Project of commercial banking

“Comparison of Islamic bank and

conventional bank investment activities”.
Group Members
JAMIL LATIF MBA-FA09-049
BABAR HUSSAIN MBA-FA09-031
M. UMER MBA-FA09-100
ASSAD FARMAN MBA-FA09-025
HASSNAIN RAZA MBA-FA09-085
Comparison of the following banks
Meezan Islamic bank

Allied bank
 MEEZAN ISLAMIC BANK
Meezan is a publicly listed company first incorporated
on January 27, 1997. It started operations as an
investment bank in August of the same year. In
January, 2002 in an historic initiative, Meezan Bank
was granted the nation's first full-fledged commercial
banking license dedicated to Islamic Banking, by the
State Bank of Pakistan.
 Our Vision

Establish Islamic banking as banking of first choice to

facilitate the implementation of an equitable
economic system, providing a strong foundation for
establishing a fair and just society for mankind.
 Our Mission

To be a premier Islamic bank, offering a one-stop

shop for innovative value added products and services
to our customers within the bounds of Shariah, while
optimizing the stakeholders value through an
organizational culture based on learning, fairness,
respect for individual enterprise and performance.
 Our Objectives

To develop a committed service culture which

ensures the consistent delivery of our products and
services within the highest quality service parameters,
promoting Islamic values and ensuring recognition
and a quality banking experience to our customers
 Types of products offered

 Riba Free Meezan Providence

 Riba Free - Certificates of Islamic Investment
 Riba Free - Monthly Musharakah Certificate
 Riba Free - Dollar Saving Account
 Riba Free - Rupee Saving Account
 Riba Free - Current Account
 Car Ijarah - Islamic Car Financing
 Islamic Mode of Financing

These modes of financing have been written by

Maulana Taqi Usmani who is the former Chairman of
Shariah board of Meezan Bank. After studying these
we will be in a position to understand the 90%
working of the bank. The important modes of
financing are…
 Cont..

 Musharakah
 Mudarabah
 Ijarah
 Investment Banking
Realizing the increasingly diverse needs of our
customers for advisory and structured finance
transactions, a specialized department focusing on
Investment Banking services has been established at
Meezan Bank. The department is geared towards
providing comprehensive and innovative financial
solutions through a diverse product offering,
providing a broad array of financing solutions to the
bank’s clients. The focus is on nurturing and
developing long-term relationships with clients by
understanding their unique financing requirements
and providing Shariah-compliant financing solutions.
 Cont..

August 2010
Ufone - Pakistan Telecommunication
Corporation Limited
Syndicated Musharakah
PKR 1,000 million
Lead Advisor & Arranger
To finance its network expansion
Cont..
2009
Liberty Power Tech Limited
February 2009
Liberty Power Tech Limited
Rated Privately Placed Sukook Issue
PKR 12,650 million
Lead Arranger
Shariah Structuring Advisor
Cont..
September 2007
Engro Chemicals Limited
Privately Placed Sukook Issue
PKR 3,000 million
Joint Lead Advisor & Arranger
 
 
Cont..

September 2007
Dawood Hercules Chemicals Limited
Privately Placed Sukook Issue
PKR 6,500 million
Lead Advisor & Arranger
Shariah Structuring Advisor
 Analysis

 Deposits were 100,333,051 in Dec. 31 2009 which

were 119,000,889 in Sept. 30 2010. (growth 19%).

 Financings – Net were 44,188,066 in Dec. 31 2009

which were 43,371,335 in Sept. 30 2010. (growth -2%).

 Investments in Dec. 31 2009 was 23,290,309 which

was 25,471,727 in Sept. 30 2010. (growth 9%).
Cont..
 Due from financial institutions was 34,499,500 in
Dec. 31 2009 and now 37,158,500 in Sept. 30 2010.
(growth 8%).

 Total Assets was 124,181,734 in Dec. 31 2009 and now

143,422,448 in Sept. 30 2010. (growth 15%).
 ALLIED BANK LIMITED
It started out in Lahore by the name Australasia bank
before independence in 1942; was renamed allied
bank of Pakistan limited in 1974 and than Allied bank
limited on 2005. In august 2008, because of capital
reconstruction, the bank’s ownership was transferred
to a consortium comprising of Abraham leasing
limited, and than Abraham group.
 vision

To become a dynamic and efficient bank providing

integrated solutions and the first choice of bank for all
customers.
 MISSION
 To provide value-added services to our customers.
 To provide high-tech innovative solutions to meet
customer requirements.
 To create sustainable value through growth, efficiency
and diversity for all stakeholders.
 To provide a challenging work environment, and
reward dedicated team members.
 To play a proactive role in contributing towards the
society.
 CORE VALUES
The core values of Allied Bank are these:

 Integrity
 Excellence in Service
 High Performance
 Innovation and Growth
 PRODUCTS
 Phone Banking:
 Credit Cards:
 Internet Banking:
 Online Banking:
 Allied ATM Networks:
 Corporate Leasing:
 Financial Analysis
Your bank while remaining prudent under the
circumstances continued to emphasize on improving
cost effective deposit mix, building risk weighted
assets by ensuring quality and optimizing costs to
pursue its strategy of maintaining steady growth…

 Deposits of the bank stood at Rs. 317,742 million

as at March 31, 2010, which grew by 11.6% over
corresponding period
 Gross deposits thus depicted a modest decrease of
around 4% from Rs. 249,887 million as at December
31, 2009 to Rs. 240,359 million as at March 31, 2010.
Gross Advances as at March 31, 2010, however,
remained higher by Rs. 36,770 million or 18% from
March 31, 2009 level, leading to increase in Loans to
Deposit Ratio to 75.6% as at March 31, 2010.

 The balance sheet size of Your Bank increased to Rs.

399,837 million as at March 31, 2010 while the equity
of the bank increased to Rs. 30,250 million compared
to Rs. 29,960 million as at December 31, 2009.
 The balance sheet size of Your Bank increased to Rs.
399,837 million as at March 31, 2010 while the equity
of the bank increased to Rs. 30,250 million compared
to Rs. 29,960 million as at December 31, 2009.

 Profit Before Tax of Your Bank increased by 19.9% to

reach Rs. 2,683 million during three months period
ended March 31, 2010 compared to Rs. 2,239 million in
the corresponding period of March 31, 2009.
 Profit After Tax also rose by 22.7% to Rs. 1,777 million
compared to Rs. 1,448 million in the corresponding
period.

 Resultantly, the EPS of Your Bank increased to Rs.

2.27 during three months ended March 31, 2010
compared to Rs. 1.85 in the corresponding period of
previous year.
 Conclusion
 
We have studied both the banks products and
services and their process very deeply and the result
for all this research is that the conventional banking
system is an old system which have a strong base now
at the time so for competing conventional banking
system definitely Islamic system has required some
time…
 Cont..
Due to which the profit rates of Islamic banks are
below the commercial banks due to which people
hesitate to invest or deal with the Islamic banks and
another thing is that due to uncertainty Islamic bank
is not dealing with many of the services which
commercial banks are providing so Islamic banks
should find alternate for this problems for which we
have suggest some recommendations to Islamic bank
which are given below..
 Recommendations to Meezan bank

 They should provide personal loan by making

assurance that loan would be not used in any illegal
activity.

 They should use Musharakah contracts no doubt this

is risky but they also have a rate of profitability.

 They should launch awareness programs to promote

Islamic banking.
Cont..
 Increase the use of takaful as people want assurance
of their assets and investments.

 Grand incentives to create Islamic private debt

security.
 Recommendations to Allied bank

 The bank has a lot of financing schemes but there are

little advertisements of these schemes so ABL should
more advertise its schemes.

 Some of the talented employees should be sent to

other countries for their advance trainings.

 In back offices the employees are still depend on

manual work which causes slow performance. It
should convert their system to an automated one.
Cont.
 ABL should promote the paperless banking.

 In some groups or wings, approach towards

employees is still bureaucratic, late promotion,
favoritism in appraisals and lack of sufficient
incentives are some problems arising dissatisfaction
so the employees should be promoted on fair policies
to increase more satisfaction among them.

 ABL should introduce the Islamic products because it

has the potential market.
Thank you