mc080203376 vu nbp presentation

8/9/2019 Mc080203376 VU NBP Presentation

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Humayoun Ahmad FarooqiHumayoun Ahmad Farooqi

MC080203376MC080203376MBA (Finance)MBA (Finance)


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National Bank ofNational Bank of

PakistanPakistan

Internship ReportInternship Report


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BriefBriefIntroduction of theIntroduction of theorganizationorganization

VisionVisionTo be recognized as a leader and a brand synonymous withTo be recognized as a leader and a brand synonymous withtrust, highest standards of service quality, internationaltrust, highest standards of service quality, internationalbest practices and social responsibility.best practices and social responsibility.

MissionMissionNBP will aspire to the values that make NBP truly theNBP will aspire to the values that make NBP truly theNations Bank, by:Nations Bank, by:

Institutionalizing a merit and performance cultureInstitutionalizing a merit and performance culture

Creating a distinctive brand identity by providing theCreating a distinctive brand identity by providing thehighest standards of serviceshighest standards of services

Adopting the best international management practicesAdopting the best international management practicesMaximizing stake-holders valueMaximizing stake-holders value

Discharging our responsibility as a good corporate citizenDischarging our responsibility as a good corporate citizenof Pakistan and in countries where we operateof Pakistan and in countries where we operate

Overview of OrganizationOverview of Organization


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Brief history of OrganizationBrief history

of Organization

Established vide NBP Ordinance No. XIX ofEstablished vide NBP Ordinance No. XIX of

November 9. 1949November 9. 1949 Awards and achievementsAwards and achievements

Nature of OrganizationNature of Org

anization

Financial InstitutionFinancial Institution

Largest commercial bank in PakistanLargest commercial bank in Pakistan

Government OrganizationGovernment Organization

Islamic BankingIslamic Banking


Overview of OrganizationOverview of Organization


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Business VolumeBusiness Volume

ParticularsParticulars Year ending 2008Year ending

2008

Paid up CapitalPaid up Capital Rs. 8,969,751,00Rs. 8,969,751,000

Shares holders equity and ReservesShares holders equity and Reserves Rs. 81,367,002,00Rs. 81,367,002,000

DepositsDeposits Rs. 624,939,016,00Rs. 624,939,016,000

Advances-netAdvances-net Rs. 412,986,865,00Rs. 412,986,865,000

Investment-netInvestment-net Rs. 170,822,491,00Rs. 170,822,491,000

Total AssetsTotal Assets Rs. 817,758,326,00Rs. 817,758,326,000Pre-Tax ProfitPre-Tax Profit Rs. 23,000,998,00Rs. 23,000,998,000

After-Tax ProfitAfter-Tax Profit Rs. 15,458,590,00Rs. 15,458,590,000

No. of BranchesNo. of Branches 1,271,276

No. of EmployeesNo. of Employees 15,2015,204


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Habib Bank LimitedHabib Bank Limited United Bank LimitedUnited Bank Limited

Muslim Commercial Bank LimitedMuslim Commercial Bank Limited Allied Bank LimitedAllied Bank Limited Askari Commercial Bank LimitedAskari Commercial Bank Limited Soneri Bank LimitedSoneri Bank Limited

Bank Al-Habib LimitedBank Al-Habib Limited Bank Al-Falah Limited.Bank Al-Falah Limited. Standard Chartered Bank LimitedStandard Chartered Bank Limited Other local and foreign banks operatingOther local and foreign banks operating

in Pakistanin Pakistan


Competitors of OrganizationCompetitors of Organization


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Organizational Hierarchy ChartOrganizational Hierarchy Chart

President

Director/ Senior Executive Vice President

Provincial or Regional Chiefs/ Executive Vice Presidents

Vice President

Assistant Vice President

Officer Grade I

Officer Grade II

Officer Grade III

Clerical / Non-Clerical Staff


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Training ProgramTraining Program

General Banking DepartmentGeneral Banking Department

Opening an AccountOpening an Account

Accepting DepositsAccepting Deposits Making PaymentsMaking Payments

Govt. Receipts and PaymentsGovt. Receipts and Payments

Advances/Credit DepartmentAdvances/Credit Department Retail AdvancesRetail Advances

Commercial AdvancesCommercial Advances


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Structure of FinanceStructure of Finance

DepartmentDepartment

Hierarchy of Finance DepartmentHierarchy of Finance Department

Branch Manager

Retail Officer Credit Officer

Clerical/ Non clerical staff Clerical/ Non clerical staff


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Functions of FinanceFunctions of Finance

DepartmentDepartment Accounting system of OrganizationAccounting system of Organization

Double entryDouble entry

Accrual systemAccrual system

Finance system of OrganizationFinance system of Organization Investing and lendingInvesting and lending

Holding up cash position for other financialHolding up cash position for other financialinstitutionsinstitutions

Use of electronic Data in decisionUse of electronic Data in decisionmakingmaking Core Banking ApplicationCore Banking Application

Electronic Banking systemElectronic Banking system


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Sources of FundsSources of Funds

Deposits and Mark up/interest/returnDeposits and Mark up/interest/return

Fee, commission and brokerageFee, commission and brokerage

Dividend IncomeDividend Income

OthersOthers

Allocation of FundsAllocation of FundsProviding loansProviding loans

ExpensesExpenses

Functions of FinanceFunctions of Finance

DepartmentDepartment


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Critical AnalysisCritical AnalysisBalance Sheet As at December,31Balance Sheet As at December,31

20082008


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Critical AnalysisCritical AnalysisProfit & Loss Account for the year endedProfit & Loss Account for the year ended

December 31, 2008December 31, 2008


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Critical AnalysisCritical AnalysisCash Flow Statement for the year endedCash Flow Statement for the year ended

December 31, 2008December 31, 2008


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Critical AnalysisCritical AnalysisStatement of changes in equity for theStatement of changes in equity for the

year ended December 31, 2008year ended December 31, 2008


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Critical AnalysisCritical AnalysisRatio AnalysisRatio Analysis

Liquidity RatiosLiquidity Ratios

Leverage RatiosLeverage Ratios

Profitability RatiosProfitability Ratios

Activity RatiosActivity Ratios

Market RatiosMarket Ratios Statement of Cash flow RatiosStatement of Cash flow Ratios

Other RatiosOther Ratios


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Critical AnalysisCritical Analysis

2006 2007 2008

142279638/ 524181985 153810681/ 609784513 161976396/ 675617003

27.14% 25.22% 23.97 %


Current Ratio = (Current Assets/Current Liabilities) *100Current Ratio = (Current Assets/Current Liabilities) *100

where current Assets = Cash and balance with treasury banks +where current Assets = Cash and balance with treasury banks +

Balances with other banks + Short term lending to financialBalances with other banks + Short term lending to financial

institutionsinstitutions

Current Liabilities = Bills payable + Borrowing + other Short termCurrent Liabilities = Bills payable + Borrowing + other Short term

liabilitiesliabilities

2 2 . 0 0 %

2 4 . 0 0 %

2 6 . 0 0 %

2 8 . 0 0 %

20 0 6 20 0 7 200 8


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2006 2007 2008

(142279638 23012732)/524181985

(153810681 21464600) /609784513

(1611976396 17128032)/675617003)

22.7 % 21.7 % 21.4%


Acid Test Ratio = (Current Assets-Prepaid Expenses/CurrentAcid Test Ratio = (Current Assets-Prepaid Expenses/Current

Liabilities)Liabilities) *100*100

2006

2007

2008

21.20%

21.60%

22.00%

22.40%

22.80%

2006 2007 2008


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2006 2007 2008

Working capital 142279638 524181985=

38190234700

153810681 -609784513 ==4559783200

161976396 675617003 =9440939300

Interest earned /working capital

(43788628/38190234700)

(50569481/4559783200)

(50569481/4559783200)

0.11% 1.1% 0.64%


Sales to working capital ratio = (interest earned/WorkingSales to working capital ratio = (interest earned/Working

Capital)*100Capital)*100

Where working capital= Current assets- current liabilitiesWhere working capital= Current assets- current liabilities


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2006 2007 2008

(553178593/ 635132711)

* 100

(645855939/ 762193593)*

100

(715299108/ 817758326)

* 100

87.01% 84.73% 87.47%


Debt ratio = (Total Debt/Total Assets)*100Debt ratio = (Total Debt/Total Assets)*100


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2006 2007 2008

(553178593/79090712)*100

(645855939/ 8154319) *100

(715299108/ 8969751) *100

78.01% 79.20 % 79.74%


Debt to equity ratio = (Total Debt/Total ShareholdersDebt to equity ratio = (Total Debt/Total Shareholders

equity)*100equity)*100


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2006 2007 2008

(492853073/

5458977220) *100

(608382912/

677653543) * 100

(655781930/ 737148932)

*100

90.28% 89.77% 88.96%


Total capitalization ratio= (Long term debt/(Long term debt +Total capitalization ratio= (Long term debt/(Long term debt +

shareholders equity))*100shareholders equity))*100

where Long term debt= Long term Deposits and other accounts +where Long term debt= Long term Deposits and other accounts +

Other liabilities-long termOther liabilities-long term


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2006 2007 2008

(492853073/28996608) * 100

(608382912/

36071426) * 100

(655781930/

39682105) * 100

16.99% 16.86% 16.52%


Long term asset to long term debt ratio= (Long termLong term asset to long term debt ratio= (Long term

assets/Long term debt)*100assets/Long term debt)*100

16.40%

16.50%

16.60%

16.70%

16.80%

16.90%

17.00%

17.10%

2006 2007 2008


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2006 2007 2008

(363944869 /43788628)*100

(51145457/50569481)*100

(60933234 /60942798)*100

83.11% 101.14% 99.98%


Net Profit Margin= (Profit available for appropriation/netNet Profit Margin= (Profit available for appropriation/net

earning)*100earning)*100

80.00%

84.00%

88.00%

92.00%

96.00%

100.00%

104.00%

2006 2007 2008


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2006 2007 2008

(36394869 /635132711)*100

(51147457 /762193593)*100

(60933234 /817758326)*100

5.7% 6.7% 7.45%


Return on assets ratio = (Net Profit /Total assets)*100Return on assets ratio = (Net Profit /Total assets)*100

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

2006 2007 2008


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2006 2007 2008

Operatingincoem

26310577 +2371546=28682123

28060501 +4722735=32783236

23000998 +10990814=33991812

(28682123 /43788628)*100

(32783236 /50569481) * 100

(33991812 /60942798) *100

65.50% 64.82% 55.77%


Operating income margin =Operating income margin = (Operating income / interest(Operating income / interest

earned)earned) *100*100

Where operating income= profit before tax + ProvisionsWhere operating income= profit before tax + Provisions

52.00%

56.00%

60.00%

64.00%

68.00%

2006 2007 2008


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2006 2007 2008(36394869/ 625450737)

* 100(51147457/ 736270614) *

100(60933234/ 790336099)

* 100

5.82% 6.95% 7.71%


Operating asset turnover = (Profit available for appropriation/Operating asset turnover = (Profit available for appropriation/

Operating assets) *100Operating assets) *100

Operating assets = Total assets fixed assets deferredOperating assets = Total assets fixed assets deferred

tax assetstax assets

5.00%

6.00%

7.00%

8.00%

2006 2007 2008


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Return on Operating asset = (Profit after taxation/ OperatingReturn on Operating asset = (Profit after taxation/ Operating

assets) *100assets) *100

2006 2007 2008

(17022346/ 625450737)* 100

(19033773/ 736270614) *100

(15458590/ 790336099)* 100

2.7% 2.5% 1.95%

1.50%

2.00%

2.50%

3.00%

2006 2007 2008


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2006 2007 2008

(36394869/139946995)* 100

(51147457/ 211146038)*100

(60933234/ 170822491)* 100

26.01% 24.22% 35.67%


Return on Investment = (Net profit available forReturn on Investment = (Net profit available for

appropriation/ investment) * 100appropriation/ investment) * 100

25.00%

29.00%

33.00%

37.00%

2006 2007 2008


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2006 2007 2008

(17022346/ 53044649) *100 (19033773/ 69270631) *100 (15458590/ 81367002) *100

32.09% 27.47% 18.99%


Return on total equity = (net profit after tax/ Total equity) *Return on total equity = (net profit after tax/ Total equity) *

100100

17.00%

22.00%

27.00%

32.00%

37.00%

2006 2007 2008

18.99%


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2006 2007 2008

(42316608/ 43788628) *100

(47174315/ 50569481) *100

(53473892/ 60942798) *100

96.63% 93.28% 87.74%


Gross Profit Margin = (net mark up/ interest income) * 100Gross Profit Margin = (net mark up/ interest income) * 100

87.00%

90.00%

93.00%

96.00%

99.00%

2006 2007 2008


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2006 2007 2008

(43788628/635132711) * 100

(50569481/762193593) * 100

(60942798/817758326) * 100

6.89% 6.63% 7.45%

Activity RatiosActivity Ratios

Total assets turnover = (interest earned/ total assets) * 100Total assets turnover = (interest earned/ total assets) * 100

6.40%

6.60%

6.80%

7.00%

7.20%

7.40%

7.60%

2006 2007 2008


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2006 2007 2008

1474605/ 590000 2831895/ 708970 6104894/ 814000

2.5 4 7.5

Market RatiosMarket Ratios

Dividend per share = (Total dividends/ Number of sharesDividend per share = (Total dividends/ Number of shares

outstanding)outstanding)

0

1

2

3

4

5

6

7

8

2006 2007 2008


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2006 2007 2008

17022349/ 896875 19033733/ 896975 15458590/ 896975

18.97 21.22 17.23


Earning per share = (Net Income/ Average number of sharesEarning per share = (Net Income/ Average number of shares

issued)issued)

15

20

25

2006 2007 2008


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2006 2007 2008

249.05/24.01 259.9/23.34 162.54/17.23

10.37 11.13 9.43


Price earning Ratio = (Avg. market price per share/ EarningPrice earning Ratio = (Avg. market price per share/ Earning

per share)per share)

9

9.6

10.2

10.8

11.4

2006 2007 2008


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2006 2007 2008

(2.5/ 24.01) * 100 (4/ 21.22) * 100 (7.5/17.23) * 100

10.41% 18.85% 43.53%


Dividend Payout = (Dividend per share/ Earning per share)Dividend Payout = (Dividend per share/ Earning per share)

10.00%

20.00%

30.00%

40.00%

50.00%

2006 2007 2008


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2006 2007 2008

(2.5/249.05) *100 (4/259.9) *100 (7.5/162.54) *100

1.01% 1.54% 4.61%


Dividend Yield = (Dividend per share/ avg. market price perDividend Yield = (Dividend per share/ avg. market price per

share)share)

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

2006 2007 2008


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2006 2007 2008(10176913/ 553178593) *

100(78804419/ 645855939) *

100(2532681/ 715299108) *

100

1.83% 12.20% 0.35%

Cash Flow Statement RatiosCash Flow Statement Ratios

Operating cash flow to total debt = (Operating cash flow / totalOperating cash flow to total debt = (Operating cash flow / total

debt) * 100debt) * 100

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

2006 2007 2008


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2006 2007 200810176913/708970 78804419/896975 2532681/896975

14.35 87.86 2.82


Operating cash flow per share = (Operating cash flow /Operating cash flow per share = (Operating cash flow /

Number of equity shares) * 100Number of equity shares) * 100

0

10

20

30

40

50

60

70

80

90

100

2006 2007 2008


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2006 2007 2008

(10176913/ 2891755) * 100 (78804419/ 3263249) * 100 (2532681/ 28789320) * 100

3.51% 24.14% 0.87%


Operating cash flow to cash dividend = (Operating cash flow /Operating cash flow to cash dividend = (Operating cash flow /

Cash Dividend) * 100Cash Dividend) * 100

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

2006 2007 2008


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2006 2007 200828682123/ 10419 32783236/ 14079 33991812/ 15204

2753 2329 2236


Net income per employee = (Operating income / number ofNet income per employee = (Operating income / number of

employees) * 100employees) * 100

2000

2300

2600

2900

2006 2007 2008


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2006 2007 2008635132711/ 14019 762193593/ 14079 817758326/ 15204

45305.1 54136.9 53785.7


Asset per employee = (Total asset / number of employees) *Asset per employee = (Total asset / number of employees) *

100100

40000

45000

50000

55000

2006 2007 2008

Series1


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2006 2007 2008

(3575143/ 19033773) *

100

(2011427/ 17022346) * 100 (2532681/ 28789320) *

100

33.93% 11.81% 18.78%


Growth of Income = (Change in income / income of last year) *Growth of Income = (Change in income / income of last year) *

100100

where change in income = income of this year income ofwhere change in income = income of this year income of

last yearlast year

10.00%

20.00%

30.00%

40.00%

2006 2007 2008


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Horizontal AnalysisHorizontal AnalysisBalance Sheet as at December 31,Balance Sheet as at December 31,

20082008


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Vertical AnalysisVertical Analysis


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Industry AnalysisIndustry Analysis

Ratio NBP Bank Al- Falah ABL UBL

Net Profit Margin Ratio 25.36% 10% 27% 27%

Gross Profit Margin Ratio 87.74% 57% 72% 65%

Return on total Equity 15% 7% 18% 18%

Return on Assets (After tax) 1.89% .372% 1.1% 1.37%

Total Assets to shareholders fund 7.98 20.47 16.40 13.79

Earning per share (pre-tax) 25.64 2.24 9.47 10.8

Earning per share (after- tax) 17.23 1.63 6.43 8.24

Payout Ratio 49.33 76.69 54.43 56.9

Book Value 90.71 18.27 32.19 35

Net Interest Income Growth 9.75% 5.68% 1.98% .83%

f hF t P t f th


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Future Prospects of theFuture Prospects of the

OrganizationOrganization

Committed to interests of stakeCommitted to interests of stake

holdersholders

Complete automation of workComplete automation of work Commitment to employeeCommitment to employee

empowermentempowerment

Commitment to vision, missionCommitment to vision, missionand core valuesand core values


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SWOT AnalysisSWOT Analysis

AwardsAwards

Branch networkBranch network

Agent of State Bank of PakistanAgent of State Bank of Pakistan

Highest asset and highest no. ofHighest asset and highest no. of

accountsaccounts

Overseas operationsOverseas operations

Leader in agricultural financeLeader in agricultural finance

StrengthsStrengths


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Political pressurePolitical pressure

Lowest internal controlLowest internal control

Unsatisfactory Corporate cultureUnsatisfactory Corporate culture

Behind in IT and online bankingBehind in IT and online banking

Insufficient training and technicalInsufficient training and technical

educationeducation

Shortage of staffShortage of staff

WeaknessesWeaknesses


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Trusted and reliable bankTrusted and reliable bank

Rapidly increasing depositsRapidly increasing deposits

Agent of SBPAgent of SBP

Vast networkVast network

Electronic bankingElectronic banking

Islamic bankingIslamic banking

OpportunitiesOpportunities


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ThreatsThreats

Penalties by SBPPenalties by SBP

Emergence of new competitorsEmergence of new competitors

High complaintsHigh complaints

Govt. transaction a heavy workGovt. transaction a heavy work

loadload


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ConclusionsConclusions

Customer SatisfactionCustomer Satisfaction

Record maintenanceRecord maintenance

More accounts fewer depositsMore accounts fewer deposits

Job rotation, Promotion,Job rotation, Promotion,

AppreciationAppreciation

Training and communicationTraining and communication

Theory vs PracticeTheory vs Practice

Delegation of authorityDelegation of authority


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RecommendationsRecommendations

Performance appraisalPerformance appraisal

Delegation of authorityDelegation of authority

Customer complaintsCustomer complaints

Credit card, cash financingCredit card, cash financing

Decreasing AdministrativeDecreasing Administrative

expensesexpenses

Technological advancementsTechnological advancements

Organizational CommitmentsOrganizational Commitments


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THANKTHANK

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mc080203376 vu nbp presentation

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