ASKARI BANK LIMITED

INTERNSHIP REPORT
Submitted by: Faryal Malik Alamgir
Enrollment #: 01-120112-020
MBA 6(B)
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Table of Contents
ACKNOWLEDGEMENT.................................................................................................................................1
Executive summary:....................................................................................................................................2
Company Overview:....................................................................................................................................3
Askari products and services:......................................................................................................................4
Organizational structure:.............................................................................................................................4
Company branch analysis:...........................................................................................................................1
Credit department:......................................................................................................................................1
Types of charges:.....................................................................................................................................3
Pari Passu charge:................................................................................................................................3
Accounts department:.............................................................................................................................4
Accounts opening department:...............................................................................................................5
Types of accounts:...............................................................................................................................6
Clearance department:............................................................................................................................6
Outward clearing:................................................................................................................................6
Inward clearing:...................................................................................................................................1
Difference between inward clearing and outward clearing:................................................................2
Remittance department:.........................................................................................................................2
How DD is issued:................................................................................................................................3
How payment is made:........................................................................................................................3
Pay order:............................................................................................................................................3
Payment Procedure:............................................................................................................................3
Outward Bills for Collection:................................................................................................................4
Inward Bills for Collection:...................................................................................................................4
Cash department:....................................................................................................................................4
Cash receipt section:............................................................................................................................5
Cash payment section:............................................................................................................................5
Financial analysis:........................................................................................................................................5
Balance sheet:.........................................................................................................................................6
Profit and loss account:...............................................................................................................................6
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Ratios:..........................................................................................................................................................7
Interpretation of financial statements:....................................................................................................8
Interpretation of ratios:...........................................................................................................................9

ACKNOWLEDGEMENT

In the name of ALLAH, the most gracious, most merciful and most beneficial who endowed me
with the will and thoughts to complete this project with the praise of his beloved Holy Prophet
(PBUH). I am very thankful to my supervisor Miss Musarat who kept my morale high by her
suggestions and appreciation. Without her precious guidance and help I could never be able to
complete this project. I would like to acknowledge parents for their support and courage. I would
like to admit that I owe all our achievements to our truly, sincere and most loving parents, who
mean the most to me, and whose prayers are a source of determination for me In the end I would
like to say thanks to all of those who helped me in any way and made it easier for me to
complete this task. I can mention some of those names as:

Mr. Mansoor (Credit officer)

Ms. Aliya (Accounts Officer)

Mr. Shadab (Clearing Officer)

Ms. Durdanna (Mailing department officer)

Ms. Sadia Jabeen (Clearing Officer)

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Executive summary:
Askari Bank was incorporated in Pakistan on October 9, 1991, as a public limited company. It
commenced operation on April 1, 1992, and is principally engaged in the business of banking, as
defined in the Banking Companies Ordinance, 1962. The Bank is listed on Karachi, Lahore and
Islamabad Stock Exchanges. I chose this company to complete my internship which is degree
requirement of university in partial fulfilment of my MBA degree. I had six weeks great learning
experience there. During my internship, I was rotated to different departments of bank including
accounts department, clearing department, credit, cash and mailing department. I spent two
weeks in accounts and one week in each department.

This particular bank branch is situated at Peshawar road Rawalpindi near Zahoor Plaza. Building
has two floors. Ground floor is comprised of deposits section while first floor is comprised of
credit functions of bank. Deposits section is further divided into six departments namely account
opening, cash, remittance, mailing, clearing and foreign currency. Cash section performs cash
related function like cash receipts and payments in form of utilities bills collection etc. Clearing
section performs the clearing of cheques for collection. It is divided into two parts inward
clearing and outward clearing. Remittance section performs transferring of funds from one
branch to another or from one account to another. Pay order is made for intra city transaction and
demand draft is made for out of city.

While credits department deals with loan payments, repayments, receiving credit requests,
processing and evaluating loan proposals. I worked in this department under guidance of Mr.
Mansoor and spent a week time in this department. While preparing this report I have tried to
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use simple words and deliver whole knowledge gained by myself during my work experience at
Askari.

Company Overview:

Askari bank formerly has known as Askari commercial bank limited works as a Unit of Army
Welfare Trust that was established for the Welfare of Army Officials. The office of Army
Welfare Trust is situated at AWT Plaza, Rawalpindi. AWT offers the “AWT Saving Scheme” to
the army officials only. Askari bank headquarters is also situated in AWT plaza. The Bank has
240 branches divided into north (82) central (79) and south region (79). Askari Bank was
incorporated in Pakistan on October 9, 1991, as a public limited company. It commenced
operation on April 1, 1992, and is principally engaged in the business of banking, as defined in
the Banking Companies Ordinance, 1962. The Bank is listed on Karachi, Lahore and Islamabad
Stock Exchanges.

Askari bank is also providing Islamic banking services naming it as “Halal Banking Solutions”.
The Bank has expanded its Islamic Banking network to 38 branches and 02 sub-branches in the
major cities of Pakistan, covering the Capital and the four provinces. Further expansion is
planned with improved capabilities for offering products conforming to Shariah principles.
History and background:

Askari Bank incorporated in October 1991, Bank commenced its operations in April 1992, and
has since expanded into nationwide with modern technology in the banking sector. It is part of
Army Welfare Trust that was established for the Welfare of Army Officials. . AWT has its units
as Askari associates, Askari General, Askari Leasing, Private Mills, Textile business, cement
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industry and Askari commercial bank. It was the first Pakistani Bank to offer online banking
service throughout the country. Country-wide ATMs network was also first time introduced by
Askari. It was the first Pakistani bank to introduce internet banking concept and together with
ABN- Amro bank, it developed inter-bank switch for ATMs.

Askari products and services:

Main services offered by Askari are to provide lending, accepting deposits and related financial
services. Finance related services being offered by Askari are credit risk management, foreign
trade, corporate and merchant banking, retail banking, electronic banking, credit cards,
marketing and customer services. There are some of the retail products being offered by Askari:

 Askari Auto loans that are provided to finance purchasing of any auto vehicle.
 Askari internet Banking offering E- solutions
 Askari MasterCard-credit card facility
 Askari Bank’s value plus-rupee Deposit Accounts
 ASKCARD that is also known as Debit Card
 Askari offering of loan for purpose of house purchase, known as mortgage finance.
 Askari’s offering of business loans known as Business Finance

Organizational structure:
In order to define the structure of whole organization, I may draw a hierarchal chart of that particular
branch in which I did my internship
 BRANCH MANAGER

Mr. Sabir

CREDIT INCHARGE OPERATION

MANAGER (Sir
(Sir Usman) Ali)

CREDIT OFFICER CREDIT OFFICER 2

1 (SIR (SIR IMRAN)
MANSOOR)

CREDIT INCHARGE ACCOUNTS

DEPARTMENT AND
IT NETWORK

CD INCHARGE
A/C OPENINIG
Miss Musarat OFFICERS. (Miss
Rizwana, Sir Omer)

ACCOUNT
CLEARING OFFICERS s
OFFICERS (Ms.
Mr Shadab, Ms.Sadia
Aliya, Miss Asma)
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Company branch analysis:

I have conducted a detailed analysis of Askari bank limited in various terms including
operations, marketing, human resource and financial analysis. First, I will mention how various
departments operate inside Askari and how efficiency is achieved in its operations.

Credit department:
Lending or financing is one of the basic functions of banks of all categories, through which they
gain major part of their profits. Main function of a bank is to accept deposits and lend that money
on a higher interest rate. The difference between the interest rate being paid to depositors and
interest rate received by borrowers is the main source of income.

1. PROPOSAL:

The first step in the Credit Management is receiving a credit request that is in form of a hand
written request in which borrower describes why he wants to borrow particular amount of money
and describes his financial needs fully. It is called lending proposal for the bank each borrower
has a purpose for borrowing. Some borrow to fulfill their working capital needs, others wants to
finance any project. All this information is described in that hand written application. This
application is called the “Loan proposal”.

PROCESSING OF LOAN PROPOSAL:

Now, after receiving the loan proposal, judgment of credit officer starts by inspecting the quality
of that proposal and risk associated with borrower. In order to minimize that risk, banker is
supposed to make a judicious judgment, which should be based on a critical study of advance
proposals. Basic Borrowers Fact Sheet is filled by customer that is fully detailed revealing
information regarding business and position of borrower and a copy of identity card of customer
is also taken. This whole information is taken in order to have a complete confidence in the
integrity and ability of the customer to repay the borrowed money and make timely installments
within reasonable time.
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EVALUATION:

Now; after processing of proposal proper evaluation process gets started to assess the risk and
estimate the potential of a particular business. Electronic Central Information Bureau (ECIB)
report is taken through system by sending borrower fact sheet along with ID card copy to SBP
and ECIB. Consumer protection department of SBP issues ECIB report only to banks and it
remains strictly confidential. This whole evaluation stage include knowing the purpose of
borrowing and business prospects of a customer it sometimes involve visiting the business place,
analyzing the financial statements and evaluating the collateral securities.

Credit Approval:

After analyzing all prospects of borrower and receiving the ECIB report from SBP, now credit
committee decides to approve or disapprove the loan proposal. Certain things are taken into
account before approval like is there any chance of write off. If yes then committee do not
approves the loan. For loam less than 1 million there is a separate committee, while for high
worth loans starting from 5 million, there is another credit committee. Before formal approval,
loan proposal + credit memo + client full information + ECIB report is evaluated by company
lawyers who are expert of all legal technicalities. After their approval, all information is sent to
RCAD which analyzes the authentication of guarantee and collateral security to analyze whether
worth of securities is equivalent of loan amount or not. If it’s worth is adequate, than DAC is
issued and whole process gets completed.

RISKS INHERENT IN LENDING:

There are certain risks involved in lending money including management risk that is associated
with managerial capabilities and nature or organization, market risk that in financial terms is
referred as beta, earning fluctuation risk, default risk and marketability risk. This risk is
minimized by AKBL through FRR that is facility risk rating by which every loan proposal is
rated according to element of risk involved. LG is more sensitive than term loan which is more
secured. BCC (branch credit committee) rate the proposals according to preset criteria. Before
giving a rate, following facts are taken into account:
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Evaluation of facility and client is rated through obliged rating. Criteria of Obliged rating are as
follows:

ratings Securities

AAA 89-100

AA1 81-88

A 73-80

BBB 65-72

BB 57-64

B 49-56

CCC 41-48

CC 33-40

C 25-32

D 17-24

DD 9-16

Types of charges:
If security is above 100 percent, than highest rank is given as AAA that shows it is safest in
terms of security. It can be understood with the help of an example:

Illustration:

Suppose Tahir borrows rupees 400000 from Askari and securities of worth 500000 are presented
by him. Then Askari can charge upon the excess amount of 100000. And this loan proposal may
get AAA rating from credit rating committee.

Pari Passu charge:

It is also possible that two different banks have a joint charge over a security. In that case
ranking will be given by both banks and preference maybe given to any one particular or equally
to both. For example Askari and HBL may have a joint charge over a security. But if Askari was
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the primary lender then HBL has to take permission from AKBL and after granting permission a
joint charge can be built upon security. Now; in case of default, upon sale of security first AKBL
will clear its charges after its clearance balance will be used to clear accounts by HBL.

Illustration of hypothecation:

Car financed by bank loan but used by client.

Personal guarantee: personal guarantee can be given by anyone. For example I take loan from
AKBL, and my father who is a rich man gives guarantee of mine. Bank will accept worth able
guarantees no matter a close relation exists or not.

Lien: lien is charged over account present in AKBL.

Accounts department:
Accounts department is known as backbone of an organization all financial matters deals and
monitors in the account department. I worked one week in accounts department. First two days I
sorted out the cheques and arranged them in sequence. After that I checked the activity which
contains the title of the cheque, amount and other particulars including date etc. Main function of
this department is to maintain the record of expenses related to other departments of Askari, full
information regarding basic salary, increment, benefits etc. of all employees of Askari are
recorded and maintained by this department. In Peshawar Road branch where I did internship
accounts department was headed by Miss Aliya who guided me how to sort out cheques. There
are eight different types of cheques in AKBL including:

 CD known as current deposit.

 Savings
 BBA that deals with the salaries
 ASDA that means Askari Special Deposit Account
 GL under which general cheques from different sources fall.
 HO means head office cheques.
 V/P that means value plus
 FC that means foreign currency.
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I was able to sort out cheques with the help of serial numbers allocated to each type of
cheque. It took me two days to recognize and remember the serial numbers and distinguish
between two different types of cheques. Cheques with their serial numbers are as follows:

Types of cheques Serial numbers

Current deposit 030010002963
Savings 030100002963
BBA 0300210002963
ASDA 030165000293
GL 10103210, 20103211, 30103212, 40103213
HO 030606008
V/P 030700321, 0303200021
FC $, pound, euro

After cheque sorting, all cheques are punched and made bunches, while sorting they are
matched with the ids of different employees in order to cheque whether correct amount,
name and date has been entered or not. I was told that it is very important task as any wrong
entry can lead to very serious problems. Like if wrong amount is credited to a particular
account or instead of debit, voucher is entered as credit entry. It will harm financially as well
as affect the goodwill of the bank. It may also result in audit issues also. After that all
cheques are counted and separate files are made for each. All debit vouchers are entered
separately and all credit vouchers are entered by making another entry in the register.

Accounts opening department:

AKBL Peshawar road branch has two account opening officers namely Sir Umar Innayet and
Miss Rizwana Bibi. At the time of opening accounts, it is the duty of officers to tactfully obtain
as much information about the integrity and character of the person. It is very important that at
this stage, officers should pay full attention and follow proper procedure for opening different
types of accounts for numerous types of clients. Main functions of account opening department
include providing account opening form according to the customer's requirements, providing
guidance to customers regarding filling the form, checking the form filling, preparing checklist
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and stamping, keeping all record and book keeping of entries, issuing check books, issuing
certificates, signature verification and completing the procedure for account closure.

Types of accounts:
 Individual accounts.  Clubs, societies and  Proprietorship.
 Partnership firm association  Joint Accounts.
accounts. accounts.  Other
 Joint Stock Company  Executors and miscellaneous
accounts. administrators accounts.
 Agency accounts. accounts.

Procedure for account openings is as follows:

The requirement for opening these types of a/c are

o Attested photo of client.

o Permanent residential address of client.
o Attested NIC copy.
o Profession of customer.
o The reference of any person who has already the a/c or any respected personality.
o The other information related to the a/c filled on choice of applicant.
o The signatures are taken on form as well as on the specimen; proper signature verification is
made on system and recorded on computer.

Clearance department:
AKBL Peshawar road branch’s clearance department is headed by Mr. Shadab responsible for inward
clearance and Miss. Sadia Jabeen responsible for outward clearance. Main function of this department is
to clear all incoming and outgoing cheques and there is a lot of transactions and lengthy book keeping
involved. No cash is involved and no extra service charges are made, all major payments are incurred
through this department with the help of NIFT.

Outward clearing:
Following are the steps taken while outward clearance of cheques for whom Miss Sadia Jabeen
is responsible in AKBL Peshawar road branch:
 Whenever a cheque is drawn, branch name in taken into consideration.
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 It should be taken into account that amount in words and figures are same.
 Officer must check that signature of the drawer appears on the face of the instrument.
 There should be no material alteration, if so, it should be properly authenticated.
 Last endorsee’s account should be credited and instrument should be properly indorsed.
 Endorsement is in accordance with the crossing if any.
 The title of the account on the paying-in-slip is that of payee or endorsee but it doesn’t hold
true for bearer cheque.
One thing to be taken care of is that clearing stamp should be made in such a way that it appears
not only on face of the instrument but the stamp should be affixed in such a manner that half
appears on counterfoil and half on paying-in-slip. Now after stamp, instrument is discharged,
whereas a bearer cheque as well as cheques drawn on other banks needs not to be discharged.
The instrument along with slip is retained while the properly signed counterfoil is given to the
client. After all this procedure these steps are taken by officer:
 The details of the instrument including date amount bank name amount are recorded and the
pay-in-slip is separately entered in the outward clearing register.
 Particular serial no. is given to each instrument.
 Now after manually entering all instruments, all outward and inward clearing cheques along
with slips are entered in system software and balance should match with that of manual
register in order to reduce any chance of omission. Register should be balanced. A report is
generated after the balance gets matched.
 After doing all this activity, a particular voucher is filled with total clearing amount and sum
total of vouchers of all instruments are punched and put into bag
 Now, NIFT rider comes and collects the cheques for outward clearing purpose by taking
along the bag.
 Up to here; it was the procedure of outward clearing, for inward clearing bag reaches next
day morning at the branch. And inward clearing process gets started.

Inward clearing:
After outward clearing, inward clearing process gets started with following steps:
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 All details of the instruments including name, date, bank branch, signature, and amount are
matched with the list.
 The instrument is separated and account of the payee is checked whether sufficient funds are
available to debit the corresponding account.
 Floating status of the instrument is finally recognized at bank branch which sent that cheque
for clearing purpose.

Difference between inward clearing and outward clearing:

There is difference between both terms; inward clearing is cheques drawn by the bank
branch clients on their account in favor of other bank branch customers. When inward clearing
cheque is received by branch, the account of person who issued that cheque in favor of other
person is given debit advice while payment is made to bank branch who presented that cheque.
This is inward clearing, while outward clearing is that when bank receives cheques drawn on the
other bank branch within city and sends for collection purpose is considered as Outward
Clearing, while those cheques which are sent out of city for collection, OBC is made which
means outward bills collection. But it is only made when receiving bank branch is located out
clearing zone of that area. It is also called outbound clearing.

Illustration:

 AKBL has to transfer funds to Meezan Bank limited through clearing department. For
AKBL, it is clearing inward, whereas for Meezan it is clearing outward.
 A cheque drawn on Askari bank limited deposited in Habib bank limited is an outward
cheque for Habib bank where as inward cheque for Askari bank limited.

Remittance department:
Main function of the remittance department is to transmit money from one place to another. It
not only brings income for bank but is also much convenient for customers for transferring funds
from one place to other. AKBL Peshawar road branch’s remittance department is headed by Sir
Umar Inaam along with remittance officer Sir Kiyani. Following instruments are prepared in this
department:
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o Pay order
o Demand Draft
o Foreign Demand Draft
o Pay slip
o Payment of Remittances
o Cancellation of pay order & demand draft department.

How DD is issued:
In order to issue demand draft, application is filled by bank customer and duly signed application
is submitted with bank branch by entering all required information. Then remittance officer
thoroughly checks whether information filled is correct or not. Now, as bank is not giving this
service as free, so service charges in form of commission are charged by bank and deducted from
account however if there is tax exemption case then no charges are deducted. If cash is involved
then cashier counts and signs the application after that it is entered in the cash register. Then after
taking the signature of remittance officer as well as operation manager, entry is made manually
in register and demand draft is handed over to client. The entry is made in the DD issuing
register, DD is given to the customer. After all this procedure gets completed, proper vouchers
are prepared, posted , printed and mailed to respective bank branch.

How payment is made:

o As demand draft has been mailed upon its receipt by corresponding bank branch, credit
advice is properly received and signature verification is made through system check.
o After that entry is made on the payable register and corresponding vouchers are prepared
o These vouchers are attached with DD credit and system records the entry.
o After checking numbers, payment is made and closing entry is made in registers that shows
DD payable balance is zero now.

Pay order:
Pay orders are issued for the purpose of payment within the city. Banker’s cheque is another
name given to pay order. As bank issues it on its own guarantee so it’s also called confirmed
cheque payment with no involvement of risk of insufficient funds.

Payment Procedure:
When pay order receipt is presented it is duly signed by two authorized officers:
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o Pay order is entered for book keeping purpose in issuance register.
o After which whole amount is given to customer either in form of cash of by crediting his
account.
o After than manual entry, it is posted in the system.

Outward Bills for Collection:

Outward Bills for Collection are the bills received by bank and sent to other branches located out
of city for collection and local clearing in that city.

Procedure:
 First of all cheques from different cities are separated from each other.
 Then they are given serial numbers and are recorded in outward bills
 Proper schedules are prepared for different branches and cheques are attached with it.
 Then that schedule is mailed to respective branches while copy of it is retained by bank.
Upon clearance, IBCA is received by branches that means inter branch credit advice.
 The OBC numbers are checked and bank deducts commission charges from the customer’s
account.

Inward Bills for Collection:

Inward Bills for Collection are those bills that are received by other bank branches for purpose
for clearing at local level.

Procedure:
o As outward collection for other branches is treated as inward bills collection for this branch
so upon receipt of schedule all cheques are entered manually in the register and serial
numbers are given to each instrument.
o The cheques are lodged for clearing.
o After completing whole above procedure, inter branch credit advice is sent to respective
branches where cheque was received.
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Cash department:
All physical movement of cash in the bank is made through the cash department. Normally cash
department performs following functions

o Receipt
o Payments
o Act according to any standing instructions
o Fund transfer
o ATM handling
o Signature verification
o Prize bond handling

Cash receipt section:

Mainly cash section is divided into two parts; cash receipts and cash payments. First I will
describe how cash receipt section of the bank functions:

Fill up deposit slips Deposited on receipt Cashier counts the

customer amount and fulfill
other requirements

Process completes. Handover deposit slip

to customer with
receiving stamp
Cash payment section:

Cheque is presented at Two signatures from Cheque is recorded and

token counter customers on back token is allotted
of cheque.

Officer cancels Posting is made Cashier counts amount

cheque after and payment is made
supervision
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Financial analysis:

Balance sheet:

Assets 2012 2011 2010 2009 2008

cash and 24435 26168 22,565 19,386 16,030
balance
balance with 8864 6235 3,785 8,364 3955
other banks
Lending to 6319 1592 9,172 4614 4480
financial
institutions
Investments 145378 133757 102,260 67046 35678
advances 143727 150711 152,784 135034 128818
Operating 8841 9349 9,988 9262 8266
fixed assets
Other assets 15491 15945 14,190 10621 8964
353056 343756 314,745 254327 206191
Liabilities:
Bills payable 3700 2756 3,090 2946 2585
Borrowings 8373 17273 25,555 19300 15190
Deposits and 306937 291503 255,937 205970 167677
other accounts
Sub ordinate 6987 6990 5,993 5995 2996
loans
Deferred tax 118 83 86 334 13
Other 7252 7374 8,081 4833 4759
liabilities
333368 325,980 298,740 239,378 193,220
Net assets: 19688 17776 16004 14949 12971

Profit and loss account:

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Particulars 2012 2011 2010 2009 2008
Interest 6,741 8236 6328 3670 3670
income after
provisions:
Non markup 4,117 2903 2800 2707 2707
interest
income
Non markup 9,128 8726 7855 5916 5916
interest
expense
Profit before 1,730 2413 1273 461 461
taxation:
tax 475 785 330 75 75
Profit after 1,255 1628 943 1108 386
taxation:
EPS 1.54 2.00 1.34 1.79 0.76

Ratios:
Profitability Ratios Percentage: 2007 2008 2009 2010 2011 2012

Profit before tax 15.19 2.51 7.22 4.66 7.36 5.34

Gross Yield on Earning Assets 9.97 11.02 11.48 11.42 11.55 10.74

Return on average assets (RoA) 1.54 0.20 0.48 0.33 0.49 0.36

ROE 22.99 3.06 7.85 6.09 9.64 6.70

Return on Capital employed 4.75 0.59 1.43 1.00 1.06 0.59

Liquidity Ratios

Advance to deposits (CDR) 70.46 76.83 65.56 59.70 51.70 46.83

Current 1.21 1.26 1.22 0.97 1.84 1.99

Cash to Current Liabilities 0.15 0.15 0.17 0.13 0.24 0.26

Investment/ market Ratios

Price Earning (PE) 11.18 15.34 12.52 11.95 4.36 11.18

Price to Book 0.16 0.03 0.05 0.04 0.02 0.04

Earnings per share (EPS) Rupees 8.92 0.95 2.18 1.48 2.30 1.54
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Capital Structure Ratios

Income / Expense 1.13 1.02 1.07 1.04 1.07 1.05

Capital Adequacy (CAR) 9.35 9.22 11.75 10.30 11.35 11.81

Earning assets to total assets 86.91 85.94 85.71 86.34 86.05 86.90

Weighted average cost of deposits 5.33 5.49 6.19 6.51 6.87 6.77

Net assets per share 40.80 31.96 29.47 24.90 25.14 24.21

Interpretation of financial statements:

Balance sheet has depicted that there is a constant increase in net value of assets from 2008 to
2012. Lending to other financial institutions has abruptly increased from 2011 to 2012 that has
positive impact over 2012 balance sheet. Advances have decreased while investments have
increased as compared to past year. This means that bank has more focused over investment side
as compared to giving advances by issuing loans. Over liabilities side, it is shown that
subordinate loan amount has significantly increased from 2008 to 2012 that shows bank has
taken loan from other lending sources more as compared to past year 2008. Overall, amount is
somehow constant from 2009 onwards. At the close of the year 2012, customer deposits had
reached Rs. 307 billion from Rs. 292 billion on December 31, 2011, an increase of 5.3 percent.
During the year, saving deposits increased by 15.8 percent and were 53.8 percent of the total
deposits, compared to 48.9 percent at the close of 2011. Current accounts also registered
improvement, in terms of 11.5 percent increase over 2011, as well as accounting for around 21.6
percent of the total deposits compared to 20.4 percent in 2011.

Profit and loss account shows that bank has main source of income through lending money and
earning interest income over it. As income from lending money is more than income earned
through other sources including fee commission etc. non markup interest expense is greater than
non-mark up interest income. But overall income has positive balance as interest income is much
greater than remaining two. .. So net income balance is positive and shows constant increase over
years. earnings per share has increased from 2008 to 2012 but if we compare it with preceding
year, than it has fallen from 2 to 1.54 which shows share value has decreased over time.
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During the year under review, Bank’s operating profit (i.e. profit before provisions and
impairment against non-performing assets and taxation) was at Rs. 4,418 million, registering an
increase of 4.1 percent over Rs. 4,244 million in 2011. Askari Bank’s profit after tax stood at Rs.
1,255 million for the year ended December 31, 2012, compared to Rs. 1,628 million for year
2011, a decline of 22.9 percent, while profit before tax decreased to Rs. 1,730 million from Rs.
2,413 million, a drop of 28.3 percent. The decrease in profits before and after tax was attributable
mainly to increase in provisions and impairments against non-performing loans (NPLs) and
investments by 46.8 percent.

Interpretation of ratios:
We can see that profitability position of AKBL has decreasing trend as profit before taxation
ratio has significantly decreased from 2007 to 2012. Whereas return on capital employed has
fallen from 4.75 to 0.59, however gross yield on earning assets has shown positive rise. Firm’s
liquidity position has improved as current ratio has a constant rise and is highest in 2012 as
compared to previous years. Cash to current liabilities has also increased reflecting firm has
greater amount to cash at hand compared to other current assets such as receivables . Firm’s
earning per share shows a significant decrease in its value reflecting that market value of AKBL
has fallen down in terms of its share price. Price earnings ratio has increased from previous year
that has positive effect for short term earnings, capital structure ratios somehow are constant
throughout five year time period.
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