Académique Documents
Professionnel Documents
Culture Documents
H)
And
First step to talk
To
All those from whom I learnt
Who always remains?
In our heart
Through out the whole span of our life and are
Nearest, dearest and deepest
To us
CONTENTS
INTRODUCTION TO NATIONAL BANK.
SENIOR MANAGEMENT.
MISSION STATEMENT.
FEATURES..
SERVICES OFFERED BY NBP..
GUIDE LINE OF CREDIT POLICY.
CREDIT DEPARTMENT
CREDIT CYCLE
OTHER RETAIL FUNCTIONS
NBP PRODUCTS.
CORPORATE INFORMATION..
FOREIGN EXCHANGE DEPARTMENT........
DOCUMENTARY CREDIT..
BRANCH LEVEL HEIRACHCY.
OPERATIONS MANAGEMENT.
SWOT ANALYSIS.
ATM FINDER.
DIRECTORS REPORT
FINANCIAL HIGHLIGHS..
COLLECTION POLICY..
TECHNOLOGY
NOTICE OF 55TH ANNUAL GENERAL MEETING.
BALANCE SHEET
INTRODUCTION
National Bank of Pakistan maintains its position as Pakistan's premier bank determined to
set higher standards of achievements. It is the major business partner for the Government
of Pakistan with special emphasis on fostering Pakistan's economic growth through
aggressive and balanced lending policies, technologically oriented products and services
offered through its large network of branches locally, internationally and representative
offices.
We shall work to
Care
about relationships.
Lead through the strength of our commitment and willingness to excel.
Practice integrity, honesty and hard work. We believe that these are measures of
true success.
An innovative, creative and dynamic institution responding to the changing needs of the
internal and external environment
S Ali Raza
Chairman & President
M. Zubair Motiwala
Director
Azam Faruque
Director
Ekhlaq Ahmed
Secretary Board of Directors
SENIOR MANAGEMENT
Amer Siddiqui
Ziaullah Khan
Amim Akhtar
Ekhlaq Ahmed
Tahira Raza
Tahir Yaqoob
SENIOR MANAGEMENT
Masood Karim Shaikh SEVP & Group Chief, Corporate & Investment Banking
Group and CFO
Shahid Anwar Khan
Muhammad Sardar
Khawaja
S. M. Rafique
Amim Akhtar
Javed Mehmood
Muhammad Nusrat
Vohra
Nadeem A. Dogar
Uzma Bashir
FEATURES
National Bank of Pakistan is an established bank. It has some special features with the help of those
it is growing rapidly.
Efficiency
Employees at National Bank of Pakistan are quite efficient. They work more the working hours and
it is all according to their will. It also shows their loyalty, commitment to organization.
Customer Services
All the customers are entertained individually. Same kind of behavior and attentions is given to all
customers.
Complaint Box
Getting ideas for improvement from the customer side is a new idea and that is working
Employee Benefits
Employees are given the benefits like bonus, gratuity funds, increments, house rents, medical and
conveyance allowances.
INTERNATIONAL BANKING
National Bank of Pakistan is at the forefront of international banking in Pakistan which is
proven by the fact that NBP has its branches in all of the major financial capitals of the
world. Additionally, we have recently set up the Financial Institution Wing, which is placed
under the Risk Management Group. The role of the Financial Institution Wing is : To effectively manage NBPs exposure to foreign and domestic correspondence
Manage the monetary aspect of NBPs relationship with the correspondents to
support trade, treasury and other key business areas, thereby contributing to the
banks profitability
Generation of incremental trade-finance business and revenues
NBP offers:
DEMAND DRAFTS
MAIL TRANSFERS
PAY ORDER *
Move
your
money
safely and quickly using
NBP Mail
Transfer
service. And we also
offer
the
most
competitive rates in the
market.
NBP
provides
another
reason to transfer your
money using our facilities.
Our pay orders are a
secure and easy way to
move your money from one
place to another. And, as
usual, our charges for this
service
are
extremely
competitive.
TRAVELER'S CHEQUE
Negotiability:
Pak Rupees
Travelers
Cheques are a
negotiable
instrument
Validity:
Availability:
Encashment:
Limitation:
Safety:
There is no
At 700 bran
At all 400 br
No limit on p
NBP Trave
our money
LETTER OF CREDIT
COMMERCIAL FINANCE
FOREIGN REMITTANCES
To facilitate its customers in the area of Home Remittances, National
Bank of Pakistan has taken a number of measures to:
Increase home remittances through the banking system
PakRemit
Remit funds
from USA to
Pakistan
New Features:
The existing system of home remittances has been revised/significantly improved and welltrained field functionaries are posted to provide efficient and reliable home remittance
services to nonresident Pakistanis at 15 overseas branches of the Bank besides Pakistan
Zero Tariffs: NBP is providing home remittance services without any charges.
Strict monitoring of the system is done to ensure the highest possible security.
Special courier services are hired for expeditious delivery of home remittances to the
beneficiaries.
SWIFT SYSTEM
The SWIFT system (Society for Worldwide Inter bank Financial
Telecommunication) has been introduced for speedy services in
NBP
the area of home remittances. The system has built-in features
SWIFT
of computerized test keys, which eliminates the manual
Network
application of tests that often cause delay in the payment of
Click here
home remittances.
The SWIFT Center is operational at National Bank of Pakistan with a universal access
number NBP-PKKA. All NBP overseas branches and overseas correspondents (over 450)
are drawing remittances through SWIFT.
Using the NBP network of branches, you can safely and speedily transfer money for our
business and personal needs.
SHORT TERM
INVESTMENTS
NBP now offers excellent rates of
profit on all its short term investment
accounts. Whether you are looking
to invest for 3 months or 1 year,
NBPs rates of profit are extremely
attractive, along with the security
and service only NBP can provide.
N.I.D.A
National Income Daily Account
The scheme was launched in
December 1995 to attract corporate
customers. It is a current account
scheme and is part of the profit and
loss system of accounts in operation
throughout the country.
EQUITY INVESTMENTS
NBP has accelerated its activities in the stock market to
improve its economic base and restore investor confidence.
The bank is now regarded as the most active and dominant
player in the development of the stock market. NBP is
involved in the following:
Investment into the capital market
Introduction of capital market accounts (under
process)
NBPs involvement in capital markets is expected to increase
its earnings, which would result in better returns offered to
account holders
MODE OF
CALCULATION:
AVERAGE BALANCE
DURING A CALENDAR
MONTH
INTERNATIONAL BANKING
DEMAND DRAFTS
MAIL TRANSFERS
PAY ORDER *
AGRICULTURAL FINANCE
NBP provides Agricultural Finance to
solidify faith, commitment and pride of
farmers who produce some of the best
agricultural products in the World.
Agricultural Credit:
The agricultural financing strategy of
NBP is aimed at three main objectives:
Agricultural
Credit
(Medium
CORPORATE FINANCE
Working Capital and
Term Loans:
Short
Term):
Farm Credit:
NBP also provides the following
subsidized with ranges of 3 months to 1
year on a renewal basis.
Operating loans
Land improvement loans
Equipment loans for purchase of
tractors, farm implements or any
other equipment
Livestock loans for the purchase,
care, and feeding of livestock
Production Loans:
Production loans are meant for basic
inputs of the farm and are short term in
nature. Seeds, fertilizers, sprayers, etc
are all covered under this scheme.
If you require any further information,
please do not hesitate to e-mail us.
Syndication:
National Banks leadership in loan
syndicating stems from ability to
Forge strong relationships not only
with borrowers but also with bank
investors. Because we understand our
syndicate partners asset criteria, we
help borrowers meet substantial
financing needs by enabling them to
reach the banks most interested in
lending to their particular industry,
geographic location and structure
through syndicated debt offerings. Our
syndication
capabilities
are
complemented by our own capital
strength and by industry teams, who
bring specialized knowledge to the
structure of a transaction.
Operations
Manager
Branch Manager
Mahar shukat
Ch.Ijaz Hussian
Shahid Gardezi
Foreign
Exchange Zamin
Coporate Incharge
Mubashir Pasha
Raza
compliace
Officer Ashraf
nayab
Remittance
Manzar
Gillani
Accounts
Incharge
Govt.
Section
Malik Hanif
Accounts opening
Clearing
Tariq Ameer
Haji M. Arshad
Saeed
Total outstanding financing facilities by banking company to single person shall not at
any point of time exceed 30% of banks unimpaired capital.
No banking company shall make loans or advances against the security of its own
shares.
Pak rupee equivalent of face value of special US Dollar bonds converted at official rate,
FIBs lodged by the party as collateral shall be deducted.
Aggregate exposure of bank against all its clean facility shall not at any point exceed
the amount of banks capital and general reserve.
A borrower who is prepared to inject fresh equity irrespective of the fact that its equity
is negative is eligible to obtain finance from bank to the extend of 10 times fresh
injected equity.
No banking company allow financing facilities whether fund based / non funded against the shares
of companies which are not in central depository system
CREDIT DEPARTMENT
Credit means belief or trust. The quality of being credible or trustworthy. Other words we can use
for credit as trust in ones integrity in money matters and ones ability to meet payment when due.
The earning of National Bank of Pakistan is chiefly derived from interest charge and discounts. This
department is the revenue generating department. Credit department basically has three segments:
1. Credit marketing department
2. Credit administration department
3. Trade finance department
Advance department deals with extending loans to customers. State Bank of Pakistan (SBP) has
prescribed regulations which are called PRUDENTIAL REGULATIONS. Every bank has to
follow these regulations. If any bank violates the regulations it should be liable for penalties under
the core spirit of SBP
The National Bank of Pakistan limited the credit is extended on the basis of these rules and
regulations. These regulations tells the terms and conditions under which you can extend loans to the
borrower and to what extend.
CREDIT FACILITIES
At National Bank of Pakistan two types of credit facilities are available
1. Funded facilities
2. Non funded facilities
(B)
NON-FUNDED FACILITIES
The facilities where there is no direct involvement of banks fund. Following are the non-funded
facilities.
1. Letter of credit L/C
2. Letter of guarantee L/G
CREDIT CYCLE
Request
Processing Information
Decision
Offer
Security
Scrutiny
Documentation
Disbursement
Monitoring
Repayment
Renewal
Enhancement
STEP I
Credit cycle start with request letter. When customer gives a request letter to bank that he want that
much amount of credit from bank.
STEP II
When bank receive the request letter form customer. The officer of credit marketing department
make credit line proposal of client. It is essential that the proposal define clearly the purpose of
facility, the source of repayment, the agreed repayment. Schedule, the value of security and customer
relationship consideration implicit in credit division.
The security to be accepted as collateral for the facility and all the documentation relating to the
security of facility must be in the approved from all the procedures and required documentation must
be completed all these things all feed in CLP.
CLP is basically a medium to present proposal for seeking approval of credit line in client. In CLP
they feed complete data of the client that include:
Credit Limit
Legal status of company
Line of Business
Purpose of facility
Security
CCA
Prudential checklist
STEP III
After the processing of information, credit officer decided whether to give credit to that person or
not. They also check whether its security has any market value or not. Decision is taken by the
branch credit committee (BCC ). If the proposal is within the discretionary powers of committee the
proposal may approve after revaluation of credit risk.
It CLP beyond discretionary power of branch credit committee the CLP is sent to credit division at
head office along with supporting documents and recommendation of branch credit committee.
STEP IV
When decision is made now credit officer offer that we will give you loan up till that limit not more
than that. Up till now credit marketing officer does all the process. After that credit administration
officers work start.
Credit administration department basic function is to fulfill the requirement of documents as a
security for credit. Different types of documents are required for pledging, mortgage and
hypothecation.
Letter of guarantee
Letter of continuity
Agreement of finance
PT 1 in favor of borrower
PT 1 in favor of bank
Valuation report
STEP V
Here documents are checked security is properly checked by the value. Value tells the security. Here
following characteristic of security are checked.
Market value
Consistency
Salable
Storable
Transferable
Transportation
STEP VI
On completion of legal documents and security arrangements and receipt of completion certificate
from recognized legal counsel, the bank according to the approved schedule prepared by bank after
obtaining confirmation of other payments have been funds from sponsors other source viz, equity
fund from sponsors release of fund by other co financiers etc. after the valuation of security the loan
is disbursed to customer.
STEP VII
Responsibility lies to branch manager to monitor the overall profit and risk aspect of credit portfolio
in accordance with criteria setout in banks credit policy. After the disbursement credit
administration officer monitor the performance of customer whether he is fulfilling the requirement
or not. He is paying markup or not for which purpose he has taken the loan whether he is utilizing
loan for that purpose or not.
STEP VIII
After specific time period credit officer see what customer want whether he wants to renew / revise
or writ off it. If he wants to renew it he said to officer to renew it with same limit.
COLLECTION POLICY
The loan officer will be responsible for the collection of finance installments for initial 60 days from
the date of default. After that, the case will be handed over to the collection officer provided by the
Outsourced Collection Agency.
Collection Structure
The country collections Head will manage overall collections. Under the country Head there will be
Regional collections Managers (RCM). The collection officer will directly report to the RCM and
indirectly report to the Branch Manager.
The collection process is to be divided into following four categories:
Front End
Mid Range
Hard Core
Repossession
Selling Skills
The New Model of Selling
Selling has changed dramatically over the last few decades, primarily because customers
have changed
Customers are far more knowledgeable about products and services available today then ever
before.
Competition today is far more stronger than has ever been
There are far more products and services available to satisfy customers needs then ever
before
Customers are more sophisticated and demanding then they have ever been, for even the
smallest products
Acceptance- satisfaction a deep subconscious need of every person
Acceptance must be established first
You express your acceptance with unconditional positive regards, no judgment!
Smile be glad to see him or her
Agreeability- one of the most desirable qualities in human relation
Never tell him hes wrong in his general opinion
If the issue is unimportant, just let it pass
If the issue is important, use third party question to avoid appearing argumentative.
Positive Mental Attitude- the degree to which you are a Cheerful Person
Always look for the good in every person and situation
Always interpret things positively to yourself
Smile, relax, be friendly with every one you meet
Courtesy- the degree to which you are polite and correct in your interaction with others
DOCUMENTS REQUIRED
1. Borrower must be employee of the Federal /Provincial Government / Semi Government /
Autonomous body / NBP.
2. CNIC copies of the borrower
3. Salary Slip indicating detail of salary of the borrower
4. Attested copies of CNIC by gazetted officer
5. Branch has obtained CIB Report of the borrower
6. Branch has obtained duly signed and stamped BBFS.
7. Customer written declaration giving details of all financial institutions.
8. DDO is signature has been verified
9. Loan will be approved after receipt of at least one salary in account.
10. The sanctioned amount of Advance Salary Finance doesnt exceed 20 times.
11. The expiry of the NBP Advance salary is at least 6-months before retirement.
12. The repayment period does not exceed 60 months.
13. Three undated cross cheques in favor of NBP covering full amount of Finance have been
obtained as security.
14. All documents have been obtained as per the requirement of NBP Advance salary scheme
including undertaking as per scheme.
15. Documents have been recorded in Document Execution Register/ MISC security Register.
16. NBP offers mark-up 15% on principal amount at fixed rate.
17. There are bi variable rates offered by NBP for this service.
SAIBAAN SCHEME
NBP SAIBAAN DOCUMENTS FOR SALARIED CLASS
Appointment letter.
Approved Map
Aks Sajra.
Fard Malkiat
Naqal Intiqal
PT-I
Fee for Evaluator pay order ( in case of construction Rs.2000/= (in case of Purchase
Rs.3000/=
Confidential Report
TARGET MARKET
The scheme is offered to:
1. Eligible young citizens of Pakistan falling within an age group of 18-40 years.
2. Unemployed Applicant.
3. Applicant to be residing in the same area/ city for at least 2 years
4. Applicant having CNIC
NBP Helpline
0800-80080
from 8:30 am to 10:00 pm
CORPORATE INFORMATION
COMPANY SECRETARY
Ekhlaq Ahmad
AUDIT COMMITTEE
Muhammad Arshad Chaudary
Syed shafqat Ali Shah Jam
M. Zubair Motiwala
AUDITORS
M. Yousaf Adil Saleem & Com
Chartered Accountants
Taseer Khalik & com
Chartered Accountants
HEAD OFFICE
NBP Building I.I Chandrigarh
Road Karachi
LEGAL ADVISORS
Mandiwala & zafar
Advocates & Legal Consultants
National Bank of Pakistan acts as importer bank as well as exporter bank for different parties who
are interested in the business of export & import.
DEFINE IMPORT
All goods and services brought into a country that were purchased from organizations located in
other countries.
DEFINE EXPORT
All goods and services sent from one country to another country.
1. At Usance L/C
2. At Sight L/C
SIGHT L/C
Requires the importer / importing bank to pay as soon as it receives the clean documents from
exporter.
USANCE L/C
It extends time period (30days, 60days, 90days, 120days, 150days, & 180days).to importing bank
for payment. After specified time period importer have to pay.
Letter of guarantee gives in behalf of person that I will pay in case of default.
CERTIFICATE OF ORIGIN
This certificate shows that goods are from Pakistan.
COVERING SCHEDULE
If in covering schedule, it is given that Please remit proceed to our Karachi office account #
574348812 with (Standard Chartered Bank) USA for onward credit to National Bank of Pakistan.
BENEFICIARY CERTIFICATE
If L/C requires some information as proof of anything from exporter then exporter has to present
beneficiary certificate for that proof.
E-FORM
E-form has four copies:
One for custom officer
One for exporter
Triplicate copy for SBP
Duplicate copy for bank
Bank reporting or duplicate and triplicate is done by bank. Custom officer should clear product.
(Date is given on the foot form).
IMPORTS
L/C is opened by the importer. There are two types of L/C:
a) Revocable L/C
b) Irrevocable L/C
NECESSARY REQUIREMENTS
If place of issue and port of loading is different on bill of lading, then along with the stamp of
shipment on board, vessel name and port of shipment is written.
DOCUMENTARY CREDIT
TRADE SERVICE DEPARTMENT
National Bank of Pakistan has his full fledged trade service department. As a credit instrument and
as a means of making as a payment the documentary credit is an essential instrument for conducting
word trade today. A documentary credit represents a commitment bank to pay the seller of goods or
services a certain amount provided present stipulated documents evidencing the shipment of the
goods with prescribed period of time.
For the cases of imports or exports first the parties have to do upon a sale contract regarding the term
and condition of sale. One method of payment is by L/C which is secured and now a day mostly uses
the business.
Letter of credit is under taking by opening bank that it will make payment if documents are as per
terms of LC.
Country of origin
Branch name
Quantity
Shipment to
Insurance company
Shipment from
One thing should also be submit which is INDENT. If the foreign party has any agent they will issue
the indent with following details:
o To Messer
o Importers, etc
PAYMENT TO SELLER
The negotiating bank upon receiving the documents from the seller checks the documents according
to terms and conditions of credit upon satisfying it self of this the negotiating bank makes payment
to the seller if sight credit. It then forwards the documents to the opening bank and reimburses it self
through the opening banks account with itself.
OPERATIONS DEPARTMENT
Operations department of the National Bank of Pakistan is responsible for the overall operations of
the bank.
Operations department has following segments.
a) Cash
b) Clearing
c) Remittance
d) Account opening
e) Accounts department
The details of those departments that are controlled under operation department are as under.
a) Account opening
b) Cash department
c) Clearing
d) Remittances
Current Account
1. No limitation on frequency or amount transaction
2. No profit payable
Saving Account
1. Profit is payable
2. No of withdraw restricted
3. Large amount of withdraws requires 10 days.
General Principles
1. No account will be opened on fictitious name.
2. All documents necessary required for opening account must be taken after verification from
original.
3. No operation of account should be allowed & check book must not be issued until all
formalities are confirmed.
4. Genuineness of introduction should be properly ensured.
5. All information of AOF should be filled at front of concerned officer.
TYPES OF ACCOUNTS
The bank deals in different accounts opening;
1. Individual Account
2. Joint Account
3. Business Account
4. Partnership Account
Cash Department
Cash department of National Bank of Pakistan works under the operation department.
This department is given the complete responsibility of cash, as result of transaction in touch local
and foreign currencies. It is also responsibility for the book keeping of these transactions and the
safe custody of cash. Out of five counters of cash department one counter is fixing for senior citizens
and females. All counters are dealing at the same time in deposits, withdraw and online transaction
processes.
This department performs the main function.
a) Cash receipts
b) Cash payments
Clearing Department
Before discussing it is necessary to know what is Clearing.
The process by which cheques exchanged between the collecting and paying bank and the ensuing
financial settlement is called Clearing.
This facility is provided by the state bank of Pakistan for offsetting of cross obligations between the
different banks. Clearing is of two types:
1) Inward clearing
2) Outward clearing
Accounts Department
Account department is the most important department of the bank. Because it is concerned with:
Revenue
Expenses
Assets
Liabilities
These are the pillars of any business. In this department, all the vouchers that are posted during one
day are sent to the account department next day. These vouchers are already posted to computer by
the concerned department.
Types of Account
Current Account
Saving Account
Notice Deposit
Term Deposit
Remittance department
The need of remittance is commonly felt in todays business. A major function of any bank is to
transfer of funds from one place to another place National Bank of Pakistan
Uses the following modes of transfer of funds.
Demand Draft
Telegraphic Transfer
Pay Order
Call Deposit
Pay Slip
Money transfer
COLLECTION DEPARTMENT
All the cheques under collection are called cheques under collection in National Bank of Pakistan.
There are two types of bills for collection:
Outward Bills for Collection
Inward Bills for Collection
SWOT ANALYSIS
During the internship of eight weeks of mine in National Bank of Pakistan, near khechary chowk
Multan, I am going for SWOT Analysis.
Strength
National Bank of Pakistan enjoying the large market share in Home financing.
Home financing and agriculture loans are introduced recently by National Bank of Pakistan.
Branch manager and Chief Manager having good co-ordination with staff to make the
environment friendly.
Weakness
National Bank of Pakistan main branch Multan still having the shortage of cash and deposits
counters.
Opportunities
Banking industry is one of the most growing sectors in Pakistan. So National Bank of
Pakistan should be continually expanding its network of branches.
Muslims are consciously differentiating the Islamic-base banking from interest-base banking.
That is why there is large caution of expansion
All products of Consumer Financing that include home financing, and other products should
be introduce to all the braches in the cities of Pakistan.
Threats
National Bank of Pakistan having large networks of hundred branches that play and
important role in banking business. National Bank of Pakistan compares its working to other
key players in banking industry.
Many other banks are now involving themselves in consumer financing at competitive rate.
This is one of the biggest threats for National Bank of Pakistan consumer financing products.
Burewala
Multan
Faisalabad
Muzaffarabad
Gujar Khan
Peshawar
Gujranwala
Quetta
Gujrat
Rawalpindi
Hyderabad
Sheikhupura
Islamabad
Sialkot
Karachi
Taxila
Lahore
Wah Cantt.
Mirpur
DIRECTORS REPORT
On behalf of the Board of Directors it gives me great pleasure to present the annual
accounts for year ended December 31, 2002. National Bank made many strides during
2002 in positioning for the future both operationally and structurally.
To improve customer focus, reduce decision-making layers and promote teamwork. The
bank has substantially restructured its business. An entire layer of controlling offices i.e.
zones has been eliminated and total number of regions enhanced from 9 to 29. A new
matrix structure is now in place, which separates the front and back office with special
emphasis on corporate governance and enhanced internal controls. This process, which
was commenced in late 2001, is now fully functional and demonstrating positive results.
The rationalization program for staff reduction and branch closures was successfully
completed in 2002. Going forward the objective would be to ensure optimum efficiency in
staff levels while balancing the benefits of technology with the branch network.
To meet the challenges of position of NBP as a market leader, training is seen as a critical
success factor. Training has been restructured to make it more need based and aligned
with the corporate vision of inculcating customer focus and developing core competencies
under a program Gearing up for Excellence . A strategic training management plan was
developed keeping in view the stakeholders expectation. We are glad to say that while
training is a process of continuous improvement, we have achieved significant results thus
far.
To position the bank for capitalizing on the requirements of the relatively lower banked
sectors, a dedicated Commercial and Retail banking group was created. Within a short
span of time a number of retail products have been launched and the customer response to
these schemes has been very encouraging. New retail products will be offered to cater the
large diversified customer base of over 9 million, the largest in the country. The success of
retail banking is critical to maintaining interest revenue and enhanced fee income. We are
confident that with our large customer base and delivery capabilities, NBP will emerge as a
market leader in the retail/ consumer business in the very near future.
Corporate banking as a dedicated business is being very well received by the corporate
sector. The bank was mandated as a lead manager in significant capital market
transactions. Through a combination of a large direct equity portfolio as well as a 25%
holding in NIT
Pakistans largest mutual fund, NBP has one of the largest equity portfolios in the country.
Given the strong stock market performance in 2002 attractive trading gains were realized.
This area will continue to be one of our key income contributors as the capital market gains
depth.
NBP continues to be the principal bank for handling the government treasury business. We
have also re-activated our subsidiaries catering to non- banking financial activities. We are
also planning to open stand-alone Islamic Banking branches. Thus, in combination with our
very large and diversified banking base we are truly a universal bank in Pakistan, in a
position to offer the entire range of banking and financial products. We regard this as our
key competitive edge.
NBP is committed to invest in the development of the bank's Information Technology
infrastructure. Several initiatives have been undertaken in this regard. New on line
branches were added. The ATM network is being expanded across the country at
convenient locations and an ATM switch sharing arrangement is being placed. During the
year, the bank signed an agreement with Western Union for expanding the base for
documented remittances. We are also developing a strategic plan for Information
Technology that synchronizes our future growth with product development.
For overseas operations our focus continues to be on trade financing activity to take
advantage of the bank's presence in most countries (16 countries, 20 branches/offices)
which are Pakistan's major trading partners. During 2002 we established a wholly owned
subsidiary in Almaty. Currently we are present in four of Central Asian countries and our
unique representation should provide us with a major competitive edge in the coming years
as the Central Asian countries realize their economic potential.
Financial Performance
In 2002, NBP increased its pre-tax profit to Rs. 6,045 million from Rs. 3,016 million in 2001,
an increase of over 100%. The improved profitability was achieved due to a combination of
higher interest revenue, enhanced fee income and run off of the amortization of the 1997
Golden Handshake Scheme. Prudent addition to loan loss reserves was made which
continues to improve the cash coverage for non-performing loans.
All key financial and operating ratios demonstrated improvement. Cost/ income ratio was
0.44 (excluding one off provision of Rs. 832 million for benevolent fund and Rs. 513 million
for charge for special separation package) as against 0.52 of the last year. Pre-tax return
on equity was 45.27% as compared to 25.85% of the current year and is impressive by any
yardstick. Pre-tax return on assets improved to 1.43% as against 0.77% of last year.
Capital adequacy ratio of the bank is 14.5%, which is 38% higher as compared to 10.52%
of last year.
Deposits of the bank increased by Rs. 12 billion. While there was increase in private sector
loans due to adjustment / repayment of loans by large public sector entities and
substantially lower commodity operations borrowings, advances decreased by Rs. 30
billion.
Market Recognition
For the second consecutive year, NBP was recognized as the best bank in Pakistan by the
prestigious periodical, The Banker" UK (a subsidiary of Financial Times Group).
Furthermore M/s JCR-VIS Credit Rating Company Limited maintained its rating of AAA,
while the standalone rating was raised by one notch to AA-, which is one of the highest in
the banking sector.
Future Outlook
going in 2003, the reduction in the interest rate environment will overall have a negative
impact on the financial sector's profitability in the short term. To meet these challenges we
will focus on building our loan portfolio, both on corporate and retail side. On the retail side
focus will be on additional fee business while maintaining stringent controls over cost.
Longer term we will be focusing on those sectors in the country, which have traditionally
received less attention from the financial sector, i.e. agriculture, small and medium
enterprises and of the entire range of retail products. Our key strength remains our
customer base of over 9 million and we are confident that we are positioned to capitalize on
the opportunities.
Rs. In million
Authorized Capital
5,000
Paid-up Capital
3,730
23,936
Deposits
362,866
Advancesnet
140,547
Investments-net
143,525
Total
Assets
432,803
Pre-Tax
Profit
6,054
After-Tax
Profit
2,253
No. of
Branches
Branch Network
No. of Employees
1,204
12,195
ATM FINDER
Multan
S
Branch
No.
Qasim Road
1
Branch
2 Main Branch
Location
Telephone - 061
9200529
9200892
9210139
9200872
Gulgasht Colony
Gulgasht Colony Multan
Branch
Chowk Nawan Chowk Nawan Shaher,
4
Shaher
Multan
3
Ordinary business:
1. To receive and adopt the Audited Accounts of the Bank for the year ended 31st
December, 2003, together with the Directors & Auditors Reports thereon.
2. To appoint auditors for the year ending 31st December, 2004 and fix their remuneration.
3. To consider and approve Cash Dividend @ Rs. 1.25 per share i.e., 12.5% and 20%
Bonus Shares (thereby increasing Paid-up Capital of the Bank from Rs. 4,103,421,850/to Rs.4,924,106,220/-) as recommended by the Board of Directors for the year ended
31st December, 2003 (subject to GoP / Regulatory approvals).
Rs.
82,148.50
Special Business:
Rs. 15,009,000.00
4. To approve / ratify the following donations aggregating Rs.
Rs.
Rs.
500,000.00
60,000.00
Approval for :
i)
Donation of the sale proceeds of 1414 fractional Bonus shares of 2002 to any
charitable trust:
Ratification for :
ii)
iii)
iv)
Rs.
15,651,148.50
Note:
i)
The Share Transfer Books of the Bank shall remain closed from 21-04-2004 to 30-042004 (both days inclusive). Transfers received at Messrs THK Associates (Pvt.) Ltd.,
Ground Floor, Sheikh Sultan Trust Building No. 2, Beaumont Road, Karachi, the
Banks Registrar and Share Transfer Agent, at the close of the business on 20-04-2004
will be treated in time for purpose of the entitlement of Cash Dividend / Bonus Shares.
ii)
A member entitled to attend and vote at the Annual General Meeting is entitled to
appoint another member as a proxy to attend and vote on his / her behalf. The
Government of Pakistan and State Bank of Pakistan and any Corporation(s), being
member of the Bank, may nominate any person as its representative to attend the
Annual General Meeting under authority of a Power of Attorney or a Board of Directors
Resolution. Proxies or nominations, in order to be effective and valid, must be received
at the office of the Banks Registrar / Transfer Agent, Messrs THK Associates (Pvt.)
Limited, Ground Floor, Sheikh Sultan Trust Building No.2, Beaumont Road, Karachi, not
less than 48 hours before the time of holding the Annual General Meeting.The CDC
Account Holders and Sub-Account Holders, whose Registration details are available in
the Share Book Detail Report shall be required to produce their respective Original
National Identity Cards (NICs) or original Passports at the time of attending the Annual
General Meeting to facilitate identification. Such Account Holders and Sub-Account
Holders should also bring / know their respective participant I.D. No. and the CDC
Account Number. In case of proxy, he/she must enclose an attested copy of his / her
NIC or Passport. Representative(s) of corporate member(s) should bring usual
documents required for such purpose.
iii)
Members are requested to timely notify any change in their addresses to the Banks
Registrar / Transfer Agent, Messrs THK Associates (Pvt.) Limited.
Donation of net sale proceeds amounting to Rs. 82,148.50 of 1414 fractional bonus shares2002 to a charitable trust :
On the basis of operating results for the year ended December 31, 2002, the Board in its
meeting held on April 07, 2003, recommended payment of 12.5% cash dividend and 10%
Bonus Shares to the Banks shareholders, which was also approved by the Banks
shareholders in 54th AGM held on May 13, 2003.Accordingly, Dividend Warrants and Bonus
Shares were issued to the shareholders as per their entitlement. In this connection, 1414 Bonus
Shares, being fractional shares, could not be distributed to the shareholders. For disposal of
these fractional 1414 Bonus Shares a consolidated Share Certificate No. 052348 in the name of
Secretary (Board), NBP, was issued which was sold through a member of KSE, Messrs A.
Sattar Motiwalla Securities (Pvt.) Ltd., against net sale proceeds of Rs.82,148.50 .
On account of high cost of computer printing, post printing, distribution / postage and handling
charges of the fractional coupons, the NBP Board in its meeting held on March 26, 2004
recommended that the sale proceeds of the fractional Bonus Shares, be donated to a
Charitable Trust.In this connection, approval of shareholders is now being solicited for donating
the net sale proceeds amounting to Rs. 82,148.50 of 1414 fractional Bonus Shares 2002, to a
charitable trust, name of which will be approved by the President (NBP).
ii)
iii)
One time grant / donation of Rs. 500,000/- to Dr. Muhammad Uzair, an ex-employee of former
NDFC (merged into NBP):
Dr. Muhammad Uzair is a renowned scholar who served in various public sector / autonomous
organizations for about 30 years. He unfortunately could not earn regular pension. He is over 70
years of age and is in dire need of financial assistance.
Rs.
Rs.
Rs.
Rs.
15.009 Million
0.500
0.060
Million
Million
15.569 Million
We have reviewed the Statement of Compliance with the best practices (the Statement)
contained in the Code of Corporate Governance (the Code) prepared by the Board of Directors
of National Bank of Pakistan to comply with the Prudential Regulation No. XXIX,
responsibilities of Board of Directors vide BSD Circular No. 15, dated June 13, 2002, Listing
Regulation No. 37 of the Karachi Stock Exchange, and Chapter XIII of the Lahore Stock
Exchange and Chapter XI of the Islamabad Stock Exchange where the Company is listed.
The responsibility for compliance with the Code is that of the Board of Directors of the Bank.
Our responsibility is to review, to the extent where such compliance can be objectively verified,
whether the Statement reflects the status of the Banks compliance with the provisions of the
Code and report if it does not. A review is limited primarily to inquiries of the Bank personnel
and review of various documents prepared by the Bank to comply with the Code.
As part of our audit of the financial statements we are required to obtain an understanding of the
accounting and internal control systems sufficient to plan the audit and develop an effective
audit approach. We have not carried out any special review of the internal control system to
enable us to express an opinion as to whether the Boards statement on internal control covers
all controls and the effectiveness of such internal controls.
Based on our review, nothing has come to our attention which causes us to believe that the
Statement does not appropriately reflect the Banks compliance, in all material respects, with
the best practices contained in the Code as applicable to the Bank for the year ended December
31, 2003.
M. Yousuf Adil Saleem & Co.
Chartered Accountants
Karachi
B AL AN CE S HEE T
as at December 31, 2003
2002
US dollars
2003
in ' 000
2003
Note
2002
in '000
ASSETS
966,294
624,309
1,033,967
420,301
6
7
59,420,502 55,531,453
24,154,070 35,878,101
377,891
525,738
30,213,352 21,716,802
2,497,455
2,891,943
Investments
2,445,642
2,801,365
Advances
10
166,195,619 143,524,971
160,990,265 140,547,374
478,332
381,892
Other assets
11
21,946,846 27,489,021
141,210
155,554
12
8,939,483
8,115,131
-
8,210,760
471,860,137 432,802,853
LIABILITIES
58,567
174,568
95,647
287,001
Bills payable
Borrowings from financial institutions
14
15
6,314,166
6,883,222
16
5,496,738
16,493,514
3,365,744
10,032,135
395,568,490 362,865,637
Sub-ordinated loans
1,289
516,506
715
453,821
49,526
10,369
17
18
41,117
26,080,400
74,051
29,682,837
13
595,864
2,846,186
7,114,622
7,730,775
444,276,123 408,866,590
416,511
479,985
NET ASSETS
64,912
124,317
71,403
141,526
REPRESENTED BY
Share capital
Reserves
59,243
102,616
Unappropriated profit
248,472
168,039
315,545
164,440
416,511
479,985
Contingencies and commitments
19
20
21
27,584,014
23,936,263
4,103,422
8,133,312
3,730,384
7,144,326
5,897,163
3,404,593
18,133,897
9,450,117
14,279,303
9,656,960
27,584,014
23,936,263
472,030
255,766
216,264
31,707
2003
US dollars in '000
338,487
117,205
221,282
29,317
366
1,813
2,824
36,710
179,554
7,996
8,261
45,574
175,708
54,587
15,957
11,471
185
8,443
90,643
270,197
56,742
19,606
12,367
2
37,408
126,125
301,833
79,406
28,354
8,928
42,318
159,006
55
415
159,476
110,721
5,536
82,852
4,883
5,109
42,999
135,843
582
398
136,823
165,010
8,250
105,185
46,112
17,401
2,461
65,974
39,211
13,089
156,760
80,914
25,048
(22,252)
83,710
73,050
59,243
24,592
877
38,558
77,769
833
60,076
133,126
(3,921)
(7,305)
(6,491)
(14,280)
(8,114)
(18,526)
(8,925)
(30,510)
2003
Mark-up/return/interest earned
Mark-up/return/interest expensed
Net mark-up/interest income
Provision against non-performing advances
Provision for diminution in the value of
investments
Provision against off balance sheet obligations
Bad debts written off directly
22
23
10.3
9.10
18.1
10.5.1
24
9.5
25
26
27
2002
Rupeesin '000
Note
28
19,452,317
6,735,579
12,716,738
1,684,777
27,126,839
14,698,507
12,428,332
1,822,154
459,523
474,743
2,619,043
10,097,695
21,031
104,217
162,276
2,109,678
10,318,654
3,260,863
1,126,742
710,726
108
2,149,800
7,248,239
17,345,934
3,137,007
917,020
659,247
10,609
485,209
5,209,092
15,527,746
4,761,408
280,632
293,612
2,471,083
7,806,735
33,454
22,894
7,863,083
9,482,851
474,143
4,563,326
1,629,445
513,073
2,431,935
9,137,779
3,134
23,874
9,164,787
6,362,959
318,148
9,008,708
4,650,000
1,439,444
(1,278,839)
4,810,605
4,198,103
3,404,593
6,044,811
2,650,000
1,000,000
141,426
3,791,426
2,253,385
752,226
47,890
3,452,483
7,650,586
1,413,246
50,411
2,215,883
4,469,268
(419,811)
(225,339)
(820,684)
(373,038)
(512,928)
(1,753,423)
(466,298)
(1,064,675)
59,243
0.09
102,616
0.18
5,897,163
3,404,593
10.23
5.49
30
2003
2003
2002
US dollars in '000
Note
(132,872) (182,649)
6,682
(1,762)
498,950 (385,040)
61,339
80,533
434,099 (488,918)
19,496
37,081
(25,280)
112,433
230,537
569,057
24,887
(74,115)
249,640 644,456
23,261
(90,736)
(105,044)
(5,172)
(162)
(219)
(81,945) (96,127)
742,340 254,642
(1,078,416)
(423,058)
(55,963)
(1,362)
15,957
19,606
(2,800)
(10,172)
(5,509)
(4,539)
279
275
(1,126,452) (419,250)
Rupees
in '000
9,008,708
1,126,742
7,881,966
6,044,811
917,020
5,127,791
386,662
1,684,777
459,523
474,743
293,612
(7,568)
12,584
33,454
(108)
3,337,679
11,219.645
491,764
1,822,154
21,031
104,217
513,073
(4,833)
9,361
3,134
(10,609)
2,949,292
8,077,083
(10,496,550)
(101,263)
(22,127,668)
4,628,100
(28,097,381)
(7,635,970)
383,984
28,673,903
3,525,063
24,946,980
2,130,994
6,461,379
32,702,853
(4,259,266)
37,035,960
(5,214,439)
(297,239)
(12,584)
(5,524,262)
14,633,962
1,120,395
(1,452,828)
13,248,569
1,430,240
14,346,376
1,336,778
(6,036,703)
(9,361)
(4,709,286)
42,661,153
(24,312,528)
(78,276)
1,126,742
(584,586)
(260,876)
15,799
(24,093,725)
(61,974,971)
(3,216,109)
917,020
(160,935)
(316,597)
16,007
(64,735,585)
(463,814)
(32,934)
(496,748)
121,529
(9,834,982)
94,313,554
84,478,572
(466,298)
(29,715)
(496,013)
154,959
(22,415,486)
116,729,040
94,313,554
Share
Capital
Reserve
3,730,384
3,109,488
3,845,237
521,338
752,226
11,958,673
1,413,246
- current year - net of tax ----------------------------------------------------------------------------------------------------------50,411 50,411
Deferred tax liability recognized
on exchange equalization reserve
(1,173,510)
(1,173,510)
Balance as at December 31, 2002
3,730,384
2,179,374
373,038
4,070,576
521,338
3,404,593 14,279,303
4,198,103
(512,928)
-
186,968
47,890
BASIS OF PRESENTATION
In accordance with the directives of the Federal Government regarding the shifting of the banking system
to Islamic modes, SBP has issued various circulars from time to time. Permissible form of trade related
mode of financing includes purchase of goods by the bank from their customers and immediate resale to
them at appropriate mark-up in price on deferred payment basis. The purchases and sales arising under
these arrangements are not reflected in these accounts as such but are restricted to the amount of facility
actually utilized and the appropriate portion of mark-up thereon.
US dollar equivalent
The US dollar amounts shown on the balance sheet, profit and loss account and cash flow statement are
stated as additional information solely for the convenience of readers. For the purpose of conversion to
US Dollars, the rate of Rs 57.4685 to one US Dollar has been used for both 2003 and 2002 as it was
prevalent rate as on December 31, 2003.
3.
STATEMENT OF COMPLIANCE
These financial statements are prepared in accordance with approved accounting standards as
applicable in Pakistan and the requirements of the Companies Ordinance, 1984 and the Banking
Companies Ordinance, 1962. Approved accounting standards comprise of such International Accounting
Standards as notified under the provisions of the Companies Ordinance, 1984. Wherever the
requirements of the Companies Ordinance, 1984, Banking Companies Ordinance, 1962 or directives
issued by the Securities and Exchange Commission of Pakistan (SECP) and the State Bank of Pakistan
(SBP) differ with requirements of these standards the requirements of the Companies Ordinance, 1984,
Banking Companies Ordinance, 1962 or the requirements of the said directives take precedence.
The SECP has approved the adoption of International Accounting Standard 39, Financial Instruments:
Recognition and Measurement and International Accounting Standard 40, Investment Property. The
requirements of these standards have not been taken into account for the purpose of these financial
statements as the implementation of the said
standards have been deferred by SBP, vide BSD circular number 10 dated August 26, 2002, for banks in
Pakistan till further instructions. However, investments have been classified in these financial statements
in accordance with the format of financial statements for banks issued by SBP vide BSD circular No. 36
dated October 10, 2001.
Consolidation
The bank accounts for its investments in associates and subsidiaries at cost, except for quoted
associates which are valued at market rates prevailing at reporting date. The details of these investments
are given in notes 9.4 and 9.6.
The bank considers that the effect of consolidation of subsidiaries ' financial statements will not have any
material impact on bank's financial position or results and accordingly consolidated financial statements
have not been prepared. The SECP has granted exemption to the bank from the requirements of sub
section (1) of section 237 of the Companies Ordinance, 1984 vide its letter No. EMD/CO/233/627/20031164 dated August 5, 2003.
TECHNOLOGY
For technology, existing CAMS systems bas been enhanced / modified in the light of the proposed
scheme. The system is centralized and its database is to be maintained at Head Officer level the I.T
system (CAMS) will be lived at all National Bank of Pakistan online branches
IT platform with specific automation and MIS generation capabilities for the scheme, as under:
o Product type sales i.e. CNG auto Rickshaw, Utility Store & PCO etc.
o Geographical distribution of loans
o Processing Turn Around Time
o Performance evaluation reports on Turn Around Time
o By Classification of applicant
o Loan limits
o Loan tenure
o Mark-up rate wise
o Govt. mark-up share collection and loss sharing reports Etc.