INTERNSHIP REPORT

ON

PRIME COMMERCIAL BANK LTD

Evolution, Functions and Organization

SUBMITTED BY:

Zafreen zafar
2004-M.Arch-03

This report is submitted in partial fulfillment of the requirements for the degree of BS
(hons) in the subject of management.

INSTITUTE OF ADMINISTRATIVE SCIENCES

University of Punjab, Lahore.
 Abstract
This documents attempts to present the historical evolution, the various functions, as
well as the present organizational setup of Prime Commercial Bank Pvt ltd (PCB).
Different dimensions of this organization are explored in this report.

Chapter 1 introduces the bank to the readers. It gives the reason for
establishment, brief history, vision statement, core values, business
philosophy and location of branches and head office.

Chapter 2 describes the organizational structure. The Board of Directors,

management, various departments and committees and regional zoning of the
bank is discussed in this chapter.

Chapter 3 describes the consumer services provided by the bank.

Chapter 4 describes the employee benefits.

Chapter 5 gives the financial overview of the bank from 1993 to 2006.

Chapter 6 gives the authors remarks on Prime Bank in context with banking sector in
Pakistan.

Finally selected bibliography is provided in the end for further exploration on the
bank.
Acknowledgements

Turning ambitions into reality is quite easier when there are people who provide you
constant support from sharing of knowledge, experiences and precious time to moral
support. I thank all the persons who shared their knowledge, experiences and time
with me, and provided me firm moral support in times of desperation as I compiled
my report. I extend my utmost appreciation and thanks to the professional and
emotional endorsement of all these personalities.
FIRSTLY I WOULD LIKE TO THANK God almighty who give me ability and
strength to make and complete this report then to my teachers and parents who are
always there to support me when ever I find any problem.

Secondly, I would like to thank to the entire PIA society branch of Prime Commercial
Bank, Lahore, who shared their knowledge and experiences with me and spared their
precious time in helping me to understand the working of their bank, banking systems
and related terminology.
Professional accomplishment is not the result of a single day's work. Carefully
considered actions build upon one another throughout life until the goal is achieved.
So I am grateful to all the teachers who taught me directly or indirectly during the
course of my studies because without them, I would not have been able to achieve my
present position
TABLE OF CONTENTS
PREFACE 7
CHAPTER 1: INTRODUCTION Error! Bookmark not defined.
1.1 Vision 8
1.2 Core Values 8
1.3 Mission 8
1.4 Business Philosophy 9
1.5 Location 9
CHAPTER 2: THE ORGANIZATION Error! Bookmark not defined.
2.1 Board of Directors 13
2.2 Management 13
2.3 Departments 14
2.3.1 Risk Management 15
2.3.2 Commercial Banking Group 16
2.3.3 International Banking & Treasury 16
2.3.4 Human Resource & Administration 16
2.3.5 Consumer Banking Division 16
2.3.6 Information 17
2.3.7 Audit 17
2.3.8 Credit Administration 17
2.3.9 Central Operations 17
2.3.10 Training and Development 17
2.3.11 Compliance 17
2.3.12 Legal & Corporate Affairs 18
2.3.13 Systems & IT 18
2.4 Committees 18
2.5 Regional Zoning 18
2.5.1 Lahore I: 18
2.5.2 Lahore II: 18
2.5.3 Central: 18
2.5.4 Karachi: 19
2.5.5 North: 19
2.5.6 South: 19
CHAPTER 3: CONSUMER SERVICES Error! Bookmark not defined.
3.1 9am to 5pm Non Stop Banking 20
3.2 Online Banking 20
3.3 Prime Cash (ATM card) 20
 3.4 Prime Car Financing 21
3.5 Prime Home Financing 21
3.6 Smart Financing 21

CHAPTER 4: EMPLOYEE SATISFACTION 21

4.1 Monetary Compensation 22
4.2 Psychological Compensation 22
CHAPTER 5: FINANCIAL OVERVIEW 23
5.1 Total Assets 23
5.2 Advances 25
5.3 Profit before tax 26
5.4 Deposits 27
5.5 Shareholder’s Equity 28
CHAPTER 6: ARCHITECTURAL CHARACTRISTICS Error! Bookmark not
defined.
CHAPTER 7: CONCLUSIONS Error! Bookmark not defined.
BIBLIOGRAPHY Error! Bookmark not defined.
ANNEXURES 28
PREFACE

Banking is one of the most sensitive businesses all over the world. Banks play very
important role in the economy of a country and Pakistan is no exemption. Banks are
custodian to the assets of the general masses. The banking sector plays a significant
role in a contemporary world of money and economy. It influences and facilitates
many different but integrated economic activities like resources mobilization, poverty
elimination, production and distribution of public finance. Either it is purchase of car
or building of a home, banks are always there to serve you better; It is play ground or
any educational or healthy activities of the society, the money of banks nurture them;
It is an industrial project or agricultural development of the country the sponsor-ship
of banks is very much involved. Thus, Banks play very positive and important role in
the overall economic development of the country.

Pakistan has a well-developed banking system, which consists of a wide variety of

institutions ranging from a central bank to commercial banks and to specialized
agencies to cater for special requirements of specific sectors. The country started
without any worthwhile banking network in 1947 but witnessed phenomenal growth
in the first two decades. By 1970, it had acquired a flourishing banking sector. Today,
the market for Banks is diverse in Pakistan comprising Public Sector Banks, Private
Banks, Specialized Banks, Foreign Banks and Development Financial Institutions. By
the end of 2004, the total number of scheduled banks was 46 out of which 4 are public
sector banks, 19 private banks, 3 specialized banks, 14 foreign banks and 6
development financial institutions. (Annexure 1)

For this term report in the subject of communication, I chose “Prime Commercial
Bank” as the organization because I am very much interested in these banking
phenomena and especially the rapid changes in this field which have been brought
with the inception of private banks. Since prime bank is the only private bank near my
residence, so I thought why not take it as a case study for this report.

In the end I would just say that this document is only for general information. Its
contents may not be considered as advice, instructions, directions, or official point of
view of the Prime Bank in any matter.
 CHAPTER 1: INTRODUCTION

Prime Bank is the vision of a group of Pakistani professionals with extensive domestic
and international banking and finance experience. They teamed up in 1992 with a
selective group of successful and like-minded business houses in Pakistan and overseas.
Some of the foreign investors involved i.e. Al Mehfooz Group belongs to a highly
regarded, very sizeable and well diversified business group of Saudi Arabia (major
investor in National Commercial Bank, Jeddah).

During the initial years, Prime Bank’s strategy was focused on continuing improvement
of internal procedures and operating structures, to ensure a greater control over the
quality of its operations.

After twelve years of well controlled, yet sure and successful operations, the Bank is now
poised to move forward rapidly to be at the cutting edge of financial services combining
highly efficient delivery systems with continuous product innovation. Therefore,
development of superior Human Skills and the latest Information Technology platform
are the cornerstones of Prime Bank’s overall strategy to be in the exclusive club of
winning banks of the future. In the year 2004, PACRA rated this bank as A+.(annexure 2)
Presently, staff of Prime Bank exceeded 1700 of whom over 1000 are professional
personnel including MBA’s, CA’s, M. Com’s and MCS etc.

As far as ownership is concerned, the al Mehfooz group owns 51% of the shares whereas
various Pakistani investors jointly own 49%.

1.1 Vision

To be the Preferred Bank in the Region.

1.2 Core Values

 Passion to succeed
 Striving for customer delight
 Integrity in all our dealings
 Free and open communication
 Promoting team spirit
 Fostering best practices leading to good governance
 Creating an enabling environment for individual performance and collective
growth

1.3 Mission
To provide exceptional value to all our stakeholders by competing fairly in our niche
markets on the basis of superior service, innovative products and highest level of
professionalism based on customer orientation, team work, creativity and operational
excellence while maintaining high ethical standards as a socially responsible corporate
citizen.

1.4 Business Philosophy

The Bank is committed to be a sophisticated, prominent and professional institution,
providing one window service to its customers. The Bank visualizes itself as a full service
institution dedicated to the specialized needs of its niche markets.

Prime Bank's activities primarily cover the provision of a full range of banking services
to the commercial middle market segments of the country, with increasing emphasis in
future on the growth of the consumer finance, agriculture and small and medium
enterprise sectors.

Prime Bank's operating strategy is focused on continuous improvement of internal

procedures and operating systems to provide better services to its customers by ensuring
effective control on the quality of its operations.

BUSINESS STRATEGY:
Prime bank due to its continuous and steady growth has achieved an important
competitive place in the market over the last few years. A strengthened capital base will
enable it to expand in new areas while the core product will continue to strengthen to
contribute towards more profitability. The key to success in this competitive environment
is innovation and foresight. The bank continues to pursue the strategy of targeting the
middle market segment of the economy, which has resulted in an impressive growth in
both advances as well as deposits during the last couple of years

FUTURE OUTLOOK:
The future prospects of the economy and the banking industry in particular,
look promising. Key macroeconomic fundamentals have stabilized and are showing signs
of further improvement. Prime Bank is well poised to take advantage of these
encouraging developments and therefore continues its strategy of balanced growth and
consolidation.

1.5 Location
Head office of Prime Bank is located in D.H.A, Lahore (Fig 2). At present, the bank
possesses a growing nationwide network of 49 branches in 19 cities throughout Pakistan.
(Fig 1 and Annexure 3) These are focusing primarily on the middle market commercial
banking segment, consumer banking initiatives as well as agricultural, housing and
financing of small and medium sized enterprise. The bank intends to open twelve more
branches during 2005.
 CHAPTER 2:THE ORGANIZATION

In 1992, when the Bank started its operations Commercial Banking activities were
initiated only. During 1993, two more business divisions i.e. Corporate Banking and
Financial Services were added. In 1996, Consumer Banking facilities were launched.

In order to perform its functions effectively, the organization of the Prime Bank has been
subject to a number of changes from time to time. A process of setting up new
departments, merging others, establishing local offices has been continued since its
inception. The present structure of the Bank reflects its maturity, strength and ceaseless
efforts by forerunners during the last decade. An account of its present structure is given
below.

2.1 Board of Directors

The general superintendence and direction of the affairs and business of the Bank have
been entrusted to the Board of Directors. The board has eleven members and seven
committees. It is headed by the Chairman. Other members include the President/ Chief
Executive, Seven Directors and Company Secretary.

The Board exercises all the powers and does all acts and things that may be exercised or
done by the Bank , expressly directed or required to be done by the Bank in general
meeting or in annual general meeting. All decisions of the Board are taken by majority of
members present and voting. They include:

Mr. Sami Mubarak Baarma Chairman

Mr. Saeed I. Chaudhry President & Chief Executive Officer
Mr. Bilal Hakim Director / Chairman of Executive Committee
Mr. Abdul Elah A. Mukred Director / Chairman of Audit Committee
Mr. Tariq S. Asghar Director
Mr. Shahid Hafiz Kardar Director
Mr. S. Shahid Hussain Director
Mr. Rehman Ghani Director
Mr. Tariq Iqbal Khan Director
Ms. Shaheen Ali Secretary to the Board

2.2 Management
The management of the Bank consists of a President, Heads of departments and Regional
Managers. The President is the Chief Executive Officer and directs and controls the
whole affairs of the Bank on behalf the Board. (Table 1)
President and CEO Mr. Saeed I. Chaudhry

Heads of Divisions & Departments

Mr. Khalid Imran Senior Mr. M. Usman
Risk Management Credit Administration
Executive Vice President Senior Vice President

Commercial Banking Mr. Amanullah Khan

Mr. Irqam Siddique
Group & General Senior Executive Vice Central Operations
Senior Vice President
Manager Branches President

Mr. S.M.Azam Zaidi

International Banking Training and Mr. Ghazanfar Azzam
Senior Executive Vice
& Treasury Development Senior Vice President
President

Human Resource & Mr. Moghis Bokhari Mr. Gul M.Khan

Compliance
Administration Executive Vice President Group Vice President

Consumer Banking Mr. F.S.Azm Ali Legal & Corporate Ms. Shaheen Ali
Division Executive Vice President Affairs Group Vice President

Chief Information Mr. Sultan A. Khan Syed Hassan Rizvi

Systems & IT
Officer Executive Vice President Group Vice President

Mr. Sajjad Haider

Audit
Executive Vice President

Table 1 the Management

2.3 Departments
The organization of the Bank has been divided into thirteen departments. A brief
description of these departments is given below. (Fig 3)
 Board of Directors

President and CEO

Risk Management

Commercial Banking Group

Executive Committee of the Board
International Banking & Treasury
Audit Committee of the Board
Human Resource & Administration

Management Committee
Consumer Banking Division

Information
Central Credit Committee

Audit
Asset & Liability Management Comm.

Credit Administration

Human Resource Committee

Central Operations

IT Steering Committee
Training and Development

Compliance

Legal & Corporate Affairs

Systems & IT

REGIONAL SUB OFFICES

Regional Head (Lahore I)

Regional Head (Lahore II)

Regional Head (Karachi)

Regional Head (Central)

Regional Head (North)

Regional Head (South)

Figure 1 Organizational Structure

2.3.1 Risk Management

The main purpose of financial and banking organization is to create valuable system by
interacting with its environment, customers, constituents, suppliers, technology,
competition, economy, government, etc. A valuable system is created by the conversion
of available resources i.e. human, financial, physical, and intangible assets into goods and
services that fulfil the needs of the customers and save the best interests of the banking
and financial organization. Risk management performs all these diversified but integrated
work to achieve maximum out-put. Managing risk is actually managing the organization:
planning, organizing, directing, and controlling organization systems and resources to
achieve objectives. Managing risk must come from within and act to change the
organization and its response to changes in the environment. The purpose of risk
management is to save the best interests of the bank and enhance the chances of
investments.

2.3.2Commercial Banking Group

This department is entrusted to arrange Central Board meetings. It takes care of all the
affairs related with Board of the Bank, acts as spokesman of the Bank for media and other
external stakeholders, and manages publications. Also it is involved in expansion of
branch network, promotion of healthy competition among its branches and thus
significantly improving the quality of banking services.

2.3.3International Banking & Treasury

The international banking division predominantly focuses on:

(i) the international banking needs of domestic customers, and

(ii) International correspondent banking.

International banking division caters to the needs of the Bank’s domestic corporate and
other customers in financing import and export transactions. PCB’s products include
foreign letters of credit, guarantees, remittances, acceptances and collections.

In order to effectively handle the trade related business of PCB on a global basis,
correspondent banking arrangements have been established with 327 of the world’s major
bank franchises. Close long-term business relationships have been developed with 27
renowned exchange companies, operating in the Middle East to handle the remittances of
the Pakistani expatriate community.

2.3.4Human Resource & Administration

Its objective is excellence at acquiring, developing and retaining the right talent for the
bank by continuous innovation & improvement of the human resource policies &
procedures, providing effective facilitation and advisory services to line departments and
efficient and timely delivery of HR services. It also deals with general administration of
the bank.

2.3.5Consumer Banking Division

This department deals with consumer services like prime cash, smart financing, car
financing and house financing. It consists of the products, services and programs that
drive higher revenues; satisfy end users and lower the total cost of service.
2.3.6 Information
This department deals with general inquiry as well as media relations. This department
offers innovative and unique programs to provide knowledge and tools for public
relations from high-level strategic recommendations to hands-on implementation support.
Their goal is to deliver quality results quickly.

2.3.7Audit
It provides independent appraisal of all the activities of PCB aiming to add value,
improve operational efficiency, risk management and internal control systems. Chief
responsibility of this department is to carefully examine and assess the paperwork carried
out in all departments.

2.3.8Credit Administration
This department handles various types of credits, including syndicated lending, project
financing, agriculture credit financing to small & medium enterprises and micro-credit.

2.3.9Central Operations
This department provides effective & efficient accounting services & information for
planning, control and decision-making regarding annual budget and balance sheet of the
Bank.

2.3.10Training and Development

This department undertakes short-training courses for its in-service especially new
employees and officers to orientate them to the banking environment, keeping in view the
position their bank has achieved over the years and develop norms and ethics. The bank
is investing continuously in developing newly inducted young graduates through an
intensive training via its dedicated Management Training Program. Furthermore the bank
systematically trains and upgrades the skills of the existing staff through n house training
at its own training centers as well as sending staff to external courses and programs. The
quality of people at Prime bank has consistently ensured the achievement of bank
business plans and objectives.

2.3.11Compliance
Compliance department reviews and formulates proactive policy framework for Banks
concerning management of the banks and conducting special studies for improvement in
the banking sector with a view to safe guard the depositor’s interest.
1.5.1 Legal & Corporate Affairs
This department is directly or indirectly involved in each transaction being carried out in
the bank. It considers all the legal aspects of that action by considering laws and other
principles directly pertaining to banks.

2.3.13 Systems & IT

Realizing the importance of information technology to its business delivery capability as
well as for achieving operational efficiency and reducing overheads, the bank continues
to substantially invest in its IT infrastructure with emphasis on adding front end products
and services as well as cost saving back end initiative.

2.4Committees
The Board of Governors has seven committees which act as advisors in their respective
fields to the board and thus help it analyzing the actual scenario. These are:
1. Executive Committee of the Board
2. Audit Committee of the Board
3. Management Committee
4. Central Credit Committee
5. Asset & Liability Management Committee
6. Human Resource Committee
7. IT Steering Committee

2.5Regional Zoning
For convenience in administration, the branches have been divided into five zones on the
basis of geographical location. (Table 2) These zones are:

2.5.1Lahore I:
This region covers the area of inner city and new developments towards Thoker Niaz Beg
in Lahore. It includes Egerton Road, Qurtaba Chowk, Circular Road, Bilal Gunj, Badami
Bagh, PIA Society and Valancia branches.

2.5.2Lahore II:
This region covers central Lahore and new developments along Raiwind. It includes
Main Gulberg, New Garden Town, Township, Gulberg Industrial Area, Defence Housing
Authority, Raiwind Road and Allama Iqbal Town branches.

2.5.3Central:
This region covers Central Punjab. It includes Multan, Sialkot, Gujranwala, Faisalabad,
Sargodha, Vehari, Gujrat and Daska Road, Sialkot branches.
2.5.4Karachi:
This region covers Karachi. It includes Abdullah Haroon Road, Jodia Bazar, I. I.
Chundrigar Road, Clifton, Sind Industrial Estate, North Karachi, Defence Housing
Authority, Cloth Market, Shahrah-e-Faisal, North Nazimabad, Paper Market, Khayban-e-
Shahbaz, Dhorajee and Shaheed-e-Millat Road branches.

2.5.5North:
This region covers Northern Punjab, NWFP and Azad Kashmir. It includes Blue Area and
F - 10 Markaz, Islamabad, Rawalpindi, Peshawar, Jhelum, Mirpur (A.K) and Mardan

2.5.6South:
This region covers interior Sind and Baluchistan. It includes Hyderabad, Sukkur, Quetta
and Turbat branches.

Mr. Khalid Ahsan

Regional Head (Central)
Executive Vice President
Mr. Kazi Masrur Mahmud
Regional Head (Lahore II)
Executive Vice President
Mr. A. Fawad Hashmi
Regional Head (Karachi)
Executive Vice President
Mr. Bilal Bin Zaheer
Regional Head (North)
Executive Vice President
Mr. Rashid Ahsan Mian
Regional Head (Lahore I)
Senior Vice President
Syed Aftab Ahmed
Regional Head (South)
Senior Vice President

TABLE 2 REGIONAL HEADS

 CHAPTER 3:CONSUMER SERVICES

The essential function of a bank is to provide services related to the storing of value and
the extending credit. Typically, a bank generates profits from transaction fees on financial
services or the interest spread on resources it holds in trust for clients while paying them
interest on the asset. Although the type of services offered by a bank depends upon the
type of bank and the country, services provided usually include; directly taking deposits
from the general public and issue of checking and savings accounts, lending out money to
companies and individuals , Cash checks ,Facilitate money transactions such as wire
transfers and cashiers checks ,Issue credit cards, ATM, and debit cards ,online banking
,Storage of valuables, particularly in a safe deposit box

As a fully functional commercial bank, the activities of Prime Bank are organized around
the following services:

3.19am to 5pm Non Stop Banking

PCB is providing non stop banking from 9am to 5pm to its customers since 1998 unlike
government banks which operate such facility until 1:30 pm only or other private banks
which take an hour’s break from 1pm to 2pm. Due to this facility, customers can come
and use the banks services without any break from 9am to 5pm. PCB is thus the pioneer
in this field.

3.2Online Banking
All the branches of PCB are computerized and linked with each other through Internet,
thus providing online banking facility to the customers; that is, if a customer has an
account in any branch of PCB, he/she can draw out money by using cheque from any of
its branches. Thus he/she can access to the accounts anytime anywhere with multiple
banking channels and powerful online banking features. This facility was initiated in
2004.

3.3Prime Cash (ATM card)

The ATM card service provided by PCB is named as Prime Cash. Services that are
available on "Prime Cash" include Cash withdrawal and Account Balance inquiry 24
hours a day. At present they don’t have their own ATM machines but "Prime Cash" is
acceptable on M-NET ATMs of participating member Banks like Muslim Commercial
Bank, Standard Chartered Bank, Citibank, Faysal Bank , Bank of Khyber , Saudi Pak
Bank Limited and Metropolitan Bank Limited.
3.4Prime Car Financing
For those people who cannot afford a car on direct payment, the bank offers car financing
loans. New and used, local and foreign assembled cars can be purchased through this
loan. The mark-up rate of 8.5% is taken on the transaction and the loan is granted for a
period of one to five years. The down payment to be made to the bank is only 20% of the
loan amount and the car is insured in the name of customer with bank as the sole
beneficiary. All Pakistani nationals, who are aged between 25 to 60 years, are either
salaried, self- employed professionals or businessmen, and earning a minimum take home
income of Rs. 30,000, are eligible to apply for this facility.

3.5Prime Home Financing

For people who want to buy, build, renovate or expand their homes, or buy a plot and
transfer loan, the bank offers home financing from Rs. 200,000 to Rs. 7,500,000. A mark-
up value of 7 % is taken and the loan is granted for a period of 3 to 20 years. The down
payment to be made to the bank is only 20% of the loan amount. All Pakistani nationals,
who are aged between 25 to 60 years, are either salaried, self- employed professionals or
businessmen, and earning a minimum take home income of Rs. 30,000, are eligible to
apply for this facility.

3.6 Smart Financing

PCB provides small loans for purchase of household electronic goods by Smart
Financing. In this service loans from Rs 10,000/- to Rs 500,000/- are granted without any
down payment, processing charges, hidden or insurance cost with free doorstep delivery
and quick approval. Monthly instalments are arranged as per convenience of the customer
on 12, 18, 24 & 36 months basis. No mark-up is taken on one year loan whereas 5%
bonus is given on timely payment of agreed upon instalments. All Salaried or Self-
employed Pakistani individuals can apply for this facility.

CHAPTER 4: EMPLOYEE
SATISFACTION

No organization can survive without its employees because they are as important to it as a
backbone is to a human body. That is why organizations utilize various methods to
increase their performance. The traditional approach to job design was to fit people to the
jobs. The modern way is to fit the jobs to the people, using job enlargement and
enrichment. Whatever the case may be, compensation is a major motivator of
performance. This compensation can be monetary or psychological. PCB utilizes these
motivators in the following ways.

4.1Monetary Compensation
The employees get various types of monetary benefits like increments, bonuses,
allowances and facilities. After the scrutiny of annual confidential reports in which their
overall job performance is mentioned, the employees get an annual increment, the
percentage of which depends upon their performance level. An annual bonus equivalent
to a month’s salary is given to every employee on 1st January. Employees are give
allowances such as house rent and utility allowances. They get facilities such as medical,
insurance and transport.

A special monetary compensation called pay for knowledge is awarded to encourage

employees to continue their studies. These include the rules like setting minimum
qualification for becoming an AVP as Master’s degree and clearance of banking diploma
of IBP. The initiation of MTO Training is also a part of this motivation. Employees who
clear this training are promoted to the designation of manager. Also the employee who
clears IBP diploma in first attempt and secures the highest marks in the bank is given a
cash prize of Rs. 50,000/-

Thus the bank tries its utmost to provide proper monetary benefits for the employees.

4.2Psychological Compensation
Psychological compensations include discouraging overtime, leave fare assistance,
biannual lunches and encouragement of long term commitment. PCB discourages
overtime and thus does not give any compensation for that but If for a very important task
employees have to stay behind they are given refreshment or dinner as the case may be. A
fifteen days leave with pay is given to the employees which can extend another fifteen
days without pay. Biannual lunches are at a four star hotel for the entire staff are
arranged. To encourage long-time commitment, employees are given incentives like loan
facility after seven years of job. Thus the bank tries to motivate its employees for long
term commitment.

4.3 Staff benefits schemes:

The bank operates a provident fund scheme for the staff, the value of
which is 175 million. Furthermore the bank also has the funded gratuity scheme for all its
permanent employees the contribution for which is made in accordance with the actuarial
recommendation
 CHAPTER 5: FINANCIAL OVERVIEW

The procedures occurring in an organization, no matter how well planned they are, are
totally useless if they do not show healthy and positive results on the balance sheet.

1.6 Total Assets

40

35

30

25

20

15

10

0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Graph 3: Assets ( Rs. in billion)

Figure 2 Graph Showing Total Assets from 1993-2004
Total Assets of Prime Bank at the time of inception in June 1992 were Rs. 4.7 billion. In
December 2004 they have grown to Rs. 36 billion. Annual compound rate is about 26
percent. According to the graph, there was a steady increase from the year 1993 to 2000
whereas a drastic increase can be seen from the year 2000 onwards. This is due to the fact
that in this era the political stability or te non existence of politics has led to the financial
stability.
 Graph 1: Deposits ( Rs. in billion)
5.2 Advances

20

18

16

14

12

10

0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Figure 3 Graph Showing Advances from 1993-2004

Graph 2: Advances ( Rs. in billion)

Total Advances of Prime Bank at the time of inception in June 1992 were Rs. 1.5 billion.
In December 2004 they have grown to Rs. 20 billion. According to the graph, there was a
steady increase from the year 1993 to 1997. Then there was two phases when advances
were maintained with very little fluctuation i.e. from 1997 to 1999 and 2000 10 2001.
From 2001 to 2004 there was a tremendous increase in advances as the figure increased
almost 3.5 times. This establishes that during the new millennium, the bank did establish
a repute which attracted customers.
 Graph 3: Assets ( Rs. in billion)
5.3Profit before tax

600

500

400

300

200

100

0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Figure 4 Graph Showing Profit before Tax from 1993-2004

Graph 4: Profit before tax ( Rs. in million)

In the first year, Profit before tax was Rs. 1.5 million which grew to Rs. 3 million for the
year 1997. After this there was a phase when it started to diminish and in 1999, it was
again Rs. 1.5 million. Then there was a remarkable recovery from the slum as the profits
steadily increased and reached Rs.550 million for the year ended 31st December 2004.
5.4Deposits

30

25

20

15

10

0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Graph
Figure 5 1: Graph
Deposits ( Rs.
Showing Total infrom
deposits billion)
1993-2004

Deposits grew from Rs. 3.2 billion to 30 billion from June 1992 to December, 2004. these
also exhibit three phases. First, a gradual increase from 1993 to 19998. second, a
maintained phase from 1997 to 2000 then a differential increase till 2004.
5.5Shareholder’s Equity
Within this period, Shareholders’ Equity grew from Rs.300 million to Rs.1.6 billion.

Bank Deposit Advances Investments

Askari Commercial Bank 51,732 30,035 26,759

Bank Al Habib 34,240 23,775 18,831

8,295
Bank of Punjab 23,767 6,621
7,761 3,298 1,328
Bolan Bank

Faysal Bank 24,554 21,935 6,842

Habib Bank Ltd 328,182 167,523 142,877

490
KASB Bank 2,640 2,118

Meezan Bank 5,079 3,532 856

Metropolitan Bank 28,515 19,444 15,013

Muslim Comm.Bank 182,706 78,924 89,610

National Bank of Pakistan 362,866 140,547 143,525

Prime Comm. Bank 21,155 10,876 10,306

PICIC Bank 14,640 9,016 7,534

Saudi Pak Bank 12,341 8,522
6,365
Soneri Bank 11,378
20,545 9,844
37,760 28,890 11,822
Union Bank
154,915 74,117 69,385
United Bank Ltd.

Table 2 Comparative Analysis of Domestic Banking Industry of Pakistan (Rs. Million)

The table shows that prime commercial bank comes at no. 12 when analyzing with
respect to other banks, which is quite a good indication and thus gives indication that in
future, it may rise in status.

Name of the Bank 1Q2004 1Q2005 Growth

Askari Commercial Bank 2.16 2.43 13%

Bank Al Habib 0.70 1.44 107%

Bank of Punjab 0.23 1.17 407%

Bolan Bank 0.07 0.10 43%

Faysal Commercial Bank 1.91 1.39 -28%

KASB Bank 0.16 0.05 -68%

Muslim Commercial Bank 2.21 1.92 -13%

Meezan Bank 0.17 0.38 126%

Metropolitan Bank 1.09 1.68 54%

PICIC Commercial Bank 0.56 1.05 88%

Prime Commercial Bank 0.46 0.76 66%

Saudi Pak Commercial Bank 0.92 0.36 -61%

Soneri Bank 0.60 1.21 102%

Union Bank 0.54 0.62 13%

Table 3 Comparative Analysis of Earning per Share of Banking Industry of Pakistan

Earning per share is at seventh grade when compared with other banks. This helps in
attracting investors from people when shares are launched in the market.

The growth in advances has started matching growth in deposits. The quality of asset as
well liability products have been improving. The overall financial scenario is quite
promising and depicts that this bank will survive in the Pakistani market and will surely
flourish in the times to come.

PACRA rating for Prime Commercial Bank

 PACRA UPGRADES
CREDIT RATING OF
PRIME COMMERCIAL BANK LIMITED

Lahore: July 02, 2004

The Pakistan Credit Rating Agency (PACRA) has upgraded the long-term rating
of Prime Commercial Bank Limited to ‘A+' (Single A Plus) while maintaining the
short-term rating at ‘A1' (A one). These ratings denote a low expectation of credit
risk emanating from a strong capacity for timely payment of financial
commitments. The ratings are applicable to the senior unsecured creditors
(depositors) of the bank.

The ratings reflect the bank's improving risk profile, significant increase in core
earnings together with a maintained strong liquidity. The ratings also recognize
the healthy growth trends with increasing outreach and greater focus on the
middle market segment.

Source: www.pacra.com.pk.

OPERATIONAL DEPARTMENTS.

1. CLEARING DEPARTMENT:
(July 1st to july 7th 2005)
 I spend first week of my internship in clearing department where Mr. Sher Afghan
guided me. And by the end of first week I was able to work alone on that seat if needed
and I did this too.
FUNCTIONS:
1. Online transactions.
2. Receiving of cheques(local + online)
3. Return of cheques
4. Inward and outward clearing
5. Posting

2. ACCOUNT OPENING:
(July 8th to july21st 2005)
Then I worked in account opening department for 2 weeks under the guidance
of ms. Sana tehsin. Here I want to mention that she is very intelligent, hard working
and cooperative she guides me so well and I enjoyed working with her very much.
she is basically a Customer Relation officer.
FUNCTIONS:
1. Account opening
2. ATM cards
3. Lockers
4. Issuance of chequebooks
6. Foreign remittances.
7. Customer services.
8. Balance checking.

3. CASH DEPARTMENT:
(July22nd to august 4th 2005)
Then I got the opportunity to spend 2 weeks in cash department. Mostly banks don’t
allow internees to work in this department as it is a very sensitive and responsible
area of the bank but they don’t only allow me to sit and work there but they also give
me the opportunity to sit on a system. There Mr Raheel Zafar guided me with his
expertise although I find that department a bit difficult then others but he tried his best
to make me understand well.

FUNCTIONS:
1. OBC (outward bill clearing)
2. CDR (tender notices)
3. PO (pay orders)
4. DD (demand draft)
5. Receiving and giving of cash
6. Online transfers
7. Tax deductions

CREDITS DEPARTMENT:
August 5th to august8th 2005)
This department is separate from operational departments. Mrs naheed baig is the
incharge of this department.

FUNCTIONS:
1. Home financing
2. Car financing
3. Loans

ACCOUNTS DEAPRTMENT:
REPORTING PROCEDURE:
Branches report to treasury, which is in Karachi and the entire branch transactions,
is handled through treasury who has the accounts of all the branches. And bank report
to NIFT, which is a company, hired by State bank and is paid according to the number
of instruments.

BRANCH HIERARCHY
 Branch manager

BDM operations manager

Cash incharge system and accounts CRO

Assistant officers Office boy

Peons

DECISION MAKING:

Decisions relating branch are made by branch manager with the advise of
operation manger but bank decisions are centralized and made through head office and
are same for all the branches. Branch decisions related to job rotation within the branch,
leaves and conflict resolving at minor level etc are solved within the branch premises by
the related authority. Bank decisions like hiring, firing, promotions, transfers, pays, and
other issues are handled by head office where there are separate departments for resolving
all these areas. The branch is answerable to the heads for every thing they do and are
bound to follow the instructions given to them by the head office.

CONFLICT RESOLVING:
Conflicts are tried to resolve within the branch but in extreme cases other
authorities get involved in it. They always try not to make any other get the hint of their
conflicts because they work as a family and it is the matter of their prestige so they
always try to resolve all the staff conflicts themselves.

MARKETING STRATEGIES:
Here I want to mention that most of the banking is on staff relations because there are no
extra facilities available to attract the customers. They have only four ATM machines of
their own and they don’t have credit cards so mostly the customer comes to them because
of their good dealing. Each employee of the bank has been given a target of bringing a
deposit of 5 millions to the branch in which they are working within a limited period of
time and this will be helpful for them in their increase in pays.