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Introduction
Overview
NBP was established on November 9, 1949 NBP is a major business partner of Government of Pakistan NBP listed on the Karachi, Lahore, and Islamabad stock exchange
A large network with 1284 Branches NBP has 98 ATMs with 101 ATM Machines 221 Online Branches, 06 Customer Facilitation Centers 12 Swift Branches, 24 Overseas Branches
Introduction
Business Volume
Total number of shares 876975 Total assets 817,758,326,000 (2008) Profit after Taxation 15,458,590,000 (2008)
Introduction
Competitors
There are several bank acting as competitors of National Bank of Pakistan, some of those are Habib Bank Ltd. Allied Bank Ltd. Bank Alflah Muslim Commercial Bank United Bank Limited Standard Charted Bank Bank Al-Habib
Organizational Hierarchy
President Board of Directors Senior Management Regional Chief Zonal Chief Branch Manager
Training Program
During the internship period of 6 weeks I got training in various departments in the branch. A brief introduction of these departments is as under: Deposit of Current and PLS Saving Accounts & Account Opening Remittances and Bills Govt. Payments and Receipts Credit
Net collection of Utility Bills Payment of utility bills through cheque Tax Collection,
Issuance of short term and long term Loan Financing small investors through various financing schemes. Loan against Gold Agricultural Advance to farmers
Information System is very helpful in decision making process. Various applications are used for the purpose like MIS, ERP, BBO and Office Suit etc. Critical Analysis help in finding out where the necessary step should taken
Sources of Funds
NBP raise it fund through following sources Share Capital Reserves Borrowings Deposits Other Liabilities Mark Up/Return/Interest
Allocation of Funds
NBP allocate its fund to following sources Lending to Financial Institutions Investments Advances Operating Fixed Assets Other Assets
Ratio Analysis
Current Ratio =Current Asset / Current Liabilities 2008 Current Ratio 2.86 2007 7.40
Current Assets = Cash and Balance with Treasury Bank + Balance with other Banks Current Liabilities = Bills Payable + Borrowings Current ratio decrease due to Increase in borrowing in year 2008
Net Working Capital Ratio = Current Asset - Current Liabilities/ Total Assets Net Working Capital Ratio 2008 2007
0.15
Time Interest Earned = EBIT / Interest Charges Time Interest Earned 2008 1.18
0.15
2007 1.95
Fixed Charges Converge Ratio = EBIT+ Fixed Charges / Fixed Charges + Interest Fixed Charges Coverage 2008 2007
1.36
2007 0.85 2007 9.32 2007 5.64 2007 0.14
Total Capitalization Ratio = Long Term Debt / Long Term Debt + Equity
Net Profit Margin = Net Income / Revenue Net Profit Margin 2008 2007
38%
2007 2.5% 2007 83.95% 2007 0.09 2007 0.03
Revenue to Fixed Assets = Total Revenue / Fixed Assets Revenue to Fixed Assets 2008 2007
1.95
2007 0.27 2007 0.67 2007 23.34 2007 0.43
Price Earning Ratio = Market Value Per Share / Earning Per Share Price Earning Ratio
Balance Sheet
2008-2007
Base year 2007 ASSETS %
2007-2006
Base year 2006 %
12.26
2.33 (19.10) (20.20)
20.67
(7.80) 50.88 (6.73)
Advances - net
Operating fixed assets Deferred tax assets - net Other assets - net
21.35
(6.58) 43.73
7.66
167.74 14.31
Total Assets
7.29
20.01
5.58
(24.68) 28.17 10.75 (11.93) 10.00 26.43 15.68 (55.19) (0.12)
17.94
153.52 113.56 16.33 16.75 41.95 15.00 13.64 41.37 62.81 0.42
Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income Provision Against Non performing Advances Provision for diminution in the value of investments Provision Against Balance Sheet Obligations Bad debts written off directly
(1027.37)
(94.33)
(100.00)
655.09
Net mark-up / interest income after provisions Non-mark-up / interest income Fee, commission and brokerage income
Dividend income
Income from dealing in foreign currencies Gain on sale of securities - net Unrealized loss on revaluation of investments Other income - net Total non-mark-up / interest income Administrative expenses (Reversal) / Write off / other provision - net Other charges Total non-mark-up / interest expenses Profit before taxation
(11.78)
280.61 (83.11) (105.34) 745.10 21.20 0.12 27.91 344.88 3303.31 35.52 (18.03)
12.85
(21.82) 100.23 616.04 (76.52) 11.36 6.27 5.67 (1072.21) (91.77) 5.55 6.65
(18.78)
41.37
11.82
65.57
234.44
(5.00)
19.13
40.38
Vertical Analysis:
Balance Sheet
ASSETS
Each amount is divided by Total Assets (Liabilities) to get its percentage in Balance Sheet and by Sales on P/L Statement. 2008 % 13.02% 4.69% 20.89% 2.09% 50.50% 2.96% 0.39% 2007 % 12.45% 4.92% 27.70% 2.82% 44.65% 3.40%
Cash and balances with treasury banks Balances with other banks Investments - net Lendings to financial institutions Advances - net Operating fixed assets Deferred tax assets - net
5.45%
100.00%
4.07%
100.00%
76.42%
0.00% 4.85%
77.66%
0.00% 0.67% 4.06%
Total Liabilities
Represented by: Share capital Reserves
87.47%
1.10% 2.44%
84.74%
1.07% 2.07%
Inappropriate profit
Surplus on revaluation of assets - net of tax
6.41%
2.58% 12.53%
5.95%
6.18% 15.26%
100%
100%
Provision Against Balance Sheet Obligations Bad debts written off directly
0.01% 0.00%
0.00% 0.08%
18.00% 42.81%
9.34% 57.16%
Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities - net Unrealized loss on revaluation of investments Other income - net Total non-mark-up / interest income
Administrative expenses (Reversal) / Write off / other provision - net Other charges Total non-mark-up / interest expenses Profit before taxation
25.37% 74.40%
37.64% 63.43%
0.21%
0.08%
99.98%
101.14%
Trend Analysis =
BALANCE SHEET For the year ended Dec 31, 20
ASSETS Cash and balances with treasury banks Balances with other banks Investments - net Lendings to financial institutions Advances - net Operating fixed assets Deferred tax assets - net Other assets - net Total Assets 64.31% 28.75% 14.31% 20.01% % 35.46% -5.65% 22.06% -25.57% 30.65% 150.13% Base year 2006 2008 2007 % 20.67% -7.80% 50.88% -6.73% 7.66% 167.74%
24.52%
90.96% 49.11%
17.94%
153.52% 113.56% 16.33%
Total Liabilities
Net assets Represented by: Share capital
29.31%
25.02% 26.50%
16.75%
41.95% 15.00%
Reserves
Unappropriated profit Surplus on revaluation of assets - net of tax Total Liabilities & Equity
43.68%
63.54% -27.04% 25.02%
13.64%
41.37% 62.81% 41.95%
Profit and Loss Statement For the year ended Dec 31, 20
Mark-up / return / interest earned Mark-up / return / interest expensed
22.90%
244.43% -152.61%
11.53%
53.56% -94.33%
362.60% -6.10%
99.14% 4.05%
Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities - net Unrealized loss on revaluation of investments
98.43%
34.97% 6.40%
-76.52%
11.36% 6.27% 5.67% -1072.21% -91.77% 5.55% 6.65%
Administrative expenses (Reversal) / Write off / other provision - net Other charges Total non-mark-up / interest expenses Profit before taxation
Profit after taxation Inappropriate profit brought forward Transfer from surplus on revaluation of fixed assets
-9.19% 134.06%
217.72%
-5.00%
67.23%
40.38%
762,194 374,072 591,907 281,349 340,677 243,392 69,271 19,034 43,259 12,444
Future Prospects
Leader in Banking Industry An Organization Maintain the trust of Stakeholder A Fast Peace, Modern and Competitive Bank
SWOT ANALYSIS
Strengths
Highest Profitability among commercial banks One of the Oldest Bank of the Pakistan Alternative in absence of SBP Functioning as an agent of SBP
amount in shape of Deposit Stable and Sound Financial Strength Employees Loyalty, Very Low turnover rate in NBP
SWOT ANALYSIS
Weakness
No proper advertisement for newly introduces services and no attraction towards customer retaining Poor resource utilization Political pressure for financing to politicians Lack of good delegations Decreasing income over last 03 years Poor Record management and record filing
SWOT ANALYSIS
Opportunities
Attraction of the foreign investors Introducing latest computerized Technology to improve operations Introducing E-banking products New deposit schemes Being a nationalized bank strong potential to grow Role playing in economical development Micro financing for SME.
SWOT ANALYSIS
Threats
High interest rate on deposit by competitors Introducing latest computerized Technology to improve operation Emerging new entrant in the sector every year making high competition General economic crises in the country Challenging operating environment Payments and FBR collection create burden on operational staff
Conclusion
ROA, ROE, Profit Margin, Earning per share is
decreasing over the year. National Bank is losing its strength day by day. Most of procedure for function and operating are designed at head office.
Thank You