Professional Documents
Culture Documents
Dubai Islamic Bank
Dubai Islamic Bank
First of all I am thankful to "ALMIGHTY ALLAH" Who gave me the strength, patience, courage an enthusiasm nee e to !rite an complete this report, an countless salutations to upon the Hol" #rophet Muhamma $#%&H', the sea of kno!le ge !ho has gui e His &mmah to seek kno!le ge from cra le to grave( Then to m" frien s !ho assiste me in this effort an !e !orke aca emic career( The preparation of this report !as a massive un ertaking )ut the highl" competent an e*perience management of Askari %ank for provi e me !ith all assistance, information, a vice an suggestions that I nee e !hich contri)ute importantl" to this report( a"long to accomplish this assignment( I have a e)t of gratitu e to all m" teachers !ho taught me throughout m"
1. EXECUTIVE SUMMARY
As per the re,uirements for the egree of M%A at AI-&, I got an opportunit" to get eight !eeks internship e*posure( Askari %ank, F.+/ Marka0, Islama)a provi es me the chance to have this e*perience !ith a prestigious institution( 1uring m" internship I !as rotate in the various epartments in or er to get in epth i ea of ho! the )ank functions( This report thoroughl" outlines an e*plains m" o)servations, fin ings an anal"sis an m" kno!le ge of the )anking sector in general an Askari %ank in particular( In this report, there is an intro uction of Askari %ank( In intro uction, there is histor" of Askari %ank, strong commitment an lo"al service, highl" traine professionals, an cre it rating( The report also inclu es the etails of the pro ucts offere )" 1I%#L !hich inclu es Takaful plan an other Islamic 2ompliance pro ucts( This report also focuses the general )anking of 1I%#L !hich inclu es 2ash epartment, 3emittances section, Account opening, 1e)t car s etc( 4u)se,uent to it this report contains m" e*perience an learning that !hat I have learne from this internship an !hat !as m" e*perience regar ing this internship( The report also contains m" anal"sis that I scrutini0e in the organi0ation )" using t!o metho 4W-T an Financial anal"sis( With the help of these metho s I have some suggestions an recommen ations to improve the performance of the %ank, !hich also mentione in this report( %" follo!ing these suggestions )ank can improve their pro uct market an can easil" gain the attraction an satisfaction of customers( 5ot onl" the customers, )ank also can improve the satisfaction an performance level of its emplo"ees )" these suggestions(
internship I learnt that ho! to eal !ith customer( Financial institution is a place !here ever" t"pe of )usinessmen visits, so uring m" internship in 1I%#L I met !ith man" )usinessmen an learnt that ho! ifferent )usinesses run( An another main o)7ective that I !ant to achieve that ho! an organi0ation consist !ith ifferent epartments an ho! ifferent functions are one in ifferent epartments of an organi0ation( Through this internship I learne man" things( It !as a great e*perience for me to comprehen the !orking environment( 1uring this perio I face ifferent t"pes of !orking con itions, !hich !ill help me to kno! that, ho! to han le these con itions in future( Through this internship I am a)le to o !ork in all epartments of %ank )ecause I kno! all rules, policies, an responsi)ilities, !hich mentione in 1I%#L epartments an pro ucts of these epartments so I achieve :/; of m" o)7ective <
ivi e into or inar" shares of 3s +/ each( The %ank is a su)si iar" of Askari %ank #D42, &A> $The hol ing 2ompan"'(
6//?
8434 4322 3274 833 3917 -633 -412 -2.09 10 225
6//C
21308 16114 11348 2974 5126 -568 -369 -0.89 17 350
6//:
32050 25459 18074 3019 6018 -272 -182 -0.35 25 470
6//E
35368 27981 20590 2823 6776 352 277 0.38 36 722
DIB ! is offering fixed deposit account according to the Sharia principles. "ere in fixed deposit account deposited amount is invested and finally share of profit or loss is distributed between bank and customer.
SERVICES OF DIB-L
4ervices are output of the firm, !hich are in intangi)le form an at present offers to his customers inclu e9 3eceipts of customer=s eposits 2ollection of his che,ues ra!n on other )anks Making pa"ments through che,ues ra!n on it Making remittances Foreign tra e service the )ack )one of an" organi0ation to earn profit( Ho!ever, there are some )asic services !hich 1I%#L, F.+/ )ranch
+/
+.?.2.2 MAIL TRANSFERS/ (oney is safely and .uickly moved by using DIB ! (ail *ransfer service. And DIB ! also offered the most competitive rates in the market. +.?.2.+ -AY ORDER/
DIB ! provides another reason to transfer money using its facilities. ay orders are a secure and easy way to move money from one place to another. And as usual# charges for this service are extremely competitive.
+.?.2.> TRAVELER6S CHE@UES/ /egotiability+ ak 'upees *ravelers 0he.ues are a negotiable instrument. 1alidity+ *here is no restriction on the period of validity. Availability+ At 23 branches of DIB ! all over the country. 4ncashment+ At all branches of DIB !. !imitation+ /o limit on purchase. Safety+ DIB ! *ravelers 0he.ues are the safest way to carry money. +.?.2.? LETTER OF CREDIT/ DIB ! is committed to offering its business customers the widest range of options in the area of money transfer. In a commercial enterprise !etter of 0redit service is $ust what customers are looking for. &ith competitive rates# security# and ease of transaction# DIB ! !etters of 0redit are the best way to do business transactions.
++
finance 6 0ash %inance 6 Small %inance 6 Discounting 7 Bills 4xport Bills urchased 8 re,shipment.
3.5.3.(
)e$iu'
ter'
oan!
an$
Ca%ita
E#%en$iture
"inancing*
DIB ! provides financing for its clients capital expenditure and other long, term investment needs. By sharing the risk associated with such long,term investments# DIB ! expedites clients attempt to upgrade and expand their operation thereby making possible the fulfillment of our clients vision. *his type of long term financing proves the banks belief in its client9s capabilities# and its commitment to the country.
+6
capabilities are complemented by capital strength and by industry teams# who bring speciali5ed knowledge to the structure of a transaction.
+<
DIB !s involvement in capital markets is expected to increase its earnings# which would result in better returns offered to account holders.
>. ORGANIZATIONAL STRUCTURE >.1 STRUCTURE OF THE ASKARI BANK -AKISTAN LTD.
In Askari %ank, the hea is calle G2hairmanH of the %ank( An after 2hairman there is 4i* %roa of 1irectors( Askari %ank has >leven Groups !hich control the !orking of the 1ivisions, Wing, 1epartment, 4ection an 3egional of the Askari %ank( In 1I%#L, G1epartmentH is calle GWingsH( C'( r1() A -re& 5e)%
B*(r5 *; D re$%*r&
Se$re%(r8 Se$re%(r8 B*(r5 B*(r5 *; *; D D re$%*r& re$%*r&
O2er(% *) Gr*02
C*11er$ C*11er$ (. (. A A Re%( .. B(), )= Re%( B(), )= +@ Gr*02 Gr*02 Over&e(& Over&e(& M()(=e1e)% M()(=e1e)% Gr*02 Gr*02
I.T. Gr*02
Br()$' M()(=er
1eposits 1ept
>.
3emittances
2learance 1ept
A vances 1ept
H3 1ept
#ension 1ept
2ash 1ept
Account -pening
%ills 4ection
I !orke in Askari %ank #akistan Limite as an internee for t!o months( 1uring internship, I rotate in ifferent epartments !here I learne a)out these epartments( The )ranch manager monitors the !hole )ranch to evelop efficienc" an effectiveness( The ifferent epartment=s etails are liste )elo!( There are seven epartments are operating in F.+/ Marka0 %ranch( In eposits section, various kin s of eposits are ma e in routine an reporte to hea office( The eposit section is ver" +A
efficient an
internal remittances to
facilitate the customers( 3emittances are transferre through pa" or er, )ank raft an telegram transfer( In clearance epartment, che,ues are cleare through clearing house )" using the facilit" of 5IFT( In a vances epartment, )ank makes ifferent kin of a vances an offer attractive Islamic compliance pro ucts to attract customers( In other epartments, H3 epartment functions the recruitment, performance appraisal, training an other relevant 7o)s( In cash epartment, the collection an pa"ment of cash is ma e( $5-T>9 -rganogram is attache in anne*es('
>.+.1.1 Re$e 2%
The mone", !hich either comes or goes out from the )ank, its recor shoul )e kept( 2ash epartment performs this function( The eposits of all customers of the )ank are controlle )" means of le ger accounts( >ver" customer has its o!n le ger account an has separate le ger car s(
>.+.1.2 -(81e)%&
It is a )ankerBs primar" contract to repa" mone" receive for this customerBs account usuall" )" honoring his che,ue(
+?
LOCAL CHE@UE
%" local che,ue !e mean collection of che,ue from the )anks !hich are the mem)ers of the clearinghouse an !hich are locate !ithin the cit"(
OUT STATION CHE@UE
%" out station che,ue !e mean collection of che,ue from the )anks !hich are situate outsi e the cit"( It means that presenting )ank an the )ank on !hich the che,ue is ra!n are not situate in the same cit"(
+C
The )ank uses in!ar clearing register for the purpose of recor ing all the etails of the che,ues that the other )anks have issue on the )ank(
2ustomers keep their savings in #L4 4aving Accounts an )usinessmen save their mone" in )ank 2urrent Accounts( 1I%#L gives profit on saving accounts an special saving accounts(
&A DA# Sui )as and *0! from >.?? am to @.?? pm all the branches through out the countries are observing this practice to ease the long .ueues lined, up at the counters of banks.
6/
The "ear 6//A marke the first "ear of Islamic )anking operations( 1uring the "ear un er revie!, in a ition to active participation in various 4ukuk transactions, 1I%#L has e*ten e its Islamic %anking -perations 5et!ork(
Re2*r%&
It generates reports like S%(%e1e)% *; A$$*0)% A$% v %8 $a report on the activit" of all accounts', S%(%e1e)% *; A;;( r& $a report on the assets an lia)ilities', S%(%e1e)% *; F*re =) E:$'()=e $a report on the foreign e*change currencies at the )ank' an S%(%e1e)% *; -r*; % ()5 L*&&( These reports can )e generate at ail", !eekl", monthl", ,uarterl" or "earl" )asis as re,uire )" the )ank(
B05=e%
6+
Formulation of "earl" )u gets J targets in consultation !ith the )ranch manager is also one )" the accounts epartment(
A$% v %8 C'e$, )=
1ail" activit" checking an monitoring is one )" the accounts epartment of the !hole )ank(
S%*r(=e *; Re$*r5&
Accounts 1epartment also has the ut" to store vouchers an s"stem generate reports(
-(81e)%&
The accounts epartment is responsi)le to pa" ven ors on )ehalf of the )ank !ith authori0ation from the )ranch manager( It also has to amorti0e large pa"ments an calculate epreciation of )ranch assets(
esta)lishing relationship al!a"s gives priorit" of his organi0ation these )enefits9 Ma*imi0ation of profit( >arning per share ma*imi0ation( Increase of sale Welfare 3e uce in cost Ma*imi0ation of sharehol erBs !ealth(
6<
Automatic Teller Machines $ATM' an ATM car s have )een the )iggest innovations that have simpl" change the !a" people to a" are no! making their personal transaction( With ATM car s, people can take out mone" from their accounts at an" time, from an" )ank that the" !ant to, at their convenience( ATM car hol ers can take mone" out of their accounts, from an" K+ linkB net!ork ATM, the largest ATM net!ork of the countr"( -ther ATM net!orks inclu e KMnetB an K2irrusB( To a" all )anks are mem)ers of K+ linkB, !hile most of them are mem)ers of Mnet an 2irus( Internet %anking is another ma7or technological pro uct intro uce )" ifferent )anks of
#akistan( With the help of internet )anking, customers !ith the convenience of their o!n personal computers can transfer mone" from their accounts, vie! their )alances an a lot more(
?.>.> I))*v(% *)
Innovation is a must in mo ern times, as it !ill help )anks to compete in to a"Bs highl" technologicall" a vance in ustr"( 4ome of the innovations that the )anking in ustr" is looking for!ar are9 More a vance means of connectivit" )et!een )ranches through )etter an a vance soft!are an har !are to maintain connections !ith )anks in remote areas an uring
6@
natural calamities in #akistan( These might inclu e )etter connection through WiFi or WiMa*, )oth ne! technologies( More a vance information s"stems in )anks that are more secure than )efore to
eliminate an" chances of frau an !hich are even more user frien l" to help emplo"ees to use them not onl" to make critical ecisions )ut also satisf" customer nee in a more timel" manner( A vancements in online transfer from inter )ranch to an even more helpful inter )ank transfers( Automation of simple operations task that !ill not onl" improve efficienc" )ut also re uce costs like stationer" an courier services, like automation of check )ooks etc(
2CCD
%ills #a"a)le
2CCE
2CCF
2CCG
The anal"sis of the )alance sheet of the )ank sho!s that current lia)ilities increases over the perio of time, the increase in lia)ilities an increase in loan sho!s that compan" !ants to have more cash in han rather than len ing it to others an losing the return on that investment( As for as the fi*e lia)ilities of compan" are concern the" are sho!ing increasing tren an same is case !ith the current an long term lia)ilities )ut the increasing tren in assets is lo!er than the increasing tren in lia)ilities !hich in not a goo position for the )ank as sho!n in the ta)le )orro!ing are more increase in 6//E(
6A
2CCD
Mark.up income
2CCE
2CCF
2CCG
3D(%( S*0r$e/ DIB F )()$ (. S%(%e1e)%&' In generation of fun s of 1I%, the most important source is mark.up income( There are three earning revenues( %anks earning are mark.up income, non.mark.up income an other income( In 6//A, the mark.up income is 6/E@C<<< !hich sho! a goo strength of 1I%#L( With the passage of time the revenue of 1I%#L is increasing !ith goo figures an market share( The revenue generate )" the 1I%#L is investe in the market to ma*imi0e its market share an to increase its profita)ilit" in e*( In last five "ears the tren s in generation of fun s are positive an remarka)le(
2CC?
2CCD
2CCE
2CCF
2CCG
6?
Balances with other banks Lending to financial institutions Investments Advances Fixed assets Deferred tax assets Other assets
154,834,534
248,313,793
275,685,541
328,895,152
348,990,764
3D(%( S*0r$e/ DIB F )()$ (. S%(%e1e)%&4 In )alance sheet of )ank the most important item is earning assets( There are four earning assets( %ank has strong earning assets like a vances investments an len ing to financial institutions has ma7or percentage in of assets of )ank( In lia)ilit" an e,uit" anal"sis the )orro!ing from financial institutions an eposits have ma7or portion an reserve an share capital has ma7or portion in e,uit"( -ut of the three earning assets $len ing to financial institutions, a vances an investments' onl" a vances have recor e a gro!th !hile Len ingBs to financial institutions an Investments fell respectivel"( Anal"sis of )alance sheet sho!s increase or ecrease in each item as a percentage of assets means that assets are chosen as ke" figure( As !e have seen in the ta)le the interest e*pense is increasing !ith the turnover so the )ank is more utili0ing on a vances( As for as the fi*e lia)ilities of compan" are concern the" are sho!ing increasing tren an same is case !ith the current an long term lia)ilities(
6C
ASSETS
+E,C/:,A+: <,+:<,EAC . <A,A/<,+E? :<,E<+,@// @,6:/,A/@ . <,66?,EAE Cash & balances with treasury banks
Balances with other banks Lending to financial institutions Investments Advances Fixed assets Deferred tax assets Other assets
154,834,534
248,313,793
275,685,541
328,895,152
348,990,764
LIABILITIES
6,6<<,?C+ +6,C6<,:</ +6E,C+@,:E+ +,:EE,@:/ . %ills #a"a)le
6CA,:<@ 6,6CA,<@@
%orro!ings 1eposits J other accounts 4u). -r inate loans Lia against asset su)7 to finance lease 1eferre ta* lia)ilities -ther lia)ilities
1>GHD??HDDG
2>CHF>GHDDE EH>D>H12D
2D+H>>+H?GD 12H2>1HG>?
+12HDE?H+CF 1DH21GHF>>
++1HG>DHC2? 1EHC>>HE+G
NET ASSETS
?H2D1H>F>
6:
-RESENTED BY
2,500,000 1,008,772 860,300 6,387,372 4,369,072 4hare capital 3eserve &n appropriate profit 4urplus on revaluation of assets.net of Ta* 122>1G>? EH>D>H12D 12H2>1HG>? 1DH21GHF>> 1EHC>>HE+G
6E
12HD+GHEE C
A,/EE,+EA +,6C<,:?< +,//:,E:: . . . :CA,++< FH2?EH1?G
21HCFFHC>C
@,E6?,?/@ +,C+:,@C: +,6/A,?<: . . . +,AC<,E/A GH>2>HD2?
2EHEF2H1EC
?,+@@,?6: 6,:E+,CAA +,<<<,:@/ +,+?E,A+A $@,@?@' ?6C,?+: 12H1D2HFG2
2FHGCDHE+?
?,C:+,?:< <,6?<,6@? +,/@6,:6C 6,<@+,?E/ $<+,E?@' +@C,<?< 1+H?>>HF>?
2DHCFEH21D
C,E6A,<C/ 6,:C:,E<6 <,E?E,/AC <EA,@6C +,C/C +,6@A,<?E 1DH>1?HFD2 >2H?C+HCEF +:,+C+,+E: C@C,A6+ A:<,<?+ 1GH?C2HCFC
+CH?12HDD?
++,+EA,+<< +E:,6E: ?<,6/? 11H>?DHD+E
+GHG>?HCD2
+<,@@<,@@+ $+C,6:<' 6/:,<6C 1+HD+>H>F?
>2H>?1H?FC
+@,6/A,E++ +?:,/6C +C,+@+ 1>H+G1HCEG
2CHFGDHG2 G
:,:C:,:/+ <6,6@< :,6:@L FHG1GH+2F
1GHC?DHC2F
9
11HGEEHDC 1 9 11HGEEHDC 1
@,EA/,/// :@C,EA: $+A,C6E'
1GHC?DHC2F
C,+A@,//6 $+,/E:,C/E' 6E+,6E+
2DH+1CH?EE 9 2DH+1CH?EE
:,?EA,AE: A</,?A6 ?+,E:+ GH2FFH2+1
2FHCDCH?C1
9
2+HCCCHGGF
9
2FHCDCH?C1
:,<++,A// <E+,@EC <6<,C<+
2+HCCCHGGF
++,C?6,?A/ . $@,66/,6@/'
DH+>DH?F> 12HECGH>>>
E,+?+,C@C @<,66+
1EHC22H+>D
+E,<C6,A6< ..............
GHC2DHE2F 1GHC++HEE+
<6,/C@,?CC <E,//C
EH?>2H>CF 1?H>?FH?GC
@A,<@@,+:: +</,@A?
?HEF2H22G DH1G?H+E2
A,:E6,E/6 @A,@E?
21HG1>H>12
+DH+G>HFDG
?1H1>EH>?E
DCHG++H2+>
21.?1
2C.FF
2+.+>
1E.>F
12H1++HEE C 1CH>F
Mark-up / return / interest expensed Net mark-up / return / interest income Provision against non-performing advances Provision for / (reversal of) diminution in the value of Investments Provision against off balance sheet obligations Bad debts written off directly
</
i)
Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities-net Unrealized gain/(loss) on revaluation of investments Classified as held for trading Other income Total non-markup / interest income
ii)
Administrative expenses Other provisions / write offs Other charges Total non-markup / interest expenses Extra ordinary / unusual items
iii)
Taxation - Current - Prior years - Deferred
iv)
Unappropriated profit brought forward Transferred from surplus on revaluation of fixed assets on account of incremental depreciation
Profit available for appropriation Basic and diluted earning per share-after tax 3D(%( S*0r$e/ DIB F )()$ (. S%(%e1e)%&4
<+
Different kinds of ratios are selected for different types of situations. Some of the ratios calculated for DIB ! are given below.
CURRENT RATIO
<6
3 2.5 2 1.5 1 0.5 0 2005 2006 2007 2012 2009 CURRENT RATIO
INTERPRETATION
*he current ratio of DIB !# for the year C??># is <.<2 times of current liabilities. It is good to meet the short,term obligations# when compared with the current ratio C??D# which is <.?> times of current liabilities. *he company should maintain minimum limit of current ratio for Bank i.e.<.
4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0 2005 2006 2007 2008 2009 Net !"#$%& C'($t')
INTERPRETATION
/et working capital of C??> increases from year C??D. This is safet" cushion to cre itors( The volume of net !orking capital is sho!ing positive tren s(
<@
DE@T RATIO
0.880
INTERPRETATION
0reditors prefer low debt ratio# debt ratio shows that how much asset the company has to honor their obligations. *his ratio is increased from ?.DA<> to ?.DC>C. *his is a good for the company because the company has < asset to pay ?.DC>C debts.
<A
INTERPRETATION
Debt to e.uity ratio is the relationship borrowed funds and owners capital and e.uity multiplier is the relationship between total assets and total e.uity. But it is good that the ratio is decreasing in C??> than C??D. *he overall leverage position is showing better trend as compare to previous years.
<?
INTERPRETATION
From the calculation it is ver" much clear that the performance of 1I%#L is ver" goo still to 6//C( An the tren is up!ar ( It tells us a firmBs net income per rupee of revenue( As the tren is up!ar it sho!s the high profits in revenue per rupee in case of 1I%#L( It is )ecause of high a vances the 1I%#L has given to the people )ut in 6//: the ratio tren is o!n!ar !hich not goo for 1I%#L(
<C
RETURN ON E,UIT40.00/ 35.00/ 30.00/ 25.00/ 20.00/ 15.00/ 10.00/ 5.00/ 0.00/ 2005 2006 2007 2008 2009
Ret-"% !% E,-$t.
INTERPRETATION
It is decreasing every year with different rate. *his condition is not good for DIB ! because every investor want to earn high income on his investment.
<:
INTERPRETATION
*he results show that the 'eturn on Asset are decreased which show that the DIB ! Assets are not properly utili5e in C??> or may be there are no proper environment for Banking sector because in C??D economic crisis. akistan face the
<E
INTERPRETATION
*his ratio indicates that out of total asset how much bank utili5e its asset for further investing. *his ratio in decrease in C??># which is not useful for the bank to enhance its revenues.
@/
INTERPRETATION
!oans or advances are the ma$or assets of a bank while deposits are ma$or liabilities of a bank. "igher ratio shows the better solvency of bank.
INTERPRETATION
*his ratio shows that how much cash you have to pay the liabilities :deposits;. As this ratio show that company has fewer amounts of cash than @+
deposits. It also indicates that bank is investing so the bank is enhancing its business. But at the same time it could be risk for bank for li.uidation.
E,UIT- TO ASSETS
50.00/ 40.00/ 30.00/ 20.00/ 10.00/ 0.00/ 2005 2006 2007 2008 2009 E,-$t. t! A11et1
INTERPRETATION
@6
*his ratio shows the position of e.uity in total assets of business. *his ratio is in increasing trend. But the bank should increase its e.uity by increasing the wealth of shareholders.
E,UIT- TO DEPOSITS
60.00/ 45.00/ 30.00/ 15.00/ 0.00/ 2005 2006 2007 2008 2009 E,-$t. t! De(!1$t
INTERPRETATION
@<
*his ratio shows that how much e.uity part is there in total structure. *he capital advocacy re.uirement is CDE. *he bank was not fulfilling the re.uirement in C??@ 7 C??3 but now bank has 2<.2CE# which is good.
E,-$t. t! De(!1$t
INTERPRETATION
@@
As their earnings per common share is good year by year it mean that results of the ratio indicate that firm has paid a handsome return on investment showing the profit generations. Because the companys net income is increasing gradually. As shown above the bank basic earning per share is increasing due to increase in net income. *his shows how mush profit each share has earned in any particular year. It is most important ratio for peoples who decide about investing their money. Although it decreased in C??> but the overall performance is good.
RETURN ON INVEST)ENT
@A
40.00/ 35.00/ 30.00/ 25.00/ 20.00/ 15.00/ 10.00/ 5.00/ 0.00/ 2005 2006 2007 2008 2009
Ret-"% !% E,-$t.
INTERPRETATION
It is decreasing every year with different rate. *his condition is not good for DIB ! because every investor want to earn high income on his investment.
@?
3.00/ 2.50/ 2.00/ 1.50/ 1.00/ 0.50/ 0.00/ 2005 2006 2007 2008 2009 Ret-"% !% T!t') A11et1
INTERPRETATION
*he results show that the 'eturn on Asset are decreased which show that the DIB ! Assets are not properly utili5e in C??> or may be there are no proper environment for Banking sector because in C??D economic crisis its assets to create profits( akistan face the
@C
A&,(r B(), -(, &%() L%5. B(.()$e S'ee% Ver% $(. A)(.8& & 3R& CCC4 F*r %'e 8e(r e)5e5 De$ +1H 2CCK
2CC? 2CCD L +6(<6 A(A? 6C(+C 6(:6 @?(@< @(+/ +(?/ 2CCE L +6(<: ?(@/ 66(/< <(?6 @E(CC +(A6 . @(6C 2CCF L +6(@A @(E6 6C(C/ 6(:6 @@(?A <(@/ . @(/C 2CCG L +<(/< @(?E 6/(:E 6(/E A/(A/ 6(E? /(<E A(@A
ASSETS
2ash J )alances !ith treasur" )anks %alances !ith other )anks Investments.net Len ing to financial institutions A vances. net -perating Fi*e assets 1eferre Ta* Assets -ther assets.net
T*%(. A&&e%&
LIABILITIES
%ills #a"a)le %orro!ings 1eposits J other accounts Lia)ilities against asset su)7ect to finance lease 1eferre ta* lia)ilities.net -ther lia)ilities
1CC
1CC
1CC
1CC
1CC
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In )alance sheet of )ank the most important item is earning assets( There are four earning assets( %ank has strong earning assets like a vances investments an len ing to financial institutions has ma7or percentage in of assets of )ank( In lia)ilit" an e,uit" anal"sis the )orro!ing from financial institutions an eposits have ma7or portion an reserve an share capital has ma7or portion in e,uit"( -ut of the three earning assets $len ing to financial institutions, a vances an investments' onl" a vances have recor e a gro!th !hile Len ingBs to financial institutions an Investments fell respectivel"( Fertical anal"sis of profit an loss sho!s increase or ecrease in each item as a percentage of sales means that sales are chosen as ke" figure( As !e have seen in the ta)le the interest e*pense is increasing !ith the turnover so the )ank is more utili0ing on e*penses( 5et Interest income !as +/; higher this "ear to 3s <C(/A: )illion o!ing to volume gro!th( The interest earne in the +6 months of 6//: is 6+; higher than that of 6//: )ut it !as matche )" more than proportionate increase in the interest e*penses, !hich rose )" @+;( 4o in vertical anal"sis the net interest income is ecrease in 6//E as compare to 6//:( 1I%#L irectors give some of reasons in increasing in interest e*penses( Firstl", the )anks have )een impose a minimum of A; eposit rate on all the savings schemes( This ha previousl" )een left at the )anks= iscretion as to ho! much the" have to pa"( A fe! of the )anks have also )een penali0e )" the 4%# for acting like cartel in eposits( 4econ l", there has )een other attractive scheme from the 5ational 4avings, !hich offere )etter rates an raine the li,ui it" from )anking sector(
Furthermore, the econom" !as going through high inflation, so the people !ere not too optimistic a)out saving in )anks as the mone" !as losing its value ver" fast(
ecreasing tren
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position uring last t!o "ears, that position in not goo for the compan"( -nl" profit availa)le for appropriation is increasing as compare to previous "ears, !hich is +/+(6E; in 6//E(
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ASSETS
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LIABILITIES
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#rovision against non.performing a vances #rovision for iminution in the value of Investment Provision against off balance sheet obligations %a e)ts !ritten off irectl"
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N*) 1(r,902 )%ere&% )$*1e Fee, commission an )rokerage income 1ivi en income Income from ealing in foreign currencies Gain on sale of securities.net &nreali0e gainI$loss' on revaluation of investments 2lassifie as hel for tra ing -ther income T*%(. )*)91(r,02 < )%ere&% )$*1e
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The hori0ontal anal"sis of the )alance sheet of the )ank sho!s that current assets increases over the perio of time, the increase in cash an ecrease in loan sho!s that compan" !ants to have more cash in han rather than len ing it to others an losing the return on that investment( as for as the fi*e assets of compan" are concern the" are sho!ing increasing tren an same is case !ith the current an long term lia)ilities )ut the increasing tren in assets is lo!er than the increasing tren in lia)ilities !hich in not a goo position for the )ank (as sho!n in the ta)le )orro!ing are more increase in 6//E( The hori0ontal anal"sis of #rofit J Loss account of "ears 6//C.6//E sho!s a continuous ecrease in mark up, non mark up an also there is a rapi an huge ecrease in the profits in 6//:( The a ministrative e*penses have )een ecrease in 6//: )ut again it !ill increase in 6//E( The income after ta* is ecrease, !hich !as +E; lo!er than the income earne in 6//:( The )ank profits )efore ta* are increasing tren , !hich is +:; higher than the previous "ear of 6//:( The management of the )ank gives man" reasons of the ra ical change in profita)ilit"( First of all, a verse economic con itions omesticall", the la! an or er, po!er shortages, recor high inflation, li,ui it" in the )anking s"stem, steep rise in interest rates, increase in government )orro!ing from the central )ank, rising import )ill an resulting gro!th in fiscal eficit( The interest e*pense is also increase in 6//:.6//E( The management give ifferent reasons that the )anks have )een impose a minimum of A; eposit rate on all the savings schemes( This A<
ha previousl" )een left at the )anks= iscretion as to ho! much the" have to pa"( A fe! of the )anks have also )een penali0e )" the 4%# for acting like association in eposits( 4econ l", there has )een other attractive scheme from the 4avings, !hich offere )etter rates an raine the li,ui it" from )anking sector( Furthermore, the econom" !as going through high inflation, so people !ere not too optimistic a)out saving in )anks as the mone" !as losing is value ver" fast( The provisions against non.performing loans !ere +6@; higher as compare to 6//C( The a vances recor e an increase )ecause the )ank !as len ing though ver" pru entl" ue to increasing 5#Ls $5on.performing loans'( Along !ith the increase in A vances, the composition has also change a )it( A shift from long.term to short.term loans is o)serve (
E.C ORGANIZATIONAL ANALYSIS WITH REFERENCE TO THE COM-ETITORS IN TERMS OF TOTAL ASSETSH TOTAL LIABILITIES AND TOTAL REVENUE
1I%#L is one of the lea ing Islamic %anks !ith Islamic compliant pro ucts( It has earne a
goo market share in a ver" short span of time ue to its efficient an effective management an proactive market approach( There are a lot of its competitors in market tr"ing to ominate its market strength an share( Here 1I%#L is compare !ith 5%# an %AF in terms of its total assets, total lia)ilities an total revenue etc( T*%(. A&&e%& T*%(. L (" . % e& R02ee& ) M .. *)& %anks 5%# %AF 1I%#L 6//E @/,<A@ 6?6?E<@6<E?@ 6+,E<C +C,C:+ 6//: <6,A:A +C,:A: +6,A?A 6//E +E,<E< +A,<?A +A<6< +/,<?6 6//: +@,?:C +6,<6@ :,A@6 6//E 6A,<?: 6A<?A@6, 6+,:A@ @<,EC+ +A,<?: 6//: 6/,A:C +:,AC@ +6,?A@ T*%(. Reve)0e
$4ource9 Annual reports of various )anks' As per the ta)le, the total assets of 5%# are @/<A@ million in 6//E !hich are ma*imum in volume as compare to %AL an 1I%#L( In 6//E, the total assets of 1I%#L are +CC:+ !hich A@
sho! a positive tren as compare to 6//:( 4imilarl" the tren s of all )anks from 6//: to 6//E are positive an sho! a goo change in terms of ,uantit"( The volume of lia)ilities of 5%# is higher as compare to other )anks ue to its e*tensive )ranching an net!orking( The volume of all the )anks sho!s positive tren s from 6//: to 6//E( This is )ecause of ne! pro7ects, increase in short term an long term lia)ilities( The volume of 5%# is high as compare to other )anks like %AL an 1I%#L in terms of ,uantit" ue to its e*tensive pro ucts net!orking an the other reason is that )ecause it pla"s the functions as an agent of the government( 1I%#Ls volume of revenue is comparativel" lo!er as compare lo!er then its competitors( %ecause 1I%#L has recentl" esta)lishe in 6//A thatBs the reason its volume of revenue is lo!er(
AA
emplo"ee have to !ork all a" !ithout rela*ing !hile some others have nothing to o at all( This not onl" creates confusion among emplo"ees )ut also hurting an istur)ing for overall setup of the )ank( An a)ove all it results in issatisfaction among customers as !ell( D ;;ere)$e "e%!ee) %'e*r8 ()5 2r($% $e/ A vast ifference e*ists )et!een theor" an practice an 1I%#L has !ritten proce ure )ut practical !ork one )" emplo"ees is a )it ifferent from !ritten proce ures( B(), 50%8 %* 1( )%( ) &e$re$8/ The" onBt care a)out maintaining secrec", especiall" uring the rush hours( The" speak lou l" a)out the account position an !hile getting clearance of che,ue the person can easil" get the !hole information from the le ge( The eposit clerk must )e careful !hile passing an" che,ue( In this regar another shortfall is in giving the information a)out the )alance on telephone( E:$e&& ve 2(2er !*r,/ It is notifie that ue to the length" proce ure of paper !ork the )ank emplo"ee are over )ur ene ( The" are una)le to give proper attention to the clients an face ifficulties in getting their 7o) one( -ne reason for length" proce ure an e*cessive paper !ork in the )ank is the lack of computeri0e technolog"(
A?
M*re ($$*0)%& ;e!er 5e2*& %&/ >fficient )anking is one, !hich oes not emphasi0e on num)er of accounts )ut on greater amount of eposits( 1I%#L is more intereste in increasing its num)er of account irrespective to its eposit( De.e=(% *) *; (0%'*r %8/ Manager has ver" limite authorit"8 he has to take the approval from his management authorit" i.e( In case of a vance he has to take the approval of general an regional manager( The other pro)lem is create , !hen the manager is not present in his office, the customer having to !ait for hours( This iscourages )oth customer an officers )ecause the" have to suffer a lot( L($, *; &2e$ (. Me5 %r( ) )=/ 1I%#L oes not provi e a e,uate facilit" of speciali0e training to their staff( Training is generali0e rather than speciali0e ( As the !orker finishes his training, he is in ucte into a specific fiel !ithout having great eal of kno!le ge a)out the fiel ( (
1C.C CONCLUSION
1I%#L is an effectivel" operating an profit making organi0ation an carr"ing out its activities un er a specifie s"stem of proce ure( The main regulator" )o " is 4tate %ank of #akistan, !hich provi es polic" gui elines an professional )asis( While the hea streamline the approach an ensures that the mone" market operates on soun !ith the passage of time !ith a vie! to office specifies the !hole proce ure of function an
capa)ilities so as to )ring them at par !ith international practices( There are people !ho are motivate to!ar s their !ork )ut on the !hole, it seems like
emplo"ees o not !ork on time an en7o"s !asting their time, !hich is a )ig hur le in its !a" to progress( Also !orking at the )ank, I also foun out that all the epartments are not linke together( >mplo"ees usuall" hi e their !ork from other emplo"ees as its match going on an !hoever oes the )est !oul )e a!ar e ( That shoul not )e the case( All the epartments shoul !ork as team not as in ivi uals, so that the !hole )ranch !oul get )enefit out of it( 4o
AC
there is a lack of team!ork, also ue to this !eakness of the )ranch, its customers are not satisfie ( I talke to man" clients of the )ank )ut most of them !ere not satisfie !ith the services provi e speciall" in the epartments namel" Account epartment, 2ash epartment an %ill collection section( 4o I !oul suggest to the emplo"ees to !ork !hole. hearte l" an sho! keen interest in their !ork(
A:
4xtra counters should be established in order to facilitate during the rush days the difficulties faced by the bank staff as well as the customers. All Branches of the Bank must be online. All the departments should be established separately. Bank can increase its profit ratio by reducing extra expenditures and to enhance the volume of advanced especially retail loans. I done internship# I recommend that security level in the bank should be enhanced especially where I got internship and operation of (obile phones must not be allowed inside the Bank. Bank should take step to establish separate counters for the old age employees and pensioners. *he Bank should locate new market for its operational activities in the country as well as abroad. *he Bank should increase profit rate on deposits and saving schemes especially for pensioners and old age citi5ens. %or improvement of internal control and system the compliance wing and surprise inspection system should work more effectively. *o avoid complaints and leaving the bank $ob number of staff should be enhanced and their salaries should be leveled to the private8multinational banks. Double shift system should be introduced to improve attitude and behavior of the employees. ayment of salaries should be made separately to accommodate the valued customers and depositors. %or collection of utility bills i.e. 4lectricity bills# *elephone bills# &ater and )as bills separate cash receipt counter must be established. rocedure of receiving loans should be easy and short time to facilitate the borrowers and enhance the profitability of the Bank
AE
12.C REFERENCES
!!!( i)pl(com(pk !!!( i)pl(com(pkIAnL3eport(htm !!!(s)p(org(pk !!!(askare)ank(com(pk !!!(mc)(com(pk !!!()ankalfalah(com !!!(h)l(com(pk !!!(u)l(com(pk !!!(a)l((com(pk !!!( ail"times(com(pk Irsha , M( $6//C'( Mone" %anking an Finance, 5a""ar Asa #rinters( ?/
4i i,ui, A( H( $+EE:'( #ractice an la! of %anking in #akistan $6n > ', Narachi 1ecent #rint >nterprises( Fan Horne, D(2 an D(M Wacho!ic0, D3(++th > ition, GFun amental of Financial ManagementH 5e! Derse"9 #rentice.Hall, Inc(+EE:. (anagement Brief# Ganuary C??D published by "uman 'esources (anagement and administration )roup# Askari Bank akistan !td. "ead Fffice =arachi.
%inancials,"alf Hearly Account Gune 2?# C??D. 4conomic Indicators akistan# Ganuary C??D published by 4conomic 'esearch &ing# 0redit (anagement )roup# DIB ! "ead Fffice =arachi. Annual 'eport C??@#C??3#C??B#C??D# C??> published by DIB !# "ead Fffice =arachi. Brochure, DIB ! Awards 7 Achievements. %inancial 'eview of Banking Sector by State Bank of akistan Interviews of Bank staff of DIB !
ORGANOGRAM OF DIB-L
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