XECUTIVE SUMMARY:

The Department of Administrative Sciences offers Masters degree in Business

Administration. They are giving the best education and are offering for
specialization, financial management, marketing management, human resource
management and computer application to business. An important program is six to
eight weeks internship with any recognized institution.

I decided to take up Askari Bank Limited for my internship because it is a competing

Bank nowadays and gives a good training to the internees. So in order to learn
more this was my choice.

This report is about my internship that I have undergone at Askari Bank Limited
Multan Branch from 2nd June 2008 to 18th July 08. During my internship I am able
to learn practical aspect of business, and get good working experience.

On the very first day of my internship I reported to Operation Manager Mr. Noor ul
Islam. He gave me small introduction of the Bank and introduced me to the staff of
the Bank. Every internee is rotated among the Banks departments and so was I.
This rotation is done in order to have general concept regarding Banks functions,
operations and policies. In this rotation the stay in department is usually a week. I
have learned more about the Basic Banking, Credits and Foreign Trade department
and have given below the caption of activities I was involved in during the period of
six weeks.

During my internship I found that Askari Bank is a best Bank in Multan because
most of the Exports and Imports in Multan are done through this Bank. Multan is one
of the cotton growing cities of Pakistan. Most of the businesses in Multan are
directly or indirectly linked to cotton that is also the case with Askari Banks clients.
Because Multan is an Agricultural City, and its major export is Cotton and Mango.
So its export is done on seasonal basis. In the season of cotton and Mango export
Askari Bank get its target easily but difficult for it to get its target in the off season.

Low profit rates used to be one of the major reasons for not meeting the deposit
targets. The profit rates on Askari deposit schemes were quite low when compared
with other Banks especially with the National Saving Centers, but now Askari Bank
is giving a comparatively high profit rates to its customers. In todays every
customer is a rational customer, he knows the value of money and wants a best
return on his money.

INTRODUCTION TO BANK:

Askari Bank Limited (AKBL) works as a Unit of Army Welfare Trust was established
for the Welfare of Army Officials. The office of Army Welfare Trust is situated at AWT
Plaza, Rawalpindi. AWT offers the AWT Saving Scheme to the army officials only.
AWT has its units as under:
Askari Associates.
Askari Leasing.
Askari General.
Private Business.
Textile Mills.
Cement Industry.
Askari Commercial Bank.

Askari Bank Limited was incorporated on October 9, 1991, as a Public Limited

Company, and is listed on Karachi, Lahore and Islamabad Stock Exchanges. The
Bank obtained business commencement certificate on February 26, 1992 and
started operations form April 1, 1992. Askari Bank is scheduled Commercial Bank
and is principally engaged in the business of Banking as defined in the Banking
Companies Ordinance 1962.

Askari Bank Limited continues to scale new heights in all areas of its operations. The
safety and security of depositors funds, high productivity and optimum use of
technology are the hallmarks of its corporate strength.

In 1994, AKBL earned international recognition as Asia Money Award and the title of
Best Commercial Bank of Pakistan for the year 1994, while Euro money declared
the Bank as best domestic Bank of Pakistan for the year 1995.

ASKARI BANK LIMITED MULTAN

Askari Bank Limited Multan was inaugurated on December 28,1994.

It is located on Abdali Road Opposite to PIA Office. The location is connected to all
the main trade centers in Multan. It is a prosperous branch streaming towards great
achievements.

At the time of its establishment the factored who were considered are as follows
Multan is zone covering a large population.
Multan City is linked to many big cities.
Agro based area constituting growers and gainers
Army Offices & Fort Colony
Educational Institution

DEPARTMENTS:

The bank has following department:

Account Opening department
ATM Department
Credit Card Department
Account Department
Credit Department
Remittance Department
Foreign Trade Department
Cash Department

ACCOUNT OPENING DEPARTMENT

Borrowing funds from different sources has become an essential feature of todays
business enterprises. But in the case of a bank borrowing funds from outside parties
is al l the more vital because the entire banking system is based on it. The borrowed
capital of a bank is much greater their own capital. Banks borrowing is mostly in
the form of deposits. These deposits are lent out to different parties. Such deposit
creation is done through opening an account in the Bank.

In AKBL Multan Mr. Sheeraz Hassan is operating the account opening department
along with performing some auxiliary functions of Check Book Issuing

TYPES OF ACCOUNTS

In AKBL, there are the following types of accounts:

Current account.
Saving Account.
Askari Special Deposit Account.(ASDA)
Basic Banking account
Term Deposit.

CURRENT ACCOUNT

In current account there is no interest on it. It is for only transaction purposes. They
are paid on demand. When a banker accepts a demand deposit, he incurs the
obligation of the paying all cheques drawn against him to the extended of the
balance in the account. As there is no profit paid on this account it is also called
chequing account because cheques can be drawn on it. Current account is mostly
opened for business.

SAVING ACCOUNT

The purpose of this account is to induce the habit of saving individuals in the
neighborhood. The minimum deposit for opening the account is Rs.1050/- (as
obvious in the Annexure).

Though individuals open such accounts for saving purpose, persons belonging to
Armed forces and different military institutions are free to use this account on
current basis.

ASKARI SPECIAL DEPOSIT ACCOUNTANT

ASDA account is an interest bearing current account interest is paid. The payment
of return is monthly, where as the rate of return with aspect to the amount of
minimum deposit clear from deposit schedules in following table). It is also chequing
account because cheques can be drawn on it. It is necessary for this account that
the client must maintain a minimum balance of Rs. 50,000 at the end of the month.
Thats why it is similar to current account. It is mostly opened by Business but
individuals too open this account.

Tax of 0.3% would be deducted on ASDA if withdrawals are more than Rs.25,000.

TERM DEPOSITS

A term deposit is a deposit that is made for a certain periods of time at the end of
the specific period. the customer is allowed to with draw the principle amount .

AKBLs Term deposits are of types clear in the deposit scheme in the table). One of
them is Askari Advantage one month. The rate of return on this account is set by
head office. The term deposit account vary one month to 1 year for all following
accounts (as clear from Deposit Scheme in the table).

The amount of profit is given to depositors in three ways:

By cash
By sending a bank Draft to depositors Home address or Officers or whichever is
specified as mailing Address.
The amount is credited in any one of the checking Accounts of the depositor.

ACCOUNT OPENING PROCEDURE

Fro the chequing accounts (C/A, ASDA, SAVING), there are different types of account
holders are required for all these types of account holders. The operation /procedure
requirement that is needed for Individual Account differ greatly from Joint
account proprietorship Partner ship , Limited Company

and Club society or Association as explained below.

INDIVIDUALS ACCOUNT

When a single man or women opens an account in his/her own name and has the
right to operate it is called individual Account.

DOCUMENTATION REQUIREMENT

For literate person copy of National Identity Card is required as a primary

requirement. For illiterate person and Veiled Women, along with the copy of National
Identity Card requirement he or she must come in person for opening the account.

OPERATION

The person place a Check Mark in the type of account and type of operation
required
He/She fills in part-I of the form , a fix his /her either two or four similar signature
(or thumb expression in the signature space and get it introduced and signed by a
person who already has an account with the bank and write his account no in the
specific rows in a specific space.
The person fills in next of Kin position where he/she father, mother, husband/wife
or any other relatives name, his /her address, phone no and affix his/her signature
to certify this requirement. This requirement is needed because in his/her absence
bank can have correspondence with the specific person.

The person put her /his signature ( or thumb expression) on the signature
Specimen Card (SS CARD) similar in the area on the form. One the back of S.S card
mailing address, telephone no, Person to contact and introducer space is filled in. All
these requirement are necessary for future
The person deposits the initial amount for opening account on to the cash counter.
The person put his signature on form -A (check book requisition) on two places in
authorized signature and fills in the Title of Account space by writing his name.
If the person put his signature in Urdu or any language other than English, he
signed a Vernacular form where under take that affixed signature are original and
his own signature and two postal size photos are needed.
The next day is the opening of account.

JOINT ACCOUNT

When two or more persons, neither partners, nor trustees, open an in their name is
called joint Account. Husband and wife or two persons of same sex can open joint
account.

DOCUMENTATION

For joint account copy of National Identity Card of all the persons is obtained other
things remaining same as in individuals account.

OPERATION

The person checks the type of amount and type of operation required in the
respective box on the form.
The persons fill in the Part-I and part-II in the form.
Signatures of both persons are obtained on the form in the area specified for
signature and S.S. Card.
In the title of account space names of all the persons are mentioned.

Accounts holder specified in the form that they will operate the form singly or
jointly.

PROPRIETORSHIP ACCOUNT

When an owner of a firm operating singly, opens an account in his firm name, this
account is called a proprietorship Account the proper himself liable for all his acts.

DOCUMENTATION REQUIRED

For this kind of account, an application for opening the account on the firm letter
-pad (having the firm name) is required along with the NIC Card of proprietor.

OPERATION

All operation remains the same except that the firm name is written in the Title of
the Account area and signature of the proprietor are affixed in the S.S. Card and
the area specified for signatures on the form.

PARTNER SHIP ACCOUNT

The account is opened in the firm name and all partner designate one two persons
to act on behalf of the partner ship firmer all acts on behalf of firm. The partners in
the partnership firm are liable for the acts of the firm jointly and severely. Every
partner has in a firm has an implied authority bind his co. partners by drawing and
enclosed cheques.

DOCUMENTATIONS

Copy of N.I.C card of all partners

Application to open the account on the firm letter pad.
Partner ship deed in case registered partnership firm.
Letter showing the implied Authority of one or more partners to act on behalf of the
firm.
In case of non -registered partnership firm, understanding on behalf of the firm to
remain liable for all acts of the firm.
Name, address of all partners is written on the pad.

OPERATION

All other requirement remain same except that the form is dully signed by all
partners cards are signed by all those partners who will act on behalf of the firm and
along filling part-I , Part-Iv is also filled.

LIMITED COMPANY ACCOUNT

This account is for limited companies. In order to facilitate their transaction with
outside parties, bank provides many facilities.

DOCUMENTATION REQUIRED
Memorandum of Association.
Articles of the Association
Resolution of the Board of Director.
Certificate of Incorporation.
Certificate of commencement of business
N-I-C

OPERATION

The persons authorized in the Resolution of the Board of Directors put their
signatures on S.S Cards. Next of kin requirement is not need in case of a Limited
Company. After completing each and every formality, introducer signature is verified
by S.S card and is stamped Verified customer signatures are admitted by
stamping Admitting near signature and again signatures on S.S card are admitted
in the same way. The same process of verification and admission of the signatures is
repeated on Form-A and next of Kin area.

After completing each and every formality, Accountant is open in the computer by
writing name, address, A/C Number etc.

LETTER OF THE THANKS

At the start of the letter 2nd day, AKBL issues letter of thanks to Account opener
and account opener and Account Introducer for the trust the have on AKBL.

CHECK BOOK ISSUING

Check books are issued only for checking account such as current Account, saving
Account and ASDA Account. They are not issued for other fixed and term deposits
because of their Long term Accounts nature.

ISSUING PROCEDURE
Signatures on cheque book requisition are verified by matching with signatures on
SS.
Cheque book leaves number, account number, account holders name are
mentioned in the cheque- book is made by mentioning the and the total of sum of
excise duty and provincial tax.

The name of A/c holder and date of cheque book issuance is written on cheque
book requisition the account-opening officer puts his initials on requisition leave.
A/c number is stamped over the leaves of cheque book and finally authorized
person affix his signature over the debit voucher and he voucher is attached from
the cheque book and is handed over to the customer .

RECEIVING INWARD CHEQUES

Another responsibility and function of account Opening Department is to receive

Inward cheques for collection of other Banks as well as of AKBL . Then these
cheques are sent to clearing official who clears these checks at SBP from other
banks.

ACCOUNT CLOSING

Account is closed on the written request of the customer AKBL free of cost. But to
surrender the cheque book yet if some leaves are yet to be write to the bank as a
necessary requirements for closing the account.

PROCEDURE
The customer for individuals account write an application to the manager of the
bank an a simple paper about the closing of his account with the bank (In case of
proprietor ship partnership and limited company account the application should be
written an firm or company letter head)
The individual or in case of other type- proprietor firm and company surrender the
cheque book to the bank.
The cheque book is then torn from one side and is attached with the application.
In case of Ltd. Company account resolution of the board of directors is also obtained
to attach it with the application.

The account opening form of the account holder is taken from the account-opening
file, and the application, cheque book, and resolution of board of directors in case of
limited company account are attached with the form.
Lastly, it is written in Red Ink on the form that account closed and Date of
account closing.

EVERYDAY POSTING

Following transaction of cheque book is posted:-

Dr_____________ party A/c

50(for 10 leaves)

Rs 5/leave.

ATM- CARDS DEPARTMENT

This department deals in issuing ATM-Card, term deposits and Askari Bachat
Certificate. Mr. Sheeraz Hassan deals this department.

ATM CARD

ATM Cards are only issue to Account Holder

ISSUING PROCEDURE
The person, first open the account within the blank.
Then he fills the ATM application form in which name of account holder, Fathers
name account number and N.I.Card number are mentioned.
A copy of N.I. card is also attached with the application form.

After completing this process, the application package is sent to head office
ACBL head office takes a period of 3-4 weeks for preparing and processing of ATM
cards. First, list of card holder is issued and then after 15 days cards are send to
ACBLs issuing branch. The card and list are not sent simultaneously in order to
avoid any mishandling.
ACBL takes Rs. 350/- for 1st time issuance as charges for a card
Biannually takes Rs 75.

ACCOUNTING DEPARTMENT

Accounts department is a department which deals and checks all the activity of all
the department .It also deals in expression of finance of the bank. Salary payment is
also one function of the bank.

CHECKING BANKS DAILY ACTIVITY

Accounts department deals and checks the entire working of the Branch; all the
vouchers that have been posted at the computer are scrutinized in accounts
department. The End of Day i.e. computer print is also received from the
computer. The next day the activity is separated some statements from the End of
Day. Then next day activity separated some statements from the End of Day.
The vouchers are sorted out head wise. The vouchers are matched with the entries
in the statements.

Any abnormality if occurs, is immediately dealt with. All the vouchers and
instruction are checked individually are checked individually against the computer
printouts. After checking they are signed by Mr. .Naeem Shehzad and the internal
auditor Mr. Shafiq.

OTHER ACTIVITIES
Preparation of daily bank positions statement
Payment of salaries

Preparation of the statements

Depreciation calculation
Lockers Issuance

REMITTANCE DEPARTMENT:

The need of remittance is commonly felt is commercial life particularly and in

everyday life generally. The main function of the remittance department is to
transmit money from one place to another. By providing this service to the
customer, Bank earns a lot of income. Also customer is able to meet its day to day
financial requirements.

Demand Draft:

It is an instrument payable on demand for which value has been received, issued by
the branch of the Bank drawn i.e. payable at some other place (branch) of the same
Bank. If two Banks are involved then the DD is sent to other Bank but in other case
it is handed over to the applicant.

Issuance Procedure:
A demand draft application is given to the customer, he fills in relevant information
and signs it.
The officer checks the information form.
The Bank charges such as commission, excise duty is charged as per effective
schedule of charges. If he fills the tax exemption form, tax is not charged.

In case of cash deposit, the cashier counts the amount and signs the DD application
and enters it in the register.
Then the officer of remittance department signs it and operation manager counter
signs it.
The entry is made in the DD issuing register, DD is given to the customer.
Vouchers are prepared and posted.
DD advises are printed and mailed to the respective branch.

Payment Procedure:
The Bank receives DD.
The DD credit advice is received through mail. The numbers are checked and
signatures are verified.
An entry is made on the DD payable register and the vouchers are made.
DD credit is attached with the vouchers and given for posting to the computer.
When DD is received the test numbers are checked and the payment is made.
Vouchers are given for posting and the entry that was made in the register is closed
i.e. DD payable is Nil.

Pay Order:

It is an instrument issued for payment in same city. Pay order issued from on e
branch can only be payable from the same branch. It is normally referred to as
Bankers cheque. It is also called confirmed cheque, because Bank issues this on it
own guarantee.

Issuance Procedure:

The standard form is given to the customer. He fills in the details and signs it.
The concerned officer checks the form.
Bank charges (or commission) as per the schedule of charges and the withholding
tax of 0.3% are applied.
The cash amount of the pay order is received.
A cash memo is signed, stamped and handed over to the applicant as a receipt.
Then the pay order receipt is filled accordingly.
Counter foil is also filled.
An entry is made in the pay order issue register.
Then the authorized officer signs it after checking the pay order.
The order is then handed over to the applicant after obtaining his signature on the
PO Form.
A voucher is also made and posted at the computer.

Payment Procedure:
On presentation of the pay order receipt, two authorized officers of the branch sign
the receipt.
PO entry is made in the PO issue register.
Then the amount is credited to the account of the customer or pain in cash.
PO is posted at the computer.

Outward Bills for Collection:

The bills, which are received by the Bank and sent to other cities (branches) for the
local clearing in that city, are called Outward Bills for Collection.

Procedure:

The cheques that are of other cities are separated.

They are entered in the OBC Register and OBC numbers are given to them.
The OBC forwarding schedules are prepared for different branches.
The respective cheques are attached with the schedule.
The office copy is filled and original schedule is mailed.
On clearing, the respective Banks send back the OBCs along with the IBCA (Inter
Branch Credit Advice).
The OBC numbers are checked from the OBC register, after that entries are made.
Commission charges are deducted from the account.

Inward Bills for Collection:

The bills, which are received by the Bank from other branches out of the city for
local clearing are called Inward Bills for Collection.

Procedure:

The OBC of other branches will be the IBC of this branch. So an OBC forwarding
schedule is received by mail.
The cheques are entered in the IBC register. The IBC numbers are allotted to them.
The cheques are lodged for clearing.
After realization, an IBCA is prepared and mailed to the branch from where the
cheque was received.
At the end of the day, two vouchers are prepared and posted.

FOREIGN TRADE DEPARTMENT

Foreign trade department deals in:

Foreign currency account

Exports
Imports

FOREIGN CURRENCY ACCOUNT

Mainly this account deals in individual, personal and companies account

CRITERIA FOR OPENING FOREIGN CURRENCY ACCOUNT

There are not hard and fast rules for becoming the Foreign Currency Account holder.
Bank wants only introduction of the Client and very little about the background. I.D
card is also not necessary, if someone has; well and good, otherwise no restriction
will be there for him.

FEATURES OF FOREIGN CURRENCY ACCOUNTS

There will be legal protection for the account holders.
According to foreign exchange rules and regulation every citizen of Pakistan, either
within the Pakistan or outside the Pakistan, can open the foreign currency account.
Resident firms and Resident Companies including investment Banks can open
Foreign Currency Accounts.
All foreign nationals and foreign Companies in Pakistan or abroad can open Foreign
Currency Accounts.
Opening of Foreign Currency Accounts in the joint names of residents/non-residents
is permissible. Foreign Currency can be deposited by:
Remittance received from abroad
Foreign Currency Notes

There will be no restriction and questioning to him about the currency, which he
wants to deposit that from where he got that money.
No Zakat will be deducted on these accounts; no Income Tax deduction, no Wealth
Tax deduction will be there.
These incentives reinforce and motivated the people to invest in foreign currency
accounts rather to keep the foreign currency idle.
Foreign currency accounts can easily be transferred from one person to another,
one place to another, with in the ACBL Branches or in other Bank.
The account holder can transfer the funds freely, in any currency to any part of the
world.
Foreign currency Accounts can be used for payment of purchases at Duty Free
shops.

FACILITIES

This account provides following facilities:

Traveling quota
Out ward remittances
In ward remittances receiving
To make remittances procedure flexible

EXPORT

Mainly export deals in:

Negotiation of documents
Sending the documents for collection
Pre-shipment financing

Post-shipment financing
Remittance against agent commission
Forward covered booking
Handling the documents for negotiation according to the UCP 500 (uniform custom
and practices)
Handling the documents for collection according to URR (uniform rules for
collection)
Submission of monthly returns to SBP regarding the export on form A-2/O-2

IMPORT
Opening the letter of credit
Scrutinize the documents receive from flowing bank under letter of credit. Account
to UCP 500 and extending the credit facility to the importer informs FIM (finance
against imported merchandise) FATR (finance against trust receipt).
Arrange forward cover booking regarding import payments
Also arrange forward cover booking for letter of credit open other then ACBL
Submission of monthly returns to SBP regarding the import on form I

SWOT ANALYSIS

SWOT (Strength, Weaknesses, Opportunities & Threats) analysis of AKBL is

described below:

Strengths:

AKBL has got a well-developed on-line system in most of its branches. Remittance
Department is working very efficiently in transferring the funds of people due to this
system.
The Bank has also started ATM facility in most of its branches. 24-hour Banking is
new trend in Pakistan and AKBL has also taken apart in this trend.
One distinctive feature of the Bank is that it is the only Bank working for the welfare
of army officers, which was established by Army Welfare Trust.
The productivity of the Bank is very good. Bank is providing a high quality service to
its customers.
AKBL have strength that most of the imports which are done in Multan are handle
by AKBL Multan.

Weaknesses:

AKBL has lesser number of branches as compared to many other branches. Due to
this problem, army officers can not avail the benefits of their own Bank.
The human resource department is not performing the function of selection and
recruitment very effectively. Selection process is not on merit due to which
competent persons cannot be selected.
Bank should boost the product development and increase the range of facilities
offered for customers.
Bank is weak in its credit management. Bank should lend to very sound parties and
increase its payment rate.

Opportunities:

Govt. is taking very bold steps to promote IT in Pakistan. AKBL has an opportunity to
improve in technology.

AKBL is surrounded by many competitors. It has an opportunity to do aggressive

marketing to increase its business.
AKBL may increase its branches in competitive areas

Threats:

AKBL has many competitors, which are continuously increasing its products and
marketing aggressively. It may cause its customers to shift to competitors.
Some other Banks have competent taskforce, which is also a threat for AKBL.
Because human resource is the most valuable resource.
Due to the increased bad situation of Pakistan in which army is considered to be
involved increase the frequency of withdrawals, which would decrease deposits.

Financial Analysis:

Financial Highlights

The current years profit (2007) after taxation of the bank stood at Rs. 2,681,012 as
compared to Rs. 2,249,974 for last year. The deposits decreased by 16.49% to Rs.
11,197,424 as against Rs. 13,044,593 as on 31 Dec 2006. The loans and advances
figure stood at R.s 5,521,030 reflect on the improving market image of Askari Bank
as a formidable financial institution.

Ratio Analysis

The information contained in the four basic financial statements is of major

significance to various interested parties who regularly need to have relative
measures of the companys operating efficiency. Relative is the key word here,
because the analysis of financial statements is based on the use of ratios or relative
values. Ratio analysis involves methods of calculating and interpreting financial
ratios to analyze and monitor the firms performance. The basic inputs to ratio
analysis are the firms income statement and balance sheet.Ratios
2007 2006
Current ratio 1.03

1.04

Total asst turnover 0.11

Debt ratio

0.93

0.09

0.93

Gross Profit margin 0.11

0.22

Operating profit margin

0.21

Net profit margin

0.26

ROA

0.02

0.22

0.12

0.02

Earning asset to total assets

Earning assets are the assets which are very important for any company for the
bank earning assets are the assets on which bank can earn its profit which may
includes loans, advances, operating fixed assets and other assets on the loans and
advances bank can make profit by giving or investing in some where so Askari Bank
has increased its earning assets in the year 2007 as compared to the previous year
that show the good trend in the profitability of the Askari bank and the customer
believe on the Bank.

Ratio tells that on what percentage earning assets contribute the total assets. Well
bank also has increased its earning assets ratio shows the more profitability of the
bank as it can be shown by the profit and loss account of the 2007 that shows the
net mark up income more for the year as compared to the previous year so bank is
going gradually to the more profitability by giving more advances and loans.

Earning assetsASSETS

2007

Cash 13356055
Balances with other banks
Lending

3497054

14444143

Investments 39431005
Advances

100780162

Operating fixed assets

5128428

Total earning Assets

176636847

Other assets 5535038

TOTAL182171885

Total Earning Assets:

Formula:

Earning Assets / Total Assets

= 176636847 / 182171885

= 0.969616

Rs. 176636847

Return on earning asset

This ratio indicates the how much of earning assets take part in making of the profit
before taxation. This ratio is decreased during the year. Why is it so it has different
reasons these are as follows

Profit before taxation was more in the previous year as compared to the year 2007
because bank has low expenses and less provision for the bad debts and also bank
has small investments and limited loans and advances but in 2007 situation has
changed and bank increased its loans and advances.

Earning assets were also low in the previous year as compared to the 2007 so
overall ratio has been decreased but shows the good trend for the making of long
term planning

Formula:

Profit after tax / earning assets

= 2,681,012 / 176636847

= .015

Loan loss coverage ratio

This important figure is a reserve account to cover unexpected defaults on loans by

borrowers. These are generally referred to as no performing loans. The higher the
no performing loan and charge-off percentages, the higher the provision for loan

losses should probably be. Consequently, this would reduce net income and
earnings per share.

Well in the year 2007 banks this ratio has been increased to a great extent due to
different reasons theses are as follows.

Profit before taxation is low for the 2007 due to more expenses because bank is in
expanding mode thats why its expenses are increasing day by day.

Provisions and bad debts also increased in the year 2007 because bank also has
invested more in this year and ad more also granted more loans.

Formula:

Provision against non-performing loan and advances / profit (loss) before tax

= 3,920,240 / 2,299,785

= 1.70

Loan to deposit

Well there is a concept that banks loans are its assets while its deposits are
liabilities. But if a bank has low deposits then obviously it will give low loans
because bank gives its loans by the deposits and earn on the loans then pay mark
up on the deposits to the customers.

Well bank has increased its loans to deposits ratio in the year 2007 showing its
more deposits as well more loans and that is good for the bank to remain in the
market and to penetrate in the market.

But profit has not increased with the same ratio because

Bank has low mark up rates

Bank has more capacity for provisions

Formula:

Loans / deposit

= 14444143 / 11,197,424

= 1.289

Current ratio

This ratio indicates the liquidity of the bank. Well this ratio has been decreased but
nt much decreased during the year to a small extent due to

Bank has increased its deposits so liabilities have been increased.

Bank has increased its assets as well to overcome the liabilities.

So overall we can say bank is the liquid enough to pay its liabilities

Formula :

Current assets / current liabilities

= 171508419 / 166214583

= 1.03

Debt Ratio:

Debt ratio remained the same in previous year it was .93 and in 2007 its again 0.93.
Bank has not decreased its debt ratio in 2007.

Net Profit Margin:

Net profit margin of a bank has been increased from 0.12 to 0.21.

Horizontal and vertical analysis

Comparing analytical data for a current period with similar computations for prior
years affords some basis for judging whether the condition of the business is
improving or worsening. This comparison of data over time is called as horizontal or
trend analysis, to express the idea of reviewing data for a number of consecutive

periods. It is distinguished from vertical analysis or static analysis which refers to

the review of the financial information of only one accounting period.

HORIZONTAL ANALYSIS

Balance sheet accounts

2007

2006

%age

14879230

-1523175

-10.2369

ASSETS

Cash

13356055

balances wid other banks

52.3107

3497054

7333002

-3835948

Lendings

14444143

8392950

6051193

72.09852

Investments

39431005

28625915

10805090

37.74583

Advances

100780162

99179372

1600790

1.614035

o.fixd assets

5128428

3810331

1318097

34.59272

defferd tax assets

other assets

TOTAL

5535038

182171885

3812788

1722250

166033588 16138297

45.17036

9.719899

LIABILITIES

bills payable

2627051

1839077

787974

42.84617

Borrowings

17553525

14964087

2589438

17.30435

deposits&other acc

143036707

131839283 11197424

8.493238

sub-ord loans

2997300

2998500

-1200 -0.04002

471519

736298

-264779

liabl against assets

deferred tax liab
other liab

TOTAL

3219796

169905898

Net assets

12265987

2603113

616683

154980358 14925540

-35.9608

23.69021

9.630601

11053230

1212757

PROFIT and loss accounts 2007

2006

%age

interest earned

12596921

2546320

20.21383

6977313

1708311

24.48379

5619608

838009

15143241

interest expensed 8685624

net mark up/interest income

14.91223

6457617

10.97197

loans & advances 3920240

1128137

value of investment

1501

376

1128513

2793228

2792103

247.4968

1125 299.2021

bad debts written off

3921741

interest income after provision

43.5355

247.514

2535876

4491095

-1955219

1072868

1013660

592085.841012

Non markup/interest income

fee,comm,brockerage income
dividends income

137079

109326

2775325.38554

income from dealing in for curr 655761

584344

7141712.22174

gain on sale of inv 2361251

2248777

1999.375

unleasing gain

1728

other income

336809

112474

-2308 4036 -174.87

321758

total non markup/interest income

113.4153

7101372

6630349

150514.677739

4565496

471023

2139254

2426242

7.104045

Non markup/interest expense

admin exp

4789536

3277353

1512183

46.14038

other pro/write offs

other charges

12051

6141 5910 96.2384

total non markup/interest expense

46.23407

4801587

3283494

1518093

2299785

3346855

-1047070

-31.2852

983875

-885340

-89.985

Profit before taxation

current yrs

98535

prior yrs

-233950

Deferred

-245812

-381227

113006

1096881

Profit after taxation2681012

-358818

-317.521

-1478108

-134.756

2249974

431038

19.15747

profit brought forward

1799979

1617597

182382

11.27487

profit available for appr.

4480991

3867571

613420

15.8606

VERTICAL ANALYSIS

balance sheet accounts

2007

2006

ASSETS

cash

13356055

7.331567657

balances wid other banks 3497054

14879230

63.18030698

8.961578
7333002

4.416577

lendings

14444143

Investments 39431005
advances

7.928854115

21.64494538

28625915

100780162 55.32146851

o.fixd assets 5128428

8392950

5.054971

17.24104

99179372

59.73452

2.815158881

3810331

2.294916

3.038360173

3812788

2.296396

defferd tax assets

other assets 5535038

TOTAL

182171885

166033588

LIABILITIES

Bills payable 2627051

1.442072689

1839077

1.107654

Borrowings 17553525

9.635693784

14964087

9.012687

deposits&other acc 143036707 78.51744357

131839283 79.40519

Sub-ord loans

2997300

1.645314259

2998500

1.80596

deferred tax liab

471519

0.258831927

736298

0.443463

other liab

3219796

1.767449461

2603113

1.567823

liabl against assets

TOTAL

169905898

154980358

Net assets

12265987

11053230

Findings on the basis of analysis

By the horizontal or comparative analysis in which base year is taken as 2006

certain changes are measured in the Banks performance. Cash with other banks
and balances with other banks gradually increased in the time line showing the
banks good performance and this indicate that bank can earn more by making
balances with the other banks. Lending to financial institutions not done in the last
year due to more investments done by the bank and by giving more and more
advances to the customers but this also has increased the bad debts and provisions
of the bank as compared to the previous years.

Operating assets has been decreased so that is in favor of the bank. On the
liabilities side bank also has increased its bills payable that shows that bank has
certain increased in the liabilities as well banks deposits also increased showing the
great penetration in the market place as well customers believe on the bank to
make deposits thats why banks mark up expense has been increased. Equity also
increased in the previous year but banks profit has been decreased because bank
has invested so much and in the development process so increased in the
expenses. Overall banks financial position in the marketplace has been increased in
terms of deposits and advances. All these reasons are favorable to the bank in year
2006 because at one side banks assets have been increased in the form of
advances and at other side markup income increased due to deposits because bank
can more invest it

Balance Sheets one portion that is Assets shows certain changes during the year.
e.g

Cash & balances with treasury banks have been increased that shows the bank has
fulfilled and improved SBP requirements because of maintenance of foreign
currency as well as Pakistani currency with other banks due to this balances with
the other banks whether outside the Pakistan or inside the Pakistan have been
increased.

While investment have been decreased due to making balances with the other
banks and so advances increased by giving more to the customers so earning power
also increased. In 2007 bank not lend money to the financial institutions. Banks
operating fixed assets have been decreased to a small extent due to this profit also
is increased because bank is the service organization and for service organizations
no need of more operating fixed assets. Banks deposits and other accounts have
not been increased to the same extent as bank is giving advances. Well that shows

a positive trend because bank expenses would be automatically decreased that are
due to cash management.

Banks net assets have been decreased because of less operating fixed assets and
also due to increase in liabilities. Balance Sheet shows the assets are more
contributed by the Advances and liabilities are more contributed y the Deposits that
are favorable for the Bank. Overall result is less profit for 2007 as compared to
2006. But this has certain different reasons these are as follows

Increase cash and balances with the other banks

More advances

Increase in deposits

All these reasons are favorable to the bank in year 2007 because at one side banks
assets have been increased in the form of advances and at other side markup
income increased due to deposits because bank can more invest it.

Applications of Class Room Concept:

In Accounts department there was an implementation of Financial Accounting in

making balance sheets, income statements, calculation of depreciation etc
In credits department there was an implementation of different categories of loans
like personal loans, corporate loans etc which was studied in Financial Management.

Recommendations:

Already the bank is having a good infrastructure not much recommendations are
needed as a manager but few can work :Customers should be given some sort of facilities which can convince people for
investment and go for Askari bank for Exports n Imports.
Fist floor of bank is much congested, there is needed to work on that.
There is not a proper environment of customer dealing on that floor thats why
customer feels difficulty in that.
Accounts department was much congested, so area of that department should be
extended.
After biannually closing of bank there should be a get together of all the employees
of bank which can give them a healthy atmosphere to work.
Few of the employees used to interfere in others work so they should be strictly
advised to perform their own duty well.