Brand Management

Bank Alfalah December 5

Marketing Mix 2010

BBA/ITM(11)

Group Members
Report to:
• Anum Nisar 315 Ms,Perkha Khan
• Hira Lone 333
• Misbah Shakir 344
• Wajiha Zafar 362
 Bank Alfalah Limited
(“BAL”)
Executive Summary

Pakistan after getting its independence, did not inherit a strong banking industry and
since then saw a number of events in the industry, like the nationalization of banks in the
1970’s. However today, the banking industry of Pakistan has been growing over the past
few years, mainly because of the consistent policies implemented by the Government of
Pakistan, including the privatization of banks in Pakistan. Also the State Bank of
Pakistan’s, monetary policy has been very friendly toward the banking industry. There
are a number of different banks established in Pakistan, including local incorporated
commercial banks, foreign incorporated commercial banks, development financial
institutions, investment banks, discount & guarantee houses, housing finance companies,
venture capital companies, micro finance banks and Islamic banks. Bank Alfalah was
incorporated in 1997 and was later privatized by the Government of Pakistan. The Abu
Dhabi Group bought the majority shares of the bank and so got the rights to control the
bank’s operations. Since the privatization of the bank, Bank Alfalah has implement
different policies to make it one of the best banks of Pakistan, which included introducing
new products and services and increase its operations by opening new branches in
Pakistan. Today Bank Alfalah is operating in more than 70 cities of Pakistan and
operating its foreign branches in Bangladesh, Afghanistan and Bahrain. The total
employees of Bank Alfalah in 2008 were 6,543, which was an increase of 25% from the
past year. The increase in the number of employees joining Bank Alfalah shows that
people feel confident in Bank Alfalah as a prospect employer. The financial statistics of
Bank Alfalah are also as impressive as their human resource. The profit after taxation for
Bank Alfalah in 2007 amounted to Rs 1,762,691 (‘000) and its total assets for 20067
amounted to Rs.275,685,541 (‘000). The stock prices and earning per share of the bank
have also increased over the years. Bank Alfalah promotes its products and services
through print and electronic media. Bank Alfalah also promotes itself by sponsoring
different events. For Bank Alfalah, it has to compete in an industry that has grown in
2006 by almost 17% in overall assets and profits growth was 33% from the previous year
in 2006. The major 5 competitors of Bank Alfalah, pose close competition and are mainly
large nationally incorporated banks and a few international banks, that all want to become
the leading banks of Pakistan, by creating some edge in the industry. To create this edge,
technology has played an important role in the industry as banks are continuously trying
to improve its products and services by introducing innovative products. Lastly Bank
Alfalah has seen a rapid growth in its activities by introducing a range of products and
services and showing its presence in the country by opening new branches and in future
should keep this momentum and always strive to become the best.

Company Background Bank Alfalah Limited (“BAL”)

Bank Alfalah Limited is a private bank in Pakistan owned by the Abu Dhabi Group. Bank
Alfalah was incorporated on June 21, 1997 as a public limited company under the
Companies Ordinance 1984. Its banking operations commenced from November 1, 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 195
branches in 74 cities, with the registered office at B.A.Building, I.I.Chundrigar, Karachi

Since its inception, as the new identity of H.C.E.B after the privatization in 1997, the
management of the bank has implemented strategies and policies to carve a distinct
position for the bank in the market place.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.

This facilitates our commitment to a culture of innovation and seeks out synergies with
clients and service providers to ensure uninterrupted services to its customers. We
perceive the requirements of our customers and match them with quality products and
service solutions. During the past five years, we have emerged as one of the foremost
financial institution in the region endeavoring to meet the needs of tomorrow today.

Type Private
Founded June 1997, Karachi
Headquarters Principal Office, Karachi Pakistan
H.E. Sheikh Hamdan Bin Mubarak Al
Key people
Nahayan (Chairman)
Banking
Industry
Capital Markets
Loans, Credit Cards, Savings, Consumer
Products
Banking etc.
Revenue ▲PKR 25.783 Billion (2008)
Net income ▲PKR 3.130 Billion (2008)

Vision

To be the premier organization operating locally & internationality that provides

the complete range of financial services to all segments under one roof.
 Mission
To develop & deliver the most innovative products, manage customer experience,
deliver quality services that contributes to brand strength, establishes a competitive
advantage and enhances profitability, thus providing value to the stakeholders of
the bank

Now 12 years after being incorporated, Bank Alfalah has emerged as one of the
foremost financial institution in the region, endeavoring to meet the needs of
tomorrow today, operating through 198 branches in 74 cities nation wide, with
total employees exceeding 6000. Bank Alfalah also expanded its network
internationally by opening branches in Afghanistan, Bangladesh and Bahrain
to further improve its image as a premier banking institution

Operational Analysis

The bank is currently operating through more than 274 branches domestically and an
international presence in Afghanistan, Bangladesh and Bahrain, with the registered office
at B.A.Building, I.I.Chundrigar, Karachi. Some of the main branches are located in all of
the major cities including: Lahore, Kasur, Islamabad, Gawadar, Peshawar, Faisalabad,
Quetta, D.I.Khan, Rawalpindi, Sargodha, Sukkur, Sialkot, Multan, Murree, Attock
District, Gujranwala, Pirmahal etc

Bank Alfalah is operating with an extensive network of 198 branches nationwide

that are spread allover the four provinces, Different varieties of services that
each branch is equipped to provide include:

Branch/Retail Banking: Example: Deposits, Remittances, Lockers

Consumer Banking: Example: Credit Cards, Auto Loans, Home Loans
Electronic Banking: Example: Phone Banking, ATM's, Online Banking
Corporate Banking: Example: Short/Long Term Finance, Trade Finance,
Structured Finance
Treasury Finance: Example: Money Market, FOREX Market, Investments, Govt.
Securities

As Bank Alfalah is operating with such as extensive network of branches, it is not

possible for it to control all activities of its different branches from one main
location, that is their head office in Karachi, so due to this reason they have
divided their branches in two areas: the north and south, these two areas are
further divided into different areas, 10 each controlled and monitored by their
respective area office. There are 9 area offices in the northern area. Each
branch of Bank Alfalah comes under an area office, for example, the area
office of Bank Alfalah I-8 Markaz is located in Rawalpindi. The area offices
are responsible for authorizing its branches on providing different services to
its customers. Each branch has to first get an approval from the area office
before providing any service to its customers. For example, a car financing
application needs to be approved by the area office before any legal documents
or order for a car is placed by the bank. Furthermore Bank Alfalah is also
operating 7 foreign branches in three countries, namely Bangladesh,
Afghanistan and Bahrain. Another major part of operations for Bank Alfalah
includes remittances that come from abroad and are thus considered as home
remittances.

Some of banks with which Bank Alfalah has agency agreements are as follows:
Union National Bank, Abu Dhabi, U.A.E First Gulf Bank, Abu Dhabi, U.A.E
Alfalah Exchange Company, Abu Dhabi, U.A.E U.A.E Exchange Center, Abu
Dhabi, U.A.E Bank Alfalah has also established relationships with other
internationally renowned banks are part of Bank Alfalah list of
correspondence banks. The total numbers of banks that are included in this
list of correspondence are 170, in all major countries of the world and help
Bank Alfalah in providing services to its customers.

Furthermore Bank Alfalah is also a member of MoneyGram, a service that

facilitates speedy transfer of remittances on a person-to-person basis and
SWIFT (Society for Worldwide Integrated Financial Transfers), a service that
facilitates banks to transfer important messages or financial transfers securely
and speedily to other banks. Both these services are recognized globally, with
members from all over the world. Bank Alfalah being a member of both these
 services reiterates its commitment of providing its customers with the state of
the art service

SWOT Analysis of Bank Al-Falah

Here we have applied this very useful technique to identify the strengths, weaknesses,
opportunities and threats of Bank Al-Falah.

Strengths:
Strong Financial Position As we can see in the financial statements of the bank, the
financial position of the organization is very sound and its profitability is in increasing.
The Earning per share has been increased on a rate of about 50%, which is a very positive
sign.

Highly Qualified Employees The bank has highly qualified and skilled workforce and it
has succeeded to attract the best banking professionals from across the country due to its
growing pace and sound reputation.

Conducive Environment The management of the bank is very much concerned with the
development of and improvement of the working environment. The bank has state of the
art and purpose built branches where all the modern technologies are provided to get the
efficiency of the workforce and the customer satisfaction.

Govt. Support and Encouragement As the owners of the bank belong to UAE and the
type of their investment in Pakistan is a foreign investment, the govt. is fully supporting
the bank management due to its policy to maximize the foreign investment in the country,
to get the economic prosperity.

Fastest Growing Financial Institution Due to its successful business policies and the
strong financial position the bank has achieved the reputation of fastest growing financial
institution in the country. It has greatly increased the customer’s confidence in the bank.

Huge Expansion Plan Due to its strong financial position the bank has undergone a huge
expansion plan to compete with the existing bank all over the country and with the
passage of time the branch network is expanding at a very good pace.

Young and Energetic Workforce As the bank is a newer one in the country, the bank
has an advantage over its competitors because the majority of its workforce is young and
not very much over aged. Thus the bank is getting maximum out put from its young and
energetic workforce by spending comparatively less on their remunerations.

Islamic Banking Division The bank is one of the pioneers of the commercial banks who
have started the Islamic Banking along with their conventional banking. The bank has a
separate network of its Islamic Banking Division which has 16 branches across the
country and this network is also expanding at a very good pace.

Weaknesses:

Waiver of charges Currently the middle management of bank Al-Falah is the big reason
for waiver of charges. Bank Al-Falah loosing a lot of its income likes (Cheque book
charge, online charges, statement charges, and other things) because of management.
This is a weakness of bank Al-Falah.

Inexperienced workforce As the majority of the workforce consists of young

professional, they lack in their experience. And sometimes lack of experience becomes a
hurdle while serving to the customers. It is the point where they feel difficulty while
competing the other bank, which have a very experienced workforce.

Over work Load on Employees It was observed in the branch that as compared to huge
business the bank is dealing in, the no. of employees is lesser and thus there is an
increased workload on the employees. Due to this the efficiency of the employees is
reduced.

Employees are not very much Motivated As discussed before, the workload is high and
the employees, especially the credit department, have to do late sittings to complete their
tasks. On the other hand the bank has revised its salary increments policy to decrease the
increment rate, as a result a decreased motivation level of employees is observed.

Opportunities:

Rapidly Growing Economy At present the Pakistan’s Economy is growing on a very

fast pace. The rapid growth of economy has resulted in the increase in the growth rate of
all economic sectors especially in the banking sector which is growing at a fastest speed
than ever and in future the growth is expected to increase even a higher rate.

Increased Interest Rates The SBP has revised the interest policy and the interest rates
have been linked with the KIBOR rates. Due to which the banks interest rate has been
substantially increased which will greatly increase the banks’ profitability.

Mega Projects Financing As the increase in overall business activity in the country, the
investors are launching various types of Mega Projects especially in housing and textile
the bank has a great opportunity to finance these projects at very profitable term.

Huge Demand for Consumer Financing The increase in per capita income and overall
economy has resulted into a great demand for the consumer financing especially for
home finance and car financing and it is said that this trend will increase more in future.
The bank can earn a lot by focusing on its consumer financing sections.

Merger with UBL After the privatization of United Bank Limited, the management of
the BAL has purchased the majority shares of the UBL, and it is planning to merge these
two banks. As UBL is the second largest bank in the country, this merger can make the
bank the largest bank of the country.

Growing Trend of Islamic Banking There is a very good growth trend in the Islamic
banking in the country and in the world as well. BAL has the advantage of having full
fledged Islamic Banking network and the growth in this particular field can be very
fruitful for the bank.

Spending Practices of Mass As the Pakistani’s are known for their extravagant
practices, and to fulfill their funds requirements they don’t hesitate from getting loans
from banks. Thus there is a very good scope for the bank to run successful business in
such circumstances.

Threats:

Uncertainty of Economy Although the economy is growing at a good pace, but there are
many factors which results in the uncertain position of the economy. Such as political
uncertainty, WTO, increase in poverty etc. As a result there are permanent threats of
future risks and losses for the bank.

High Rate of Inflation The inflation rate of the country has gone above the 10%. This
can result into an unfavorable situation for the bank. And especially when the ownership
of the bank is UAE based, the net spread for them can substantially decrease.

Trend of Mergers There is a trend of mergers among the banks to become prominent in
the market and to get the maximum market share. This trend can result into the union of
some leading banks which can give tough time to the bank and it will become difficult for
the bank to compete with them.

Privatization of Banks Due to its privatization policy, the govt. is privatizing the state
owned banks. The change in management may result in the increase in the efficiency and
productivity of the banks. Thus it can become a threat for the bank.

Risk of Defaults As discussed earlier that there is a trend of launching mega projects in
the country and every one is involved in this trend without taking any measure for the
successfulness of these projects. This can result into the failure of this project which can
make it difficult for the banks to recover their funds from these defaulters.

7PS
Product (Offerings)

Banking Sector has a wide variety of products that cater to the financial need of
the masses; some of the major products that a bank provides to its customers
and is mostly used by the banks customers are as follows:

(a) General banking

Checking Accounts
Remittances
Lockers

Checking Accounts There are the main types of checking accounting that banks
provide:

Basic Banking Account (BBA) These accounts have no minimum balance

requirement and can be opened by just Rs. 10004. A customer with a BBA,
does receives an ATM card but the account cannot be turned to an ‘Online
Account’. The segment that this account is targeted is towards the salaried
individuals that have just started their professional careers, students or any
other individual that may want to open an account with a small amount of
money.

Current Account Current accounts are another type of account that banks offer,
this account does not provide any profit on it and neither zakat is deducted on
this account. This account can be turned into an ‘Online Account’ and its
customers also receive an ATM card. The major segments of this account are
sole proprietors, partnerships, companies (both private& public) and any
 other individual that wants to open their account and not earn profit or pay
zakat on their balances.

Profit & Loss Account Profit and loss accounts are one of the basic accounts that
give interest to its customer’s deposits. These accounts pay interest annually
and zakat is also deducted on these accounts. ATM card are also provided to
these accountholders. The main segment targeting these accountholders are
people that want to save money which might include household etc. This
account does not target companies

Royal profit: Minimum Deposit requirement of Rs. 50,000 only. Higher returns on
higher balances No restriction on number of withdrawals and on number of
deposits. Debit card can be used to withdraw cash and make purchases at
thousands of outlets across Pakistan which provides access to funds 24 hours a
day. Profit is credited to the customer account on monthly basis.

ALfalah kifyat Any Pakistani resident over the age of 18 can open this account. This
account is for individual/joint customers only. Other customers like companies, corporate
etc are not eligible for opening of this account Minimum balance requirement for opening
this account is Rs. 10,000/- with a maximum of Rs.1, 000,000/- Three debit transactions
are allowed in a month either through cheques or Debit Card/POS machine There is no
restriction on deposit transactions The bank will issue the first cheque book of 25 leaves
and a Debit card Profit will be calculated on monthly minimum balance basis and will be
credited in the account on quarterly basis. No profit shall be payable for a particular
month, if the minimum balance for any particular day of said month falls below the
amount of Rs. online facility available for this account All service charges are as per the
prevailing ‘Schedule of Charges’ Only one account per customer will be allowed across
all branches Account statement will be generated on half yearly basis

Alfalah Mahana Amdan This facility is not available for business and corporate
customers.

Some salient features

Minimum placement limit is Rs. 100,000/- and maximum placement limit is

Rs.15,000,000/-Expected Rate of profit is 10% Per annum(as per PLS governing
rules)Profit will be automatically credited on the 1st working day of each month into
customers Current/PLS/RP/BBA account Free Personal Accident Insurance coverage up
to the deposit amount or Rs. 1,500,000/- whichever is lower Customer can avail
financing facility up to 90% of the deposit(as per banks policy)Any Pakistani resident
over the age of 18 can open this account
Alfalah Mahana Amdan term deposit can be maintained only at any one BAL branch
with a maximum cap of Rs. 15 Million. An undertaking shall be obtained from the
customer certifying that he/she is not availing Alfalah Mahana Amdan Term Deposit
Receipt facility from any other BAL branch.(included in AOF)

Alfalah Mahana Amdan TDR will be issued for three years tenure with auto renewal
facility of principal amount i.e. the facility will be renewed automatically on maturity
(i.e. 3 years)Alfalah Mahana Amdan TDR will be subject to Zakat, Withholding Tax as
well as any other applicable taxes
Alfalah Education

Alfalah Education is a Term Deposit product with No Additional Cost (NAC) education
insurance cover for account holders with school going children. Alfalah Education
Account , beside offering competitive return on TERM DEPOSIT , offers tuition fee
reimbursement of children for 15 years of schooling or up to their 20th birthday, in the
unfortunate event of the death (either through accident, illness or natural causes) of the
main breadwinner (account holder) parent. Alfalah Education offers a competitive return
on term deposit and secondly, it creates a contingency provision for our school going
youth’s education in the hapless event of the death of any major breadwinner. The
product seems rewarding in the current scenario of increasing number of children of
school going age and the general public interest in quality education of their off springs.

Features

Deposits can be placed in multiple of 100,000 units with maximum 3 units allowed per
depositor, i.e. a maximum deposit per customer of Rs. 300,000 across all BAL branches.
All 3 units can be purchased for 1 child or each for up to 3 children. No evidence of
insurability (medical examination/health decoration) is required. Maximum entry point
age is 55 years (renewable up to 64th birthday) Benefit payment increases with age/class
of the child. The product will be offered as a 1 year term deposit at up to 7 % profit to be
paid at maturity Premium cost for each deposit unit of Rs. 100,000 would be Rs. 85 per
month and borne by the bank. Regular Zakat and WHT would apply on the deposit.
Monthly payments set forth will be paid directly to the mother/guardian, regardless of the
actual school fee. In case of joint account holders, only main breadwinner account holder
would be covered under the policy. Premium will be paid to ALICO by BAL on monthly
basis.

Benefit Schedule

Benefit Payable: for 15 years or up to the child age 20

Monthly Premium: Rs. 85
Deposit: Rs. 100,000

Remittances

Through our international correspondent banking relationships we provide direct

and indirect foreign currency remittance facility around the world.

Lockers

Bank Alfalah provides safe deposit locker facility to its customers for safe keeping of
their valuables like documents, securities and jewellery etc.

Important features of lockers facility are as follows:

• Various sizes to choose from small, medium & large.

• Annual locker rent ranges from Rs.1,000/- to Rs.3,500/-.

 • Locker rent is waived for customers maintaining a minimum deposit of Rs.2
million in current account or above US $25,000/- in a current account or US
$50,000/- in a savings account

Locker Rates

The annual license fees of the following sizes of lockers will be as follows:

Locker Size Charges

Small Rs.1000/-
Medium Rs.1500/-
Large Rs.3000/-
Special Rs.3500/-

Key Deposit: Rs.1000/- (Refundable)

The license fees lockers will be payable in advance every year and no part of the same
shall be refundable in any circumstances.

(b) Consumer Banking

 Credit Cards
 Debit/hilal card
 Auto Loans
 Home Loans

Credit Cards

Credit Cards Credit Cards are today’s one of the most selling product that banks
offer. Your Bank Alfalah Credit Card is your partner everywhere and is globally
accepted and welcomed at locations displaying the VISA logo. It is accepted at nearly
29 million locations in more than 150 countries around the globe and over 27,000
Bank Alfalah’s establishments in Pakistan. Alfalah VISA lets you pay for shopping,
travel, entertainment, meals and much more. Card members are facilitated through a
number of promotions from time to time. In addition, there are a number of strategic
business partnerships with leading local and international brands for purchase of
home appliances at exciting Step-BY-Step (SBS) monthly installment plan with free
home delivery at lowest interest rates

Salient features are:

• No Joining / Annual / Renewal fee

• Electricity, Sui Gas, PTCL and Warid bills payment through 24 hour Call Center
and Auto Debit instructions
• SMS for card usage, mini statement, payment receipt confirmation, etc.
• Cash withdrawal at all 1LINK ATMs
• Special offer on Warid post paid connections
 Features offered by Alfalah VISA.

Platinum Card
It is accepted at nearly 29 million locations in more
than 150 countries around the globe and at over
27,000 establishments in Pakistan.

Titanium
Titanium MasterCard is your partner everywhere
and is globally accepted and welcomed at locations
displaying the MasterCard logo

Gold & Silver

A perfect card combination for all segments of
salaried & professional individuals.

Services

1. Credit Cover -Protection when you need it !

Bank Alfalah offers cardmembers a new and powerful protection against the uncertainties
of life. In the unfortunate event of prolonged illness, disability or death, it’s reassuring to
know that with Alfalah Credit Cover you have no cause to worry about your monthly
credit card repayments. Alfalah Credit Cover has a range of features designed to protect
you from the setbacks of life, at rates that are affordable.

Low Rates - High Protection

As an Alfalah Credit Cardmember (Basic cardmember up to the age of 65), you can
protect yourself with Alfalah’s Credit Cover that offers you an unbelievable low rate of
0.50% of your outstanding amount in each monthly credit card statement as “Credit
Cover Premium” to insure your credit balance.

Protection against Uncertainties

In the unfortunate event of terminal illness, permanent disability or death, your entire
outstanding balance amount on your Alfalah Credit Card account will be waived without
causing any inconvenience to your dear ones. Additionally, all supplementary credit card
balances will also be waived. No worry-just peace of mind.

While You Recover - We will Cover

In the unfortunate event of temporary disablement due to an injury or illness for a period
exceeding 45 days, we will pay the minimum outstanding payment on your Alfalah
Credit Card. It’s just our way of ensuring that you enjoy complete peace of mind with
flexibility.

Convenient and Hassle-free

Being automatically enrolled to the benefits of Credit Cover, you do not need to complete
any forms or submit any applications for it. If you feel you do not need Credit Cover then
simply call our 24-Hour Phone Banking Service on 111-225-111 to cancel.

All on the Statement

All transactions will appear under a separate heading stated as “Credit Cover Premium.”
You will be charged 50 paisas per Rs. 100 of your statement balance each month.

Always There for You

Call us on 111-225-111 and we will assist you through the procedure and help you with
all the necessary requirements. Our 24-Hour Phone Banking Service will make sure that
you get complete peace of mind with the assurance of Alfalah Credit Cover.

Legalities

The rights and obligations of any cardmember subscribing to Alfalah Credit Cover will
be governed by the definitions, terms and conditions given on the back of this form. By
virtue of Credit Cover, Bank Alfalah aims to offer through an insurance company of its
choice, certain protection to those cardmembers who are subscribing to Credit Cover in
the event of death, prolonged illness, permanent, tem

24-Hours Phone Banking Service

Our well-trained and qualified phone banking team Is available to help you 24 hours a
day. Just dial 111-225-111 for:

1. Activating your card

2. Answering your queries

3. Registering and resolving your complaints

4. Reporting a lost/stolen card

Zero Loss Liability

If you ever lose your card, Bank Alfalah ensures that you never have to worry about it.
You are covered for all fraudulent charges made on your card as soon as it has been
reported lost to us. Just make sure that you report the lost card immediately upon
discovery. You are completely secure against loss/theft after the card loss has been
reported to us.

All Billing in Pak Rupees

Whether you make transactions in Dollars or any other currency, for your convenience,
all your billing will be in PAK Rupees.

Comprehensive Travel Protection Alfalah VISA offers a comprehensive cover up to

Rs. 3.5 Million on Alfalah VISA Gold Card in case of an accident, while traveling on any
common carrier. It is applicable only if the tickets are charged through Alfalah VISA
card.

Alfalah HilalCard

CARRY YOUR BANK ACCOUNT WITH YOU WHEREVER YOU GO WITH ALFALAH
HILALCARD...!

Alfalah HilalCard is the revolutionary, new-age form of cash that provides you greater
freedom, security and convenience, combined with the wide reach of Visa Network. This
single card brings just about everything within your reach. Now, you can use your
Alfalah HilalCard for all your financial needs around the world, round the clock,
wherever Visa cards are accepted, locally and internationally.

Alfalah HilalCard - The International Visa Debit Card

The Alfalah HilalCard is an International Visa Debit Card which gives you an unlimited
access to your current / savings account with a simple swipe, at millions of retail shops
and ATMs, worldwide.

Competitive edge

Why Should you apply for the Alfalah HilalCard?

• No Interest

• No Minimum Income Requirement - all you need to do is open an account in any

branch of Bank Alfalah Limited

• No PIN required for Retail Transactions

• Accepted at more than 1 Million ATMs and 29 Million retail outlets around the world.

No fees will be charged on Cash Deposit.

Difference between hilal card and credit card

Put in simple terms, a HilalCard is a Buy Now, Pay Now option while a Credit Card is a
Buy Now, Pay Later option. Alfalah HilalCard allows the following facilities:
 • No monthly repayment.

• No interest charged.

• Backed by a customer maintained Current/Savings account.

• Your limit is your balance

Auto Loans

Features

Quickest processing, No hidden charges, Minimum down payment, Complete repayment

at any point of time, Balance transfer facility {BTF} for existing as well as new clients
from other Banks, Tenure period ranging from 1 to 5 years, Financing of all brand new
locally assembled vehicles and used cars.Financing limit ranging between Rs. 200,000/-
to Rs. 2000,000/- for brand new cars.

Corporate & Individual Car Leasing BAL’s recently introduced car leasing facility for
individuals and corporate sector has set new dimensions for the product. Now you are
provided with the option of either to get the vehicle leased or financed.

Insurance Renowned and reliable Insurance companies are offering the competitive
rates of insurance. Pay year insurance premium in advance {at the time of down payment
and the remaining in the subsequent equal monthly installment.

Repayments Easily affordable installments on monthly basis in the form of post-dated

cheques will set you free of depositing your rental cheques every month.

Security Hypothecation of vehicle in the name of Bank Alfalah Limited.

You Can Act As A Co-Borrower Acting as a co-borrower will enable your family
members {spouse, children- 18 year and above} to avail the financing facility and get the
car registered in their names as well.

Home Loan

a. Buy Your Home.

b. Build Your Home

c. Renovate

d. Start it together

e. Easy Transfer
Buy Your Home With this facility, you no longer need to just dream about the home
you want for yourself and your family .We will provide you up to 80% of the purchase
price of the property, so that you can realise your dream and enter the reality of owning a
home!. Payment period ranges from 3 to 20 years

Build Your Home You own a plot but need financing to construct a home that excites
everyone in your family! No problem. We will provide up-to 100% of the construction
cost enabling you to say good-bye to rent forever! Even if you don't have a plot, we will
provide up to 60% of the value of the plot that you have selected to purchase Payment
period ranges from 3 to 20 years.

Renovate You already own a home, but need extra space for a growing family or want to
see some rooms get a new look. Simply apply for financing of up to Rs. 3.50 million or
40% of the surveyed value of your home and get yourself the extra space!

Start it Together The crown jewel of our Home Finance scheme, the golden opportunity
for someone starting a career to buy an already constructed housing unit early in life! We
offer a moratorium of up to 3 years in principal payments, for a financing of up to 20
years. You service only the mark-up element initially, and principal repayment starts after
the end of moratorium period

Home Start is specially designed for young professionals to own a quality asset.

Easy Transfer Does your existing installment on a home finance leave you with nothing
to spend? You need not worry any more because we have genuinely attractive rates and
flexible payment options that could leave more funds with you each month. With our
Home BTF, repaying your home finance will not make you break into a sweat! Transfer
up to 100 % of the existing finance

c) FINANCIAL SERVICES

1. Structured Finance
2. Trade Finance
3. SME
4. Lease Finance
5. Agri finance

Structured Finance Department comprises a team of hand picked professionals,

dedicated to syndicated loans and structured products. The team’s expertise is well
known in the marketplace with its capability to assist public & private sector entities,
major financial institutions, multinational corporations, domestic & international
institutional investors in innovative financing including underwriting & private
placements.The scope of SFU’s activities also encompasses advisory assignments, such
as privatization, Mergers & Acquisitions (M&As), domestic listings, IPOs and
restructuring.

During the past few years, SFU has been successful in sourcing and participating in a
number of prestigious transactions involving large amounts.

Some of the value added services offered by SFU include the following:
 • Loan syndication

• Public floatation of Term Finance Certificates (TFCs) and equity

• Private placement of Term Finance Certificates (TFCs) and equity underwriting

• Guarantee syndications

• Financial restructuring

• Mergers & Acquisitions (M&As)

• Fostering joint ventures

• Privatization – Sale side and buyers side advisory

• Structuring new financial instruments

In future, SFU is envisaged to supplement the enhanced profile and profitability of Bank
Alfalah Limited through its value added services, through both asset building and income
generating aspects

2. Trade Finance (foreign trade and corresponding finance)

Inspired by a challenging spirit and an unyielding desire to create a sound and reliable
network of correspondent relationships, the bank has placed great emphasis towards it
growth. Accomplishing something for the first time requires a special focus. It demands
foreseeing possibilities. In our endeavor to do so, we successfully surmounted problems
and difficulties arising out of issues relating to weak economic conditions of the economy
and a continuous deteriorating status of country risk.

The incertitude and skepticism of the international banking community towards financial
institutions from emerging markets remained intact. Our persistence during the past four
years allowed us to make significant inroads into the arena of correspondent banking.
Large international banks, after critically evaluating us, agreed to enter into relationship.

During 2002 we added 81 banks to our network of correspondents, bringing the total
number over 170. Of these relationships, there are now several banks that rank amongst,
the top financial institutions in the world. Our geographical coverage now extends to over
100 countries, which is adequately compatible with our trade flows. Our correspondents,
during the year extended us unqualified support, which enabled us to undertake a healthy
quantum of foreign trade business. There are many challenges ahead for the bank, in the
coming year, our bank will not only continue to review its efforts on existing
correspondents to make the relationship more beneficial, but will also add more
correspondents to establish a comprehensive international networking to facilitate our
customer’s transaction as well as the Bank’s proprietary needs.
We have provided against the list of correspondents their world and country ranking.
These ranking have been taken from The Bankers Almanac – July 2001 issue.We would
like to emphasize that correspondent arrangements do not necessarily imply the existence
of account relationship. We are in the process of rationalizing our current nostro account
relationships. We shall continue to open new accounts in various currencies based on our
trade flows and business requirements

3. SME

Small and Medium Enterprise (SME) means an entity, ideally not a public limited
company, which does not employ more than 250 persons (if it is manufacturing / service
concern) and 50 persons (if it is trading concern) and also fulfills the following criteria of
either ‘a’ and ‘c’ or ‘b’ and ‘c’ as relevant:

(a) A trading / service concern with total assets at cost excluding land and building up to
Rs 50 million.

(b) A manufacturing concern with total assets at cost excluding land and building up to
Rs 100 million.

(c) Any concern (trading, service or manufacturing) with net sales not exceeding Rs 300
million as per latest financial statements.

An Individual, if he or she meets the above criteria, can also be categorized as an SME.

Realizing its corporate social responsibility and carrying forward the image of "The
Caring Bank", Bank Alfalah started a separate department at the Head Office level in
early 2004. The SME Department was established with a mandate to foster SME finance
at BAL, explore opportunities for developing structured product programs for SMEs,
introduce the concept of Dedicated SME officers and finding market based solutions to
fill the financing gap to this important and under-served business segment.

Bank Alfalah believes in innovation, simplification of procedures, and reduction in

turnaround time and customer friendly service. To accomplish this resolve, the SME
Department is supported by 86 dedicated officers in 57 branches of the bank who are
nurturing valuable relationships in the SME sector.

ALFALAH KAROBAR FINANCE

Bank Alfalah’s first SME product Alfalah Karobar Finance is a running finance facility
based on projected cash flows. Under AKF, we offer working capital finance (Rs.0.5
million to Rs. 10 million) to SME’s at highly competitive rates. We have a team of
professional credit officers who provide expert financial advice along with customized
packages to a diverse range of business clientele. The product is available to SMEs
through our 86 branches in 38 cities.

Bank Alfalah took another step towards addressing the needs of the industry by
introducing Alfalah Milkiat Finance. AMF is aimed at strengthening the Small and
 Medium Enterprises viz a viz their business premises. Alfalah Milkiat Finance
offers comprehensive and flexible financing packages from Rs. 0.5M up to Rs. 20
million for the purchase, renovation and expansion of business premises

Alfalah Milkiat finance

Alfalah Milkiat Finance (AMF) is a unique long term financing facility offered to SMEs
to purchase, renovate or expand their business premises. It is being offered keeping
in mind requirements of the small business owner who needs to take his/her
business to the next level

3. Lease finance

In modern days leasing has now become an economic and financial reality of primary
importance. It is the originality of the leasing techniques and its economical advantages,
which has enabled it to enter the world of industrial investment in Pakistan and on the
international scene.

Lease finance provides a significant source of funds for companies to acquire or use
assets. Leasing provides additional earning opportunities to acquire assets and to get the
inflows simultaneously out of the operations of the same assets. The ownership of the
asset is vested with the Bank (lessor) and in return for rental payments, the client (lessee)
has full use of the asset. Being a medium to long term mode of financing, it allows the
lessee to use the funds for other profitable purposes which otherwise would have been
tied up in case of immediate payment for purchase of the asset

The lease finance facilities are available for a variety of assets (imported/local)
conforming but not limited to the following categories

1. Vehicles (Private & Commercial)

2. Plant, Machinery and equipment

3. CNG Equipment

4. Generators(Industrial & Commercial)

4. Agri finance

Bank Alfalah Limited acknowledging the vital role of a agriculture in the economic
development of Pakistan has designed Rural Finance Program named as "BANK
ALFALAH ZARIE SAHULAT". The product is designed to cater for multiple financing
requirements of our farming sector.

We are caring our customers through chain of complete, distinguished and specialized
products for agriculture sector. BAL Branches are designed to help the farmers with
expert advice, technical know-how and Credit for their multifarious activities through
timely, affordable and attainable modes to suit farmer requirements.

BANK ALFALAH ZARIE SAHULAT is available for Short, Medium and Long terms.

Bank Alfalah Limited Strategy is to focus on following Objectives:

 • Provide reliable infrastructure for Agri customers.

• Help farmers utilize funds efficiently and effectively.

• Provide farmers an integrated package of credit, supervision and technical know-

how.

Bank Alfalah Limited is committed to make dreams come true by making Pakistan's
Rural Economy healthier and stronger

BANK ALFALAH'S ZARIE SAHULAT offers finance facilities covering entire

spectrum of Farm and Non-Farm activities both for production and development purpose.
We offer following wide range of Agri Finance Products to encourage farmers to increase
farm production.

(d) TREASURY AND INVESTMENT

 Money Market
 Foreign Exchange Market
 Investment
 Government Securities
 Custodianship
 Financial Advisory Services

Money Market

• Short term money market inter-bank trading.

• Active Treasury Bills trading in secondary market.

• Forward – forward inter-bank money market trading.

• Money market linked lending to and borrowing from corporate clients.

Foreign Exchange Market

• Active trading in ready and forward USD/PKR.

• Active quotations of foreign exchange rates in fifteen major currencies.

• Information in respect of prevailing rates of most of the currencies of the world

for corporate clients and individuals.

• Forward – Forward foreign exchange rates of USD/PKR.

 • Active swap trading in USD/PKR and other major currencies such as EUR, GBP,
JPY and CHF.

Investment

• Active Investment in treasury bills (TBs).

• Active Trading in Pakistan Investment Bonds (PIBs).

• Active investment in Certificate of Investment (COIs)

• Active investment in Terms Finance Certificates (TFCs)

Government Securities

• Efficient service for individuals and corporate clients for buying and selling govt
securities on their appropriate requests.

Custodianship

• Investment Securities Portfolio Accounts of Customers for holding on their behalf

Treasury Bills, Pakistan Investment Bonds.

Financial Advisory Services

• Briefing on current information available in market in respect of prevailing rates

of USD/PKR.

Briefing on current information available in market in respect of foreign exchange rates

of major foreign currencies

(e) ISLAMIC BANKING

The thrust for Islamic Banking is founded on the desire to submit to the Divine
Instructions on all transactions, particularly those involving exchange of money for
money. However, it would be quite unfair to limit Islamic Banking to elimination of
Riba only. Riba is but one of the major undesirable elements of an economic
transaction, the others being Gharar (uncertainty) and Qimar (speculation). While
elimination of these objectionable aspects in a transaction is indeed a critical aim of
Islamic banking system, it is by no means its ultimate objective.

At the heart of Islamic Banking is a system of commercial transactions that not only
provides Halal modes of commercial transactions by avoiding that which is
obnoxious and objectionable, but also fosters ethical, fair and just practices.A key
element of Islamic economics is distribution of equitable rewards to the different
factors of production. Islamic economic system seeks system of Redistributive
justice where concentration of wealth in a few hands is countered and flow of
money into economy is fluent. Islamic Banking is, therefore, seen as a lynchpin to
achieving the economic and social goals of the Islamic economic system.

Islamic financing: Asset-based financing A key feature of Islamic banking is that

unlike conventional banks which deal primarily in money and financial securities,
Islamic financing is related to an asset that is a feature of the transaction, and quite
often the principal feature itself. From this springs an important distinguishing
feature of Islam wherein Islamic financing is always based on illiquid assets that
have intrinsic value. Profit to Islamic financing is generated through bonafide sale
of these assets.

Conventional banking, on the other hand, is free of such limitations. It lends money
and makes its earnings through this act of lending. Its earnings are unconcerned
with the economic fate of its lending.

A Perspective:

The history of Islamic banking from its recorded inception is less than 40 years old.
From a humble beginning in a small village in Egypt in the late 60’s, it has spread to
the four corners of the world. By normal standards in a time span that is less than
half a century it could have hardly been expected to establish foothold in Muslim
world, let alone make its presence felt in Muslim-minority countries. Yet such has
been its phenomenal rate of growth that not only is it taking firm roots in its
homestead, but is also attracting genuine interest among the standard bearers of
conventional banking and in swathes of land where Muslims are a small minority
only.

Still there is much ground left to cover. In Pakistan, Islamic Banking is less than 3%
of the Banking sector. Even in the Gulf states, where it has a larger footprint, in no
single country is the volume of Islamic banking more than a third of the entire
sector.

Many blame Islamic Banking’s small share against conventional banking to a

smaller portfolio of products. A standard complaint against Islamic banks is that
they do not have the same variety of financial instruments as found in conventional
banking. Though valid to an extent, this popular jeremiad needs to be seen in the
perspective of Islamic Banking’s brief history against more than two centuries of
conventional banking adopted in full force across the globe, its competition against
an entrenched system of banking and the constraints within which it must operate.

Notwithstanding, Islamic banking is still growing at more than twice the growth rate
of conventional banking worldwide, and while it may not have the latter’s plethora
of financial products, its repertoire of Islamic financial products is steadily
increasing.

In the following space, principal Islamic instruments are briefly described to

acquaint the reader with their fundamental aspects. Following that, Islamic Products
in BAL-IBD’s portfolio are illustrated in terms of their features.

Principal Islamic Instrument

Musharakah: Musharakah is one of the two ideal modes of Islamic financing.

The other one being Mudarabah. Musharakah is a contractual relationship
formed through mutual consent of the parties for sharing of profits and losses
in a joint venture. Assets in the venture are jointly owned in proportion to each
partner’s contribution. The profits are shared in a pre-agreed ratio. Losses,
however, are incurred in proportion to each partner’s investment. Islamic Bank
representing share of its depositors invests funds in the joint venture alongside
other investor.

Mudarabah: Like Musharakah, Mudarabah is also a form of partnership.

Whereas all partners in Musharakah contribute capital, under Mudarabah
partnership is formed between provider of capital and provider of expertise or
human resource. Proportions for sharing profit are decided upfront. Losses are
incurred solely by the partner contributing capital.

Murabaha: Murabaha is a non-participatory mode of Islamic financing where

the bank sells the asset required by its client to the client on cost-plus basis.
The asset is first purchased by the bank and the bank incurs the risk of any loss
or damage to the asset as long as the asset remains under its ownership. Upon
sale of the asset, the Islamic bank is obligated to inform the client of the exact
cost incurred in the purchase of the asset and the margin of profit incorporated
in the sale price. Payment by the client of the sale price may be deferred in
which case it would become Muajjal. The selling price once agreed cannot be
changed even when the client fails to pay on the agreed date.

Ijara: Under this facility a client may take on rent, property, vehicle or any
other real asset belonging to the bank. The bank transfers the right of use of the
asset to the client, while retaining the ownership of the asset. The client pays
periodic rent to the bank for the use of the asset. Basis for rentals can be fixed
as well as floating. Any change is rental may be made through mutual consent.

Salam: Salam is a contract of advanced payment against deferred delivery of

goods. Goods paid for in advance by the buyer are delivered by the seller after
an interval of time. The Seller receives in advance fully paid price of the goods
at the time of contract undertaking to deliver the goods specified by the buyer
at a future date.

Istisna: Manufacture of a specific product against precise specifications by a

manufacturer for delivery to buyer. It is necessary that the price of the product
and product specifications are fully agreed upon by the manufacturer and the
buyer, and that the material required for manufacture is arranged by the
manufacturer.
PERFORMANCE:

Bank Alfalah’s Islamic Banking Division (BAL-IBD) started operations in 2003 and at
its yearend reflected a modest capital base of Rs 100 million and deposits totalling Rs
113.7m. By following yearend, BAL-IBD’s equity had risen more than 4 times to Rs
569m and the balance sheet footing had swelled to Rs 7,799 million. Deposit size had
grown from less than Rs 114m to over Rs 7,229 million.

1. PERSONAL BANKING

Personal Accounts: Bank Alfalah – Islamic Banking Division (BAL-IBD) offers

Current, Savings and Term Deposit facilities to its customers seeking personal banking
relationship on-line cash deposit facility at all branches of Bank Alfalah On-line transfer
facility between all branches of BAL-IBD

Remittances:

Foreign and local remittances are both available. Foreign remittances are available in the
following currencies: US dollars, Pound Sterling and Euro.

Locker services: Locker services are offered at select branches. Lockers are available in
three sizes – small, medium and large. Annual charges for the lockers are as follows:

Small Rs 1,000/-
Medium Rs 2,000/-
Large Rs 3,000/-

Lockers are available to account holders and carry an insurance

2. Corporate banking

Murabaha Finance

• Types of Murabaha: Local purchases: For purchase of locally available goods

Imported goods/commodities/assets

• Mode of repayment: Immediately in cash

On a mutually agreed future date,Spot Murabaha (Import)
Deferred Sale Murabaha

Trade Finance

Imports
Letter of Credits, Import Murabaha Finance
Full range of services related to imports e.g. Contract registration, Import
bills for collection, Shipping Guarantees and Advance payments against imports

Exports