EXECUTIVE SUMMARY

In this report we have discussed the management strategies of Bank Alfalah. Bank AlFalah Ltd
(BAFL) has a solid foundation of over 10 years in Pakistan, with a network of over 109 branches
which are Automated Branches in 37 cities nationwide.
The evolution of Bank Alfalah signifies a movement from concept to reality; a
reality to bring about a change in the banking industries of Pakist
a n , o f f e r i n g a n alternative way of banking, providing people an opportunity to
practice beliefs in their financial matters. The bank is striving to prosper in terms of
financial returns and the value it continues to provide its stalk holders. The most
valuable asset of any financial institution is its human resource. With their key
indicators of progress already soaring to new heights, the bank is c o m m i t t e d t o
dedicate all its energies, resources and time to bring higher value and
satisfaction to their customers, employees and shareholders. The graph of bank is going up and
up every year. The ratio of profit is increasing at good percentage. The bank is serving the
people at high level of standard by going according to the wishes of the customers.
BRIEF HISTORY
Bank Alfalah Limited was incorporated on June 21st, 1997 as a public limited company under the
Companies Ordinance 1984. Its banking operations commenced from November1st, 1997. The
bank is engaged in commercial banking and related services as defined in the Banking
companies ordinance, 1962. The Bank is currently operating through in 282 branches including
48 branch of Islamic banking all over the country with the registered office at Bank Alfalah
Building, I. I. Chundrigar, Karachi.
Strengthened with the banking of the Abu Dhabi Group and driven by the strategic goals set
out by its board of management, the Bank has invested in revolutionary technology to
have an extensive range of products and services.
The bank facilitates its commitment to innovation and with clients and service providers to
ensure uninterrupted services to its customers. It perceives the requirements of its customers
and matches them with quality products and service solutions. During the past five years, it has

emerged as one of the foremost financial institution in the region endeavoring to meet the needs
of tomorrow today.
Mission
To d e v e l o p a n d d e l i v e r t h e m o s t i n n o v a t i v e p r o d u c t s , m a n a g e c u s t o m e r
experience, deliver quality services that contributes to brand strength,
e s t a b l i s h e s a c o m p e t i t i v e a d v a n t a g e a n d e n h a n c e s profitability, thus providing
value to the stakeholders of the bank.
Vision
To be the premier organizations operating locally and internationally that provides the
complete range of financial Services to all segments under one roof.
Objective
The objectives of Bank Alfalah are as follows:

To please their customers by fulfilling the financial needs as best as possible, they believe
in placing the client at the center of business and all of the products and services. For this

the management has adopted the strategy of

Caring for you Our Customers
To get maximum share of the market
To price the products optimally
To expand more the network of branches in several other cities of Pakistan as well as in

the other countries of the world.

To reinforce a corporate culture that fosters learning, creativity and flexibility.
To invest further in banking innovations which include Islamic banking, SME, Home
Loans and other areas of product development to provide higher levels of services and
value to the clients.

Rating Of Bank
Credit rating assigned to the Bank Al-Falah by PACRA (Pakistan credit rating agency) is A1+ for
short term and AA for long Term. This rating represents very high credit quality and a very low

expectation of credit risk. It also depicts the banks financial strength creditably sound portfolio
and above all, its leading position among all the major private banks operating in the country.
The bank aims to maintain its ranking in the years to come through the support of its valued
clientele.
Nature Of The Organization
Bank Al-Falah Ltd. is one of the few leading commercial banks in the country, which has been
continuously adding various investment products to its range of banking services. It has financed
the major industries like telecom sector. It has introduced many deposits schemes in Pakistan.
Main Offices
Main office the Bank Al-Falah Ltd is situated at I.I Chundrigar Road, Karachi through a network
of 292 branches (Including 48 branches of Islamic Banking, Five Branch in Bangladesh & two in
Afghanistan) located in all major cities across the country covering all the four provinces.
Bank Alafah - The Jinnah Avenue Branch:
The Jinnah Avenue Br. Branch was established on 30th June, 2004 in rented premises. It has three
floors, basement, ground floor and 1st floor. Timing of the Branch is 9am to 5 pm (non-stop
banking), Saturday 9 to 12:30 and on Friday break 1 to 3 p.m.
COMPANY MANAGEMENT SYSTEM
Management means the administration and the governing body that is concerning
the whole organization. All the decision and strategies are been proposed and
evaluated the management of the organization. At Bank Alfalah, the management is
pretty strong and there is lot centralization in the whole network of the bank. The
management at Bank Alfalah has been divided into 3 major parts.
1. Board of Directors
2. Top management
3. The group of middle managers, supervisors and the employees.

1. The Board of Directors:

The upper most part of the management is the Board of Directors or the Executives. The Board
of Directors are responsible for the first phase of the management process,
i.e. planning. So, all the decisions and the strategies are being proposed and
implemented under the instructions and the supervision of the board of directors or the
executives. Also the policies and the overall objectives of the Bank are being proposed at this
level of the organization.
2. The Top Management:
The top management involves the branch managers and the chief managers of the
bank including the operations managers as well. The major responsibilities include the strategy
formulating for the bank and supervising the whole staff at the branch. They define
and interpret the objectives and vision and then formulate policies for their completion.
3. The Middle Management, Supervisors And The Employees:
Departmental heads constitute this level of management at Bank Alfalah. They are directly
responsible for planning and controlling the activities of officers. Finally,the
employees whose activities are monitored and controlled according to the
d e s i r e d objectives.
ORGANIZATION CHART
Organizational Hierarchy
Chairman

Board of Directors

President

Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President
Assistant Vice President

Officer Group I

Officer Group II

Officer Group III

Organization Chart of Jinnah Avenue Branch, Islamabad

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Leadership:

fOVicSEerPs,GoupAdnt

The bank AlFalah organizational structure follows the autocratic style. As decisions are more

important so there are fewer people who can take decisions effectively in this organization. A
pyramid of authority concept is followed by this organization. As explained below:
Staff level 4
Senior Management(Chairman, BOD, President)
Staff level 3
Administrative Management (SEVP, EVP, SVP)
Staff level 2
Junior Management (Vice President, AVP)
Staff level 1
Supervisors (Officer Group I, II, III)

Level

Level 2

Level 3
Level 4

The staff at level 1look to their leader from level 2 to

give them permission to act. At level-2 all the team
leaders could together decided on a course of action.
However, without the permission from their leaders at

level 3 this cannot happen so it realizes that the organization has a pyramid-like structure with
the greatest authority vested at the top. Under which the span of control is very low and the

decision power is centralized to the top level management. Due to which the bank cannot operate
independently and decision takes the time. Most the house finance case and car financing cases
takes months to finalize but some of its competitors (like City Bank, MCB etc.) doing the same
job within a week.

Branch Name and Address

Name

Bank Alfalah Ltd Islamic Ashfaq Ur Rehman

Banking

Branch

Redco

Designatio
n
Branch

Manager

Plaza Jinnah Avenue, Blue

Area Islamabad

Syed Husnain Gillani

Manager
Operations

Waqas Iftikhar

Branch
sales
Supervisor

Number of employees of Jinnah Avenue Branch:

There are 45 employees in the Branch. The categories of the employees are permanent, 3 rd party
contract staff like office boy, sanitary workers & peon. Bank Al-Falah Ltd. is one of the few
banks in the country, which has more than 7,584 employees which are increasing with an
increase in volume of work as well as the incorporation of new branches
Business Volume of Jinnah Avenue Branch
Business Volume of the Jinnah Avenue Branch is Rs.20.000 million. Bank Al-Falah Ltd. has a
large client base exceeding 700,000 customers spread throughout the country who are serviced
through a network of around 282 branches (Including 05 branch in Bangladesh, 02 Branch in
Afghanistan) located at all major cities across the country covering all the four provinces. It has
online banking facility through which a customer can transfer its funds anywhere and also cashed
his cheques from any of its branches. The client mix includes individuals, firms, private limited
companies, public limited companies and multinationals besides various departments of
Provincial and Federal Government. The bank considerably understands the situation to which it
should react and accommodate the relevant material.
Bank Al-Falah Ltd. is mainly engaged in commercial banking and its related services. It also
provides services of corporate, investment and international banking.
PRODUCTS LINES

Bank Al-Falah Ltd. is one of the few banks in the country, which has been continuously adding
various investment products to its range of banking services. The bank has taken progressive
steps and has introduced innovative products and services to provide a variety of banking and
financing services. Some of them are: 1. Cash Management:
atm network
current accounts
pls accounts

pls term deposits

notice deposits

2. Car/Auto Finance:
corporate & individual leasing

insurance

repayments
security
customer can act as a co-borrower
3. House Finance:
payment period ranges from 3 to 20 years.
payment period ranges from 3 to 20 years.
4. Rupee traveler cheque (rtc)

your great companion while traveling

5. Credit Cards
6. Alfalah Hilal card
7. Money Gram
secure and reliable
convenient and fast
free message service (for senders)
8. Agri loans

ORGANIZATION STRUCTURE OF JINNAH AVENUE BRANCH

Departmentalization Structure
Organization structure is the formal arrangement of jobs within organization.
Bank Alfalah focus on departmentalization structure, that is functional departmentalization
which focused on group jobs according to their functions.
1. Audit & Inspection Department
The Audit & Inspection is conducted by the Head Office of the bank Audit and inspection
department audits the accounts of the bank. This process takes place after one month, three
months, six months or yearly basis. It depends on the policy of the bank. The audit has been
conducted in many types, which includes continuous audit internal audit, interim audit etc. in
audit department. Inspection department analyses and inspects the financial position of the bank.
2. Computer Department:
Computer department is the key department of the bank. It prepares every type of ledger,
statements, vouchers, balance sheets etc. through computer started on line services 24 hours a
day. IT expert deals the computer system of the branch.
3. Administration & Accounts Department
Another department of the bank is administration and accounts department. The main function is
to administer and calculate the P& L position of the branch. The accounts department analysis
the financial statements and also prepares the Income/expense, Budget, salary of the staff of
Branch, petty cash, ledger, vouchers, statements and other reports to the higher authority/Head
Office. There main purpose is to control and regulate the expenses and losses.
4. Credit Management Department
There are sometimes defaults in the payment of loans to commercial banks. It may occurs on
account of changes in credit policies, consumers behaviors and competitive price cutting,
inefficient management slump in the market etc. a credit analysis is refer to the investigation of
such factors that may drastically change the fortune of the business.

5. Customer Services Department

The main function of this department is to suggest different services better facilitates customers
and to compete with other banks. Its mainly concerned with the policy formation and
developments. Customers Relations Officers are greed the customers at the branch.
6. Credit Card Department
The credit department issues the credit cards to their customers; the credit card is the facility to
the customers that they can draw money any time at any place. He can buy services and goods on
discounts. A representative is sitting in the branch and worked on behalf of the head office.
7. Foreign Exchange department
Customers foreign exchange department is another service of the bank. It provides facility to
customers to open their accounts in foreign currency. The bank also gives facility to respective
customers to exchange the currency in the local currency of the country. It also provides the
services of travelers cheques of foreign currency which can be cashed any where in the world.
ADVANTAGES OF FUNCTIONAL DEPARTMENTALIZATION
There are following advantages functional departmentalization:
1. work specialization
2. timely work done because of their head of department.
3. less mistakes
4. easily managed
5. Employee are more involved & empowered
DISADVANTAGES OF FUNCTIONAL DEPARTMENTALIZATION
There are following disadvantages of functional departmentalization.
1. No innovation
2. Pressure on department to perform
3. Not appropriate as organization grows

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4. Employee Bounded to single department

5. Individual performance neglected
6. Poor communication
DIMENSION OF CULTURE
ORGANIZATION CULTURE
Organizational culture is the behavior of humans who are part of an organization and the
meanings that the people attach to their actions. Culture includes the organizational values,
visions, working language, system, symbol, beliefs and habits. It also includes perception,
descriptive and shared aspects of culture.
TEAM ORIENTATION
Bank Al-FALAH works in team orientation bases. There are several department in which work is
organized around teams rather than individuals.

Creative decisions that incurred significant change or risk are not encouraged.

Goals or targets are given to each department & they have to work on these goals to
achieve in specific time.

Job activities are designed around work team

Employee are require to follow extensive rules & regulations

Employee talk positively about the competition between teams.

Team members are encouraged to interact with people across functions & authority
level.

Managers supervise employees to ensure that there are no deviations.

Management is concern with high productivity, regardless of the impact on employee

morale or turnover.

11

There are distinctive department & line of authority.

There is seniority trend in the determination of pay raises & promotions.

STRONG CULTURE
Bank Alfalah perceive strong culture. The stronger a culture become, the more affects the way
managers plan, organize, lead & control.

There Values are widely shared

There culture convey consistent messages about whats important

There employee strongly identify with culture

There employee have strong connection between shared value & behavior.

GOAL SETTING
TRADITIONAL GOAL SETTING
In Bank Alfalah goals are sets by traditional goal setting which means goals are set by top
managers & become sub goal for each organizational area.

Top managers know what the best so they set the goals & guide how to achieve these
goals.

There is mean-ends chains which is integrated network of goals which has been shown
in organizational structure.

Goals achieved at lower levels become the means to reach the goals at next level. At the
accomplishment of the goal at that level become the mean to achieve the goal at the next
level & so up through different organizational level.

DRAWBACKS OF TRADITIONAL GOAL SETTING

Bank alfalah under comes many problems in this goal setting goal setting which are as follows:

Mostly performance is not evaluated on whether the goals have been achieved or not so it
does not create a strong connection of employee with bank & their job.

12

Turning broad strategic goal into department, team and individual is difficult.

In this manager define goal in board terms.(e.g . achieving profit or marketing leadership)

MANAGING HUMAN RESOURCES

The most valuable asset of any financial institution is its human resource.
Bank Alfalah has at present a dedicated and commendable workforce of around
6,543 staff members other than outsourced. The training and development centre remains at
the helm of imparting training and related skills, not to only fresh recruits but also
to existing employees. Bank Alfalah has in place the state of the Training and
Development Center both in Lahore and Karachi for equipping the personnel of Bank Alfalah
with the tools that help to carve a better future of employee and organization itself.
THE RECRUITMENT PROCESS
CcH wSi
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RPaH tL
PENs eE
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ORIr eTn

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DNoMsIa
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13

Bank Alfalah uses the given above recruitment process for hiring new employee in their bank.
1. Recruitment
They choose many sources which give them better employee:
External Sources

Internet

Employee referrals

Company Web site

Newspaper

Internal Sources

Hiring from internal workers

Promotion given on the basis of experience

Intera-net

Memos

2. Selection
On the basis of recruitment candidate is selected then there are many stages from which
candidate have to pass

A candidate drop his CV & educational documents in the branch.

Branch manager conduct the interview of that person. If branch manager thinks that
candidate is fit for the required job, he forward his documents to Area Manager.

14

Area manager on the recommendation of Branch Manager calls the candidate for
interview.

If he passed the interview of Area Manager, he forward his documents for test to HR.

HR manager on the recommendation of Area Manager calls candidate for test.

The test is written comprises of basic skill in English, Math & analytical skills.

If candidate pass the test on achieving minimum 50% marks, he is called for PANEL
INTERVIEW.

In PANEL INTERVIEW all aspects of candidate are judged like, his background,
qualification and social setup.

Upon successful completion of all documents, references, photos, CNIC & experience
letters the candidate is selected & offered job in the bank.

3. Training
Classroom Lectures
After joining the new employee is given training on job as well as academy. Employees attend
lectures designed to convey specific information. On successful completion of training the
employee is appointed in a branch for practical job.
4. Performance Management
Written Essay Method
Bank Alfalah focused on written essay method for evaluating employee performance. In this
method following steps are taken:

Manager writes the description of employees strengths & weaknesses on the basis of
past performance.

15

Evaluation based on quarter year & also annually.

Suggestions for improvement also provided to the employee.

Advantages Of Essay Written Method

There are following advantages of written essay method:

Simple to use

Provide connection with employees

Provide motivation & empowered employees

Employee learn more in this method

Disadvantages Of Essay Written Method

There are following disadvantages of written essay method:

Measurement of evaluator or Manager may be better than actual performance.

5. Compensation & Benefit

Variable Pay Systems
Bank Alfalah provides compensation and benefit to their employee by variable pay system in
which individuals compensation is contingent on performance.

Bonus is given to employee as a reward on good performance.

Promotion is also given to the employee on better performance.

6. Career Development
In Bank AL-FALAH on the basis of performance, employee can develop his career, bank gives
them promotion, in this way

by working in different departments employee gain more

16

experience & knowledge and going step by step upward gives the employee more experience of
each department and finally, employee can become the branch manager.
Ethical values:
Professionalism without integrity is like a book without pages
Because the right may not always be obvious, we must be guided in our every
action by

set of

well-defined

values, governing

our decision.

Alfalah

bank understands that its commitment to satisfy customer needs must be fulfilled
within in a professional and ethical framework
7. High Performance Employee
Bank AL-FALAH give to their employee bonuses & promotions on the bases of high
performance.

POLICIES AT BANK:
At Bank Alfalah, policies are been formulated at the

Executive

level of the organization. Policies for any organization constitute a major part.
Alfalahs policy regarding consumer-banking policies includes the development
through the electronic consumer banking operations. Likewise, Bank Alfalah has created niche
for itself in the marketplace. It is planning to introduce new consumer products
like credit cards, e-banking etc. Few of the policies are mentioned below:
Selection of Client
In Alfalah bank Clients are carefully checked to learn about them before establishing a
relationship. References are excellent sources of new accounts as they give an
opportunity to learn about a potential client before establishing a relationship. This policy
helps in protecting the integrity of the bank. It ensures good relationship with the clients.

17

Promotion and Incentives

Bank hires officers in range 1. Then depending upon their job performance they are promoted to
next range. More facilities and increments are given along with promotion. The bank gives a car
facility to the officers of range 5. Banks policy is to give cash rewards and salary
increments for increasing the employees satisfaction. Also with the expansion of the
branch network growth in the current era, more and more opportunities have been provoked not
only for the young generation but also for the employees of the bank.
Accounting Policies
Bank Alfalah has adopted almost the same accounting procedures that other financial
institutions

are

adopting

at

this

time.

These

accounting

procedures

or

Accounting policies are made according to Generally Accepted Accounting Principles, the
GAAP. The process flow and the usage of the policies in the day wise routine are mandatory for
all the employees working in the specified departments at the branch.
Quality assurance services
Service excellence is one of the priorities of Bank Alfalah. A separate quality
assurance department is to be established as well very soon for the removal of little flaws that are
still prevailing at some of the branches regarding facilities for the consumers. The focus of the
bank is to develop new areas of activities along with traditional banking activities
of resource mobilization and credit disbursement.
MANAGEMENT STYLES
Management must have to adopt some administrative style to get all the activities to be done
effectively and efficiently. In Alfalah bank there is both centralized and
decentralized style.
Management refers to the universal process of effectively and efficiently getting
activities completed with and through other people. It is a process by which
planning, organizing, leading and controlling a r e p e r f o r m e d t o

achieve the

18

desired objectives of the organization. These functions are being performed at three levels in
Bank Alfalah.
Managerial level
Administrative style of Branch Manager is authoritative. His authoritative style is the
requirement of administration. For the implementation of strategies and getting t h e a c t i v i t i e s
to

be

done

properly

unity

of c o m m a n d w a s t h e r e q u i r e m e n t o f t h e t i m e . I n i t s a b s e n c e
t h e environment of uncertainty and deregulation in the bank to a little extent.
Department Head level
Department heads are responsible for the overall operations of the department
assigned. There is a sign of good delegation of authority for decision-making in
Alfalah Bank at this level. Department managers always ask his subordinates before
referring the solution to a problem to the Branch Manager. So at this level employees are very
much contended to their work.
Staff level
At the staff level, as employees are satisfied to the work assigned and authority
structure, so management at this level is concerned to the decisi
o n s o f t h e department heads level.
IMPACT OF MANAGEMENT STYLE ON EMPLOYEES
Management styles have a great impact on the overall working of an organization. The key
issues, which can arise due to strong authoritative actions by the management can
be of the following nature

Absenteeism
Irresponsible behavior
Coordination
Reporting time delays

19

But at Bank Alfalah Ltd. these issues have never been provoked till now. This is
due to the fact that employees have been given equal importance as been given to
high level operatives. The following important aspects need consideration.
Motivation
Motivation can be defined as a willingness to expend energy to achieve
a

goal

or

reward.

The

ma nagement st yles adopt ed b y th e ba nk affe ct greatly,and empl o

y e e s a r e motivated in order to enhance their performance and achieve the derived goals.
Morale and Productivity
The employees of the bank possess high morale, and thus exhibit
high productivity. The employees are happy and are also productive wor
k e r s . J o b attitudes and morale are quite positive for two reasons.

Firstly

Employees gain social satisfaction from interactions at the work place. Working
conditions and supervision are good.

Secondly

H i g h m o r a l e r e s u l t s f r o m h i g h m o t i v a t i o n t o produce. In other words we can

say that management should put its eggs in the basket that creates a high-motivated work
force.
Job efficiency and satisfaction
Consequently

the

overall

impact

of

the

well-equipped

management

styled

organization is the job efficiency and job satisfaction. At Bank

A l f a l a h t h e employees are very much satisfied with the job and the overall working

20

conditions of the bank, so in due response, the bank is enjoying high efficiency in managing the
time delays in reporting and working operations.
ENVIRONMENTAL ANALYSIS:
The external environment of Bank AlFalah includes their external custome
rs andcompetitors etc. The country forces affecting the environment e.g. p
o l i t i c a l f o r c e s , Economic forces, Socio-cultural forces, and Technological forces
are the part of the external environment.
1) Political Factors
Political factors in any countries affect the organizations and institutions greatly. If theres a
stable political environment, the organizations flourish successfully but if there is
instability in political environment, then there is a bad effect on all
i n s t i t u t i o n s a n d organizations. If we look Bank Al-Falah with the aspect of
political environment, there are some rules made by the government to follow. A
regulatory approval is necessary f r o m t h e S t a t e B a n k o f P a k i s t a n i n o r d e r t o
l a u n c h a b a n k . F u r t h e r m o r e t h e r e i s r equirement of State Bank of Pakistan that the
paid up capital of Bank Al- Falah should be Rs 10 billion by 2010, Rs 13 billion till 2011 and Rs
23 billion by 2013
2) Economic Factors
The economic conditions of the country at the current are not so good, and there
was a huge economic crisis recently which affected many banks. Bank Al-Falah
should consider short term and long term issues concerning economy of the country. It is
obvious that with the current situation, Bank Al- Falah like many other banks is
being affected by the challenges like inflation, unemployment and economic crisis.
3) Socio- Cultural Factors
Every country has its own social values and cultures. Bank Al-Falah is doing well
by keeping in mind the cultural values of Pakistan. From its advertisements that it

21

reflects the true cultural and social values. And by doing this, Bank-Al Falah is
attracting a great deal of customers. Because it is natural that when some
organization t a k e s c a r e o f c u s t o m e r s s o c i a l a n d c u l t u r a l v a l u e s , t h e n t h e
c u s t o m e r s a r e n a t u r a l l y attracted towards that particular organization.
4) Technological Factor
The technology plays a very important role in todays successful organization. Bank Al-F a l a h
is doing well in introducing technologies as and when required by the
B a n k . Further it trains the employees to use those technologies.
COMPETITORS ANALYSIS:
Competitors should always be studied with

great

care, because competitors can

greatly influence an organization position. Bank Alfalah has a lot of competitors

because in a short span of 5 year it has achieved what not many banks had achieved.
This leads to competitions. Similarly Bank Alfalah should keep a tag on the competitors move
or another new technology it is introducing, because to sustain in the micro
environment, competitor has to be viewed with a lot of care.
(Rupees in million)
Bank

Al-

Balance Sheet

HBL

Total Deposits

404,629

360,648

154,914

Total Assets

486,982

24,314

183,003

Advances

258,306

118,864

77,744

Shareholder's Equity & Revaluation Surplus

311,880

673,063

163,413

Falah

UBL

Profit & Loss

8

Total Net Income

235,120

257,264

8,173

Total Expenditure

1,378,300

4,344,252

5,441

11 Pre-Tax Profit

716,400

2,563,290

2,731

12 Profit after Taxation

568,000

1,702,094

1,414

13 Earning Per Share (Rs/ Share)

8.21

5.75

2.82

22

Others
15 Exports / Imports

296,492

71,847

4,073

16 Number of Branches

1,469

109

816

17 Number of Staff
18,625
5218
[Source: Web site of Annual Reports of Bank Al Falah, HB & UBL]

9834

The overall position of Bank Alfalah is very strong. However, it can further improve its
operation/ profit by enhancing its network throughout the country

Competitive Advantage
Bank Al-Falah has some competitive advantage over its competitors, like
Superior services: Bank Al-Falah provides superior and quality services to its
customers by taking care of their needs. Bank al- Falah works hard to maintain its customer
loyalty. Bank al- Falah targets every type of customer in the society.
Turn around time of 48 hours: This means that the when the customer complains f o r a n y
p r o b l e m , t o t h e b a n k , T h e B a n k Al - F a l a h t r i e s t o f i x t r i e s a t p r o b l e m
within 48 hours. This is another competitive advantage for Bank al-Falah.
No annual fee for the credit cards: Bank Al- Falah doesnt charge any annual fee for the
credit cards. Where as other banks charge this fee.
Number one portfolio in Pakistan: This means that Bank Al- Falah offers a wide variety of
products and services as compared to other banks.
280 branches Nationwide, with 8 to 9 branches worldwide: Bank Al- Falah is
currently operating in 8 to 9 countries.
COMPETATIVE ADVANTAGE OF BANK AL-FALAH
Bank Alfalah has the competitive advantage of providing better services than other banks.

Timely attained the customer

Guide them about their problem

Provide all information to their customer

23

Courteous calls for customer

Product services are different for younger, older, child customers.

SWOT ANALYSIS
Opportunities
The opportunities on which bank Alfalah can capitalize upon are delineated as under.
1)Ext ensi on of Loca l Branch Netw ork
O n e o f t h e b i g g e s t o p p o r t u n i t i e s f o r b a n k Al f a l a h

is to extend its branch

network in Pakistan. The essential pre-requisites for a vast branch network are all
there; sponsors have the money, managerial expertise are available, and last but not the least
any bank with Bank Alfalah Limited written in blue at its front is accepted in the market.
2)Est abli shin g Foreig n Branch Network
G o i n g g l o b a l c o u l d h a v e b e e n t e r m e d a s a f a d a f e w ye a r s a g o , b u t n o w f o r
t h o s e business organizations that want to survive and thrive globalization has become the
order of the day. In order to increase the bottom line figure, it really is crucial. But the
senior management would start implementing this course of action once they feel that they have
got a strong hold in Pakistan.
3)Cap ital izing On Inf ormation Technol ogy
I f B a n k Al f a l a h L i m i t e d s s e n i o r m a n a g e me n t a n d t h e I T d i v i s i o n m a k e a
concentrated effort to make best possible use of this IT it would enable Bank Alfalah to harness
unexplored benefits of immense magnitude.
4)Une xplo red Market of Multinat ional Corporatio ns
I f t h e management is able to develop a strong relationship with MNCs then it would open
doors of huge and unimaginable opportunities for Bank Alfalah Limited. If even a single MNC

24

becomes a corporate client of Bank Alfalah Limited i.e. it deposits its revenue with Bank Alfalah,
pays

its

salaries

through Bank

Alfalah,

does

trade dealings

t h r o u g h B a n k A l f a l a h , a n d a v a i l s c r e d i t f a c i l i t i e s o ffe r e d b y B a n k A l f a l a h , it
would make a world of difference to Bank.
5 ) C u s t om e r s a r e m ore w i l l i n g
Muslims

are

more

consciously

differentiate

the

Islamic-base

banking

from

interest- base banking. That is why there is huge chance of expansion.

THREATS
T h e p r e d o m i n a n t t h r e a t s B a n k Al f a l a h i s f a c i n g a t t h e mo m e n t a r e d i s c u s s e d
i n t h e following lines.
1)Private Sector Banks
Bank Alfalah Limited is at present facing really tough competition from not only the first line
international banks (ABN AMRO, Standard Chartered, Citi Bank) but is also having a
neck to neck race with other privatized banks such as Askari Commercial Bank Limited, Union
Bank, Prime Commercial Bank, Faysal Bank Limited, Bank Al-Habib Ltde t c . Al l t h e n e w
s c h e me s l a u n c h e d b y t h e s e b a n k s a n d t h e i r p l a n s t o e x p a n d b r a n c h networks are
a real threat for Bank Alfalah Limited.
2 ) N e w Tra d e P o l i c e s
Introduction of new trade policies and laws are also been a source of threats to the
o rg a n i z a t i o n d u e t o t h e i m p o s i t i o n o f n e w r u l e s a n d t e r r i f i e s , p r e v i o us m a i n t
a i n e d regulations have to be amended.
3)Net work Expans ion By F oreign B anks
Foreign banks have a lot of plus points as compared to Pakistani banks (state owned
and private); they have better products, better and personalized service, desirable interest
rates, foreign branch network, butthey definitely lack in local branch networ

25

k ( i n Pakistan). Literary no foreign bank has been able to expand its network to farfetched places of Pakistan. Pakistani banks (private banks in general and state owned
banks in particular) are spread all over Pakistan. This is an intangible asset for Pakistani banks.
But i f a n y o f t h e f o r e i g n b a n ks e x p a n d s i t n e t w o r k , b a c k e d b y t h e i r
t r a d i t i o n a l p o w e r f u l service, then it might prove to be the start of downfall for
Bank Alfalah, unless and until Bank Alfalah Limited raises its level of service and
product feasibility to the international standards.
4)If Pakistani Banks (Especially State Owned Banks), Backed By H
u g e Network Improve the Service They Give And Their Employee Skill Set
State owned banks like National Bank of Pakistan and Habib Bank Limited have huge
networks, they have the experience, but the only set back they have is below par
service and lack of motivation amongst the employees. If their corporate strategy is
altered, and the managerial policy is revitalized, enabling them to improve upon the service
they give and enabling them to convert their work force into human capital then such
financial institutions backed up by their huge networks pose a potential threat to
Bank Alfalah. So, Bank Alfalah should attempt to expand their branch network as
efficiently as possible and as soon as possible.
5)Ter rorist Ima ge of the Cou ntry
After the 9 / 11 incident every kind of transaction that uses to take place with the
outside world has assumed a different mode. The trade finance transactions are the bread and
butter for the commercial bank, were also hampered by that terrorist attack on 11th of September,
but as far as our image in the international community is concerned there is still
ac o n s i d e r a b l e r o o m f o r i mp r o v e m e n t . I f t h i s s i t u a t i o n f u r t h e r a g g r a v a t e t h a n
improving, the trade finance business would really be hampered, and one of the
major earning ravenues for Bank Alfalah will loose its footings. This fact poses a real
threat to the sanctity of Bank Alfalah.
6)Inc onsisten cy in Gove rnment Po licies

26

T h i s i s a p h e n o me n o n t h a t c o u l d h a mp e r s mo o t h f u n c t i o n i n g o f a n y
o rga n i z a t i o n working in a particular country. Although the sponsors of Bank Alfalah
Limited,Al- Nahayan Family are really committed to invest more and more in the country but
still any drastic change in either the economic policies like increase in taxation rates,
or any change in the foreign policy, which could hurt Pakistans image could also
shake the investor confidence and also could lead to a decrease in the repute of the
entire banking sector of Pakistan.
STRENGTHS
The predominant strengths of Bank Alfalah Limited are
1)Humble Management
The

senior

management

of

Bank Alfalah

Limited

Their m o d e s t y i s a n i n t e g r a l p a r t o f t h e

is

considerably

humble.

o rga n i z a t i o n a l c u l t u r e o f t h e

b a n k . T h e mo d e r n management techniques have discarded the bureaucratic style of

management in which employees were treated as servants if not as slaves. In the
contemporary business world employees are said to be the biggest and the most
crucial assets of a business concern, specifically if we are talking about a service industry
and this is precisely the management policy Bank Alfalah Limited follows:
The

humility

of

the

management

serves

as

big

morale booster and encouragement catalyst for all employees in gener

a l a n d n e w employees in particular.
2)Stre ngth And Com mitm ent O f Spo nsor s
Bank Alfalah Limited is a project of Al-Nahayan family, which is a renowned Abu
Dhabi based investor family. The B a n k A l f a l a h L i m i t e d i s o n e o f t h e

strongest

financial houses of Pakistan. The Al-Nahayan family is a royal family and this fact further
adds to the banks inherent strength.
3)Kaizan

27

Kaizan is a process of continuous improvement in production and every aspect of v a l u e a d d e d

(Japanese).

In

very

short

time

span

the

ma n a g e m e n t

of

Bank

A l f a l a h L i m i t e d h a s b e e n a b l e t o d e v e l o p i t s i m a g e i n a v e r y e ffe c t i v e a n d
e ffi c i e n t ma n n e r. Th r o u g h t h e l a b o r i o u s e ffo r t s o f t h e t o p m a n a g e me n t a n d
t h e e m p l o ye e s , t h e e n t i r e o rga n i z a t i o n a s a w h o l e h a s b e e n a b l e t o
c o n t i n u o u s l y a d d i t s p r e s t i g e a s a r e l i a b l e , service oriented, and flourishing
financial institution. When we compare the image of Habib Credit and Exchange
Bank with that of Bank Alfalah Limited we find a world of difference, and when we
compare the image of Bank Alfalah Limited at its inception with its present image we find an
even greater difference. This fact proves the thesis that there has been continuous value addition.
The number of individuals and corporate entities that feel comfortable while dealing with Bank
Alfalah Limited is increasing on a daily basis.
4)Phenomenal Grow th In Profitability, Bran ch Netw ork And
D e p o s i t Portfolio
In the very first year of its inception Bank Alfalah closed its operations a ta deposit portfolio of
Rs. 7 billion, at the end of the second year the deposit portfolio had risen to Rs. 14 billion. Thus
Bank Alfalah Limited is growing at a multiplier rate of 50%.The profit before provisions and
taxation of your bank for the year 2006 stood at Rs. 3.264 billion which was 10% higher
than that of last year. The deposit grew by 7.7% and stood at a figure of Rs. 239.509 billion while
advance portfolio grew by 26% and showed a figure of Rs. 149.999 billion. When Bank Alfalah
Limited started its operations it only had three branches and in a short time span the branch
network has expanded to 195.
5)Vast ly Exp erie nce d M anageme nt
The people who occupy the top positions in Bank Alfalahs management hierarchy are certainly
no mugs at what they do. Rather they are as capable and as competent as they come.
Their superior management skills certainly do create a synergistic effect when coupled with the
enormous amount of trust sponsors have put in the management. One of the most evident proofs
of

above

average

management

expertise

are

the

deposit

28

portfoliog r o w t h , p r o f i t a b i l i t y g r o w t h , a n d b r a n c h n e t w o r k g r o w t h f i g u r e s s h o w
n u n d e r t h e previous heading.
6)Hig hly Train ed Human Res ourc e Departmen t; Transformatio n Of Work Force
Into Human Capital
One of the most significant catalysts, management of BAL had incorporated---andit still is
incorporating---in the organization, when H.C.E.B was transformed into Bank Alfalah
Limited, was induction of young and energetic business graduates. This was donein order to
achieve quite a few objectives; one was to raise the overall skill level of thework
force so that service provision could be improved and the second objective was
toreduce the average age of Bank Alfalah Limiteds employees so that an overall
sense of change is trickled down to the grass root level of the organization. Bank Alfalah
has an excellent selection / recruitment and training program which are undertaken at itsTraining
and Development Center, Human Resource Division Karachi.
7 ) S u p e r i o r C on s u m e r F i n an c e
In contemporary banking consumer finance has assumed immense significance, as it is that
department of a commercial bank whose personnel directly and extensively deal with the client
body. One of the most predominant sub departments of consumer finance i s A l f a l a h C a r
F i n a n c e . T h e c u s t o m e r i n t e r f a c e i s g r e a t e r i n t h e c o n s u m e r f i n a n c e d e p a r t me n
t , a n d t h e d i l i g e n t s t a ff o f B a n k Al f a l a h e n r i c h e d w i t h i t s s u p e r i o r service and
relationship skills attracts / persuades these clients to develop relationship w i t h
B a n k Al f a l a h i n t h e a r e n a o f c o r p o r a t e b a n k i n g a s w e l l . Th u s a s t r o n g
c o n s u me r f i n a n c e d e p a r t m e n t r e a l l y h e l p s t h e b a n k
t o e x p a n d i t s c o r p o r a t e b a n k i n g business.
8)Cru cial Loc atio n Of Bran ches
A l l t h e f o r t y f i v e b r a n c h e s o f B a n k Al f a l a h L i mi t e d a r e l o c a t e d a t e x t r e me l y
crucial and vital locations, which is indeed a very significant factor towards earning

29

more p r o f i t . M o r e o v e r a l l o f t h e b r a n c h e s a r e v e r y w e l l f u r n i s h e d w h i c
h i s a n i n t e g r a l characteristic of a good bank in this age of consumerism.
9 ) I m a g e B u i l d i n g Ac t i v i t i e s
Activities such as building of Alfalah Square at Liberty Lahore, the China Khan at t h e Al f a l a h
Square,

Al f a l a h

Mini

Golf

Course,

and

Shahdin

Manzil

(proposed

m a i n branch, Lahore at The Mall, under construction) have really contributed a lot towards the
image building process of Bank Alfalah. Such activities also make people aware of the
upgrading process of Bank Alfalah . Such activities are classified a s trength because
they involve people in the change process that contributes a lot towards building customer
loyalty.
WEAKNESSES
The chief weaknesses are enlisted as under
1)Small Size
Bank Alfalah is small in size; there is no doubt about this fact. Although, as mentioned in the
strengths section, the branch network is expanding at a phenomenal rate but still the size is
not big enough as compared to some of the big banks present in the market. Bank
Alfalah has 189 branches in the whole of Pakistan. A huge branch network is always an
invaluable asset for any bank. Customers simply love it when they could see another branch
of their own bank at every turn they take. Extensive branch network might reduce per
branch profit but it is very likely to raise the overall profit figure for the entire
organization as a whole.
2 ) L a c k of R es e a r c h C e l l
There should be a research cell in the bank, which should be engaged in gathering the
information about the present actions of its competitors
3)Unev en treatment with c usto mers
C u s t o me r s h a v i n g a c c o u n t s w i t h s ma l l a m o u n t s a r e n o t g i v e n s a m e s e r v i c e s
a n d dealing given to those with high accounts.

30

4)Skill Set Of Employees Is Not Up To The Mark As There Is No Job Rotation

The contemporary banking all over the world has taken a unique turn i.e. they have
made job rotation an integral part of their management philosophy. Job rotation adds
v a l u e t o e v e r y s i n g l e e m p l o ye e , a s h e i s a b l e t o p e r f o r m a v a r i e t y o f j o bs
r e l a t e d t o b a n k i n g p r o f e s s i o n . M o r e o v e r j o b r o t a t i o n i n c r e a s e s t h e h u ma n c a p
i t a l p o o l o f t h e organization as everyone is trained in more than one sphere of
banking. Bank Alfalah completely lacks this.
5)For eign Banks St ill Are A Little More Pre stigious
Although

Bank Alfalah

is continuously adding

to its

prestige,

but still it

cann o t b e r a t e d a s a b a n k w i t h t h e s a m e r e p u t e a s I n t e r n a t i o n a l B a n k s
f u n c t i o n i n g i n Pakistan, for instance ABN AMRO Bank, Citi Bank and Standard
Chartered. Banks function as custodian of peoples possessions, act as their agents, represent
clients in trade dealings outside the country, and give different types of guarantees and
in all of these transactions repute plays a central role. And when it comes to repute foreign
banks have a little more of it as compared to Bank Alfalah.
6)Ban k Alfal ah Limi ted Does Not Posse ss Fore ign Net work
Foreign banks and some local banks having international network have this edge over Bank
Alfalah. Banking transactions regarding trade finance constitute a very important part
of contemporary banking and moreover they are said to be the bread and butter for the
commercial bank. Bank Alfalah, for such transactions has to rely on its correspondents and
agents in other countries, and naturally has to pay them some remuneration, an expense
banks having foreign network do not have to incur.
7)No Adve rtis ing in Elect ronic Media
Bank Alfalah does embark upon occasional sales promotion activities, it also gives
a d v e r t i s e me n t s i n t h e p r i n t me d i a , b u t i t h a s n e v e r f l a s h e d a n a d v e r t i s e me n t
o n t h e television screen, which is said to be the strongest of all Medias. Some other

31

commercial banks are really capitalizing on the

power of this media; examples are Askari
commercial bank, Muslim commercial bank,
Habib Bank Limited ete
ALFALAH

BCG MATRIX
In BCG matrix bank Alfalah lies in the middle of star and
cash cow units.
Focuses on market share position
and industry growth rate
Manages business portfolio through relative
market share position and industry growth rate.
Growth Strategies

Bank Alfalah is enjoying a moderate rapid growth in the market and the competitive
strategy

position

as

well

in

the

industry.

So

for

this

purpose,

Bank Alfalah is in an excellent strategic position.

Its

concentration on current markets and products are appropriate strateg

i e s . A l s o B a n k Alfalah Ltd. can afford to take risks and advantages of external
opportunities in many areas, this is the reason that now Bank Alfalah Ltd, has started the
ISLAMIC

banking

in

the countries like Afghanistan and Bangladesh. So market de

v e l o p m e n t , m a r k e t penetration and product development are appropriate strategies
CONCLUSION
Hence Bank Alfalah is making efforts to make their banking solutions become accessible to more
and more people, they have embarked upon a rapid expansion program, aiming to
provide a networking that makes the services available to an y of their
customers in all the major urban centers of Pakistan- with a view to go international in
the near future. With their key indicators of progress already soaring to new heights,

32

the bank is c o m m i t t e d t o d e d i c a t e a l l i t s e n e r g i e s , r e s o u r c e s a n d t i m e t o
b r i n g h i g h e r v a l u e a n d satisfaction to their customers, employees and shareholders
RECOMENDATIONS
Here we are putting some suggestions, which will enable the bank to compete with
other banks more effectively & efficiently.
It is observed that the employees were overburdened so they have to stay at
branch till late at night. In this way their efficiency is affected and hiring more employees can
reduce their work.
The employees should be signed jobs for specific period and than they
should shifted to other department so that they gain knowledge of other jobs.
Bank Alfalah Limited should properly advertise and Communicate to public
about the services provided by it, so that more customers will be attracted.
the banks management should give more incentives and pay scale of officers
should be revised & improved.
System and operations should be more defined and organized.
Administration drawbacks should be improved by the strict control of
general issues.

33