Acknowledgment

In The Name of Allah, the Most Beneficent, the Most Merciful All gratitude and thanks to almighty ALLAH the gracious, the most merciful and beneficent who gave us courage to undertake and complete this task. We are very much obliged to our ever caring and loving parents whose prayers have enabled us to reach this stage. We are grateful to almighty ALLAH who made us able to complete the work presented in this report. It is due to HIS unending mercy that this work moved towards success. We are highly indebted to our course instructor Ms.Syeda Habibah Hussain Rizvi for providing us an opportunity to learn about the Business communication and ethics and assign us to implement on Bank Al-Falah" which is vital ingredient of BBA program. We are very great full to our teacher for providing us guideline for the completion of this report. We feel great pride and pleasure on the accomplishment of this report.

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Preface

Banking sector owes a crucial importance in the economy of any country through its vibrant functions. This is the deep motivation that geared up us to select the bank for our project. Moreover, the practice and familiarity observed and learned during this time period would also attest very helpful and alleviating in the awaiting proficient life. This report is an upshot of our observations and the information collected from Bank AlFalah, Pakistan. Bank Al-Falah posses an imperative importance in the Banking sector of Pakistan. It always remains the center of hustles in business activities. It always endows with great covenant of rally round in terms of funds and services. Although, such a small period of time is not enough to learn the complex operations of Bank Al-Falah Limited yet we made tough efforts to discuss them comprehensively in this report. We have view many Marketing and Management concepts to elaborate this report with the material read, listened and observed. We have strong belief that this report will guide and ease the readers to understand the operations and communication of Banking system and more significantly have good knowledge about Bank Al-Falah Limited, one of the most trusty and leading Bank in Pakistan. We hope that the readers will appreciate our report and sense that reading our report is not the wastage of time in any opinion.

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EXECUTIVE SUMMERY
For successful market position, marketing, management, product and communication strategies are imperative in todays rapidly moving high-tech market. Companies need to take a new technologies or ideas and efficient management to develop a complete product that addresses a customer needs and propagate these needs through communication effectively in valuable market as well as executive flawlessly on bringing it to market. In this report we have tried to cover the marketing and management strategies by Bank Al Falah. Bank Al Falah was in corporate in June 21st, 1997 its banking operations started from November 1st, 1997. The bank engaged in commercial banking and related services. The bank is currently operating through 223 branches. Bank Al Falah target market conceits of individual client as well as number of business organization. Bank Al Falah has segment the market on demographic, psychological and behavioral style to target maximum number of segments with different varieties of products suitable for each segment. In marketing terms this strategies in competitors is known as the Flank Attack &Frontal Attack. In this report we have discussed the marketing plan, organizational culture and communication and financial analysis of Bank Al Falah Limited comprising of segmentation, product & services, competitors analysis, positioning marketing mix, means of communication, HR and other departments carried by the Bank Al Falah. We have also briefly discussed the integrated marketing communication (IMC) being used by the Bank Al Falah to address its customers. We have tried our best to cater all of these aspects being followed by Bank Al Falah and hope that this report will help you explain your concepts about these strategies to a greater extent.

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COMMERCIAL BANKING SCENARIO IN PAKISTAN

At the time of independence in 1947, there were 38 scheduled banks with 195 offices in Pakistan but by December 31, 1973, there were 14 scheduled Pakistani commercial banks with 3,233 offices all over Pakistan and 74 offices in foreign countries. Nationalization of Banks was not done 1st January 1974 under the Nationalization act 1974 due to certain objectives. But it had negative effects on efficiency of the banking sector afterwards a privatization Commission was set up on January 22, 1991 and the commission transferred many banks to the private sector i.e., MCB & ABL. The government approved & permitted the establishment of 10 new private banks in 1991. Hence many new private banks have incorporated. Since then, BANK ALFALAH is one of the namely established private banks in Pakistan.

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History
Bank of Credit & Commerce International (BCCI) was a Pakistan based bank established by Mr. Agha Hassan Abdi from UBL in association with U.A.E and Europe. BCCI has its branches in 74 different countries of the world. It had its 3 branches in Pakistan. In 1991, the BCCI was banned when is was accused by European countries that the bank was involved in some illegal operations with Gulf countries. The major reason behind European accusation was that BCCI was of Islamic mode. There for the bank was closed due to international pressure. Then its 3 Pakistani branches were taken over by the Government of Pakistan which were named as Habib Credit and Exchange Bank (HCEB) and these were working as subsidiary of Habib Bank Limited. Following the privatization in July 1997, Habib credit and Exchange Band assumed the new identity of Bank Alfalah on February 25, 1998. It is now Abu Dhabi based bank as the family of Sheikh Nahayan Mubarik Al-Nahayan purchased 70% of its shares and 30% shares remained with Habib Bank on behalf of Government of Pakistan. It has its 18 branches in 8 cities of Pakistan at that time. Charged with the strength of Abu Dhabi group and under the leadership of Sheikh Nahayan Mabarak Al-Nahayan, Minister of Higher Education and Scientific Research, Government of Abu Dhabi and a prominent member of Royal Family, the bank is energized with the vision, envisaging the development of various sectors in Pakistan.

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INTRODUCTION

Bank

Al Falah Limited was incorporated in June 21st, 1997 as a public limited

company under the Companies Ordinance 1984. Its banking operations began from November 1st, 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 223 branches in Pakistan 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 their commitment to a culture of innovation and seeks out synergies with clients and service providers to ensure uninterrupted services to its customers. The bank perceived the requirements of customers and matches them with quality products and service solutions. During the past five years, bank has emerged as one of the foremost financial institution in the region endeavoring to meet the needs of tomorrow as well as today. To continually upgrade the quality of service to the customers, training of team members in all the integral aspects of banking, customer service and IT was specially focused. The portfolio concentrates on all aspects of conventional banking as well as the financial needs of corporate sector. Dynamic and high value product includes Car Financing, Home Financing, Rupee Travelers Cheques, Credits Cards, Debit Cards, On line Banking, ATM and consumer Durables. In addition to this, Islamic Banking Division is a recent initiative which operates as separate branch. It offers Shariah Compliant products through a network of five branches, which will increase to 50 by the year 2007. The bank is committed to combine all it s energies and resources to bring high value, security and satisfaction to its customers, employees and shareholder. The Bank has invested in revolutionary technology to have an extensive range of products and services. This -6-

facilitates commitment to a culture of innovation and seeks out synergies with client and service providers to ensure uninterrupted services to its customers.

mission statement
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."

Slogan: THE CARING BANK

" Lets Look Ahead Towards a Brighter Future Together "

Bank Believes:

"A tribute to our heritage" Every door leads to our customers. The legacy of leadership stands as our guiding light. -7-

The strength of chain relies on the strength of each link. A keen ear is a key to understanding. Achievement is nothing without Time is our most valuable asset. Performance is nothing without the ability to measure it.

target.

long term Objectives

To make sure that all new services are well communicate to the clients in due time. To make our product as user friendly as possible To facilitate our client in the best way and in turn create brand loyalty. To provide innovative and hassle free service to our clients. To help sales meet their targets. To make sure that all new services are well communicate to the clients in due time. To make sure that all new services are well communicate to the clients in due time.

BOARD OF DIRECTORS

H.E. Sheikh Hamdan Bin Mubarak Al Nahayan Chairman

Mr. Abdulla Nasser Hawalileel Al-Mansoori Director

Mr. Abdull Khalil Al Mutawa Director

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Mr.Khalid Mana Saeed Al Otaiba Director

Mr. Ikram Ul-Majeed Sehgal Director

Mr. Nadeem Iqbal Sheikh Director

Mr. Sirajuddin Aziz Director & CEO

o
C S B e

a r d
h a i r m

o
a r y

f
n o

i r e c t o

r s

c r e t a o a r d c t oC r ( m E e

t h

i r e

t oD r i r e

t oD r i r e

D B i r e c t oD r i r e c t o r m ( G b e o r v ) t . ( NG o o mv t .i n N a ot e

Committee
There are two main committees in the Bank Alfalah Limited Board Advisory Committee Executive Committee

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Organizational Chart
C O U N P C h o H O e a d p e o f C r a t i o T R r e Y s i d p r W e I D n e t r a t i n g E H I E R A R C H Y

i e f O f f i c e

oC u o n u t nr y t r y R iE s k e x n sM a n a g e V i c e r o d r a s t e M B a

c u t iv e E x e c u t i v e C h a r a c P r e s Vi d i e e t P r e s i dA e c nc to u n c n B r s M a r a n c h n a g e

t e t a

r n

I n f o r m a t i o Cn o r p D e p a r t m e n Ht e a

r a n c h n a g e

r s

Short term GOALS & OBJECTIVES

Goals and objectives are factors through which the companys devotion and commitment to the job can be seen. If the goals are realistic and achievable, than surely that organization is doing its job. Bank Alfalah also has certain goals and objectives which it is trying to achieve, through its various strategies and operations. The goals and objectives are mentioned below: 1. To create a sound base and through efficient systems achieve modern banking throughout Pakistan. 2. By the end of every accounting year there is an increase in deposits. As the deposit rate of during 2009 was approximate 52 Million and the same has been increased in 2012 by 77 Million. 3. To create unit banking network in all the branches of Bank Alfalah at the end of the year. This means that all the operations of the bank, i.e. deposits to advances, imports, exports, L/C Opening, foreign currency and many more aspects under one roof, so that the customer can be facilitate in one visit. 4. Islamic Banking is one of the goals of Bank Alfalah though it has been initiated in the last fiscal year and it is very acceptable for general public. However, there is lot - 10 -

of work to do for successful implementation of the Islamic Banking Plan. In this regard the Bank is opening specific Islamic Banking Branch under the supervision of its Islamic Banking Division.

STRATEGIES
Bank Alfalah has formulated certain sets of strategies to enable it to achieve its goals and objectives. These strategies are mentioned below: 1. In order to achieve its goals of creating a sound base and presence of efficient modern banking system, Bank Alfalah has started operation of Automated Teller Machines in all the major areas like Karachi, Lahore, Islamabad and other cities of Pakistan. 2. Bank Alfalah is committed to building long-lasting relationships through an assertion to service excellence and providing innovative products to meet the changing needs of our valued customers. Although still in its infancy, compared to the exalted banking standards, Bank Alfalah, backed by a strong Abu Dhabi Group and inspired by the vision of its Board and Management, has built up a strong customer base. The Bank provides a full range of banking services to corporate clients, while applying leading technologies. Today the Bank is well-positioned to provide appropriate banking services to customers. 3. The main focus is building relationships and being known by the way they do business. Management recognizes that a banking relationship requires compatibility, communication, and cooperation and that each customer deserves nothing less than full attention and available resources to meet their financial objectives. 4. Core value and corporate culture is based on the belief that superior personalized service is the most important product. Bank is in the process of getting to know customers by name and understand their business and personal financial needs. This one-on-one, personalized service quality has served as Bank Alfalah's unique signature since inception and continues to separate it from other financial institutions.

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5. The Bank Alfalah team comprises of some of the most highly skilled and professional financial experts in banking industry. Managers, lenders and trust advisors offer the unique perspective of knowing and understanding in the local economy. The Management focuses its attention on making informed and feasible economic decisions, bringing better returns and more profitability for investors and customers. 6. Keeping in view the unrest among the Islamic Community on the Interest Bearing Banking the Alfalah is in the process of target marketing and gives its full attention to this segment of a large population over the world. 7. To acquire the reputation and status of bank which operates on international standard, Alfalah Bank was to get the credit rating of Pakistan Credit Rating Agency, which gave it the AA- and A1+ in the long term and short term respectively. Flow of command/ Chain of command: Downwards communications are usually done in the Bank Alfalah for directing the orders or strategies whereas upwards in terms of briefing them about the work done or in progress. Middle management always works as the intermediary between the top management and the lower. Usually, there is no such communications between the lower and top management except in special occasions. CEO The CEO of the Bank Alfalah controls the whole management affairs Everyone under him, Country managers, vice presidents are accountable before him He direct the orders or takes the suggestions or feedback from them . He establish the environment of the strategies planning and aware of to hold the global market Manages the HRM and assigns works to individual for betterment Controls the administration activities and carries on the establishment process for the betterment of Bank - 12 Executive Incharge(E.I)

Investigates the business development reports that our business get profit or loss Analysis the audit and inspection division for efficient work His work is to divide the cards in best manner just like debit, credit, ATM card and Hilal card in Bank He did his work for international and treasury division in Bank Divided the I.T informational technology related work among the employees Support the corporate and home finance He monitoring the credit division Investigate the legal affairs Responsible for the directing the actions and strategies to the Branch managers All of the managers working under them are accountable to him Managers gave feedback back or brief about the progress or flaws in the work to the Vice President.

Executive Vice President:

Branch Manager: Responsible for the implementing the strategies into action by directing the plan of action Set the task force Dividing into groups of team and then assign the special work to them Managing all of the daily bases task related to the customer Centralized V/S Decentralized: Centralized describe the degree to which decision making is concentrated at a single point in the banking or any organization. If the top managers make the banking organizational key decision with the little or no input from below then the banking organizational is centralized. In Bank Alfalah the major portion of organizational is "Decentralized", because the Managers of all levels have the power of decision making. Types of Organization Tall V/S Flat

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Bank Alfalah is a Tall organization with the wide series of the Directors, Presidents, Vice-President and Mangers working in the tree shape of hierarchy of management.

Major Competitors:
The growth in the banking industry of Pakistan has led to an increase in the number of banks both domestic and international to be established and create a competitive industry. For Bank Alfalah its competitors come in the form of both domestic and international commercial banks established in Pakistan. Allied Bank Faysal Bank Habib Bank MCB Bank United Bank Citibank National Bank

Market Shares: According to a publication of the State Bank of Pakistan, The Banking Statistics of Pakistan 2006, the total deposits for banks over all were Rs. 3,200,332 (million) and market shares of the competitor banks in term of deposits and other accounts are as follows: Banks Bank Alfalah Askari Bank MCB Bank United Bank Limited Citi Bank Deposits(in thousands) 239509391 131839283 257461838 335077873 63103884 Overall Market Shares 7% 4% 8% 10% 2% Domestic Banks Market Shares 8% 4% 8% 11% 3%

As such no financial organization in Pakistan is unable to determine the correct market share of the banking industry. Also banks do not disclose certain confidential - 14 -

information to the general public and internees. Still generally foreign banks in Pakistan contribute to about 35% to the whole banking industry. Out of which Askari, Citi,
Standard Chartered, Muslim Commercial, ABN-AMRO banks share the major market.

PRODUCTS portfolio
With the mission to provide all-encompassing banking services to the customers, Bank Alfalah has a uniquely defined menu of financial products. Currently it is one of the most comprehensive portfolios of personalized financial solutions that are custom-tailored to serve the requirements not only of conventional customers but also fulfill the needs of the corporate sector: Car Financing Home Financing Credit Cards Debit Cards Rupee Travellers Cheques Online Banking ATMs Islamic Banking Corporate Financing

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Car Financing
Car Financing is one of the major renowned product of Bank Alfalah and can be utilized in terms of Financing of Used Vehicles, Loan against Car, Balance Transfer Facility, Refinancing Facility (only for Alfalah Customers) and it is characterized in terms of: Lowest Mark up Lower Insurance Quick Processing Lower Down Payment

Quickest processing No hidden charges Minimum down payment. Complete repayment at any point of time - 16 -

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

1. Car Leasing BALs 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.

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Product

Price including ST & Price Including FED ST, FED & WHT w.e.f 01/07/09 w.e.f 01/09/09 317,739 348,000 422,643 457,948 Rs. 585,000/Rs. 647,000/Rs. 652,000/314,713 346,991 370,191 407,513 800,904 856,383 1,007,687 1,058,122 1,049,043 827,130 890,000 980,000 1,050,000 1,295,000 1,245,000 1,335,000 N/A N/A 852,000 1,036,000 1,348,000 322,500 355,600 379,400 417,600 820,800 877,600 1,032,700 1,084,300 1,075,000 847,600 915,000 1,005,000 1,080,000 1,328,000 1,280,000 1,370,000 390,000 431,000 325,600 356,600 433,100 469,300

SUZUKI MEHRAN SUZUKI SB308R VX SUZUKI SB308R VX CNG SUZUKI ALTO SUZUKI ALTO RA410 VX SUZUKI ALTO RA410 VX CNG SUZUKI CULTUS Suzuki Cultus VXR Suzuki Cultus VXL Suzuki Cultus VXL (Met. Colors) SUZUKI RAVI SUZUKI PICKUP ST308R SUZUKI PICKUP ST308R CNG SUZUKI BOLAN SUZUKI VAN ST308 VTR SUZUKI VAN ST308 VTR CNG SUZUKI LIANA SUZUKI LIANA 1.3L RXI MT SUZUKI LIANA 1.3L RXI MT CNG APV CBU APV 1.5LGLXMT APV 1.5LGLX CNG JIMNY CBU JIMNY MT JIMNY JLSX MT TOYOTA Toyota Corolla XLi Toyota Corolla GLi Toyota Corolla 2.0D Toyota Corolla 2.0D Saloon Toyota Corolla Altis MT Toyota Corolla Altis AT DAIHATSU Daihatsu Coure CL Daihatsu Coure CL CNG HONDA CITY Honda City I-DSI MT 1.3L Honda City VTEC Steermatic 1.5L HONDA CIVIC Honda Civic VTI MT 1.8L

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Product

Honda Civic VTI MT SR 1.8L Honda Civic VTI PT SR 1.8L HONDA ACCORD Honda Accord 2.4L

Price including ST & Price Including FED ST, FED & WHT w.e.f 01/07/09 w.e.f 01/09/09 1,480,000 1,520,000 2,810,000

Two passport size photographs Copy of National ID card Bank statement for the last six months Salary certificate (for salaried individual) Business proof (for a business person) N.T.N Certificate Co-borrowers NIC copy (if the car is to be in the name of the co-borrower)

2. Home Financing
Major features of Bank Alfalh Home Financing are Lowest Mark-up, Quick Processing, Multiple Repayment Options and Free Valuation. It has been bifurcated in terms of Home Buyer, Home Construct, Home Improver, Home Balance Transfer Facility. Financing Limit Tenure : : up to Rs. 10,000,000/up to 20Years 30% Borrower / 70% Bank

Equity Participation :

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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 realize your dream and enter the reality of owning a home. Payment period ranges from 3 to 20 years

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.

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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. You can stretch your payments for up to 10 years.

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.

The installment on a home finance spend all of our earning and leave you with nothing to spend. Now don't worry anymore 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. - 21 -

No penalty on early settlement of loan with no time limit for early settlement. Convenience of Balloon payments towards adjustment of principal every month without any extra charge or penalty (Min Rs. 50,000)

3.Credits Cards

Bank Alfalah Visa Card is everywhere and globally accepted and welcomed at locations displaying the VISA logo. It is accepted at nearly 30 million merchants and 870,000 ATMs in more than 150 countries around the globe and over 10,000 establishments in Pakistan. Alfalah VISA pays for shopping, travel, entertainment, meals and much more. 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 30 million locations in more than 150 countries around the globe and over 18,000 Bank Alfalahs 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 - 22 -

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

Target Sedmentation:
Platinum Card It is accepted at nearly 30 million locations in more than 150 countries around the globe and at over 17,000 establishments in Pakistan. Gold & Silver A perfect card combination for all segments of salaried & professional individuals. Young Professional This Card is for you, if you are a Graduate and have just started your Career. Women Exclusive Now for the first time in Pakistan, Bank Alfalah has introduced a credit card exclusively for women. This card has its unique features.

Student Card - 23 -

For the first time in Pakistan, Bank Alfalah introduces a credit card for Students.

Supplementary Card Now you can give Free Supplementary Cards to anyone you care for. Visa Mini Visa Mini is a practical and convenient part of your everyday life - whether you go for shopping, dine out, buy grocery, want to go for holidays. Awami Card Alfalah Awami Card is your partner everywhere and is globally accepted and welcomed at locations displaying the VISA logo. It is accepted.

Your partner everywhere and is globally accepted and welcomed at locations displaying the VISA logo. It is accepted at nearly 30 million locations in more than 150 countries around the globe and at over 17,000 establishments in Pakistan. You also have the option of withdrawing cash by requesting an Over-the-Counter Cash Advance at 3,60,000 financial institutions worldwide or at any Bank Alfalah Branch/ATM or participating VISA member banks in Pakistan.

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For every Rs. 50 you spend on your Alfalah VISA Card, you will earn 1 Fortune point. Your accumulated Fortune points can be exchanged for a whole range of items displayed in our Fortunes Catalogue. It offers a wide range of lifestyle categories catering to your own and your familys taste.

Schedule of Charges The following Schedule of Charges is associated with your Alfalah VISA Platinum Card. Please make a note of the following so that you are fully informed of the charges on your Card.
Schedule of Charges Service Fee 3.00% per month (APR 36%). 3.00% per month (APR 36%). 1.75% per month on SBS transactions. 1.50% per month on BTF transactions. Rs. 600/- or 10% of minimum amount, whichever is higher. Cash Payment Processing fee Merchant Discount Charges Rs. 100/- per transaction. Upto 5% of transaction amount.

Late Fee

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

This Card is for you, if you are:

have just started your Career... not qualified for any other credit cards income criteria...

As a Classic Blue Cardholder you have a privilege of having access to all features of Alfalah VISA Credit Cards including two free supplementary cards.

A Credit Card Exclusively for Women..

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Now for the first time in Pakistan, Bank Alfalah has introduced a credit card exclusively for women. This card has its unique features which have been tailor-made for women in Pakistan. Requirements: The requirements of this card depends on what basis this card has been applied for:

If the female is applying on her own income basis, she herself will be liable to pay for the amount spent through the card(s).

If the female is a house wife and does not have any direct income source, she can apply for the card through the person responsible for the household (i.e. husband or father) who will sign an undertaking to be responsible for the amount spent through all the card(s) issued under this scheme.

For the first time in Pakistan, Bank Alfalah introduces a credit card for Students. This card is for you if you are enrolled in a professional university (as per Bank Alfalahs approved list) with 15 years of schooling experience. Now you can pay your fee, buy books or just CD player & DVDs etc. Requirements with Alfalah VISA... :-) Not only

this but you will also earn reward points and can redeem them for a TV, Mobile Phone,

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1. The applicant must be a graduate with 14 years of schooling and must be currently enrolled in a professional college/University.

Supplementary

Cards

All Bank Alfalah Basic Card members can apply for supplementary cards in separate categories including Sons Card, Daughters card (children who are above 13 years of age) and House Staffs card. This feature has been introduced for the first time in Pakistan, yet another beginning made by Bank Alfalah Credit Cards. In addition, supplementary cards can be issued to anyone you like thus giving you complete freedom of choice (Only 1 supplementary card will be issued to Awami Card holder) Distinguish Card Design for Each Category

Each supplementary card category contains its own specific design of card. These card designs which have been specifically designed keeping in view the trends and tastes of the modern day young generation who has the desire to look exclusive in itself. You can get supplementary cards in unique designs for your son, daughter and house staff, but any other person can also enjoy this privilege using your own card design.

Distinguish

Spending

Limit

for

Each

Category

Not only are the card designs unique, the basic Card member can also assign a separate percentage or amount of the total credit limit of the credit card account to each of the - 28 -

supplementary cards. So, whether it is your son who needs his monthly pocket money, or your daughter needs to make school fees payments, or your chef, chauffeur or maid is usually the one who buys all the groceries it is you who will decide how much credit each of them gets for it.

Unique Supplementary cards There are three design categories of Supplementary cards, namely, the Son's card, the Daughter's card and the House Staff card. This enables you to get away from the day-today hassle of buying groceries, petrol, children's books, etc, as each member can then do his or her own purchases.

Fo rget your wallet and with Alfalah VISA Mini!

Visa Mini is a practical and convenient part of your everyday life - whether you go for shopping, dine out, buy grocery, want to go for holidays or feel like buying something of interest while you are out just for a jog!

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You can take it with you anywhere you like with no hassle as it has a perforated hole in the bottom left corner making it attachable to your key chain, mobile phone or other dayto-day carry along device.

43% smaller than the regular sized credit card with the same features and benefits. Accepted at over 30 million merchants worldwide and around 17,000 establishments in Pakistan (used on electronic POS terminals only). Has the same security features as the regular sized Alfalah VISA credit card.

Your Alfalah Awami Card is your partner everywhere and is globally accepted and welcomed at locations displaying the VISA logo. It is accepted at nearly 30 million locations in more than 150 countries around the globe and at over 18,000 Bank Alfalahs establishments in Pakistan. Alfalah Awami Card lets you pay for shopping, entertainment, meals, travel and much more. So what are you waiting for!Get your Alfalah Visa Credit Card

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4. Debit Cards Bank Alfalah Limited presents Alfalah Hilal Card, the first Visa Electron International Debit Card which gives an unlimited access to current / savings account with a simple swipe at millions of retail shops and ATMs worldwide. The Alfalah Hilal Card comes with a host of conveniences and benefits combined with the wide reach of Visa Network enabling it to be accepted at more than 840,000 ATMs and 13 million retail outlets around the world, making it the most acceptable Debit Card available in Pakistan. 5. Rupee Travelers Cheques Rupee Travelers Cheques are as good as cash and are accepted at the major shops, travel agents, hotels business establishments and all over the country and abroad. This service is being offered to facilitate instant fund availability to travelers and business people who used to carry a large sum of money with them. 6. On Line Banking To provide enhanced and value added products to customer bank is constantly striving for additional facilities. Bank provide fully automated on-line telephone banking facilities to its customers enabling them to carry out banking transactions like balance inquiries, statement requests, product information and exchange rate 7. Automated Teller Machine (ATM) - 31 -

The Bank Alfalh offers 24 hours self service banking facilities to its customers on country wide basis through deployment of Automated Teller Machine. This system allows the banking facilities such as cash withdrawals, cash deposits, funds transfer, balance inquiries, account statements. Electronic cash dispensing facilities are available in major cities of Pakistan. All ATMs are linked through a state-of-the-art Satellite Based Communication System which offers 24 hours real time service. 8. Islamic Banking A separate division is a recently initiated, which operates as separate branch. It offers Shariah Compliant products through a network of five branches, which will increase to 50 by the year 2007. Islamic Banking has launched following products with the perception that these are in accordance with the Sharia Principles. Alfalah Masharaka Homes Murabaha Finance Aflalah Car Ijarah

9. Corporate Financing The portfolio concentrates on all aspects of conventional banking as well as the financial needs of corporate sector including dynamic and high value product. Loaning against securities Letter of Credit Letter of Guarantee Demand Finance Cash Finance

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 - 32 -

requirements of our farming sector. BANK ALFALAH ZARIE SAHULAT is available for Short, Medium and Long terms.

Alfalah Paidawari Zarie Sahulat Alfalah Musalsal Zarie Sahulat Alfalah Tractor and Transport Zarie Sahulat Alfalah Machinery & Equipment Zarie Sahulat Alfalah Aabpaash Zarie Sahulat Alfalah Islah-e-Araazi Zarie Sahulat Alfalah Poultry Zarie Sahulat Alfalah Dairy & Livestock Zarie Sahulat Alfalah Fisheries Zarie Sahulat Alfalah Silos/ Storage Zarie Sahulat Alfalah Marketing Zarie Sahulat Alfalah Agri Industrial Zarie Sahulat

TELEPHONE BANKING
BANK ALFALAH gives you a service of Telephone Banking. Telephone banking is a service provided by a financial institution, which allows its customers to perform transactions over the telephone. Now customers can also speak to a live representative located in a call centre or branch. Although this feature is not always guaranteed to be offered 24/7. - 33 -

In addition to the self-service transactions listed earlier telephone banking representatives are usually trained to do what the branch was traditionally do.

On this you can do following; Loan applications Investment purchases and redemptions Cheque book orders Debit card replacements Change of address, etc

Online Banking
Online banking starts from 1998 and firstly introduced by Bank Alfalah. Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by trained personnel. Online banking solutions have many features and capabilities in common but traditionally also have some that are application specific for ease of the customers. The common features fall broadly provide by Bank Alfalah: Transaction, Bank Alfalah allow to performing a financial transaction such as an account to account transfer, paying a bill, wire transfer and applications, apply for a loan, new account, etc Electronic bill presentment and payment - EBPP Funds transfer between a customer's own checking and savings accounts or to another customer's account Investment purchase or sale Loan applications and transactions such as repayments of enrollments Non-transactional (e.g., online statements, check links, co browsing, chat) Bank statements Financial Institution Administration Support of multiple users having varying levels of authority Transaction approval process

Software use by Bank Alfalah

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Bank Alfalah working with temenos software from 2009. Temenos offers a range of quality banking software products that address clients needs for both today and tomorrow. TEMENOS T24 (T24) : T24 is the most technically advanced banking system in the world today. It is a 24-hour real-time banking application that provides multiple application server support to a huge number of users. The system also eliminates the need to run End Of Day processing. It ties together multiple channels and provides CRM functionality and true non-stop processing in a single system. TEMENOS INSIGHT: Insight is a browser-based business intelligence and financial performance management solution specifically designed for banks running T24 as their core banking system. Insight is fully integrated with T24 so that it operates without the need for extensive consultation, data mapping or development. It provides flexible reporting and data analysis tools to enable the bank to realize the full value of its system data whilst monitoring key performance indicators in a timely and accurate manner.

MARKETING MIX (4PS)

The marketing analysis of the bank focus the promotional complain the 4 Ps of marketing are also vision of the bank that it uses for its marketing (called 4 Ps) i.e. names of 4 Ps.

Product:
The product of Bank Al Falah are its various banking services which are following PLS & Non PLS Account(Profit loss saving accounts and nonprofit loss saving accounts) ATM Cards VISA Cards - 35 -

LOCKERS Credit Extension.

Price:
The price for various services of bank is given in the booklet The schedule of bank charges. The prices at the bank are quite competitive with those of other bank working vertically. The Bank Al Falah try to that they give loan at low interest.

Placement:
The distribution channels are its employees who deal with customers. The bank has over 223 branches through which it offers services to its clients in different sectors like as: Industrial sector Agriculture sector Commercial Areas Small Towns Public Organizations

Promotion:
Various promotional techniques as advertising, personal selling etc. are used the promotional strategies of the bank vary according to the market condition. However the following techniques are mostly used. Sponsorships Sports Sponsor: Bank Alfalah beleief in the providing the quality service through the idea of "Where there is Sports, there is Al Falah" - 36 -

In the arena of sports, Bank Alfalah is actively involved in sponsoring events. Sports today not only represent healthy and clean way of life, it is big business in its own right. The sponsoring events Sponsored by the Bank Al Falah Limited in Pakistan range from Cricket Golf, Squash, Polo, and Volley ball, to Hockey. BAL uses attractive slogans to prominent. Some famous Events are : Al Falah Cup (Cricket) Bank al Falah Pakistan Squash Open Bank al Falah Polo AL Falah Cricket Triangular Series Event Sponsor

Social Events
BAL encourages extra-curricular activities and social events that allows employee to have a social exchange outside the working environment. In this employee are encouraged to bring their family members along, giving them a chance to fell a part of BAL family network social events like; Picnics Barbeques Sports Cultural Tours Actually they are creating a reference group (a group to which attached persons feel internal recognition by telling others about that group) and doing the marketing in terms of Word of mouth (The marketing that spread from one person to others in the circle of its family, friends, relatives, neighbors etc). Some famous events are: Whaga Border Trip - 37 -

 Lahore Basant Trip

Integrated Marketing Communications Advertising

It is a non personal presentation in paid form to introduce a product or service idea Bank Alfalah use the following tools for advertising. TVC BAL uses more TVC as compared to its competitors. They choose those channels for advertisement where its target customers exist. They mostly choose those spots for TVC at peak hours in between the News. And special in the cricket matches. The TV channels it chooses for advertise are Sports channels like Ten Sports, and others like PTV, GEO, ATV, ARY, etc. News Paper BAL uses leading newspapers that are read by the business class and the family heads. They mostly gave there advertisement mostly on Jung, Dawn, The News, The Nation, etc. - 38 -

Journals BAL used these journals to promote their name DAWN, STAR SPORTS etc. Magazines BAL used these magazines to promote their activities. Flyers Mostly these are using when there open a new branch in a new city or a new a scheme or product/service is introduced. Then these are used at a large scale at the chowks, squares; outside the shopping malls, Liberty, Pace, Super Jinnah, Blue Area, Karachi company stop, Tariq road etc. Billboards This is an important source of advertisement. BAL uses this only those places that have great importance for the business class or where mostly multinationals companies have offices and the traffic spots like Mall road, DHA, Lahore Cantt, Barkat Market, Davis Road, LDA Plaza, and Peshawar Morr. Hooding These are like billboards but large in size than billboards same they are using in few places in the big cities at important places like near big flyovers, squares, big buildings, etc

Source of Brand Equity:

Brand equity is willingness for someone to continue to purchase your brand about my product of Bank Alfalah. We discuss how our products attained the sources of brand Equity. Authenticity - 39 -

BAL is providing best services to its customers. It is there service of quality that within nine years of there working they become the largest branch holder with in private banks and it represents their progress. Consistency BAL improving its products/services with the passage of time. They provide all the customized products/services that are needed by the low/medium level income. All types of banking are available in all the branches. They did not give any chance to his competitor to overcome their weakness. Reassurance BAL always created a true faith among their customers by giving different fatalities to their customers (WOL, WARID post paid connections) and making good relationship by sponsoring different events (Basant Mela, Jashan-e-Baharian) social gathering, fairs on different occasions collection for earth quake victims, etc Differentiation The unique point that make different BAL from other banks is that they use penetrating marketing strategy instead of skimming, they focused on that segment which is mostly ignored by others banks. They provide all the banking facilities (car, credit cards, debit cards, ATM cards, Home loans, Agriculture loans, study loans, etc) to a normal income person now layman can enjoy all the facilities that he only desires. They become so popular in banking sector that the really proof there slogan Caring Bank. The most prominent point is that there name is spreading through word of mouth. So they needed less advertisement as compared to other banks. Identification: BAL attained this level by recognition through his Slogan Caring Bank. It focused on the layman needs and fulfill it by presenting approachable schemes of products/services. Brand meaning:

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BAL created his meaning by presenting its valuable Products/services and covers the customer perception. Customer responses: Customers response about the BAL is resulted in increased the no of branches rapidly so that feelings of people about BAL become strong and strong with his efficiency. Loyalty relationship: BAL created a strong relationship with the customers. So Al Falah becomes the largest banks that have maximum branches (177) in limited time (1997-2009) and increases this span consciously. Positioning of Brand with respect to Competitors : All banks positioned themselves at different unique edges to positioned in target

customer mind following are the positioning edges of various banks ABN Bank: They positioned themselves as for high level business and social class. They use the skimming strategy for their growth. Standard Charted Bank: They positioned themselves as foreign bank there staff and environment is totally different from the others banks. They also skimmed the market. United Bank Limited: They recently merged with bank Alfalah limited. Allied Bank Limited

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They got the award of bank of the year. They positioned as old trusty bank and it use a penetration strategy to get its goals. Bank Alfalah Limited They positioned as fast growing bank. They used intensive penetration strategy to position them.

HUMAN RESOURCE MANAGEMENT

Human Resource Planning At Bank Alfalah Limited, Human Resource Planning involves a decision making in three areas of combined activities: Step-I The bank identifies its organizational needs and then acquires a right king of human resource accordingly. Step-II Bank motivates them to achieve excellent performance by giving them different sorts of targets according to their job requirements. Step-III It also creates an interactive link between the employee goals and the organizational goals. Recruitment and Selection Bank Alfalah Limited recruits three kinds of employees: 1. 2. 3. Top Level Management Trainee Officers Contractual Basis Employees

Training and Development In Bank Alfalah Ltd. the process of Training and Development consists of various other activities like: Training:

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i.

The appraisal form of an employee indicates the areas in which the employee should be trained and developed. It also elaborates the abilities of an employee.

ii.

Management and Organization Development Division of each region timely reviews the employees and recommends them for training during the operations it they note any discrepancy between the desired and actual performance. This review is performed after every quarter.

iii.

Upon the request of GM (Operation), indicates which sort of training is needed in a particular region regarding the Operation Support and Service.

Development: Management Skill Training Special Training for Foreign Transferred Employees

Performance Appraisal: It is a structured discussion between employee and supervisor. It provides an opportunity for the supervisor to recognize an employees achievement, offer suggestions for improvement when needed, discuss job responsibilities, define objectives, counsel for career advancement, and justify a pay adjustment. Regarding the performance appraisal, bank adopts both type of approaches. Traditional Approach: The traditional approach is primarily concerned with the overall organization and its past performance. In Bank Alfalah, overall performance is reviews at branch level. Each branch is liable to show its performance in a positive direction according to set goals. Development Approach: This approach viewed the employees as individuals and has been forward looking through the use of goal setting. All the employees in the each of the branches are given a performa. Every employee working in the bank is - 43 -

assigned targets, usually their target are in the form of amount. The performances of all the branches are reviewed in the end of December. Till yet Bank Alfalah, has no computerized system to assess the performance of employees

Performance Appraisal Process: The performance appraisal process in the Bank Alfalah Ltd. consists of four inter-related steps: i. Establish a common understanding between the manager (evaluator) and employee (evaluate) regarding work expectations, mainly the work to be accomplished and how those work are to be evaluated. ii. Establish ongoing assessment of performance and the progress against work expectation. iii. Formal documentation of performance through the completion of a performance and development appraisal form appropriate to the job family. iv. The formal performance and development appraisal discussion, based on the completed appraisal form and ending in the construction of a development plan. Reward Management Reward Management elaborates how people are rewarded in accordance with their value to an organization. It is concerned with both financial and non-financial rewards. A reward system of an organization consist of integrated policies, processes and practices for rewarding its employees in accordance with contribution, skill and competence and their market worth. In Bank Alfalah the elements of reward management system are consists of Basic Pay; the fixed salary or wage which constitutes the rates for the job. This rate is varied in a skill based or competence based system according to the individuals skill or competence. - 44 -

The rates are fixed by managerial judgement of what is required to recruit and retain the employee. In Bank Alfalah there is no any concept of individual performance related pay except to the Business Development Officer. Business Development Officers are those who are hired at contractual basis. They are assigned different targets. If they exceed to the targets they can enjoy the individual performance related pay otherwise they are fied. There is no concept of bonuses, commission or over time related pay. The official timing of bank is 09.00 AM to 06.00 PM but almost all of the employees have to work till near 08.00 PM. However, for this additional work they are not getting any additional bonuses / over time. Aggressive Banking Bank alfalah expanding their network of Islamic Banking. Bank Al Baraka has been serving the Islamic banking sector since 10 years and they have only 5 branches in Pakistan. On the other hand bank Alfalah has established 20 branches in a year. Motivation Bank Alfalah motivating their employees by giving them comprehensive benefits and professional environment within the organization, which enhances the performance of the employees. Bank motivates their employees by giving 3 bonuses in a year. BENEFITS Monitory Benefits Monitory benefits are given to the employees on the basis of their performance like salary rise, cash prize. Grade Promotion Bank also provides benefit to their employees in the form of grade promotion. Grade promotion motivates the employee to do their work efficiently and effectively. Abroad Posting - 45 -

Bank benefit their employees by sending them on overseas posting where they can enhance their professional skills and get handsome financial benefits in terms of salary or fridge benefits.

TARGET MARKET:
Bank Alfalah target market consists of individual clients as well as a number of business organizations. Due to different market segments, BALs different branches have their target markets. To capture the import business in Pakistan, the targeted segments is valid markets known as business & commercial hub of Pakistan. Due to specialized services provided by BAL, and its highly competitive foreign exchange rates, most of the major importers in this area deal with BAL. Examples include; Mughal Steel and International, New Shalimar Steel, Vellcone International, Rana Brothers etc. As far as the individual clients are concerned, the targeted segment is posh areas like DHA. BRANCH NETWORK

An efficient branch network is essential for achieving its target. Its plan to open 25 more branches in the year 2009, at different location in the country increasing its network to 215 branches covering over 22 cities. Bank follows a strategy of optimum financial and quality human resource location in order to enhance the performance potential of all its branches. Conventional Branches Islamic Banking Branches Overseas Branches
FUTURE OUTLOOK

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The economic future for the country seems brighter with many key indicators moving in a favorable direction. Investors confidence is recovering and entrepreneurial activity has gained momentum. They will continue to follow strategy based on business and deposit enhancement and network expansion POSITIONING: The distinguish place of product/service in target customer mind. BAL positioned itself as caring bank and customized banking. When customer thinks about Alfalah bank the following points come in his mind. Consumer banking Easy approach to all departments Felling of self respect Fulfill of their dreams like (build own home, buy personal cars, etc). Guaranteed profit. Security. All these thinks are in the customer mind. Due to Alfalah aggressive growth when ever customer think about banking sector the first bank comes in mind that would be Bank Alfalah. Bank Alfalah bank positioned also as a fast growing. Where there is a new town there would be the a branch of Alfalah provide maximum products/services under one roof .

Unique Positing:
Positing mean image of service/Product in customer mind it can be created by various attributes or qualities of product /service. BAL positioned itself by a unique way that It is in the customer mind that

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BAL is aggressive growing bank New town opened Alfalah reach their first BAL Spreads its branches at Teasel Level in Pakistan

SWOT Analysis of Bank Alfalah

Strengths
Strengths are the core competencies of any organization & as far as BAL is concerned the core competencies of this organization are: Target Achievement Policies & Procedures Controlling Standards Priorities Rewards & Benefits Job Security for the Employees. Favorable, friendly & Healthy Working Environment. Documentation System is so much accurate. - 48 -

Accounting & Banking System is Accurate & Reliable one.

Weaknesses Weaknesses are the lacking points which every organization must avoid in order to make its operational effectiveness. Hectic Working Environment. Work load. Lack of Self Marketing Department. Low Training & Coaching. Low incentives like bonuses overtime pay etc. Human Resource Department is not so much effective. Appraisal is not done frequently. Low salary packages as compared to other banks.

Opportunities In fact, when we study all our weaknesses critically & deeply than we come to know that we can convert our weaknesses into strengths. So basically these are our opportunities. The opportunities for BAL are: On the job training & coaching sessions can be conducted. Work sharing activities should be started so that a person who is working continuously for 9 hours can get relax. Marketing department should be started in order to promote the name of BAL. Appraisal should be conducted frequently so that employees get motivated & do their work as a loyal employee. Attractive salary packages should be awarded. - 49 -

Threats Though Bank Alfalah has a strong footing and maintain a good number of loyal customer, still bank has threats in various sectors. When we see the possible threats for BAL, the threats are prevailing such as: o The conventional banks those having high growth rate and high market share are always being a threat. o There is an average not low turnover rate, mainly because of low incentives as compared to the other banks. o Large business parties have fewer attractions in being a client of BAL-IBD, mainly because of excessive amount of documentation.

PEST Of Bank Alfalah

Political : Analysis of Political environment is very critical and this environment has a strong influence upon the activities of any organization in a society. Political environment strongly affects the marketing decisions. The political stability of a country has its impact on the consistency of policies of local government. Pakistan has always been struggling for political stability since its creation. Government has been changing in Pakistan many times due to multiple reasons and most of the times Military has taken the charge of the government. So, there are significant political risks in Pakistan. But the positive aspect is that State bank of Pakistan has been given sovereignty and it is now an autonomous body in making its decisions. From this perspective environment becomes suitable and favorable for Islamic banking. BAL-IBD can make their strategies accordingly as there is no chance for any major Change of policies in near future.

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Economical : Pakistani economy is good for foreign investments and it is also good for Islamic banking sector of Pakistan. GDP rate of Pakistan is showing a consistency in upward direction and per capita income has increased as compared to past. FDI is increasing every year. Home economy is in recovery phase but it is showing good indicators for banking sector. Some transactions of Islamic banking like modaraba have been promoted by giving incentives. As Pakistani economy is showing some level of stability and consistency from last couple of years, so its good sign for BAL Islamic banking as well. Socio-Culture Pakistan is situated at very important geographically location and it has a diverse culture. Islam is the religion of majority of the population and Islam has deep and ever lasting influences upon the culture of the people of the area. So, the life style of people and attitudes of consumers is favorable for Islamic banking as people are religious and they want to deal in Islamic finances. Pakistani people have a respect for their religious and cultural celebrations. BAL Islamic banking is taking an advantage of this socio-cultural environment of Pakistan. Technological : There is lack of proper infrastructure in Pakistan, for that reason different sectors are not becoming able to cope with the technology. Banking sector has introduced a lot of innovative services with the help of technology. Islamic banking is also on its way but it is expanding slowly as compared with potential demand of Islamic banking.

Comparison with Competitors

Boston Consultant Group Matrix (BCG) Model

Gr

Market share High Low

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owth rate

High

Car

Islamic Banking ATM Debit Card

Financing Home Financing Online Banking Deposit Investment Credit Cards

Low

Rupee

Traveler Cheque

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Star: In the star, we have Car Financing Home Financing Online Banking which show the high growth rate and high market share. Cash Cow: In the cash cow, we have Deposits Investments Credit Cards which show the low growth rate and high market share. Question Mark: In the Question Mark, we have Islamic Banking ATM Debit Card which show the high growth rate and low market share. Dog: In the Dog, we have Rupee Travelers Cheque which shows the low market share and low growth rate.

Comparison (Car Finance) Alfalah Bank

1-Alfalah Car installments remain same linked with KIBOR. 2-In case of booking of vehicle Alfalah bank charge installment with insurance. 3-The mark up rate of Alfalah Car is 15.50%.

Citi Bank
1-Citi Bank Car finance installments flucharts annually linked with KIBOR. 2-Installments start right from the first month regardless of delivery of vehicle.

3-The mark up rate of Citi Bank Car finance is 16%.

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Alfalah Bank
1-Alfalah Car installments remain same linked with KIBOR. 2-In case of booking of vehicle Alfalah bank charge installment with insurance. 3-The mark up rate of Alfalah Car is 15.50%.

MCB Bank
1-MCB Car 4 U installments flu-charts annually linked with KIBOR. 2-Installments start right from the first month regardless of delivery of vehicle.

3-The mark up rate of MCB Car 4 U is 14.25%.

Financial Analysis/ source of finance 1.

Investments

Bank has classified its investments under three titles and that are:

Hold for trading: These investments are short term investments which

bank has kept for generating profit by the fluctuations in price of securities and interest rate etc.

Held to maturity: These are the investments which have fixed or

determinable payments and bank has intention to keep them till maturity.

2.

Available for sale: These are the investments which do not fall under the

title of Hold for trading and Held for maturity. Advances

Loans and Advances: Bank states Loans, advances and lease investments net of

provisions against non performing advances. Provisions of specific and general nature for operations in Pakistan are made in accordance to the rules and regulations which have been defined by the State Bank of Pakistan. The - 54 -

advances to overseas customers are handled under the prevailing rules of the customers country.
Finance Lease Receivables: In lease, Bank transfers the entire risks and rewards

incidental to the owner of the assets. Bank recognizes the present value of the lease payments under a receivable and shows them under the title of advances to customers in the balance sheet.

3.

Fixed Assets:

Fixed assets are categorized into two classes. Accounting Policies regarding these classes have been discussed below:

Tangible Assets: Fixed assets except office premises are recorded at cost less accumulated depreciation and accumulated impairment losses, if any. Office premises are recorded at revalued amount less accumulated depreciation.

Depreciation on the fixed assets is charged on straight line method. Depreciation is estimated while keeping the amount of residual value of the assets (if any) in the mind.

Maintenance cost and repair charges are charged to the income and subsequent costs are stated as carrying value of the asset or under separate head whichever is appropriate, if their period of benefits extends more than one accounting period.

Office premises are revalued by the professionals so as to eliminate the effect immateriality from the fair value of the assets.

Surplus from the revaluation is stated as surplus on revaluation of the fixed assets and deficit is deducted from the previous value of the surplus on revaluation of fixed assets. The value which exceeds from the incremental depreciation charged to the assets is transferred to the inappropriate profits. - 55 -

Gain and losses are transferred to income except those which are related to surplus. Those are directly transferred to inappropriate profits.

Intangible Assets Intangible assets which have finite life are stated on the balance sheet on the cost less accumulated amortization and impairment losses, if any.

Amortization on the intangible assets is charged on straight line method on a rate which is reviewed on the balance sheet in order to eliminate the factor of immateriality.

The other intangible assets which have infinite life are stated on the cost less impairment losses if any.

Financial statement analysis Operational results

All figures are in millions 2008 2009 2010 Operational results Total Income Operating Expenses Profit before income tax and provisions Profit before income tax Profit after tax EPS Basic earnings per share (Rs.) Source: Bank Alfalah Annual report 31,822 8,289 6,906 4,536 3,130 35,78 9 9,957 3,831 1,795 1,301 40,743 11,002 4,711 1,016 897

3.92

1.41

0.71

Total income was 31,822 million in year 2008 and it has increased in the last two years. Operating expenses has been increasing in last three years. Following the year 2008 operating expense was 8289 million, year 2009 it was 9957 million and in year 2010 it was 11002 million. Basic earnings per share have decreased so far with 0.71 till 2010.

Profit before tax

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Profit before tax as you can see above, It has been decreasing in last three years. This shows that year 2009 profit is much lower as compared to year 2008 and in year 2010 profit is less than year 2008. The reason being this decline is higher operating expenses which lead its profit to cut down.

Balance Sheet
Table below shows the advances and deposits comparison as well as last three year change.

The source of the finance or investment to the Bank Alfalah are shown in the table below: Earning for the Bank Alfalah gets from the mark-up or the interest earned and they are the one of the source for the Bank. The earning for the holding of the securities also increase and increase the source of the finance. From the table one of the problem seen that interest earned or return from the customer for the Bank in 2010 is lower as compare to the 2009. But the interest from the financial institutions increase in 2010 as compare to the 2009.

All figures are in millions 2008 2009 2010 Balance Sheet Shareholders Equity Total Assets Advances - net of provision Investment - net of provision Deposits and other accounts - 57 13,767 328,89 5 171,99 88,492 273,17 4 14,609 348,99 1 191,79 0 75,973 300,73 3 19,770 389,070 188,042 99,160 324,760

CONCLUSION & SUGGESTIONS

BANK ALFALAH under the leadership of Sheikh Nahayan Mabarak Al-Nahayan has made significant in building of strengthening both the corporate and retail banking sectors in Pakistan. BANK ALFALAH views specialization and service excellence as the cornerstone of its strategy. The people of bank innovation, creativity, reliability, customized services and their execution are the key ingredients for their future growth. Based on this approach, - 58 -

their Treasury Division and the Structured Finance Unit have been geared to provide specialized services to the Corporate customers. Revenues from these activities have started yielding dividends and they expect significant growth in these areas in the coming years. While building on their in-depth familiarity with their customers needs and anticipated developments in the banking industry, the Retail and Corporate areas of their operations will continue to provide a strong and stable base to the business of the Bank. They are aware that they have stepped into the 21st century and they must meet its challenges by acquiring the highest levels of Technology. They will thus be accelerating their enable them distribute their products and services through most efficient and hightech means. They say that they will invest in the modern tools and substantial allocation of resources will be made to achieve this objective during the current year. Their programme to launch real time on line Banking Services and introduction of ATMs at strategic locations have been firmed up and it will be fully operational during the year 2001. Their focus would be to constantly seek out growth opportunities through increased quality assets and by offering a wider range of products and services to their esteemed customers. There are significant growth opportunities for BANK ALFALAH and they are confident in their ability to grasp them. They are committed to enhancing the shareholders value and look forward with greater optimism to a prosperous future for BANK ALFALAH

The bank maintained its position as the fifth largest bank of Pakistan in terms of total assets. BALs advances witnessed sizeable growth (around 14%) funded by healthy deposit mobilization. The growth was above the industry further strengthening BALs system share. However the banks share in the industrys deposit base experienced a marginal squeeze, attributable to its cautious approach towards deposit mobilization to achieve a favorable deposit mix for augmenting spreads. In addition, BAL continued expanding its consumer base with main focus on credit cards, followed by mortgage business. Bank Alfalah Limited is a well-known and successful financial institution in the

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banking sector, it is said, nothing is perfect in the world, and there is always space for deficiencies. Although the bank has a vast network of nationwide branches but it should spread its branch network throughout the world especially in the countries involved in international trade with Pakistan. In order to compete with the other banks. ATM services should be excellent as we can see the growing competition among the banks. The bank should acquire the services of the highly qualified people accompanied by lucrative incentives to promote its status as desirable in the next millennium. In order to market its products it should accentuate to give advertisements on both print and electronic media. The quality of human resource lies at the center of every organizations success and no doubt, Bank Alfalah Limited is fully aware of the importance of a satisfied and well-trained work force that gives completive advantage but the problem, which I have observed, is that employees of Gulberg Branch do not have enough knowledge about their products. Therefore, the policy of the bank should be to continually encourage its employees for their knowledge enhancement about their products. The state of the art training and development center at Bank Alfalah should arrange workshops and seminars for employees at every level to empower them professionally. Bank Alfalah Limited operates as progressive and adaptive organization maintaining dynamism and flexibility in all facets of its operations but in this era of stiff competition it should consider to launch new products to attract the customers. Their aim should remain to provide customers with value pricing and to ensure that quality of their portfolio is never compromised despite market pressures. Going forward, the bank intends to maintain the growth trend. While preserving diversification in the credit portfolio, the management intends to deploy additional funds in risk free avenues including direct/indirect sovereign lending. Growth in consumer - 60 -

financing is expected to be fuelled mainly by the credit card business. Meanwhile, BAL plans to add 49 new branches to its network in the near-term with primary focus to build low cost deposit base. Though BALs profitability is likely to improve, it is expected to remain under pressure on account of rapid network expansion. Meanwhile, the bank, in addition to exploring prospects of entry into other regional countries, intends to fortify its existing overseas operations with expansion in branch network and deployment of complete suite of all financial products. BAL is undergoing a revamping of its organizational structure with an aim to improving the efficiency of decision making at all levels and enhancing the quality and timeliness of its services. Besides, instilling a risk conscious culture is also a key objective. BALs Risk Management Division (RMD) has developed Credit Initiation and Internal Rating System (CIIRS) in accordance with Basel II for generating obligor internal ratings. CIIRS provides technological platform for assessing credit worthiness of new and existing customers and enables structured analysis of customer data for decision-making. The system is currently in validation phase. Moreover, the bank is implementing Economic Capital Framework (ECF) across the bank, which is expected to enable BAL to quantify and attribute cost to various material risks besides facilitating in calculating the riskadjusted profitability of each business line. The Bank is now over staff the building under operation is in adequate for such a large staff as new branches opening in different part of city should be availed. Under no circumstances cheque book should be given if the account formalities should be complete. There are two officer involved in Cash Deposit process which is time consuming. Cashier should be given certain powers to receive cash of US$ and DM to provide prompt services. Cheque which are drawn on Bank Alfalah Branch and returned unclear in clearing are not reflected in the statement of account of the customer. These cheques must be reflected in the account so that credibility of the customers may be assessed. The bank should try to give more loans to the small borrowers as the past history shows that most of the loans given to corporate borrowers have converted into bad debt - 61 -

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