The Bank of Punjab

The Bank of Punjab 2012
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TABLE OF CONTENTS Sr. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Contents Preface Acknowledgement Executive summary Mission Statement & Vision &Core values Introduction To BOP Introduction History Corporate Information Presidents Message Functions of Board Total Branches Ownership Management Hierarchy Online Branches Service Process of Departments Departments at branch BOP customer Service Design Cash Department Remittance Department Account Opening Department Cheque Book Issuance Dept. Clearing Department Credit Department Types of Financing Procedure To Getting Finance Business Promotion SWOT Analysis Consolidated Financial Statements Horizontal Analysis Vertical Analysis Financial Ratio Analysis Page No. 3 4 5 6,7 8 9 10 11,12 12,13 14,15 16 17 17,20 20,24 24 25 25 26,28 29,32 33 37,39 39,41 42 42,46 46,47 47,52 52,57 57,61 61,65 65,69 71,85
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DEDICATION
This project is dedicated to our parents who ever wished to see us a successful man in every field of our life.
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PREFACE
First of all, I thank Almighty Allah who provided me the opportunity and strength to undertake this project. on THE BANK OF PUNJAB.
We are thankful to our teachers without whose cooperation it would have not been possible for me to make this project.
Although I have face a lot of difficulties in my report but I have also learnt a lot from it and this is only and only due to the guidance of the staff of THE BANK OF PUNJAB
At the end, I request to my honorable teacher, there is a need of improvement in my project but I hope you will accept my project.
THANK YOU
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ACKNOWLEGMENT
It is my pleasure and bounden duty to acknowledge with all humility that the preparation of this PROJECT has been a transcontinental matter with the respectable teacher and management of The Bank of Punjab.
First of all I have achieved great intellectual depth only because due to my brilliant teachers for their creative guidelines, back up, unflinching support, understanding and tolerant behavior and having given me a valuable chance for practical research, and now I cannot get last in the shadows what I have achieved. It is incredible how many of the insights that one gains as student of a superb researcher and teacher live on with the rest of ones life
Finally we would like to acknowledge the support of seniors and special thanks for their valuable suggestions.
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EXECUTIVE SAMMURY
The Bank of Punjab always aimed for innovation in environment friendly banking. Being a division of such a renowned and well respected company in business of banking, we offer services for all key consumer market sectors. They aim at satisfying their customers demands better and more profitably than their competitors.
The banking sector has been accelerated within 4-5 years in Pakistan. The banking sector has become more competitive and the banks have competitive advantage are achieving their goals more efficiently as compared to other banks. The Bank of Punjab comes to know this fact vary late but they have managed to face this competitiveness. As a comparison of 2009, 10 and 011 The Bank of Punjab has increased their growth marketing share by giving more and more customers value services.
Now, The Bank of Punjab has come up with an innovative investment in the market for consumer satisfaction. The Bank of Punjab has really made huge investment of opening and renovation of new branches for customer convenience. They understand that their customers are aware of the friendly services provided by us. Since the awareness is increasing, our potential competence in the market is also increasing. So they are trying to increase their market share.
The Bank of Punjab is marketing their services in an appropriate way that also takes into account the risks of competitiveness, and our services and products are aimed to reduce that risk. They also believe that their consumers have chosen to be served by them by providing value added services.
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The Bank of Punjab products main aim is to satisfy the customers is the banks first priority. For the prosperity of the banks stakeholders that allows the bank to constantly invest, improve and succeed. To enrich the lives of community in where the bank operate. For the talented and high performance of employees, Bank of Punjab constantly launches programs of recognition and rewards. Bank of Punjab seeks excellence in everything it does. The Bank of Punjab follows integrity in all their dealings and seeks respect for its customers and others.
M I S S I O N S T A T E M E N T To exceed the expectations of our stakeholders by leveraging our relationship with the government of Punjab and delivering a complete range of professional solutions with a focus on program driven products
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and services in the agriculture and middle tier markets though a motivated team.
VISION To be a customer focused bank with service excellence.
CORE VALUES
The bank focuses on these values in its operations: CUSTOMER To satisfy the customers is the banks first priority. PROFITABILITY
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For the prosperity of the banks stakeholders that allows the bank to constantly invest, improve and succeed. CORPORATE SOCIAL RESPONSIBILITY To enrich the lives of community in where the bank operate. RECOGNITION & REWARD For the talented and high performance of employees, Bank of Punjab constantly launches programs of recognition and rewards. EXCELLENCE Bank of Punjab seeks excellence in everything it does. INTEGRITY Bank of Punjab follows integrity in all their dealings. RESPECT The bank seeks respect for its customers and others
INTRODUCTION
THE BANK OF PUNJAB
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Constitutional Base
The Bank of Punjab was established under the provisions of Section 28 Federal list included in the 4th schedule of the constitution of the Islamic Republic of Pakistan, 1973. This section prescribes that the parliament i.e, the Federal legislature has exclusive powers to enact legislation to conduct banking business by corporations except in the case of those corporations, which are Owned or controlled bye a province and carrying out business only within that province. This means firstly, that the constitutions pre-supports the existence of banking corporations outside the control of the federal government and allow the provinces the right to establish corporation owned or controlled by them provided that they do business only within the administrative boundaries of the FINAL PROJECT provinces and secondly, that the
INTRODUCTION The Bank of Punjab was established in 1989, under The Bank of Punjab Act 1989 and was the eminence of scheduled bank in 1994. The Bank of Punjab is functioning as a scheduled commercial bank with its network of 226 branches at all key business centres in the country. The Bank of Punjab provides all types of banking services such as Deposit in Local & Foreign currency, remittances & advances to business, Trade, Industry & Agriculture. BOP has indeed entered a new era of science of the nation under experience and professional hands of its management. The Bank of Punjab plays a vital role in the national economy through mobilization of hitherto untapped local resources, promoting saving and providing funds or investments. Attractive rates of profit on all types of deposits, opening of Foreign
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Currency Accounts and handling of Foreign Exchange business such as imports, exports and Remittance, Financing, Trade and Industry for working capital requirements and money market operations are some facilities being provided by the Bank. The lending policy of Bank is not only cautious and constrictive but also based on principles of prudent lending with maximum emphasis on security.
HISTORY
The bank of Punjab appeared on the banking horizon on November 15, 1989. The bank was established under an act of Punjab assembly via. The bank of Punjab Act, 1989. The bill of this effect was passed by the provincial assembly on July 3, 1989 and assented to by governor of the Punjab in accordance with the provisions of the constitution on july 26, 1989. In a short period, after its inception, it has developed at a pace unequalled by any other institution of its kind in the country. Being the fastest growing banking institution in Pakistan, it is playing a pivotal role in the economic development of the country. Though the bank was established under circumstances that were not too congenial for the establishment of a provincial banking institution, it has however, shown tremendous growth in all
areas of its activities due mainly to pragmatic policies based on merit and professionalism. The bank has extended its branch network throughout the Punjab; the bank is also extending its network of branches to other provinces of the country. By the end of March, 1995branches are opened at Karachi and Islamabad. There are total 266 branches all over the country including Azad Kashmir. It may not be irrelevant to mention here that the 10 new commercial banks, permitted in the private sector, have been allowed to open only 10 branches, each in a period of two years. In other words, these 10 banks will open 100 branches in all during the first two years. In crating the bank, the efforts of the management have not only been directed towards maximization of profit but also towards creating a corporate culture in which talent and professionalism can thrive and motivation can be enhanced to the highest possible level. Experience has shown that to get the best out of employees, it is necessary to create a
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conductive environment in which the employed feel that the organization belongs to them and the merit and the .
professionalism are the only basis for the career advancement
CORPORATE INFORMATION MR. GHAFOOR MIRZA MR. NAEEMUDDIN KHAN President Chairman
DIRECTORS MR. TARIQ MAHMOOD PASHA MR. TARIQ BAJWA MR. RIZWAN ULLAH KHAN MR. JUNAID ASHRAF KHAWAJA MR. FAROOQ AHMED AWAN MR.M.NAVEED MASUD
SECRETARY TO THE BOARD Mr. RAZA SAEED
AUDIT COMMITTEE Mr. GHAFOOR MIRZA Mr. M.NAVEED MASUD Mr. JUNAID ASHRAF KHAWJA
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AUDITORS ERNST &young ford Rhodes sidat hyder ,chartered accountants
REGISTERED OFFICE BOP Tower ,10-B ,block E-11, Main boulevard, gulberg -3 LAHORE
WEBSITE www.bop.com.pk
REGISTRAR M/s Corplink (Pvt) Ltd. Wings Arcade, 1-K (Commercial) Model Town, Lahore. Ph : 042-5839182
PRESIDENT MESSAGE
By the grace of Allah the Almighty, year 2011 has marked itself as an addition of another successful chapter in our history of achievements. Throughout the year, we have kept up our gait, pacing steadily and beneficially in almost all the areas of banking business operations. Comprehensive deposit and loan growth strategies, progressive new consumer and business banking solutions, and experienced, highly trained financial professionals have positioned us ,the bank of Punjab, for continued success throughout the country.
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During previous half decade, Government effort and its efficacious policies have created a benevolent business environment, especially, for industrial and financial sectors. The banking sector has remained an active participant in developing financial sectors, consequently gained huge profits from sharp rise in private sector credit off take that has grown by an average of 27% , in pars 3 year, compound with higher dividend income and immense capital gains derived as a result of astonishing rise in our stock markets. Unlike some other commercial banks, which derived substantial portion of their income and growth from capital markets and investment banking activates, our focus remained intact a core banking activates supported by our robust policies and business strategies. We have made strong efforts for deposit mobilization. Almost all the segments of the market are tapped by us for marshalling deposits. Our real test was to deploy the available resources in most efficient manner in order to reach the optimum level of productivity minimizing the overall risk. This is where we, the Bank of Punjab, have stood most successfully as evident from our record results of past three years. Beside corporate sector, we are also aware of the opportunities arising out of consumer and SME sector. We have contrived a very comprehensive strategy with the aim to continuous enhancing performance also in consumer and SME sector together-with yhe corporate sector. The strategy is based on offering relevant, tailored consumer banking products for the niche market rather than offering generic products foe the entire segments of the market. Targeting this niche market has not only saved huge marketing and advertising costs but also helped the bank achieve most of the share of its consumer loan portfolio fully secured. Another significant achievement of this strategy is increased customer base as the customers have to open their accounts with the bank of Punjab in order to avail a certain facility. Information Technology, nosegays, has become a very prominent booster in daily operational activates of almost all business segments. Employing Information Technology for cost effectiveness and to increase efficiency has become a global truth and practice. We are definitely not unaware of this fact, as we have embarked upon a pretty ambitious project of designing our own core banking system in collaboration with a local leading software company. We have accomplished a lot in the past years, and we are certainly gratified by our performance results. But we are not the ones who rest on their accolades. BOP's management is very optimistic for year 2007. There are challenges and opportunities ahead that both keep us up at night and inspire us to charade into the office every day to keep growing our bank, the Bank of Punjab.
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President of BOP NAEEMUDDIN KHAN
BANK MANAGEMENT
ADMINISTRATION DIVISION ADMINISTRATION DIVISION The administration division of the bank in Lahore (The Head Office). In the administration division all the record related to the officers that they kept. It is the duty of the administration division or the personnel department in head office to make assessment for the requirement of manpower in each branch of the bank. This division also decides whether the employees are selected within the bank or outside the bank. The administration department makes the general policy for employees welfare, transfer posting, discipline action, medical converge insurance and group life insurance is also their responsibility. Their functions are:-
Recruitment Training Performance Review Salary Administration Executive Training and Development
FINANCE DIVISION This division is basically performed functions as a central body. It estimates the optimal investment, which the bank should invest for maximum profit. It also controls the expenditure of the branches.
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AUDIT & INSPECTION DIVISION This division performs the internal audit of the bank and inspects the sincerity of the employees with their work. CREDIT, TRAINING & SPECIAL PROJECT DIVISION General Manager heads this division. This division is related to the loans. This division provides loan to different departments according to their requirements as well as to the requirements of the people that how much they need the credit about their special projects.
RECOVERY DIVISION This division makes recoveries of the loans and advances which are not received even after maturity date. It also takes decisions for the recovery through litigation. OPERATIONS DIVISION It estimates and makes proposal to the administrative department about the opening of new branches at different places of the country. It also gives instruction to the branch manager regarding the purchase of the branch. It also helps the branches to make repairs and maintenance. Giving operational instructions to the branch manager also includes in divisions functions. BUSINESS PROMOTION & MARKETING DIVISION Like all other divisions the General Manger also heads this division. This division deals with the development of the software. This division also makes the planning in the development of the new software and computer programming so that the bank performs well and there is no chance for any kind of error. With this planning the bank improves its efficiency. This division also deals with
E-banking ATM cards
FUNCTIONS OF BOARD Policy formation Management of bank
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Corporate strategy Others functions OTHER FUNCTIONS The board of directors also performs the following important function. Risk management HRM including preparation of a succession plan Procurement of goods and services Marketing Determination of terms of credit discounts to customers Write-off of bad/doubtful debts, advances and receivables Acquisition/disposal of fixed assets Investment Determination and delegation of financial powers Health, safety and environment Borrowings of money and the amount is excess of which borrowing shall be sanctioned by a general meeting of shareholders Demotions, charities, contributions and other payments of a similar nature.
TOTAL BRANCHEs
Faisalabad Total Branches: 43 Gujranwala Total Branches: 45 Karachi/Quetta Total Branches: 05 Lahore Total Branches: 67
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Multan Total Branches: 63 Rawalpindi Total Branches: 37 Peshawar Total Branches: 06 Other cities Total 06 272
OWNERSHIP In 1989 the percentage of ownership was Government of Punjab owned 60% and autonomous bodies, general public and foreigners owned 40%. After that with the inclusions of foreign investors the ratios was disturbed as: Government of Pakistan General Public + Autonomous 51.50% 48.50%
MANAGEMENT HIERARCHY
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Central Management Hierarchy
Hierarchy on the basis of Power
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Bank Management Hierarchy
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Regional Offices
Management at Head Office
ONLINE BRANCHES There are 247 online branches of BOP working all over Pakistan. Here are only the online branches working in Lahore region: Sr. No LAHORE REGION Code Tel 9200419 9200187 7353427 9212170 9212171 9230254 9230451 0492 9250167 Fax 9200351 7353541 9212169 -
1 2
Main Br., Lahore Kasuri Tower
Civil Sectt.
4 5 6
Model Town Railway Road, Kasur Sahiwal Road Okara
9250098
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Shadman Branch
7565594 9212207 9212205 9220644 6361797 5724364 5722885 9231236 66365106 6820414 7119984 7281789 7230823 5758370 9220640 6362038 7236987 7448024 7574329 7723200 9220643 6361459 5880475 7928889 9230342 5417627 7590964 7725400 9220642 9212208 9220644 6361797
8 9 10
Bank Square Saddar Bazar Temple Road
11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
LCCHS New Muslim Town Garhi Shahu, Lahore Baghbanpura Chouburji Shad Bagh Bilal Gunj Empire Center Cavalary Ground Sadiq Plaza, Lahore Patiala Ground Karim Block Wahdat Road Ravi Road Br., Lahore Tufail Road Mcleod Road, Lahore Link Model Town Kot Abdul Malik Gulshan-e-Ravi Liberty Market
5724365 9231236 6315236 6871053 7237554 7605162 7230823 5710063 9220635 6362067
5710221
5873291
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31
Township
5110455 7729340 7704776 7596580 7722394 7577778
32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54
Badami Bagh Icchrah Depalpur New Garden Town Pak Block Chattan Building New Anarkali Samanabad Johar Town Shahdara Auriga Complex Mustafa Abad Pattoki Begum Kot Walton Road Jinnah Hall Mandi Road Okara Multan Road Central Model School IslamPura Mazang Chungi Circular Road, Lahore Rang Mahal, Lahore
5881812 7841592 7233679 7238742 7573525 5313340 7931121 5750688
5833812 7841593 7228568 7239504
7931738 5750086
6660504 9212172 912173
7593347 7249815 7247251 7586689 7660810 7656765 7668399
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55 56 57
Defence Road Mustafa Town Lytton Road
6666060 5424668 7234921 6317456 6317334 7721403 7119714
6666060 7832268 7313057 -
58 59 60
Corporate Br., Lahore Lady Walington Sanda Road Services Hospital Jail Road Br. Queens Road Chunian Raiwind Renala Khurd Dera Chal
61 62 63 64 65 66
7591326 6362975 04946 310136 311212
FOREIGN EXCHANGE BRANCHES FOREIGN EXCHANGE BRANCHES The Foreign Exchange Branches are listed below; Main br., Lahore, Railway road br., Sialkot, Quaid-e-azam road, Multan, Kasuri tower, Lahore, Trust plaza, Gujranwala, Shaheen chowk br. Sargodha, Model town, Lahore Railway road, Faisalabad, Circular road br., Gujrat, Gul-eakra plaza, Rawalpindi Railway road, Kasur, Shahi rd,Rahim Yar Khan br, Bank square, Lahore, Ram din br., Jhelum, Lcchs, Lahore, Empire center, Lahore, Madina town br., Faisalabad, Karim block, Lahore, Ravi road br., Lahore, Satellite town, Rawalpindi, Badami bagh, Lahore, Bhera Circular road, Lahore, Corporate br., Lahore, Blue area, Islamabad, I. I. Chundarigar Karachi, Saddar road, Peshawar, Mir pur br., AJK, Chowk yadgar, Peshawar, Malir halt, Karachi, Shahra-e-faisal Karachi, Jinnah road, Quetta, Khurrian wala, Faisalabad Mardan branch, Abbottabad branch. CORRESPONDENT BANKS CORRESPONDENT BANKS
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The correspondent banks of Bank of Punjab are; Standard Chartered Bank, Bank Saderat Iran, National Bank of Canada, United Bank AG Zurich, Danske Bank Akteisalkab, Commerz Bank, National Bank of Pakistan, ABN Amro Bank, Habib Bank Ltd, City Bank NA.
SERVICE PROCESS & DEPARTMENTS
THE BANK OF PUNJAB
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DEPARTMENTS AT BANK OF PUNJAB The fields of activities of The Bank of Punjab are considerably wide and deal them with great success. The areas of activities covered are as following: 1. General Banking 2. Commercial Banking 3. Corporate Banking 4. Agricultural Banking 5. Consumer Banking 6. International Banking 7. E-Banking 8. Foreign Exchange 9. Business Promotion Banking 10. Different Service
Cash Department Account Department Credit Department Remittances Department Clearing Department Deposits Department Bill Collection Department The Bank of Punjabs Customer Service Division
Cash Dept.
Billing Dept.
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Cheque book & Pension Dept.
Credit Dept.
Cheque Posting Dept. PIMSAT
Current a/c, BBA a/c, PLS a/c FDR Cash (Fix) Deposit s Accoun t Openin g
Billing Fee Collecti on Deman d Notices of LESCO Clearin g
Pay Order Deman d Draft Online Services CDR Wester n Union
Statement s Over Drafts Prize Bonds Pension s Shares Applicat ion
Letter of Credit Advance s Foreign Exchang e Misc. ZARCO / Money Express
CASH DEPARTMENT Cash department is most important department because it is point of contact between the bank and customer. The Bank of Punjab provides efficient and personalized services to their customer. This department creates impression of bank commitment of professionalism in its system and procedures and to courteous and efficient customer service. So the staffs of cash department are well equipped and trained not only in technical handling of cash but also in the art of customer. This department of the bank deals in operations relation to cash accounts i.e cash receipts, cash deposits, sale purchase of prize bonds. The main purpose of cash department is that it deals in money. As bank is borrowing and lending institution, therefore cash is the top most priority of Bank. Another aspect is that cash department is for the security purpose, security in a sense that there should be no embezzlement of funds or in money leaded to bank by any party or person
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FUNCTION OF CASH DEPARTMENT It includes: Receiving cash from the customer Making payment to the customer against their cheques or other payment instruments Handling cash withdrawal and deposit into the bank account with State Bank of Pakistan and with other branches of bank. Ensuring proper storage safety and security of the cash in cash and in transit. Ensuring proper cash management and storing out of issue able cash into the denominations. Maintaining daily cash positional register transfer of cheque from one account to other account and shift the cheques of other bank to clearing department. CASH DEPARTMENT HAS TWO COUNTERS Cash Receipt Counter Cash Payment Counter
CASH RECEIPT COUNTER CASH RECEIPT COUNTER If the customer wants deposit in his account then he fills the pay in slip. In pay in slip, the customer writes his account title, account number, amount in figures and words, particulars mention the mode of deposit either cash or cheque and sign it. The customer makes his payment to cashier along with the pay in slip. The cashier checks the details of pay in slip and if the customer gives broken cash then its detail are written by the cashier at the back of a in clip. Then he enters into cash receipt book and transfers it to the officer. The officer credits the customer account with same amount. He posts the transfer stamp and sign on pay in slip. Finally, the cashier returns the sign counter foil to the customer CASH PAYMENT COUNTER CASH PAYMENT COUNTER
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When the customer presents the cheque to withdraw the money the cashier check its date, amount in figure, signature and either it is of The Bank of Punjab branch or any other branch or it is branch of other bank. If it is of The Bank of Punjab Mustafa Town branch with right date then cashier enter into cash payment book and transfer to the officer. The officer feed the amount number to the cheque that demands amount is available in his account. If amount is available then he verifies his signature from SS card already feed in computer The officer passes the cheque and debits the customer amount with the same amount and posts the stamp of transfer it. Then cashier makes the payment to customer and writes the detail of notes at the back of cheque in maintains daily cash position. The cheque can be returned to customer due to following reason: If the cheque is post dated; i-e some future date is written on it. If the date is of 6 months back If the amount is not available to customer account Is the signature is not verified by the SS card If the amount in figure and words in different If any cutting is made on the cheque TRANSFER OF CHEQUES TRANSFER OF CHEQUES If one account holder wants to transfer some account from one account to another, then he will give the cheque favouring the other account holder and also fill the pay in slip. The cashier after checking the details and enter in the register transfer to the officer. The officer transfers the mentioned amount from one account to another. MAINTAIN THE CASH POSITION MAINTAIN THE CASH POSITION The cash department maintain the daily cash position due to following two reasons: All the banks are advised to maintain liquidity limit according to SBP regulation All the funds of the bank are insured to a limit. When the funds in branch exceed from these two above mention limits then branch office report to head office of the bank. The head office takes appropriate measure to maintain these limits.
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REMITTANCE DEPARTMENT Remittance means transfer of money from one branch to another branch. The bank charge commission for this type of transfer. The Bank of Punjab provides various services. In this department the internees are advised only to observe the working of the transfer of money from one place to another place of the country by the above modes of transferring money .During my stay in this department I observed that how these remittances are issued. The bank receives the written request from the customer for DD/PO/TT/OT .The followings are the main function of this department. Remittance can take place in these ways Demand Draft (DD) Pay Order (PO) Online Transfer (OT) Call Deposit Telegraphic Transfer
Demand draft, Pay Order, Online Transfer, Call deposit and all have the same remittance form in Bank of Punjab. If a customer want any of the above facilities then he have to fill a form that contains the details about Beneficiary and Benefactor. Beneficiarys Detail: The applicant or benefactor has to fill the beneficiarys information such as name of beneficiary (Receiver), Account No, Amount, Account Title, C.I.N.C No., Beneficiarys bank, branch code, address and City. Benefactors Detail: The sender of the remittance is called the benefactor he has to fill these requirements name, Copy of C.N.I.C No, Address, City, Contact number. 2.2.1 PAY ORDER PAY ORDER Pay order is used where the payment has to be made within a city. Pay order form has two parts, one for the applicant and 2 nd for the band record. Customers fill from and pay the cash to the cashier at counter. Cashier collects the cash and gives the 2nd slip to the applicant. The applicant presents the slip to the officer. Officer authenticates the Pay Order and makes entry in the computer. The officer
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prints a pay order, containing the name and branch of Drawers bank and the Drawees bank along with their codes. Then this pay order is given to the drawer. Bank charge Rs. 50 for the account holder of the branch and the persons other then the account has to pay Rs. 200 for each pay order. And there are no charges for the issuance of pay order to the Government. The amount can be paid through cash or cheque. DEMAND DRAFT DEMAND DRAFT Demand Draft is used where the payment has to be made out of city. The process of Demand Draft is similar to the Pay Order process. Demand Draft form has two parts, one for the applicant and 2 nd for the band record. Customers fill from and pay the cash to the cashier at counter. Cashier collects the cash and gives the 2nd slip to the applicant. The applicant presents the slip to the officer. Officer authenticates the demand draft and makes entry in the computer. The officer prints a Demand order containing the name and branch of Drawers bank and the Drawees bank along with their codes. Then this pay order is given to the drawer. Bank charge Rs. 50 for the account holder of the branch and the persons other then the account has to pay Rs. 200 for each pay order.
At last PO/DD/CDR is signed by officer and PO/DD/CDR is ready Cancellation Of Demand Draft In case of cancellation of demand draft the client has to give an application to the bank that the DD is not longer required and has to sign on the application. After proper verification of the signatures, officer will cancel the DD and will pass the
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entry by debiting to head office and crediting partys account. The bank then issues a debit advice to the main office. The bank charge Rs. 200 for the cancelation of the Demand Draft.
TELEGRAPHIC TRANSFER (TT) TELEGRAPHIC TRANSFER (TT) The transfer of funds by means of fax or telegram is called telegraph transfer. It is fast way to transfer of funds from one branch to another of same bank. The amount will credit to the beneficiary account within 24 hours. TT application form is filled by the customer. The bank officer enters into TT issued register. The bank officer writes the message and apply test on the TT message and give appropriate instruction such as advice and credit or advice & pay telegraph transfer receipt is issued to make cash payment to the beneficiary. The beneficiary bank enters it into TT payable register and credit to beneficiary account. But if the beneficiary has no account, then payment will be made by TTR. It is quick mode but it is not used for business purpose and preferably used for personal use. ONLINE TRANSFER ONLINE TRANSFER W hen the customer wants to transfer the money to the other branch of Bank of Punjab, within city or out of city, after filling the form and deposal of money the bank officer get connected to the online status and enter the branch code of the other branch, and then the account number of the receiver is entered. All informatio n about the account holder is queried on the screen then the entry is made.
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Procedure of Online Transfer of Money
Then the other officer authenticates the entry then the amount is credited in the account of the receiver. This process is called online transfer. 2.2.3 FOREIGN REMITTANCES FOREIGN REMITTANCES Now a facility is available in the BOP that we can also send or receive the money from outside the Pakistan, using the Western Union . The sender of the money sends he money through W estern Union, he deposits the money to the western union to send the money to the other country. The western union gives a 10 digits code number to the sender of the money which is private and confidential. The sender gives the ID card number and other the information of the receiver to the western union. Thus the money is transferred within 15 minutes. Sender of the money discloses the 10 digits code number to the person who will receive the money after mentioning the 10 digits code number. Thus the online transfer is made. The Bank of Punjab also used the services of ZARCO.
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ACCOUNT OPENING DEPARTMENT In this department, I gain the practival knowledge about opening account. This department deals with Current Account Saving Account Basic Banking Account Accounts are opened for its custoemrs and all matters regarding thereof. The customer opening current and saving account can be categorized as follows Individual account
Copy of computerized national identity card required One account holders reference
Joint account Copy of CNIC required
Proprietorship account Copy of partnership deeds Identity cards of partners
Partnership account Ltd company (Pvt/Public) account Trust/club/society account Govt. (District/provincial/Federal) account Others. ACCOUNT OPENING PROCEDURE ACCOUNT OPENING PROCEDURE In order to open an account, first of all the customer have to fill a from prescribed by the bank. The person is required to bring some references or introduction for opening the account. Introduction may be the person wo has any account with The Bank of Punjab. Introducer is written on space prescribed on the specimen signature card. Then in order to find out whether he is true introducer or not, a lettr of thanks is sent for his introduction so that nay thinkg worng may come into notice.
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ACCOUNT OPENING FORM The bank officer fills each every column of account opening from correctly with all necessary details. The specific information is recorded in the form. It is preferred that the customer in the presence of introducer fills account opening form. INTRODUCTION OF ACCOUNTS It is the most important column of account opening form. Without the proper introduction, the new account cannot be opened. The bank officer consider following precaution in this respect. The introducer should come with prospective customer to the bank, so there will be no doubt about the identity of customer. If the introducers do not come then office must take extreme care about his signature verification. Introducer having doubtful dealing with the bank should be discreetly declined. Current account holder cannot be introducer of both types of deposit but saving bank account holder cannot be the introducer of current account holder. But in exceptional cases then can introduce when saving account holder maintain substantial balance and they are old and operative account. The staff member can become introducer if they personally know to the prospective customer. NATIONAL IDENTITY CARD The bank officer check that number of national identity card is correctly recorded in the AOF and a copy of national identity card is kept in record SPECIMEN SIGNATURE CARD (SS Card) The bank officer takes signature on AOF and specimen signature card. Latterly this card is scanned in the computer and when ever customer makes any transaction in his account then his signature is verified by it. LETTER OF THANKS A letter of thanks is sent to customer through mail to verify his address. And A letter of thanks is send to introducer to verify him as introducer.
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Account Opening Procedure TYPS OF ACCOUNTS CURRENT ACCOUNT CURRENT ACCOUNT Current account holders are those who can withdrawal their amount any time in banking hours by presenting a cheque. He may thus withdraw the money several times in a day usually type of account is open by the businessmen. The current account can be open with minimum amount of Rs. 500 in The Bank of Punjab. Current Deposit Accounts are opened normally with a minimum of Rs 5,000.00 as initial deposit. Withdrawals will not be allowed against postdated (payable on any future date) and stale (06 months after issuance date) Cheques and against un-cleared funds. Where any account is not conducted to the satisfaction of the Bank, the account may be closed without any notice and the balance will be remitted to the depositor at the address given by the Account Holder(s).
SAVING ACCOUNT SAVING ACCOUNT As the entire banking system has been converted into PLS system i.e noninterest base, instead of interest based banking system. The general public with minimum Rs.100 can be open. Mark-up rat fluctuates from 6% to 9%. For
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withdraw of larger amount seven days notice in writing is required to be given. The Zakat of 2.5% per annum is deducted on these accounts. Statements of saving accounts are provided to customer twice in a year as on June 30 and December 31.profite is paid at the end of June and December at a fixed rate and this profit is calculated at minimum month balance this element of profit encourage the habit of saving among the people BASIC BANKING ACCOUNT BASIC BANKING ACCOUNT
The BBA (Basic Banking Account) in The Bank of Punjab specially designed to targets the persons with low level income. This account favours these persons to deposit their amount in the bank and bank does not deduct any kind of charges on these accounts. ? WHO WILL OPEN THE ACCOUNT?
The branch manager is responsible to handle job of account opening but in some cases, it is assigned to other officers. Information at the time of opening of account, than bank officer must assure that customer has the following characteristics: The customer must have the age of majority, it means it must be the age of 18 according to law. The customer must be of sound mind. The customer must not be bankrupt and insolvent. The customer must not be debarred under any law from entering into any contract
INDIVIDUAL ACCOUNTS Individual accounts are classifies as: Accounts of literate ladies and gentlemen. Accounts of illiterate ladies and gentlemen. Accounts of parda observing ladies. Joint Accounts. Minor Accounts.
JOINT ACCOUNTS The bank will fulfil the stop payment instruction of any cheque lodged by any member of joint account but removal of these instructions must be signed by the entire member. If any member dies then there will be no transaction in the account and balance in the account will be paid according to instruction recorded at the time of account opening. The member of joint account can delegate authority to any third party to operate the account. All the members sign such mandate but it will be cancelled if any of the members dies, insolvent of insane.
JOINT STOCK COMPANY ACCOUNT Joint Stock companies include: PRIVATE LIMITED COMPANIES The companies whose share capital is not offered to the general public instead the offer is restricted to particular class of society or within the family members called private limited. These companies are not listed in stock exchange and are not transferable.
PUBLIC LIMITED COMPANIES: Promoters and general public contribute the share capital of these companies. These companies are listed in stock exchange and their shares are transferable and brought and sold freely in stock exchange. CHEQUE BOOK DEPARTMENT
The Bank of Punjab provides a safe service of Cheque books. The each cheque is entered in the computer and the account holder name is printed on the each cheque. In this ways, there are minimum chances of fraud. The process of new cheque book is to fill a cheque book requisition application this requisition is sent
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to the Karachi. Where the cheque book is printed and sent back to Lahore. This service process takes 7 days to be completed. If the client is illiterate then an additional stamp of thumb impression is necessary on each leaf of the cheque. It means that such cheque can only be cashed when the account holder is present to withdraw the cash. For the very first time, the cheque book is issued to the account holder only for the security of the account holders. Second time any authorized person of the account holder can get the cheque book. The number of each cheque book is already entered into the computer. ATM CARD SERVICE ATM CARD SERVICE The ATM card form is filled then this form is sent to Karachi. The ATM card is prepared and sent to Lahore. This process takes 7 days to be completed. The account holder is required to present itself to get the ATM card. The ATM card enclosed in private and confidential envelops.
Cheque Book/ATM Card Process
BOP Apna Cash Card is an ATM plus Debit Card.
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The front of the card will have the following matter on it: Card Holders Name International Bin Number (6 Digits - XXXXXX) Card Number (YYYYYYYYYY) (total IMD+CARD num has to be = 16) The back of the card will have: Magnetic Strip Signature Panel Conditions of Usage M-Net and M-Net logo CLEARING DEPARTMENT
It originated many years ago when clerks from various banks had the job of taking around the other bank offices, bundles of cheques for payment. The clerks used to meet at a state banks clearing house. Before in Pakistan National Bank of Pakistan provides the clearing house facility. Now the NIFT (National Institution of Facilitation of Technology) has under taken this working. All the banks make their cheques cleared through NIFT. NIFT supervision the whole clearing functions. It collects all cheques send in clearing from the bank an collects it in their own clearing house. The next morning the cheques are presented to the paying bank. The bank after verifying all manners debit the account of the customer and prepares an advice which is send to the NIFT. There are two types of clearing Inward clearing Outward clearing
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BOP
NIFT
OTHER BANKS
Clearing House Facility (NIFT)
The NIFT attached an advice with the cheques of a particular bank. The bank varifies the cheques date, signature, clearing stamp and suficient balance of the customer then makes the entry in the computer. There are Local bills for collection(LBC) Other bills for collection (OBC)
LOCAL BILLS FOR COLLECTION (LBC) LOCAL BILLS FOR COLLECTION (LBC) The bills/instruments of local city are called the local bills for collection. A seperate register for LBC is maintained by The Bank of Punjab. OTHER BILLS FOR COLLECTION (OBC) OTHER BILLS FOR COLLECTION (OBC) The bills/instruments of out side the city are called the other bills for collection(OBC). A special register is maintained bye the Bank for OBC. REJECTION OF THE CHEQUE REJECTION OF THE CHEQUE In case of rejection of any cheque a cheque return slip is attaced along with cheque. The slip contains various reasons for the rejection of the cheque. The entry of rejection is also made in manual registers called cheque returm register. The rejected cheques are also sent back throug NIFT along an advice. The NIFT
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representer comes two time in the bank. First in the morning for inward clearing cheques and at afternoon for outward clearing cheques. INWARD CLEARING INWARD CLEARING When the account holder of the Bank of Punjab make payments via cheques to the account holders of other Branchs of Bank of Punjab or other banks, these cheques are presented to the account holders branch by NIFT, is called the inward clearing Let suppose account holder of BOP pay someone the amount via cheque. But the receiver of the cheque has his/her account in other bank, such as, MCB, ABL, and UBL etc. so the receiver of the cheque deposit the cheque in its own bank account. Now it is the responsibility of the receivers bank to collect the amount and credit in the bank account of the receiver. This is called clearing. Now a day NIFT (National Institution of Facilitation of Technology) has undertaken this job. Before clearing was done by the State Bank of Pakistan (SBP) or National Bank of Pakistan (NBP). OUTWARD CLEARING OUTWARD CLEARING When the cheques of other banks are deposited by the branch account holders in the branch, these cheques are sent for collection through NIFT, this is called outward clearing.
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CREDIT DEPARTMENT The Bank of Punjab provides various finance facility to the general public, Businessman and to agriculture sector. The Bank of Punjab provides a specified credit limit decided. The customer can withdraw cash within credit limit as and when you require. The interest is charged only on the consumed amount and for the number of days the credit is used. Finance Amount: Up to Rs 1 Million revolving credit limit. C R E D I T L I N E P R O P O S AL ( C L P ) C R E D I T L I N E P R O P O S AL A credit line proposal is made for those clients whose credit limit has been approved by the banks credit departmen t O N E T I M E T R AN S AC T I O N ( O T T ) O N E T I M E T R AN S AC T I O N An one time transaction for a client who has no approved credit limit, but the bank is doing business with that client on a one-time basic.
TYPES OF ADVANCES
RUNNING FINANCE RUNNING FINANCE

The businessmen meet the need of working capital requirement of business by getting finance/credit form the banks. Its a form of short term because the credit is granted for one year after which agreement expires and then borrower must pay back the loan or can get it renewed for another one year. The payment is made on demand or on expiry. A special cheque book is issued to borrower. The borrower can boost this competence through its time period. The limit is authorized to the borrower which is a rotating limit, means, by repaying limit can be utilized another time if the time does not expires. Markup is charged quarterly on outstanding amount of loan. There are two types of finance modes CFH (Credit Finance against Hypothecation) CFM (Credit Finance against Mortgage) ) CREDIT FINANCE AGAINST HYPOTHECATION CREDIT FINANCE AGAINST HYPOTHECATION It means the charging of property to a creditor while the property itself remains in the possession of the debtor or at least does not pass in to the cred itors possession. It is a verity of mortgage. Stocks of goods in the possession of a debtor may be hypothecated to the banker and in the letter of hypothecation the debtor undertakes. To pay the proceeds of sale of such goods to his current account with the banker. To have the stocks adequately insured against fire, riots and civil commotion with the usual bank clause incorporated in the policy
CREDIT FINANCE AGAINST MORTGAGE CREDIT FINANCE AGAINST MORTGAGE A mortgage is the transfer of an interest in specific immoveable property for the purpose o securing the payment of an existing or future debt or the performance of an obligation that may give rise to a financial liability. Before advancing mortgage against immovable property as security, the bankers conduct following preliminary enquiries Nature and value of property Investigation of title Search for prior charges CASH FINANCE
CASH FINANCE Cash finance is generally sanctioned against pledge of goods. In this case the goods pledged are seasonal in nature; the customer is being required to regulate this feature before the period Completes. Under this type of financial accommodation the facility amount is disbursed in specially opened account for the purpose. The pledged goods are unrestricted to the borrower when the customer pays back the loan to the bank. CRITERIA The customer has to meet the criteria for advances against pledge of goods. Loan is disbursed in specially opened CF A/C for the purpose. It shall be ensured that Goods tendered for pledge are When there is variation in pricing is observed during periodic assessment, the customer shall be advised to make good the deficit in the drawing power. The Goods should be free from credit restrictions obligatory by State Bank of Pakistan (SBP). The Goods should be easily saleable and their price is not extremely fluctuating. If so higher margins shall have to be approved & retained It shout not be perishable and do not need particular storing arrangements/conditions and have short expiry period. DEMAND FINANCE DEMAND FINANCE Advances are also made next to fair mortgage of property, whereby the original title actions are deposited with the Bank as Security and the charge is registered with the Registrar SECP.This credit facilities provided next to registered mortgage of property (i.e, land/buildings constructed or to be constructed) is by nature classified as a Secured Advance. An official charge on the property is established and recorded with the registrar land and property termed as Registered Mortgage. When the Finance is sanctioned to Limited Companies, where the original documents of Land/Building and other Fixed Assets are supposed by the senior charge holders, our charge (Pari-Pasu or ranking) as approved by Credit Committee, shall be recorded with the Registrar Securities & Exchange Commission of Pakistan (SECP). However, in case of Pari-Pasu Charge, NOCs from the senior Charge Holders shall be obtained before registration of charge
with SECP. In case of borrowers failure to liquidate the obligation, or on classification of the advance to Non-Performing the Bank has a legal recourse to apply for a decree in a court of law, to sell off the mortgaged property through auction as ordered by the court. CRITERIA Demand finance are allowed to be availed by the clients only on receiving of a formal DAC issued by RCAD & duly signed by CAD Head. CAD shall issue DAC only when charge Documents & Securities as spelled out in the authorize recommendation have been arriving and stuck in the safe vault, however in rare cases DAC shall be issued where some of the secondary nature documents are not received for acceptable reasons and that the deferment is approved for a specified period by the level of the authority as given below:Formal approval for deferment of specified documents from Credit Committee shall be necessary, in terms of Credit Policy.
SMALL & MEDIUM ENTERPRISE (SME) SMALL & MEDIUM ENTERPRISE This facility is up to RS. 75 million amount of advance, an entity falls into SME in BOP along with an entity, preferably not a public limited company, which does not use more than 250 personnel and 50 persons and also fulfills the following criteria That any concern with net sales not beyond RS. 300 million as per financial year A mechanized concern with total assets at cost not including land and building RS. 100 million A trading/service concern with total assets at cost excluding land and building up to RS. 50 million An individual, if needs the above policy, can also be categorized as an SME.
CORPORATE FINANCIG CORPORATE FINANCIG BOP if amount of loan is more than from RS. 75 million, loan tends into corporate category. Terms and circumstances for the corporate body;
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Demand for loan CIB description Special guarantees necessary Security vacant Assessment of the security Charge on assets of business BBFS (Basic Fact Sheet) Creation of credit approval package Lawful outlook from the legal advisor of the bank Financial analysis of the balance sheet, profit and loss account and cash flows which are projected Credit approval letter is sent to the H.O for advancing of loan Then the bank makes the facility of offered letter in which all terms and condition of loan are mentioned Authority letter signed by the customer to use his deposits, (TDR) in case of fraud then after letter of disbursement disburse the loan PROCEDURE OF GETTING FINANCE PROCEDURE OF GETTING FINANCE
When a corporation comes for the credit assistance, the credibility of the corporation is confirmed in the market. Then application is made and endorsed to head office. The head office receives credit Sanction Approved (CSA). After consent charge is taken on certain assets of the company requesting for credits. Then the party singes this security sheet. After this Disbursement Authorization Certificate (DAC) is complete. The reason of building of DAC is that the party completes documentations next to the particular confines. In a DAC following details are written: Name of the branch Name of the party Nature of finance
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Account of finance Sanctioned Advice no Expiry date Limit approved by After mentioning the necessary documents required are promissory note hypothecation certificate, which is actually the detail of the assets on which the bank takes charge. The mark-up is then calculated, after the calculation of markup, the customer is sent MUP letter in which the mark-up on his requested credit limit is given. The credit recovery department of the bank takes charge on companys assets. The customer to each bank from which he is taking credit submits joint Pari Passu of Hypothecation.
BUSINESS PROMOTION & MARKETING DIVISION
THE BANK OF PUNJAB
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3.1 BUSINESS PROMOTION SCHEMES
The Bank of Punjab provides efficient services at minimum cost. It differentiates itself from other bank due to its worthiness and a premature Goodwill. BOP was formed for the Punjab province. Punjab province formed this bank by passing a bill in the National Assembles. It is another major characteristic of the BOP, which differentiates it from other banks. The Goodwill of BOP differentiates itself from other. BOP charge lowest rates in online transaction, remittances as compared to other banks. The Bank of Punjab differentiate itself by providing such services BOP Quick Cash Scheme BOP Car Loan Scheme BOP House Loan Scheme BOP SME Loan Scheme BOP Aasaish Loan BOP House Loan for Federal Govt.
3.1.1 BOP QUICK CASH BOP QUICK CASH Bop quick cash is running finance facility provided to salaried individuals through their bank account with BOP purchase of consumer items or personal needs. The facility is an alternative to consumer financing offered by banks except it is R/F instead of Demand finance which is more favourable to borrower. You can get this personal loan from BOP if you are: ELIGIBILITY Between 25 and 55 year of age Permanent employee of selected organizations having at least 3 year experience Computerized National Identity Card You net take home salary is Rs.15,000 & above as mentioned on salary slip For Govt. Employees net take home salary is Rs.10,000
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BOP CAR LOAN BOP CAR LOAN Easily affordable & flexible Instalments Quick processing Minimum down payment Minimum Insurance BOP car loan is demand finance facility to purchase brand new locally manufactured/ assembled car for personal use. You can avail the facility if you are: Salaried person: Permanent employee of selected organizations with at least 3 year service minimum takes home salary of Rs. 15,000. For Govt. employee net take home salary is Rs. 12,000 Self employed: business person and professional having minimum 3 year in current business Between 25 to 55 years of age Minimum amount is Rs. 200,000 and maximum amount is Rs. 1,000,000. Loan is available for a period of minimum 3 year and maximum 5 years. Most competitive rate available in the market. Down payment is 10 to 20% of car value.
BOP HOUSE LAON BOP HOUSE LAON Bop house loan is long term finance facility for purchase of house flat or construction of house on self owned plot or for renovation home improvement. You can avail this facility if you are
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Salaried Person: permanent employee of selected organization with a minimum takes home salary of Rs. 20000. Self employed: Business person and professional having minimum 5 year in current business. Holder of CNIC Between 25 and 60 year of age. Most competitive rate in the market which will be the calculated on daily product basis (for each year new amortization schedule will be provided to the customer in case of any change in the mark-up)
OTHER CHARGES MUNAFA HI MUNAFA MUNAFA HI MUNAFA Another example is Munafa hi Munafa Scheme in The Bank of Punjab, this scheme provide the return @ 11% per month. This scheme attracts a large number of customers.
AGRICULTURAL SCHEMES The Bank of Punjab also supports the agricultural sector. A number of schemes were introduced by the BOP to facilitate the KISAN sector. Such as Kissan Dost Agricultural Finance Scheme Kissan Dost Tractor Finance Scheme
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Kissan Dost Aabiari Scheme Kissan Dost Mechanization Support Scheme Kissan Dost Farm Transport Scheme Kissan Dost Eslah-e-Arazi scheme Kissan dost live stock Scheme Kissan Dost Live stock scheme Kissan Dost Commercial Agro Services Finance Scheme Kissan Dost Agri Mall Finance Scheme While doing this all the centre view of the BOP management is the Customer.
SWOT
A N A L Y S I S
STRENGTH
WEAKNESS
OPPORTUNITY 3.4.1 STRENGTHS STRENGTHS
THREATS
Over the years, the Bank has proved its strength as a Leading Banking Sector Entity by receiving several awards for quality banking services as well as by achieving the following firsts in Pakistani Banking: (First bank to offer) Countrywide on-line real-time banking: Nation-wide on-line ATM Network, Internet Banking Services, E-Commerce agricultural Solutions. The major strengths of BOP are as follows:
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LEADERSHIP IN TECHNOLOGICAL INNOVATIONS Technology rapidly changes and the bank of Punjab thinks, act and does business with respect to the current technology. By adapting to the new technology, the bank of Punjab has achieved success in enhancing customer expectations, particularly with respect to speed and quality of its service.
INTERNET BANKING Internet Banking Services" are offered by the bank of Punjab for purposes of remotely accessing certain banking services through the Internet, which have otherwise been made available by the Bank through traditional means. By availing Internet banking facility, the customers can check their account balance, transfer their balance and take a print out of their bank statements.
PHONE BANKING SERVICE & INTERNET BANKING FACILITY The Banks Phone Banking service and Internet Banking facility allows customers to enjoy routine banking services from anywhere in the world, 365 days a year, 24 hours a day. The bank of Punjab has also pioneered e-commerce venture in Pakistan through a major retail distributor.
DISTRIBUTION CHANNELS Bank of Punjabs customer needs are changing and their expectations are growing. Technology is fast proliferating the distribution channels and now banking services can be accessed from multiple contact points. The Bank believes that balanced growth is the key to survival in today's global banking environment. From a humble beginning with just few branches in 1989, today bank of Punjab enjoys a network of 266 outlets, spread across the country. COST CONTROL PROCEDURES The Bank of Punjab employs certain cost control procedures. Each branch is assigned a list of budget and Discretionary Power (DP) for the expenses. The DP percentage is 20%. At the end of each month, incurred expense and budget is compared, if certain expense exceeds the budget but within DP limit i.e., 20%, then, the amount is sent to Regional office for approval. When the expenses incurred exceeds the DP limit i.e., exceeds by 20%, then the report is sent to Head Office for approval. In this way, cost incurred by each branch is controlled, and is in the knowledge of Head Office and Regional Office if exceeds its limit.
3.4.2 WEAKNESSES WEAKNESSES Though the bank of Punjab has won several awards and achievements, yet the internal environment of BOP faces a number of weaknesses, which need to be resolved. The major weaknesses of Bank of Punjab are as follows: STAFF ALLOCATION Number of Employees is not equally allocated to each branch according to the load of work. In some branches there is understaffing, imposing burden over the employees. In turn, customer dealing is affected broadly. Whereas in some branches there is overstaffing. The employees are hired without any vacancy and they are not given their proper postings. MANUAL ACCOUNTING: Although most of the office work is computerized yet in some branches there is still manual accounting. In some departments vouchers are manually made which require much burden of work. The computers in branch are not properly connected. The employees have to make use of sneaker net. The employees face the major problem when they have to take printouts, the employee copy the data in floppy then after copying the data to the computer attached with printer, and they get printouts.
PROLONGED CUSTOMER DEALING The customer dealing is not very modified in the bank. The customer counter is not easily accessible to the customer. The clients instead of reaching the customer counter in the first instance, ask other officers for the help, which interrupts their work. In addition to this, the procedure of token wastes much time of the customer.
LACK OF EMPOWERMENT The office environment of The bank of Punjab is very tough and not very encouraging. The employees are not empowered with their jobs and thus they are not motivated to perform their jobs well and in efficient way. The staff is given limited authority, the reason being that they have fewer incentives to perform their duties well.
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HIGH EMPLOYEE TURNOVER The bank of Punjab tries to create a WE culture where there is mutual trust and respect for each other but due to the problems faced to employees of bank and due to bright and more attractive opportunities available outside the bank, the staff is switching over to other organizations.
1.4.3
OPPORTUNITIES OPPORTUNITIES
The emerging global trends and development in the service sector have created new opportunities and challenges in the realm of corporate strategy of Bank of Punjab. The Bank of Punjab has a nationwide presence of 266 branches. As of December 31, 2007, the Bank had total assets of Rs. 164,855,137,000 with satisfied customers. The opportunities of Bank of Punjab are as follows:
CORPORATE CITIZENSHIP The Banks role as a responsible corporate citizen is as important to the bank as the products and services it offers. Bank of Punjab has the major opportunity to achieve the corporate citizenship by delivering its products and services to its customers nationwide.
CUSTOMER RELATIONSHIP MANAGEMENT (CRM) PROGRAM The Banks qualified and experienced technology team is now focusing on data warehousing to enhance the Customer Relationship Management (CRM) program. This prog ram will enhance the Banks opportunity to achieve its goals in effective and efficient manner.
TECHNOLOGICAL INNOVATIONS Bank of Punjab enjoys a strategic competitive advantage over all domestic banks by virtue of its leadership in technological innovations. The Bank of Punjab has fully automated transaction-processing systems for back-office support. Its branch network is connected on-line real-time and its customers have access to off-site as well as on-site ATMs, all over Pakistan.
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ASSETS The total assets of Bank of Punjab have now exceeded to Rs.164 million and the bank has many products and services to match its customers' individual needs. As part of the Bank growth strategy, the bank is now extending its banking services to the remote and rural areas.
TAKING OVER PPC Bank of Punjab is completing the formalities to take over Punjab Provincial Cooperative (PPC) having 160 branches up to 31 st December of this year. This take over will increase its strength and business area. 3.4.4 THREATS THREATS We live in a whirlpool of domestic banks, giving their best services nationwide, so it is challenging for Bank of Punjab in this competitive era to attract new customers and keeping its old customers satisfied so that they would not switch to other banks. The threats facing by Bank of Punjab are as follows; POLITICAL INSTABILITY The countrys political instability is the major threat faced by Bank of Punjab. As the political conditions of Pakistan are very unstable so it is challenging for Bank of Punjab to continue it business in competitive banking sector. ECONOMIC CONDITIONS The economy of Pakistan is not very strong and is in fluctuating conditions so it is also one of the major threats for Bank of Punjab is to carry on its business in changing economic conditions.
OPERATING ENVIRONMENT Operating Environment of Banking Sector is a major threat for Bank of Punjab to maintain its existing position and to meet the challenges and prepare for the future.
COMPETITION WITH OTHER BANKS
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BOP has to compete with other banks in the banking sector of the country. The major competitor of Bank of Punjab is PICIC commercial bank and ABL. The bank of Punjab competes with other banks on the basis of agriculture. Bank of Punjab as a Commercial Bank has made certain strategies to cope with its rival banks and has succeeded to some extent. The bank is planning to overcome it major flaws and to achieve higher position in banking sector
FINANCIAL STATEMENT ANALAYSIS
The Bank of Punjab
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CONSOLIDATED BANLANCE SHEET 2011 ASSETS 2011 Rs.(000) CURRENT ASSETS Cash and balances with treasury banks Balances with other banks lendings to financial institutions Investments Short term performing advances Other assets 2010 Rs.(000) 2009 Rs.(000)
14,054,859 3,722,089
8,787,387 5,579,566 9,367,595 2,118,242
11,864,823 28,233,211
7,593,681 1,019,488 18,026,181 16,197,505
67,844,727 3,609,457
45,530,539 25,663,287 2,040,568 1,277,201
129,329,166 91,345,951 51,855,289 FIXED ASSETS Long term performing advances Operating fixed assets
33,475,227 18,093,166 13,775,636 2,068,744 1,715,061 689,486
35,543,971 19,808,227 14,465,122 TOTAL ASSETS 164,855,137 111,154,178 66,320,411
CURRENT LIABILITIES
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Bills payable Borrowing from financial institutions Deposits and other accounts Other liabilities
856,448 6,989,424
478,001 6,791,007
267,113 2,831,605
137,727,606 88,465,051 54,724,311 2,816,341 1,474,425 567,540
148,389,819 97,208,484 58,390,569 LONG TERM LIABILITIES Liabilities against assets subject to finance lease Deferred tax liability
40,988
55,403
81,795
298,616 339,604
220,177 275,580
8,964 90,759
TOTAL LIABILITIES NET WORTH
148,729,423 97,484,064 58,481,328 16,125,714 13,670,114 7,839,083
CONSOLIDATED PROFIT & 2011
LOSS ACCOUNT
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PARTICULARS
2011 Rs(000)
2010 Rs(000)
2009 Rs(000)
MARK-UP/INTEREST EARNED Mark-up/return/interest expensed Net mark-up/return/interest income Provisions against non-performing advances Bad debts written off directly NET MARK-UP/RETURN/INTEREST INCOME AFTER PROVISIONS NON MARK-UP INCOME Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Other income TOTAL NON MARK-UP INCOME NON MARK-UP EXPENSE Administrative expenses Provision against off balance sheet items Provisions against receivable from NIT Other charges TOTAL NON MARK-UP EXPENSES
11,643,963 7,573,722
6,125,093 2,555,039 2,668,739 719,074
4,070,241
3,456,354 1,835,965
340,626
327,373
46,940
100
3,623
121
3,696,515
3,125,358 1,788,904
473,212 1,385,875
255,149 753,669
172,873 554,218
239,804 855,498 2,954,389
93,208 228,749
41,311 328,361
1,330,775 1,096,763
1,751,970 175 38 1,882,183
1,274,971 1,116,097 4,744 11,461 364 32,064 1,217
1,291,176 1,149,724
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PROFIT BEFORE TAXATION TAXATION Current Deferred PROFIT AFTER TAX Unappropriated profit brought forward Transfer from surplus on revaluation of fined assets PROFIT AVAILABLE FOR APPROPRIATION
4,768,721
3,164,957 1,735,943
880,997 83,469 3,804,255 169,817
668,700 143,015
225,916 141,853
2,353,242 1,368,174 143,590 101,699
6,174
3,166
3,980,246
2,499,998 1,469,873
HORIZONTAL A N A L Y S I S (2010-11) Base year 2009 BALANCE SHEET (Rupees in Thousands)
2011-10
%Age
2010-09
%Age
CURRENT ASSETS
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Cash & Balances with Treasury Banks Balances with Other Banks landings to Financial Institutions Investments Short Term Performing Advances Other Assets FIXED ASSETS Long Term Performing Advances Operating Fixed Assets Deferred Tax Assets TOTAL ASSETS
5,267,472 59.94% (5,645,506) (60.26%)
3,207,821 57.49% 7,249,353 342.20%
4,253,142
56%
6,574,193
644.85 11.29
10,207,030 56.62% 18,287,676
22,314,188
49% 19,867,252 77.41% 763,367 59.77%
1,568,889 76.88%
15,382,061 85.01%
4,317,530 31.34%
353,683 20.62% -
1,025,575 148.74% -
53,700,959 48.31% 44,833,767 67.60%
CURRENT LIABILITIES Bills Payable Borrowing from Financial Institutions Deposits and Other Accounts Other Liabilities LONG TERM LIABILITIES Liabilities Against Assets Subject to Financial Lease 378,447 79.17% 210,888 78.95%
198,417 29.21%
3,959,402 139.83%
49,262,555 55.68% 33,740,740 61.56% 1,341,916 91.01% 906,885 159.79%
(14,415)
(26%)
(26,392) (32.26%)
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Deferred Tax Liability TOTAL LIABILITIES
78,439 35.26%
51,245,359 52.56% 39,002,736 66.69%
2011-10 NET WORTH Share Capital Reserve Funds and Other Reserves Inappropriate Profit Surplus on Revaluation of Assets
2010-09
2,455,600 17.96% 552,771 23.52%
5,831,031 74.38% 843,489 56%
1,596,833 54.30% 1,732,491 116.52% (1,426,495) (20.69%)
1,486,692 53.66% 26,227 18.26% 3,474,623 101.63%
HORIZONTAL A N A L Y S I S (2010-11) Base year 2009 PROFIT & LOSS ACCOUNT PARTICULARS 2010-11 Rs(000) MARK-UP EARNED Mark-up Expensed Net mark-up Income Provisions against non-Performing 5,518,870 % 201009 Rs(000) 90 3,570,054 139.73 %
4,904,983 183.97 1,949,665 271.1 613,887 17.76 1,620,389 88.26 13,253 4.05 280,433 597.43
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Advances Bad Debts written off directly INCOME AFTER PROVISIONS (3,523) (97.24) 3,502 2894.1 74.7
571,157 18.27 1,336,454
NON MARK-UP INCOME Fee, Commission and Brokerage Income Dividend Income Income from dealing in Foreign Currencies Other Income TOTAL NON MARK-UP INCOME
218,063 85.46 632,206 83.88
82,276 47.59 199,451 35.99
146,596 157.27 240,849 106.76
51,897 125.63 99,612 -30.34
1,623,614
122
234,012 21.34
NON MARK-UP EXPENSE Administrative Expenses Provision against off Balance Sheet Items Provisions against Receivable from NIT Other Charges TOTAL NON MARK-UP EXPENSES
476,999 37.41
158,874 14.23
175 (85.19 (27,302) ) 10,244 841.74
(4,744)
(100)
(11,423) (99.66)
591,007 45.77
141,452
12.3
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PROFIT BEFORE TAXATION Taxatio n Current Deferred PROFIT AFTER TAXATION
1,603,764 50.67 1,429,014 82.32
64,997
7.96
442,784 195.9 1,162 0.819
(59,546) (41.63)
1,451,013 61.66
985,068 71.99
VERTICAL A N A L Y S I S (2009-10-11) BALANCE SHEET
2011 Rs(000) ASSETS Cash and Balances with Treasury Banks Balances with other Banks
2010 Rs(000)
2009 Rs(000)
14,054,859
8.52
8,787,387 7.91
5,579,566 8.41
3,722,089
2.25
9,367,595 8.43
2,118,242 3.19
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landings to Financial Institutions
11,864,823
7.18
7,593,681 6.83
1,019,488 1.54
Investments
28,233,211
24.4 17.12 18,026,181 16.21 16,197,505 2 59.4 1135126 7
Advances Operating Fixed Assets Other assets
12068744
61.45 1715061
57.24
2,068,744 3,609,457
1.26 2.18
1,715,061 1.54 2,040,568 1.84 111,154,17 8 100
689,486 1.04 1,277,201 1.93
TOTAL
164,855,137 100
66,320,411 100
LIABILITIES Bills payable Borrowing from financial institutions Deposits & other Accounts Others Liabilities against Assets Subject to Financial Lease Deferred tax Liability Total 856,448 0.57 478,001 0.49 267,113 0.46
6,989,424
4.7 6,791,007
6.97 2,831,605 4.84 93.5 8
137727554 2,816,341
92.6 88,468949 90.75 60659663 1.9 1,474,425 1.51
567,540 0.97
40,988 0.027
55,403 0.057
81,795 0.14
298,616 148,729,423
0.2
8,964
0.02
220,177 0.23
100 97,484,064
100 58,481,328 100
EQUITY Share capital 2902490 18 2,349,719 17.19 1,506,230 19.2
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Reserve funds and other reserves Inappropriate profit Surplus on revaluation of assets TOTAL
35.3 4537232 28.13 4,257,337 31.14 2,770,645 4
3219246 19.96
169,817
1.24
143,590 1.83
43.6 5466746 33.9 6,893,241 50.43 3,418,618 1 16125714 100 13,670,114 100 7,839,083 100
Share Holders Equity (Rs in M)

Series 1
10659
6777 4420 2363 3052
2007
2008
2009
2010
2011
Schedule Shareholders Equity
2007 (Rs. In M) 2,363
2008 (Rs. In M) 3,052
2009 (Rs. In M) 4,420
2010 (Rs. In M) 6,777
2011 (Rs. In M) 10,659
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EXPLANATION The above chart and the schedule clearly shows that the shareholders equity of The Bank of Punjab is continuously tend to increase during last 5 year. The authorized capital of The Bank of Punjab is one Million. The issued and subscribed capital of the bank is 193,333 ordinary share of Rs. 10 each in year 2006. The share capital is consist of Share Capital Fully paid in cash Issued as bonus share Total 2011 Rs. 19,333,340 Rs. 270,915,660 Rs. 290,249,000
VERTICAL A N A L Y S I S (2009-10-11) PROFIT & LOSS ACCOUNT Particulars 2011 % 2010 Rs.(000 Rs.(000) 79.7 Mark-up/interest earned 11644560 Fee, commission and brokerage income 473,212 3.25 4 ) 6,125,2 62 255,14 9 753,66 Dividend Income Income from dealing in foreign currencies 239,804 1.64 93,208 228,74 Other income 855,489 5.87 9 3.07 1.25 41,311 328,36 1 8.99 1.13 1,385,875 9.5 9 3.42 10.1 1 82.1 5 356956 172,87 3 554,21 8 4.73 15.1 8 % 2009 Rs.(000 ) 69.9 7 %
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TOTAL NON MARKUP/INTEREST INCOME NON MARK-UP EXPENSE
14,598,35 2 100 81.2 7,573,722 1 18.7
7,455,8 68 2,668,7 39 127785 4 66.9 100 32.4 1
3,651,8 02 719,07 4 100 37.5 3 52.2 965896 6
Administrative expenses
1754665
8 0.00
Provision against off balance sheet items 175
18.0 0 0.00 46,940 2.45
Bad debts written off Provisions against receivable from NIT
100 -
1 -
3,623 4,744
0.04
121 32,046
1.67
.000 Other charges 38 4 11,461 0.12 1,217
0.06
9,326,005 TOTAL 100
4,290,9 11 100
1,915,8 59 100
Summary
2011 Rs.(000) Share capital Reserve funds and other reserves 2,902,490 4,537,232
2010 Rs.(000)
2009 Rs.(000)
2,349,719 1,506,230 257,337 2,770,645
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Unappropriate profit Surplus on revaluation of assets Shareholders' equity Long term debts Net profit Net profit before tax Total income Total deposits Total advances Interest expenses Interest earned Interest income
3,219,246 5,466,746 10658968 339604 3,804,255 4,768,721 6,650,904 137,727,606 101,319,954 1,882,183 11,643,963 6,650,904
169,817
143,590
6,893,241 3,418,618 6,776873 4,4204,65 275,580 90,759
2,353,242 1,368,174 3,164,957 1,735,943 4,456,133 2,885,667 88,465,051 54,724,311 63,623,705 39,438,923 1,291,176 1,149,724 6,125,093 2,555,039 4,456,133 2,885,667 150,622,98 234,971,860 8 Rs. 5.20 10.01 Rs. 4 13.14
Outstanding shares Dividend per share Earning per share
290,249,000 Rs. 3.25 9.08
FINAL PROJECT
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FINANCIAL RATIO A N A L Y S I S
Ratio expresses the mathematical relationship between one quantity and another. The relationship in expressed in terms of a percentage, a rate or simple proportion. FINANCIAL RATIO Computation of financial ratios is very useful approach that keeps the management, shareholders and creditors etc. in making various decisions about the company. The term Financial Ratio is used to describe significant relationship between figures shown on a balance sheet or in a profit and loss account in a Budgetary control System. Financial Ratio thus shows the relationship between accounting data. So we can say DEFINITION
Ratio Analysis The term financial ratio is used to describe significant relationship between figures shown on a balance sheet or in a profit and loss account in a budgetary control system. Financial ratio thus shows the relationship between accounting data
An index that relates two accounting numbers and is obtained by dividing one number by the other. Computation of financial ratios is very useful approach that keeps the management, shareholders and creditors etc. in making various decisions about the company. For analysis of the financial statement rations can be classified as follows: 1. LIQUIDITY RATIOS LIQUIDITY RATIOS The ratios measure the short term ability of the company to pay its current short term liabilities and meet the unexpected needs for cash currently is called Liquidity Ratios. It includes i. ii. Current Ratio Acid test Ratio
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2. SOLVENCY RATIOS SOLVENCY RATIOS
These ratios measure the ability of the company to survive over a long period of time is called Solvency or Leverage Ratios. It includes i. ii. iii. Debt -to-Equity Ratio Debt to- Total Assets Proprietary Ratio
3. COVERAGE RATIOS COVERAGE RATIOS
Ratios that relate the financial charges of a firm to its ability to service or cover them are called Coverage Ratios. i. ii. Interest Coverage Ratio Service Coverage Ratio
4. ACTIVITY RATIOS ACTIVITY RATIOS Ratios that measure how effectively the firm is using its assets are called Activity Ratios. 5. PROFITABILITY RATIOS PROFITABILITY RATIOS Ratios that relate profits to sales and investment are called Profitability Ratios. These ratios measure the income and operating success or overall performance of the company for a particular period of time.
ANALYSIS OF MANAGEMENT EFFICIENCY OPERATIONAL EVALUATION
FINAL PROJECT
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ADMINISTRATIVE EXPENSE ANALYSIS
Administrative Expense * 100 = Mark Up /Interest /Discount And Return Earned Year 2009 2010 2011 Admin Expense 965,896 1,277,854 1,754,665 Interest Earned 3,568,956 6,125,262 11,644,560 Ratio 25% 20% 15%
2011 2010
2009
0% 10% 20% 30%
INTERPRETATION
In general administrative expanse shows decrease by 1.49%. But this is the minor increase in expenses. Ratio Of Administrative Expense To Deposit
Administrative Expense * 100 = Deposit Year Admin Expense Deposits Ratio
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2009 2010 2011
965,896 1,277,854 1,754,665
60,659,663 88,464,949 137,727,554
1.59% 1.44% 1.27%
2011 2010
2009
0% 1% 1% 2% 2%
INTERPRETATION
In case of particular category administrative expense indicates decrease, it means organization had the ability to utilize its recourses as well curtailing of its expanses. Reduction of expanses not only increases the profitability as well as the good sign for prosperity.
iii- Ratio Of Mark Up Earned To Advances
Mark Up /Interest / Return Earned * 100 = Advances (Net Of Provision)
Year 2009 2010 2011
Mark-up Earned 3,568,956 6,125,262 11,644,560
Advances 1,135,126 1,715,061 2,068,744
Ratio 314.40% 357.50% 563.12%
FINAL PROJECT
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2011 2010
2009
0% 200% 400% 600%
INTERPRETATION
There was a slightly increase in the mark up ratio earned through advancing of loan. This means that bank was following soft policy in giving loan. This is the main factor, which was putting the bank on progress track.
Cost Paid On Deposit
Mark Up /Return /Interest Expense*100 = Deposits
Year 2009 2010 2011
Mark-up Expense 1,556,263 2,668,739 7,573,722
Deposits 60,659,663 88,464,949 137,727,554
Ratio 2.56% 3.01% 5.50%
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2011 2010
2009
0% 2% 4% 6%
INTERPRETATION
This indicates the return provided by the bank on their deposit. But the bank was following very aggressive policy in that concern. Bank was receiving deposit from people at lower rate.
Average Cost Of Funds
Mark Up Paid On Deposit +Administrative Expenses*100 = Deposits Year 2009 2010 2011 Mark-up Expense 1,556,263 2,668,739 7,573,722 Admin Expense 965,896 1,277,854 1,754,665 Deposits 60,659,663 88,464,949 137,727,554 Ratio 3.86% 4.46% 6.67%
FINAL PROJECT
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2011 2010
2009
0% 2% 4% 6% 8%
A. L I Q U I D I T Y R AT I O S The liquidity ratios are calculated for short term creditors such as bankers and supplier are particularly interested to know the liquidity position of the company. CU RRE NT R AT I O The Ratio expressed the relationship of current assets to current liabilities. It widely used for evaluating a companys liquidity and short term debt paying ability. I is also called working capital ratio. FORMULA Current Ratio = Current Assets / Current Liabilities Rs. In (000) CURRENT RATIO SCHEDULE Current Ratio Current Assets Current Liabilities 58472364 97263887 148430807 Ratio
2009 2010 2011
65630925 10943911 162786393
1.12 1.125 1.10
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INTERPRETATION The current ratio should ideally be 2:1 and it depicts the situation that the bank is operating at an ideal level but minimum acceptable level is 1:1. The bank is maintaining its ratio more than 1:1 but still it has decreased in 2010 as compared to 2010. The bank is in good current ratio position.
B. LEVERAGE RATIOS Long term creditors and stock holders are interested in companys long term solvency particularly it ability to pay interest as its come due and to repay the face value of the debt of maturity. Solvency position of the company can be measured by the following ratios: DEBT TO EQUITY RATIO Debt to Equity Ratio indicates the relationship between the external equities or outsider funds and internal equities or shareholders funds. It is used to ascertain soundness of the long-term financial policies of the company. It tells how much share is of creditors in response to share holder. If shareholders shares are more than it the creditors is considered that company is going well. It is calculated by dividing long term debts on share holder funds, greater the debt equity ratio bad the financial position of the company. Lesser the debt equity ratio betters the financial position of the company. FORMULA Debt to Equity Ratio = Long Term Debt / Shareholders Equity (Rs. in 000) DEBIT EQUITY SCHEDULE Year Long term Debt Shareholder Funds 7929842 Ratio
2009
90759
0.011
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2010 2011
275580 339604
13945694 16465318
0.0198 0.0206
2011 2010
2009
0% 20% 40% 60% 80%
INTERPRETATION As the debt to equity ratio discl0se the long term financial positions of the firm, so The Bank of Punjab debt to equity ratio is continuously tend to be increase over past 2 years. Its mean that the bank is getting more and more external funds. DEBIT TO TOTAL ASSET RATIO The debt to total asset ratio is derived by dividing a firms total debt by its total assets. It highlights the relative importance of debt financing to the firm by showing the percentage of the firms assets that is supported by debt financing. FORMULA
Debit to Total Asset Ratio= Total Debt / Total Assets (Rs. in 000) DEBIT TO TOTAL ASSET RATIO SCHEDULE Year 2009 2010 2011 Total Debt 58481328 97484064 148729423 Total Assets 66320411 111154178 164855137 Ratio 88% 87.70% 90%
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2011 2010
2009
86 87 88 89 90 91
INTERPRETATION The banks debt ratio is increasing that means banks assets are in the position to cover the total debts. PROPRIETARY RATIO Proprietary ratio is also used to know the financial position of the company by solvency wise. So, this ratio can be finding if shareholder funds are divided by total assets. We can say that equity utilized to bring the assets of the company. FORMULA Proprietary Ratio= Shareholder Equity / Total Assets (Rs. in 000) PROPRIETARY RATIO SCHEDULE Year Shareholder Funds 4420465 6776873 10658968 Total Assets Ratio
2009 2010 2011
66320411 111154178 164855137
0.066 0.0609 0.0646
2011 2010
2009
0.055 0.06 0.065 0.07
FINAL PROJECT
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INTERPRETATION This ratio measures the proportion of capital that is prior charge to capital. The trend of this ratio is showing the good position and improvement. C. COVERAGE RATIO
Coverage ratios are designed to relate the financial chargers of a firm to its ability to service, or cover, them. One of the most traditional of the coverage ratios is the interest coverage ratio, or times interest earned.
INTEREST COVERAGE RATIO This ratio is simply the ratio of earnings before interest and taxes for a particular reporting period to the amount of interest charges for the period. It indicates a firms ability to cover interest charges for a particular period of time. FORMULA Interest Coverage Ratio= EBIT / Interest Expense (Rs. in 000) INTEREST COVERAGE RATIO SCHEDULE Year EBIT Interest Expenses 1,556,263 2,668,739 7,573,722 0.88 1.18 0.63 Ratio
2009 2010 2011
1,368,174 3,164,957 4,768,721
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2011 2010
2009
0 0.5 1 1.5
INTERPRETATION The Analysis shows that The Bank of Punjab is paying more and more interest as compared to the Earnings of the bank D) P R O F I T A B I L I T Y R A T I O S These are ratios which indicate the profit generating ability of the company. The creditor ad investors are more interested in evaluating the company earning power. Profitability is frequently used as ultimate test of managements operating effectiveness. Profitability ratios are: 1. Return on Assets Ratio 2. Return on Equity Ratio 3. Earnings Per Share 4. Payout Ratio
RETURN ON ASSETS RATIO Another group of profitability ratios relates profits to investment. One of these measures is the rate of return on investment or return on assets. The return on assets ratio of the SNGPL as fellow: FORMULA Return on Assets Ratio = Net Profit after Taxes*100 Total Assets (Rs. in 000)
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RETURN ON ASSETS RATIO SCHEDULE Year 2009 2010 2011 Net Profit 1368174 2353242 3804255 Total Assets 66320411 111154178 164855137 Ratio 2.06% 2.12% 2.30%
2011 2010
2009
1.9 2 2.1 2.2 2.3 2.4
INTERPRETATION This ratio is depicting the efficiency with which assets are being utilized. There is increasing trend from year 2009-2011 showing good sign for banking business. Increasing return on assets is healthy position of business. RETURN ON EQUITY RATIO This ratio is one of the most important ratios used for measuring the overall efficienc y of a firm. This ratio shows the return on Shareholders funds -paisas per rupee. This ratio is more meaningful to the equity shareholders who are interested to know profits earned by the company because the dividend is pay on this earning profit. This ratio is also reveals how well the resources of a firm are being used, higher this ratio, better are the results. FORMULA
Return on Equity Ratio= Net Profit after Taxes Shareholders equity (Rs. in 000) RETURN ON EQUITY RATIO SCHEDULE Year Net Profit Shareholders Ratio
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equity 2009 2010 2011 1368174 2353242 3804255 4420465 6776873 10658968 30.95% 34.72% 35.69%
2011 2010
2009
28 30 32 34 36 38
INTERPRETATION As this ratio measures the efficiency of management, the trend is towards increment that is 35.69 % in 2011 showing good position of the bank.
DIVIDEND PAYOUT RATIO Earnings per share of stock are a measure of the net income earned on each share of stock. It is a small variation of return on equity capital and is calculated by dividing the net profit after taxes by the total number of equity shares. Thus the Earning per share ratio of The Bank of Punjab is as follows: FORMULA Pay-out Ratio= Dividend per Share*100 Earnings per share PAY-OUT RATIO SCHEDULE
Year 2009 2010 2011
Dividend per Share 4.00 5.20 3.25
Earnings per Share 9.08 10.01 13.14
Ratio 44 52 24.73
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2011 2010
2009
0% 20% 40% 60%
INTERPRETATION Lower the payout ratio, higher will be the earnings ploughed back in the business. 2009 and 10 are showing increasing trend but in 2011, the ratio has declined up to 24.73% which is in favour of bank.
THE BANK OF PUNJAB
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The Bank of Punjab

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The Bank of Punjab 2012