INTERNSHIP REPORT

ON
ALLIED BANK LIMITED

ALI SHER
MBA ( Finance)
2020

BahauddinZakariya University
Department of Business Administration
Sahiwal Campus
 PREFACE

This Report is specially meant for the student of MBA(Finance). It is concerned to a brief study
of the operation, Function, tasks and services of Allied Bank of Pakistan.

Banking play very important role in the commerce and economic development of a country.
Now-a-days banks are using different modern technologies, which influence the managerial
activities, that’s why I decided to do my internship Training in the bank.

In preparation of this Report is have tried my best to provide all Possible information about the
operation, function and tasks of ABL in brief and comprehensive form. It also includes a brief
department worked during internship. I have also tried my best to use simple and easy words and
language.

Then internship report ends with some recommendation after identification of some problems
observed during the course of internship.
 ACKNOWLEGEMENT

All praise to Almighty Allah, the most merciful and compassionate, who give me skills and
abilities to complete this report successfully

.I am grateful to my parents who are always been a source of encouragement for me throughout
my life and from start to the end of this report.

I will thank full to my all teachers who gave me opportunity to work in the organization.

I am thankful to all my staff members so Allied Bank Of Pakistan Limited Ghauri Chowk branch
Shaiwal. The program of internship was organized in such a way that sufficient time was given
to each department according to its importance.

I found every one very co-operative and helpful for providing me the Theoretical as well as
practical knowledge about the function and operation of the bank.
Contents
EXECUTIVE SUMMARY.................................................................................................................................1
INTRODUCTION TO SECTOR........................................................................................................................5
HISTORY OF ABL..........................................................................................................................................7
STRUCTURE AND MANAGEMENT SYSTEM OF ABL....................................................................................10
BRANCHES IN PAKISTAN....................................................................................................................11
MAIN OBJECTIVE.......................................................................................................................................13
BOARD OF DIRECTORS...............................................................................................................................13
MANAGEMENT HIERARCHY.......................................................................................................................15
FUNCTIONAL HIERARCHY..........................................................................................................................16
MANAGEMENT TEAM................................................................................................................................18
PRODUCTS AND SERVICES OF ALLIED BANK LIMITED...............................................................19
Other Products......................................................................................................................................21
INTRODUCTION TO THE DEPARTMENTS....................................................................................................26
CUSTOMER SERVICE DEPARTMENT.......................................................................................................26
OPERATION DEPARTMENT....................................................................................................................26
CLEARING DEPARTMENT...............................................................................................................28
CASH DEPARTMENT.........................................................................................................................30
KINDS OF ACCOUNT..................................................................................................................................31
SAVING BANK ACCOUNT P & LOSS ACCOUNT..........................................................................31
CURRENT ACCOUNT........................................................................................................................31
FOREIGN CURRENCY ACCOUNT...................................................................................................33
FINANCIAL ANALYSIS.................................................................................................................................35
HORIZONTAL ANALYSIS.....................................................................................................................39
VERTICAL ANALYSIS...........................................................................................................................41
FINANCIAL RATIOS.....................................................................................................................................43
SWOT ANALYSIS...................................................................................................................................48
My LEARNING IN ORGANIZATION.....................................................................................................50
CLASS ROOM LEARNING IN ORANGATION................................................................................................53

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SUGGESTIONS AND RECOMMENDATION.......................................................................................54
Physical Facilities..................................................................................................................................54
Availability of staff................................................................................................................................54
Needs of Change in Recruitment Policy................................................................................................55
Marketing Concept................................................................................................................................55
Information Access................................................................................................................................55
Computer Trainings...............................................................................................................................56
Training with Clear Objectives..............................................................................................................56
Customers Orientation...........................................................................................................................56
Relocation of branches..........................................................................................................................56
ATM Network Problem.........................................................................................................................56
Loan facility..........................................................................................................................................57
AS I MANAGER IN ABL........................................................................................................................58
Reference:.................................................................................................................................................59
Annexure:..................................................................................................................................................59

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 EXECUTIVE SUMMARY
I have completed my 8 weeks Internship at Allied Bank Limited. I tried my best to gain
something practically from this opportunity. This report is prepared on the work done during my
Internship program. This report starts from the introduction of word ‘bank’ , and then the history
of ABL and its management.

Bank Mission statement and Vision shows its focus on overall performance of the bank
and quality of services and products.

The Internship program included the work mostly in Operation Department of the bank.
However mostly work is done in Account opening department, clearing department and
customer service department and information is included in this report. Then there is financial
analysis and recommendations for the improvement of organization.

Word Bank is said to be derived from the words Banc us or Banque or Bank. These are
the institutions which deal in money. Banks are the back bone of any economy. They collect and
pool the money in the shape of deposits and place the funds so raised in the hands of
entrepreneurs as loan.

ABL was established in 1942 and is one of the major commercial banks of Pakistan. The
Bank is making every effort to meet the up-coming challenges through strategic planning and
making the best use of the resources at its command.

ABL’S state of the art online banking, customers were able to access their account from
more than 900 branches located in 300 cities across Pakistan. Transactions such as Cash Deposit,
Cheque Encashment, Stop Payment, Account Statement, and Funds Transfer were done online
without the need to travel to the local branch.

ABL is playing an important role in economic development of the country. At present time it is
the third largest bank of the country in term of deposits.

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 Internship has a lot of importance for a management science student. Without a proper
training, a student cannot learn about the corporate culture of the country. So Internship is very
important for business Masters.

4
 INTRODUCTION TO REPORT

Introduction

Students of MBA studying courses leading to master’s degree in Commerce are required
to undergo an internship programme of two months duration. This is an essential academic
requirement. The internship is followed by comprehensive report writing, required to submit it.
This report is properly evaluated on the basis of its description and analytical capabilities by
internal and external examiners. I did my internship in Allied Bank Limited (ghauri chowk
sahiwal).

Purpose of Study
The purpose of the study is to work in real life situation and learn banking practice by doing.
In this context its objectives are:
 To analyze banking operations i.e. operational analysis.
 To develop concrete and feasible recommendations.
 To improve report writing skills.

Nature of the study

The study is critical in nature. It was conducted to investigate critically into the
operations of ALLIED bank ltd and it also explains that how ABL provides facilities of online
banking to its customers. The annual reports or the consolidation data of the bank has not been
focused in specific because it does not reflect on the operational performance of branches.
However, they have been referred to as when and where required.
Scope of the study
The study covers two areas with its variables, which affects the operations of the branch
directly, or indirectly. These two areas of variables are:

Branch specific variable.

Bank specific variable.

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 The branch specific variables are the variables under the control of the branch management
and directly affect its operations e.g.

 Layout of the branch.

 Customers’ relations.
 Departments in the branch
 ATM
 Online banking.

The bank specific variables are those variables, which are not in control of the branch
management e.g.

 History of ABL
 Services provided by ABL
 Role of ABL

Methodology of the study

Both primary and secondary data were used in compilation of the report.
Methodological tools used were:

Primary Data

 Personal Observations
 Discussion with Bank Personnel
Secondary Data

 Brouchers/Manuals of bank
 Annual reports 2013
 Journals, newspapers and news
 Internet

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 INTRODUCTION TO SECTOR

Banking History

Consensus on the origination of word “Bank” is not yet reached at. Some authors’
opinion is that this word is derived from the Italian words “Bancus” or “Banque”, which mean a
bench and they further relate banking business inception to Jews in Lombardy. Other authorities
state that the word “Bank” is derived from the German word “Back” which means “Joint Stock
fund” and later on due to German occupation of Italy, this word was italianated into “Bank.
Authors quote Babylonians (few quotes Chinese) who developed banking system as early as
2000 B.C.
Banking in Pakistan

Banking started in Pakistan after the bold and emergent decision of formulation of SBP
on Jul 30, 1948. Thereafter this sector has witnessed enormous growth. In 1974 banks were
nationalized, in the hope that new era of growth could be achieved through it. However, the
process is reverse since 1991, up till now MCB, ABL, and UBL have been privatized and HBL is
in the process of its privatization.

Meaning of banking

The Banking companies’ Ordinance, 1962 defines Banking as “Banking means accepting
for the purpose of lending or investment, of deposits of money from public, repayable on
demand or otherwise and withdrawal by checks, drafts, order, or otherwise.

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 INTRODUCION OF ORGANIZATION

Introduction

ABL is one of the largest banks in Pakistan, serving the Country for over 60 years in all
spheres at banking and financial Services

VISION

To become a dynamic and efficient bank providing integrated solutions and the first
choice of bank for all customers.

MISSOIN

 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
 Integrity
 Excellence in Service
 High Performance
 Innovation and Growth

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 HISTORY OF ABL

Established in December 1942 as the Australasia Bank at Lahore with a paid-up share
capital of PKR 0.12 million under the Chairmanship of Khawaja Bashir Bux, and his business
associates, including Abdul Rahman Malik who was amongst the original Board of Directors, the
bank had attracted deposits, equivalent to PKR 0.431 million in its first eighteen months of
business. Total assets then amounted to PKR 0.572 million. Today Allied Bank's paid up Capital
& Reserves amount to Rs. 10.5 billion, deposit exceeded Rs. 143 billion and total assets equal
Rs. 170 billion. The Allied Bank's story is one of dedication, commitment to professionalism,
adaptation to changing environmental challenges resulting into all round growth and stability,
envied and aspired by many.

1942 - 1947: Pre Independence

In the early 1940s the Muslim community was beginning to realize the need for the active
participation in the field of trade and industry. The Hindus had since the late 1880s established a
commanding presence in these areas and industry, trade and commerce in the undivided Sub-
continent was completely dominated by them. Banking, in particular, was an exclusive enclave
of the Hindus and it was widely believed, and wrongly so, that Muslims were temperamentally
unsuited for this profession.

It was particularly galling for Khawaja Bashir Bux and Abdul Rahman Malik to hear the gibe
that Muslims could not be successful bankers. They decided to respond to the challenge and took
lead in establishing this first Muslim bank on the soil of Punjab that was to become Pakistan in
December 1942; by the name of Australasia Bank Limited.

The initial equity of the Bank amounted to Rs 0.12 million, which was raised to Rs 0.5 million
by the end of first full year of operation, and by the end of 30th June 1947 capital increased to
Rs. 0.673 million and deposits raised to Rs 7.728 million.

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1947 to 1974: Australasia Bank

Australasia Bank was the only fully functional Muslim Bank on Pakistan territory on
August the 14th, 1947.

It had been severely hit by the riots in East Punjab. The bank was identified with the
Pakistan Movement. At the time of independence all the branches in India, (Amritsar, Batala,
Jalandhar, Ludhaina, Delhi and Angra (Agra)) were closed down. New Branches were opened in
Karachi, Rawalpindi, Peshawar, Sialkot, Sargodha, Jhang, Gujranwala and Kasur. Later it
network spread to Multan & Quetta. The Bank financed trade in cloth and food grains and thus
played an important role in maintaining consumer supplies during riot affected early months of
1948. Despite the difficult conditions prevailing and the substantial set back in the Bank’s
business in India, Australasia Bank made a profit of Rs 50,000 during 1947-48.

By the end of 1970 it had 101 branches. Unfortunately it lost 51 branches in the separation of
East Pakistan which became Bengladesh. The bank did well in despite losing lot of its assets. By
the end of 1973 the bank had 186 branches in West Pakistan.

1974 to 1991: Allied Bank

In 1974, the Board of Directors of Australasia Bank was dissolved and the bank was
renamed as Allied Bank. The first year was highly successful one: profit exceeded the Rs 10
million mark; deposits rose by over 50 percent and approached Rs 1460 million. Investments
rose by 72 percent and advances exceeded Rs 1080 million for the first time in bank history. 116
new branches were opened during 1974 and the Bank started participation in the spot
procurement agriculture program of the Government. Those seventeen years of the Bank saw a
rapid growth. Branches increased from 353 in 1974 to 748 in 1991. Deposits rose from Rs 1.46
billion, and Advances and investments from Rs 1.34 billion to Rs 22 billion during this period. It
also opened three branches in the UK.

1991 to 2004: Privatization

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 As a result of privatization in September 1991, Allied Bank entered in a new phase of its
history, as the world’s first bank to be owned and managed by its employees. In 1993 the First
Allied Bank Modaraba (FABM) was floated.

After privatization, Allied Bank registered an unprecedented growth to become one of the
premier financial institutions of Pakistan. Allied Bank’s capital and reserves were Rs. 1.525
(Billion) and assets amounted to Rs. 87.536 (Billion) and deposits were Rs. 76.038 (Billion).
Allied Bank enjoyed an enviable position in the financial sector of Pakistan and was recognized
as one of the best amongst the major banks of the country.

In August 2004 as a result of capital reconstruction, the Bank’s ownership was transferred to a
consortium comprising Ibrahim Leasing Limited and Ibrahim Group.

2005-upto date

In May 2005 Ibrahim Leasing Limited was amalgamated by transfer to and vested in with
and into Allied Bank Limited. ILL shareholders were issued ABL shares in lieu of the ILL shares
held by them. Application for the listing of ABL shares in all the Stock Exchange Companies of
Pakistan was made. ABL was formally listed and trading of the shares of the Bank commenced
w.e.f. the following dates.

 Islamabad Stock Exchange - 8th August 2005

 Lahore Stock Exchange - 10th August 2005
 Karachi Stock Exchange - 17th August 2005

Mohammad Aftab Manzoor has taken charge as CEO and President of the Bank on August 13
2007. He is an ex-president of MCB Bank Ltd.

Today

Today, with its existence of over 70 years, the Bank has built itself a foundation with a
strong equity, assets and deposit base. It offers universal banking services, while placing major
emphasis on retail banking. The Bank also has the largest network of over 900 online branches

11
and 700 ATMs in Pakistan and offers various technology-based products and services to its
diverse clientele.

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 STRUCTURE AND MANAGEMENT SYSTEM OF ABL

Board of Director

President and
CEO

Audit and Risk

Review Group

Strategic Planning
Group Finance Group

Special Asset Management

Branch Network

Branch
Manager

Operation Assistant Retail Credit Teller Cash

Manager Manager Banking Officer Officer
Officer
(RBO)

Security grads
13
BRANCHES IN PAKISTAN

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15
 MAIN OBJECTIVE

The main objective of the bank is to accept deposits and provide loans to its customers
and also to be more efficient in providing services. The bank maintained its commitment to most
efficient and personalized services to its customers. Allied Bank of Pakistan introduces many
remunerative schemes for its depositors and introduces computer services for the first time in the
banking history of Pakistan. Allied bank gives advances to small, medium and big industries,
commercial establishment, agriculture, construction companies and other needy persons. Allied
bank collects electricity gas and telephone bills from public and over hundred branches of Allied
Bank Ltd. deal in foreign exchange were facilities are given to financial and commercial so its
ultimate objective is to receive funds from the depositors and provides loans\credit facilities to
different sector including trade, industry and agriculture in its most branches.

BOARD OF DIRECTORS
Board of Directors
- Mohammad Naeem Mukhtar
- Sheikh Mukhtar Ahmad
- Muhammad Waseem Mukhtar
- Abdul Aziz Khan
- Mubashir A. Akhtar
- Pervaiz Iqbal Butt
- Akbar Sharifzada
- Sheikh Jalees Ahmed
- Tariq Mahmood
- Mubashir A. Akhtar
- (Chairman)
- Pervaiz Iqbal Butt
- Akbar Sharifzada
- Tariq Mahmood
- & Remuneration
- Committee
- Abdul Aziz Khan
- (Chairman)
- Muhammad Waseem Mukhtar
- Pervaiz Iqbal Butt

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MANAGEMENT HIERARCHY
The management hierarchy represents the different positions and designations in the
hierarchy of the ABL. However, this is not the reporting hierarchy but merely represents the
positions and grades on the basis of seniority and grades.

President

Senior Vice President

Vice President

Executive Vice President

Senior Executive Vice President

Regional General Manager

Branch Manager

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FUNCTIONAL HIERARCHY
The functional hierarchy represents the reporting order in the hierarchy of ABL. The
hierarchy has president and directors at top management level and officers Grade I, II and Grade
III at the lower level management of ABL. The middle level management consists of regional
general Manager and Regional Controller of Operations. These positions are not fixed. Any
person in the hierarchy above the branch manager can be appointed as RGM and controller
operations.
President and CEO

Board of Director

Head of Departments

Regional General Manager Controllers of Operation

Branch Manager

Office G-I, II and other lower Staff

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 MANAGEMENT TEAM
    

Asim Tufail Fareed Vardag

(Group Chief, (Chief Risk Officer)
Consumer & Personal
Banking)
       

Iqbal Zaidi Mohammad Abbas Sheikh

(Group Chief, (Group Chief, Special Assets
Compliance) Management)
       

Mohammad Aftab Muhammad Jawaid Iqbal

Manzoor (Group Chief, Coprate & Investment
(Chief Executive Banking)
Officer)
       

Muhammad Yaseen Mujahid Ali

(Group Chief, Treasury) (Group Chief, Information Technology)
       

Shafique Ahmed Uqaili Syed Shahid Raza

(Group Chief, Human (Head, Business Transformation Team)
Resources)
       

Tahir Hassan Qureshi Tariq Mehmood

(Chief Financial Officer) (Group Chief, Operations)
       

Waheed ur Rehman Zia Ijaz

(Company Secretary) (Group Chief, Commercial & Retail
Banking)

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 PRODUCTS AND SERVICES OF ALLIED BANK LIMITED

Allied Bank Limited (the Bank) offers a full suite of products and services, tailormade to
cater to the requirements of each segment of its customer base. We aim to provide
comprehensive solutions for all our customers, wherever they are located on their financial graph
including customers just beginning a banking relationship to those with more sophisticated
banking needs. Our customers have the advantage of nationwide network of over 950 online
branches with well informed and friendly staff, as well as 794 ATMs strategically located to help
provide ease of banking.

All-Time Banking

The customer will now have the convenience of withdrawing cash from any of ABL’s
ATMs (Auto Taller Machine) conveniently located in major cities at any time of the day or night
even on closed days/holidays. Other services include customer being able to inquire about the
balance of his/her account or printing an abbreviated (mini) statement showing the most recent
eight transactions up to the previous working day.

In order to obtain Allied Cash+ Card, the customers simply have to fill out prescribed
Application form. The dully-filled form should be handed over the Manager of the Branch where
the customer is maintaining his account. Non-account holders would first have to open an
account with Allied Bank to have access to this facility. The Customer can feel absolutely safe
his Allied Cash + Card because it can only be used with the Personal identification Number
(PIN), which is given to him by the bank. Graphical representations have been employed, where
appropriate, for ease of understanding.

E-Banking
Allied Direct Banking at your fingertips- Allied Direct (Internet Banking) offers convenience
from the desk to manage your bank account from anywhere, anytime. It offers features like fund
transfers, Utility bill payments, Mobile top-ups, Donations, e-shopping and much
more.

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Allied Umrah Aasan

This unique scheme facilities those persons, who cannot afford to incur the lump sum
expenses for Umrah. It allows the intending pilgrims (Aazmeen) to make payment of Umrah
charges in monthly installments.It is free of interest and markup.

Master Cards
The customer can now become the holder of a true Credit Card here in Pakistan. Allied
Bank under license from Master Card International, U.S.A. issues its Master Card to anyone
meeting the eligibility criteria. With the Allied Bank Master Card the customer is assured of a
service meeting the highest international standards maintained by Master Card.

The Allied Bank Master Card helps the customer pay without the complications of cash or
checks.

The customer has been an account holder with the Allied Bank to apply for the Allied Bank –
Master Card that is available to the customer for an initial fee of Rs. 2,000/- (Rs. 500/-
membership fee + Rs. 1,500/- annual fee). Once the customer obtains his card, he simply
presents it at Shops, Supermarkets, Hotels, Pharmacies, Nursing Homes, restaurants, Petrol
Pumps and hundreds of other establishments which display the familiar Master Card sign
throughout Pakistan and abroad.

Once purchases are made, the customer signs a voucher and that’s it he is not required to take
extra troubles. Every month the customer receives a statement showing details of transactions,
outstanding and the minimum amount due. The statements also give the last date for payment so
the customer can avoid paying service charges.

Allied Tahafuz Deposit Scheme

Brings the customer unparalleled life insurance covers along with attractive monthly profit.
Minimum Deposit amount – Rs. 50,000/- or multiples thereof. Insurance cover up to - Rs.
5,000,000/. As Competitive rate profit.

Allied Karzas Scheme (No Interest/Markup)

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 Allied Bank moves a step forwards by introducing interest free banking through Allied
Karzas Scheme. The aim of this scheme is to provide an opportunity to the depositors to take
advantage of a real Riba Free economic environment and avail.

 Deposit amount Rs. 100,000/- and multiples thereof.

Other Products

Home Remittances
The Bank having a network of more than 700 branches all over Pakistan, undertakes to
provide safe and instant payment of remittance from expatriates, routed through designated
foreign exchange companies and correspondent banks with whom special arrangements have
been made in this regard. Through the Allied Express Services, ABL ensures that beneficiaries’
Accounts in ABL branches are credited with in 48 hours of receiving home remittance
information from overseas.

Hajj Services

The Bank serves the intending pilgrims by helping them in performing this religious
obligation. The Hajj forms and other related services are provided by the bank. However, the
terms and conditions for accepting the Hajj forms from intending pilgrims are in accordance with
the Hajj Policy announced by the government, each year. Hajj applications are available with all
branches during Hajj season, immediately after the Hajj policy is announced by the Government
of Pakistan.

Utility Bills

All branches of the Bank collect utility bills of electricity, gas and telephones. For
convenience of the customers, Utility Bills are collected by the branches during banking hours
and also in the evening banking on all working days. Bills can be paid through cash or checks.
Consumers may drop bills with crossed checks into a drop box available at the branches under
“Checks Drop-in” system.

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Agricultural Finances

Bank under Agricultural Financing Schemes envisaged by the State Bank of Pakistan
extend short, medium and long term, farm and non-farm credits. The farm credits are extended
for production (inputs) and development purposes. Non-farm credits are allowed for livestock
(goats, sheep and cattle), poultry, factory including social forestry and fisheries (inland and
marine excluding deep sea fishing).

Lockers

Allied Bank Lockers are available in three different sizes Small, Medium and Large on a
yearly fee. Locker holders need not have an account in the bank but it should have enough
information for the documentation of locker operating.

Import Export Business/Trade Finance

ABL Provides highly efficient trade finance services for import/export business for our
clients/customers through large number of authorized branches where trained and motivated staff
is available to handle the business on behalf of customer.

Allied Bank Rupee Travelers Checks

Carrying cash to strange alien location can prove to be risky as a single incident can
render one without monetary backup of any sort. Hence banks introduce traveler’s checks in
order to protect against any contingency.

.Role of ABL in Banking Sector

ABL is one of the most dynamic and progressive bank in the banking industry of
Pakistan. This is due to its impressive growth and development, which it achieved during seventy
years of its existence. It did not take long for Allied to grow into one of the leading bank in the
country overtaking the several other banks which were its competitors were established earlier.

Contribution Before/At the Time of Independence

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 ABL was established as a response to the cal of Muhammad Ali Jinnah for having a
Muslim representative bank in him Sub Continent. At the time of independence when Pakistan
was in intense need of banking services and expertise, ABL rose to the occasion and rendered all
its expertise at best for the development of the newly born state.

Commitment to Serve the Customers

ABL used novel methods of customers service instead of conventional ways of the day,
which was market oriented and appealed to if customers. ABL’s dynamic, radical and
personalized style of banking differed significantly for the conventional business patterns of the
period. In fact every feature and aspect ABL’s behavior reflected highlighted those differences
most significantly, the commitment to serve the customers.

Better Working Environment

ABL has provided its employees a better working environment and salary structure and
facilities. Incentives and awards were given to promote efficiency and better service to
customers. A competitive environment was instrumental in introducing a thorough going
professionalism, which in the ultimate analysis transformed the entire outlook of the industry.

Modern Banking Policy

The expansion and growth of the banking sector in Pakistan has been remarkable. Until
1942, the growth of banking comprised the phases of laying the foundation of the banking
structure. The establishment of ABL has started a new era in the banking system. This was the
phase competition with the already established giants. Banking underwent a complete
metamorphosis; clients were naturally attracted to the bank, which provided better and quicker
banking services. When Allied Bank challenged the major banks of the time they began evaluate
their policies and were surprised to find that they had a lot to change before long. They began to
change and adopt a more modern and relevant strategy.

Deposit Mobilization

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 The banking sector as a whole and ABL in particular has played an important role in
helping to mobilized savings. The continuously rising importance of deposit money in total
money supply underscores the contribution of commercial banks in this direction.

From its inception, ABL has launched a number of successive drives for improving the deposit
base of the Bank. An essential part of each drive was to popularize the banking habit among the
people both rural and urban, and to bring a large number of customers into its orbit.

Branch Expenses

Soon after commencing business by the end of June 1942, only few branches had
been opened. The management decided to broaden the geographical coverage so besides the
cities, the bank branched out into small towns & the far-flung, less development and unbaked
areas of fulfill its social responsibility. The branches in small town and villages have been vital
help to the small industrialists and business, industrial workers, farmer’s craftsmen and other
persons of limited means. The bank had extended its network to more than 650 by the end of
Dec. 1973. At present the number exceeds 819 branches.

Home Remittances Handled

The Bank contributions in handling home remittances by overseas Pakistanis have also been
commendable.

Foreign Trade

The bank has always played key role in the promotion of foreign trade especially in financing of
exports. The bank’ achievement in the area is really commendable, as it has not only to compete
with the domestic banks but with the large international financial agencies as well.

Interest Free Banking

The Islamization of economic system in Pakistan began from July 1979. In Jan 1981 the
PLS banking was launched. Interest free modes of financing had been introduced, and in the first
half of 1985 a number of measures over taken for complete charge over of the whole system of
domestic banking to non interest basis. And finally the process of transaction from interest base

25
to non-interest banking was completed. Since the banking companies are not allowed to accept
deposits (excluding foreign currency deposits) except on the basis of Profit & Loss sharing.

A separate department at the head office was set up which was later on upgraded into a full-
fledged Islamic banking division apart from supervising the Islamic banking operations. The
division has conducted research and has been able to add to the literature on Islamic banking,
both of theoretical and practical significance.

Computerization

While mechanization in ABL, began as early as in 1950’s the bank also took the lead in
introducing computers in banking operation in Pakistan and now ABL is connected to its
branches through online banking.

Utility Booths

The bank has 34 utility booths throughout of country to accept payments, both in the
morning and in the evening against utility bills, such as gas, electricity and telephone bills. The
bank also issues television licenses.

Prize for Success in Banking Diploma Examination

The bank instituted prizes for those securing highest position in bank diploma
examinations. In 1993, three bonuses were awarded in a single year to recognize and reward to
services and achievements of its employees.

Obligation to Serve Society

ABL also plays it part in the development of society. It has established public libraries in
many cities and towns.

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 INTRODUCTION TO THE DEPARTMENTS

ABL SAHIWAL GHAURI CHOWK BRANCH

(Branch code = 0351) Address: Ghauri Chowk Sahiwal.

I did my internship of eight weeks in ABL GHAURI CHOWK BRANCH (0351) from
27-05-14 to 27-08-14. It is one of the small branches of ABL, which is yet to be renovated. I
selected this branch because of two reasons. First, I was of the view that one can find more
learning opportunities in a small branch as compare to a big one. Secondly it is situated near to
my residence.

In the same branch different departments of ABL are working. So I got the opportunity to know
briefly about every department.

CUSTOMER SERVICE DEPARTMENT

This is the department which is dealing with customers and convinced them towards to
open the accounts and persuading them to indulging in many other activities of bank, these
departments serving the customers in the various ways.

The above two departments activities are actually starting from here it can be say that
customer service department is composed of the foreign currency departments and credit
departments.

OPERATION DEPARTMENT

Computer Operations

In ABL Ghauri chowk Branch the computer section performs several duties that are as under

Daily Transactions

27
 To record all the transactions in case of deposits made by the people and also to record all the
withdrawals made by the people or customers. Each transaction has to be recorded in its
appropriate head of account with the help of prescribed codes.

Vouchers

To record all the vouchers made by the remittance department. Remittance department have
to prepare debit and credit vouchers for about every transaction recorded in their department.
Then these vouchers are sent to computer operator to record those in computer.

Advices

To record all advices received from other branches. Most of the-inter branch or intra branch-
remittances are subject to ultimate receipt of advices from the corresponding branch to
materialize the transactions. These advices also have to be recorded in computer.

Statements

To close the daily record a number of statements have to be printed out. Statements like:

 Day’s transactions (sequence)

 Overdrawn facilitated a/c statement

 Markup sheet

 Inter branch transactions

 Detail of PLS and Current a/c

• Day’s transactions (a/c wise)

• Operative, Dormant, Inoperative and Unclaimed a/c

 All ATM transactions

 Detail of GL entries (official & non customer transactions)

 Summary of all a/c (debits, credits & balances)

 Profit due, transferred, disbursed, etc.

28
 .

CLEARING DEPARTMENT

In clearing process, if the account holder of ABL receives the cheque of other bank like
Meezan Bank, Habib Bank Limited etc, and he submits it in ABL branch to be cashed. At the
same time the clearing process starts. First the bank name. Cheque number and the amount are
written in the register. After this three kind of stamps are required first bank name stamp,
secondly clearing stamp of next date and If the cheque is not local then the inter city clearing
stamp is required.

Some cheques are local and some are from out of city. The institution N.I.F.T. provides the
services in clearing the cheque. They send the different cheque to different banks. The N.I.F.T
service is now available almost every city except some of areas. The cheque of inter city is send
through N.I.F.T. And where, the N.I.F.T service is not available so the cheque is sent through
T.C.S.

OUT WARD BILL FOR COLLECTION(OBC)

OBC means the cheque of other banks. When they sent to OBC the OBC is credit & OBR
is debited and the advice is made on that time, one copy is remain in the bank and the other copy
is sent to the related branch. When they realized the opposite entry is made. It is entered in the
OBC register. The income A\c commission is credited, and postage.

INWARD BILL FOR COLLECTION(IBC)

IBC means the cheques we receive(inward) from other banks. When we receive cheques from
other banks and related its branches for the settlement of home bank.

 Remittances departments activity is also performing by clearing department.The

remittances department transfers the funds from one bank to other bank and from one
place to another place.

29
In remittances department the collection take place. The ABL made payment of only open
cheques on the counter and prohibits the payment of crossed cheques.ABL transfers money from
one place to another by the following means:

Mail Transfer

When a customer requests the bank to transfer his money from this bank to any other bank or
the branch of some other bank, the first thing he has to do is to fill an application form. In which
he states that he/she wants to transfer the money from this bank to that bank by mail. If the
customer is the account holder of the bank, operating personal will proceed further with steps
like:

 Writing a debit voucher for a/c holder’s a/c

 Preparing an advice in favor of stated bank/branch

 Writing credit voucher for GL

 Mail the advice

If the customer is not the account holder of this bank, then firstly, he has to deposit the money
and than above procedure will be adopted to transfer his money.

Pay Order

Pay order is the most convenient simple and secure way of transfer of money. It is issued by,
drawn upon and payable by the same branch of the bank. It is neither transferable nor negotiable
and as such it is payable to the payee named there in. The following are the parties to a pay
order.

 Purchaser is a person, firm, company or local authority.

 Issuing/paying branch is one which issues/pays on presentation.

 Payee is a person named there in.

Demand Draft

Demand Draft is another way of transfer of money from one bank to another bank.
Unlike pay order, a form is required to be filled for the issuance of the demand draft in which
30
necessary particulars about the beneficiary and sender are given. The sender deposits the amount
of DD plus commission and other charges on the bank counter, from where he is given a receipt
and in accordance with this receipt he is issued.

CASH DEPARTMENT

This is the most important and critical department in a Bank. There are two basic functions
performed by the cash department. These are

Receipts

An individual who has account in the Bank can deposit money in his account. For deposit
of the money the individual has to fill the deposit slip in which the account holder writes his
name, Account number, amount of the money both in figures and in words.

After filling the deposit slip the Cash amount along with the deposit slip is submitted with the
cashier. The cashier collects the cash and counts it and after verification the cashier stamps the
deposit slip. One part of the deposit slip is given back to the customer and the other part of the
deposit slip remains with the bank for the record purposes

.Bill collection is also one of the main functions of bank. Cashier has to prepare a list of bills’
serial number, a copy of which is to be sent to the corresponding organization.

Payments

The procedure of clearance of a cheque or payments is as following. First of all the

customer presents his cheque to the cashier The cashier records the account number and the
amount, which is to be drawn. Then the cashier check the cheque number in the computer for the
verification whether the account holder has such amount in his account which he is demanding
or not. If the computer passes the cheque, the Passing officer signs the cheque and sent it to the
cash counter then cashier pays the written amount to the customer and then in the end cashier
records the amount paid in computer.

31
 KINDS OF ACCOUNT

There are numbers of account that ABL offers to its customer keeping in mind their
needs and dealing

SAVING BANK ACCOUNT P & LOSS ACCOUNT

In Pakistan the saving Bank accounts are know as profit and profit and loss sharing accounts
(PLS A/C) fowling the illumination of bank. The owners of such account are not allowed to
withdraw money more than once are twice a week. In case of withdrawal of large sum, the
depositor is required to give to prior notices a week or two. Thus the bankers are not required is
always available to bank for giving to loans to their customers. Thus these deposits also serves as
source of credit certain by the commercial banks.

The rate or profit on this type of account varies from time to time. All the commercial
banks declare the rate of profit every year that is paid on these accounts on the basis of their
monthly credit balance. The bank will determine the proportion of profit & its decision will be
final. Profit will be determined on daily product basis while it will be paid on monthly basis &
will be paid on the minimum balance between the first day & last day of the month. Zakat will be
deducted on the exceeding amount as exempted from the Zakat deduction. Taxes will be
imposed according to the rules & regulation.In Pakistan post offices & national saving centers
also maintain this savings bank account to encourage saving habits among the people.

At the time of opening this account, a minimum amount of Rs.1000 is to be deposited.

Subsequently the account is opened & account number is located. The depositor is given a
cheque book. There are numbers of account that ABL offers to its customer keeping in mind
their needs and dealing

CURRENT ACCOUNT

32
 There is no limit of withdraw of money from these accounts. In practice the bankers do
not allow any profit to such deposits in Pakistan. The customers are required maintaining the
minimum credit balance in their account in case of failing incidental charges are recovered from
defaulters. This is because the depositors may withdraw current deposits at any time and as such
the bank is not entirely free to employ such deposits. In general, the bank allows the overdraft
facilities to current account holders & the prevailing rate of markup is charged from these
customers.

In ABL the minimum amount required to open the current account is

Rs. 1000. No profit is paid to account beside this that the account holder has the facility to taking
s much money as he wants.

Individual account is opened in the name of the single personal one person on whose
name it is opened only conduct it. While two opens joint account and partnership account are
more person and the bank fallow their instructions for the conduct of the account. Similarly
limited companies can also open their current account.

These deposits are also called as time deposits because these deposits are based on the
fixed duration. The period for which these deposits are kept with bank are ranged from seven
days to ten years in light of the agreement between the customer and the banker. The profit
allowed on these account depend on the duration longer the duration of the deposits the higher
will be the rate of profit.

The operation of fixed account is different from saving & current accounts. Every time
money is deposited with the bank an application from filled and the bank issue a fixed deposit
receipt for amount deposited along with specific period. Fixed deposit receipt is given to the
depositor and the bank retains the counterfoil of the same receipt.

Fixed term deposits may be in the joint names of two or more person. The payment to
one of those people will not discharge by the bank without the authority of others.

OPENING AND OPERATION OF BANK ACCOUNT

33
 As discuss earlier there is a prescribed procedure for opening different types of account .
Following steps re followed while opening a new account.

Application from for Opening of Accounting

A person who wishes to open a bank account is required to complete this from personal
information is to be furnished. The application signs the declaration to effect that he has
understood the rules and regulation of the bank.

Introduction

As required by the banking law the new customer needs to be introduced by the account
holder of the same branch where the account is being opened. The manager or any other bank
officer may introduce the new customer if they know them personally.

Signature card

At the time of opening an account a specimen signature card containing two signature
of the customer is required which the manager of the branch attaches with application
form. During the operation of account the signature is verified when the cheque is presented
for payment.

Cheque Book

After completing formalities for opening saving and current a cheque book s
issued to the customer for withdrawing cash from his or her account at the time of need. The
cheque contains minimum 25 pages & maximum 100 pages. The bank also charges excise duty
on cheque book. 1 cheque amount is 10 rupees.

FOREIGN CURRENCY ACCOUNT

The ABL is also giving the facilities of foreign currency account as well as Pak rupee
account. Foreign currency department is also playing a vital role in the banking and it becomes
immense source of earning. In the Allied bank the foreign currency account can be opened in
many currencies but the four main currencies are:

34
  US Dollar (USD)
 Euro (EUR)
 Japanese yen (JPY)
 Sterling Pond
Foreign currency account can be opened in many accounts such as:

 Current account
 Saving account
 Term deposit account

35
 FINANCIAL ANALYSIS
Allied bank limited
Balance Sheet
Horizontal Analysis
2013 % 2012 % 2011 % 2010 % 2009 % 2008
ASSETS
Cash and balances with 15
treasury banks 45775 3% 44381 16% 38159 20% 31845 % 27716 8% 25751
-
Lendings to financial 16 687 59
institutions 12461 % 10721 % 1362 -88% 11489 % 28123 78% 15793
36 28
Investments - Net 363379 % 267403 37% 195694 61% 121173 % 94789 15% 82646
Advances - Net 267001 -2% 271084 11% 244433 -3% 252345 6% 237344 11% 212972
11 23
Operating fixed assets 22084 % 19871 10% 18087 18% 15360 % 12447 12% 11134
16
Other assets 23496 % 20245 11% 18185 3% 17719 -1% 17955 -2% 18399
Total assets - net of 73419 16 51592
provision 6 % 633705 23% 0 15% 449931 8% 418374 14% 366695
LIABILITIES
18 13
Customer deposits 608412 % 514707 29% 399562 8% 371284 % 328875 11% 297475
- -
15 141 48
inter bank borrowings 32952 % 38916 -22% 49993 % 20774 % 39819 43% 27778
-
21 30
Bills payable 4879 % 6203 54% 4015 -3% 4119 % 3162 7% 2952
11
Other liabilities 17513 7% 16351 23% 13325 8% 12284 % 11061 -19% 13636
-
23 120
Sub–ordinated loans 4242 % 5490 0% 5493 0% 5495 0% 5497 % 2498
66799 15 47238
Total liabilities 8 % 581667 23% 8 14% 413956 7% 388414 13% 344339

Represented by
Share capital 10410 10 9463 10% 8603 10% 7821 10 7110 10% 6464

36
 % %
14 14
Reserves 12438 % 10899 24% 8763 17% 7517 % 6583 13% 5805
30 30
Un-appropriated profit 30855 % 23688 16% 20447 29% 15829 % 12198 43% 8537
22 20
Shareholder Equity 53703 % 44050 16% 37813 21% 31167 % 25891 24% 20806
Surplus on revaluation of 56 18 163
assets – net of tax 12495 % 7988 40% 5719 19% 4808 % 4069 % 1550
27 20
Total Equity 66198 % 52038 20% 43532 21% 35975 % 29960 34% 22356

INTERPRETATION:

ASSETS
In 2013 there is 3% increase in cash and balances with treasury and other banks (2013-2012), in
2012 there is 16% increase (2012-2011), in 2011 there is 20% of increment (2011-2010).in 2010
there is 15% increase (2010-2009) but in 2009 there is smaller change or increment 8% from
2009 to 2008.

In 2013 there is 16% increase in lending to financial institution from 2013 to 2012. There is
highest increase in 2012 which is 687% and smallest or lowest increase in 2009-2008 which is
78% and there is negative change in 2011 and 2010.

In 2013 there is 36% increase in investment but the higher change in investment is 61% which is
in (2011-2010) and in previous between (2009-2008) there is small investment change.

In 2013 there is -2% decrease from advances but from previous year there is higher change in
advances of maximum 11% and minimum 2%.

In 2013 there is 11% of increment in operating fixed assets but in previous year it was more in
2010 and in 2009 but good enough in 2008.

In 2013 there is 16% of increase in other assets even that in previous years there was minor
change in other assets and in 2009 there is decrease in other assets by -1%.

37
LIABILITIES AND EQUITIES

In 2013 there is 18% of increase customer deposit in Allied bank but in 2012 there was more
deposit ratio and in previous years there was average change or increase in customer deposits.

In 2013 there is negative change in Inter bank borrowings by -15% but in 2011-2010 there are
higher changes over the six years.

In 2013 there is -21% decreases in bills payable which is good for the organization but in
previous year there was high bills payable.

In 2013 there is less liability to pay by 7% but in 2012 it was high liability for payment and in
2009-2008 there is negative liability to pay.

In 2013 there are -23% sub-ordinate loans but in previous to three years sub-ordinated loans are
0.

In Share Capital there is continuously change of 10% from the last 5 years.

In 2013 there is 14% increase in Reserves which is lesser than from the previous year. In 2009
and 2010 there is 1% increase of reserve. For meeting the urgent needs or better performance
organization should have to increase their reserves.

In 2013 there is better Un-appropriated profit of 30% from the last years but this profit was more
in 2009-2008 which was 43%.

In 2013 there is more of surplus 56% over the five years. In previous year surplus are 40%, 19%
etc.

38
 Allied bank limited
Income Statement
Horizontal analysis
2013 % 2012 % 2011 % 2010 % 2009 % 2008
Mark–up / return / interest 5422
earned 2 10% 49503 -4% 51814 15% 44993 9% 41122 35% 30571
Fee, commission and
brokerage income 3711 17% 3169 -7% 3395 17% 2910 -16% 3470 6% 3266
Capital gain, Dividend 195
income a 4645 -55% 10353 % 3507 40% 2511 2% 2452 56% 1571
467 - 597 -
Other income 1247 358% 272 % 48 81% 251 % 36 39% 59
Total income 63825 1% 63297 8% 58764 16% 50665 8% 47080 33% 35467
-
Mark–up / return / interest 3255 - - - - -
expensed 2 5% 31142 17% 26643 19% 22428 0% 22422 30% 17273
- - - -
Operating expense 15884 6% 14957 9% 13745 19% 11567 19% -9706 14% -8513
-
Provisions-(charge)/reversal -628 -54% -1362 -58% -3267 24% -4326 -2% -4416 24% -3561
taxation -118 -97% -4195 -16% -4969 21% -4118 21% -3414 74% -1964
Total expense-percentage of - - - - - -
total income 49182 -5% 51656 6% 48624 15% 42439 6% 39958 28% 31311

Profit after taxation (Net

Income) 14643 26% 11641 15% 10140 23% 8226 16% 7122 71% 4156

39
40
INTERPRETATION

REVENUES
In 2013 there is 10% increase in revenue; in 2012 there is decrease revenue by 5% but revenue
also incremented in 2008-2009 years.

In 2013 there is 17% increase in Fee, commission, brokerage and exchange income, but in
previous years there is low tendency of increase it is higher increase over the five years.

In 2013 there is decrease in -55% in capital gain and dividend income but from last four years
there was not reduction even that capital gain and dividend income most increase by 56%.

In 2013 there is small increase in other income rather than previous years, there is more increase
in 2010-2009 by 597%.

EXPENSES

In 2013 there is 5% of increase interest expense but in previous years interest increased by 19%,
30% etc.

In 2013 there is 6% of increase operating expenses and over the last three year it was
continuously increasing but in 2009 it was again decrease by 14 %( 2009-2008).

In 2013 there is negative provision by -54%, in 2012 it was -58% but in 2009-2008 it was 24%.

In 2013 there is taxation 0f -97% but in 2009-2008 there was higher taxation by 74%.

41
 Allied bank limited
Income Statement
Vertical analysis
2013 % 2012 % 2011 % 2010 % 2009 %
Mark–up / return / interest earned 54222 85% 49503 78% 51814 88% 44993 89% 41122 87%
Fee, commission and brokerage
income 3711 6% 3169 5% 3395 6% 2910 6% 3470 7%
Capital gain, Dividend income and
unealized loss 4645 7% 10353 16% 3507 6% 2511 5% 2452 5%
Other income 1247 2% 272 0% 48 0% 251 0% 36 0%
6382 100 6329 100 5876 100 5066 100 4708 100
Total income 5 % 7 % 4 % 5 % 0 %
- - - - -
Mark–up / return / interest expensed 32552 -51% 31142 -49% 26643 -45% 22428 -44% 22422 -48%
- - - - -
Operating expense 15884 -25% 15884 -25% 15884 -27% 15884 -31% 15884 -34%
Provisions-(charge)/reversal -628 -1% -1362 -2% -3267 -6% -4326 -9% -4416 -9%
Taxation -118 0% -4195 -7% -4969 -8% -4118 -8% -3414 -7%
- - - - -
Total expense-percentage of total 4918 5258 5076 4675 4613
income 2 -77% 3 -83% 3 -86% 6 -92% 6 -98%

1464 1071
Profit after taxation (Net Income) 3 23% 4 17% 8001 14% 3909 8% 944 2%

42
 Allied bank limited
Statement of Financial Position
Vertical Analysis
2013 % 2012 % 2011 % 2010 % 2009 %
ASSETS
Cash and balances with
treasury banks 45775 6% 44381 7% 38159 7% 31845 7% 27716 7%
Lendings to financial
institutions 12461 2% 10721 2% 1362 0% 11489 3% 28123 7%
Investments - Net 363379 49% 267403 42% 195694 38% 121173 27% 94789 23%
Advances - Net 267001 36% 271084 43% 244433 47% 252345 56% 237344 57%
Operating fixed assets 22084 3% 19871 3% 18087 4% 15360 3% 12447 3%
Other assets 23496 3% 20245 3% 18185 4% 17719 4% 17955 4%
100 63370 100 51592 100 100 41837
Total assets 734196 % 5 % 0 % 449931 % 4 100%
LIABILITIES
Customer deposits 608412 83% 514707 81% 399562 77% 371284 83% 328875 79%
inter bank borrowings 32952 4% 38916 6% 49993 10% 20774 5% 39819 10%
Bills payable 4879 1% 6203 1% 4015 1% 4119 1% 3162 1%
Other liabilities 17513 2% 16351 3% 13325 3% 12284 3% 11061 3%
Sub–ordinated loans 4242 1% 5490 1% 5493 1% 5495 1% 5497 1%
58166 47238 38841
Total liabilities 667998 91% 7 92% 8 92% 413956 92% 4 93%

Net assets 66198 9% 52038 8% 43532 8% 35975 8% 29960 7%

Represented by
Share capital 10410 1% 9463 1% 8603 2% 7821 2% 7110 2%
Reserves 12438 2% 10899 2% 8763 2% 7517 2% 6583 2%
Un-appropriated profit 30855 4% 23688 4% 20447 4% 15829 4% 12198 3%
Shareholder Equity,
Equity Tier 1 53703 7% 44050 7% 37813 7% 31167 7% 25891 6%
Surplus on revaluation of
assets – net of tax 12495 2% 7988 1% 5719 1% 4808 1% 4069 1%
Total Equity 66198 9% 52038 8% 43532 8% 35975 8% 29960 7%

43
 FINANCIAL RATIOS ANALYSIS
The user of financial statements finds it helpful to calculate ratios when they interpret
company’s financial statements. A financial ratio is simply one quantity divided by another.
Ratios focus on special relationship between two items of balance sheet, income statement or one
from each. Ratios make it easier to understand a specific relationship between various items of
financial statements then looking simply at the raw numbers themselves. The number of financial
ratios that might be created is virtually limitless, but there are certain basic ratios that are
frequently used.
Liquidity ratio

It tells the firm’s ability to satisfy its short term obligations as they come due.

1) Current ratio:
current assets/current liabilities
Higher the current ratio, the more liquid the firm is considered.

  2013 2012 2011 2010 2009

Current ratio 0.50 0.58 0.63 0.75 0.79

44
 Current ratio
0.90
0.80
0.70
0.60
0.50
0.40 Current ratio
0.30
0.20
0.10
0.00
2013 2012 2011 2010 2009
Years

Graph representation:

In current ratio there is ability to pay current liability more in 2009 but it little bit
decrease in 2010 and then onward it decrease up till now 2013. It means after the 2009 it was less
ability to pay the current liability of Allied Bank.

2) Net Working Capital:

current assets – current liabilities

  2013 2012 2011 2010 2009

Net working capital -321006 -233640 -169616 -100498 -78673

45
 Net working capital
0

-5

-10

-15

-20

-25

-30

-35

Graph representation:

Net working capital is not favorable from (2009-2013).

Leverage Ratio
 Thedebt to equity ratio is a financial leverage ratio. Financial leverage ratios are used measure a
company's ability to handle its long term and short term obligations.

Three types of Leverage ratio:

1) Debt Ratios:
It measures the proportion of total assets financed by the firm’s creditors. The higher the
ratio, the greater the firm’s degree of indebtedness and more the financial leverage it has.
Debt Ratio = Total liabilities/ Total assets

  2013 2012 2011 2010 2009

Debt Ratio 90.98% 91.79% 91.56% 92.00% 92.84%

46
 Debt Ratio
93.00%

92.50%

92.00%
Debt Ratio
91.50%

91.00%

90.50%

90.00%
2013 2012 2011 2010 2009

Graph Representation:
The ratio indicates, more than half of the assets are financed by debt but the ratio is greater in
2009. Debt ratio indicate the greater the risk and more financial leverage it has. It also shows that
firm has paid some portion of the debt during the year 2011 and 2013.
2) Debt equity ratio:
total debt/total equity

  2013 2012 2011 2010 2009

Debt equity ratio 10.09 11.18 10.85 11.51 12.96

Debt equity ratio

14.00
12.00
10.00
8.00 Debt equity ratio

6.00
4.00
2.00
0.00
2013 2012 2011 2010 2009
47
Graph Representation:
As the debt of a company increases, the debt to equity ratio increases as well. Firm have
ability to pay debt more in 2009 but after in that its ability of paying debt down.

3) Time interest earned ratio:

Times interest earned (also called interest coverage ratio) is the ratio of earnings before interest
and tax (EBIT) of a business to its interest expense during a given period. It is a solvency ratio
measuring the ability of a business to pay off its debts.

Time interest earned ratio: EBIT

Interest Expense

  2013 2012 2011 2010 2009

Time interest earned ratio -0.45 -0.51 -0.57 -0.55 -0.47

Time interest earned ratio

- Time interest earned

ratio
-

Graph Representation:
The finding of this ratio indicate that organization has no ability to pay interest.

Profitability Ratio

48
 Profitability ratios enable us to evaluate the firm’s profit with respect to a given level of
sales, a certain level of assets or the owner’s investment.
The profitability ratios are of following types:
1) Gross Profit Margin
It measures the percentage of each sales dollar remaining after the firm has paid for its goods.
Gross Profit Margin = Gross profit / Sales

  2013 2012 2011 2010 2009

Gross profit
margin 40.0% 37.1% 48.6% 50.2% 45.5%

Gross profit margin

60.0%

50.0%

40.0%
Gross profit margin
30.0%

20.0%

10.0%

0.0%
2013 2012 2011 2010 2009

Graph Representation:
In 2013 gross profit margin of the bank is 40.0%. It is less in the previous year but
greater in 2011 and 2010, it also decrease in 2009 so the firm needs to cut its cost of goods sold
in order to increase its gross profit margin.

2) Operating Ratio:

49
 A ratio of a company's operatingincome to its sales. A higher operating ratio is considered id
eal because it indicates that, inthe event of a decline in sales or revenue, a company will maintain 
profitability.

Operating Ratio : Operating profit/ Sales

  2013 2012 2011 2010 2009

Operating ratio 28.53% 34.95% 35.58% 37.13% 36.60%

Operating ratio
40.00%
35.00%
30.00%
25.00%
Operating ratio
20.00%
15.00%
10.00%
5.00%
0.00%
2013 2012 2011 2010 2009

Graph Representation:
It measures the percentage of each sale dollar remaining after all costs and expenses including
interest, taxes and preferred stock dividends have been deducted.

3) Net Profit Margin:

It measures how much out of every dollar of sales a company actually keeps in earnings.
Net Profit Margin = Net Income/ Sales

  2013 2012 2011 2010 2009

Net profit margin 27.01% 23.52% 19.57% 18.28% 17.32%

50
 Net profit margin
30.00%

25.00%

20.00%
Net profit margin
15.00%

10.00%

5.00%

0.00%
2013 2012 2011 2010 2009

Graph Representation:
Net profit margin is 27.01% in 2013 that is more than from the previous years. It is continuously
increasing from (2009-2013) that is really fruitful for Allied bank limited.

4) Return on Asset:
It measures the overall effectiveness of management in generating profits with its available
assets.
Return on Assets = Net Income / Total Assets

  2013 2012 2011 2010 2009

Return on Asset 1.99% 1.84% 1.97% 1.83% 1.70%

51
 Return on Asset
2.05%
2.00%
1.95%
1.90%
1.85% Return on Asset
1.80%
1.75%
1.70%
1.65%
1.60%
1.55%
2013 2012 2011 2010 2009

Graph representation:
The return on investment/Asset of the bank is 1.99% in 2013. It is greater than the previous
years. It shows that the firm generates Rs. 1.99% for each Rs. 100 of the investment.

5) Return on Equity:
It measures the return earned on the common stockholder’s investment.
Return on Common Equity = Net Income/ Common stock equity

  2013 2012 2011 2010 2009

Return on Equity 27.27% 26.43% 26.82% 26.39% 27.51%

Graph
representation:
The findings on equity are 27.27% in 2013 which is greater than that of previous years. But in
2009 it is greater than 2013 ratio.It is quite satisfactory. This ratio is used for measuring the over
efficiency and performance of the firm as the primary objective of firm is to maximize its profits.

52
 SWOT ANALYSIS

The SWOT analysis is a comprehensive and critical overview of the operations,

procedures, rules and regulations, services and other related activities, the analysis include the
analysis of ABL Bank Ghauri Chowk Shaheen road Sahiwal branches in the light of the
entire branch and Bank specific variables which directly or indirectly affect the operations of the
branch. The tool selected for the analysis of organization is SWOT analysis.

SWOT analysis is an acronym that stands for Strengths Weaknesses, Opportunity and
Threats. This is a careful evaluation of an organization’s strengths to avail an opportunity by
overcoming its weaknesses and phasing out all the threats to its survival in order to grow and
survive.

STRENGTH:

 The First Muslim bank and that is established first time in the soil the of Pakistan is not
the other bank, it is the Allied Bank Limited. And hence it has earned a great reputation.

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  Allied Bank has a well-engineered structure and a timely execution and hence having a
successful transaction.
 The branch is situated in the commercial hub of Sahiwal. This location provides a
competitive edge to the Branch.
 The branch is situated in commercial area were business activities perform greater as
compare to residential area. Thus it increases the number of customers.
 This branch is provided with latest computer Software T24 which increases the speed of
computer work.
 he Branch has the most experienced and the least experienced staff, which is a good
combination of experienced heads.
 The branch is linked through an Online Network of Branches, it enables them to serve
customer in better way.
 ABL has a very large impressive network of branches i.e. 900 in over 300 cities and
towns.
 ABL has local branched as well as international branches.
 The branch has facility for receiving and satisfying complaints and inviting suggestions.

WEAKNESSES:
 The organization is very much mechanistic and provides no flexibility to encourage
creativity.
 The technical training of the staff is negligible e.g. in case of the absence of computer
there is no alternate trained personal who can record the daily transactions.
 The organizational culture and members are not fully cooperative.
 The control of manager is not effective.
 The branch has no industrial accounts.
 Foreign currency department and account not properly maintain.
 The filing system is not up-to-date. Much time is wasted while searching foreven a week old document
 There is a high part of favoritism, and mostly employees are hiring on the basis of
nepotism and references.

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  Branch has not providing any type of financing to customers e.g
o Long term financing
o Short term financing
o Car Financing
o Home Financing
 Branch has less furniture than requirement, and less sitting arrangements.
 ATM and online facility is yet provided by branch but it’s functioning is not very
appropriate. Often the ATM machine and online system is not working and hence many a
times the customers get disappointed by the services of the branch and they go another
bank for transferring the online transactions.
Opportunity:
 The branch is located in a commercial area hence it’s location is the big opportunity for
the bank to attracting the customers at a large scale.
 ABL is not yet giving the facilities of car financing and house financing to their
customers. It is a big opportunity for ABL to expending it’s business at a more large scale
by starting the business of car ,house financing and business financing.
 The location of the ABL, Tench Bazaar branch itself provides an opportunity toABL to get more and less
cost deposits.

Threats:
 Increase in competition due to increasing number of foreign and domestic private banks
offering highly specialized and attractive services. Although it is ahead of many banks
like HBL is a constant threat to UBL.
 The biggest threat to the operational success of the branch is the better competitor’s
services. Many private sector banks are offering higher rates of return to customers than
Allied Bank of Pakistan.
 One of the biggest to the ABL, Tench Bazaar branch is the increasing rate of dissatisfies customers. Most
of these customers were observed to be dissatisfied with the delays in their servicing.
 Extensive promotion campaigns run by competitors.

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 CONCLUSION
This SWOT Analysis is a mirror image of the bank’s present conditions. Some efforts
are made and others are still required to be made in order to improve the situation. The
management can develop elaborate strategic plans for capitalizing the available
opportunities. The bank should maintain principal of professional management and
adhere to sound and sophisticated banking rules and regulations so that confidence and
trust of the public in the institutions could be re-earned.

My LEARNING IN ORGANIZATION

The field of banking has always been a source of inspiration for me during my entire
academic career. To work in a bank, to acquaint with its working mechanism was always a point
of interest for me and ALLAHA gave me a golden opportunity to complete my internship at
ABL, one of the leading bank in Pakistan and well known in world due to its appearance in the
international markets.

People there I found are really very supportive and helps me a lot in learning new things
and also how to tackle with work activities.To adjust myself in such a large commercial
organization was not an easy task, but by the grace of Almighty Allah aids my internship in a
befitting manner and I learned a lot about the overall banking arena. This expanded my vision
about the banking sector, which in turn enabled me to make an appraisal of the economic
situation of our country.

I have exclusively studied and observed the operations/ functioning of the bank and tried
my best to abreast myself with all the dimensions of the banks.

In my 8 weeks Internship, I learned about the all basic operations of the bank. The
services and the product it offers to its customer like E-banking services basic function of all
departments of bank.

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 Like in accounts department the type and nature of account, how to open an account what
are its requirement and procedure. In remittance activities, the procedure for demand draft,
telegraphic transfer and uni-remote

ABL is full of experienced and professional traditional bankers. As it perfectly suit the
environment we are operating in, you attitude has helped ABL in capturing masses. In the private
sector, no doubt it’s a fast growing bank, but here's something that's still unrealistic to the policy
makers. The line of unsatisfied customers is increasing, not because we are not serving well, it's
because customers are not understanding the YOU attitude right.
Every customer wants to make sure his work is done at the first convenience, but they
are not concerned about the responsibility with which every employee is working. We need to
put in some guidelines for our customers, as they walk in. This will not only save their time but
will also motivate staff members to work more promptly, because if customer and employee
engage into some unhealthy quarrel, the whole environment will be disturbed. Back to my real
learning. In my eight week Internship, I worked in customer service department, as well as in
clearing department and more in operation department. Because of some work load, I was unable
to learn much about other cash and accounting department. Here is my countdown learning of
eight weeks.
Account Opening
My initial five days at customer service department was the liveliest experience of my
internship. Though physically I was there just to assist the account opening officer, but it turned
out to be much more for me. That is when I first actually imitated as a presenter of ABL to
customers, when to many people, I'm their hope.
ABL offers a variety of options for anyone; to everyone. You are an investor, regular
businessman, middle man, salaried person or a house wife; ABL serve you in every way it can
through its commendable and reliable services, because at ABL, YOU come first.
Working at Customer Service Department, I did counter with different types of customer
and opened their accounts under the supervision of the officer. When you have the sole
responsibility to open the accounts, it's always very important to understand the needs of your
customer. Understanding the psyche of customer is very important. Until and unless you're

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completely satisfied that the customer has genuine reason and need to open the account, don't do
so.
Currency and type of account
It offers you all the eight different typesof accounts mentioned before. First understand
why the customer is here and what type of accounts suits him a lot. Scale down all the options
suiting his investment or requirement and help him choose what is best for him.

ATM/Debit card dealing

Here first define your customer What ATM card is, What are its features and how to use
it. As customer get willing to use to fill out the require prescribe form and send it to head office
and also send request from computer(T24).

CLASS ROOM LEARNING IN ORANGATION

Being a part of organization I learnt about:

 Division of work
 Values
 Professional attitude
 Customer dealing
 Discipline
 Unity of command
 Setting challenges etc

The bank has great image owing to the trust but it needs to use it excellently to increase
market share with in such a competitive economy. As the business and economic conditions
continue uncertain, ABL carry on to change the new products like it has been doing in past.

For the duration of my internship exercise at ABL I have educated many things. It was a virtuous
experience for me to do work practically. In 1991, the ABL come to be the first Pakistan’s

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Privatized bank. Afterward privatization, the success and recital of the bank has increased. Today
ABL characterizes a bank that has full-grown with time

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 SUGGESTIONS AND RECOMMENDATION

Recommendations are considered to be the most important part of an internship report,

without which no report is considered complete and meaningful. This part of the report is based
on the previous sections i.e. review and analysis. Moreover, for bringing suggestions, discussions
have been conducted with the staff of ABL officers, who not only provided the basis for
recommendations but also pointed out some areas, where the change for the development is
utmost important. Realizing the importance of this section, efforts have been made to give
feasible recommendations, which are categorized under the following headings.
Physical Facilities

The physical facilities or the layout are the most fundamental features in an organization,
which the customers observe in forming an opinion, perception or idea about the organization.
Therefore, every organization tries to make a good first impression on customers through the
presentation of its physical facilities or layout. The physical facilities in the branch are not up to
the mark, which requires timely changes to provide good environment to customers. The
suggested changes and corrective actions are gives below:

 The lighting system must be improved and all the out of use lights must be replaced.

 Newspaper should be provided to the customers to avoid the pain of waiting long.
Availability of staff

The existing staff in the Bank is overburdened due to the non-availability of more staff.
Staff in the branch must be in proportion to the customer has so as to expedite the workflow,
avoid overloading of staff and remove the customer’s grievances arising mainly due to delay in
workflow.

The additional staff required is in the fallowing categories.

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 More technically trained staff should be added to the existing staff
strength
 One staff assistant or grade 2 officers properly trained in computer and sufficiently
trained in foreign currency accounts.
 One employee of grade 4 should be hire on daily wages or contract, to maintain filing.
Needs of Change in Recruitment Policy

It is important to say that the external level market is full of the required talent like MBA,
M. Com etc, but on the country only graduation with simple subjects is still the requisite
qualification for officer’s cadre, which has already worked amply in the devastation of ABL.
Therefore the recruitment qualification to the officer’s framework should be enhanced for simple
graduation, to professionally qualify preferably Masters in their respective fields.
Marketing Concept

The concept of marketing should be followed in every aspect of the organization.

Generally, the bank’s staff considers that marketing is to go to customers, beg them for opening
an account with the Bank and to abide by his every just and unjust action.

They should be taught that marketing is not only to go to customers only. A customer can also be
attracted by provided customer oriented services, showing empathy to your customers and
attending him personally.

Information Access

The Bank should provide information to all the present and potential customers relating
to the new products, services, some service’s fee structure and other matters, which are likely to
affect the customers. It should be made sure that all the customers have access to this
information. Conveying information is of no use, unless, there is some feedback from the
customers. The following measures are suggested to implement this suggestion.

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 Brochures, hand outs, pamphlets and other printed reports must be provided to customers,
which should provide all the information necessary to attract and retain customers and to
satisfy the customer’s need for more information.
· Personal contacts with the customers can help in providing information to customers. All
the customers must be provided a chance to get the desired information by personal
contact with the Bank staff.
Computer Trainings

The present conventional and training programmers need to be made more

comprehensive and reinforced with inclusion of computer training courses.
Training with Clear Objectives

Training needs assessment is necessary so that only the relevant staff is sent for the
training courses.
Customers Orientation

Every entrepreneur if concerned about the success of his business has to understand,
recognize, carefully and appropriately that his customer is “The King” of the business system
and the original spring of the business revenue. ABL should recognize its customers as the
mainstream of the bank’s revenue. They need to be provided the deserved respect, quality and in
time service and to be politely dealt with.
Relocation of branches

ABL should have to maintain their branches in distance of other Allied bank branches,
Due to low distance between Allied bank branches it began to start competition rather than to
compete with competitiors.
ATM Network Problem

I have found some problems with ATM network. Many customers have complaints that
their requests placed on ATMs don’t carry out. It is mainly because of bad PTCL lines.

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Distortion in lines of PTCL restricts the execution of requests placed on ATM machines by
customers. Although there is a network of dedicated lines for ATM machines, a request may not
be successfully carried out because of complicated request processing. A successful execution of
a request needs to be approved from three places:

 The branch (online) with which the customer (placing the request) have the account.

 Main branch of that area (city).

 The head office (in Karachi).

So connecting to all of these three places simultaneously and getting the request approved is a
complicated process. However management claims that there is nothing wrong with processing.
The only problem lies with PCL lines. So to solve this problem the bank should hire technicians
who can work during public holidays to make the ATM useable while it shows any distortion.

Loan facility

They should have to provide loan or to introduce finance facility toward its customer. By
introducing loan Customer ratio will more enhance and it get ultimately affects on sale of
volume.

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 AS I MANAGER IN ABL

As ABL is a multinational organisation and is working many countries. As far as, my steps
concerned if I become the manager in this company I would take the following steps.There are
certain things which I observed during my internship. If I were the manager there I decide to take
some steps for its prosperity.

 There should be training programmes for employees for better performance skills.

 The banking environment is decentralized that’s good but on the other hand this is
creating a bad impact because the employees are taking its negative advantage. So there
should be a control on employees and strictness.

 They come late and sometimes go back before time. There is no break time so employees
go and come late after lunch. A proper system of break has to make.

 There should be R&D department properly held.

 Many of them like to chat with other employees and spend their time in gossiping.
 There are no proper systems of hiring new employees there are simple graduates. They
must be replaced with fresh business master or bachelors for a proper system to run.

 These were some defaults that I felt during my internship and if I were the manager I will
correct them.

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Reference:
www.google.com

www.ABL.com

www.wikipidia.com

Annual Reports of ABL year 2011,2012,2013

Annexure:
 Internship Letter
 Statement of financial position
 Income statement

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