1.Abstract

Allied Bank Limited was the first bank to be established in Pakistan. It started out in Lahore by the name Australasia Bank before independence in 1942; was renamed Allied Bank of Pakistan Limited in 1974 and then Allied Bank Limited in 2005.

In August 2004, because of capital reconstruction, the Bank’s ownership was transferred to a consortium comprising Ibrahim Leasing Limited and Ibrahim Group.

Today, with its existence of over 60 years, the Bank has built itself a foundation with a strong equity, assets and deposit base. It offers universal banking services, while placing major emphasis on retail banking. The Bank also has the largest network of over 700 online branches in Pakistan and offers various technology-based products and services to its diverse clientele.

Allied Bank Limited operates by the following Vision, Mission & Values:

VisionTo become a dynamic and efficient bank providing integrated solutions and the first choice of bank for all customers.

MissionTo provide value-added services to our customers

To provide high-tech innovative solutions to meet Customer requirements.To create sustainable value through growth, efficiency and diversity for all stakeholders.To provide a challenging work environment, and reward dedicated team members.To play proactive role in contributing towards society.

ValuesIntegrityExcellence in ServiceHigh PerformanceInnovation and Growth

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Mr. S.R. Jariwalla (sitting in the center) A legendary figure in the history of the Bank.

It was particularly upsetting for Khawaja Bashir Bux to hear that “Muslims could not be successful bankers”. He decided to step-up to that challenge and takes the lead in establishing this first Muslim bank by the name Australasia Bank Limited in Punjab, which was to become Pakistan in December 1942.

The initial equity of the Bank amounted to Rs 0.12 million, which was raised to Rs. 0.5 million by the end of the first year of operation, and by the end of 30th June 1947 capital increased to Rs. 0.673 million and deposits raised to Rs 7.728 million.Australasia Bank was the only fully operational Muslim bank in Pakistan on August 14th, 1947.

However, it was severely hit by the riots in East Punjab. The Bank was identified with the Pakistan Movement. At the time of independence all the branches in India, (Amritsar, Batala, Jalandhar, Ludhiana, Delhi and Angra (Agra)) were closed down. New branches were opened in Karachi, Rawalpindi, Peshawar, Sialkot, Sargodha, Jhang, Gujranwala and Kasur. Later, the network spread to Multan and Quetta as well. The Bank financed trade in cloth and food grains thus, played an important role in maintaining consumer supplies during the early months of 1948 affected by riots. Despite the difficult conditions prevailing and the substantial set back in the Bank’s business in India, Australasia Bank made a profit of Rs. 50,000 during 1947-48.

A view of the building in Lahore that once housed the Australasia Bank branch

Allied Bank (1974 to 1991)

In 1974, the Board of Directors of Australasia Bank was dissolved and was renamed Allied Bank. The first year was highly successful; profit exceeded Rs. 10 million, deposits rose by over 50 percent and approached Rs. 1460 million. Investments rose by 72 percent and advances exceeded Rs. 1080 million for the first time in the banking history. 116 new branches were opened during 1974 and the Bank started participating in the Government’s spot procurement agriculture program. Those seventeen years saw a rapid growth for the Bank. Branches increased from 353 in 1974 to 748 in 1991. Deposits rose from Rs. 1.46 billion and Advances & Investments from Rs. 1.34 billion to Rs. 22 billion during this period. It also opened three branches in the U.K.

A view of Allied Bank's FTC branch, Karachi.

Allied Bank (1991 to 2004)

As a result of privatization in September 1991, Allied Bank entered a new phase, and became the world’s first bank to be owned and managed by its employees. In 1993 the “First Allied Bank Modaraba” (FABM) was floated. After privatization, Allied Bank became one of the premier financial institutions of Pakistan.

A view of Allied Bank, Head Office, Lahore.

Allied Bank’s capital and reserves were Rs. 1.525 billion; its assets amounted to Rs. 87.536 billion and deposits to Rs. 76.038 billion. Allied Bank enjoyed an enviable position in Pakistan’s financial sector and was

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recognized as one of the best amongst the major banks of the country.

In August 2004, as a result of capital reconstruction, the Bank’s ownership was transferred to a consortium comprising Ibrahim Leasing Limited and Ibrahim Group.

Today, the Bank stands on a solid foundation built over 63 years of hard work and dedication, giving it a strong equity, an asset and deposit base and the ability to offer customers universal banking services with more focus on retail banking. The Bank has the largest network of online branches in Pakistan and offers various technology-based products and services to its diverse clientele through its network of more than 700 branches.

(2005 To date)

In May 2005, Ibrahim Leasing Limited dissolved and the company was vested into Allied Bank Limited. ALL the shareholders were issued ABL shares instead of the all shares held by them.

An application for the listing of ABL shares in all the Stock Exchange Companies of Pakistan was made ABL was formally listed and the Bank’s share

trading began on the following dates:

Islamabad Stock Exchange 8th August 2005

Lahore Stock Exchange 10th August 2005

Karachi Stock Exchange 17th August 2005

Today, all Allied Bank Limited shareholders can trade in the Bank’s shares at their will.

3.Board of Directors

Left to Right

Pervaiz Iqbal Butt (Director)

MohammadWaseem Mukhtar (Director)

Farrakh Qayyum (Director)

Sheikh MukhtarAhmed (Director)

Abdul Aziz Khan (Director)

MubashirA. Akhtar (Director)

Sheikh Jalees Ahmed (Director)Mohammad Aftab Manzoor(CEO)Mohammad Naeem Mukhtar(Chairman)

4.Management

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Asim Tufail(Group Chief, Consumer & Personal Banking)

Fareed Vardag(Chief Risk Officer)

Iqbal Zaidi(Group Chief, Compliance)

M. Abbas(Chief, Special Assets Management)

Mohammad Aftab Manzoor(Chief Executive Officer)

M. Jawaid Iqbal(Chief, Corporate & Investment Banking)

Muhammad Shahzad Sadiq (Group Chief, Audit & CRR)

M. Yaseen(GroupChief, Treasury)

Mujahid Ali(Group Chief, Information Technology)

Shafique AhmedUqaili(Chief,Human Resources)

Khawaja Mohammad Almas(Head, Core Banking Projects)

Tahir HassanQureshi(ChiefFinancial Officer)

Tariq Mehmood(Group Chief, Operations)

Waheed urRehman(Secretary)

Zia Ijaz(Group Chief, Commercial & Retail Banking)

5.Online Branches and ATMs

Remote Cheque Encashment from any online branch.Instant Funds Transfer between any 2 online branches.

Remote Balance Inquiry and Statement of Account.

Additionally, account holders of all online branches can obtain the Allied Cash Shop Visa Debit Card for use at ATMs as well as at POS terminals.

6.Consumer

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Online Banking facilities are available to customers maintaining accounts at all online branches across the country.

The following facilities are available:

In line with the Bank’s aim to provide a host of products and services to its customers, substantial ground work has been done to establish a strong consumer banking business. Furthermore, to achieve this objective, professionals from across the industry have been recruited into areas of product development

7.Allied Visa Credit Card

With your Allied Visa Gold Credit Card every Pakistani cannow enjoy the benefits of a Gold Card internationally with unmatched savings greater flexibility, convenience and security.

Features

Buy Now, Pay Later

With your Allied Visa Gold Credit Card, your free credit period allows you to pay for your purchases up to 50 days after the date of purchase. So now you can buy all the things you want - whenever you want - at your own convenience.

Flexible Repayment

When paying your credit card bill, your Allied Visa Gold Credit Card gives you the option to either pay the entire amount according to your statement or a minimum of 5% of your total outstanding balance.

Cash Advance FacilityAs an Allied Visa Gold Credit Card member, you areentitled up to 75% of your available credit limit in cash.Just go to your nearest ATM with the VISA or PLUS sign and avail the facility of withdrawing cash 24 hours a day.

Allied Easy Installments (AEI)

The Allied Easy Installments (AEI) plan provides youwith the facility to pay your outstanding card balance inequal and affordable monthly installments spread over 3,

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The consumer portfolio, comprising the debit card,credit cards, auto loans, personal loans andmortgages will be established phase by phase.However, we are confident that our strengths,together with our largest network of online branches,A superior technology platform, a big customer base and the Consumer Personal Banking Group (CPBG), will take the Bank’s profitability to new heights.

6, 12, 18, 24, 30 or 36 months. So now you can easilyafford anything from everyday household appliances toexotic vacations abroad.

Supplementary Cards

Want to share the benefits of your Allied Visa GoldCredit Card with others? Now you can! Treat up to twopeople with supplementary credit cards and pass on the many privileges of your Allied Visa Gold Credit Card toyour chosen friends and family members.

Balance Transfer Facility

In case you have outstanding balances on other cards, consolidate these onto your Allied Visa Gold Credit Cardwith the lowest BTF rate and save more on youroutstanding payments than ever before.

With Credit Protection Plus, your Allied Visa GoldCredit Card provides payment cover against:

Death, due to accident or sicknessPermanent and Total Disability, due to sickness or accident.Temporary Total Disability, due to sickness oraccident.Terminal Illness.

8.Commercial

The Commercial & Retail Banking Group (CRBG) offers

a variety of asset and liability-based retail products to its customers. The Group’s main focus has been on introducing various financing and investment products for its valuable clientele, and contributing to the steady growth of the financial industry.CRBG consists of 4 geographic groups and is further divided across 27 regions in Pakistan. Each region is responsible for providing a quality service to its own customer-base.

In recent years, the Group has been working to find alternate ways to bank for customers, and has installed more ATMs to its already strong and largest ATM network.

Lending products:

Seasonal FinanceSeasonal Finance facility is allowed against pledge of produce of Cash Crops harvested in that particular crop season. The delivery of pledged stocks/goods is made against appropriate cash payment.

Foreign Currency DepositsAllied Bank offers the facility for opening Current, Savings and Term deposit Accounts. These accounts can be opened in US Dollar, Pound Sterling, Euro, and Japanese Yen at designated branches.

Allied Profit Plus – Term DepositThe scheme offers an attractive return on various tenors tailored to the individual needs of our customers. Profit is payable on maturity.

Slabs1 Month

3 Months

6 Months

12 Months

Rs 0.5 (M) to less than Rs 5(M)

6.50% 7.00% 7.50% 8.00%

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Rs 5 (M) to less than Rs 10(M)

6.75% 7.25% 7.75% 8.25%

Rs10 (M) to less than Rs 15(M)

7.00% 7.50% 8.00% 8.50%

Rs15 (M) to less than Rs 20(M)

7.50% 8.00% 8.50% 9.00%

Rs 20 (M) &above

8.00% 8.50% 9.00%  9.50%

Hajj Services The Bank serves the intending pilgrims by helping them in performing this religious obligation. The Hajj forms and other related services are provided by the bank. However, the terms and conditions for accepting the Hajj forms from intending pilgrims are in accordance with the Hajj Policy announced by the government, each year. Hajj applications are available with all branches during Hajj season, immediately after the Hajj policy is announced by the Government of Pakistan.

Development Role of ABL in NWFP

The ABL functions to pursue the profit motive

principle, satisfying the social and economic needs of

the country. ABL is playing it part in the socio-

economic development of NFWP with the following

objectives.

To participate in the economic development

of the region.

Encouragement of new entrepreneurs of small

and moderate teams.

To provide financial and technical, assistance

for the modernization of existing units in

small and medium sector and for setting up of

new units.

To provide new development opportunities to

improve the pattern of income distribution.

Encouragement of industry based on locally

fabricated machinery and local raw material.

To act as a bridge between local and foreign

entrepreneurs.

Allied Basic Banking Account In order to provide basic banking facilities to low income people in Pakistan, Allied Bank has introduced “Allied Basic Banking Account” (ABBA).This account can be opened with an initial deposit of Rs 1000/=. The account is a non-remunerative account with no minimum balance requirement. The account will be closed automatically if the balance remains “zero” continuously for one year. The statement of the account will be issued on yearly basis. There are no service charges on the said account for a maximum 2-withdrawals and 2-deposits during a calendar month. Additional transactions will be subject to a service charge as per Bank’s schedule of charges for every withdrawal/deposit, while there is no limit for free of charge withdrawals from ATM.

Internet Banking

Banking at your fingertips! Allied Direct Internet Banking offers you the convenience to manage and control your banking and finances - when you want, where you want to! It's Simple, Convenient, Secure and Faster. So, just get clicking. Some features of Allied Direct are:

Simple and ConvenientEasier navigation and help provided at every step so you can have most out of this service. With Allied Direct convenience is just a click away. Secure and FasterSecured & encrypted with latest tools and technologies, Allied Direct is the choice for secure and fast Internet Banking. 24x7 Access

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You now have access to your account 24 hours a day, 7 days a week. You transfer funds or even pay bills even if it's a holiday. To use Allied Direct Internet Banking, you should be a registered Allied Bank Account holder with a valid ATM Card. If you do not have an account, please visit any of our nearest branches and open your account and obtain an ATM Card. Our friendly branch staff will help you open your account quickly.

Allied Profit Plus – Deposit Account Allied Profit Plus–Deposit Account is a profit bearing checking account with the payment of profit on a monthly basis. The estimated rate of profit is given below:

Slabs

Rates effective

from 01.01.06

Rs 1(M) to less than Rs 5 (M) 6.00%Rs 5(M) to less than Rs 10 (M) 6.50%Rs 10(M) to less than Rs 25 (M) 7.50%Rs 25(M) & above 8.00%

Salient Features Of The Scheme

The applicable profit rate would be based on slab of amounts maintained on average monthly basis and the profit credited in the account on monthly basis. There is no restriction for maintenance of any minimum balance in the account Individuals, Companies, Schools, Hospitals, Charitable Organization etc., are free to open their account in this scheme

Additional benefits for deposits of Rs.0.5 million and above are:

Free Online Transactions Free issuance of Payment Orders Free issuance of Demand DraftsAllied Monthly Income Scheme

Allied Monthly Income Scheme is a unique product with attractive returns. It provides an opportunity for a regular monthly income. The period of deposit under this scheme is 3 years.

Minimum AmountRs 100,000 (with increments of Rs 10,000/-)

 ProfitPayable on monthly basis

 Projected profit ratesRs 850 per month on a deposit of Rs 100,000/- @ 10.20% per annum

 EligibilityAll individuals & institutions other than Financial Institutions

 Period 3 years

ATM free of charge Complementary credit card with approved credit limit Free transfer of monthly profit to any branch of ABL all over the Pakistan LOCKERS Allied Bank Lockers are available in three different sizes Small, Medium and Large on a yearly fee. Locker holders need not have an account in the Bank.

REMITTANCES Allied Bank can transfer funds to the remotest part of the country for payment/credit to the customer himself or a third party, through Telegram/Telex/Telefax for payment/credit on the same/next day. Telegraphic transfers can also be made abroad in Foreign Currency.

Carrying cash to strange alien location can prove to be risky as a single incident can render one without monetary backup of any sort. Hence traveller’s cheques are introduced by banks in order to protect against any contingency.

Telegraphical TransferBanks are offering various types of products related to funds transfer in Pakistan, assuring the fastest delivery

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of Funds around the Globe, through Telex, SWIFT and other Electronic Media.

Allied Bank with its large network spread all over the country is sharing quite a sizeable Funds transfer business in the domestic market.

Bank has recently moved to optimize the use of electronic media to handle Funds Transfer with speed. Even the shift over to "SWIFT" is at hand and a network has been established by Central Office

Demand Draft

A draft is one of the most popular Banking instrument in the trade circles to settle business deals and transferring funds from one place to another. Allied Bank has taken radical steps for a speedy Issuance/Payment of Drafts through automation and introduction of a more simplified system based procedure.

Pay OrdersPay order is a Bank instrument issued by a Bank in Pak Rupees at the request of a customer to transact payment to a named payee through banking channel.

Generally payments against such cheques (Pay orders) are restricted to "Payees Account" and as such are required to be enrooted through a Bank Account locally.

Traveller Cheques - ABRTC"Rupees Traveller Cheques" is one of the most convenient products launched by Allied Bank, which has an excellent market response.

ABRTCs are only to be issued by the authorized branches of the ABL.

With the application of Government levies, nominal commission is also charged on issuance of "Traveller Cheques".

Traveller Cheques shall be valid until encased unlike a "Negotiable Instrument" which is valid for 6 months.

Utility Bills All branches of the Bank collect utility bills of electricity, gas and telephones. For convenience of the customers, Utility Bills are collected by the branches during banking hours and also in the evening-banking on all working days. Bills can be paid through Cash or Cheques. Consumers may drop bills with crossed Cheques into a drop box available at the branches under "Cheque Drop-in" system.

Utility Bill payment facility - Pay your telephone, electricity, and gas utility bills on any of our ATMs without having to wait in long queues outside your branch.

OBJECTIVES:-

We have set our objectives in accordance with the S.M.A.R.T techniques I .e. the same should be specific measurable, achievable realistic and time banned.

Our main objectives are:

The branch should have handsome deposit base.

All the targets set by the management from time to time should be achieved on dates.

The branch credit portfolio should match with deposits.

Reduction in profitability ratio.

To ensure more courteous services to our customers.

To have an effective control on internal working.

Observe dress code set by the management.

Overall uplifting of branch/punctuality.

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Strategies:-

We have made different strategies wisely in order to our objectives, smoothly well in time. We can define our strategies in terms of following points:-Assigning Duties to the staff.

Controlling expenses.

Distribution of Targets.

Motivation of staff.

Ideal working atmosphere.

Maintaining discipline/punctuality.

Courteous services to the customers.

Cooperation among the staff.

Timely disposal of credit proposals/correspondence.

Awareness about banking system.

Investment Banking

Allied Bank – IBG was established in 2005 and focuses on the Investment Banking market.

It has the highest number of Successful Arrangement and Participation in Key Privatization & Acquisition Financing Transactions achieved by any Investment Banking Group in PakistanIt has already penetrated the investment banking market by taking the lead in a number of major transactions and arranging funding of more than US$ 6 billion to date.

Allied Bank – IBG is reputable for building business on the basis of strong corporate relationships and showing a clear understanding of Structured Finance.The team consists of dedicated and young professionals with extensive experience, who provide various Advisory & Arrangement Services to Corporate Clients.Allied Bank-IBG has played an active role in Debt Origination and Distribution through innovative and tailor made solutions for its target customer base. It is also well known for having successfully completed mandates in a timely manner, and is regarded as one of the most active Investment Banking entities in the country today.

9.Background Of The Study

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The study is about the High Value Course on Effective

Branch Management of Allied Bank Limited which was

conducted through interviews.

Every student of B.Com and MBA has to undergo an

internship program of eight weeks in any organization

to get exposure to the real time business environment.

The real purpose of this internship program is to provide

an opportunity to the students to see the practical

applications of their background professional studies.

The report is a reflection on my experience when I was

interne in ABL. Since its inception in 1942, ABL has

maintained a steady growth over the sixty years span of

its operations. After its nationalization in 1974, it was

denationalized in 1991 and the employees became the

owners of ABL, through the unique concept of ESOP

(Employees Stock Ownership Scheme).

Purpose of the Study

Purpose of the study was two pronged.

General Purpose

The general purpose:

To get acquaintance to the banking operations.

To see the application of our Professional

studies especially.

Specific Purpose

Specific purpose of the study includes.

A partial fulfilment as a requirement for the

completion of MBA degree.

To objectively observe the operations of Allied

Bank of Ltd in general.

Nature of the Study

The study is critical in nature. It was conducted to

investigate critically into the operations of Allied Bank

Ltd especially its operations in and the operations of

ABL.

The annual reports or the consolidation data of the Bank

has not been focused in specific because it does not

reflect on the operational performance of branches.

However, they have been referred to as when and where

required.

Scope of the Study

The study covers two areas with its variables, which

affects the operations of the branch directly, or

indirectly. These two areas of variables are:

Branch specific variable.

Bank specific variable.

The branch specific variables are the variables under the

control of the branch management and directly affect its

operations e.g.

Layout of the branch.

Customers’ relations.

Technology management.

The bank specific variables are those variables, which

are not in control of the branch management and

indirectly affect the operation of the branch e.g.

Operations of other branches Allied Bank in the

area.

Operational audit/review of the branches.

Training and development programmes.

Discretionary powers of manager.

Methodology of Research

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The research methodology adopted was as follows:

Data Sources

Both primary and secondary have been used in the

compilation of this report. The methodology used is as

under:

During the compilation of this report, I relied mainly on

the primary data. The tools used for the collection of

primary data are interviews and observation. The

secondary data was mainly used for as a background

material and for purpose of references. The major

sources of secondary data were the annual reports and

other printed material of the Bank.

Research Approaches

Keeping in view my limitations during and the nature of

the study, two research approaches were adopted. These

research approaches are:

Survey.

Observation as.

Participant observation and

Non-participant observation.

Sampling Procedures

The sampling procedure used was non-probability

judgmental and convenience procedure

Sampling Plan

Details of the sampling plan used during this report are

given below.

Sampling Unit

The sampling unit constitutes of the following.

Manager of Allied Bank branch.

Staff of Allied Bank branch.

Customers.

Personnel from Regional operations department.

Sample Size

The sampling size constituted of

All the customers coming into the Bank.

One bank manager.

Five staff member.

Two personnel from operation department.

Contact Method

Personal contact method was used as a contact method,

which included:

Structured interviews with managers and

personnel from operations department.

Unstructured interviews with staff members.

Mission Statement

To provide quality financial services with an edge of

technology businesses particularly small and medium

size enterprises through a motivated human resource

endeavouring to achieve customer satisfaction. The

bank now plane to focus on further objectives, set as

follow:

Diversity Products and Services

Anticipating customer needs, the bank is introducing

various types of financing structures tailored to the

capital investment requirements of its corporate clients

as well as small and medium size enterprises.

Focus on Consumer Banking.

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Making use of its computerized network of branches,

the bank plane to enhance its market share and

profitability via focusing on consumer banking products

and services as well as integrating e-banking into its

delivery channels.

Improvement Credit Assessment, Loan Monitoring

and Debts Recovery.

The management intends to improve asset quality by

implementing strategies for identification, measurement

and mitigation of risk which will result in reducing the

quantum of non-performing loans

Increase Employee Productivity through Training

and New Techniques.

The bank seeks to increase employee productivity

through a combination of training and implementation

of modern human resources techniques. Frequent in-

house and external training programs are expected to

help the Bank in maintaining and developing efficient

work forces.

Obligation to Serve Society

ABL also plays it part in the development of society. It

has established public libraries in many cities and

towns.

Limitations

The Study was subject to the following limitations, the

absence of which could have made this report more

accurate, systematic and factual:

Lake of published financial data.

Access to data.

The non-cooperative behaviour of manager and

staff members.

My weak financial position

Banking System in Pakistan The banking system of a country to the working process

followed by the banking institutions. It is identified

through the relationship between the apex banks (central

bank) and the other banks operating in the economy. It

embodies the principles and practices relating to the

banking transactions prevalent in the country.

In Pakistan there is a central banking system controlled

by the central bank the State bank of Pakistan. The

central bank (SBP) directs and controls the activities of

other banks operating in the economy. It guides

commercial banks through the monetary measures,

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which are collectively conducive for the economic

development of the country.

At the time of partition, there were 631 offices of the

scheduled banks. West Pakistan contained 487 and East

Pakistan 144 such offices. There were only two

Pakistani banks namely Habib Bank and Australasia

Bank with their head offices in Pakistan.

The Central Bank of the country (SBP) was established

in July 1948. It recommended to the government to

establish a new bank, as an agent of the State Bank as

well as spearhead of its credit policy. The government

accepted the suggestion and National Bank of Pakistan

came into existence in September 1949. This ban also

helped Habib Bank to expand its organization. From

here onwards rapid development took place in the

banking system of the country. Currency notes of the

value of Rs. 5, Rs. 10, and 100 were issued by the State

Bank for the first time in October 1948 and by August

1949 all currency notes issued by the Reserve Bank of

India worth Rs. 12,000 million were withdrawn and

replaced by Pakistani currency.

Under the banks Nationalization Act, of 1974 the

commercial banks were nationalized in January 1974.

The nationalized banks included Habib Bank, Allied

Bank, Muslim Commercial Bank and National bank

besides these Nationalized Commercial banks

(NCB’s) and other commercial banks in the private

sector, there are certain foreign bar operating in Pakistan

like Citibank, standard and chartered Grind lay’s Bank

etc. The foreign banks are under the administrative

control of State Bank being the central Bank of the

country.

The Federal Government also setup the Pakistan

Banking Council (PPC) on 21st March 1974 under the

banks nationalized Act of 1974. It reports directly to the

Ministry of Finance and provides support and advice to

the State Bank. Its responsibilities include.

Evaluate performance of (NCB’s) according to

criteria laid down by the PBC and socio-

economic objective set by SBP.

Policy recommendations to the Federal

Government.

Policy guidelines to the (NCB’s).

Appointment of senior staff and training within

the (NCB’s).

Grand approval to (NCB’s) to write off loans

exceeding Rs. 25, 000, 00.

Monitor performance of (NCB’s) including

overseas branch.

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10.Business Plan

All commercial organization including banks carries out

their business activities the prime objectives of

Profitability & Financial stability.

There may be many other business /social objectives but

profitability & financial stability are utmost important &

inter linked, hence require proper planning, monitoring

periodic review & timely correction/revision.

Planning (As a Tool to Achieve)

Planning is the first & foremost step to achieve the

objective, a milestone or vision famous saying are:

"Without a plan, the only ways you get where are going

is by accident."

"Falling to plan is planning to fail."

"No one can tell you the future of your business but a

solid plan will prepare your business for the future."

Planning can be defied & understood as:

The established of the objective & the formulation

evolution & selection of the policies, strategies, tactics

& actions required for achieving the objectives.

Planning may be long term strategic planning & short

term/operational planning.

Aims Settings (In Banks)

In banks short – term business goals and objectives are

set by the head office .in consultation with then

concerned branches, Prior to the commencement of each

financial years to support the long- term goals and

objectives more precisely" the vision"

The goals are mainly set for deposits, advances

disbursement & recoveries (including non-performing

loans) profitability & other business likes: import,

export & bank guarantees etc. . .

Role of branches towards achievements

of the business goals of the banks (why planning?):

Banks branches play a key role in the business

development of the banks as bulks of the business is

routed through them. The planning to achieve the

desired goals and objective need a serious look & one

must follow a very scientific & systematic approach or

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business strategy towards the business development so

as to achieve the optimum.

Hence a business plan is a must achieve the short –term

goals and objectives & the long-term vision and the

mission.

Why Shall I Plan? (Of Course Planning Is A

Managerial Function):

As a branch manager of one of the branches of a

commercial bank I need to plan to achieve the business

objectives set by the management of my bank for my

branch & to support the overall goals set for the bank.

My sprit is that the objectives speak about the

confidence of my management on my abilities, potential

of team provided to me & the range of product &

services on offer to our target market and re genuinely

based on the market potential shall take the expectations

of the management as only a bottom line& always try to

realistically surpass them well within the given time

frame & then exceed them at the time of the final review

point of time.

Where We Are? (The Past & The Today):

Present position of the branch business:

The balance sheet & income statement i.e., profit-loss

account & other vital information of the branch as on

June 30.2007 is enclosed as annex .A&B.

Products & Services Being Offered:

The bank is offering variety of product & services to the

customers' .these includes the traditional conventional

banking products as well as modern banking tools. Bank

accepts deposits from all categories of depositors &

offer competitive profit rates to them .lending too is on

offer at the market based competitive rates .beside

branch is offering on –line.

Banking, remittances, non-found based bank guarantees,

consumer banking products. Debit Card/ATM card etch

to its customers.

Modern Banking Policy

The expansion and growth of he banking sector in

Pakistan has been remarkable. Until 1942, the growth of

banking comprised the phases of laying the foundation

of the banking structure. The establishment of ABL has

started a new era in the banking system. This was the

phase competition with the already established giants.

Banking underwent a complete metamorphosis; clients

were naturally attracted to the bank, which provided

better and quicker banking services. When Allied Bank

challenged the major banks of the time they began

evaluate their policies and were surprised to find that

they had a lot to change before long. They began to

change and adopt a more modern and relevant strategy.

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Deposit Mobilization

The banking sector as a whole and ABL in particular

has played an important role in helping to mobilized

savings. The continuously rising importance of deposit

money in total money supply underscores the

contribution of commercial banks in this direction.

From its inception, ABL has launched a number of

successive drives for improving the deposit base of the

Bank. An essential part of each drive was to popularize

the banking habit among the people both rural and

urban, and to bring a large number of customers into its

orbit.

Customers Segmentation:

Majority of the clientele of the branch consists of self-

employed individuals. Our branch also has good number

of SME & Corporate Sector Clients.

Branch Expenses

Soon after commencing business by the end of June

1942, only few branches had been opened. The

management decided to broaden the geographical

coverage so besides the cities, the bank branched out

into small towns & the far-flung, less development and

unbaked areas of fulfill its social responsibility. The

branches in small town and villages have been vital help

to the small industrialists and business, industrial

workers, farmer’s craftsmen and other persons of

limited means. The bank had extended its network to

more than 650 by the end of Dec. 1973. At present the

number exceeds 819 branches.

Important Statistics About ABL:

Total customers 4,605,000

Employees 6,747

Total branches 735

Utility booths 34

Airport booths 1

Total clients in Rawalpindi region 245,000

Foreign Trade

The bank has always played key role in the promotion

of foreign trade especially in financing of exports. The

bank’ achievement in the area is really commendable, as

it has not only to compete with the domestic banks but

with the large international financial agencies as well.

Swot Analysis (Strength, Weakness, Opportunities &

Threats):

Strengths:

We are commercial bank operating in the area

for the last 17 years.

A network of more than 280 On-Line branches

spread all our country providing variety of

17

product & services to all communities of the

society.

We are maintaining our focus on technology

based facilities to our customers & have taken

an edge by providing unique self-service

banking to the customers of all banks by

installing more than ten off-site ATMs

countrywide.

Our branch has been blessed with a team of

young, energetic and qualified staff willing to

achieve their personal ambitions as well as

organizational goals. The urge to excel in the

bank is a real asset for me as I can drive more

energy from their support.

Despite operating in the stiff market

competition, we have relations with almost the

major corporate of the area.

Weaknesses:

The branch is not ideally located to attract more

core clientele i.e.; retailers & whole-sellers.

Our major focus is an corporate clients due to

which we cannot earn optimum spread on our

resources, as the corporate clients prefer higher

inward return on their own investments (lower

pricing for their lending’s.

Our bank is having more convential approach &

is comparatively less aggressive as compare too

few of our immediate competitors particularly

in the area of operation of my branch.

Our bank has yet no global representation

outside the frontiers of Pakistan.

Opportunities:

We are planning to have our representations

outside the country, to start with Middle East,

which carry more business & will further

improve image & reputation of the bank.

Established relations with corporate clients

provide opportunity of handing more

business at a comparatively negligible

marketing cost.

Competition is the source of innovation.

Threats:

Stiff & cut throat compitetion in the market is a

major threat as we cannot afford any laxity to

serve the clientele below their expected level

rather need to exceed their expectations every

time to retain them.

We need to review our systems & procedures

periodically to respond to the technological

changes & the latest products/services being

introduced/offered by our competitors.

Keep the staff posted at the branch motivated to

maintain the services level as well as to retain

them in the arena where ample opportunities of

personal/financial growth are available to them.

Major focus on corporate client’s effects branch

profitability & at the cost of precious SME

business at Low cost & high returns.

Financial Analysis

Financial analysis is based on the actual data of the

ABL, Chungi No.22 branch provided by the Operations

Control Department. The analysis and all its tools are

different from that generally followed in the

18

conventional analysis procedures. The reasons for this

little different procedure are:

The Balance Sheet of the branch is not available

because there is no requirement for Bank

branches to prepare a Balance Sheet.

The high level of secrecy maintained by banks

regarding the disclosure of their financial data,

which denied me access to the organized data

required for the analysis.

There is no Cash flow Statement prepared and

maintained by the bank branches.

Tax is not charged to the Branch but is paid by

the central office of the Bank upon the

consolidated income of all branches.

Tax is not charged to the Branch but it paid by

the central office of the Bank upon the

consolidated income of all branches.

The conventional tools of analysis are mostly

devised for non-banking companies which are

not reliable tools to be employed for the

analysis of a banking company generally and

the bank branch particularly.

Look of financial data published by Allied

Bank of Pakistan.

However the bank Authorities granted me access to

the necessary data required to analyze the financial

performance of the branch and hence to assess

Operational success of the Bank G.T. Road branch.

The data so obtained is analyzed as follows:

Deposits and Other Accounts

Deposits are the lifeblood of banking company.

Deposits are the fuel which keeps the organization. The

number of Accounts depicts the customer’s confidence

over the Bank, but deposits are the quantitative measure

of this trust. This direct relationship determines the

success or failure of a bank.

Deposits and Other Accounts (Rs. In million)

Advances (Rs. In million)

19

YearDeposits and

Accounts

Increase

(decrease)

Percentage

Change

2005 96,803 - -

2006 94,492 (2,311) 2%

2007 103,883 9,391 10%

2008 114,218 10,335 10%

2009 126,392 12,174 11%

YearAdvances

(Million)

Increase

(decrease)

Percentage

Change

2005 57,132 - -

2006 54,403 (2,729) 5%

2007 45,316 (9,087) 17%

2008 40,659 (4,657) 10%

2009 58,800 18,141 45%

Total Assets (Rs. In million)

YearTotal

Assets

Increase

(Decrease)

Percentage

change

2005 105706 - -

2006 103,568 (2,138) 2.%

2007 112,465 8,897 9%

2008 117,516 5,051 5%

2009 154,208 36,692 31%

Assets are the economic resources, which are expected

to benefit the future or present operations of the

business. For ABL the cash, loans and advances form

the major portion of the assets, effectively supported by

fixed assets. The total assets of the bank have decreased

by 2,138 million (2%) in the year 2007 as compared

2008. in the year 2009 8,897 million (9%) increase was

shown by ABL. And 5% and 31% increase in advances

are shown by ABL for the year 2008 and 2009

respectively.

Profit before Tax (Rs. In million)

Profit after Tax (Rs. In million)

YearProfit

after tax

Increase

(Decrease)

Percentage

change

2005 4,842 - -

2006 1,122 (3,720) 77%

2007 1,069 (53) 5%

2008 386 (683) 64%

2009 168 (218) 56%

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YearProfit before

tax

Increase

(Decrease)

Percentage

change

2005 4,492 - -

2006 839 (3,645) 81%

2007 1,587 748 89%

2008 954 (633) 40%

2009 457 (497) 52%

Earnings per Share

YearEarning

per share

Increase

(Decrease)

Percentage

change

2005 45.54 - -

2006 10.55 (35) 77%

2007 10.06 (0.49) 5%

2008 3.63 (6) 64%

2009 0.74 (3) 80%

No. of Employees

YearNo. of

Employee

Increase/

(Decrease)

Percentage

change

2005 7,217 - -

2006 7,082 (35) 0.48%

2007 6,947 (135) 1.90%

2008 6,959 12 0.17%

2009 6,747 (212) 3.04%

No. of Branches

The branches of ABL are on the decline trend for the

last five year. In 2005 the total numbers of branches are

929. In 2006 the numbers of branches are decrease by 73

(8%). Respectively in 2007 the number of branches

decreased by 42(5%), in 2008 the number of branches

decreased by 62 (8%), and in 2009 the branches of ABL

decreased by (2%)

Operational details for the last ten years vis-avis

future plans:

Deposits mix & the cost of deposits:

The present deposit base of the branch is Rs. 310 M.

Deposits mix & the respective profit rates on deposits

are appended in Annex C. The cumulative cost of

deposits for the year remained at 5.68. Our main focus

will be to further improve the deposits mix so as to

maintain the cost of deposits at present level as interest

rates have already grown . This will ultimately improve

our profitability linked with the financial stability of the

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YearNo. of

Branches

Increase

(Decrease)

Percentage

change

2005 929 - -

2006 856 (73) 7.85%

2007 814 (42) 4.90%

2008 752 (62) 7.61%

2009 735 (17) 2.26%

bank / branch. Obviously low / no cost deposits are the

main focus of our business growth strategies.

Credit Portfolio:

The present credit base of the branch is 20 M. The

product wise detail of the portfolio along with the

relative rate return is appended in Annex C. The average

return / yield on Advances for the year stood at 17%.

Our focus will be on the disbursement of new advances

at competitive rates of return; however, the quality of

finances is the foremost priority. Obviously quality

advances with NIL Non – performing loans portfolio are

the main focus of our business growth strategies.

Fee Based Business:

The branches’ guarantees business outstanding liabilities

as on 30-06-2009 stood at Rs. 0.430 (M), although it is

very merger amount, now we focused on issuing of the

guarantees in order to increase the profit portfolio of the

branches.

Profitability & liquidity:

The branch profit position for the year ended 2006 was

5.534 (M) and the cost of the deposit was less than

6.0%. Our branches needs improvement in low cost 0%

deposits in order to earn more profit and less attention is

given to corporate sector and high cost deposits.

Critical business needed to be retained:

Branch could not afford to lose its core deposits based &

need to improve the same. We shall need to retain or

maintain our relations with our prime customers passing

us their business. Top 25 depositors & borrowers of the

branch, who are our main source of profitability, shall be

retained as we cannot afford to lose them & we shall

Focus to get more business from them as compared to

the last year as only than we can meet the desired

results.

Targets:

I have projected following targets for the year 2010 for

final review of the higher management of the bank in

comparison to the position of December 31, 2009.

Finding and Recommendations

The critical analysis ABL in the previous section is the representation of its past, mirror of its present, and an insight into its future. The past data of ABL/ABL, Chungi No.22 branch enabled me to study the organization in a historical perspective and understand the nuisances in the banking operations. Study of the present of ABL helped me evaluate the organization in comparison to its future and competitors. The data obtained from the analysis of its present and future in combination with my professional studies resulted in some suggestions and implementation plans, which can help to increase the profitability and operational success of the ABL, Stadium Road branch Rawalpindi.

Some of the major findings suggestions are discussed.

Physical Facilities

The physical facilities or the layout are the most

fundamental features in an organization, which the

customers observe in forming an opinion, perception or

idea about the organization. Therefore, every

organization tries to make a good first impression on

customers through the presentation of its physical

facilities or layout. The physical facilities in the branch

are not up to the mark, which requires timely changes to

provide good environment to customers. The suggested

changes and corrective actions are gives below:

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The lighting system must be improved and all

the out of use lights must be replaced.

There is always a stinking smell in the Bank due

to the out of order condition of washroom.

Therefore the washroom must be brought into

order to remover this unpleasant smell.

Generators should be made available to the

branch to minimize the disruptions due to power

failure.

Newspaper should be provided to the customers

to avoid the pain of waiting long.

A cash counting machine can help reduce the

time spent in counting cash.

Availability of Staff

The existing staffs in the Bank are overburdened due to

the non-availability of more staff. Staff in the branch

must be in proportion to the customer has so as to

expedite the workflow, avoid overloading of staff and

remove the customer’s grievances arising mainly due to

delay in workflow.

The additional staffs required are in the fallowing

categories.

One staff assistant or grade 2 officers properly

trained in computer and sufficiently trained in

foreign currency accounts.

One class IV employee, preferably on daily

wages or contract, to maintain filing.

Technical Training of Staff

More technically trained staff should be added to the

existing staff strength while the efficiency of the

existing staff should be increased through proper

training and development.

The training needs should be assessed through proper

research so as to compete in the fast growing banking

sector. Training should be provided to existing and new

employees in the following areas.

Customer’s relations.

Organizational behaviour and developments.

Marketing and

Computer literacy.

The decreasing commitment of employees can be

increased by introducing an effective performance

appraisal system, which can reward and recognize the

achievements and services of employees for the Bank.

The appraisal system must have the following features.

Feed Back:

o Periodically provided to employees and

recognizing their efforts through reward

(bonuses) and publicly appreciation.

Uniform:

o The appraisal system must be uniform

in evaluating all the employees without

any discrimination.

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Objectivity:

o The appraisal system must be based on

facts and figures and objective

evaluation of the facts on grounds.

Simplification of Advances

The biggest source of the bank revenue is advances. The

advances of ABL branch are on its decreasing trend,

causing a decrease in the revenue for the bank. The bank

should make the advance procedure simple and quick to

meet the customer’s requirements. The following steps

are suggested for simplifying the advance procedure.

Increasing the discretion of manager for the

amount of advance to Rs. 100,000.

Speeding up the process of investigation and

verification.

Expanding its customer base.

Marketing Concept

The concept of marketing should be followed in every

aspect of the organization. Generally, the bank’s staffs

consider that marketing is to go to customers, beg them

for opening an account with the Bank and to abide by

his every just and unjust action.

They should be taught that marketing is not only to go

to customers only. A customer can also be attracted by

provided customer oriented services, showing empathy

to your customers and attending him personally.

Customer Orientation

Deposits are the main source of funds for commercial

banks. Therefore, the priority of every bank is to

increase the number and amount of deposits. The key to

successful business does not lie in simply attracting new

customers. The real success is to maintain in the old

customers and attract new customers at the same time

because retaining a customer is more difficult than

attracting new customers.

Every depositor should be given equal importance and

there should be no differentiation between customers so

that every customer feels himself as much important as

the other customer.

The attitude of the staff should be friendly to all the

customers. The customers should be taken to the

concerned person or guided friendly if the concerned

person is not available. The attitude of “that’s not my

job” should not exist anymore.

Mobilization of Less Cost Deposits

The analysis of expenses shows that 43% of eh expenses

of the bank are the payments on fixed deposits, which is

a very high proportion. Apart from this the interest

earned on advances Rs. 0.265 million is smaller than the

interest paid on different deposits.

The bank should launch a campaign to get less cost

deposits much as high amount current account as well as

low cost PLS saving accounts.

24

Decentralization

The authority in the bank is highly centralized with a

very wide span of control, which hinders the smooth

functioning of the organization. All the authorities are

vested at the regional or central office. Some the

authority must be delegated at the branch level in the

following areas.

Reprimanding the negative behaviour of lower

level staff.

Providing some incentives/exemptions to

customers in different services charges.

Information Access

The Bank should provide information to all the present

and potential customers relating to the new products,

services, some service’s fee structure and other matters

which are likely to affect the customers. It should be

made sure that all the customers have access to this

information. Conveying information is of no use, unless,

there is some feedback from the customers. The

following measures are suggested to implement this

suggestion.

Brochures, handouts, pamphlets and other

printed reports must be provided to customers,

which should provide all the information

necessary to attract and retain customers and to

satisfy the customer’s need for more

information.

Personal contacts with the customers can help in

providing information to customers. All the

Customers must be provided a chance to get the

desired information by personal contact with the

Bank staff.

Complaint and suggestion box should be

maintained at the door of the Bank where the

customers can point out drawbacks in the

customer’s services and put forward their

suggestions on his improvement of the services

quality of the Bank.

Performance Audit

The financial audit of the bank is conducted on regular

basis both as a surprise and routine audit. However, the

performance and system audits are completely ignored

which, otherwise, should have been a compulsory part

of the auditing services of the Bank. The immediate

outcome of ignoring performance outcome is

shortcoming in the non-financial aspects of his

organization such as customer relations, lack of

necessary facilities, motivation of employees, and the

control of manager.

In the light of the above facts it is suggested that the

performance audit of the bank must be carried out on

both regular and surprise basis to keep the Bank

competitive in the run of for more customers, more

deposits and high profitability.

Campaign for Increasing the Deposits.

The numbers of account holders in a bank make a

significant contribution to the deposits of the Bank and

25

determine its business volume, profits and size of a

bank.

Therefore, ABL, Stadium Road Rawalpindi branch must

a clear plan for increasing the number of accounts. The

details of plan for increasing the number of accounts are

given in the implementation plan.

Relocation of Branches

Allied bank has many branches in Rawalpindi. All these

branches are so closely located so that they are mostly

taking away each other customers, rather than

competing the real competitors.

The distance between these branches should be adjusted

in such a way that they would not only cover a wide

customer base and compete the other banks without

cannibalization of its own profits. The proposed

relocation scheme of all branches of ABL in Rawalpindi

is given in the implementation plan.

Increases in Business Share

Along with concentrating on increasing the customer

base, the Bank must also emphasize on securing the

highest market share in other banking services such as

issuance of letter of credit, foreign exchange,

remittances, bills identification of productive secure and

easily realizable advances etc. to achieve this strategy

the Bank should have a clear plans with the consent of

the higher management. The plan must be divided into

different periods – weekly, monthly, semi-annual and

annual. Every stage of the plan must be monitored and

controlled on regular basis.

Use of Computer Technology

Presently the computers available in the Bank are used

for recoding accounting entries. There is no other use of

Computer. The minor calculations and letter that could

have been easily done in Excel and Ms Word are done

manually.

It is suggested that full benefit must be taken of the

technology available. All the minor calculations should

be done in computers and all the correspondence should

be typed with the help of computers. This will benefit

the bank in two ways:

The data can store with dependability and

reliability.

The data so stored can be easily retrieved in less

time.

Calculations with the help of computer are less

time consuming and have a very low margin of

error.

The results of computer assisted calculations are

more reliable.

ABL CHUNGI NO.22 BRANCH INTRODUCTION

Location

It is situated 1.5 Kilometres to the south of Mall

Road, Saddar, Rawalpindi.

History

Before partition of the Indian subcontinent, there

were many brick-kilns in this area. Kilns are called

Bhattas in Urdu and Punjabi languages. Many

trenches were created as a result of digging of land

26

for obtaining mud that was used for making bricks.

Therefore this place was referred to as "Trenches of

Bhattaas" by the Britishers which was distorted and

modified to Tench Bhatta by the locals.

Population

It has a population of 200,000 which includes a majority of Punjabis/Pothoharis and a minority of Urdu speaking Mohajirs, Kashmiris and Pathans.

Main Commercial Area

Main Tench road, named Chaudhry Muhammad

Iqbal road in December 1985, represents the main

commercial area. One can find all sorts of business

out-lets and shops on either side of road. Also, the

longest bazaar of south Asia.

Prominent Neighbourhoods in Tench Bhatta

1) Aziza bad 2) Mughal Abad 3) Faisal Colony 4) Allama Iqbal Colony(People's Colony) 5) Qasai chowk 6) Afshan Colony 7) Bakra Mandi 8) Dhoke Chauhdrian 9) Chungi No22 10) Dhoke Sydian

Roads

Tench road connects Octroi Post 22 (Baees number Chungi) with Abid Majeed Road and then leads to Dhok Sayedan. The portion of Tench road between

Octroi Post 22 ("Baees number Chungi) to Abid Majeed Road was named Chaudhry Muhammad Iqbal Road in December 1985.

Abid Majeed Road connects Tench Bhatta with the Mall road (Peshawar Road) Saddar.

Schools & Colleges

1) Standard High School

2) Federal Government Girls High School, Chaudhry Muhammad Iqbal Road.

3) Expert College of Computer Sciences 4) Noor College for Women 5) Government Public Academy Secondary School 6) Al- Qalam Public School (St# 3 Allam Iqbal

Colony) 7) Anam Girls Collage 8) Adnan Modern High School 9) Anam Public School 10) Standard High School 11) Federal Government Girls High School, Abid

majeed Road. 12) Zubair Public School

CHUNGI NO.22 BRANCH

My branch Chungi No.22 Tench Bhatta Rawalpindi (0571) established in 1976.At present total staff members are six with total no of Accounts 4600.Our Branch is having total deposits of 450 million.

Projection for Upcoming Years: A Conclusion

During my internship in ABL Chungi No.22 I observe

many of the finding which were presented in the

previous. Now if conclude with major finding which are

given below. Major findings, which came into light as a

result of the critical evaluation of organization and

performance of Bank ABL Chungi No.22, are listed

below.

27

The branch is facing shortage of staff, which has

made the existing staff overloaded.

The branch lacks some physical facilities and

equipment’s such as sitting room, electric

generator etc.

The equipment’s and machines in the branch

require and maintenance.

The branches of ABL in his area eating up each

other’s profits by entering into competition and

rivalry with ineffective administrative control

from the top.

The marketing mix of ABL is not competitive in

fast growing banking market.

The organization is very mechanistic.

The findings of analysis were carefully and thoroughly

studied for possible corrective actions and

improvements. As a result of this study, the following

suggestions and recommendations were developed, the

implementation of which can help the branch to improve

its performance. A bird eye view of these

recommendations and suggestions is given in the text to

follow.

New technically trained staff should be added

to present staff.

The location of ABL branches in Rawalpindi

should be reconsidered and the distance between

branches should be increased.

A comprehensive plan should be developed

attract new customers accounts and deposits.

New equipment’s such as computers, lights,

UPS and electric generators should be provided

to the branch while the existing equipment’s

should be fully utilized.

The marketing mix should be strengthened.

An objective appraisal system should be

introduced to motivate employees.

The advances procedures should be simplified

and expedite.

Some authority should be decentralized and

delegated at the branch level.

Continuous monitoring and research and development should be an indispensable activity of the Bank.

REFERENCES:www.abl.comwww.google.com/imageswww.wikipedia.org/alliedbankhistory

PRESENTED AND COMPILED BY

28

SAHIBZADA AZHAR MG09CHUNGI NO.22 TENCH BHATTA ROAD RWPCell No: 0300-5241232

E-mail: sahibzada.sarmad@hotmail.com

29