Bank Alflah Report
Bank Alflah Report
Bank Alflah Report
INTRODUCTION
1.1: Background Information:
Bank Alfalah limited (BAL) is a private bank in Pakistan owned by the Abu Dubai
Group. Bank Alfalah was incorporated on June 21, 1997 as a public limited
company under the companies ordinance 1984. Bank Alfalah is registered at both
Karachi and Lahore stock exchange with a ticker name of BAFL. Its banking
operations commenced from November 1, 1997. The bank is engaged in commercial
banking and related services as defined in banking companies ordinance, 1962,
with the registered office at B.A building I.I. chundigar road Karachi.
This was a further strengthened with a partnership of Abu Dubai Group which
owns 70 % of Bank Alfalah shares. This allowed the bank to invest more in
revolutionary technology to increase its range of products and services.
Since its inception, as new identity of Habib Credit and Exchange Bank Limited
(H.C.E.B.) after the privatization in 1997, the management of the bank started
implementing strategies & policies to crave a distinct position of bank in market
place.
Member
Member
Member
Member
Member
Member
Member
Member
Member
Member
CHAPTER NO 2
ORGANIZATIONAL STRUCTURE
Chairman
Board of
Directors
Executive Committee
Executive Incharges
Branch
Manager
Operation
Manager
Account
Opening
Remittanc
es
Clearing
Credit
Manager
Import/
Export
Manager
Cash
Accounts
CHAPTER NO 3
PRODUCT AND SERVICES
The following are product & services being provided by Bank Alfalah
currently.
Branch Banking
Consumer Banking
Corporate Banking
Finance
Electronic banking
Total
Total profit
Branch Profit
Total lockers
Of 2010
Advances
of 2010
Saving Rate
Opened in 2010
Of 2010
6000.00(M)
1700.00(M)
Increases 2%
From
90.00(M)
5% to 8%
35
Current A/C
A/C Opened In
Increases
Deposits Increases
2010
20%
From
47 %
From
1200.00(M)
1600.00(M)
TO
TO
1320.00(M)
1980.00(M)
From
From
1600.00(M)
1200.00(M)
TO
TO
1920.00(M)
1380.00(M)
1600
750
400
600
08 (Months)
.50 (paisa)
12 (Months)
.75 (paisa)
From
From
From
8.50
8.50
8.50
To
To
To
8.75 Rs.
9.00 Rs.
9.25 Rs.
Total Deposit
Total
Total profit
Branch Profit
Total
Of 2011
Advances Of
of 2011
Saving Rate
lockers
Increases 5%
Opened in
2011
2011
From
8000.00(M)
2200.00(M)
150.00(M)
6% to 11%
54
Total No. OF
PLS A/C
current A/C
A/C Opened In
Deposit
Opened In 2011
2011
Increases
25%
From
From
1320.00(M)
1980.00(M)
TO
TO
1800.00(M)
2500.00(M)
2200
700
50
08 (Months)
.60 (paisa)
12 (Months)
.90 (paisa)
From
From
From
8.75
9.00
9.25
To
To
To
9.05 Rs.
9.60 Rs.
10.15 Rs.
Total
Total profit
Branch Profit
Total
Of 2012
Advances Of
of 2012
Saving Rate
lockers
Increases 11%
Opened in
2012
2012
From
15000.00(M)
3500.00(M)
200.00(M)
11% to 22%
81
PLS A/C
Current A/C
current A/C
A/C Opened In
Deposit
Deposits Increases
10
Opened In 2012
2012
3000
Increases
73 %
37%
From
From
18000.00(M)
2500.00(M)
TO
TO
2100.00(M)
4700.00(M)
1100
08 (Months)
.64 (paisa)
12 (Months)
.97 (paisa)
From
From
From
9.05 To
9.60 To
10.15 To
9.37 Rs.
10.24 Rs.
11.12 Rs.
3.4: DEPARTMENTS
11
Current Account
Current Account
The current account is the most common account and the most preferred amongst
business concerns. There is no restriction on the amount of withdrawal. Current account
enables the client to do cash transactions in a more efficient manner.
Features:
Current Accounts can be opened in the BAL with the sum not less than
Rs.5000/-
No Profit
No deduction of Zakat
12
There can be profit or loss on the investment of the Customers funds deposited
with the bank and this amount shall be acceptable to the Customer. The profit is
paid half yearly.
Deduction of Zakat
Fixed Profit
The longer the period for which the amount is kept higher is rate of interest.
13
Term Deposit usually for the period of three months, six months, One year, and
five years.
Bank can close the Account after one year if balance is zero
CNIC
Partnership Deed
Partners CNIC
Company Letterhead
Memorandum of Association
Article of Association
Directors CNIC
Company Letterhead
3.5.2: Remittance:
Remittance department deals with the local remittances and foreign remittances.
Functions:
It deals with the remittances or fund transfers that occur within the country
between banks or individual people and organizations. The fund transfer was
identified by me simply as inflow and outflow of the money.
It deals with the provision and receiving of pay orders and demand drafts and TTs
etc.
Also all types of utility bill payments are entertained by this department.
It deals with the transfer of funds which are in a foreign currency form such as US
dollars, Euros etc
This fund transfer may be at international level between the banks and individuals
and banks or between the individuals and organizations etc but the currency used
is other than PKR.
Pay Order:
The instrument is used for transfer of funds within the premises of a city. Using the cash
in hand, if pay order is up to the limit of Rs. 200,000, the bank charges are Rs. 232. If it is
more than Rs. 200000, bank charges 0.1% of the pay order money. If using the bank
Account (cheque), the customer is charged Rs. 58 when the pay order money is below Rs.
100,000. For the pay order above this amount, charges are increased
Demand Draft:
The instrument is used to transfer the funds from one city to other within a country. Bank
charges are same as for the pay order mentioned above.
TT (Telegraphic Transfer):
15
There are four forms of telegraphic transfer which include the transfer of funds (from
other countries also such as UAE etc) using internet. These are:
The important thing about the telegraphic transfer is bank do not charge any
commission on such transfer.
3.5.3: Lockers:
Bank Alfalah has given its customers the facility of lockers, so that they can secure
their important things in the lockers, for example gold, important documents or
anything which a person wants to keep safely. BAFL lockers are available in three
different sizes large, medium, and small on a yearly fee. There is no need to open
account to get the facility of lockers.
Serial
Locker size
number
Maximum loss
(current)
coverage/Limit
1:
Small
Rs. 1500/-
Rs. 300,000
2:
Medium
Rs. 2000/-
Rs. 400,000
3:
Large
Rs. 3000/-
Rs. 500,000
Inward clearing
Outward clearing
Inward Clearing
The process where instruments drawn payable on Bank Alfalah Abbottabad City Branch
are deposited by the holder with other banks/ branch and presented for payment.
Outward Clearing
The process where the instrument drawn payable on some other bank / branches is
deposited for collection with Bank Alfalah Abbottabad City Branch.
Clearing Cheques:
This department receives the cheques and other negotiable instruments drawn on local
branches of other banks. NIFT has a clearing house, in which
Cheques and other negotiable instruments are brought by each local bank
representative and the claims of each bank on other is offset and a settlement is made by
the payment of difference. Clearing system is helpful for both the customers and bank in
saving money, time and labor.
Procedure:
The cheques and drafts which come to branch from different banks. They entered into the
register. After this process the balance with total drafts and total amount are given to the
representative in shape of clearing. BAFL works under the rules and a regulation set by
the State Bank of Pakistan (SBP) and BAFL has an account with SBP. The main work of
the clearinghouse of SBP (NIFT) to collect inward and outward cheques and maintain the
record as branches. The clerk of forwarding branch prepares the schedule and vouchers of
all the clearing cheques, which he receives by the clerk on that day and sends these
cheques to the checking officer. Checking officer passes these cheques and vouchers by
his signatures, endorsement stamp and branch special crossing stamp. Clerk posts the
17
contra entries of these vouchers in the clearing register. Representatives banks collect
these cheques. Next day at 10:00 A.M. representatives of all local banks and foreign
banks exchange their cheques, which are drawn on their banks.The clearinghouse
debits/credits the payee/receipt branch with the total amount of the cheques paid on their
behalf. The settlement of book entries e.g., if BAFL is to give Rs. 4 Million to MCB and
MCB has to give Rs.3 million to BAFL then BAFL will draw a cheque of 1 Million in
favor of MCB. SBP will debit this amount from BAFL count & credit If MCB account.
This way mutual cross debiting and crediting in the books of SBP settle the banks
account.
Collection Cheques / OBC
The collection cheques/OBCs are the cheques, which we have cleared for our customers
when some of our customers receive the cheque that is of some other city. These types of
cheques are known as collection cheques or the other name we gave them is OBC
Current Finance
Karobar Finance
Milkiat Finance
18
Current Finance
Current Finance is a short term facility mainly provided to companies. It provides the
customers with the funds over a period of time, mainly one year. The main advantage of
the current finance facility is that markup is only charged on the utilized part of the
finance facility and is mainly used by companies for their working capital management.
The bank to provide this facility keeps a security; mainly a mortgaged property and can
provide 60% of its assessed value as funds.
Karobar Finance
Alfalah Karobar Finance is another short term facility that is only provided to individuals
and sole proprietors. This facility also has one year validity with markup charged on the
amount used.
This facility again provides individuals to maintain their working capital management
and is again given to individuals for a security. The conditions for current finance and
karobar finance are same with one big difference, which is that in karobar finance, the
individual has to clear all his balance in his account, once in a year.
Milkiat Finance
Alfalah Milkiat Finance is a long term facility that is provided to SMEs and there are
four main types of facilities provided:
Tenure of 2-12 years except for renovation, which is for 2-4 years
Mark up of (KIBOR+4%)
19
Eligibility age should be less than 65, with 3 years of existing business.
Import
Export
20
3.7.1: Import
Import Department of BAL deals with the import of merchandise. Import can be defined
as:
The bringing of commodities into Pakistan from outside by sea, land or air.
Requirements of the importer
These requirement / document must be fulfilled from importer before doing the import:
NTN
Letter of Credit
Contract
Advance Payment
Open Account
Letter Of Credit
A Letter Of Credit is a financial instrument issued by a bank on behalf of the registered
customers It gives surety to the Exporter that his amount is safe.
The letter of credit is a written instrument issued by the buyers bank authorizing the
seller to draw in accordance with certain terms and conditions.
Parties Involved In A Letter Of Credit:There are four basic parties involved
1. Importer
2. Issuing Bank
3. Exporter (Beneficiary)
4. Advising Bank
Contract
21
These are the contracts on which there is no liability of the bank. Bank charge
commission against this services.
Main Reason of Bank Involvement
Bank involve in contract for that purpose:
The record of this foreign exchange entered in State Bank Of Pakistan (SBP) and this
record shows that how many Foreign Exchange go outside Pakistan that is helpful to
count the total imports of Pakistan.
Advance Payment
In mean some part of payment is made before shipment and remaining is made after
shipment. Advance Payment is through TT (Telegraphic Transfer). But State Bank Of
Pakistan allows limit of Rs.10, 000 it means that Advance Payment does not exceeds
Rs.10, 000.
In case of Advance Payment the importer show the document to Bank Al-Falah Limited
after four months as a proof of import.
Open Account
Open Account is reciprocal of Advance Payment. In this case importer first receives the
shipment and then makes the payment. And there is no limit involved in open Account.
Importer makes payment of any amount.
In open Account there is no as such restrictions from State Bank Of Pakistan (SBP)
importer simply show the document and make payment after one year means no
restriction of time is involved.
Import Process
22
Prepare four copies of Form I (Form I explain the detail of import that are helpful
for the SBP.
Preparation of L/C
3.7.2: Export
Exports are major sources of earning foreign exchange and play an important role in the
economic development of the country. It helps to utilize excess resources of the country.
Exports mean selling goods to another country.
Exports of all eligible commodities through authorized banking channels are admissible
under exchange control regulation.
Requirement for the Exporter:These requirement / document must be fulfilled from exporter before doing the export:
NTN
Commercial Invoice
Bill of lading
Packing list
Total quantity
Net weight/carton
Gross weight/carton
E-form: Initial document on which total export proceeding is based. In this form,
all the conditions are given, which are necessary for exports.
Procedure
Copies of E-Form
Verification of E-Form
Export Documents
Dispatch
Keeping records of the daily transactions in hard copy and soft copy, that is all
type of book keeping.
Reporting the daily, weekly and monthly performance reports to the respective
offices.
Preparing the annual reports /financial statements (final accounts) of the bank.
Department deals with the sale and purchase of required assets for the branch,
reimbursement of daily expenses by bank staff and medical cover etc.
3.8.1: Reports
It generates reports like Statement of Account Activity (a report on the activity of all
accounts at Bank Alfalah Liaqat Road), Statement of Affairs (a report on the assets
and liabilities of Bank Alfalah Liaqat Road), Statement of Foreign Exchange (a
report on the foreign exchange currencies at the bank) and Statement of Profit &
Loss (a report on the income and expenditures of Bank Alfalah Liaqat Road).
These reports can be generated at daily, weekly, monthly, quarterly or yearly basis as
required by the bank.
Sorting Vouchers
25
Checking Activity
Packing
26
27
CHAPTER NO 4
LEARN AS AN INTRNEE:
4.1: My Activities:
In the branch I perform different types of duties in different department. I was rotated in
different departments in different weeks, so that I could get the experience of different
tasks in the bank. The departments in which I worked are given below.
Account Opening:
I worked for one week in the account opening department at the bank & learned a lot
from the caring and helping staff in the department.
Whenever a customer comes to open their account, they have to fill a relationship
contract with the bank. As part of my internship I had to fill these forms and then use the
appropriate bank stamps to complete these forms. Also as part of the relationship form, I
also had to do a Verisys, a verification system started by NADRA on the CNIC of the
new account opener. A Verisys tells, if more information pertaining to the customer is
needed to open the account or not.
Furthermore as all relationship forms have to be sent to Karachi, a central location, for all
account relationship forms, I had to develop a list of daily forms sent and their quantity.
Remittance:
The second week I was advised to spent few days in remittance department and try to
learn its functions and working of this department. This department was administrative by
Mr. Abdul Hamid. He helped me in learning all about the local remittances and foreign
remittances.
Learning
My major learning was about the concepts of Transferability and the negotiable
instruments.
28
AND I also learned to enter the daily inward and outward proceedings in the
register as record.
Credit Department
In the fourth week of my internship I was advised to spent the whole week in Credit
department. I learned here many important concepts of interest.
29
The Credit department of Bank Alfalah work with both SMEs and corporate clients.
There are two major categories of credit line facilities that Bank Alfalah provides to its
customer.
Import
Export
Account Department
In my last & sixth week at Bank Alfalah was in account department. Here I
learned some important concepts and assumptions that are use in the accounting
for banks.
In the accounts department, I had to do daily activity checking and there are four stages
in which activity checking takes place:
1. Collecting vouchers, cheques etc from all departments
2. Sorting Vouchers
3. Checking Activity
4. Packing
4.2: Major Product
Banking sector has a wide variety of products that carter to financial need of
masses; some of the major products that bank provide to its customers and it is
mostly used by the banks customers are as follow,
30
Checking Accounts
Car Financing
Home Financing
Credit Cards
Current Account
Tracking devices with all Suzuki Mehran and all Toyota Models
Co borrowers facility
The mark up rates for all locally build new cars is a follows.
Mark up rates for car financing
Fixed Rates
31
Financing Product
Car Loan for Brand
New Vehicles
1 yr
2 yr
3 yr
4 yr
5 yr
Variable Rates:
Financing Product
Car Loan for brand new vehicles
2 yr - 3
yr
Kibor +
3%
4 yr - 5 yr
Kibor + 4%
Kibor + 5%
(locally manufactured)
Second Hand Vehicles
32
Fixed rate for one year @ 11.5% Salaried and @ 13.5% Businessmen and
expatriate Pakistanis.
33
Credit Card
Silver
Market Segment1
Salaried and self employed individuals
Gold
Platinum
4.3: Benefits
Some of the monetary and non monetary benefits that Bank Alfalah provides to its
employees are as follows:
Gratuity Fund
Medical Insurance
Bonuses
Life Insurance
Promotions
34
ATM/DEBIT card for cash withdrawals through any ATM and debit transactions
at various retail outlets.
35
branch believes that making your existing customers loyal is very important, because it is
really the existence of your already existing customers that attracts new people, like a
famous saying that money attracts money so in the same way loyal customers attract new
customers. To achieve this motive, this branch has made it its policy to give its customers
full time and attention, to introduce them with new policies, through their employee.
36
CHAPTER NO 5
SWOT ANALYSIS
Following is the SWOT Analysis of BANK ALFALAH LIAQAT ROAD on my personal
based experience and the recommendations proposed:
Strength
Followings are the strengths of BANK ALFALAH LIAQAT ROAD BRANCH under my
observation during my internship.
Liaqat Road Branch holds a sound repute in the financial circle of grain market.
The branch has very strict rules & regulations about the customers complaints.
The customers are treated as very special persons in the branch.
Liaqat Road Branch also provides the locker services with reasonable charges.
Weakness
37
During my stay at internship, one of the weakness I observed Bank Alfalah facing
that some remuneration is charged on Cheque Book, Statement & online transfers
etc. Most of the clients complaint about it and compare it with other banks
functional. As other banks are providing free or with less charges.
The branch was having huge business, but the workforce in branch was not in that
number that it can handle the maximum customers, so resulting in loss of
customer and loss of revenue. So as a weakness, there must be more workforce to
handle the business in a branch.
Opportunities
The Branch has a sound financial so business parties are much interested to be
the part of the organization.
There is no strong competitor in the market so the branch can expand its
skilled field force to increase the business.
Threats
All the competitors branches are using different means and methods to popularize
their product and services.
The management should recruit more staff for Bank Alfalah Liaqat Road Branch,
because in this branch often many customers face tension due to the rush of work.
The pay packages given to the employees in this branch should be enhance.
Opening of new branches in the grain market like Meezan Bank, MCB, & faysal
bank are big threats for this branch.
38
CHAPTER NO 6
FINANCIAL ANALYSIS
6.1:BALANCE SHEET
(RUPEES IN '000)
ASSETS
Cash & Balances with treasury banks
Balances with other banks
Lendings to Financial institutions
Investments Net
Advances-net
Operating fixed assets
Deferred tax assets
other assets
2014
50,515,643
12,331,713
18,313,485
324,319,454
290,597,237
15,740,100
31,310,661
743,128,293
2013
61,204,697
34,764,008
2,522,022
219,690,369
260,779,850
14,835,200
1,204,000
16,427,478
611,427,624
2012
58,044,054
26,720,993
876,870
189,486,762
233,933,358
13,747,520
384,601
13,272,536
536,466,694
11,758,155
55,232,916
605,963,224
9,987,000
9,543,480
23,115,102
525,525,770
9,991,000
8,430,910
21,227,834
457,118,723
5,874,742
853,331
14,514,599
698,309,225
11,350,528
579,525,880
13,567,083
506,219,292
LIABILITIES
Bills payable
Borrowings
Deposits and other accounts
sob-ordinated loans
Liabilities against assets subject to finance
lease
Deferred tax liabilities
other liabilities
39
NET ASSETS
44,819,068
31,901,744
30,247,402
15,872,427
12,338,026
9,613,374
37,823,827
6,995,241
44,819,068
13,491,563
7,274,222
7,499,831
28,265,616
3,636,128
31,901,744
13,491,563
5,636,549
6,561,628
25,689,740
4,557,662
30,247,402
743,128,293
611,427,624
536,466,694
PRESENTED BY
Share Capital
Reserves
Unappropriated profit
Surplus on revaluation of assets - net of tax
40
6.1.1:BALANCE SHEET
VERTICAL ANALYSIS
ASSETS
Cash & Balances with treasury banks
Balances with other banks
Lendings to Financial institutions
Investments Net
Advances-net
Operating fixed assets
Deferred tax assets
other assets
2014
6.80%
1.66%
2.46%
43.64%
39.10%
2.12%
0.00%
4.21%
100.00%
2013
10.01%
5.69%
0.41%
35.93%
42.65%
2.43%
0.20%
2.69%
100.00%
2012
10.82%
4.98%
0.16%
35.32%
43.61%
2.56%
0.07%
2.47%
100.00%
1.58%
7.43%
81.54%
1.34%
1.56%
3.78%
85.95%
1.63%
1.57%
3.96%
85.21%
1.10%
0.00%
0.11%
1.95%
93.97%
0.00%
0.00%
1.86%
94.78%
0.00%
0.00%
2.53%
94.36%
6.03%
5.22%
5.64%
2.14%
1.66%
1.29%
5.09%
0.94%
6.03%
2.21%
1.19%
1.23%
4.62%
0.59%
5.22%
2.51%
1.05%
1.22%
4.79%
0.85%
5.64%
100.00%
100.00%
100.00%
LIABILITIES
Bills payable
Borrowings
Deposits and other accounts
sob-ordinated loans
Liabilities against assets subject to finance
lease
Deferred tax liabilities
other liabilities
NET ASSETS
PRESENTED BY
Share Capital
Reserves
Unappropriated profit
Surplus on revaluation of assets - net of tax
41
6.1.2:BALANCE SHEET
HORIZONTAL ANALYSIS
ASSETS
Cash & Balances with treasury banks
Balances with other banks
Lendings to Financial institutions
Investments Net
Advances-net
Operating fixed assets
Deferred tax assets
other assets
2014 VS 2013
-17.46%
-64.53%
626.14%
47.63%
11.43%
6.10%
0.00%
90.60%
21.54%
2013 VS 2012
5.45%
30.10%
187.62%
15.94%
11.48%
7.91%
0.00%
23.77%
13.97%
23.21%
138.95%
15.31%
-0.04%
13.20%
8.89%
14.96%
70.07%
0.00%
0.00%
27.88%
20.50%
0.00%
0.00%
-16.34%
14.48%
40.49%
5.47%
17.65%
69.61%
28.18%
33.82%
92.38%
40.49%
0.00%
29.05%
14.30%
10.03%
-20.22%
5.47%
21.54%
13.97%
LIABILITIES
Bills payable
Borrowings
Deposits and other accounts
sob-ordinated loans
Liabilities against assets subject to finance
lease
Deferred tax liabilities
other liabilities
NET ASSETS
PRESENTED BY
Share Capital
Reserves
Unappropriated profit
Surplus on revaluation of assets - net of tax
42
2014
55,378,477
33,505,003
21,873,474
(Rupees in
'000)
2013
43,961,477
27,066,229
16,895,248
1,447,931
85,897
5
1,533,833
20,339,641
954,563
94,797
4,288
1,053,648
15,841,600
3,120,035
492,348
2,042,957
1,058,167
160,098
2,162,836
9,036,441
29,376,082
2,800,461
482,567
1,535,808
1,588,895
8,465
1,862,498
8,278,694
24,120,294
20,261,215
38,453
356,486
206,362
20,862,516
8,513,566
8,513,566
17,288,779
2,100
-162,621
184,408
17,312,666
6,807,628
6,807,628
15
3,122,512
-288,216
38,419
2,872,715
5,640,851
2,400,321
-159,060
-110,000
2,131,261
4,676,367
(Rupees)
3.41
4.09
43
46
27
18
1
1
3
15
1
1
1
7
22
15
6
6
2
4
VERTICAL ANALYSIS
44
2014
100.00
%
60.50%
39.50%
2013
100.00
%
61.57%
38.43%
2012
100.00
%
59.68%
40.32%
2.61%
0.16%
0.00%
2.77%
36.73%
2.17%
0.22%
0.01%
2.40%
36.04%
4.01%
3.71%
0.00%
7.72%
32.60%
5.63%
0.89%
3.69%
1.91%
0.29%
3.91%
16.32%
53.05%
6.37%
1.10%
3.49%
3.61%
0.02%
4.24%
18.83%
54.87%
5.51%
0.76%
2.84%
2.88%
0.00%
3.81%
15.80%
48.40%
36.59%
0.07%
0.64%
0.37%
37.67%
15.37%
15.37%
39.33%
0.00%
-0.37%
0.42%
39.38%
15.49%
12.29%
32.99%
-0.05%
0.28%
0.45%
33.68%
14.72%
12.25%
5.64%
-0.52%
0.07%
5.19%
10.19%
5.46%
-0.36%
-0.25%
4.85%
10.64%
6.82%
-1.64%
-0.35%
4.83%
9.89%
HORIZONTAL ANALYSIS
45
2014 VS 2013
25.97%
23.79%
29.47%
2013 VS 2012
-4.60%
-1.58%
-9.07%
51.69%
-9.39%
-99.88%
45.57%
28.39%
-48.36%
-94.45%
268.38%
-70.39%
5.46%
11.41%
2.03%
33.02%
-33.40%
1791.29%
16.13%
9.15%
21.79%
10.40%
38.25%
17.26%
19.65%
460.23%
6.04%
13.70%
8.15%
17.19%
1731.10%
-319.21%
11.91%
20.50%
25.06%
25.06%
13.71%
-109.54%
-224.61%
-10.89%
11.55%
0.36%
0.36%
30.09%
81.20%
-134.93%
34.79%
20.62%
19.94%
-23.60%
-78.93%
-31.25%
-4.30%
2.64%
0.89%
2014
2013
2012
TAT
0.89%
0.74%
0.72%
Interpretation:
This ratio should be high which is better for the business but, Bank Alfalahs total assets
turnover showing a mixed trend of increase and decrease in past five years. In 2014 it is
high at 0.89% as compare to 2013 at 0.74% but is even less of the highest value of 0.72%
in 2012.
Return on Investment:
This ratio is calculated by dividing Op profit by the average of operating assets as shown
by the formula,
Return on Investment = Op Profit/Average Operating Assets
Year
2014
2013
2012
ROI
10.42%
8.33%
8.30%
Interpretation:
The answer of this ratio should be high or should be shown a positive increasing trend for
better and favorable results. Bank Alfalahs ROI showing a increasing trend over the past
3 years with Highest in 2014 that is 10.42% and lowest as 8.30% in 2012 which is not
favorable for the bank.
46
Return on Deposits:
This ratio measures the return on deposits by the total deposits of the organization
obtained by dividing net income after taxes to total deposits as shown by the formula,
Return on Deposits = Net Income After tax/Total Deposits
Year
2014
2013
2012
ROD
0.93%
0.89%
0.99%
Interpretation:
As this ratio shows the total return which business gains from the total deposits, so it
should be high which will be better for the business but it is showing a continuous
decreasing trend from 2012 to 2014 except a highest value in 2012 which is 0.99%.
Fixed Assets Turnover:
This ratio measures the efficiency of using fixed assets in generating income or sales. It is
the ratio of annual sales to total fixed assets as given by the formula,
Fixed Assets Turnover = Annual Sales or Total Income/Total Fixed Assets
Year
2014
2013
2012
FAT
35.84%
31.52%
33.14%
Interpretation
The result of this ratio should always be high for favorable business environment because
high ratio shows that business is investing more efficiently and effectively in fixed assets
for generating sales. It is showing a very ambiguous trend, as it was high in 2014
decreases then increases in 2012.
47
Current Ratio:
Current ratio indicates the liquidity position of the business that whether business can
fulfill its obligation or not. It is the ratio of current assets to current liabilities as,
Current Ratio = Current Assets/ Current Liabilities
Year
2014
2013
2012
CR
92.63%
297.54%
287.10%
Interpretation:
The current ratio should be in reasonable range. It should not be too high or too low, both
conditions are not favorable. In this case of Bank Alfalah, it is showing a decreasing trend
which is not favorable for the business because it may pose difficulty for the bank to
fulfill its current obligations.
Debt Equity Ratio:
This ratio tells about the financial leverage of the organization that what proportion of
debt and what proportion of equity is being used by the organization for financing its
available assets. It is calculated by dividing long term debt to total capitalization as
shown by the given formula,
Debt Equity Ratio = Long Term Debt/ Total Capitalization
Year
2014
2013
2012
DER
26.4%
35.35%
22.88%
Interpretation:
A higher value of debt equity ratio is much favorable for the business as its high value
tells about the efficiency of the business to using its available debt for financing. Bank
Alfalahs debt equity ratio is showing a decreasing trend over the past 3 years but as
compare to 2014 the ratio of 2013 is increased 35.35% and in 2014 ratio is 26.4%.
48
Year
2014
2013
2012
ROTA
0.75%
0.76%
0.85%
Interpretation:
Higher Ratio is favorable for the business which shows better use of assets by the
business for generating profits. Bank Afalahs ROTA is showing a decreasing trend over
past 3 years except in 2012 with a highest value of 0.85%.
Return on Equity:
This ratio shows a relationship between net income after taxes and shareholders equity,
and measures the efficiency of the organization of generating profits by using
shareholders equity. It is calculated by dividing net income after taxes to shareholders
equity as shown by the given formula,
Year
2014
2013
2012
ROE
12.58%
14.65%
15.06%
Interpretation:
It should be high for favorable results. This ratio of Bank Alfalah is showing a decreasing
trend.
49
2014
2013
2012
ITA
43.64%
35.93%
35.32%
Interpretation:
This ratio should be in high figures for favorable results of the business. Bank Alfalahs
ITA is showing a higher trend of increasing in last 3 years. In 2014 it is high at 43.64% as
compare to 2013 and 2012 which is favorable. But bank should try to keep it high by
making better policies.
Deposits to Total Liabilities
It is calculated by dividing total deposits to total liabilities as shown by the given
formula,
Deposits to Total Liabilities = Total Deposits/Total Liabilities
Year
2014
2013
2012
DTL
86.78%
90.68%
90.30%
Interpretation:
It is showing a mixed trend of increase and decrease over last three years. As it is
decreased in 2014 to 86.78% from 90.68% in 2013 which is not favorable.
50
2014
2013
2012
ED
7.39%
6.07%
6.62%
Interpretation:
It is showing an increasing trend over the last three years which is favorable.
2014
2013
2012
ETA
6.03%
5.22%
5.64%
Interpretation:
It is showing an increasing trend except in 2013 but overall it is increasing which is
favorable for the business.
51
2014
2013
2012
CTD
10.37%
18.26%
18.54%
Interpretation:
As this ratio tells about the liquidity status of the bank. It is showing increase trend in
2012 and 2013 in 2014 its showing decreasing trend.
52
CHAPTER NO 7
CONCLUSION
The aim of internship for the internee can be concluded as:
BANK ALFALAH should lower their transaction rates, so that can retain and
attract more customers.
54
CHAPTER NO 8
RECOMMENDATIONS
My recommendations for BANK ALFALAH can be summed up as follows:
There must be a Customer Care Officer in BANK ALFALAH Liaqat Road Main
Branch.
The employees should be signed jobs for specific period and than they should
shifted to other department so that they gain knowledge of other jobs.
Bank Alfalah limited should properly advertise and communicate to public about
the services by it, so that more customers will be attracted.
The banks management should give more incentives and pay scale of officers
should be revised & improved.
Audit should be held internally. Rather there should be an audit Department in the
branch to make audit on daily basis. This can become as helpful as different banks
are having this department of their own.
Lockers, ATM, all these facilities should be provide to attract more customers.
55