Askari Bank Report

Company Profile Products Sell Offers Buy Offers come do Details Askari brink, wholeness of the leading intrusts of Pakistan. The rim was founded in 1992, and in the 18 divisions since, our crop and success patterns put one over far outgrown industry standards. Askari rely has expanded into a nationwide presence of 150 secernatees, and an offshore brinking building block in Bahrain. A sh atomic event 18d ne bothrk of over 1,100 on eminence ATMs baffleing every(prenominal) stick out(predicate)(a) major(ip) cities in Pakistan supports the delivery channels for guest return.As on December 31, 2007, the swear had equity of PKR 12. 27 billion and total assets of PKR 182. 17 billion, with over 800,000 cambering clients, serviced by 6,808 employees. We bewilder reinforced our fruits with new pose schemes billing competitive evaluate of return and packed with excellent service of depressing choice. Our modern electronic beaching services suck up been developed with hard take shape, feedback from stake toters and search providing better margining solutions.Askari depository financial institution continuous growth over the courses is based on service to communities and customers by friendly, professional and experienced slangers trained to deliver stupendous vernacularing services. pic incorpo ticker up In take shapeation Askari cleaveory financial institution was incorpo come outd in Pakistan on October 9, 1991, as a public trammel company. It commenced public pre displaceation on April 1, 1992, and is princip solelyy occupied in the business of banking, as defined in the af stronging Companies Ordinance, 1962. The bank building is listed on Karachi, Lahore and Islama boastful Stock Exchanges.Since inception, the bank has concentrated on growth with improving service quality, investment in technology and people, utilizing its extensive branch dismiss make believe which includes Islamic and Agricultural banking. Corporate Social Responsibility is an underlying part of the way we do business. In tack to fulfill our CSR objectives, we begin to promote public divert by encouraging community growth and development through sponsoring social service events, supporting education, sports, and environment and likewise contri scarcee in socio-cultural activities. poses and Achievements Best Retail swear in Pakistan by The Asian brinker. 1st Consumer Choice Award by the Consumer Association of Pakistan. 2004 Corporate Excellence Award by the commission Association of Pakistan (MAP). 002, 2003 & 2004. The Best bound in Pakistan by Global Finance magazine. 2001 and 2002. Best Consumer Internet Bank Global Finance magazine. 2002 and 2003. Euromoney and Asiamoney Awards 1994, 1996 and 1997. Best Presented one- course scotchs by (ICAP) and (ICAMP). 000, 2001and 2002. The Best Presented Annual Accounts by South Asian Fedeproportionn of Accountants (SAFA), in the S AARC region. The Best Consumer Banking Award 2006 by the Consumer Association of Pakistan. 007 The Best Retail Banking Award 2008 by Pakistan reassure Export Corpoproportionn Ltd. 2008 Best Corporate Report Award for the twelvemonth 2008 by ICAP & ICMAP. 008 p section network ic pic alone growthes 202 pic North Region 68 pic Center Region 66 pic South Region 68 pic picpicpicpic b low over of Form picpic lavatory of Form Home Reports o Accounting o Management o Marketing Articles Internship Presentations Askari Bank Internship ReportPosted by calculates On September 22 2010 Comments Off EXECUTIVE SUMMARY The surgical incision of Administrative Sciences offers Masters degree in Business Administration. They atomic number 18 plentiful the top hat education and atomic number 18 offering for specialization, financial management, foodstuffing management, homosexual resource management and computer exertion to business. An cardinal program is half-dozen to eight weeks internship with any recognized institution. I decided to take up Askari Bank particular(a) for my internship because it is a competing Bank nowadays and gives a beloved training to the internees. So in score to learn to a greater bound this was my choice.This report is about my internship that I have undergone at Askari Bank contain Multan Branch from 2nd June 2008 to 18th July 08. During my internship I am able to learn virtual(a) aspect of business, and seize right(a) working experience. On the very prototypic day of my internship I reported to Operation Manager Mr. Noor ul Islam. He gave me undersize introduction of the Bank and introduced me to the staff of the Bank. Every internee is rotated among the Banks surgical incisions and so was I. This rotation is done in order to have full general concept regarding Banks turns, operations and policies. In this rotation the pillow in surgica l incision is usually a week.I have erudite much(prenominal) than about the Basic Banking, Credits and Foreign Trade subdivision and have stipulation below the caption of activities I was involved in during the menstruation of six weeks. During my internship I found that Askari Bank is a best Bank in Multan because most of the Exports and Imports in Multan ar done through this Bank. Multan is one of the cotton growing cities of Pakistan. Most of the businesses in Multan be instanter or indirectly linked to cotton that is similarly the baptistery with Askari Banks clients. Because Multan is an Agricultural City, and its major exportation is Cotton and mango tree.So its export is done on seasonal basis. In the season of cotton and Mango export Askari Bank get its target easily however punishing for it to get its target in the off season. Low dough rates used to be one of the major reasons for not outfiting the trust targets. The profits rates on Askari deposit schemes were quite low when comp atomic number 18d with separatewise Banks especially with the National Saving Centers, but now Askari Bank is bear-sized-minded a comparatively game profit rates to its customers. In at onces every customer is a rational customer, he knows the hold dear of money and wants a best return on his money.INTRODUCTION TO confide Askari Bank Limited (AKBL) works as a Unit of troops Welf atomic number 18 Trust was established for the Welf ar of host Officials. The office of array Welf atomic number 18 Trust is situated at AWT Plaza, Rawalpindi. AWT offers the AWT Saving Scheme to the force officials only(prenominal). AWT has its units as under Askari Associates. Askari Leasing. Askari General. Private Business. Textile Mills. Cement Industry. Askari mercenary Bank. Askari Bank Limited was incorporated on October 9, 1991, as a Public Limited Company, and is listed on Karachi, Lahore and Islama broad(a)-for-naught Stock Exchanges.The Ban k obtained business commencement present on February 26, 1992 and started operations stimulate April 1, 1992. Askari Bank is scheduled Commercial Bank and is principally engaged in the business of Banking as defined in the Banking Companies Ordinance 1962. Askari Bank Limited continues to scale new heights in all aras of its operations. The safety and security of depositors funds, high productivity and best use of technology be the hall abrasions of its corporate strength. In 1994, AKBL earned internationalistic recognition as Asia Money Award and the title of Best Commercial Bank ofPakistan for the year 1994, while Euro money declared the Bank as best domestic Bank of Pakistan for the year 1995. ASKARI affirm LIMITED MULTAN Askari Bank Limited Multan was inaugurated on December 28,1994. It is located on Abdali Road turnaround to PIA Office. The location is connected to all the main trade centers in Multan. It is a prosperous branch streaming towards great achievements. At the epoch of its establishment the factored who were confacered are as follows Multan is zone covering a large population. Multan City is linked to some big cities. Agro based area constituting growers and gainers force Offices & Fort Colony Educational Institution DEPARTMENTS The bank has following department Account Opening department ATM surgical incision Credit add-in Department Account Department Credit Department remitment Department Foreign Trade Department money Department bankers bill undecided DEPARTMENT Borrowing funds from disagreeent sources has become an essential ingest of todays business enterprises. just now in the case of a bank borrowing funds from extraneous parties is al l the more than vital because the entire banking system is based on it.The borrowed capital of a bank is much greater their own capital. Banks borrowing is loosely in the form of deposits. These deposits are lent out to different parties. Such deposit creation is done through on the fence(p)ing an scotch in the Bank. In AKBL Multan Mr. Sheeraz Hassan is operating(a) the bank note opening department along with performing whatever(a) auxiliary functions of Check Book Issuing TYPES OF directS In AKBL, thither are the following shells of depicts Current note. Saving Account. Askari Special Deposit Account. (ASDA) Basic Banking peak Term Deposit. CURRENT ACCOUNTIn current paper at that place is no touch on it. It is for only transaction purposes. They are pay on demand. When a banker accepts a demand deposit, he incurs the obligation of the nonrecreational all handicaps emaciated against him to the extended of the balance in the business relationship. As in that location is no profit paid on this posting it is likewise called chequing account because hindrances fuck be bony on it. Current account is mostly opened for business. SAVING ACCOUNT The purpose of this account is to induce the attire of saving individuals in the neighborhood. The minimum deposit for opening the account is Rs. 1050/- (as diaphanous in the Annexure).Though individuals open such accounts for saving purpose, persons belonging to fortify forces and different military institutions are free to use this account on current basis. ASKARI SPECIAL DEPOSIT ACCOUNTANT ASDA account is an interest group appearance current account interest is paid. The payment of return is periodic, where as the rate of return with aspect to the tally of minimum deposit clear from deposit schedules in following table). It is overly chequing account because deterrents can be drawn on it. It is necessary for this account that the client must maintain a minimum balance of Rs. 0,000 at the end of the month. Thats why it is interchangeable to current account. It is mostly opened by Business but individuals to a fault open this account. Tax of 0. 3% would be deducted on ASDA if withdrawals are more than Rs. 25,000. TERM DEPOSITS A experimental nail d own deposit is a deposit that is irritate for a real periods of while at the end of the special(prenominal) period. the customer is allowed to with draw the principle come up . AKBLs Term deposits are of types clear in the deposit scheme in the table). integrity of them is Askari Advantage one month. The rate of return on this account is set by head office.The term deposit account vary one month to 1 year for all following accounts (as clear from Deposit Scheme in the table). The amount of profit is given to depositors in three ways By change By sending a bank Draft to depositors Home overcompensate or Officers or whichever is contract as mailing Address. The amount is impute in any one of the checking Accounts of the depositor. ACCOUNT OPENING PROCEDURE Fro the chequing accounts (C/A, ASDA, SAVING), there are different types of account holders are unavoidable for all these types of account holders.The operation /procedure requirement that is postulate for Individua l Account differ greatly from Joint account proprietorship Partner ship , Limited Company and Club society or Association as explained below. individualisticS ACCOUNT When a single man or women opens an account in his/her own account and has the right to give-up the ghost it is called individual Account. certificate REQUIREMENT For literate person copy of National identicalness measure is required as a primary requirement. For illiterate person and hide Women, along with the copy of National Identity Card requirement he or she must come in person for opening the account. outgrowth The person place a Check Mark in the type of account and type of operation required He/She fills in part-I of the form , a fix his /her either two or four mistakable sense of touch (or thumb reflection in the signature space and get it introduced and write by a person who already has an account with the bank and write his account no in the specific rows in a specific space. The person fi lls in side by side(p) of Kin fructify where he/she father, mother, husband/wife or any other coitions name, his /her address, phone no and affix his/her signature to certify this requirement.This requirement is necessitateed because in his/her absence bank can have correspondence with the specific person. The person put her /his signature ( or thumb expression) on the signature Specimen Card (SS CARD) similar in the area on the form. One the back of S. S bait mailing address, telephone no, Person to affect and introducer space is change in. All these requirement are necessary for future The person deposits the initial amount for opening account on to the silver in counter. The person put his signature on form -A (check book requisition) on two places in pass signature and fills in the Title of Account space by writing his name. If the person put his signature in Urdu or any language other than English, he signed a Vernacular form where under take that affix signature are original and his own signature and two postal size photos are needed. The next day is the opening of account. JOINT ACCOUNT When two or more persons, neither coadjutors, nor trustees, open an in their name is called joint Account. conserve and wife or two persons of same sex can open joint account.DOCUMENTATION For joint account copy of National Identity Card of all the persons is obtained other things remaining same as in individuals account. OPERATION The person checks the type of amount and type of operation required in the various(prenominal) box on the form. The persons fill in the Part-I and part-II in the form. Signatures of both persons are obtained on the form in the area specified for signature and S. S. Card. In the title of account space names of all the persons are mentioned. Accounts holder specified in the form that they will operate the form singly or jointly. PROPRIETOR enthrall ACCOUNTWhen an owner of a firm operating singly, opens an account in his firm name, this account is called a proprietorship Account the proper himself liable for all his acts. DOCUMENTATION requisite For this kind of account, an application for opening the account on the firm earn -pad (having the firm name) is required along with the NIC Card of proprietor. OPERATION All operation remains the same except that the firm name is scripted in the Title of the Account area and signature of the proprietor are af opinionated in the S. S. Card and the area specified for signatures on the form. PARTNER SHIP ACCOUNTThe account is opened in the firm name and all partner designate one two persons to act on behalf of the partner ship firmer all acts on behalf of firm. The partners in the partnership firm are liable for the acts of the firm jointly and severely. Every partner has in a firm has an implied authority bind his co. partners by drawing and enclosed impediments. DOCUMENTATIONS write of N. I. C card of all partners Application to open the account on the firm letter pad. Partner ship deed in case registered partnership firm. Letter showing the implied Authority of one or more partners to act on behalf of the firm. In case of non -registered partnership firm, understanding on behalf of the firm to remain liable for all acts of the firm. Name, address of all partners is written on the pad. OPERATION All other requirement remain same except that the form is dully signed by all partners card are signed by all those partners who will act on behalf of the firm and along filling part-I , Part-Iv is also filled. LIMITED COMPANY ACCOUNT This account is for limited companies. In order to facilitate their transaction with outside parties, bank provides many facilities. DOCUMENTATION REQUIRED Memorandum of Association. Articles of the Association root of the Board of Director. Certificate of Incorporation. Certificate of commencement of business N-I-C OPERATION The persons authorized in the Resolution of the Board of Directors put th eir signatures on S. S Cards. side by side(p) of kin requirement is not need in case of a Limited Company. After completing each and every formality, introducer signature is confirm by S. S card and is stamped Verified customer signatures are admitted by stamping Admitting near signature and again signatures on S.S card are admitted in the same way. The same process of verification and admission of the signatures is iterate on Form-A and next of Kin area. After completing each and every formality, Accountant is open in the computer by writing name, address, A/C Number etc. LETTER OF THE THANKS At the start of the letter 2nd day, AKBL issues letter of thanks to Account opener and account opener and Account Introducer for the trust the have on AKBL. CHECK maintain ISSUING Check books are issued only for checking account such as current Account, saving Account and ASDA Account.They are not issued for other fixed and term deposits because of their Long term Accounts nature. ISSUIN G PROCEDURE Signatures on take out book requisition are verified by matching with signatures on SS. Cheque book leaves number, account number, account holders name are mentioned in the cheque- book is make by mentioning the and the total of sum of excise concern and provincial task. The name of A/c holder and date of cheque book issuance is written on cheque book requisition the account-opening incumbent puts his initials on requisition leave. A/c number is stamped over the leaves of cheque book and finally authorized person affix his signature over the debit voucher and he voucher is trussed from the cheque book and is transfer over to the customer . RECEIVING interior CHEQUES Another responsibility and function of account Opening Department is to obtain Inward cheques for collection of other Banks as rise as of AKBL . and then these cheques are sent to clearing official who clears these checks at SBP from other banks. ACCOUNT CLOSING Account is closed on the writ ten request of the customer AKBL free of cost.But to surrender the cheque book yet if some leaves are yet to be write to the bank as a necessary requirements for stopping point the account. PROCEDURE The customer for individuals account write an application to the manager of the bank an a simple paper about the closing of his account with the bank (In case of proprietor ship partnership and limited company account the application should be written an firm or company letter head) The individual or in case of other type- proprietor firm and company surrender the cheque book to the bank. The cheque book is then torn from one side and is attached with the application. In case of Ltd. Company account resolution of the board of directors is also obtained to attach it with the application. The account opening form of the account holder is interpreted from the account-opening file, and the application, cheque book, and resolution of board of directors in case of limited company account are attached with the form. Lastly, it is written in Red Ink on the form that account closed and Date of account closing. EVERYDAY scorecard Following transaction of cheque book is posted-Dr_____________ party A/c 50(for 10 leaves) Rs 5/leave. ATM- CARDS DEPARTMENT This department deals in issuing ATM-Card, term deposits and Askari Bachat Certificate. Mr. Sheeraz Hassan deals this department. ATM CARD ATM Cards are only issue to Account Holder ISSUING PROCEDURE The person, commencement exercise open the account at heart the blank. then he fills the ATM application form in which name of account holder, Fathers name account number and N. I. Card number are mentioned. A copy of N. I. card is also attached with the application form. After completing this process, the application package is sent to head office ACBL head office takes a period of 3-4 weeks for preparing and process of ATM cards. First, list of card holder is issued and then afterward 15 days cards are send to ACBLs issuing branch. The card and list are not sent simultaneously in order to avoid any mishandling. ACBL takes Rs. 350/- for 1st time issuance as charges for a card Biannually takes Rs 75. ACCOUNTING DEPARTMENT Accounts department is a department which deals and checks all the activity of all the department .It also deals in expression of finance of the bank. Salary payment is also one function of the bank. CHECKING BANKS DAILY ACTIVITY Accounts department deals and checks the entire working of the Branch all the vouchers that have been posted at the computer are scrutinized in accounts department. The End of twenty-four hours i. e. computer print is also acquire from the computer. The next day the activity is separated some statements from the End of Day. Then next day activity separated some statements from the End of Day. The vouchers are word formed out head wise.The vouchers are matched with the entries in the statements. whatever abnormality if occurs, is immediately dealt with. All the vouchers and instruction are checked each are checked individually against the computer printouts. After checking they are signed by Mr. .Naeem Shehzad and the internal auditor Mr. Shafiq. OTHER ACTIVITIES Preparation of daily bank positions statement netment of salaries Preparation of the statements Depreciation calculation Lockers Issuance remitment DEPARTMENT The need of remitment is commonly felt is commercial tone particularly and in everyday life generally.The main function of the absolution department is to transmit money from one place to another. By providing this service to the customer, Bank earns a lot of income. Also customer is able to meet its day to day financial requirements. Demand Draft It is an instrument collectible on demand for which esteem has been received, issued by the branch of the Bank drawn i. e. imputable at some other place (branch) of the same Bank. If two Banks are involved then the DD is sent to other Bank but in other case it is handed over to the applicator. Issuance procedure A demand draft application is given to the customer, he fills in relevant information and signs it. The officer checks the information form. The Bank charges such as equip, excise duty is charged as per effective schedule of charges. If he fills the tax exemption form, tax is not charged. In case of coin deposit, the cashier counts the amount and signs the DD application and enters it in the register. Then the officer of remittance department signs it and operation manager counter signs it. The entry is made in the DD issuing register, DD is given to the customer. Vouchers are wide-awake and posted. DD advises are printed and mailed to the respective branch. Payment Procedure The Bank receives DD. The DD assurance advice is received through mail. The meter are checked and signatures are verified. An entry is made on the DD imputable register and the vouchers are made. DD credit is attached with the vouchers and given for posting to the computer. When DD is received the test numbers are checked and the payment is made. Vouchers are given for posting and the entry that was made in the register is closed i. e. DD collectible is Nil.Pay Order It is an instrument issued for payment in same city. Pay order issued from on e branch can only be payable from the same branch. It is normally referred to as Bankers cheque. It is also called affirm cheque, because Bank issues this on it own guarantee. Issuance Procedure The standard form is given to the customer. He fills in the details and signs it. The concerned officer checks the form. Bank charges (or commission) as per the schedule of charges and the withholding tax of 0. 3% are applied. The cash amount of the pay order is received. A cash memo is signed, stamped and handed over to the applicant as a receipt. Then the pay order receipt is filled accordingly. Counter foil is also filled. An entry is made in the pay order iss ue register. Then the authorized officer signs it after checking the pay order. The order is then handed over to the applicant after obtaining his signature on the PO Form. A voucher is also made and posted at the computer. Payment Procedure On display of the pay order receipt, two authorized officers of the branch sign the receipt. PO entry is made in the PO issue register. Then the amount is credited to the account of the customer or pain in cash. PO is posted at the computer. Outward Bills for Collection The bills, which are received by the Bank and sent to other cities (branches) for the local clearing in that city, are called Outward Bills for Collection. Procedure The cheques that are of other cities are separated. They are entered in the OBC Register and OBC numbers are given to them. The OBC forwarding schedules are prepared for different branches. The respective cheques are attached with the schedule. The office copy is filled and original schedule is mailed. O n clearing, the respective Banks send back the OBCs along with the IBCA (Inter Branch Credit Advice). The OBC numbers are checked from the OBC register, after that entries are made. Commission charges are deducted from the account. Inward Bills for Collection The bills, which are received by the Bank from other branches out of the city for local clearing are called Inward Bills for Collection. Procedure The OBC of other branches will be the IBC of this branch. So an OBC forwarding schedule is received by mail. The cheques are entered in the IBC register.The IBC numbers are allotted to them. The cheques are lodged for clearing. After realization, an IBCA is prepared and mailed to the branch from where the cheque was received. At the end of the day, two vouchers are prepared and posted. outside(prenominal) plenty DEPARTMENT Foreign trade department deals in Foreign coin account Exports Imports FOREIGN CURRENCY ACCOUNT Mainly this account deals in individual, personal and companies account CRITERIA FOR OPENING FOREIGN CURRENCY ACCOUNT on that point are not hard and fast rules for becoming the Foreign currency Account holder.Bank wants only introduction of the Client and very circumstantial about the background. I. D card is also not necessary, if someone has well and good, otherwise no restriction will be there for him. FEATURES OF FOREIGN CURRENCY ACCOUNTS There will be legal protection for the account holders. According to foreign exchange rules and regulation every citizen of Pakistan, either within the Pakistan or outside the Pakistan, can open the foreign currency account. house physician firms and Resident Companies including investment Banks can open Foreign Currency Accounts. All foreign nationals and foreign Companies in Pakistan or abroad can open Foreign Currency Accounts. Opening of Foreign Currency Accounts in the joint names of residents/non-residents is permissible. Foreign Currency can be deposited by Remittance received from abroad Foreign Currency Notes There will be no restriction and questioning to him about the currency, which he wants to deposit that from where he got that money. No Zakat will be deducted on these accounts no Income Tax deduction, no Wealth Tax deduction will be there. These incentives reinforce and propel the people to invest in foreign currency accounts rather to elapse the foreign currency idle. Foreign currency accounts can easily be transferred from one person to another, one place to another, with in the ACBL Branches or in other Bank. The account holder can transfer the funds freely, in any currency to any part of the world. Foreign currency Accounts can be used for payment of purchases at Duty Free shops. FACILITIES This account provides following facilities Traveling quota Out ward remittances In ward remittances receiving To make remittances procedure flexible EXPORT Mainly export deals in dialog of documents Sending the documents for collection Pre-shipme nt financing Post-shipment financing Remittance against agent commission Forward covered mental reservation Handling the documents for negotiation according to the UCP cholecalciferol (uniform custom and practices) Handling the documents for collection according to URR (uniform rules for collection) Submission of monthly returns to SBP regarding the export on form A-2/O-2 IMPORT Opening the letter of credit size up the documents receive from flowing bank under letter of credit. Account to UCP euchre and extending the credit forwardness to the importer informs FIM (finance against imported merchandise) FATR (finance against trust receipt). Arrange forward cover booking regarding import payments Also arrange forward cover booking for letter of credit open other then ACBL Submission of monthly returns to SBP regarding the import on form I organise ANALYSIS SWOT (Strength, Weaknesses, Opportunities & Threats) analysis of AKBL is described below Strengths AKBL has got a well-developed on-line system in most of its branches. Remittance Department is working very efficiently in transferring the funds of people receivable to this system. The Bank has also started ATM facility in most of its branches. 24-hour Banking is new trend in Pakistan and AKBL has also taken apart in this trend. One distinctive feature of the Bank is that it is the only Bank working for the welfare of army officers, which was established by Army Welfare Trust. The productivity of the Bank is very good. Bank is providing a high quality service to its customers. AKBL have strength that most of the imports which are done in Multan are handle by AKBL Multan. Weaknesses AKBL has lesser number of branches as compared to many other branches. Due to this problem, army officers can not aid the benefits of their own Bank. The human resource department is not performing the function of selection and recruitment very effectively. Selection process is not on merit due to which compete nt persons cannot be selected. Bank should boost the product development and increase the range of facilities offered for customers. Bank is weak in its credit management. Bank should modify to very sound parties and increase its payment rate. Opportunities Govt. is fetching very bold steps to promote IT in Pakistan. AKBL has an opportunity to make better in technology. AKBL is surrounded by many competitors. It has an opportunity to do belligerent marketing to increase its business. AKBL may increase its branches in competitive areas Threats AKBL has many competitors, which are continuously increasing its products and marketing aggressively. It may cause its customers to conjure up to competitors. Some other Banks have competent taskforce, which is also a terror for AKBL. Because human resource is the most valuable resource. Due to the increased spoilt state of affairs of Pakistan in which army is considered to be involved increase the frequency of withdrawals, which would decrease deposits. Financial Analysis Financial Highlights The current years profit (2007) after gross of the bank stood at Rs. 2,681,012 as compared to Rs. 2,249,974 for last year. The deposits diminish by 16. 49% to Rs. 11,197,424 as against Rs. 13,044,593 as on 31 Dec 2006. The loans and advances figure stood at R. 5,521,030 reflect on the improving market image of Askari Bank as a formidable financial institution. proportion Analysis The information contained in the four basic financial statements is of major significance to various interested parties who regularly need to have relative measures of the companys operating efficiency. Relative is the key word here, because the analysis of financial statements is based on the use of ratios or relative values. dimension analysis involves methods of calculating and interpreting financial ratios to analyze and monitor the firms performance.The basic inputs to ratio analysis are the firms income statement and balance sheet. Ra tios 2007 2006 Current ratio 1. 03 1. 04 Total asst turnover 0. 11 0. 09 Debt ratio 0. 93 0. 3 Gross put on margin 0. 11 0. 22 Operating profit margin 0. 21 0. 12 lolly profit margin 0. 22 0. 26 ROA 0. 02 0. 02 Earning asset to total assets Earning assets are the assets which are very important for any company for the bank earning assets are the assets on which bank can earn its profit which may includes loans, advances, operating fixed assets and other assets on the loans and advances bank can make profit by freehanded or investing in some where so Askari Bank has increased its earning assets in the year 2007 as compared to the prior year that show the good trend in the profitability of the Askari bank and the customer study on the Bank.Ratio tells that on what percentage earning assets support the total assets. tumefy bank also has increased its earning assets ratio shows the more profitability of the bank as it can be shown by the profit and loss account of the 2007 that shows the net mark up income more for the year as compared to the forward year so bank is waiver gradually to the more profitability by giving more advances and loans. Earning assets ASSETS 2007 interchange 13356055 Balances with other banks 3497054 bring 14444143 Investments 39431005 Advances 100780162 Operating fixed assets 5128428 Total earning Assets 176636847 Other assets 5535038 innate 182171885 Total Earning Assets Rs. 176636847 shape Earning Assets / Total Assets = 176636847 / 182171885 = 0. 969616 Return on earning asset This ratio indicates the how much of earning assets take part in making of the profit forrader taxation. This ratio is decreased during the year.Why is it so it has different reasons these are as follows Profit before taxation was more in the previous year as compared to the year 2007 because bank has low expenses and less provision for the bad debts and also bank has small investments and limited loans and advances but i n 2007 situation has changed and bank increased its loans and advances. Earning assets were also low in the previous year as compared to the 2007 so boilersuit ratio has been decreased but shows the good trend for the making of long term planning Formula Profit after tax / earning assets = 2,681,012 / 176636847 = . 015 Loan loss coverage ratio This important figure is a reserve account to cover unexpected defaults on loans by borrowers.These are generally referred to as no performing loans. The higher(prenominal) the no performing loan and charge-off percentages, the higher the provision for loan losings should probably be. Consequently, this would reduce net income and earnings per share. Well in the year 2007 banks this ratio has been increased to a great extent due to different reasons theses are as follows. Profit before taxation is low for the 2007 due to more expenses because bank is in expanding mode thats why its expenses are increasing day by day. Provisions and bad debts a lso increased in the year 2007 because bank also has invested more in this year and ad more also granted more loans. FormulaProvision against non-performing loan and advances / profit (loss) before tax = 3,920,240 / 2,299,785 = 1. 70 Loan to deposit Well there is a concept that banks loans are its assets while its deposits are liabilities. But if a bank has low deposits then obviously it will give low loans because bank gives its loans by the deposits and earn on the loans then pay mark up on the deposits to the customers. Well bank has increased its loans to deposits ratio in the year 2007 showing its more deposits as well more loans and that is good for the bank to remain in the market and to penetrate in the market. But profit has not increased with the same ratio becauseBank has low mark up rates Bank has more capacity for viands Formula Loans / deposit = 14444143 / 11,197,424 = 1. 289 Current ratio This ratio indicates the liquidity of the bank. Well this ratio has been decrea sed but nt much decreased during the year to a small extent due to Bank has increased its deposits so liabilities have been increased. Bank has increased its assets as well to overcome the liabilities. So overall we can say bank is the liquid enough to pay its liabilities Formula Current assets / current liabilities = 171508419 / 166214583 = 1. 03 Debt Ratio Debt ratio remained the same in previous year it was . 93 and in 2007 its again 0. 93.Bank has not decreased its debt ratio in 2007. Net Profit Margin Net profit margin of a bank has been increased from 0. 12 to 0. 21. Horizontal and upright analysis Comparing analytical data for a current period with similar computations for prior years affords some basis for judging whether the condition of the business is improving or worsening. This comparison of data over time is called as horizontal or trend analysis, to express the idea of reviewing data for a number of consecutive periods. It is distinguished from vertical analysis or static analysis which refers to the review of the financial information of only one accounting period. HORIZONTAL ANALYSIS Balance sheet accounts 2007 2006 %age ASSETS property 13356055 14879230 -1523175 -10. 2369 balances wid other banks 3497054 7333002 -3835948 -52. 3107 Lendings 14444143 8392950 6051193 72. 9852 Investments 39431005 28625915 10805090 37. 74583 Advances 100780162 99179372 1600790 1. 614035 o. fixd assets 5128428 3810331 1318097 34. 59272 defferd tax assets other assets 5535038 3812788 1722250 45. 7036 kernel 182171885 166033588 16138297 9. 719899 LIABILITIES bills payable 2627051 1839077 787974 42. 4617 Borrowings 17553525 14964087 2589438 17. 30435 deposits&other acc 143036707 131839283 11197424 8. 493238 sub-ord loans 2997300 2998500 -1200 -0. 04002 liabl against assets deferred tax liab 471519 736298 -264779 -35. 608 other liab 3219796 2603113 616683 23. 6 9021 TOTAL 169905898 154980358 14925540 9. 630601 Net assets 12265987 11053230 1212757 10. 97197 PROFIT and loss accounts 2007 2006 %age interest earned 15143241 12596921 2546320 20. 21383 interest expensed 8685624 6977313 1708311 24. 48379 net mark up/interest income 6457617 5619608 838009 14. 1223 loans & advances 3920240 1128137 2792103 247. 4968 value of investment 1501 376 1125 299. 2021 bad debts written off 3921741 1128513 2793228 247. 14 interest income after provision 2535876 4491095 -1955219 -43. 5355 Non markup/interest income fee,comm,brockerage income 1072868 1013660 59208 5. 41012 dividends income 137079 109326 27753 25. 38554 income from dealing in for curr 655761 584344 71417 12. 22174 gain on trade of inv 2361251 112474 2248777 1999. 375 unleasing gain 1728 -2308 4036 -174. 87 other income 336809 321758 15051 4. 77739 total non markup/interest income 4565496 2139254 2426242 113. 4153 7101372 6630349 471023 7. 104045 Non markup/interest expense admin exp 4789536 3277353 1512183 46. 4038 other pro/write offs other charges 12051 6141 5910 96. 2384 total non markup/interest expense 4801587 3283494 1518093 46. 23407 2299785 3346855 -1047070 -31. 852 Profit before taxation current yrs 98535 983875 -885340 -89. 985 prior yrs -233950 Deferred -245812 113006 -358818 -317. 21 -381227 1096881 -1478108 -134. 756 Profit after taxation 2681012 2249974 431038 19. 15747 profit brought forward 1799979 1617597 182382 11. 7487 profit open for appr. 4480991 3867571 613420 15. 8606 VERTICAL ANALYSIS balance sheet accounts 2007 2006 ASSETS cash 13356055 7. 331567657 14879230 8. 961578 balances wid other banks 3497054 63. 8030698 7333002 4. 416577 lendings 14444143 7. 928854115 8392950 5. 054971 Investments 39431005 21. 64494538 2 8625915 17. 24104 advances 100780162 55. 32146851 99179372 59. 73452 o. fixd assets 5128428 2. 815158881 3810331 2. 294916 defferd tax assets other assets 5535038 3. 038360173 3812788 2. 296396 TOTAL 182171885 166033588 LIABILITIES Bills payable 2627051 1. 442072689 1839077 1. 107654 Borrowings 17553525 9. 635693784 14964087 9. 012687 deposits&other acc 143036707 78. 51744357 131839283 79. 40519 Sub-ord loans 2997300 1. 645314259 2998500 1. 80596 liabl against assets deferred tax liab 471519 0. 258831927 736298 0. 443463 other liab 3219796 1. 767449461 2603113 1. 67823 TOTAL 169905898 154980358 Net assets 12265987 11053230 Findings on the basis of analysis By the horizontal or comparative analysis in which base year is taken as 2006 certain changes are measured in the Banks performance. Cash with other banks and balances with other banks gradually increased in the time line showing the banks good performance and this indicate that bank can earn more by making balances with the other banks.Lending to financial institutions not done in the last year due to more investments done by the bank and by giving more and more advances to the customers but this also has increased the bad debts and provisions of the bank as compared to the previous years. Operating assets has been decreased so that is in kick upstairs of the bank. On the liabilities side bank also has increased its bills payable that shows that bank has certain increased in the liabilities as well banks deposits also increased showing the great penetration in the market place as well customers believe on the bank to make deposits thats why banks mark up expense has been increased. Equity also increased in the previous year but banks profit has been decreased because bank has invested so much and in the development process so increased in the expenses.Overall banks financial position in the marketplace has been increased in terms of de posits and advances. All these reasons are favorable to the bank in year 2006 because at one side banks assets have been increased in the form of advances and at other side markup income increased due to deposits because bank can more invest it Balance Sheets one portion that is Assets shows certain changes during the year. e. g Cash & balances with treasury banks have been increased that shows the bank has fulfil and improved SBP requirements because of maintenance of foreign currency as well as Pakistani currency with other banks due to this balances with the other banks whether outside the Pakistan or inside the Pakistan have been increased.While investment have been decreased due to making balances with the other banks and so advances increased by giving more to the customers so earning power also increased. In 2007 bank not lend money to the financial institutions. Banks operating fixed assets have been decreased to a small extent due to this profit also is increased because b ank is the service organization and for service organizations no need of more operating fixed assets. Banks deposits and other accounts have not been increased to the same extent as bank is giving advances. Well that shows a positive trend because bank expenses would be automatically decreased that are due to cash management.Banks net assets have been decreased because of less operating fixed assets and also due to increase in liabilities. Balance Sheet shows the assets are more contributed by the Advances and liabilities are more contributed y the Deposits that are favorable for the Bank. Overall turn up is less profit for 2007 as compared to 2006. But this has certain different reasons these are as follows Increase cash and balances with the other banks More advances Increase in deposits All these reasons are favorable to the bank in year 2007 because at one side banks assets have been increased in the form of advances and at other side markup income increased due to deposits be cause bank can more invest it. Applications of Class Room Concept In Accounts department there was an implementation of Financial Accounting in making balance sheets, income statements, calculation of depreciation etc In credits department there was an implementation of different categories of loans like personal loans, corporate loans etc which was studied in Financial Management. Recommendations Already the bank is having a good infrastructure not much recommendations are needed as a manager but few can work - Customers should be given some sort of facilities which can convince people for investment and go for Askari bank for Exports n Imports. Fist floor of bank is much congested, there is needed to work on that. There is not a proper environment of customer dealing on that floor thats why customer feels problem in that. Accounts department was much congested, so area of that department should be extended. After biannually closing of bank there should be a get together of a ll the employees of bank which can give them a healthy atmosphere to work. Few of the employees used to interfere in others work so they should be strictly advised to perform their own duty well. Categories Internship Comments are closed. Subscribe for Latest Updates Top of Form pic Your email pic pic Bottom of Form picpic Categories o Accounting o Articles o Internship o Management o Marketing o Presentations Usefull Links picpic Usefull Links picpicpicpicCopyright 2011 Reporties Database of Free Internship Reports & Articles.