry tim consuming
and difficult task
It is rcommndd that vry dpartmnt should kp thir data in computrs; similarly
advanc dpartmnt should also kp th profil of th borrowrs in computrs which will
mak thir job asir whil calculating diffrnt installmnts. Spcial computr programs
should b dsignd according to thir nds, nsuring full rliability and scurity.
4.5.9) Utility bills chargs:
Th banks ar ntitld to lvy spcial chargs on utility bills (lctrically, gas, tlphons tc.)
from consumr. It was fixd by th govrnmnt. Ths chargs ar so lss that thy ar
unabl to mt th cost of th bank. Ths chargs should b incrasd to Rs.10 pr bill to
nabl th branch to covr thr handling costs and arn som profit.
4.5.10) Link with th Had Quartr:
100 major branchs of NBP should stablish a dirct link with th had quartr in Karachi,
through intrnt. This will mak th functions and dcision making of th managmnt asir
and convnint.
31

\
4.5.11) Crdit Cards:
National bank of Pakistan should start its oprations in crdit cards. Ths cards ar vry
hlpful for th ordinary customr in gnral and th businss in particular.
To mak it mor scur and to liminat th misus of it, th managmnt is rquird to kp
propr scurity against th card.
4.5.12) Installing Valuator
Valuator machin is usd to count th currncy nots and its installation will hlp to liminat
th counting rrors and will sav tim as wll.
So for th purpos of saving tim th installation of valuator is compulsory.
4.5.13) Forcasting:
Efficint forcasting may incras th profitability of th any organization. So Forcasting
nds to b introducd at NBP. Bfor taking any major dcision it is ncssary to judg
dcision, which thy ar likly to tak. Whthr it has good or any bad impacts for th bank
and for th conomy as a whol. It will also hlp in bttr planning.
4.5.14) Intrst On Ovrdraft:
Ovrdraft is a short trm crdit facility providd by th bank to its trustworthy customrs fr
of intrst. Only bank commission is charg on th amount of crdit availd. It is
rcommndd that th bank should charg small amount of mark-up on th ovrdraft, which
will hlp th bank to improv its rvnu position.
4.5.15) Clan Loan:
Clan loan or clan ovrdraft is th crdit facility xtndd to th customrs without any
scurity. Ths typs of small trm loans should not b xtnd to any body, bcaus som
tims ths loans ar providd to blu-yd popl of th managmnt and thy bcom a
part of bad dbts.

32

4.5.16) Cash Financing:


In this mod of financing th amount of crdit not utilizd by th borrowr is rmaind tax
fr. It is rcommndd that a small amount of intrst should b chargd on this mod of
financing. Bcaus th bank dos not utiliz this amount anywhr.
4.5.17) Staff Rlationship:
Good rlationship among th staff mmbrs lads to th bttr prformanc in any
organization. It is obsrvd that th staff rlationship was normal but som tim it is notd
that thir xistd a littl conflicts among th staff mmbrs. So this sort of attitud is not good
bcaus it wak th spirit of tam work.
4.5.18) Impropr Distribution of Work:
Propr distribution of work lads to succss in vry organization. Propr distributions of
work prvnt th mploy from ovrwork and undr work situation. For a smooth running
of an organization propr distribution of work is vry ssntial.
During th intrnship I obsrvd that thr was no propr distribution of work in th bank,
som of th mploy work lik ants whil othrs sat idl staring hr and thr. So this
cratd a lot of ovrwork situation for som mploys.
4.5.19) Favoritism and Npotism:
In th Oghi branch during th intrnship, it is obsrvd that thr is lot of npotism and
favoritism.
Whn som of th mploys ar transfr to othr placs, du to thr rlations with top
managmnt thy can cancl thir transfr in fw wks.
So I suggst that in th organization thr should b no favoritism, npotism and politics and
thir transfr and promotion should b mad on mrit and provid favorabl nvironmnt to
all th mploys qually. Thy should b rwardd on thir prformanc.
4.5.20) Intr Dpartmnt Transfr:
It is obsrvd during th intrnship that, thr ar numbr of mploys who ar working on
on sat sinc last two yars. It can affct th prformanc and motivation of th mploys
ngativly. Thrfor thr should b th intrdpartmntal transfr of th mploys to mak
33

th jobs and th working nvironmnt intrsting. And this transfr should b for a rasonabl
tim priod.
4.5.21) arkting Policy: Th branch should adopt various markting stratgy and
promotion stratgy to promot th bank and its products. Ths markting stratgis may b
vry hlpful. For this purpos th bank should conduct th sminars and confrncs within
and outsid th bank.
Th NBP should adopt various prizing schm just lik allid bank (kar amd schm) bank
Alfalah (monthly incom arning schm) and various othrs. dia and nwspaprs can b
hlpful in this rgard.
4.5.22) Facilitis In branch:
Thr is no propr facility for th customrs in th bank whn thy ntr th bank. Th propr
furnitur is not availabl for th customrs. In th tim of rush th popl mov hr and
thr in th bank which rally crat th disturbanc.
So in ordr to maintain th good working nvironmnt th customr should b srvd
proprly so that thy can fl that thy hav takn th right dcision to choos this bank for
th safty of thir mony. If th bank taks stps in this dirction thn, it will incras th
goodwill of th bank.
4.5.23) Complaint Of Customr:
Thr should b an inquiry dsk to provid th information and to rciv th complaints of
th customr in th bank.
Thr is no complaint box availabl in th branch and not any prson appointd to har th
complaints.
So I suggst that managmnt should install a complaint box in th branch, and rcruit a
spcial prson for th guidanc of th customr in th bank.
4.5.24) Analysis of th Businss:
Propr analysis of th businss should b conductd bfor xtnding any typ of loan. For
this purpos profssional training of th staff mmbr is rquird.

34

4.5.25) Crdit onitoring:


Th crdit dpartmnt of th bank should carris out vigilant crdit monitoring. Thy should
nsur th propr paymnt of installmnts and th markup by th borrowr.
Th staff mmbr who has don all th papr work of th loan xtnsion should prform th
monitoring vry carfully.
4.5.26) Avoiding Bad Dbts
Grat car should b takn whil xtnding th loans. Loans should b awardd against
rasonabl scuritis, whr markt valu should b qual to th loan grantd.
Policis should b adoptd in such ways that nsur that no loan is xtndd on political
prssur.
SBP rgulations for loan approval should b strictly followd. According to which currnt
ratio of th borrowrs businss must b 1:1 and th dbt to quity ratio should b 1:2 mans
liquidity position of th businss should b halthy.

35

RFRNCS

1. Gibson, Charls H, (2002); Financial Rporting & Analysis, 7th Edition. Prntic Hall
Intrnational Corporation.
2. Lawrnc J.Gitman, (2008); Principls of managrial Financ. 11th Edition, San Digo Stat
Univrsity.
3. Siddiqi, Asrar H (2008); Practics and law Banking in Pakistan, (8th Ed), Royal Book
Company, Karachi.
4. NBP Annual rport (2012), (2013), (2014 Half Yarly Rport); National Bank of Pakistan
5. National bank of Pakistan 2012, xcutiv committ, viwd 05 may, 2014, <http://
www.nbp.com.pk>
6. National bank of Pakistan 2014, publications, annual rports, accssd on 09 ay
2014<http:// www.nbp.com.pk/Publications/indx.aspx>
7. Businss rcordr 2012, highst rating, viwd 05 may,2014, <http://www.brcordr.com/top-

storis/0/1175012/>

36