A c c or d i ng To M as r oo r Ra z a :

NB P is alw ays ther e to supp o rt b usiness es that ha ve justifia b le need s.

PROFIT & LOSS ANALYSIS

The Nations Bank.....

ADVANCE
FINANCIAL
MANAGEMENT

PRESENTED TO:
Sir. Sohail
Sawani

PRESENTED BY:
Harish Chander
14166
MBA-E-3Y

NBPs
INTRODUCTION.

FACTS.....
Engaged in providing commercial banking
and related services in Pakistan and
overseas.
The Bank's services are available to
individuals, corporate entities and
government.
Established via NBP Ordinance No. XIX of
9. 1949
November
1310+ domestic
branches.
26 overseas branches.
Agency arrangement with 3000+ banks
worldwide.
More than 17000 employees.
Trustee of public funds
Agent to the State Bank of Pakistan
Lead player in the debt equity market, corporate investment
banking, retail and consumer banking, agricultural
financing, treasury services.

VISION
..
To be recognized as a leader and a brand
synonymous with trust,
highest standards of service quality, international
best practices
and social responsibility.

MISSION
..

NBP will aspire to the values that make NBP truly the
Nations Bank, by:
Institutionalizing a merit and performance culture.
Creating a distinctive brand identity.
Adopting the best international management
practices.
Maximizing stakeholders value.
Discharging our responsibility as a good corporate

SWOT ANALYSIS.

Custodianofgovernment.
Agentofstatebank.
Oldandsoundfinancialinstitution.
Westernunionfacility.
Vastnetwork.
Jobsecurity.
Customersatisfaction.
Onlinebanking.
Highestratingandreceiveawarded.
Productandservices.
Moredeposit.

Poordealing.
Lackofcomputerizednetwork.
Politicalpressure.
Lackofadvertisementofproducts.
Lackofitinfrastructure.
Favoritism.
Resistancetochange.
Slowdecisionmaking.

Growingbankingsystem.
Trustduetogovernmentbank.
Economicactivities.
Electronicbanking.
Marketingplan.
Increasebusiness.

Numberofcommercialbank.
Competitionwithotherbanks.
Politicalinfluence.
Customersatisfaction.
Highinterestrates.

ORGANIZATIONAL
STRUCTURE..

OVERALL..
CHAIRMAN&
PRESIDENT
BOARDOF
DIRECTOR

PRESIDENTS
SECRETARIAT

CORPORATE&
INVESTMENT
BANKINGGROUP

HRM&
ADMINSTRATION
GROUP

SECRETARYBOARD
OFDIRECTOR

CREDIT
MANAGEMENT
GROUP

OPERATION
GROUP

SPECIALASSET
MANAGEMENT
GROUP

AUDIT&
INSPECTION
GROUP

COMMERCIAL&
RETAILBANKING
GROUP

OVERSEAS
MAMGEMENT
GROUP

COMPLIANCE
GROUP

TREASURY
MANGEMENT
GROUP

I.T.
GROUP

OVERALL..
CHAIRMAN&
PRESIDENT

OPERATION
GROUPCHIEF

HRMGROUP
CHIEF

COMPLIANCE
GROUPCHIEF

AUDIT&INSPECTION
GROUPCHIEF

SOUTHREGION
SOUTHREGION

WESTREGION
WESTREGION

NORTHREGION
NORTHREGION

HEAD1
HEAD1

HEAD4
HEAD4

HEAD5
HEAD5

BRANCH3
BRANCH3

BRANCH2
BRANCH2

BRANCH1
BRANCH1

HEAD3
HEAD3

HEAD2
HEAD2

OVERSEASREGION
OVERSEASREGION

EASTREGION
EASTREGION

BRANCH4
BRANCH4

BRANCH5
BRANCH5

OVERALL..

FINANCE..
FINANCE
GROUP

INTER
BANK
TRADING

MONEY
MARKET&
SECURITIES

FX
SALES

MONEY
MARKET
SALES

BUDGET&
BUSINESS
REVIEW

FOREIGN
EXCHANGE

FINANCIAL
CONTROL
DIVISION

EQUITY
&
INVESTMENT

SBP
RETURNS

CORPORATE
SALES

TAXATION

REPORTING..

REPORTING TO
SBP..
Online1stOctober2005

S.
No.

Departme
nt

Name of Returns

Freque
ncy

Finance

Daily RCOA

Daily

Finance

Daily

Finance

Daily position of inflows and outflows in

Special Convertible Rupee Accounts (SCRA)
Reporting Chart of Accounts (Weekly)

Weekly

Finance

Weekly GAP Analyses

Weekly

Finance

Weekly position of SCRAs

Weekly

Finance

Monthly RCOA- (Weekly format)

Monthly

Finance

Monthly

Finance

Finance

10

Finance

Statement regarding Sectoral Balance

sheet of Banks-A03
Credit/Loans Classified by Borrowers of
Scheduled Banks-A07
Deposits Distributed by Category of
Deposit Holders of Scheduled Banks-A05
Form IX-X

11

Finance

Monthly

12

Finance

New Foreign Currency Accounts (FE-25

Deposits and its Utilization)
Old Foreign Currency Accounts

Monthly
Monthly
Monthly

Monthly

REPORTING TO
SBP..
S.
No.

Departm
ent

Name of Returns

Freque
ncy

13
14

Finance
Finance

Monthly
Monthly

15

Finance

Balances held abroad

Weighted Average Lending and Deposits
Rates of Scheduled Banks & Rate of Return
on Concessional Loans
Reporting Chart of Accounts (Quarterly)

16

Finance

Bank investments in Sukuk,TFCs

17

Finance

Collection of Scheduled Banks Statistics

18

Finance

19

Finance

20

Finance

21

Finance

22

Finance

Collection of Scheduled Banks Regional

Statistics on Advances (Disbursements &
place of Utilization)
Form XII (Statement showing Assets &
Liabilities)
Foreign Investment Survey / CDIS (as per
letter)
Coordinated Portfolio Investment Survey
Abroad (as per letter)
Government debt ownership survey (as per
letter)

Quarterl
y
Half
Yearly
Half
Yearly
Half
Yearly
Half
Yearly
Annually
Annually
Annually

REPORTING TO
HO..
S.
No.

Name of Returns

Frequenc
y

Profit and Loss Statement

Quarterly

Deposits Statement

Weekly

Advances Statement

Weekly

Key Ratios

Quarterly

Group Performance Summary

Quarterly

Administrative Expenses Summary

Monthly

Key Highlights Domestic Regions

Monthly

Key Highlights Overseas Branches.

Monthly

Provisions Summary

Quarterly

10

Petty Cash Summary

Monthly

FINANCIAL
HIGHLIGHTS..

IN A NUTSHELL (10
13)

PROFIT AND LOSS

ANALYSIS

ANALYSIS..
1. Markup / Returns / Interest
earned.
2. Markup / Returns / Interest
expense.
3. Net Markup / Interest income.
4. Provisions.
5. Net Markup / Interest income
after provisions.
6. Non Markup / Interest income.
7. Non Markup / Interest expense.
13. Earnings per share.
8. Profit before tax.
14. Spread ratio.
9. Taxation.
15. Non-interest income to total
10.Profit after tax.
11.Other comprehensive incomeincome.
16. Dividend per share.
12.Total comprehensive income.
17. Net profit margin.
18. Times interest earned.
19. Return to total assets.
20. Return to total equity.

MARKUP.....
RS'BILLION
INTEREST EARNED
NET INTEREST INCOME

100

95

88
45 43

2010

DESCRIPTION
INTEREST EARNED
INTEREST EXPENSE
NET INTEREST INCOME

INTEREST EXPENSE

49 47

2011

2010 2011
INCREASE - 7.75%
INCREASE - 7.22%
INCREASE - 8.30%

99
56

61
44

2012

2011 2012
INCREASE - 5%
INCREASE - 16.29%
DECREASE - 6.70%

38

2013

2012 2013
DECREASE - 1.06%
INCREASE - 7.81%
DECREASE - 12.52%

MARKUP/ INTEREST EARNED

2010 2011
Issuance of loan and
advances to customers.
Increase in investment in
held for trading securities,
available for sale securities
and held to maturity
securities.

2011 2012
Issuance of loans and
advance to customers.
Increase in investment on
held to maturity securities

2012 2013
Minor decrease

MARKUP/ INTEREST EXPENSE

2010 2011
Increase in interest on
customers deposits,
securities sold under
repurchase agreements and
short term borrowings.

2010 2011
Increase in markup interest
earned.

2011 2012
Increase in interest on
customers deposits and
securities sold under
repurchase agreements.
Decrease in short term
borrowings.

2012 2013
Increase in interest on short
term borrowings.

2011 2012
Increase in markup interest
expense.

2012 2013
Increase in markup interest
expense.

NET MARKUP/ INTEREST

INCOME

NON MARKUP.....
RS'BILLION
INTEREST INCOME
NET INTEREST INCOME

2010

2011
-9

DESCRIPTION
INTEREST INCOME
INTEREST EXPENSE
NET INTEREST INCOME

26

24

19

18

37

36

31

27

INTEREST EXPENSE

-12
2010 2011
INCREASE 9.67%
INCREASE 16.35%
INCREASE 33.33%

2012
-12
2011 2012
INCREASE 23.34%
INCREASE 17.77%
SAME 0%

2013
-11
2012 2013
INCREASE 7.21%
INCREASE 2.58%
INCREASE 8.33%

NON MARKUP/ INTEREST

INCOME
2010 2011
Increase in dividend income,
income from dealing in
foreign currency and
compensation for delay
refunds.

2011 2012
Increase in dividend income,
income from dealing in
foreign currency and gain on
sale and redemption of
securities.

2012 2013
Increase in each head i,e,
dividend income, gain on
sale and redemption of
securities, other income and
income from dealing in
foreign currency.

2010 2011
Increase in administrative
expenses in shape of salaries
and allowances, charge for
defined benefit plans, repairs
and maintaince,
advertisement and
sponsorships, write offs.

2011 2012
Increase in various
administrative expenses.

2012 2013
Increase in write offs.

NON MARKUP/ INTEREST

EXPENSE

PROFIT BEFORE TAX TAX

PROFIT AFTER TAX
RS'BILLION
PBT

TAX

PAT

26

25

21
18

18
7

15
7

2
2010
DESCRIPTION
PBT
TAX
PAT

2011
2010 2011
INCREASE 6.54%
INCREASE 22.69%
INCREASE 0.24%

2012
2011
DECREASE
DECREASE
DECREASE

2013
2012
17.81%
23.42%
15.13%

2012
DECREASE
DECREASE
DECREASE

2013
68.89%
75.48%
63.19%

PROFIT BEFORE TAX

2010 2011
Excess of interest income
over interest expense and
provision.

2011 2012
Excess provisions and interest
expense.

2012 2013
Increase in provisions.

TAX
2010 2011
Increase in PBT which results
in greater current year tax
charge.
Reduction in settlement of
deferred tax.

2011 2012
Decrease in profit before tax
which eventually reduces the
current year tax charge.

2012 2013
Decrease in profit before tax
which reduces the current
year tax charge.
Increase in settlement of
deferred year.

PROFIT AFTER TAX

2010 2011
Minor increase.

2011 2012
Decrease in profit before tax.

2012 2013
Decrease in profit before
tax.

OTHER COMPREHENSIVE
INCOME
RS (000)
3,440,504

12,216
2010

2011

2012

2013

-867,899
-2,498,624
DESCRIPTION
INC / DEC
CHANGE
REASON

2010 2011
DECREASE
7204.61%
Settlement of
exchange
adjustments on
translation of net
assets of foreign
branches.

2011 2012
DECREASE
187.89%
Settlement of
exchange
adjustments on
translation of net
assets of foreign
branches.

2012 2013
INCREASE
237.70%
Settlement of
exchange
adjustments on
translation of net
assets of foreign
branches.

TOTAL COMPREHENSIVE
INCOME
RSBILLION
17,575,430
16,736,823

12,442,386
8,940,528

2010

DESCRIPTION
INC / DEC
CHANGE
REASON

2011

2010 2011
DECREASE
4.77%
Decrease in profit
after tax.

2012

2013

2011 2012
DECREASE
25.66%
Decrease in profit
after tax.

2012 2013
DECREASE
28.15%
Decrease in profit
after tax.

EARNING PER SHARE

RS PER SHARE
13
10
9

2010

DESCRIPTION
INC / DEC
CHANGE
REASON

2011

2010 2011
DECREASE
7.22%
Decrease in profit
after tax.

2012

2013

2011 2012
DECREASE
16.29%
Decrease in profit
after tax.

2012 2013
DECREASE
7.81%
Decrease in profit
after tax.

SPREAD RATIO
(Interest Earned / Interest
Expense)
IN TIMES
2

2
2
2

2010

DESCRIPTION
INC / DEC
CHANGE
REASON

2011

2010 2011
INCREASE
0.51%
Minor increase.

2012

2013

2011 2012
DECREASE
10.15%
Excess in interest
earned over excess in
interest expense.

2012 2013
DECREASE
7.91%
Decrease in interest
earned and increase
in interest expense.

INCOME
(Non-Interest Income / Total
Income)
IN TIMES

2010

DESCRIPTION
INC / DEC
CHANGE
REASON

2011

2010 2011
SAME
0%
Nothing.

2012

2013

2011 2012
INCREASE
11.76%
Increase in noninterest income.

2012 2013
INCREASE
10.53%
Increase in noninterest income.

DIVIDEND PER SHARE

(Dividend Paid / No. of Ordinary
Shares)
RS Per Share
6

1
1

2010

DESCRIPTION
INC / DEC
CHANGE
REASON

2011

2010 2011
DECREASE
90%
Reduction in
profitability of the
N.B.P and increase in
number of ordinary
shares of N.B.P.

2012

2013

2011 2012
INCREASE
13.33%
Reduction in
profitability of the
N.B.P and increase in
number of ordinary
shares of N.B.P.

2012 2013
DECREASE
10.29%
Reduction in
profitability of the
N.B.P and increase
in number of
ordinary shares of
N.B.P.

NET PROFIT MARGIN

(Net Profit after Tax / Net
Sales x 100)
Ratio (%)
20

18
15

6
2010

DESCRIPTION
INC / DEC
CHANGE
REASON

2011

2010 2011
DECREASE
10%
Increase is net sales
without resulting in
higher profitability.

2012

2013

2011 2012
DECREASE
16.67%
Reduction in profit
after tax despite of
an increase in net
sales.

2012 2013
DECREASE
60%
Reduction in profit
after tax due to
heavy interest
expenses and
provisions.

TIMES INTEREST EARNED

(PBIT / Interest Expense)
IN TIMES
2

2
1
1

2010

DESCRIPTION
INC / DEC
CHANGE
REASON

2011

2010 2011
SAME
0%
Nothing.

2012

2013

2011 2012
DECREASE
10.39%
Increase in interest
expense over
increase in profit
before interest and
tax.

2012 2013
DECREASE
18.84%
Reduction in profit
before interest and
tax along with
increase in interest
expense.

RETURN ON TOTAL ASSETS

(PBIT / Total Assets x 100)
Ratio (%)
7

6
5

2010

DESCRIPTION
INC / DEC
CHANGE
REASON

2011

2010 2011
DECREASE
14.29%
PBIT increases along
with the increase in
total assets which
means assets were
not properly utilize
to earn the required
return on total
assets.

2012
2011 2012
SAME
0%
Nothing.

2013
2012 2013
DECREASE
16.67%
Reduction in profit
before interest and
tax.

RETURN ON TOTAL EQUITY

(Profit After Tax / Total Equity
x 100)
Ratio (%)
17

16
14

5
2010

DESCRIPTION
INC / DEC
CHANGE
REASON

2011

2010 2011
DECREASE
5.88%
Increase in profit
after tax but
followed by higher
increase in total
equity.

2012

2013

2011 2012
DECREASE
12.5%
Decline in profit after
tax.

2012 2013
DECREASE
64.29%
Decline in profit
after tax.

MAJOR CAUSE..

PROVISIONS
RSBILLION
19,490,650

9,969,689

9,339,126

2010

2011

DESCRIPTION
INC / DEC
CHANGE
REASON

2010 2011
DECREASE
6.33%
Decrease in
provisions against
non performing
advances including
foreign exchange
adjustments and
amount written off.

10,688,398

2012
2011 2012
INCREASE
14.45%
Increase in provisions
against non
performing advances.

2013
2012 2013
INCREASE
82.35%
Increase in
provisions against
non performing
advances and
provisions against
off balance sheet
obligations.
Bangladesh branch
result in heavy loss.

RECCOMANDATION
S..

TrainingshouldbegiventoNBPstaff.
Changetheprevailingcultureofthebank.
Makeextensiveefforttogivefacilitiesofretailandconsumerbanking.
Technologyinthebankingwhichwillbenecessaryforfuturebanking.
Vigilantintheeyesofcustomer.

Bankshouldincreasetheutilitybillsprocessingfees.
Shouldreducetheiradministrativeexpenses.
Branchesthatarenotmuchusedshouldbecloseddown.
Loanstothesmallbusinessmenandtheagriculturesector
atthelowmarkuprate.
Procedureoftakingservicesfromthebankmustbemadeeasierand
straightforward.

Employeesshouldlearntheconceptofresponsibilityaccounting.
DirectlinkwiththeheadquarterinKarachithroughInternetorIntranet.
Startitsoperationincreditcard.
Thereshouldnotbeanyabruptpolicieschangebytheuppermanagement.
Outlookandinteriorlayoutofthebranches.