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1. EXECUTIVE SUMMARY:

The aim of an internship was to have the practical knowledge about the organizational working. The organization I selected to me for an internship was ABL Branch. Departments working in this building are Operations department, Credit department, Retail department, I accepted this task as a challenge and tried my best to explore & cover each and every aspect of ABL with in my 6 weeks internship. This internship report covers many important aspects which are basically related with the operations and financial aspects of the bank. In this study, first of all, I have discussed about the United Bank, its history, nature and product lines. I have also discussed the functional and departmental organization of the bank that Allied Bank Limited providing the general banking services. Allied Bank Limited Pakistan currently has a wide network of branches inside the country and in all commercial centers of the world as well. The Bank is providing deposits facilities to more than five hundred thousand customers in the country and which is increasing day by the time. In the deposits area the bank is providing special accounts such as PLS Term Deposit (Monthly Income account), which provides a monthly withdraw able return on the account The bank is trying to revolutionize the services. In the advances side the bank has been successful in deploying its resources in the best way in all commercial, industrial and agricultural sectors of the country. Financial statements from year 2007 to 2011 were analyzed. Ratio analysis gave the overall view of the financial condition of the bank. The ratio analysis helps in planning and forecasting. Ratios of return on equity, return on asset, return on deposits, net profit margin, average profit per branch, loan to deposit ratio, debt to equity, total asset turn over, debt ratio, gross profit margin, loan to asset and earning per share were analyzed. Both horizontal and vertical analyses were done. In the light of these analyses, positive indicators were described. In the end of my Internship report. Weaknesses were also stated and recommendations were given for the improvement of the organizational performance.

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2. OBJECTIVES OF STUDYING THE ORGANIZATION

The primary purpose of this study is to fulfillment of the requirements for the degree of MBA (Banking & Finance).For this connection each student of this particular course is required to undertake training in a relevant organization selected by them, for a period of 6-8 weeks. The secondary purpose of this internship is to understand how the theoretical knowledge can be applied to the practical situations and examine an organizations financial issues and identify its opportunities/ problems and also suggest corrective measures. This internship is also very necessary to gain confidence and become aware of the mechanism of an organization.

PURPOSE OF THE STUDY

Purpose of the study was two pronged.

General Purpose
To get acquaintance to the banking operations. To know what sort of changes IT brings in managerial activities. To see the application of our Professional studies especially.

Specific Purpose
Specific purpose of the study includes. A partial fulfillment as a requirement for the completion of MBA degree in Banking and Finance Sector. To objectively observe the operations of Allied Bank of Ltd in general and the operations of ABL, Shah Ruke ne Alam Branch, Multan in specific. To make recommendations or implementation plans for the improvement of the operations of ABL, in the Shah Ruke ne Alam Branch, Multan light of our professional studies.

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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.

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

Data Sources
Both primary and secondary have been used in the compilation of this report. The methodology used is as under:

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During the compilation of this report, I relied mainly on the primary data. The tools used for the collection of primary data are interviews and observation. To get primary data I also performed some practical work. The secondary data was mainly used for as a background material and for purpose of references. The major sources of secondary data were the annual report 2007; other printed material of the Bank and internet played a vital role as a source of secondary data.

LIMITATIONS
The Study was subject to the following limitations, the absence of which could made this report more accurate, systematic and factual: have

Lake of published financial data. Lack of ATMs back hand information with stuff. Access to data. The non cooperative behavior of some managers and staff members.

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3. 3.1

OVERVIEW OF THE ORGANIZATION BRIEF HISTORY OF ALLIED BANK LIMITED

ABL is the first Muslim Bank established on territory that later on became Pakistan. It was established on December 3, 1942 as Australasia Bank at Lahore with capital of 0.12 million. At that time the chairman was Kh. Bashir Baksh. ABLs story was one of the dedication, commitment to professionalism and adaptation to changing environmental changes. The bank's history is divided into many phases. During 25 years of united Pakistan the bank advanced forward in all areas of its activities. 1970s were a difficult decade for all Banks of Pakistan. In 1971 East Pakistan was separated and Australasia Bank lost its 50 branches and a lot of capital as well. Nevertheless the growth remained steady. In 1974 all the Banks were nationalized including Australasia Bank. The small provincial Banks were merged into Australasia Bank. On 1st July 1974 the new entity was renamed as ABL of Pakistan Limited. Then it started its operations as Public sector financial institution. Different Phases of the Bank Are as Follows: THE PRE INDEPENDENCE PERIOD (1942-47) Australasia Bank had the unique distinction of being closely identified with some of the countrys most Prominent leaders of the freedom moment. Such as Mian Mumtaz Daultana (Board of directors), Mian Iftikhar Hussain and Maulana Zafar Ali Khan. The bank originally started its operation in the garage of Khawaja Bashir Bakshs bungalow (who was the chairman) near the Lahore Railway Station. But the success of Bank enforced the directors to open its another branch in Anarkali on 1st March 1944. Kh. Bashir was first chief executive. He was the person who was really working in its development. His sincerity of purpose can be judged from his great moments. Another branch was opened at Amaratsar in 1945. In June 1946, the bank earned the status of scheduled bank. During 1946-47 many other branches were opened at Mcleod Road Lahore, Jallandhar, Ludhiana, Agra and Delhi. At independence the industrial and commercial sectors were underdeveloped but ABL contributed a lot in the development of these sectors.

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AUSTRALASIA BANK IN PRIVATE SECTOR (1947-74) It was the only full functional Muslim Bank on the land of Pakistan. On August 14, 1947 bank was identified with Pakistan moment. Many of its Board of Directors were prominent Muslim League leaders. Jallandhar and Ludhiana branches were attacked by rioters because of Muslim staff appointed in these branches of bank. But when the Pakistan flags wee hoisted on the branches then all the banks in India were closed down. With this, the bank lost a lot of capital and its deposits and almost 6 branches. During 1948 new branches were opened at Karachi, Rawalpindi, Peshawar, Sialkot, Sargodha, Jhang, Gujranwala and Kasur. But later on its branches were spread to Multan and Quetta. At that time, the bank financed trade in cloth and food grains and thus maintained consumers supplies during the riot effected early months of 1948. Australasia Bank made a profit of 50,000/= in 1947-48. In August 1948, Australasia Bank became the first Pakistani Bank to successfully negotiate and open L/C for a Sialkot based importer of books. So it also made correspondence relations with Midland (UK), Chase Manhattan (USA) and Lloyds (India). During the treasury functions of Federal Govt. of Pakistan and it also acted as Banker to several local Govt. Bodies and to the Punjab University during this period. Treasury functions were taken by National Bank of Pakistan in 1949. In 1950-51, Chairman was replaced with his own brother Kh. Sharif Baksh. During 1955-56, Mr. Naseer A. Sh. became the Chairman of Board and close working relationship was forged between the new Chairman and Managing Director. This partnership proved in modernizing its operations and consolidating its financial position. In 1963, Bank had 29 branches in various cities. And deposits were 89 million and advances were 66 million. Bank was mainly concerned with general banking and trade financing (including foreign exchange transactions). It helped a lot in development of small and medium sized business houses. These were Nishat, Crescent, Pak Cement, Haroon traders, Takht Bhai Sugar, Insaf, Punjab soap, Pak fruit and Saboor Oil Mills etc. In 1964, 13 new branches were opened including 3 in East Pakistan. In 1965, 17 new branches were opened and over 83 % of gross profit for the year was earmarked for development expenditure in connection with opening of new branches. In 1966 bank opened 26 new branches and doubled its reserved funds. For the first time in history, its advances were increased to Rs. 160 million and deposits raised by almost 58 % exceeding Rs. 232 million mark. In 1966, Central Office was built in Karachi but Head Office remaining at Shah Chiragh Building, Lahore.

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16 new branches were opened in 1967 and 20 in 1968. Respectively their funds were increased gradually. 21 new branches were opened in 1971. But separation time the 51 branches were lost by the bank which was a big loss. ALLIED BANK: PUBLIC SECTOR YEARS (1974-91) Under the Nationalization Act of 1974, 14 scheduled banks were taken over by the Government. Australasia Banks Board of Directors was dissolved and the bank was renamed as Allied Bank of Pakistan Limited. Sarhad Bank, Lahore Commercial Bank and Pakistan Bank Limited were merged into Australasia Bank. At time of merge, ABL was second highest among all the banks Nationalized in 1974. Allied Banks first Executive Board was constituted of Mr. Iqbal A. Rizvi as President, Mr. Ajmal Khalil as Joint President and Mr. Khadim Hussain Siddique as member. In 1974 Mr. I.D. Junejo and Mr. Safdar Abbas Zaidi joined the Board later. 116 new branches were opened in 1974 and it started participation in commodity Operation program of Government. In 1970s Bank played an important part of agricultural area loans and other loans. In 1976 Mr. Ajmal replaced Mr. Rizvi as Chief Executive and President. During 1974-77, 361 new branches were opened and 230 of these were located in villages and small towns. It also opened its foreign branch in London, near the Bank of England. In 1980 the Bank of England granted Allied Bank recognition as a full fledge Bank under the U.K. Banking Act. In 1981, President was changed. In 1984, again new president was come to know. He tries to increase the international business. It also initiated a major counter program. In 1985, mainframe computer was installed and effective management system was developed. During this period profitability was increased. New President Mr. Maqbool introduced different schemes in 198788. In 1989, new 13 branches were installed. Over 1991, 745 branches were there in all over the Pakistan. A NEW BEGINNING In November/ December 1990, the Government announced its commitments to the rapid privatization of the Banking sector. Allied Banks management under the leadership of Mr. Khalid Latif decided to react positively to this challenge. In September 1991, ABL entered in a new era of its history as worlds first bank to be owned and managed by its employees. The 850 executives and 7200 staff members spread over 750 branches throughout the Pakistan established a high degree of cooperation and family feelings After this, it grows more and more, even at present in Year 2012 it has near about 1900 domestic branches throughout the country and 4 foreign branches in U.K.

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Allied bank Objectives: Allied bank has following objectives: i) Main objective of Allied bank is to earn profit. ii) To provide services to their customers and assistance in the development of commerce and trade. Allied bank also have another responsibility to give service to their communities. It watches the growth and development of his community especially the commerce and business of the area.

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3.2 Nature of Allied Bank Limited

The Bank was incorporated in Pakistan and is engaged in commercial banking and related services. The Bank is listed on all the three stock exchanges of Pakistan. The Bank operates 1078 branches inside Pakistan including the Karachi Export Processing Zone branch and 17 branches outside Pakistan. The domestic branch network includes 5 Islamic Banking Branches. The Banks principal activities are to provide commercial banking and other financial services. The Bank offers personal banking, cash management, retail loans and other financial services. These services include deposits, savings/current bank account, vehicle loans, personal loans, retail trade finance, global banking, lending to priority sector and small scale sector, foreign exchange and export finance, corporate loans and equipment loans. ABL is a commercial bank, which transacts the business of banking in accordance withthe provisions of BCO, 1962. Section 7 of the Act authorizes banks to engage in the prescribed form of business. In the light of this section ABLs functions can be categorized as under: Agency services General Utility Services Underwriting of loans raised by the Government or public bodies and trading by corporations etc. Providing specialized services to customers, and Hajj-related services

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3.3 BUSINESS VOLUME OF ALLIED BANK LIMITED

Rupees in Millions Year Total Assets Deposits Advances Reserves Investments
Table 3.1

2008 553,231,467 465,571,717 220,794,075 10,813,914 149,350,096

2009 577,719,114 463,426,602 268,838,779 13,536,041 156,985,686

2010 645,132,711 501,872,243 316,110,406 13,879,260 139,946,995

2011 762,193,593 591,907,435 340,677,100 15,772,124 210,787,868

2012 817,758,326 624,939,016 412,986,865 19,941,047 170,822,491

UBL Annual Report

Horizontal Analysis (%)

Year Total Assets Deposits Advances Reserves Investments
Table 3.2

2008 100 100 100 100 100

2009 104 100 122 125 105

2010 117 108 143 128 94

2011 138 127 154 146 141

2012 148 134 187 184 114

Source: ABL Annual Report

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Total customers Total branches Utility booths Airport booths Total clients in Multan region Table 3.3

4,605,000 735 34 1 145,000 Source: ABL Annual Report

BRANCH NETWORK OF ALLIED BANKLIMITED

Allied Bank has been divided into 16 regions, each under the control of a regional General Manger (RGM). The RGM is not any fixed designation in the organizational hierarchy. The person appointed for its position can be a SEVP and EVP.

The details of these regions are given below: Region Abbottabad Bahawalpur Faisalabad Gujranwala Hyderabad Islamabad Karachi Lahore Mardan Email coablatd@brain.net.pk ro_bahawalpur@ikr.abl.com.pk ablcircle@fds.comsats.net.pk ro_gujranwala@lhr.abl.com.pk ro_hyderabad@abl.com.pk ro_Islamabad@isb.abl.com.pk ro_karachi@abl.com.pk ro_lahore@lhr.abl.com.pk allieds@brain.net.pk

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Mirpur (AJK) Multan Peshawar Quetta Sargodha Sialkot Sukkar Table- 3.4

ro_Mirpurak@isb.abl.com.pk ro_multani@lhr.abl.com.pk ro_peshwar@isb.abl.com.pk ro_quetta@abl.com.pk ro_surgodha@lhr.abl.com.pk ro_sialkot@lhr.abl.com.pk ro_sukkir@abl.com.pk

ABL has a large network of branches, which extends to the remotest areas of the country. In December 1983, there were 1623 branches whereas in 1974 it had only 1238 branches and in 2009 these figures show total number of1112 Domestic and 17 overseas Branches.ABL has been very active in increasing its overseas branches network. The first foreign branches were established in London in 1963. Now ABL has branches in Bahrain, Qatar, Saudi Arabia, United Arab Emirates, Yemen Arab Republic, UK Switzerland, Egypt, Oman and The United States. These branches are playing a significant role in channeling home remittances and foreign trade of Pakistan.

3.4 NUMBER OF EMPLOYEES OF ALLIED BANK LIMITED

Permanent Temporary/ On Contractual basis Bank's own staff strength at the end of the year 9520 12 9532

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Outsourced Total Staff Strength

Table 3.3 Source : ABL Annual Report

5522 15054

An employee may be defined as: "A person in the service of another under any contract of hire, express or implied, oral or written, where the employer has the power or right to control and direct the employee in the material details of how the work is to be performed." 1An employee contributes labor and expertise to an endeavor. Employees perform the discrete activity of economic production. Of the three factors of production, employees usually provide the labour. Specifically, an employee is any person hired by an employer to do a specific "job". In most modern economies, the term employee refers to a specific defined relationship between an individual and a corporation, which differs from those of customer, or client. The relationship between ABL and its employees is usually handled through the Human Resource Management & Administration Group & Employees benefit disbursement & trustee division. These groups handle the incorporation of new hires, and the disbursement of any benefits which the employee may be entitled, or any grievances that employee may have. There are differing classifications of workers within Allied Bank Limited, these are: Permanent Temporary / On Contractual Outsourced

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3.5 Product Lines

The most precise definition of product is anything capable of satisfying needs, including tangible items, services and ideas. In marketing, a product is anything that can be offered to a market that might satisfy a want or need. Since 1575, the word "product" has referred to anything produced. Since 1695, the word has referred to "thing or things produced. The economic or commercial meaning of product was first used by political economist Adam Smith.In general usage, product may refer to a single item or unit, a group of equivalent products, a grouping of goods or services, or an industrial classification for the goods or services. The consumer banking products include personal accounts, credit cards, loans, investment products, treasury products and many more. The ABL offering for sale several related products individually, which is commonly known as product lining. A product line is defined as A group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through same types of outlets, or fall within the given price ranges. The followings are the main consumer banking products of ABL.

CONSUMER PRODUCTS
In line with the Banks aim to provide a host of products and services to its customers, substantial ground work has been done to establish a strong consumer banking business. Furthermore, to achieve this objective, professionals from across the industry have been recruited into areas of product development, sales, credit policy, research, consumer analytics, call centers and service quality departments. The consumer portfolio, comprising the debit card, credit cards, auto loans, personal loans and mortgages will be established phase by phase. However, we are confident that our strengths, together with our largest network of online branches, a superior technology platform and a big customer base, will take the Banks profitability to new heights.

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Commercial & Retail Banking Group (CRBG) The Commercial & Retail Banking Group is the core business arm of the bank generating a major share in income. It caters to the needs of the customers from almost every segment of life including Individuals like salaried persons, students, senior citizens, house wives and Businesses from small shops and cottage industries to middle / large size organized businesses. CRBG offers full range of Deposit and Advances products from general to specific & tailormade solutions to meet the customer needs. This includes various deposit products, Commercial & SME Loans, Agriculture Loan, Trade Facilities, Bancassurance, online banking including instant transfer of funds within the entire banking network. The Group is driven by the ambition to continue contributing as the leading Business, serving our 2.5 million longstanding customers with candid and reliable banking services. The Commercial & Retail Banking group is organized under four geographical territories consisting of 28 regions and over 800 branches (100% online) spread across the country for providing quality banking services to the customers. CRBG has always been focusing to establish Allied Bank as market leader by proactively identifying needs of its customers and satisfying those needs in true spirit. Accordingly innovative and unique business products were offered from the platform of CRBG including Allied Advance Profit Scheme, Allied Business Account, Allied Business Finance and Agriculture Finance Products & Bancassurance products which significantly contributed to our customer convenience. As a matter of fact Allied Advance Profit Scheme was first of its kind in the banking history of Pakistan. In terms of commercial assets, focus was laid on various sectors of economy and large number of customers were brought to the fold of the bank from different sectors, such as, Rice, Cotton, Pesticide, Wheat, traders and exporters. CRBG at ABL continued with its commitment to facilitate existing customers and expanding its reach with a comprehensive plan for branches & ATM network expansion.

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INTERNET BANKING
Banking is now at Customer fingertips! Allied Direct Internet Banking offers Customer the convenience to manage and control Customer banking and finances - when Customer want, where Customer want! It's Simple, Convenient, Secure and Faster. Allied Direct Internet banking is now on Customerr Mobile phone as well.

Corporate Leasing
Allied Bank started lease operations when it integrated with Ibrahim Leasing Limited. Facilities include leases for machinery, commercial vehicles and equipments. The Bank provides lease facilities to corporate and commercial clients in all industrial enterprises for balancing, modernization, replacement and expansion schemes .

Agriculture Finance
The Bank, under the guidelines of the State Bank of Pakistan, extends short, medium and long term Agriculture credit facilities to farming community of Pakistan on easy terms to increase the credit flow to Farm and Non-Farm segments of Agriculture sector. Farm credit is extended for the purpose of production of crops to meet working capital expenses and Development of Agri land. Non-Farm Credit facilities are offered for Livestock (Cow, Buffaloe, Goats, and Sheep etc.), Poultry (Eggs, Day Old Chicks, Layer, Broiler, Hatchery) and fisheries (inland and marine, excluding deep sea fishing).

Farm Loans
Production Loans 1. Inputs like seeds, fertilizers, pesticides, weedicides, herbicides, labour charges, water charges, vegetables, floriculture, forestry etc. 2. Working capital finance to meet various farming expenses.

Development Loans

Improvement of agricultural land, orchards, etc. Construction of Godowns

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Purchase of Tractors, Machinery & other equipments Installation of Tube wells Farm Transportation, etc.

Non-Farm Loans Livestock

Working capital 1. Purchase of animal fodder and feeds, Vaccinations, Vitamins and other medications for animals including artificial insemination 2. Overhead expenses i.e. labor, fuel, electricity etc

Term loan 1. Purchase of mature milk yielding buffaloes/cows, Purchase of Young animals for rearing for dairy farming 2. Purchase of Milk storage chilling tanks and milk carrying containers, feed grinders, tokas, feed mixing machines and feed/milk containers etc. 3. Construction/Procurement of permanent sheds, water tanks, water pumps etc.

Poultry
Working capital 1. Purchase of Eggs, Birds / Day old chicks, bird feed and feed raw material and vaccination

2. Overhead expenses i.e. labor, utility bills, Cost of fuel for generators & vehicles, transportation etc. Term loan 1. Purchase of Equipment/Machinery for Broiler/Layer farm & Hatchery

2. Farm construction for broiler, layer, hatchery and procurement of other items required for the establishment of poultry farming industry etc.

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Fisheries
Forestry Agriculture Revolving Credit Scheme Loan Tenure: 3 Years (Clean up once a year) One time documentation for 3 years. Loan limit will be based on the Indicative per Acre limit prescribed by ABL/SBP and/or requirement of the applicant. Development Loans/Finances (Term Loans) Loan Tenure: up to 7 years Repayment: Monthly/Quarterly/Bi-Annual/Lump sum

Utility Bill
Customers can pay their utility bills (e.g. electricity, gas, telephone) at any of the Banks branches. For further convenience, bills are collected on all working days during normal banking hours and also at certain times during the evening. Bills can be paid with cash or cheque, plus customers can even drop crossed cheques in drop-boxes available at all branches. Furthermore, customers can also pay their bills using any of the Banks ATMs or via Internet Banking for SSGC and SNGP bills.

CORPORATE FINANCE
Corporate
The Corporate Investment Banking Group (CIBG) holds the Banks loan portfolio and enjoys a leading position in corporate lending in the country. It offers a wide range of financial services to medium and large sized public and private sector entities. These services include, providing and arranging tenured financing, corporate advisory, underwriting, cash management, trade products, corporate finance products and customer services on all bank related matters.

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The Bank has played a key role in the countrys economic growth by providing a vast amount of funds to large industrial and corporate sectors of the economy. And because it has played a big part in major investment and corporate banking transactions, Allied Bank is considered one of the top investment banks in the country today. CIBG (Corporate Investment Banking Group) Corporate Banking - Project Finance - Long Term Financing - Short Term Financing - Trade Finance - Project Finance - Syndication - Advisory - Cash Management - Home Remittances Allied Bank-IBG is the most Preferred Investment Banking Outfit because of Timely Completion of Mandates Highly talented and experienced analysts An employee focused work culture Flexible delivery models to satisfy client specific requirements A cost effective, one window solution for customers Its ability to rapidly adapt to changing industrial & client specific processes. The dedicated Transaction Manager Model ensuring high quality service at all times Investment Banking Financial Institution

ABL INCOME FUND

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ABL Income Fund (ABL-IF) is an open end, fixed income fund with no direct exposure to the stock market. The objective of ABL Income Fund is to earn superior risk adjusted rate of return by investing in a blend of short, medium, and long-term instruments, both within and outside Pakistan. ABL-IF would benefit Investors who want to earn a competitive return and avail tax benefits also having the ease of withdrawing money at their convenience

ABL STOCK FUND

ABL Stock Fund (ABL-SF) is an open end equity fund. The objective of ABL-SF is to provide higher risk adjusted returns to the investors by investing in diversified portfolio of equity instruments offering capital gains and dividends. It would benefit Investors seeking higher growth on capital with high risk exposure and availing tax benefits with the ease of withdrawing money at their convenience.

ABL CASH FUND

ABL Cash Fund (ABL-CF) is an open end, money market fund with no direct or indirect exposure to shares, TFCs and long term debt instruments. The objective of ABL-CF is to provide investors, consistent returns with a high level of liquidity, through a blend of money market and sovereign debt instruments. It benefits Investors seeking low risk investments and consistent returns with ready access to funds. Given its highly liquid profile, the fund can be used by retail and institutional investors for efficient cash management.

Flexible Income Plan

If Customer would like to receive income based on the performance of ABL-CF on monthly, quarterly, half yearly or annual intervals then Flexible Income Plan is what Customer should opt for. Customer return will vary with funds performance during that period. Fixed Income Plan

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If Customer would like to receive regular/fixed income on Customerr investment on monthly, quarterly, half yearly or annual intervals, as per Customerr preference then Fixed Income Plan is the option for Customer. Distribution in the form of Bonus Units only, as and when declared. Growth Units (minimum investment of Rs 5,000) For investors who prefer capital growth on investments The unit value grows in line with the growth in NAV. If Customer would like Customerr investment to grow over a period of time with redemption at Customerr discretion, then Growth Units are the option for Customer. The management company shall calculate the redemption value to be paid to the Unit Holder(s) based on the redemption price of the business day. Distribution in the form of cash or bonus units, as and when declared.

ABL ISLAMIC CASH FUND

ABL Islamic Cash Fund (ABL-ICF) is a Shariah compliant, open end, money market fund having no direct or indirect exposure to shares/stock market or long term debt instruments. The objective of ABL-ICF is to seek maximum possible preservation of capital and offer steady rate of return by investing in liquid Shariah compliant instruments.

Flexible Income Plan

If Customer would like to receive income based on the performance of ABL-CF on monthly, quarterly, half yearly or annual intervals then Flexible Income Plan is what Customer should opt for. Customerr return will vary with funds performance during that period. Fixed Income Plan If Customer would like to receive regular/fixed income on Customerr investment on monthly, quarterly, half yearly or annual intervals, as per Customerr preference then Fixed Income Plan is the option for Customer.

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Distribution in the form of Bonus Units only, as and when declared. Growth Units (minimum investment of Rs 5,000) For investors who prefer capital growth on investments The unit value grows in line with the growth in NAV. If Customer would like Customer investment to grow over a period of time with redemption at Customer discretion, then Growth Units are the option for Customer. The management company shall calculate the redemption value to be paid to the Unit Holder(s) based on the redemption price of the business day. Distribution in the form of cash or bonus units, as and when declared. Allied Visa Gold Credit Card

With Allied Visa Credit Card customer can enjoy a variety of state-of-the-art features and unmatched value by spending at over 49,000 merchants across Pakistan and 27 million merchant outlets worldwide! And what more, Customer can also use Customer credit card at over 1 million ATMs internationally.

Allied Phone Banking

In case a customer requires any additional help regarding his Allied Visa Credit Card, Allied Phone Banking is there to provide Customer with immediate help, 24 hours a day. Just calling on 0800-22522.

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4 ORGANIZATIONAL STRUCTURE OF ALLIED BANKLIMITED

Head offices Structure
Registered Office: 3-4 Tipu Block, Main Boulevard. Garden Town, Lahore. . Share Registrar Technology Trade (Pvt.) Ltd Email: General Info: info@abl.com.pk Human Resource: Group.Chief.Hr@abl.com.pk cmu@abl.com.pk

Complaint Management Unit: Postal Address:

Khyaban-e-Iqbal, Main Clifton Rd, Bath Island, Karachi, Pakistan

Legal Advisors Haidermota and Company (Barrister-at-Law & Corporate Counselors)

AUDIT COMMITTEE

Mubashir A. Akhtar (Chairman) Pervaiz Iqbal Butt

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A. Akbar Sharifzada Sheikh Jalees Ahmed

4.1 ORGANIZATIONAL (MANAGEMENT) LEVELS AT ABL

MANAGEMENT SYSTEM OF ABL

Successful and profitable banking management depends on two principal factors. a) The manner in which the functions of banking, that is the acquiring of deposits, the investing or converting such deposits into earning assets, and the servicing of such deposits, are performed. b) The degree to which officers and employees contribute their talents to the progress and welfare of the bank in discharging duties and responsibilities. Allied Bank Management Banks are managed by board of director or similar group of men who are responsible to the owners, creditors, and the government for the well being of their institutions. The government selects all or some of directors of ABL. Management of ABL are given as follows: Banks Information 1. Directors: Rashid M. Chaudhry is the chairman and Mohammadi Yaqoob is secretary of ABL, are also the board of directors.ABLs other directors are M. Saleem Shaikh, S. Jauhar Husain, I.A. Usmaini, Raja Raza Arshad, Mohammad Saleem Sethi, Athar Mahmood Khan. Stockholders elect the directors for a term of one year and they are eligible for re-election. Voting is cumulative, that is, each shareholder has the right to vote the member of shares owned by him. The boards may format major policies and select officers to execute them. They may supervise these officers, review their act. 2. Executive Committee

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Executive Committee consists of Rashid M. Chaudary (president), M. Salim Shaikh, S. Jauhar Husain, I. A. Usmain, Naveed Masud, Bilal Mustafa, M. Saleem Khan Durrani, Ashfaq Hassan Qureshi, Shariqe Umar Farooqi (secretary). 3. Officers: Officers are selected by the directors to manage their banks. An officers relationship to the board is that of an employee to an employer. Chief Officer (Rashid M. Chaudary) of ABL is known as Chairman, Senior Executive Vice President (M. Saleem Sheikh, S. Jauhar,). They are also members of the board of director and are large shareholders. They are in a position, to dominate the bank's policies as well as its administration. The Chief duty of the chairman is to lend the bank's funds. This work is often subject to little supervision by the board of directors.

STRUCTURE OF ABL LIMITED

No bank can be expected to operate efficiently unless all employees with in a department, division or section know: A) From whom they are to receive the work they are to do. B) What they are supposed to do with the work after they receive it. C) How they are supposed to handle the operation of item.

D) When they are supposed to do work, perform the operation.

E) To whom they give the item or function after finishing it. To perform the functions efficiently the bank has its Head Office in Karachi, which is controlled by the president of the Bank. The bank has regional office under head office in major areas of the country. Regional Chief heads this office. The region Consist of many zonal offices with a zonal chief. There are many branches in a zone to carry the functions effectively and performing customer services locally. ABL Ltd. is functionally organized into divisions and divisions are further divided into department and sections. Every province has its own regional office and zonal offices. Executive vice president heads the divisions and departments are further headed by OGI (Officer of Grade I). Manager heads branches.

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BRANCH NETWORK
There are Four Provincial Headquarters of Allied Bank Limited situated at Lahore (Punjab), Karachi (Sind), Peshawar (NWFP & Azad Kashmir) and Quetta (Baluchistan).

PROVINCIAL HEADQUARTERS PUNJAB:

7E/3, Main Boulevard, Gulberg, Lahore

SINDH:
Jubilee Insurance House, I.I. Chundrigar Road, Karachi

NWFP:
1st floor, State Life Building, The Mall,

AZAD KASHMIR:
Peshawar Cantt.

CITY CIRCLE LAHORE

Zones 2 Branches 47

MULTAN CIRCLE
Zones 2 Branches 66

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MANAGEMENT LEVELS
The ABL has four types of management levels which are as fallows:

TOP MANAGERS
Top managers are responsible for making organization-wide decisions and establishing the plans and goals that affect the entire organization. These individuals typically have titles such as executive vice president, president, managing director, chief operating officer, chief executive officer or chairman of the board. The ABL have its top management in their head office at Karachi. They are responsible for making the plans and establishing goals the run their business smoothly all over Pakistan & around the globe. Among seven member of group Chief Executive is called the president. The bank has directors for superintendence and direction of its business. The Government appoints six directors as members and one president. These members are also responsible for making the policy of the bank.

MIDDLE MANAGERS
Middle managers include all levels of management between the first line level and the top level of the organization. These managers manage the work of first line managers and may have titles such as department head, project leader, plant manager or division manager. ABL divided his management into various regions such as Rawalpindi region, Gujranwala region etc. In ABL, regional management falls under this category. They are responsible for the planning, organizing, leading and controlling of the resources and staff of the whole region.

FIRST LINE MANAGERS OR LOWER LEVEL MANAGEMENT

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First level managers are the lowest level of management and manage the work of non-managerial individuals who are involved with the production or creation of the organizations products. The branch managers of ABL fall under this category. These managers are responsible for planning, organizing, leading and controlling the staff and all affairs of the branch.

NON MANAGERIAL EMPLOYEES

Non managerial employees are not concerned with any decision making. They are normally specialized in their work. The nature of their job is repetitive & clerical as they do same work again & again. The non managerial employees of ABL consist of OG-II, OG III and clerical staff.

HIERARCHY OF ALLIED BANK LIMITED

The Hierarchy (An arrangement of objects, people, elements, values, grades, orders, classes etc., any system of persons or things ranked one above another) of ABL is shown as Annexed at the end of this report. The hierarchy may include: Categorization of a group of people according to ability or status. A body of clergy organized into successive ranks or grades with each level subordinate to the one above. A series in which each element is graded or ranked A body of officials disposed organically in ranks and orders each subordinate to the one above it; a body of ecclesiastical rulers. An organization with few things, or one thing, at the top and with several things below each other thing.

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The President of ABL is ranked Top at the hierarchy. The other six directors of ABL are ranked second in the hierarchy. The Provisional, Regional & Zonal chiefs are ranked 3 rd, 4th& 5th respectively. The vice President & assistant vice Presidents of ABL are ranked 6th& 7th respectively. The Officers Grade I, II & III are ranked 8th at the hierarchy of ABL. The lower level of ABL is consist of Clerical & non- clerical staff.

4.2 ORGANIZATION STRUCTURE OF THE BRANCH

A well-developed and properly coordinate structure is an important requirement for the success of any organization. It provides the basic framework within which functions and procedures are performed. Any organization needs a structure, which provides a framework for successful operations. The operation of an organization involves a number of activities, which are related to decision making, and communication of these decisions. These activities must be well coordinated so that the goals of the organization are achieved successfully. The organization chart & Organogram of ABL Shah Ruk ne Alam Branch Multan is shown on Annexed at the end of this report. This chart defines the line of authority in the branch and its departments. It is a sort of visual presentation of the organizational structure. It specifies the duties and responsibilities of the personnel or staff of the branch. The purpose of an organizational structure is to help in creating an environment for human performance. Although the structure must define the task to be done, the rules so established must also be designed in the light of abilities and motivation of the human recourse available. By analyzing the organization structure of the branch following elements can be found in the structure.

A) CENTRALIZED

DECISION MAKING

The Branch Manager of ABL is responsible for all the affairs of the Bank. All the decisions relating to Branch are made by him and the subordinates have to obey these decisions. All the employees of the Bank are report directly to the Branch Manager. The branch has two operation Managers. Operation Manager I controls Clearing house & Remittance Department and Operation Manager II controls Deposits, Advance & Branch accounts department. Both of them

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are report directly to the Manager regarding affairs of their departments. The Chief Accountant controls Accounts department & is report directly to branch Manager. The branch also has two cashiers responsible for cash & Pension disbursement department reports directly to branch Manger. The BBO (Branch Back Office System) Operator controls computer department of the branch and is report directly to Operation Manager I and Branch Manager.

B) DOWNWARD

COMMUNICATION

Communication is the process by which information is exchanged and understood by two or more people, usually with the interest to motivate or influence the behavior of others in the organization. Downward communication is the message and information sent from top management to subordinates in a downward direction. The same pattern is followed at ABL Bahawalpur Central branch, the Manager of the branch sent orders, information & messages to following subordinates Operation Manager I Operation Manager II BBO ( Branch Back Office System) Operator Chief Accountant Cashier I Cashier II Clerk I Clerk II Non Clerical Staff

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C) CHAIN OF

COMMAND

The chain of command is an unbroken line of authority that links all persons in an organization and shows who reports to whom. By analyzing the organizational structure of the ABL Bahawalpur Central branch it can be found that there is a scalar principle followed with in the branch because each and every employee of the branch knows to whom they can report. The authority and responsibility for different tasks and duties are different, as well as every one knows the successive levels of management all the way to the top.

D) AUTHORITY AND

RESPONSIBILITY

The chain of command illustrates the authority structure of ABL Bahawalpur Central Branch. Authority is the formal and legitimate right of the manger to make decisions, issues orders and allocates resources to achieve organizational desired outcomes. By analyzing the chain of command of ABL, one can come to the conclusion that, as there is scalar pattern followed at the organizational setup of ABL, therefore it is implied that everyone in his position knows that what is ones authority and what is the responsibility and the authority it allocated.

E) DELEGATION
Delegation is the process, which managers use to transfer the authority and responsibility to position below in the hierarchy. Most organizations today encourage managers to delegate authority to the lowest possible level to provide maximum flexibility to meet customer needs and adapts to the environment. At ABL Bahawalpur Central branch Operation Managers have some authority & responsibility relating to affairs of the Branch.

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4.3 DEPARTMENTS OF THE BRANCH

Banking procedures are divided between various departments. Different departments do their jobs in occurrence with the bank policies. In ABL each branch is divided into various departments depending on their size and volume of business. Head of department manages each department & officials of the branch follow procedures. The departments working within ABL Bahawalpur Central branch are as under: 1. Clearing House Department 2. Remittance Department 3. Computer Department 4. Deposits Department 5. Advances Department 6. Account Opening Department 7. Accounts Department 8. Cash Department

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1. CLEARING HOUSE DEPARTMENT

As part of their daily business activity, banks receive cheques and other financial instruments from their customers drawn on other banks, to be collected and credited to their accounts. Similarly, banks receive cheques/instruments from other banks, deposited by customers of the banks drawn on the customers of the drawee banks. Therefore, the banks act as Collecting Banks when they send cheques/instruments for collection and as paying Banks, when they receive cheques/instruments for collection from other banks. Since each bank receive and sends cheques/instruments for collection to and from an number of banks, the process of settlement would clearly be very cumbersome and time consuming if every cheques/instrument had to be sent by the collection bank to each of the drawee banks or branch upon which different collection items are drawn and to individually pay the proceeds to each of the bank sending cheques/instrument in for collection. Therefore, the banks have evolved what is called the Bankers Clearing arrangement. The Clearing System enables cheques to be paid or cleared centrally and settlement made for receivables and payables between the banks. The SBP co-ordinates clearing activity through its offices, called the Clearing Houses, set up in big cities and towns. Where SBP does not maintain its own office, some other bank, usually ABL (ABL) performs this function. But the clearing house facility is available only for cheques/instruments drawn on banks situated within the same city/clearing house area.

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W ORKING

OF THE

C LEARING P ROCESS

Under the clearing arrangements, the State Bank of Pakistan (SBP) offers a Clearing House or a centralized exchange facility, which works on the following general lines: All the banks operating in a city who are members of the Clearing House maintain an account with the SBPs Clearing House. Every day representatives of all the banks in every city meet the Clearing House, first meeting in the morning, at an appointed time, for the purpose of depositing their own customers , cheques/instruments to be collected from other banks and receiving cheques/instrument drawn on their account holders from the others banks. At the Clearing House accounts of all the banks are debited by the total amount of cheques/instruments drawn on their customers accounts and credited with the amount of their customers cheques/instruments drawn on other banks, as per the list of cheques submitted by each bank. The cheques/instruments received, also called Inward Clearing, and are taking back by each bank to its bank/branch. The amounts of each cheques/instrument is debited or recovered from each drawee customers account and credited to the Clearing House account. Similarly, against the amount credited by the Clearing House as Outward Clearing, the appropriate customers accounts are credited and clearing House account is debited. Any cheques/instruments received by a bank that cannot be paid, due to insufficient balance in its customers account or for any other reason, are returned back to the Clearing House and a credit is claimed and obtained there against.

R ULES & R EGULATIONS

OF

C LEARING H OUSE

Timing:(Monday to Saturday)

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i. ii.

1st Clearing at 10:00 a.m. 2nd Clearing at 2.30 p.m.

Each bank will send competent representative to exchange the cheques. Each bank is required to insure that all cheques and other negotiable instruments are properly stamped and suitably discharged

An objection memo must accompany each and every cheque when return unpaid duly initialed.

Each bank is required to maintain sufficient funds in the principal account with SBP to meet the payment obligations.

The State Bank of Pakistan debit the account of each member of the clearinghouse with the proportionate working expenses incurred on the operation of clearing house. These expenses are very nominal.

O UTWARD C LEARING

AT THE

B RANCH

The following points are to be taken into consideration while an instrument is accepted at the counter to be presented in outward clearing: The name of the branch appears on its face where it is drawn o. It should not stale or post dated or without date. Amount in words and figures does not differ. Signature of the drawer appears on the face of the instrument. Instrument is not mutilated.

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There should be no material alteration, if so, it should be properly authenticated. If order instrument suitably indorsed and the last endorsees account being credited. Endorsement is in accordance with the crossing if any. The amount of the instrument is same as mentioned on the paying-in-slip and counterfoil.

The title of the account on the paying-in-slip is that of payee or endorsee (with the exception of bearer cheque).

If an instrument received other than ABL then special crossing stamp is affixed across the face of the instrument. Clearing stamp is affixed on the face of the instruments, paying-in-slip and counterfoil (The stamp is affixed in such a manner that half appears on counterfoil and paying-in-slip). The instrument is suitably discharged, where a bearer cheque does not require any discharge and also an instrument in favor a bank not need be discharged.

The instrument along with pay-in-slip is retained while the counterfoil is given to the customer duly signed. Then the following steps are to be taken: 1. The particulars of the instrument and the pay-in-slip or credit voucher are entered in the outward clearing register. 2. Serial no is given to each voucher. 3. The register is balanced; the credit vouchers are balanced from the instruments and are released to the respective departments against acknowledgement in the register. 4. The instruments are arranged bank wise. 5. The schedules are prepared in triplicate, two copies which are attached with the relevant instrument and the third is kept as office copy.

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6. The house page is prepared from schedules in triplicate. 7. The schedules and house pages are signed by the house in charge with branch stamp. 8. The grand total of the house page is taken and agreed with that of the outward clearing register. 9. The instrument along with duplicate schedule and house page are sent to the main office. 10. The entry of the instrument returned unpaid is made in Cheques returned Register. If the instrument is not to be presented again in clearing then a covering memo is prepared. The covering memo along with returned instrument and objection memo is sent to the customer who sent the same to his account.

I NWARD C LEARING

OF THE

B RANCH

1. The particulars of the instruments are compared with the list. 2. The instruments are detached and sort out department wise. 3. The entry is made in the inward clearing register (serial no. Instrument no. Account No) 4. The instruments are sent top the respective departments 5. The instruments are scrutinized in each respect before honoring the same.

S PECIAL C LEARING
In addition to the normal clearing function at Clearing house it is mutually agreed to hold an extra clearing at the clearing house on the particular day and time which is known as special clearing it is arranged due to the rush of work arising out of say, more Holidays declared by the Central Govt. at a time, but normally special clearing is held on last working day of half yearly and yearly closing i.e. 30th June and 31st Dec. every year.

2. REMITTANCE DEPARTMENT

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The Remittance department deals with the transfer of money from one place to another. Funds transfer facility or remittance of funds is on of the key functions of the banks all over the world. Remittances through banking channels save time, costs less and eliminate the risks involved in physical transportation of money from one place to another. ABL transfers money in the following ways. Pay Order Demand Draft Mail Transfer Telegraphic Transfer Pay Slip Call Deposit Receipt Letter of Credit Travelers Cheque

The Job responsibilities & requirements of remittance department include: Responsible for money transfers, issuance of pay-orders & drafts, collection items, maintenance of cheque books & ATM cards and all other counter specific products and services Ensure highest level of customer service in a professional and competent manner Must ensure that the activities are carried out strictly in accordance with the laid down procedures/processes, and SBP/Compliance guidelines

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Responsible for Cash, Clearing, Inland remittances including Demand Drafts and Pay Orders

Ensure high standards of customer services within the assigned turn around time Ensure compliance with SBP's regulations and internal controls handling cash, clearing, local remittances, and other related activities at branch level

P ARTIES INVOLVED IN R EMITTANCES

There are four parties involved in Remittance, which are Remitter Remittee Issuing Bank paying Bank

R EMITTER
One who initiates, or requests for a remittance. The remitter comes to the issuing or originating branch, asks for a remittance to be made, and deposits the money to be remitted. The bank charges him a commission for this service. He may or may not be the branchs customer.

I SSUING B ANK
The bank that sends or affects the remittance through demand drafts, telegraphic transfers, Mail Transfers, Pay order etc

P AYING B ANK

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Paying Bank also knows as the drawee branch, the branch on which the instrument is drawn. It has to make the payment (usually located in a different city or country).

K INDS

OF

R EMITTANCES

Transfer within the branch Transfer from one branch to another Transfer from one bank to another bank in the same city Transfers from one bank to another bank in two cities.

3. ACCOUNT OPENING DEPARTMENT

The opening of an account is the establishment of banker-customer relationship. This department performs the duty of opening accounts for customers. It also issues checkbooks to customers. A person who wishes to open an account with the bank has to fill an account opening form obtained from any branch of ABL. The bank officer tactfully obtains information about character, integrity, responsibility, occupation and the nature of business of the perspective customer. Any individual, who has attained the age of majority and is of sound mind can open and maintain his/her account. Two or more individuals may open an account jointly. Similarly, business organizations such as sole proprietary concerns, partnership firms, and limited liability companies as well as non-profit organizations like clubs, trusts, societies, associations and NGOs etc, may open their accounts. The documents required for ABLs Account opening are showed as Annexed at the end of this report. The following requirements are necessary for opening an account. Identification of the new customer. Ascertaining the genuineness of the stated occupation business of the customer.

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Determining the correct residential and permanent address. Completion of all relevant columns of the Account opening form. Proper completion of documentation.
OF

F UNCTIONS

A CCOUNT O PENING D EPARTMENT

Providing account opening form according to the customer's requirements, Guide the customer about the requirements of the account opening and form filling, Check the forms whether they are correctly completed or not, Preparing checklist, Stamping on the form, Maintaining account opening register, Pasting of forms in register after release from general banking in charge, Issuance of cheque books, Issuance of accounts maintenance certificate, Closure of account Verification of signature in case of cheque presented before releasing of account opening from SS card is not yet scanned

4. CASH DEPARTMENT

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All physical movement of cash in the bank is made through the cash department. As bank is borrowing and lending institution, therefore cash is the top most priority of Bank. Another aspect is that cash department is for the security purpose, security in a sense that there should be no embezzlement of funds or in money leaded to bank by any party or person. The efficiency of bank is also related to this department the more efficient the bank is the stronger and busy is the cash department. Cash department perform following functions Cash department owes its important to the fact that it is a major point of contract between the bank and the customer, the banks most valued relationships. This department is the showcase of the bank and conveys the first impressions about the banks commitment to professionalism in its systems and procedures and to courteous and efficient customer service. Normally cash department performs following functions Collection of funds Acceptance of deposits Collection of utility bills Payment of checks Remittances Act according to any standing instructions Transfer of funds from one account to another Verification of signatures Posting Handling of Prize bond

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The two main activities of cash department are as fallows:

D EPOSIT C ASH I N C USTOMER S A CCOUNT

When the customer want to deposit amount in his account at opening of account or after that then he has to fill a deposit slip that shows the amount and the account in which the cash will be deposited. Then teller will receive amount and credit the customers account that shows increase in customers bank account.

M AKE P AYMENTS F ROM C USTOMER S A CCOUNT

When the customer draws a cheque on the bank to pay a certain amount then BBO Operator will debit the customers account that shows reduction in his account balance.

C HEQUE

ENCASHMENT PROCEDURE

R ECEIVING O F C HEQUES The cash is paid against the cheques of the client. The following points are important. Cheque is drawn on same branch Cheque is not post dated. Amount in words and figure are same. It should be bearer cheques so the word bearer should not cross.
OF

V ERIFICATION

S IGNATURE

After receiving the cheques the cheques the operation manager verify the signature of the account holder and the signature on the cheques. If the signature is not same it is returned back otherwise forward to BBO Operator for posting. C OMPUTER T ERMINAL P ROCESS

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The cheque is received in computer terminal, where BBO operator checks the balance of the account holder. The BBO operator also sees the stop payment instructions, whether received from account holder or not. After considering these points BBO Operator post the cheque in BBO (Branch back office system) and forward to operation manager. P AYMENT O F C ASH After posting the cheque the operation manager cancelled the cheque and returned back to cashier. The cashier enters the cheque in cash paid registered and pays against the second signature of receiver on the back of the cheque.

5. DEPOSITS DEPARTMENT
The primary function of ABL is to accept and receive surplus money from the people, which they willingly deposit with the Bank. Like all other Banks, ABL also take incitation to attract as much depositors as it can. The deposit department accepts/collects deposit from accountholders. The ABL offer different deposit schemes to its customers, which includes the following: Current Deposits PLS Saving Deposits Fixed Deposit Account ( Time Deposits) Foreign Currency Account ABL Premium Aamdani Foreign Currency Account National Income Daily Account (NIDA)

6. ADVANCES DEPARTMENT

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The bank is profit seeking institution. It attracts surplus balance from the customer at low rate of interest and makes advances at a higher rate of interest to the individuals and business firms. Credit extensions are the most important activity of all the financial institutions, because it is the main source of earnings. Advances department is one of the most sensitive and important department of the bank. The major portion of the profit is usually earned through this department. The job of this department is to make proposals about the loans; the credit management division of head office directly controls all the advances. The advances Department receive application from intending borrowers. After receiving application the advance department processes it further. After analyzing and detailed investigation, they decide whether to approve the loan or not. Some loan approvals are made by the Manager of the branch within his powers as prescribed by the banks higher authorities, while some loan applications are submit to higher authorities for their approval. Some advances are of the following nature Agriculture advance to farmers Medium term advance for working capital Long term advance for setting industry Short term advance to businessman

The Advances department deals in following transactions: 1. Preparation and submission of proposals of Running finance, Cash finance, Demand finance, Export finance, Staff finance, Finance against imported merchandise etc for sanction of finance limit from the hire authority. 2. Preparation and posting of vouchering of all type of finance. 3. Accruals & recovering of Markup on finances on periodical basis.

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4. Approval of transfer of funds through DD-TT, PO, MT, IBCO etc to various branches by debiting the limits. 5. Preparation of weekly, monthly, quarterly, and annually statement to the hire authority. 6. Transfer of funds from one account to another account of the party taking the authority letter. 7. Preparation of advances record. 8. Timely submission of returns/reports, daily, weekly, monthly & quarterly. 9. Checking of computer outputs of the department on daily basis. 10. Balancing of all financing heads.

7. COMPUTER DEPARTMENT
This department is playing a very important role in making the banking procedures faster and helping the bank for providing better services to its customers. The ABL has three types of branches in all over Pakistan, these included
A)

ONLINE BRANCHES

The branches, which are directly, link with central computer AS-400, through wide area networking through fiber optics. These branches have dumb terminal directly linked with central computer.

B)

BATCH BRANCHES

The branches where all transactions are carried out with the computer base system but these branches are not connected to the central computer with wide area net working. Batch branches are using three type of system, Branch Back Office (BBO) based on FoxPro, Branch Automated System based (BAS) on UNIX, Branch Integrated System (BIS) based on FoxPro in Karachi mostly branches are facing this problem. BAS was establish in the beginning while BBO is

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currently implemented now efforts are under way to convert all branches into Electronic Banking System (EBS) which is used by online branches as this system does not require a person to remain sitting till the branch closed its daily operation but the system automatically close it self when the branch timing is over. The database in head office is also based on this system.

C)

MANUAL BRANCHES

The branches where all transactions are carried out manually and records are maintained on registers usually stored in big wardrobes. Manual branches reports Regional head office regarding their daily transactions. In Regional head office through On Line, terminal data goes to head office central computer; Except for branches those are On Line as they transfer there daily data directly through there own terminal. As day-to-day, activities of all branches are recorded in a central computer.

E VENING

DATA RECEIVING CENTER

Data form batch branches reach the main branch in floppy diskettes while form manual branches it is in form of hard copy. Data comprises of transactions in profit loss account, current account, advances etc termed as Daily Transaction Report. Clerk in charge register all diskettes and manual in registers called job booking register one for each of two type of data. These floppies and manual are bring in by riders. There are fourteen riders in total who bring information form all branches located in Karachi region.

D ATA

ENTRY

D EPARTMENT

The next task after receiving the data is to enter that data in to a computer. The floppy disk is directly inserted in the computer. The program in used is based on COBOL language. This program is designed in away that it demand Hash Value value before opening the floppy for further action this value serve the purpose of password or pin code send by the branch on entering that value the data enter in to the computer. This computer is attached with the terminal of central computer. The operator of that terminal takes the data from the computer and converted it in to a text file through that terminal the data finally goes to the central computer.

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D EFECTS

AND

E RROR H ANDLING

Errors of different origin occur when the data goes to central computer. Sometime retrieving data from the system (BAS, BBO, and BIS), other than used in HO (EBS) also caused errors. Other errors include Unmatched (This error occurs when document no matched with the previous one exists), no master (when opening of new account is not mentioned), Date in Valid, duplicate cheques (this error occur when the last objection is not removed). These and other such errors are seen by the person in charge. In the end of day print out of the data enter in central computer is taken. AnyIncomplete information for any branch and any information require by that particular branch is sent to that branch. More over material is used to make a WST which is sent to State Bank of Pakistan.

8. ACCOUNTS DEPARTMENT
Accounts Department of the bank can be considered the most important department. This department is basically concerned with processes and activities of recovering, sorting, summarizing and reporting data resulting from the whole day transactions of all the departments. Actually the process of this activity starts from the preparation of all the required vouchers by different related departments. When these vouchers are prepared, these are posted into respective computer terminals by the relevant departments. Before merging, a batch list is printed out by Computer Department and duly checked by the respective departments. After this, merging stage comes, after which a proof list is printed out. This is the stage, where Accounts Department starts performing its function. Proof list is checked by the Accounts Department. The account department prepare following vouchers and reports Monthly Profit & Loss account- F48 General Ledger General Ledger- Abstract Check Book Issue Register

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Western Union payments Register Demand Notices Miscellaneous Book Bank Transfer scroll General Ledger- Head wise Hash Value Register End of Day register Monthly return register Charges A/c register P-L-S Profit list Weekly Telegram Mail Transfer Register Provident file Transfer Responding Advice Dispatched Register-F15 Cash Remittance IN Cash Remittance OUT ABL General Account Utilities register

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Statement of affairs Closing entries Daily activity checking Minor expense recording

5.

STRUCTURE DEPARTMENT

OF

BRANCHS ACCOUNTS

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5.1 Description of Accounts Structure

The structure of ABLs Accounts department is shown as Annexed at the end of this report. The Accounts department of the branch is controlled by the Chief Accountant under direct supervision of Branch Manager. The Branch has one cashier & two clerks for assistance and help of Chief Accountant. The BBO (Branch Back Office system) Operator has also assist Chief Accountant in various tasks. The head of branchs Accounts department is called Chief Accountant, who performs his functions under direct supervision of Branch Manager. The Chief Accountant is responsible for the central accounting records and controls over all financial transactions of the Branch. He also directs a wide variety of accounting activities and meets important deadlines& analyzes and interprets accounting data of the branch. The other responsibilities of Chief Accountant include: Plans and directs the activities of Cashier, BBO Operator and clerical employees of the branch engaged in the maintenance of a variety of accounting records. Directs and participates in the development and revision of procedures in order to meet requirements of law, provide services to Branch Manager, improve efficiency in branch activities, and coordinate branch activities with those of other departments. Directs and reviews the preparation of periodic and special financial statements, reports, projections, and recommendations, on which important administrative decisions are based. Directs and reviews the study of new and revised laws, rules, and programs affecting the central accounting system and records and installs or recommends changes as appropriate. Designing and operating a system to capture, record, process, and store all relevant documents and information about the financial activities of the branch.

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Ensuring the integrity and reliability of the information system, and preventing fraud from inside and outside the branch.

Preparing financial statements that are reported to Regional Management of ABL. Preparing financial statements and accounting reports for distribution to the branch Manager for their planning, control, and decision-making needs.

The Chief Accountant with the help of branchs clerical staff is preparing following reports: o Monthly Profit & Loss account- F48 o Daily Statement- F21 o General Ledger o General Ledger Abstract o General Ledger head wise o Bank transfer Scroll o Misc Book o Monthly return file o Charger List o PLS Profit list o Weekly Telegram o Transfer Responding Advice Dispatched Register- F15

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o Cash Remittance In o Cash Remittance Out o ABL General Account o Clearing register o Debit & Credit supplementary Debit supplementary is used for debit voucher and credit supplementary is used for credit voucher books and register maintained by bank are as fallows General ledger included: Statement of daily affairs Cash book or cash cum day book Transfer book Income & expenditure ledger

Income& expenditure includes: 1. Discount 2. Service charges 3. Commission from utility services 4. Salaries allowances & provident fund 5. Rent taxes insurance lighting 6. Profit paid on deposits and borrowings

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7. Auditors fee & legal charges

5.2

BANK ACCOUNTING OPERATIONS

The ABLs accounting consists in making computerized, written and permanent records of every transaction. For Computerized recording of transactions the bank used software called BBO (Branch Back Office). BBO enable Bank to record a variety of transactions. The most common part of BBO which is operating by the BBO Operator is Individual Ledgers. Individual Ledgers are the accounts in which accounts with depositors are kept. They are kept so that the balance of each depositor's account may at any time be readily seen, and they should be frequently balanced to verify their correctness. The three column form of individual ledger is used because it has a column for checks paid or other debit entries, one for deposits or other items credited, and a third for showing the balance after each entry or the day's entries are made in the account. The BBO enlist Chart of Accounts of the Bank shown in Annexed . All the accounts shown in Annexed are opened and managed through BBO. All the Remittances of the bank are recorded managed and control through BBO. The End of the Day report is also generated through BBO. The most important record keeping and report generated by Banks Accounts Department is Statement of the Bank. The statement of the bank shows the general, or control, accounts of the bank, and the various books of the bank show the detail of these items. It would not be impossible, but it would be entirely impractical, to enter every figure directly on the statement of condition. Instead of total deposits, the balance of each depositor would appear opposite his name. On the other side, instead of loans and discounts, there would be an itemized list of the loans with the names of the borrowers. The first principle in bank accounting, as in all other bookkeeping, is that for every debit there must be a credit, and vice-versa. In accordance with this fundamental theory the books are maintained. With respect to the statement, every Rupee of liabilities is accounted for by another Rupee of resources. Similarly each accounts at the end of the day for each item of cash is balanced. Each bank employee has had the experience of remaining at his desk until a late hour at night checking up his day's work searching for a difference of a few cents. Often they become embittered at what seems to them a tyranny when

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the small sum of money involved is considered. The reason they must settle, however, is not on account of the possible loss of ten cents, but because the most important principle in bank accounting is involved. "Accuracy first" is a motto that should be framed, figuratively at least, upon the wall of every banking room. The books used by ABL are of various kinds and their purpose is indicated by name. A ledger is a book used to keep a record of balances. To "post" means to enter in the proper columns either the debits or credits on the ledger, and the difference between them represents the balance either due by or to the bank. Another important book which is used by the ABL is journal, a book in which daily transactions are listed in regular order as to accounts, and the total debit or credit is then posted on the ledgers. All other books, cards and sheets used by bank of whatever nature is a part or subdivisions of these books. Often they become known among the clerks by some other name descriptive of their general appearance. For instance, the general ledger scratcher in one bank is known as the "red book," while the collection scratcher is the "black book." The records made by one clerk upon one set of books go to check the records of another clerk upon a different set of books. For instance, the paying teller and the receiving teller will each keep a record of checks cashed or deposited payable within the bank. The debit postings of the individual bookkeeper would agree with the teller's figures. Skillful accounting lies in making the fullest possible use of original entries, at the same time having a check on all figures to guard against either error or fraud. Every transaction ultimately affects the bank's statement of condition by debit or credit. For example, a deposit of Rs.1000 is made, consisting of Rs.200 cash and checks as follows: Rs.200 on the bank itself and Rs. 600 payable in another city. At the end of the day (assuming this to be the only deposit), on the liabilities side there is an increase of Rs 800 all of which appears in the item "deposits" being the total Rs.1000, less the check for Rs 200 which is charged to the account of the drawer. On the resource side, then, a corresponding increase of Rs.800 and this is made up by an increase in the cash of Rs 200 and an increase of Rs.600 in the item "due from banks." Or a transaction may appear on one side of the statement only. The bank has sold Rs.5, 000.00 of the bonds it owns.

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5.3

ROLE OF CFO (CHIEF FINANCIAL OFFICER)

The organizations most senior executive role charged with leading and directing

financial strategy and operations.

Financial Management:
Public Financial Management (PFM) is the system by which financial resources are planned, directed, and controlled to enable and influence the efficient and effective delivery of public service goals.

ROLE OF CFO (Chief Financial Officer):

Traditional role of Chief Accountant: The Chief Accountants used to perform several tasks which were preparing accounts, preparing budgets, operational reporting and interpreting, evaluating operating results, preparing income tax returns, establishing internal control procedures to safe-guard the companies assets. Transition from Chief Accountant to Chief Financial Officer: Due to increased governance requirement there arises a need to empower the chief accountant and to make him responsible by requiring him to sign the accounts. There comes the code of corporate governance, which makes the chief accountant powerful and more responsible. With the new role, Chief Accountant becomes Chief Financial Officer (CFO). APPOINTMENT AND APPROVAL REQUIREMENT: The appointment, removal and remuneration terms and conditions of employment of the chief financial officer of a listed company shell be determined by the Chief Executive Officer with the approval of the Board of Directors. THE CFO IN A PUBLIC SERVICE ORGANIZATION:

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Is a key member of the Leadership Team, helping it to develop and implement

strategy and to resource and delivers the organizations strategic objectives sustainably and in the public interest; 2 Must be actively involved in, and able to bring influence to bear on, all material

business decisions to ensure immediate and longer term implications, opportunities and risks are fully considered, and alignment with the organizations financial strategy; and 3 Must lead the promotion and delivery by the whole organization of good

financial management so that public money is safeguarded at all times and used appropriately, economically, efficiently and effectively. To deliver these responsibilities the CFO: o o Must lead and direct a finance function that is resourced to be fit for purpose; Must be professionally qualified and suitably experienced.

Implication of New Responsibilities: The new responsibilities apply to all Chief Financial Officers of Listed Companies, Insurance Companies, Banks and DFIs. Mostly the CFO presents the financial position relating to the period which has been over, and the period which has to come that is the financial position attained and the financial projection i.e. where the organization will be.

Responsibilities towards Board of Directors: The Chief Financial Officer is required to furnish necessary and classified information to the board of directors along with his analysis and suggestions as the Chief Financial Officer attends the board meetings, any issue with financial implications is being discussed, the person likely to be most in command of these implication is on the spot and immediately available for questions.

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In order to strengthen and formalize corporate decision-making process, significant issues are required to be placed for the information, consideration and decision of the boards of directors by the CFO. These are: Annual business planes, cash flow projection, forecasts and long term planes. Budgets include capital, manpower and overhead budgets along with variance analyses. Quarterly operating results of the company as a whole and in terms of its operating divisions or business segments. Details of joint ventures or collaboration agreements or agreements with distributors, agents, etc. Default in payment of principal and/or interest, including penalties on late payments and other dues, to a creditor, bank or financial institution, or default in payment of public deposit. Failure to recover material amounts of loans, advances, and deposits made by the company, including trade debts and inter-corporate finances. Significant public or product liability claims likely to be made against the company, including any adverse judgment or order made on the conduct of the company. Responsibilities towards Shareholders: The Chief Financial Officer is required to provide all the necessary data to be presented in the Directors Report. For this purpose Chief Financial Officer must ensure the following. The financial statement, prepared by the management of company, present fairly its states of affairs, the results of its operation, cash flows and changes in equities. Proper books of accounts of the company have been maintained Appropriate accounting policies have been consistently applied in preparation in financial statements and accounting estimates are based on reasonable and prudent judgment.

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International accounting standards, as applicable in Pakistan, have been followed in preparation of financial statements and any departure there from has been adequately disclosed.

The system of internal control is sound in design and has been effectively implemented and monitored. There are no significant doubts upon the companies ability to continue as going concern. There has been no material departure from the best practice of corporate governance as detailed in the listing regulations.

Internal And External Reporting for Decision Making

Chief Financial Officer now has extensive responsibilities for internal and external reporting. All the information required for decision-making by the Board of Directors and Chief Executive is processed and furnished by the Chief Financial Officer. Apart from this, external reporting requirement is fulfilled by Chief Financial Officer, the accounts and financial statements are signed by the Chief Financial Officer before they are sent to concerned authorities. CCG requires that the listed companies submit their quarterly accounts to the shareholders within one month of the close of the first and third quarter of year of account.

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The CCG does not prescribe the time for submitting half yearly accounts to the shareholders. Here we can refer to section 245 of companys ordinance 1984 for this purpose, which requires half yearly accounts to be submitted within two months of the close of first half. The CCG requires a limited review of half yearly accounts by external auditor. Annual audited accounts are now required to be submitted within four months of the close of financial year.

5.4

USE OF ELECTRONIC DATA IN DECISION MAKING

The technological development in the field of information systems make it possible for management to use electronic data in decision making. An understanding of the effective and responsible use and management of information systems and technologies is important for managers, business professionals, and other knowledge workers in todays internetworked enterprises. Information systems play a vital role in the e-business and e-commerce operations, enterprise collaboration and management, and strategic success of businesses that must operate in an internetworked global environment. Thus, the field of information systems has become a major functional area of business administration. The management of a business can use

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information systems in their decision making process. Before proceeds its important to discuss precisely about decision making. Decision making can be regarded as an outcome of mental processes leading to the selection of a course of action among several alternatives. Every decision making process produces a final choice. The output can be an action or an opinion of choice.A significant part of decision making skills is in knowing and practicing good decision making techniques. One of the most practical decision making techniques can be summarized in following simple decision making steps: 1. Identify the purpose of Customerr decision. What is exactly the problem to be solved? Why it should be solved? 2. Gather information. What factors does the problem involve? 3. Identify the principles to judge the alternatives. What standards and judgment criteria should the solution meet? 4. Brainstorm and list different possible choices. Generate ideas for possible solutions. See more on extending Customer options for Customer decisions on my brainstorming tips page. 5. Evaluate each choice in terms of its consequences. Use Customer standards and judgment criteria to determine the cons and pros of each alternative. 6. Determine the best alternative. This is much easier after Customer go through the above preparation steps. 7. Put the decision into action. Transform Customer decision into specific plan of action steps. Execute Customer plan. 8. Evaluate the outcome of Customer decision and action steps. What lessons can be learnt? This is an important step for further development of Customer decision making skills and judgment. The decision making of Management of ABL rely on information system resources which includes people and a variety of hardware, software, data, and

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communications network technologies as resources to collect, transform, and disseminate information in Bank.

INFORMATION SYSTEM RESOURCES OF ABL

A) PEOPLE B) C)

RESOURCES

HARDWARE RESOURCES SOFTWARE RESOURCES RESOURCES

D) DATA E)

NETWORK RESOURCES

5.5 SOURCES OF FUNDS

Rupees in Millions Year Share Capital Reserves Borrowings Deposits
2008 2009 2010 2011 2012

4,924,106 10,813,914 11,084,790 465,571,71

5,908,927 13,536,041 8,756,847 463,426,60

7,090,712 13,879,260 11,704,079 501,872,24

8,154,319 15,772,124 10,886,063

8,969,751 19,941,047 40,458,926

591,907,43 624,939,016

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7 Other Liabilities 23,068,314

2 24,974,450

3 26,596,300

5 30,869,154 39,656,831

Horizontal Analysis (%)

Share Capital Reserves Borrowings Deposits Other Liabilities
Table 5.1

100 100 100 100 100

120 125 79 100 108

144 128 106 108 115

166 146 98 127 134

182 184 365 134 172

Sources: ABL Annual Report

GENERATION OF FUNDS
Rupees in Millions Year
Markup/return/interest earned Net markup/interest income Net markup/interest income after provisions 2008 20,947,33 3 14,387,93 5 12,639,77 2009 33,692,66 5 23,370,89 7 21,146,97 2010 44,100,93 4 30,153,71 6 27,782,17 2011 50,569,48 1 33,629,47 0 28,906,73 2012 60,942,798 37,058,030 26,087,216

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0 Total non-markup/ Interest income Total income ( Interest + non-Interest) PROFIT BEFORE TAXATION 8,304,716 20,944,48 6 11,977,60 1

0 9,392,351 30,539,32 1 19,056,02 8

0 12,162,89 2 39,945,06 2 26,310,57 7

5 13,544,84 5 42,451,58 0 28,060,50 1 16,415,862 42,503,078 23,000,998

Horizontal Analysis (%)

Markup/return/interest earned Net markup/interest income Net markup/interest income after provisions Total non-markup/ Interest income Total income ( Interest + non-Interest) PROFIT BEFORE TAXATION Table 5.2 100 100 100 100 100 100 Sources: ABL Annual Report 161 162 167 113 146 159 211 210 220 146 191 220 241 234 229 163 203 234 291 258 206 198 203 192

5.7 ALLOCATION OF FUNDS

Rupees in Millions Year Lendings to Financial Institutions
2008 2009 2010 2011 2012

10,511,322

16,282,942

23,012,732

21,464,600

17,128,032

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Investments Advances Operating Fixed Assets Other Assets

149,350,09 6 220,794,07 5 9,202,969 19,141,569

156,985,68 6 268,838,77 9 9,454,365 23,941,056

139,946,99 5 316,110,40 6 9,681,974 37,113,698

210,787,86 8 170,822,491 340,677,10 0 412,986,865 25,922,979 30,994,965 24,217,655 44,550,347

Horizontal Analysis (%)

Lendings to Financial Institutions Investments Advances Operating Fixed Assets Other Assets
Table 5.3 100 100 100 100 100 155 105 122 103 125 219 94 143 105 194 204 141 154 282 162 163 114 187 263 233

Sources: ABL Annual Report

1.

CRITICAL ANALYSIS

During Internship it was my prime objective to furnish my knowledge (Theory) to various practical situations. The practical work presents an analytical problem while relating theory with practice. As a result, analysis of practical versus theory requires a distinct approach. This part of

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report is the essence of the internship, as this will help to better understand the working environment of the bank by finding the relationship between what is written in the books and what is actually going on in fields. The theory written in the books in cases is not implemented as it is. In some cases theory is implemented with a little modification but in other cases theory has nothing to do with practice. In accounting, banks dont prepare worksheet, but part of worksheet is prepared like trial balance. The securities for the loans are handled in the same way as theory says like mortgage, pledge, hypothecation, advances against insurance policies or liquidation procedure is the same. There is some difference lies in types of loans in bank that is theory talks about four or five types of loans that is cash finance, overdraft, loans etc., but in practice there are some more types used by bank like running finance, demand finance etc. All other concepts of remittances, bills, foreign exchange deposits, letters of credit are in accordance with theory almost. A bank's balance sheet is different from that of a typical company. Customer won't find inventory, accounts receivable, or accounts payable. Instead, under assets, Customer shall see mostly loans and investments, and on the liabilities side, Customer shall see deposits and borrowings.

FINANCIAL STATEMENTS ANALYSIS

Financial analysis is a process which involves reclassification and summarization of information through the establishment of ratios and trends. Financial statement analysis is the process of examining relationships among financial statement elements and making comparisons with relevant information. It is a valuable tool used by investors and creditors, financial analysts, and

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others in their decision-making processes related to stocks, bonds, and other financial instruments. The goal in analyzing financial statements is to assess past performance and current financial position and to make predictions about the future performance of a company. Investors who buy stock are primarily interested in a company's profitability and their prospects for earning a return on their investment by receiving dividends and/or increasing the market value of their stock holdings. Creditors and investors who buy debt securities, such as bonds, are more interested in liquidity and solvency: the company's short-and long-run ability to pay its debts. Financial analysts, who frequently specialize in following certain industries, routinely assess the profitability, liquidity, and solvency of companies in order to make recommendations about the purchase or sale of securities, such as stocks and bonds. The analysis of financial statement refers to the examination of the statements for the purpose of acquiring additional information regarding the activities of the business. The users of the financial information often find analysis desirable for the interpretation of the firms activities. The overall objective of financial statement analysis is the examination of a firms financial position and returns in relation to risk. This must be done with a view to forecasting the firms future prospective. Analysts can obtain useful information by comparing a company's most recent financial statements with its results in previous years and with the results of other companies in the same industry. Three primary types of financial statement analysis are commonly known as horizontal analysis, vertical analysis, and ratio analysis.

RATIO ANALYSIS
Ratio analysis enables the analyst to compare items on a single financial statement or to examine the relationships between items on two financial statements. After calculating ratios for each year's financial data, the analyst can then examine trends for the company across years. Since ratios adjust for size, using this analytical tool facilitates intercompany as well as intercompany

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comparisons. Ratios are often classified using the following terms: profitability ratios (also known as operating ratios), liquidity ratios, and solvency ratios. Profitability ratios are gauges of the company's operating success for a given period of time. Liquidity ratios are measures of the short-term ability of the company to pay its debts when they come due and to meet unexpected needs for cash. Solvency ratios indicate the ability of the company to meet its long-term obligations on a continuing basis and thus to survive over a long period of time. Financial ratios allow for comparison: Between companies Between industries Between different time periods for one company Between a single company and its industry average

HORIZONTAL ANALYSIS
This technique is also known as comparative analysis. It is conducted by setting consecutive balance sheet, income statement or statement of cash flow side-by-side and reviewing changes in

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individual categories on a year-to-year or multiyear basis. The most important item revealed by comparative financial statement analysis is trend. A comparison of statements over several years reveals direction, speed and extent of a trend(s). The horizontal financial statements analysis is done by restating amount of each item or group of items as a percentage. Such percentages are calculated by selecting a base year and assign a weight of 100 to the amount of each item in the base year statement. Thereafter, the amounts of similar items or groups of items in prior or subsequent financial statements are expressed as a percentage of the base year amount. The resulting figures are called index numbers or trend ratios. Formula = Current Year amount / Base Year amount * 100 Horizontal analysis, whilst simple to execute and useful to a certain extent, has its limitations. These limitations include: Being highly dependent on the selection of base year and the period under examination in the financial model. Horizontal analysis provides little insight into why the trend occurred in a financial model. Horizontal analysis does not provide insight into whether the trend in the financial model results was superior/inferior to some benchmark. Horizontal analysis does not address the challenge of negative numbers.

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RATIO ANALYSIS FOR LAST FIVE YEARS:

A ratio expresses the mathematical relationship between one quantity and another as a percentage, rate, or proportion. A ratio can be computed from any pair of numbers. Given the large quantity of variables included in financial statements, a very long list of meaningful ratios can be Ratio presentation includes ratios that are most often used when evaluating the credit worthiness of a customer.

Return on stockholders equity:

= 11160 /(60181+52276/2) =11160 / 56228.5 =19.8% 2012 Profit / loss after tax Total stockholders' equity Average stockholders' equity (60181+52276 2) Return stockholders' equity (%) on 19.847 59 19.45629 21.86221 27.45495 41.20104 / 56228. 5 47249.5 38116 30606.5 22980 60181 52,276 42,223 34,009 27,204 11160 9193 8333 8403 9468 2011 2010 2009 2008

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Interpretation:
This ratio is more meaningful for share holders who are interested to know the profit earned by the company because the dividend paid from available profit higher ratio means factor of production fully utilized and good position. ROEs between 15% and 20% are considered desirable. The ratio of 2011 is high as compare to previous year, but in 2007 that was very favourable.

RETURN ON ASSETS ROA:

The formula:

= 11160 / (698785+619716)/2 = 11160 / 659250.5 2012 Profit / loss after tax Assets 11,160 698,785 9,193 619,716 8,333 605,539 8,403 530,124 9,468 423,266 2011 2010 2009 2008 =1.7%

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Average Assets

total 612627. 659,251 1.69283148 1 5 1.50058 6 567831. 5 1.46751 3 476695 1.76276 2 385157. 5 2.45821 5

(698785+61971 6)/2 Return Assets (%) on

Interpretation:
This ratio has an increasing trend. It means the assets of the business are fully utilized in more and efficient way and also shows the favorable trend of the business.

PROFIT BEFORE TAX PBT:

=17742/44229 2012 Profit Before Tax Gross Income Profit Before Ratio =profit before tax / Gross Income (%) 40.11395 31.63672 36.00176 Tax 17,742 44,229 2011 14,035 44,363 2010 13,874 38,537

=40.1% 2009 13,005 33,102 2008 14,292 27,813

39.28766

51.38604

Interpretation:
There is an increasing trend in the ratio which is favourable indicator, here we can observe that gross income has an increasing trend.

GROSS SPREAD RATIO:

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The formula:

= 25892 / 44229 =58.5%

2012 Profit Before Provision Gross Income Profit Before Tax Ratio 58.5407 8 25,892 44,229

2011 27,348 44,363

2010 22,434 38,537

2009 19,677 33,102

2008 16,846 27,813

=profit before tax / Gross income(%)

61.6459 7

58.2141 8

59.4435 4

60.568 8

Interpretations:
Through ratio analysis we can use the gross spread ratio to determine the profitability, liquidity and leverage of a bank. there is mutual trend in this ratio, in 2009 it was high which is a good sign but in 2011 it is goes down which show that there is decrease in the profit as well as in gross income.

ADVANCE-TO-DEPOSIT RATIO (NET) ATD:

=368692-34960/550646 2012 2011

=60.6% 2010 2009 2008 260,90

Advances provisions(negative

368,692 34,960

382,478 28,387

390,903 19,763

316,737 17,383

9 13,600

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amounts) 335,07 Deposits Advances to Deposit 60.6073 6 71.9644 5 76.7515 9 74.6565 2 73.806 4 550,646 492,036 483,560 400,975 8

(Net) Ratio= Advances Provisions/ Deposits Interpretation:

In 2011 the deposits are high as compare to previous year but advances are low, which shows that organization did not availing its resources properly.

GROSS INCOME:
The formula:

= 44229- 44363 / 44363 = -.3%

2012 Gross Income of this Year Growth In Gross Income(%)= Gross Income of this year Gross Income of last Year / Gross Income of last year 0.3020 5 15.1179 4 16.4189 5 19.0162 9 45.4198 5 44,229 2011 44,363 2010 38,537 2009 33,102 2008 27,813

Interpretation:
There is a decreasing trend in the ratio mentioned above which is not favourable because there is no growth.

GROWTH IN NET PROFIT AFTER TAX:

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NET PROFIT AFTER TAX:

=111609193/9193*100 2012 Net Income of this Year Growth In Net Income(%)= Net Income of this year - Net Income of last Year / Net Income of last year 21.3967 1 10.3204 1 11,160 2011 9,193

=21.4% 2010 8,333 0.8330 4 2009 8,403 11.248 4 59.152 8 2008 9,468

Interpretation:
There is an increasing trend in the net income which is good indicator for investor.

TOTAL ASSET TO SHAREHOLDERS FUND RATIO:

Total Assets Total Assets to Shareholder's Fund Shareholder's Fund = 698785 / 68415 2012 Assets Shareholder's Fund Assets to shareholder's fund = Assets / Shareholder's Fund 698,785 68,415 10.2139 2 2011 619,716 60,937 10.1697 8 13.80523 = 10.21 2010 605,539 43,863 2009 530,124 42,421 12.4967 4 2008 423,266 29,863 14.1735 9

Interpretation:

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This ratio shows the relationship between total assets and shareholders equity. Higher ratio will be favourable.

NONPERFORMING LOAN NPL: What Does Nonperforming Loan - NPL Mean?

A sum of borrowed money upon which the debtor has not made his or her scheduled payments for at least 90 days. A nonperforming loan is either in default or close to being in default. Once a loan is nonperforming, the odds that it will be repaid in full are considered to be substantially lower. If the debtor starts making payments again on a nonperforming loan, it becomes a reperforming loan, even if the debtor has not caught up on all the missed payments.

Nonperforming Loan - NPL

Institutions holding nonperforming loans in their portfolios may choose to sell them to other investors in order to get rid of risky assets and clean up their balance sheets. Sales of nonperforming loans must be carefully considered since they can have numerous financial implications, including affecting the company's profit and loss, and tax situations.

2012 Non Advances Advances NPL Ratio = Non 13.1798 4 Performing 48,593 368,692

2011

2010

2009

2008

39,101 382,478

27,839 390,903

22,012 316,737

16,255 260,909

Performing Loans / Advances (%)

10.2230 7

7.12171 6 6.949614

6.23014 2

HORIZONTAL ANALYSIS:
2012 2011 2010 2009 2008

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Cash and Balances with treasury and other 85654 66878 57567 61718 62974 Banks Cash and Balances with treasury and other 46792 183.052 7 142.9261 46792 46792 123.027 4 46792 131.898 6 46792 134.582 8 Banks 2005 Cash and Balances with treasury Banks(%) and other

Interpretation:
There is an increasing trend in the ratio which is a good sign. = 12385 / 17868 2012 Lending to Financial 12385 Financial Financial 17868 69.3138 6 17868 129.628 4 17868 127.630 4 17868 138.694 9 17868 165.502 6 23162 22805 24782 29572 = 69.3 % 2010 2009 2008

2011

Institution Lending to Institution 2005 Lending to Institution (%)

Interpretation:
There is decreasing trend in the ratio mentioned above; it means that organization is hesitating to lending due to some risk of loss. = 356.3% 2012 Investment - Net Investment - Net 2005 227237 63661 2011 138398 63661 217.398 Investment - Net (%) 356.9485 4 2010 118865 63661 186.715 6 2009 115937 63661 182.116 2 2008 67661 63661 106.283 3 = 227237 / 63661

Interpretation:
The ratio is increasing very sharply which is positive sign. = 368692 - 34960 / 219275 =162.9%

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2012 Advances- gross Provisions against non performing advances Advances - Net Advances - Net 2005 Advances- Net (%) 34960 333732 204810 162.9471 368692

2011 382478

2010 390903

2009 316737

2008 260909

28387 354091 204810 172.8876

19763 371140 204810 181.211 9

17383 299354 204810 146.161 8

13600 247309 204810 120.750 5

Interpretation:
There is mutual trend in the ratio, it increases 2008 but after that there is decreasing trend due to economic conditions of the country. = 22424 / 4449 2012 Operating Fixed Assets Operating Fixed Assets 2005 Operating Fixed Assets (%) 4449 504.023 4 4449 492.829 8 4449 405.057 3 4449 380.782 2 4449 117.644 4 22424 2011 21926 = 504.02% 2010 18021 2009 16941 2008 5234

Interpretation:
There is an increaseing trend in the ratio mentioned above. = 20012 / 10103 2012 Other Assets Other 2005 Assets 10103 10103 10103 10103 10103 20012 2011 17514 2010 19677 = 198.1 % 2009 11741 2008 10195

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Other (%)

Assets 198.0798 173.3544 194.7639 116.213

100.910 6

Interpretation:
There is an increasing trend in the ratio. = 698785 / 347049 2012 2011 2010 = 201.4 % 2009 2008 2005 34704 Total Assets 698785 619716 605539 530121 423266 9 34704 Total Assets 2005 347049 201.350 Other Assets (%) 5 347049 178.567 3 347049 174.482 3 347049 152.751 1 347049 121.961 5 100 9

Interpretation:
There is round about cent percent increase in the total assets of the organization. = 550646 / 289226 = 190.4% 2012 Deposits Accounts Deposits Accounts Deposits Accounts (%) and Other 190.3861 and Other 289226 289226 170.121 6 289226 167.191 1 289226 138.637 3 289226 115.853 3 and Other 550646 492036 483560 400975 335078 2011 2010 2009 2008

Interpretation:
There is increasing trend which is positive indicator. = 45105 / 21790 2012 2011 2010 = 207% 2009 2008

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Borrowing

from 45105 35145 44196 59103 39491

Financial Institution Borrowing Financial 2005 Borrowing from Financial from Institution

21790

21790

21790

21790

21790

206.998 Institution (%) 6

161.289 6

202.82 7

271.239 1

181.234 5

= 11986 / 3999

=299.7%

2012 Sub - Ordinated Loans Sub 2005 Ordinated Loans 3999 299.724 Sub - Ordinated Loans (%) 9 11986

2011 11990

2010 11994

2009 5997

2008 5998

3999 299.82 5

3999 299.92 5 = 121.3%

3999 149.962 5

3999 149.987 5

=5046 / 4160

2012 Bill Payable Bill Payable 2005 5046 4160 121.298 Bill Payable (%) 1

2011 5147 4160 123.72 6

2010 5194 4160 124.855 8

2009 6079 4160 146.129 8

2008 4561 4160 109.639 4 = 283.5%

= 17588 / 6205 2012 Other Liabilities Other Liabilities 2005 17588 6205 2011 14462 6205 2010 16732 6205 2009 15549 6205

2008 9275 6205

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283.448 Other Liabilities (%) 8

233.070 1

269.653 5

250.588 2

149.476 2 = 193.7 %

= 630370 / 325381 2012 Total Liabilities Total Liabilities 2005 630370 325381 193.732 Total Liabilities (%) 9 = 12242 /5180 2012 Share Capital Share Capital 2005 12242 5180 236.33 Share Capital(%) 2 = 21689 / 6235 2012 Reserve Reserve 2005 21689 6235 347.858 Reserve (%) 9 = 26250 / 7351 2012 Un-Appropriated Profit / (Loss) Un-Appropriated Profit / (Loss) 2005 Un-Appropriated Profit / (Loss) (%) 7351 357.094 3 7351 301.836 5 7351 225.87 4 = 320.9% 7351 212.950 6 26250 22188 16604 15654 2011 2011 18960 6235 304.089 8 2010 15502 6235 248.628 7 = 357.1% 2010 2009 2011 11129 5180 214.845 6 2010 10117 5180 195.308 9 2011 558780 325381 171.73 1 2010 561677 325381 172.621 3 2009 487703 325381 149.886 7

2008 393402 325381 120.90 5

= 236.3% 2009 8094 5180 156.254 8 = 348.4% 2009 10262 6235 164.58 7 2008 8299 6235 133.103 4 125 2008 6475 5180

2008

12430

7351 169.092 6

= 60181 / 18756

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2012 Surplus on Revaluation of assets Surplus on Revaluation of assets 2005 Surplus on Revaluation of assets (%) 282.761 2912 8234

2011

2010

2009

2008

8660

1640

8412

2660

2912 297.390 1

2912 56.3186 8

2912 288.873 6

2912 91.3461 5 = 315.7%

= 68415 / 21668

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VERTICAL ANALYSIS:
2012 Cash and Balances with treasury banks Total Assets Cash and Balances with treasury banks (%) and other 12.2575 6 10.7917 2 9.50673 7 11.6422 5 14.8781 1 and other 85654 698785 66878 619716 57567 605539 61718 530121 62974 423266 2011 2010 2009 2008

2012 Lending Institution to Financial 12385

2011

2010

2009

2008 2957

23162 61971

22805

24782 53012

2 4232 66 6.986 623

Total Assets Lending to Financial

698785 1.77236 2

6 3.7375 18

605539 3.76606 6

1 4.6747 82

Institution (%)

Interpretation:
Ratio shows the proportion of lending to financial institution in the total assets and there is decreasing trend in the ratio mentioned above. Investment - Net Investment - Net Total Assets 2011 = 227237 / 698785 2012 Investment Net Total Assets Investment - Net (%) 227237 698785 32.51887 2011 138398 619716 22.3324 9 = 32.5% 2009 115937 530121 21.8699 1 2008 67661 423266 15.98546

2010 118865 605539 19.62962

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Interpretation:
This ratio show the proportion of investment in total assets which is comparatively high from last years and it is positive indicator. Advances - Net

Advances - Net Total Assets 2011 = 368692-34960 / 698785 2012 Advances- gross Provisions against non 34960 333732 698785 47.758 Advances- Net (%) 9 28387 354091 619716 57.1376 2 19763 371140 605539 61.2908 5 17383 299354 530121 56.4689 9 13600 247309 423266 58.4287 4 368692 2011 382478 2010 390903 =47.8% 2009 316737 2008 260909

performing advances Advances Net Total Assets

Interpretation:
This ratio show the percentage of net advances in the total assets, which has decreased from 2008. Operating fixed Assets

Operating fixed Assets Total Assets = 22424 / 698785 = 3.2%

2012

2011

2010

2009

2008

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Operating Fixed Assets Total Assets Operating Fixed Assets (%) 3.208998 3.538072 2.976026 3.195686 1.236575 22424 698785 21926 619716 18021 605539 16941 530121 5234 423266

Interpretation:
Ratio shows the proportion of operating fixed assets in the total assets. There is mutual trend in the ratio mentioned above. Un-Appropriate Profit And Loss: Un-Appropriated Profit / (Loss) Un-Appropriated Profit / (Loss) = Total Assets 2012 Un-Appropriated Profit / (Loss) Total Assets Un-Appropriated Profit / (Loss) (%) 26250 698785 3.7565 2 22188 619716 3.5803 5 16604 605539 2.7420 2 15654 530121 2.95291 1 12430 423266 2.93668 8 2011 2010 2009 2008

Surplus on Revaluation of assets: Surplus on Revaluation of assets Surplus on Revaluation of assets = Total Assets 2012 Surplus on Revaluation of assets 8234 8660 1640 8412 2660 2011 2010 2009 2008

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Total Assets Surplus on Revaluation of assets(%) Total Equity:

698785 1.17833 1 Total Equity

619716 1.39741 4

605539 0.27083 3

530121 1.58680 8

423266 0.62844 6

Total Equity = Total Assets 2012 Total Equity Total Assets Total Equity (%) 68415 698785 9.79056 5 2011 60937 619716 9.83305 3 2010 43863 605539 7.24362 9 2009 42421 530121 8.00213 5 2008 29863 423266 7.05537 4

VERTICAL ACCOUNT:

ANALYSIS

OF

PROFIT

AND

LOSS

Interest/Return/Non Interest Income Earned: Mark Up/Return /Interest Earned:

2012 Interest/Return/Non Interest Income 59332 61107 51,919 41046 32992 Earned Fee Commission. Brokerage and Income Capital Exchange 7992 Gain & 712 1418 69454 1233 3048 72527 769 1,866 62598 1382 1618 50038 1115 738 39940 7139 8,044 5992 5095 2011 2010 2009 2008

Dividend Income Other income Total Return Interest/Return/Non Interest Earned (%) Income

85.42633

84.2541398

82.94035

82.02966

82.60391

Horizontal Analysis:

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Interest/Return/Non Interest Income Earned:

2012 Interest/Return/Non Interest Income 59332 61107 51,919 41046 32992 Earned Interest/Return/Non Interest Income 20159 294.320 2 20159 303.12515 5 20159 257.547 5 20159 203.611 3 20159 163.658 9 Earned 2005 Profit After Taxation (%) 2011 2010 2009 2008

Interpretation:
This ratio has increasing trend which is very favourable for the organization. Because ratio shows that organization is earning through investment such as through advances. Fee Commission Brokerage and Exchange Income: 2012 Fee and Commission. Exchange 7992 7139 8,044 5992 5095 2011 2010 2009 2008

Brokerage Income Fee Commission. Brokerage and Exchange 3219 3219 3219 3219 3219 Income 2005 Fee Commission. Brokerage and Income (%) Exchange 248.275 9 221.77694 9 249.891 3 186.144 8 158.27 9

Interpretation:
There is an increasing trend in the ratio mentioned above, which is favourable for the organization. The ratio raise more than hundred percent.

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P a g e | 89

Bank Analysis with reference to commercial Banks listed on stock exchange

Financial Position of Commercial Banks Registered in Pakistan
Name of Commercial Bank Paid up Reserves Assets Capital (Rs. Bn) Habib Bank ABL Allied Bank MCB United Bank First Women Bank of Punjab Soneri Bank Askari Bank Bank Al- Habib Bank of Khyber Bank Al- Falah Saudi Pak
7.59 8.97 6.46 6.28 10.12 0.28 5.29 4.11 4.06 4.79 4 8 5 23.6 18.54 5.48 35.88 12.82 0.22 7.43 1.88 7.59 2.8 1.34 2.95 0.22 735.71 788.12 344.7 450.34 576.02 8.04 217.85 81.61 194.21 167.36 34.43 333.02 50.83 584.85 621.53 293.97 350.72 465.54 6.4 180.82 64.73 153.32 136.75 24.4 287.77 42.35 411.36 173.42 168.45 228.98 328.55 3.09 142.85 45.83 114.04 93.25 11.14 180.02 27.62

As of June 2010 Deposits Advances Profit (Rs. Bn) (Rs. Bn) After Tax (Rs. Bn)
7.5 8.1 2.51 7.68 5.59 0.05 -2.63 0.47 0.05 1.25 0.11 1.69 -0.81

Earnings Branch Per share (Rs)

9.75 9.03 3.88 12.22 5.53 1.67 -4.97 1.13 1.01 2.61 0.27 2.12 -1.54

Credit

(Rs. Bn)

(Rs. Bn)

Network Rating (Nos)

1400 1249 757 1038 1100 38 272 90 155 203 34 231 55

AA+ AAA AA AA+ AA+ BBB+ AAAAAA AA BBB+ AA A-

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Faysal Bank KASB Bank Meezan Bank NIB Bank Mybank Atlas Bank Standard Chartered JS Bank Habib Metropolitan

5.3 4.02 4.54 28.44 4.24 5.01

3.57 0.17 0.81 8.46 0.41 0.52

137.31 53.66 71.74 177.98 45.47 30.7

99.61 44.33 57.84 112.12 31.96 22.18

87.61 32.65 38.3 85.43 23.03 17.5

0.75 0.08 0.44 -0.73 0.43 -0.2

1.41 0.39 0.98 0.23 1.02 -0.39

111 41 111 240 69 31

AA A A+ AAA AAA+ AAA+

38.72 5.11

1.95 0.01

276.38 24.16

173.81 14.08

126.27 9.57

1.31 0.16

0.34 -0.31

176 11

6.02

6.7

192.45

128.97

101.22

1.57

2.6

100

A stock exchange is a corporation or mutual organization which provides "trading" facilities for stock brokers and traders, to trade stocks and other securities.The securities traded on a stock exchange include: shares issued by companies, unit trusts and other pooled investment products and bonds. To be able to trade a security on a certain stock exchange, it has to be listed there. The initial offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market. In Pakistan securities are traded on three stock exchanges which are Karachi stock exchange, Lahore stock exchange and Islamabad stock exchange. The financial position of commercial banks registered on stock exchanges in Pakistan, are shown in preceding page in terms of their: Paid-up Capital Reserves Assets

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Deposits Advances Profit after tax Earnings per share Credit rating

The best way to analyze these commercial banks is to analyze their credit ratings. The ABL enjoys the highest credit rating amongst Pakistani banks; JCR- VIS Credit rating Co. Limited awarded highest standalone credit rating of AAA to ABL. The JCRVIS Credit rating Co. comments about ABL say a lot about the bank: JCR-VIS believes that the current economic situation puts certain leading industrial sectors and the general consumer under financial stress. Therefore, the second half of 2008 and 2009 are likely to be challenging for the banking sector as a whole, in terms of maintaining growth, asset quality and profitability. The JCR-VIS Rating Process include following steps: 1. Signs agreement for an initial rating 2. Submits preliminary information materials 3. Conducts a preliminary study 4. Submits a detailed questionnaire to the issuer/client 5. Provides detailed information in response to detailed questionnaire 6. Conducts pre due diligence meeting analysis 7. Conducts due diligence meetings

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8. Conducts post due diligence analysis 9. Brief for internal rating committee meetings is prepared 10. Sub Committee recommends preliminary/initial rating 11. Rating Committee decides the preliminary/initial rating 12. Discusses the rating rationales and rating issues with client 13. Notifies issuer of the preliminary/initial rating, deliberates on appeals by client, if any

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FUTURE PROSPECTS OF THE ORGANIZATION:

ABL expects its strong customer focus to drive the banks future business strategy. On the domestic front the bank has already launched its consumer banking business ABL plans to increase investment in developing human resource, infrastructure and internal systems to support the aggressive consumer initiative and exploration of new revenue recognition ABL plans to introduce a range of credit cards backed by visa and master card and establish a strong market position through innovation and provisions of superior value to the customer On the international front, ABL plans to continue to build the core gulf business with special focus on trade.

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 Shah Ruk-ne-Alam Branch Multanes 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.

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STRENGTHS

This branch is provided with 3 fax machines, more than 7 telephone connections, which makes communication easier with different branches The branch is linked through a online network of 755 BRANCHES, thus enabling them to serve customer in better way. This branch is provided with latest computer which increases the speed of computer work.

The branch is situated in the commercial hub of Multan. 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. The Branch has the most experienced and the least experienced staff, which is a good combination of experienced heads and exuberance of youth. The branch is the main branch in the areas, which is another plus point for the Branch. It holds the Hundi Accounts, where the payments are made through checks. This process provides an opportunity to the Branch to have more of the Hundi customers as the Bank customers.

Weaknesses
The Branch has a good staff combination on the basis of experience, but their training capabilities are not up to the requirements of the fast changing banking environment. The customers Long-term contacts are not maintained with customers. 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.

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The organization is very much mechanistic and provides no flexibility to encourage creativity.

The lower staff is non cooperative as compared the lower staff of other branches. The control of manager is not effective. The discretionary powers of manger are very low to offer more incentives and value added services to its customers.

There is a lack of commitment and professionalism on part of the employees. The staff is always in a hurry to leave the bank as soon as possible. They were also observed to starting their operations comparatively late.

The organizational culture is not cooperative Nepotism was observed on part of the manger as well as the top management towards some staff members.

The branch has no industrial accounts. The level of technology management in the branch is very low. The technology available is not maintained well mainly because of the lack of technically trained staff. For instance the scanner, in spite of its availability has not been used for scanning the specimen signature cares.

In spite of the presence of technology many jobs are done manually such as the letters, drafts for fax messages and other calculations, which could be easily, done in MS Word and Ms Excel.

The branch lacks some physical facilities such as clean washrooms which can affect employees performance

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The layout of the branch is such that it is hindering the flow of work on one hand and the documents are lying exposed which can be easily taken away by any person entering the branch.

The job distribution is not up to the mark. The immediate result of this immediate result of which is: The filing system is not up-to-date. Much time is wasted while searching for even a week old document. The staff spent ore time in collections than required.

Delays were observed because the prescribed procedures are not followed. Though ABL, Shah Ruk-ne-Alam Branch Multan in the area it lack specialized counters or facilities such as: Investment advisory counters; Leasing or leasing arrangements; Credit services.

The four branches of Allied bank in Multan are closely located where most of the services offered are not at all differentiated.

No efforts are made to recover the outstanding debts. There is no facility for receiving and satisfying complaints and inviting suggestions. Foreign currency accounts are not entertained. The main reason for these negative responses that the staff is not trained in dealing foreign currency accounts.

Customers coming to the Bank for TTs TCs etc. are not received with open hearts and thus deprives the bank of revenues.

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Some shortcomings on part of Allied Bank of Pakistan, which affects the operations of the bank Shah Ruk-ne-Alam Branch Multan:

There is a lack of functional and proper research and development, which could scan the micro and macro environmental data for future planning and strategy. Financial audits are conducted but operational audits have not received proper attention as much as it should get. There is no procedure, which could encourage the middle and lower level management to initiate creativity.

OPPORTUNITIES
The biggest opportunity for the ABL, Shah Ruk-ne-Alam Multan is the greater number of Hindi customers who get their payments through ABL, Bank Shah Ruk-ne-Alam Branch Multan. These customers can be easily convinced to open their accounts with ABL.

A considerable portion of the labor force of the area is serving overseas. Their families can be encouraged to use ABL as channel for remittances. The Internet facility in the area provides an opportunity to ABL to get Online. The Bank has the basic infrastructure, which can facilitate the online process. The location of the ABL, Shah Ruk-ne-Alam Branch Multan itself provides an opportunity to ABL to get more and less cost deposits. The group from its survey and analysis of IT companies have found out that there are many companies which are not satisfied with its current bank, so Shah Ruk-ne-Alam branch with its superior service quality and long working hours can capture those customers

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THREATS
The biggest threat to the operational success of the branch is the better Allied Bank of Pakistan. Cannibalization of profits is yet another threat to the success of ABL Shah Ruk-ne-Alam Branch Multan. The branches of Allied Bank are located very close to the bank Shah Rukne-Alam branch. All these branches are taking away each others customers. One of the biggest to the ABL, Shah Ruk-ne-Alam Branch Multan is the increasing rate of dissatisfies customers. Most of these customers were observed to be dissatisfied with the delays in their servicing. The greatest threats to the performance of ABL, Shah Ruk-ne-Alam Branch Multan are the decreasing morale of employees. They feel that they are not provided with bonuses. They are not given proper attention to have a say in the annual meetings. The proxy forms are signed on their behalf without letting them know. High-pressure interest groups are developing which poses a constant threat to Allied Bank. competitors

services. Many private sector banks are offering higher rates of return to customers than

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OVERALL POINTS OF CONCERN FOR THE ORGANIZATION:

Weakness are the internal attributes of the bank to decrease in comparison with competing bank. Most of employers are not well qualified and dont have right professional attitude that may hinder ABL to perform up to the mark and to satisfy their sophisticated clients. most of them are graduates and under graduates The management of the bank offered low profit on profit and loss account approximately 6% before deducting the tax. The other banks offer more then this. employees are involved in internal politics which is creating ghastly effects over the banks environment Very few employees are honest to the banking repute as well as to the banks management, while others are by nature very hypocrite and diplomat. Favoring some customers and neglecting and even treating them very badly is a very common practice by staff, I myself noticed this behavior during my internship. Facilities like e-mail fax and link through net is not available at every desk, it should be provided in every department. HRM is not much effective and active in the bank. Every branch must have one HR counter They are not using modern techniques like prizes scheme of other banks Most of the loans have been converted in to bad debts. All the branches are not computerized.

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FINDINGS AND SUGGESTIONS:

The critical analysis ABL in the previous section is the representation of its past, mirror of its present, and an insight into its future. The past data of ABL Shah Ruk-ne-Alam Branch Multan enabled me to study the organization in a historical perspective and understand the nuisances in the banking operations. Study of he present of ABL helped me evaluate the organization in comparison to its future and competitors. The data obtained from the analysis of its present and future in combination with my professional studies resulted in some suggestions and implementation plans, which can help to increase the profitability and operational success of the ABL Shah Ruk-ne-Alam Branch Multan..

Some of the major findings suggestions are discussed. 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. There is always a stinking smell in the Bank due to the out of order condition of washroom. Therefore the washroom must be brought into order to remover this unpleasant smell. Generators should be made available to the branch to minimize the disruptions due to power failure. Newspaper should be provided to the customers to avoid the pain of waiting long. A cash counting machine can help reduce the time spent in counting cash.

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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 customers grievances arising mainly due to delay in workflow. The additional staff required is in the fallowing categories. 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.

COMMITMENT OF EMPLOYEES The decreasing commitment of employees can be increased by introducing an effective performance appraisal system, which can reward and recognize the achievements and services of employees for the Bank. The appraisal system must have the following features. Feed Back: Periodically provided to employees and recognizing their efforts through reward (bonuses) and publicly appreciation. Uniform: The appraisal system must be uniform in evaluating all the employees without any discrimination. Objectivity: The appraisal system must be based on facts and figures and objective evaluation of the facts on grounds.

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SIMPLIFICATION OF ADVANCES The biggest source of the bank revenue is advances. The advances of ABL Shah Ruk-neAlam Branch Multan are on him decreasing trend, causing a decrease in the revenue for the bank. The bank should make the advance procedure simple and quick to meet the customers requirements. The following steps are suggested for simplifying the advance procedure. Increasing the discretion of manager for the amount of advance to Rs. 100,000. Speeding up the process of investigation and verification. Expanding its customer base.

MARKETING CONCEPT The concept of marketing should be followed in every aspect of the organization. Generally, the banks 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. CUSTOMER ORIENTATION Deposits are the main source of funds for commercial banks. Therefore, the priority of every bank is to increase the number and amount of deposits. The key to successful business does not lie in simply attracting new customers. The real success is to maintain in the old customers and attract new customers at the same time because retaining a customer is more difficult than attracting new customers. Every depositor should be given equal importance and there should be no differentiation between customers so that every customer feels himself as much important as the other customer. The attitude of the staff should be friendly to all the customers. The customers should be taken to the concerned person or guided friendly if the concerned person is not available. The attitude of thats not my job should not exist anymore.

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MOBILIZATION OF LESS COST DEPOSITS The analysis of expenses shows that 43% of expenses of the bank are the payments on fixed deposits, which is a very high proportion. Apart from this the interest earned on advances Rs. 0.265 million is smaller than the interest paid on different deposits Rs. 4.1 millions The bank should launch a campaign to get less cost deposits much as high amount current account as well as low cost PLS saving accounts. IINFORMATION ACCESS The Bank should provide information to all the present and potential customers relating to the new products, services, some services 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.

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 customers need for more information.

Personal contacts with the customers can help in providing information to contact with the Bank staff.

customers. All

the customers must be provided a chance to get the desired information by personal

Complaint and suggestion box should be maintained at the door of the Bank where the customers can point out drawbacks in the customers services and put forward their suggestions on his improvement of the services quality of the Bank.

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CONCLUSION:
It is evident from this report that it is making progress by leaps and bounds. the profit of ABL have grown considerably during last few years and this is trend is expected to continue into future. Therefore, we conclude that ABL has very prosperous present and future, which assures the shareholders of wealth maximization. Side by side of it I think that if bank would be able to cover and control on the above mentioned sentences, I think there is also a fault of the customers and in order to make the proper working of the bank, the customer should also cooperate with the bank which will be really a good, ambitious and diligent condition for the bank. And then bank will be really in such a situation and position to compete its competitors in the country as well as on international level.

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REFERENCES:

Internet www.google.com www.Abl.com Bank Staff Fundamental of Financial Management (James C. Van Horne, John M. Advance Accounting (Simons and Karrenbrock 4th Edition)

Wachowicz,Jr.13th Edition )

Murphy, H. A., Hildebrandt, H. W., & Thomas, J. P. (2007). Effective Business Communication (7th Edition) NBF Islamabad. Robbins, S.P., & Coulter, M. (2007) Management (8th Edition) NBF Islamabad. The Bank, Financials. Retrieved January 20, 2010 from http://www.abl.com.pk. Kotler, P. & Armstrong, (2006) Principles of Marketing (10th Edition) Pearson New Jersey.

In Corporate Governance By Abdul Naeem Khan

Professional I ICMAP

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ANNEXURE
A-I BRANCHES LOCATION:

overseas branches

United States of America Qatar UAE United Kingdom Bahrain Republic of Yemen Zurich

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A-2 ORGANIZATIONAL STRUCTURE:

President

Senior Vice President

Vice President

Executive Vice President

Senior Executive Vice President [rosodmemtPresident Regional General Manager Managerxecutive Vice President

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A-3

Branch Manager Functional hierarchy

President and CEO

Board Director

of

Head Departments Regional Manager General

of

Controllers Operation

of

Branch Manager

Office G-I, lower Staff

II

and

other

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Source: ABL, Annual Report.

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A-3

Organizational Hierarchy of ABL

Chairman

Deputy Chairman Board of Directors

Executive Committee Managing Director

SEVP EVP

VP

Officer Grade-I

Non Clerical
Source: ABL, Annual Report.

Clerical Staff

Officer Grade-II

Officer Grade-III

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A-4

BRANCH FUNCTIONAL CHART

Area manager

Operational manager Cash department

Credit department

Computer department Account opening

Foreign dept

currency

Clearing department Finance department Audit department

Bills remittance

and

Legal department

Employees working

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SHORT FALLS/ WEAKNESSES OF ALLIED BANKLIMITED

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CONCLUSIONS

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RECOMMENDATIONS

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REFERENCES

Black's Law Dictionary page 471 (5th ed)