On

High Street Branch Sahiwal

Submitted By
Muhammad Hamza
BBA-13-06
(2013-17)

Department Of Business Administration

Bahauddin Zakariya University, Sub Campus,

Sahiwal.
 ACKNOWLEDGEMENT

In the name of Allah the most beneficent, the most merciful. I thanks to ALLAH ALMIGHTY
for His blessings that I’m able to perform the internship program effectively and efficiently.
I’m very thankful to my teachers who gave me enough knowledge about the taking of the
internship program. I’m thankful to my parents also from whom I have been able to perform
the internship program. I am indebted to all my colleagues, friends, especially staff of the
AKBL branch Sahiwal, without their help I would not be able to learn and perform well in
the period of my internship learning. Whenever I asked from them. Every person in branch
gave me special attention and guide me every time.
It is also a great pleasure to record honorable regards to all those who helped us lot in
learning and enhancing our knowledge and ability during the report.
Finally for all possible errors, omissions and shortcomings in writing of this report only we
are responsible for which we hope that all concerning regards of this report will forgive us.

Thank you
 DEDICATION

When the person does something there must be an Inspiration behind for doing work.
Especially I dedicate my work to my parents, from whom I have received a great inspiration
and boost for doing this important work. Also I dedicate this work to my Parents and my
Teachers, they guide me and show their confidence in me and make me realize that I’m
very capable of doing this work. I dedicate my work to all my friends and colleagues who
really helped me to perform this work. May Allah bless all of them. Ameen
Contents
EXECUTIVE SUMMARY ................................................................................................ 1

INTRODUCTION ............................................................................................................ 2

THE VISION ................................................................................................................... 4

THE MISSION ................................................................................................................ 4

OBJECTIVES ................................................................................................................. 5

AWARDS & ACHIEVEMENTS ....................................................................................... 6

Organizational Structure ................................................................................................. 7

DEPARTMRNTS OF ASKARI BANK .............................................................................. 8

ACCOUNT OPENING DEPARTMENT .................................................................................. 9

LOCKERS ................................................................................................................................ 11

Foreign Trade Department .................................................................................................... 11

CLEARING DEPARTMENT .................................................................................................. 12

CREDIT DEPARTMENT ........................................................................................................ 15

REMITTANCE DEPARTMENT ............................................................................................. 17

Agriculture Department .......................................................................................................... 18

CASH DEPARTMENT ............................................................................................................ 19

Financial Analysis ..........................................................................................................20

Ratio Analysis................................................................................................................24

SWOT ANALYSIS .........................................................................................................29

PEST ANALYSIS ..........................................................................................................31

CONCLUSION ..............................................................................................................32

RECOMMENDATIONS .................................................................................................32

Learning As a Student Internee .....................................................................................34

References ....................................................................................................................36

ANNEXURE ..................................................................................................................37
EXECUTIVE SUMMARY

Bank plays very important role in the economy of any nation. The economic health of any
country can be checked by having a look at its banking sector. Also the banks mobilize
the savings of the people in to other projects, thus such series of further investment brings
boom to the economy and open more jobs.

Askari bank establishment in Pakistan gave banking sector a new horizon. Askari
Commercial Bank limited continues to scale new heights in all areas of its operations. The
safety and security of depositor’s funds, high productivity and optimum use of technology
are the hallmarks of its corporate strength.

A main portion of the report consists of my findings and task that I have performed during
my Internship and also I have observed the working of the other people in the bank also
mentioned in this report. I have done work in various Departments of the Askari bank and
learn about the activities which are performed in these Departments. Last portion of my
report is consist on ratio analysis, SWOT analysis, Conclusion and recommendation. After
true finding, core result, I have also suggested some necessary recommendation
according to my observation.

I had a great experience to learn about this new banking system and the future of this
banking is seemed to be very strong in coming years due to its increasing trend.

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INTRODUCTION
Askari Bank was incorporated in Pakistan on October 9, 1991, as public limited company.
It commenced operations on April I, 1992, and is principally engaged in the business of
banking. as defined in the “Banking Companies Ordinance, 1962”, The Bank is listed on
the Karachi, Lahore and Islamabad Stock Exchanges and its shares have consistently
remained amongst the highest quoted in the banking Sector in Pakistan.
The Askari Bank Limited is working from many years in Pakistan. This organization helps
in business, economy of the country and public in many categories. It provides all help in
all fields of loans, mortgages etc. The Bank is a Scheduled principally engaged in the
business of banking as defined in the Banking Companies Ordinance, 1962.
Askari Bank has expended into a nation-wide presence of 349 conventional branches, 78
"Islamic Banking Branches" and an "Off-Shore Banking Unit" in Bahrain. A shared network
of over 1300 on-line ATMs covering all major cities in Pakistan supports the delivery
channels for customer services.
Since inception, the bank has concentrated on growth through improving service quality,
investment in technology and people, utilizing its extensive branch network which includes
Islamic and agricultural banking. Corporate Social Responsibility is an integral part of the
way we do business. In order to fulfill our CSR objectives, we attempt to promote public
interest by encouraging community growth and development through sponsoring social
service events, supporting education, sports and environment and also contribute in socio-
cultural activities.

Listed on stock exchange

Askari Bank is listed on Karachi, Lahore and Islamabad stock exchanges.

Commencement of Business
The Bank obtained its business commencement certificate on February 26, 1992 am
started operations from April 01, 1992.

Registered office
The registered office is situated at AWT Plaza, the Mall, Rawalpindi.

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Branch Network of ACBL
The Bank has successfully penetrated key markets through branch expansion and
business diversification. Just 7 branches at the start of 1992 were working, but now in
whole Pakistan more than 700 branches of Askari Bank Limited are functioning. The
branch network is connected on-line real-time. The branch network is isolated
Region/Area wise.
The system of regional and Area offices has been introduced since 1999 for effective
supervision and control of branches. The scope of the system also spans the development
and management of Bank's business and activities on regional basis.

Core Values Of Askari Bank

Commitment: Passionate about our customers’ success and delighting them with quality
of our service

Integrity: A distinctive investment, delivering outstanding performance, return and value

Fairness: Exemplary compliance, governess and business ethics

Teamwork: Caring for our people and helping them to grow

Service: Dedication towards social development and improvement in quality of life.

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THE VISION
“To be the bank of first choice in the
region”

THE MISSION
To be the leading private sector bank in Pakistan
with an international presence, delivering quality
service through innovative technology and effective
human resource management in a modern and
progressive organizational culture of meritocracy,
maintaining high ethical and professional
standards, while providing enhanced value to all
our stakeholders, and contributing to society.

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OBJECTIVES
 To achieve sustained growth and profitability in all areas of business.
 To build and sustain a high performance culture, with a continuous improvement
focus.
 To develop a customer-service oriented culture with special emphasis on customer
care and convenience.
 To build an enabling environment, where employees are motivated to contribute
to their full potential.
 To effectively manage all kinds of risks inherent in the banking business.
 To maximize use of technology to ensure cost-effective operations, efficient
management information system, enhanced delivery capability and high service
standards.
 To manage the Bank's portfolio of businesses to achieve strong and sustainable
shareholder returns and to continuously build shareholder value.
 To deliver timely solutions that best meets the customers’ financial needs.
 To explore new avenues for growth.

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 AWARDS & ACHIEVEMENTS

 “The Best Annual Report Award for the year 2012 – 2nd Runner-up“ by ICAP &
ICMAP

 “The Best Annual Report Award for the year 2011“ by ICAP & ICMAP

 “Best Presented Annual Report Award and SAARC Anniversary Awards for
Corporate Governance Disclosures 2011“ ” by South Asian Federation of Accountants

 “Best Retail Bank in Pakistan” by The Asian Banker

 “1st Consumer Choice Award” by the Consumer Association of Pakistan – 2004

 “Corporate Excellence Award” by the Management Association of Pakistan

(MAP) – 2002, 2003 & 2004

 “The Best Bank in Pakistan” by Global Finance magazine – 2001 and 2002

 “Best Consumer Internet Bank” Global Finance magazine – 2002 and 2003

 “Euro money and Asia money Awards” – 1994, 1996 and 1997

 “Best Presented Annual Accounts” by (ICAP) and (ICAMP) – 2000, 2001 and 2002

 “The Best Presented Annual Accounts” by South Asian Federation of Accountants

(SAFA), in the SAARC region

 “The Best Consumer Banking Award 2006” by the Consumer Association of

Pakistan – 2007

 “The Best Retail Banking Award 2008” by Pakistan Guarantee Export Corporation
Ltd – 2008

 “Best Corporate Report Award for the year 2008″ by ICAP & ICMAP – 2008

 “The Best Annual Report Award for the year 2010″ by ICAP & ICMAP

 “The Best Presented Accounts Award 2010 – 2nd Runner Up-Joint” by South Asian
Federation of Accountants

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Organizational Structure

PRESIDENT

SENIOR EXECUTIVE VICE PRESIDENT

EXECUTIVE VICE PRESIDENT

SENIOR VICE PRESIDENT

VICE PRESIDENT

ASSISTANT VICE PRESIDENT

OFFICER GRADE 1

v
OFFICER GRADE 2
BRANCH HIERARCHY

OFFICER GRADE 3

v
JUNIOR OFFICER

v
PABX OPERATOR

v
DRIVER

v
PEON

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DEPARTMRNTS OF ASKARI BANK

Banking procedure divided in to various departments. There are various departments

working under the policies of the bank. Askari Bank Sahiwal Branch also working under
various departments which are working for the convenience of their customers. Head of
the department manages each department and officials of the branch to follow the
procedure. In AKBL Sahiwal branch I have done Internship and I have done work in many
departments in order to get familiar with the working of the departments.

In AKBL Sahiwal Branch I have done work in following Departments;

 Account opening Department
 Accounts Department
 Clearing and Remittance Department
 Credit Department
 Agriculture Department

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 ACCOUNT OPENING DEPARTMENT

The opening of an account is the establishment of banker-customer relationship. The

account opening department is the main department in the banks.
In AKBL Sahiwal Miss SUMERA JAFFAR and Sir Ali Shan is operating the account
opening department. At the time of opening an account of customer they made preliminary
investigation of customer because of following reasons:
 Avoid Frauds
 Safeguard Against Unintended Overdraft
 Negligence
 Inquiries about Client
Functions of Account Opening Department
Following functions are to be performed by account opening Department
 Providing account opening form according to the requirement of the customer that
which type of account customer actually wants to open a corporate account, joint
account, individual account etc.
 Guide the customer that what type of requirements should be fulfilled in order to
open the account.
 Check the form carefully that the customer correctly completed their account
opening form.
 Check the customer signature is matching with the ID Card signature.
 If the customer signature is different from ID card signature, on the undertaking
form both sign is taken and new sign is use for account opening.
 Stamping on the form and on all related documents.
 Issuance of cheque books.
 Issuance of account maintenance certificate (on customer demand).
 Closure of account.
 Verification of signature in case of cheque presented before releasing of account
opening from SS card is not yet scanned.
 Prepare deposit slips for customer.
 Give ATM and Cheque books to customers.
 Keeping record of ATM, Cheque books, SMS Alerts, Account opening form, etc.

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Types of Account Opening Form
1. Assan Form
2. Individual / Joint Form
3. Corporate Form

Documents Required
Following are the documents which are necessary required from customer according to
account opening form:

Assan Account Form

 CNIC Copy.
 Copy of ID Card of next of kin.
Individual / Joint Account Form
 CNIC Copy.
 Copy of ID Card of next of kin.
 Business letter or job proof if salaried person.
Corporate Account Form
 CNIC Copy
 Copy of NTN (National Tax Number)
 Company Letter Pad

Account Opening Procedure

A banker must have following information about the customer;
 Customers Name
 Address
 Contact numbers
 Mailing Address / Permanent Address
 CNIC number
 Expiry date of CNIC
 Nationality

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 LOCKERS

Askari bank offer facility of lockers to its customer

There are three sizes of lockers available.
Size of locker Rent of locker (Rs.) p.a
Large 4640
Medium 2900
Small 2320

Foreign Trade Department

Foreign trade department deal in:

 Foreign currency account
 Export
 Import

Export:
Mainly export deals with:
 Negotiation of documents
 Sending the documents for collection
 Post shipment financing
 Remittance against agent commission
 Forward covering booking
 E-Form
 This section helps the exporters to settle the financial affairs

Import:
Mainly import deals with
 Opening the letter of credit
 For issuing the L/C bank required sufficient funds in the account if importer.
 Scrutinize the documents receive from flowing bank under letter of credit.

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  Arrange forward cover booking regarding import payments
 Also arrange forward cover booking for letter of credit open other than Askari
Bank Ltd.
 Submission of monthly return to SBP regarding the import on form.

CLEARING DEPARTMENT

In order to make arrangements for the speedy and economic collection of cheques, drafts
or other documents payable or deliverable at or through offices of members of Clearing
House, Clearing services are provided in all big cities by State Bank of Pakistan or National
Bank OF Pakistan, where State Bank has no office.

TYPES OF CLEARING
Following are the two types of clearing:
 Inward clearing
 Outward clearing

PROCEDURE OF INWARD CLEARING

The bank’s clearing representative receives instruments drawn on our bank presented by
other banks through clearing house under the clearing schedules. After the receipt of
instruments from other banks, the bank’s representative enters them in the summary sheet
under the columns pertaining to inward clearing (received).
After comparing the delivery slips with documents received in clearing and verifies the
totals. She totals the receipts in the summary strike a balance showing the net amount
due to or from the bank and hands over the same to the supervisor of Clearing House for
authentication.
All instruments received in inward clearing are entered individually in the Inward Clearing
Register and totaled for counter checking. The instruments received in Inward Clearing
are also checked on the following counts:
 The crossing and clearing stamps of the collecting bank have been affixed and
the clearing stamp is correctly dated as of the date of presentation in clearing.
 The crossing and clearing stamps are of the same bank.
 Specially crossed instrument has been presented by the same bank or its agent.
 Collecting bank’s discharge is in order.

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  Crossing of a bank, other than the collecting is cancelled.
 Amount in words and figures
 Signatures and balance

There-after instruments are released for posting to the debit of respective accounts, after
preparing vouchers duly signed by two authorized concerned officers. Any instruments to
be returned unpaid in clearing are returned the same day through 2nd session of the
Clearing House i.e. 2nd Clearing.
The returned instruments are returned along with cheque Returning Memo and the reason
for returning the cheque is given on the memo which is signed by an authorized concerned
officer. The cheque returned is entered in the Cheques Returned Register as per columns
of the said Register. The remarks of returning the cheque are also given in the remarks
column against the entry of the relevant cheque in the Inward Clearing Register. In case
of insufficient balance, charges as per effective schedule of charges are recovered from
the drawee’s concerned account.

PROCEDURE FOR OUTWARD CLEARING

All cheques received for outward-clearing to be deposited by the customers are accepted
on the bank’s relevant pay-in-Slip duly filled in by the depositor as per printed columns of
the Pay-in-Slip. The depositor writes the instrument number and the name/branch of the
bank drawn on and signs at the prescribed column (deposited by) for his signature.
Immediately on receipt of the instrument the receiving official of the bank affixes the bank’s
crossing and clearing stamps on the face of the instrument.

Bank’s discharge is given on the back of the instruments. The Pay-in-Slip is stamped on
both parts, with the clearing stamp dated for next working day, putting his signatures
beneath the stamp. The pay-in-slip along with the instrument is passed on to the
concerned authorized checking officer for his signature on the pay-in-slip and discharge.
After his signature the counter-foil is handed over to the depositor.
All instruments received over the counter and from branches for outward-clearing are
entered in the Outward Clearing Sheet. All columns of the Sheet are filled-in for each
instrument received for outward clearing. In case an instrument has been received from
any other branch of the bank, the name of the branch is mentioned in the column for name
of depositor. At the close of the business total amount of all items entered in the Sheet is
worked out and mentioned at the end of the day’s entries.

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All instruments received for outward clearing is sorted bank-wise. Bank-wise schedules
is prepared in duplicate and totaled individually. The grand totals of all schedules, amount
and number of instruments, must agree with the totals as per Outward Clearing Sheet. A
bank-wise summary of all outward clearing is prepared as per bank-wise schedule, on the
form and the total number of instruments; their amount is mentioned in the relevant printed
columns.

This total is cross checked with the totals as per Outward Clearing sheet/grand total of
bank-wise schedules. After completing the above formalities vouchers for the outward
clearing is prepared and placed, along with schedules in the outward clearing Sheet,
before the checking officer for checking, signing bank’s discharge/relevant vouchers and
schedule(s).

The checking officer ensures that all formalities mentioned before have been duly
completed and then release the vouchers for posting in the relevant accounts on the next
working day. The instruments are presented in the first clearing the next day in Clearing
House by the bank’s clearing representative to other bank’s representative along with the
bank-wise schedule. One copy of schedule is received back from other banks
representative after obtaining his acknowledgement.

TIMING OF CLEARING
 Inward Clearing at 10:00 am
 Outward Clearing at 3:00 pm

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 CREDIT DEPARTMENT

Credit means advances, loans arranged for the worthy customers. In AKBL Mam Rabia
and Sir Kashif operating the credit department.

Forms of lending
Banks generally lend in the form of cash credits, overdrafts and loans. Banks lend money
in the form of ‘clean advances’ against Promissory Note as well as ‘secured advances’
against tangible and marketable securities. The bankers prefer such securities which do
not run the risk of general depreciation due to market fluctuations. Common securities for
the banker’s advances are as under:
 Pledge
 Hypothecation
 Guarantees
 Indemnity

Pledge
In the pledge the ownership remains with the pledger, but the pledgee has the exclusive
possession of property until the advance is repaid in full, while in case of default the pledge
has the power of sale after giving due notice.

Hypothecation
When property in the goods is charged as security for a loan from the bank but the
ownership and possession is left with the borrower, the goods are said to be hypothecated.

Guarantees
When an applicant for an advance cannot offer any tangible security, the banker may rely
on personal guarantees to protect himself against loss on advances or overdraft to the
applicant.

Indemnity
A contract by which one party promises to save the other from loss caused to him by the
conduct of the promisor himself or by any other person is called a contract of indemnity.

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Classification of Credit Facilities
The credit facilities extended by the bank are classified as: -
1. Funds Based.
2. Non-Funded.

Funds Based Credit Facilities

In such type of facilities the bank provides finance to its customers. Askari Commercial
Bank makes numerous types of funds based advances to its customers.
A few of important advances are discussed below.
1) Running Finance
2) Cash Finance
3) Term Finance

Running Finance
It is allowed to the borrower under a pre-sanctioned limit. A current account is opened and
the conduct of this account is kept under review for a period of three to six months. The
borrower can draw cheques on his current account but maximally up to the amount of limit
sanctioned to him. The amount outstanding against the borrower is shown as debit in the
account for a partial amount. The markup is charged on the basis of Daily Products of the
amount outstanding.

Cash Finance
This type of finance is allowed to the borrower against the hypothecation or pledge of the
moveable property/stock of the borrower. In majority of cases this finance is allowed
against pledge of stock (cash crops). The amount of finance is credited to borrower
special finance account and he/she utilizes it for business purposes. For this account the
separate cheque book is issued to the borrower.

Term Finance
It is a loan account opened in the name of the borrower. The amount of finance is credited
to borrower’s personal account by debiting the Term Finance Account. The amount of
finance is distributed in lump sum. The repayment of Term Finance is usually in
installments and besides other documents a letter of installments is taken from the
borrower at the time of disbursement. By that letter, the borrower binds himself to pay the

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installments at regular intervals. The amount of installments includes principal plus markup
for repayment period.

Contingent Non-Fund Based Facilities

In such type of facilities, the bank provides only guarantee to third party on behalf of its
customers.
Types of non-funded credit facilities:
I. Letter of Credit
II. Letter of Guarantee

Letter of credit
A letter of credit as name signifies does one person or bank to another requesting the
letter to pay any amount of money up to a certain limit to the person write a letter named
in the letter or in whose favor the letter is written. In this letter generally a date is fixed up
to only the addressee should make which advances. Thus a letter of credit remains in
force up to a certain date only. Generally, banks grant this letter of credit.

Letter of Guarantee
Guarantees issued by the Bank are classified under two broad categories.

Financial Guarantee
Where the bank guarantees the fulfillment of a financial commitment on behalf of
customer.
Performance guarantees
Where the bank guarantees the performance of a contract or other work as specified in
the guarantee

REMITTANCE DEPARTMENT

The need of remittance is commonly felt in commercial life particularly and in everyday life
generally. The main function of the remittance Department is to transfer money from one
place to another. By providing these services to the customer, bank earns a lot of money.
Also customers become able to meet its day to day financial requirements. This

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Department deals with the local currency transfer only. AKBL provides these services to
both customers and non-customers.

Instruments of Remittance Department

The remittance department main function is to transfer money from one place to another.
The remittance department deals with the following instruments in order to transfer money
from one place to another place;

1. Pay Order
It is an instrument issued for payment in same city. Pay order issued from one branch can
only be payable from the same branch. It is normally referred to as a banker’s cheque. It
is also known as confirmed cheque, because bank issues this on its own guarantee.

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

Agriculture Department

The role of agriculture in Pakistan economy is of pivotal nature. Due to diverse

geographical and climatic conditions, the country has tremendous potential for agricultural
growth and development. Askari Bank’s Agriculture and Rural Business Division (ARBD)
has gained further strength with improved and efficient delivery and control mechanism
for meeting increased demand for credit by the farmers in easy, accessible and affordable
manner. With an innovative product range, being best rated in the market, the Bank
continues to surpass its allocated targets for agriculture financing.

The uneconomic holding primitive method of cultivation, natural calamities such as floods
and drought, illiteracy of the cultivators and lack of infrastructure including organized ware-
housing have adversely affected the repaying capacity of the agriculturists.

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Therefore financing of agriculture is much more complex as compared to commercial
lending and industrial lending. AKBL agriculture loans on easy terms and conditions to
small scale land owing farmers boost the country’s economy and yield greener harvests.
AKBL enables farmers to buy good quality seeds, fertilizers and pesticides.

Agricultural banking products and services are offered across the country through efficient
delivery channels under a control mechanism with minimum turnaround time for loan
application approvals. The Bank has set up a vibrant program for fresh lendings under
revised parameters, enabling farmers to avail financing in an easy, accessible and
affordable manner.

CASH DEPARTMENT
All physical movement of cash in the bank is made through the cash department. Normally
cash department performs following functions:
 Receipts
 Payments
 Transfer of funds from one account to another
 Handling of ATM
 Verification of signatures
 Handling of prize bonds.

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Financial Analysis

Financial analysis (also referred to as financial statement analysis or accounting

analysis or Analysis of finance) refers to an assessment of the viability, stability and
profitability of a business, sub-business or project.
.

I have used different tools of financial analysis in this section. Financial statements of
Askari Bank are analyzed in following ways:

▪ Horizontal Analysis.
▪ Vertical Analysis.
▪ Ratio Analysis.

Horizontal Analysis

A procedure of fundamental analysis in which an analyst compares ratios or line items in

a company's financial statements over a certain period of time. The analyst will use his or
her discretion when choosing a particular timeline; however, the decision is often based
on the investing time horizon under consideration.

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 Askari Bank Limited
Horizontal Analysis of Summarized Balance sheet
From The Year 2009-2013
Year 2013 2012 2011 2010 2009
Assets % % % % %
Balance with treasury banks 77.57 55.66 26.04 7.25 100
Balance with other banks 23.82 -19.26 -25.03 5.29 100
Lending to financial institution -73.55 134.22 95.98 350.84 100
Investment 149.41 119.20 49.30 30.52 100
Advances 21.42 3.01 7.52 -2.40 100
Fixed assets -0.19 -2.79 3.13 5.22 100
Deferred tax assets
other assets 47.65 47.85 42.69 62.97 100
Total assets 53.72 34.15 17.91 11.48 100
Liabilities
Bills payable 144.23 56.53 30.98 9.10 100
Borrowings 55.06 32.72 0.07 50.87 100
Deposits and other accounts 52.00 33.42 17.72 7.99 100
Subordinated loans 128.49 178.03 194.31 194.43 100
Defferd tax liabilities -44.39 -13.73 100
other liabilities 20.16 -7.65 -18.01 -11.38 100
Total liabilities 52.50 33.27 17.24 10.54 100
Net Assets 77.46 51.23 30.86 29.85 100
Equity
Share capital 68.75 68.75 68.75 68.75 100
Reserves 78.03 29.51 20.63 13.33 100
Un appropriate profit 90.33 52.23 -29.92 -21.95 100
Surplus on revaluation of assets net of tax 87.08 20.56 5.86 -3.00 100
depreciation expense -0.39 40.23 34.38 21.72 100

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 Askari Bank Ltd.
Horizontal Analysis of Summarized Income Statement
From The Year 2009-2013

Year 2013 2012 2011 2010 2009

% % % % %
Mark up earned 48.81 43.05 21.20 14.84 100
Mark up expensed 34.18 25.34 16.40 20.30 100
Net mark-up income 77.42 77.71 30.58 4.15 100
Provisions against loans & advances -9.21 -8.42 10.20 81.46 100
Provision diminution in investment value 15.53 66.27 34.63 -78.56 100
Bad debts written off directly -95.89 -79.87 -9.87 111.38 100
Net mark up income after provisions 116.79 106.11 35.87 -1.35 100
Fee, commission and brokerage income 19.84 1.48 -6.16 -9.63 100
Dividend income 15.99 -36.30 -32.07 -17.52 100
Income from dealing in foreign currencies 43.16 21.92 23.91 11.47 100
Gain on sale of securities 213.01 -66.98 -81.71 62.38 100
Gain/loss on revaluation of investment -100.83 -93.91 -101.82 -101.57 100
Other income 40.77 42.94 4.42 4.96 100
Total non mark-up interest income 50.97 11.30 -2.38 7.45 100
Administrative expense 55.05 41.06 28.27 11.49 100
Provisions against balance sheet obligation -99.94 -176.90 -78.81 -104.90 100
other charges 68.57 62.87 -37.55 -35.28 100
Total non mark-up interest expense 55.86 42.76 28.09 10.49 100
Profit before taxation 277.95 202.76 -23.73 -43.37 100
Current 81.61 88.62 -51.32 -38.37 100
Deferred -34.42 19.69 -67.78 -33.33 100
Prior year 86.89 -152.56 1034.24 109.87 100
Profit after taxation 250.12 169.20 -25.58 -31.07 100
Un appropriated profit brought forward 8.17 -50.21 -44.54 -28.95 100
Surplus on revaluation of fixed assets 20.78 20.78 20.78 0.45 100
Profit available for appropriation 59.18 -3.71 -40.29 -29.27 100

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Bahauddin Zakariya University, Sub-Campus, Sahiwal
 Vertical Analysis
A method of financial statement analysis in which each entry for each of the three major
categories of accounts (assets, liabilities and equities) in a balance sheet is represented
as a proportion of the total account.

Askari Bank Ltd.

Vertical Analysis of summarized Balance Sheet
From The Year 2008-2012
Years 2012 2011 2010 2009 2008
Assets % % % % %
Balance with treasury banks 10.82 10.87 10.01 9.01 9.37
Balance with other banks 4.98 3.72 3.93 5.84 6.18
Lending to financial institution 0.16 1.66 1.58 3.84 0.95
Investment 35.32 35.57 27.57 25.49 21.77
Advances 43.61 42.39 50.34 48.33 55.21
Fixed assets 2.56 2.86 3.45 3.72 3.95
Defferd tax assets 0.07 0.09
other assets 2.47 2.84 3.12 3.77 2.58
Total assets 100.00 100.00 100.00 100.00 100.00
Liabilities
Bills payable 1.67 1.22 1.16 1.03 1.04
Borrowings 4.19 4.11 3.52 5.63 4.12
Deposits and other accounts 90.30 90.70 90.96 88.51 90.60
Subordinated loans 1.16 1.62 1.94 2.06 0.77
Deferred tax liabilities 0.03 0.05 0.06
other liabilities 2.68 2.36 2.38 2.73 3.40
Total liabilities 100.00 100.00 100.00 100.00 100.00
Equity
Share capital 44.60 52.34 60.49 6.10 46.91
Reserves 18.63 15.91 17.12 1.62 18.58
Un appropriate profit 21.69 20.36 10.83 1.22 20.23
Surplus on revaluation of assets net of tax 15.07 11.39 11.56 1.07 14.29
100.00 100.00 100.00 100.00 100.00

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Bahauddin Zakariya University, Sub-Campus, Sahiwal
 Askari Bank Ltd.
Vertical Analysis of Summarized Income Statement
From The Year 2008-2012
2012 2011 2010 2009 2008
% % % % %
Mark up earned 100.00 100.00 100.00 100.00 100.00
Mark up expensed 59.68 57.99 63.56 69.33 66.18
Net mark-up income 40.32 42.01% 36.44 30.67 33.82
Provisions against loans & advances 4.01 4.21 5.98 10.39 6.57
Provision diminution in investment value 3.71 5.55 5.31 0.89 4.78
Bad debts written off directly 0.00 0.01 0.07 0.17 0.09
Net mark up income after provisions 32.60 32.24 25.08 19.22 22.38
Fee, commission and brokerage income 5.51 4.85 5.29 5.38 6.84
Dividend income 0.76 0.43 0.54 0.70 0.97
Income from dealing in foreign currencies 2.84 2.52 3.02 2.87 2.95
Gain on sale of securities 2.88 0.32 0.21 1.94 1.37
Gain/loss on revaluation of investment 0.00 -0.03 0.01 0.01 -0.59
Other income 3.81 4.03 3.47 3.68 4.03
Total non-mark-up interest income 15.80 12.12 12.55 14.57 15.57
Administrative expense 33.00 31.23 33.51 30.74 31.67
Provisions against balance sheet obligation 0.00 -0.05 0.02 0.00 0.09
Provisions against other assets 0.28 0.41 0.25
other charges 0.45 0.45 0.20 0.22 0.40
Total non mark-up interest expense 33.68 32.09 33.98 30.94 32.15
Profit before taxation 14.72 12.27 3.65 2.86 5.80
Current 6.82 7.37 2.24 3.00 5.59
Deferred -1.64 -3.11 -0.99 -2.16 -3.72
Prior year -0.35 0.10 -2.59 -0.51 -0.28
Profit after taxation 9.89 7.91 2.58 2.52 4.20
Un appropriated profit brought forward 11.39 5.45 7.17 9.69 15.67
Surplus on revaluation of fixed assets 0.06 0.07 0.08 0.07 0.08
Profit available for appropriation 21.34 13.43 9.83 12.29 19.95

Ratio Analysis

It can be defined as a tool used by individuals to conduct a quantitative analysis of

information in a company's financial statements. Ratios are calculated from current year
numbers and are then compared to previous years, other companies, the industry, or even
the economy to judge the performance of the company. Ratio analysis is predominately
used by proponents of fundamental analysis. I have calculated and analyze different ratios

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Bahauddin Zakariya University, Sub-Campus, Sahiwal
for the purpose of financial analysis.
Profitability/ Efficiency Ratio

A class of financial metrics that are used to assess a business's ability to generate
earnings as compared to its expenses and other relevant costs incurred during a specific
period of time. For most of these ratios, having a higher value relative to a competitor's
ratio or the same ratio from a previous period is indicative that the company is doing well.
I have calculated profitability ratios for Askari Bank which are explained below:

Year 2008 2009 2010 2011 2012

Profitability/ Efficiency Ratio
Spread Ratio 0.34 0.31 0.36 0.42 0.4
Net interest Margin Ratio 0.03 0.03 0.03 0.04 0.03
Return on Assets 0.00273 0.00371 0.0023 0.01 0.01
Return on Equity 0.08 0 0.04 0.14 0.15

Graphical Explanation:

Profitability Ratio
0.5

0.4 Spread Ratio

0.3
Net interest
0.2 Margin Ratio
0.1 Return on
Assets
0
2008 2009 2010 2011 2012

Interpretation:
As it is clear from above explanation that profitability ratios are increasing with the passage
of time. This factor shows that margin of profitability increases and profit of the bank is
increasing which is a good sign for bank.

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Bahauddin Zakariya University, Sub-Campus, Sahiwal
Profitability/ Efficiency Ratio:
Some other profitability/efficiency ratios measured and interpret here.

Year 2008 2009 2010 2011 2012

Profitability/ Efficiency Ratio
Non-interest income to Total Assets 0.01 0.01 0.01 0.01 0.01
Interest Ratio 0.66 0.69 0.64 0.58 0.6
Admin. Exp. To Profit before tax 5.46 10.76 9.19 2.55 2.24
Admin Exp. To non-Interest income 2.03 2.11 2.67 2.58 2.09
Return on Revenue (ROR) 0.04 0.03 0.03 0.08 0.1

Graphical Explanation:

Efficiency ratio
Non-interest income to
12
Total Assets
10 Interest Ratio

8
Admin. exp. to Profit
before tax
6
Admini Exp. to non
4 Interest income
Return on Revenue
2
(ROR)
0 Return on Revenue
2008 2009 2010 2011 2012 (ROR)

Interpretation:
During two consecutive years 2009 and 2010 its ratio of administrative expenses to profit
was high which is not a positive sign but now it is decreased even below the ratio of
2008.This point show the efficiency of organization to cater its financial problem. Its ROR
is increasing it means bank is going to earn more profit.

Liquidity Ratio:
A class of financial metrics that is used to determine a company's ability to pay off its short-
terms debts obligations. Generally, the higher the value of the ratio, the larger the margin

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Bahauddin Zakariya University, Sub-Campus, Sahiwal
of safety that the company possesses to cover short-term debts.

Year 2008 2009 2010 2011 2012

Current ratio 3.4 3 3.5 3.2 2.9
Cash and balance with bank to total assets 0.16 0.15 0.14 0.15 0.16
Investment to Total Assets 0.22 0.25 0.28 0.36 0.35
Advances to Total Assets 0.55 0.48 0.5 0.42 0.44
Total liabilities to Total assets 0.95 0.94 0.95 0.94 0.94

Graphical Explanation

Liquidity Ratio
Current ratio
4.0
3.5
Cash and balance with
3.0
bank to total assets
2.5
Investment to Total
2.0
Assets
1.5
Advances to Total
1.0
Assets
0.5
0.0
Total liabilities to Total
2008 2009 2010 2011 2012 assets

Interpretation:
Current ratio of the bank is satisfactory. This ratio which is subject to seasonal fluctuations
is used to measure the ability of an enterprise to meet its current liability out of its current
asset. This ratio is decreased in 2009 and 2012 and highest in 2010. It shows that the
bank has high liquidity in 2010 and less power to meet its short term obligation in
2007.Other financial ratios have shown a consistent manner. Bank is not trying to minimize
its TL to TA ratio which is almost same throughout the period. It should be minimizing so
TL not exceed TA. Which shows organization’s excellent position of liquidity.

Leverage Ratio:
Leverage ratio used to calculate the financial leverage of a company to get an idea of the
company's methods of financing or to measure its ability to meet financial obligations.

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Bahauddin Zakariya University, Sub-Campus, Sahiwal
There are several different ratios, but the main factors looked at include debt, equity,
assets and interest expenses.

Year 2008 2009 2010 2011 2012

Leverage Ratio
Capital Ratio 0.05 0.57 0.05 0.06 0.06
Deposit to Equity
Ratio 17.64 14.7 15.87 15.57 15.11
EPS 1.14 0.71 0.72 2.6 3.38

Graphical Explanation:

Leverage Ratio
20

15
Capital Ratio
10
Deposit to Equity Ratio
5 EPS
0
2008 2009 2010 2011 2012

Interpretation:
Leverage ratios of Askari bank shows that its financial value is enhancing. As we see its
EPS is increasing and from 2008 to 2012 the change in EPS is noticeable.

Cash flow Ratio:

This section of the financial ratio looks at cash flow indicators, which focus on the cash
being generated in terms of how much is being generated and the safety net that it
provides to the company. These ratios can give users another look at the financial health
and performance of a company

Year 2008 2009 2010 2011 2012

Cash Flow Ratio
Cash flow to Profit after Tax 10.76 15.49 18.7 22.24 1.92
Cash flow to Current Liabilities 1.65 2.3 0.99 0.82 0.15

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Bahauddin Zakariya University, Sub-Campus, Sahiwal
Graphical Explanation:

Cash Flow Ratio

25
20
15
Cash flow to Profit after
Tax
10
Cash flow to Current
5 Liabilities
0
2008 2009 2010 2011 2012

Interpretation:
Cash flows are basically the cash inflows and out flows from the business many factors
involved in cash inflows as well as cash out flows. Cash flow to profit after tax ratio tell us
that whether we have availed all the opportunities for making profit or not Cash flow to
current liabilities ratio is decreasing with the passage of time.

SWOT ANALYSIS

Strengths

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Bahauddin Zakariya University, Sub-Campus, Sahiwal
ASKARI BANK is a sound financial institution in Pakistan with considerably high good well.
It is because of the following strengths:
 Personalized and compassionate is the major strength of Askari Bank.
 And this service has to heavy positive impact on customer’s satisfaction.
 Customers’ loyalty is a key to success every organization, and this is also strength
of Askari Bank limited.
 Askari Bank has a very broad network and branches which makes people access
easy and convenient to it.
 Askari bank focusing on Trade financing: it attaches the great significance to the
development or maintenance healthy correspondence relationship with others
banks and financial institution.
 Askari Bank is well equipped with modern information system which adds to its
strength to deal.
 High credit rating by ASKCRA is a great strength for the Askari Bank.

Weaknesses
 Here is nothing in the world which is perfect. So same in the case with Askari Bank
it carries some weaknesses.
 Askari bank is falling a lot of behind in media for its marketing as compared with
others HBL, UBL, MCB, ALFALAH and SCB.
 Asakri Bank has not so much market share this is also a weak point for askari.
 There is only one branch in the Sahiwal I think this is also a weak point for Askari
bank.

Opportunities
 With increasing popularity, Askari Bank has opportunity to increase its market
share.
 With the changing of E-Banking the Askari Bank has opportunity to offer new
option and different ion with others banks.
 Askari bank can design universal account like other foreign bank for online facility.
 Askari Bank’s fast spreading network the opportunity to capture other potential
markets not accessed by the other financial instruction and encase all the staff.
 Offering Islamic banking system is a great opportunity to get new customers and
touching height of success.

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Bahauddin Zakariya University, Sub-Campus, Sahiwal
  Huge demand for consumer financing in our country offer great opportunity.
Threats
 The current political position is one of the major threats.
 The bad governance of government is also a threat for Askari.
 New introducing bank are also a threat for Askari just like FAYSAL, SONERI, JS,
SAUDI etc…
 High rate of inflation is also a threat for bank.
PEST ANALYSIS
Political Analysis
Askari Bank is operating in one of the world’s most volatile political environment. On one
side there is a very week and unpopular government and on the other there is war against
terror going on. Since Askari bank is part of Askari Welfare Trust which is run by Pakistan
Army so it has the advantage of not being interfered directly by the government but political
forces impact Askari’s business through consumers and businesses which are affected
directly by political instability. There is also a great awareness about some of the global
challenges such as climate changes, poverty, scarcity of resources, and demographic
shifting.

Economic Analysis
The outlook for the Pakistani banking sector remains relatively downbeat despite the
potentially vast consumer market in the country. Pakistan has several characteristics that
make for a favor able banking sector outlook for instance buoyant demographics, a
domestic economy geared towards private consumption and an extremely under-banked
population. However, we should not expect rapid sector development over the medium
term as these positive factors are neutralized by an unstable security outlook and a below-
potential growth path for the economy and recent floods that have put a lot of pressure on
the economy.

Social Analysis
There has been a marked increase in the use of credit cards in Pakistan but the usage is
currently limited to educated middle class only. At the same time accelerated by the spread
of internet in the country people are more inclined to us the net to do banking transactions
specially bill payments and within the bank transactions. Since Askari bank has the

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Bahauddin Zakariya University, Sub-Campus, Sahiwal
reputation of being a conservative bank so its consumers are quite loyal and will stay with
the bank even under tough economic situation or in the presence of alternatives.

Technological Analysis
The technology makes it possible to empower the system and establish a competitive
advantage. Pioneering the new ideas, adding the skills and operational excellence are
part of the guiding principle of the organization. Askari has recently been investing heavily
in Information Technology as a means of competitive advantage against large Pakistani
banks.

CONCLUSION

I observed the Askari Bank Limited a financially sound bank. Its profits are increasing year
-by-year. Its staff is very good and sincere with the bank. Askari Bank Limited Sahiwal
branch has made significant progress in building and strengthening both the corporate
and retail banking sectors in Pakistan.
Asian Bank Limited views specialization and service excellence as the cornerstone of its
strategy. The people at bank realize that innovation, creativity. Reliability, customized
services and their execution are their key ingredients for future growth.
Revenues from these activities have started yielding dividends and they expect significant
growth. They are aware that they have stepped into the 21st century and they must meet
its challenges by acquiring the highest level of the technology. They will thus be
accelerating their technological advance to enable them to distribute their products and
services through most efficient and high tech means. They say that they will continue to
invest in the modern tools and substantial allocation to resources will be made to achieve
this objective during the current year. Online banking have been started and the
introduction of ATM at strategic locations have been firmed up.

RECOMMENDATIONS

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Bahauddin Zakariya University, Sub-Campus, Sahiwal
Besides taking care of the above mentioned problems there are some recommendations
which can be advised to the bank, which can be helpful for the Bank:
1. Employees should be given a course of training from time to time or they can also
use the on the Job training method. Training can be done in the following areas
 Better training of employees in the communication skills area
 Undergrads have to be trained accordingly
 Continuous training about the latest updates
2. New advertising campaigns should be launched especially in the electronic
advertisement areas
3. There is a need for expansion of the working area especially in the finance
department as the work load is increasing and new recruitments are compulsory
4. Politics should be discouraged in such an environment
5. The employees should be given more incentives and rewards for their good
performances
6. There should always be innovation in any business to flourish and there is a lot
more to explore in the banking sector and its always first come first served.

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Bahauddin Zakariya University, Sub-Campus, Sahiwal
Learning As a Student Internee
It was very good experience of internship at Askari Bank Limited. I was introduced to
difference aspects of banking and finance and found this field very interesting. This report
comprises my six week internship at AKBL.

Duties and New Knowledge Acquired

1st and 2nd Week
I started my first day of internship with the introduction of bank employees and with
introduction of bank departments. In This week just know how work done in the various
departments in the bank Like: Finance/ credit department, Operation Management, Cash
department, Account opening department I knew about the purpose of the bank and the
functions of the bank and judge the practical performance of the departments. I learnt
about basic modes of AKBL, then I learnt about characteristics of these modes in first
week. Then I learnt about the Debit Visa Card and SMS alert. I learnt about the types of
Financial Products like Deposit Account and Term certificate.

3rd and 4th Week

During 3rd week they told me about the stamping of account opening form. How and where
to stamp. Cutting is not allowed on the form I stamped an empty account opening form
just for practice. Personally deals the customers and gave them information about account
and products information. Fill two spare account opening form for practice Filled three
account opening form of customers with the help of Operational Manager Ms. Sumaira
Jaffer. Personally deals the customers and gave them products knowledge who wants to
open their account Filled the account opening form and also stamped the form. AKBL is a
centralized bank that’s why account opening have to fill carefully because the form is
approved by head office .Told me when they use signature differ form. When they use
address differ form. And when letter head pad is required.
During 4th week I learnt about how to maintain the record in the register when cheque
book is delivered to the customer. I learnt about how to maintain the record in the register
when ATM card is delivered to the customer. I learnt about how to maintain the record in
the register when Cheque Books is delivered to the customer.

5th and 6th week

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Bahauddin Zakariya University, Sub-Campus, Sahiwal
During my 5th week of internship I came to know about the facility of LOCKERS and its
functions. Lockers have 3 types of it: Small Size Lockers, Medium Size Lockers, and Large
Size Lockers. The officer told me its functions and charges. I also learnt about inward and
outward clearing and learnt how the transactions are made.
During 6th week, I learnt about maintainace of TDR Balancing Report, Cheque Book
Maintainace Report, Daily Account Maintaince Report and Non-Financial Transactions
Report. And I learnt about Subsidiary Ledger and Daily Major Deposit and Withdrawals
Reports and also get overview of these reports from Sir. Ali Shah.

Problems Encounter
In the start I faced many problems like to difficulty to understand the work but the AKBL
staff was very good and co-operative there. They helped me a lots and having a good time
in bank.

My Experience at AKBL and Its Impact on My Career

During my six weeks internship in AKBL, I get a very good knowledge of banking. The
management provides me a rotation plan of all the departments. I spent at least one week
in each department. The employees of all the departments cooperated with me very much.
They all helped me a lot in each and everything. I also learned that what type of behavior
use and which type of language use with the customer and how attract toward it. Behavior
of employees is very good to me. This internship provides help to get job in the banking
sector. Experience of internship is good to me and I make relationship with the employees.
Experience of internship helps me in professional life. I think this experience help me in
my career.

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Bahauddin Zakariya University, Sub-Campus, Sahiwal
References

 Mian Tariq (Area Manager)

 Sir Shafique (Branch Manager)
 ASKARI ABNK, (http://www.askaribank.com)
 State bank of Pakistan, (http://www.sbp.org.pk)

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Bahauddin Zakariya University, Sub-Campus, Sahiwal
 ANNEXURE

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Bahauddin Zakariya University, Sub-Campus, Sahiwal