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Company Background

• Bank of Credit and Commerce and International (BCCI)—1972

• Habib Credit and Exchange Bank—1992 • Bank Alfalah on June 21st, 1997 as a

public limited company • currently operating through 282 branches • 48 Islamic banking branches• 7 foreign branches in Bangladesh, two in

Afghanistan and one in Bahrain

• 5th largest bank

• Bank Alfalah holds 6% of the total banking sector assets

Credit Rating

• PARCA credited Bank Alfalah as• For long term „ AA‟ (double A)• For short term A1+ (A one plus)

The credit rating shows• very low expectation of credit risk • strong capacity for timely payment of financial

commitments in the long term • highest capacity for timely repayment in the short

term

Organizational Hierarchy

Chief Executive Officer

Co-Chairman Central Management Committee

Group Heads

Regional Managers

Area Managers

Hub Managers

Branch Managers

Officers Grade I, II, III

Vision And Mission

• Vision“To be the premier organizations operating locally and internationally that provided the complete range of financial services to all segments under one roof”

Vision And Mission(Con’t)

• Mission Statement

“To develop and deliver the most innovative products, manage customers experience, deliver quality service that contributes to brand strength, establishes a competitive advantage and enhances profitability, thus providing value to the stakeholders of the bank”

Mission

• To provide the new and more innovative products than the other banks to the customers.

• To take and manage the ideas of the valuable customer for the Bank

• deliver high quality and quick services to the customers, who are keep great value for Bank Alfalah.

• Bank Alfalah tries to promote those activities which give the fruitful result to the customers and the stakeholder of the bank

Core Values

1. Customer Relationship “Before we discover we must explore”

2. “Every Drop Counts” This shows that Bank Alfalah does not only care its corporate customers but they also treat the individual customer very well.

3. Dedicated Professionals Unusual efforts on the part of the employees who are apparently ordinary workers is one of the key indicates

of the superior enterprise

Core Values(Con’t)

4 .Training & Development

Committed to the personal welfare and professional

development of all our team members

5. Technological innovation

“Modern science is not an option, it is an obligation”

6. Ethical values Professionalism without integrity is like a book without pages”

GOALS & OBJECTIVES

• To create a sound base, and through efficient systems achieve modern banking through out Pakistan

• By the end of every accounting year there is an increase in deposits. As a result its deposits are increasing day by day.

• To create unit banking network in all the branches of Bank Alfalah, the end of the year. This means that all the operations of the bank, i.e. deposits to advances, imports, exports, L/C Opening, foreign currency and many more aspects under one roof, so that the customer can be facilitate in one visit.

• To promote industrial, agricultural and socio economic processes through the active participation of private and public sector in the country.

• Islamic Banking is one of the goals of Bank Alfalah though it has been initiated in the 2002 and it is very acceptable for general public. However, there is lot of work to do for successful implementation of the Islamic Banking Plan. In this regard the Bank is opening specific Islamic Banking Branch under the supervision of its Islamic Banking Division.

STRATEGIES

• efficient modern banking system • long-lasting relationships through an assertion

to service excellence and providing innovative products

• Management recognizes that a banking relationship requires compatibility, communication, and cooperation and that each customer deserves nothing less than full attention and available resources to meet their financial objectives

• superior personalized service is the most important product

• The Bank Alfalah team comprises of some of the most highly skilled and professional financial experts in banking industry

• Keeping in view the unrest among the Islamic Community on the Interest Bearing Banking the Alfalah is in the process of target marketing and gives its full attention to this segment

• Pakistan Credit Rating Agency, which gave it the AA- and A1+ in the long term and short term respectively

Strategic Business Units (SBUs)1. General Banking

– Deposit Accounts– Lockers– Remittance

2. Financial Services– Karobar Finance

– Milkiat Finance – Quick Finance

Strategic Business Units (SBUs)

3. Consumer Financing– Alfalah Car Finance– Alfalah Home Financing– Hilal Debit Card

4. Treasury and Investment

5. Bank Alfalah Islamic Banking

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PEST Analysis

Political Environment • Lawyers’ movement • Violence in Karachi • The Lal Masjid debacle • Militancy operation in FATA, NWFP and Swat its

impact on other parts of the country • The return of Benazir Bhutto’s and her

subsequent assassination

PEST Analysis(Con’t)

Political Environment• Unstable political situation affect bank’s

policies

• Talibinization affected our repute in the world

• Investors hesitate investing in Pakistan

PEST Analysis(Con’t)

Economic Indicators• Gross Domestic Product (GDP)• inflation Increased• balance of payment • debt of the government increased• Decrease in FDI(Foreign direct investment)• Financial crisis made it BAL management

difficult to survive

PEST Analysis(Con’t)

Socio cultural environment• low saving culture

• Religious culture and people hesitate to accept interest on deposits

• 70% rural population and very low literacy rate

PEST Analysis(Con’t)

Technological FactorsBanks turning to heavy IT investments

• which differentiate their products• provide response times • improve customer satisfaction • products and services are gaining faster

acceptance like ATM, Master cards, Telebanking, Internet banking and mobile banking

SWOT Analysis

Strengths• aim is not to earn profit but also to satisfy

its customers• Bank has “AA” and “A1+” Credit Rating for

long term and short term loans• The name “ALFALAH” is leaving the

Islamic and favorable impact on the minds of public

• BAL is providing the facility of Money Gram

SWOT Analysis(Con’t)

• Personnel of Alfalah are well trained and highly skilled.

• Bank Alfalah has a wide network of branches at the ideal locations

SWOT Analysis(Con’t)

Weaknesses

• BAL is that it is not offering the loan facility to newly established businesses

• BAL’s lending procedure is quite complicated • BAL is not offering any credit facility for students • BAL is charging online charges for transfer of

money but some other banks not charging• Majority of the workforce consists of young

professional, they lack in their experience

SWOT Analysis(Con’t)

Opportunities• Bank Alfalah is spreading its network outside the

boundaries of Pakistan • In addition to excellent routine banking,it offered

special products like car, home and credit cards facility which helped in market penetration

• There is growth trend of islamic banking so BAL has the advantage of having Islamic Banking network and the growth in this particular field

SWOT Analysis(Con’t)

Threats • Foreign financial institutions like City Bank,

HSBC etc also having strong banking policies may attract customers

• The political instability is a great threat for BAL• Due to economic instability like currency

depreciation and inflation, the bank is constantly facing a threat e.g. people have low disposal income and lower deposits in banks.

Analysis of Competition

Market Structure BAL• There are large number of Financial Institutions

in the Market like MCB, NBP, HBL, NIB, ABL, UBL, PICIC, KASB, Faysal Bank etc.

• There is large number of customers in the Market

• In the Market there are number of substitutes are available National Saving center, Stock exchanges, Government Securities and Advances

Market Structure BAL(Con’t)

• The products are relatively homogenous • Types of Accounts• Credit Cards• Debit Cards• Car Finance• Advances• Foreign Exchange dealings

Porter's 5 Forces Analysis

Threat of New Entrants• Person can't come along and start up a bank,

but there are services, such as internet bill payment, on which entrepreneurs can capitalize

• threat is companies offering other financial services. e.g an insurance company to start offering mortgage and loan services

Porter's 5 Forces Analysis

Power of Suppliers

• The suppliers of capital might not pose a big threat

• the threat of suppliers luring away human capital because larger banks are offer incentives and take away trained employees

Porter's 5 Forces Analysis

Power of Buyers• The individual doesn't pose much of a threat to

the banking industry because of high switching cost of mortgage, car loan, credit card, and mutual funds with one particular bank

• corporate clients have banks wrapped around their little fingers

• Financial institutions can switch them by by offering better exchange rates, more services, and exposure to foreign capital markets

Porter's 5 Forces Analysis

Availability of Substitutes • there are plenty of substitutes in the

banking industry • there is a non-banking financial services

company that can offer similar services like Insurance, mutual funds companies

• n the lending side of the business, banks are seeing competition rise from unconventional sources of capital

Porter's 5 Forces Analysis

Competitive Rivalry• Banks must attempt to lure clients away from

competitor banks. They do this by offering lower financing, preferred rates and investment services

• They compete on the best and fastest services • Larger banks would prefer to take over or merge

with another bank rather than spend the money to market and advertise

Boston Consulting Group SBUs

Recommendations & Suggestions

• Bank should prefer to promote worker on the basis of their talent and avoid favoritism

• there is misdistribution of work. There should be fair distribution of work

• Bank Alfalah is only dealing in Money Gram; it should also starting providing the service of other money transfer lines like Western Union.

• BAL should provide loan to students at low mark up rate and easy terms & conditions.

• Bank Alfalah Limited needs to use more marketing channels such as radio to make the public aware of its products and services. In the presence of intense competition Bank Alfalah Limited has to realize the importance of marketing.

• There are no incentive schemes for employees of Bank Alfalah like scholarship schemes for employees that want to pursue higher education

• Bank Alfalah Ltd should continuous to expand its business, by increasing its deposit portfolio through aggressive market penetration strategies.

• Bank Alfalah limited has the web site, which has not been updated. The web site is very less informative and it won’t leave a good impression on the visitor. So I suggest that it should be updated to meet the requirements of the visitors.

ANY QUESTION

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