PowerPoint Presentation

According To Masroor Raza: NBP is always there to support businesses that have justifiable needs.

The Nations Bank.....

PROFIT & LOSS ANALYSIS

PRESENTED BY:Harish Chander 14166MBA-E-3YADVANCE FINANCIAL MANAGEMENTPRESENTED TO:Sir. Sohail Sawani

NBPs INTRODUCTION.

Engaged in providing commercial banking and related services in Pakistan and overseas. The Bank's services are available to individuals, corporate entities and government.Established via NBP Ordinance No. XIX of November 9. 1949Trustee of public fundsAgent to the State Bank of PakistanLead player in the debt equity market, corporate investment banking, retail and consumer banking, agricultural financing, treasury services.

FACTS.....1310+ domestic branches.26 overseas branches.Agency arrangement with 3000+ banks worldwide.More than 17000 employees.

VISION..

To be recognized as a leader and a brand synonymous with trust, highest standards of service quality, international best practices and social responsibility.MISSION..

NBP will aspire to the values that make NBP truly the Nations Bank, by:Institutionalizing a merit and performance culture.Creating a distinctive brand identity.Adopting the best international management practices.Maximizing stakeholders value.Discharging our responsibility as a good corporate citizen.7

SWOT ANALYSIS.

Custodian of government.Agent of state bank.Old and sound financial institution.Western union facility.Vast network.Job security.Customer satisfaction.Online banking.Highest rating and receive awarded.Product and services.More deposit.Poor dealing.Lack of computerized network.Political pressure.Lack of advertisement of products.Lack of it infrastructure.Favoritism.Resistance to change.Slow decision making.Growing banking system.Trust due to government bank.Economic activities.Electronic banking.Marketing plan.Increase business.Number of commercial bank.Competition with other banks.Political influence.Customer satisfaction.High interest rates.

ORGANIZATIONAL STRUCTURE..

CORPORATE & INVESTMENT BANKING GROUPCHAIRMAN & PRESIDENTCREDIT MANAGEMENT GROUPAUDIT & INSPECTION GROUPCOMPLIANCE GROUPPRESIDENTS SECRETARIATBOARD OF DIRECTORHRM & ADMINSTRATION GROUPOPERATION GROUPCOMMERCIAL & RETAIL BANKING GROUPTREASURY MANGEMENT GROUPSPECIAL ASSET MANAGEMENT GROUPOVERSEAS MAMGEMENT GROUPI.T. GROUPSECRETARY BOARD OF DIRECTOROVERALL..

OPERATION GROUP CHIEFHRM GROUP CHIEFAUDIT & INSPECTION GROUP CHIEFCOMPLIANCE GROUP CHIEFSOUTH REGIONNORTH REGIONWEST REGIONEAST REGIONOVERSEAS REGIONHEAD 1HEAD 2HEAD 3HEAD 4HEAD 5CHAIRMAN & PRESIDENTBRANCH 1BRANCH 2BRANCH 3BRANCH 4BRANCH 5OVERALL..

OVERALL..

INTER BANK TRADINGFINANCE GROUPMONEY MARKET & SECURITIESFOREIGN EXCHANGECORPORATE SALESFX SALESMONEY MARKET SALESFINANCIAL CONTROL DIVISION TAXATIONBUDGET & BUSINESS REVIEWEQUITY & INVESTMENTSBP RETURNSFINANCE..

REPORTING..

REPORTING TO SBP..S. No.DepartmentName of ReturnsFrequency1FinanceDaily RCOADaily2FinanceDaily position of inflows and outflows in Special Convertible Rupee Accounts (SCRA)Daily3FinanceReporting Chart of Accounts (Weekly)Weekly4FinanceWeekly GAP AnalysesWeekly5FinanceWeekly position of SCRAsWeekly6FinanceMonthly RCOA- (Weekly format)Monthly7FinanceStatement regarding Sectoral Balance sheet of Banks-A03Monthly8FinanceCredit/Loans Classified by Borrowers of Scheduled Banks-A07Monthly9FinanceDeposits Distributed by Category of Deposit Holders of Scheduled Banks-A05Monthly10FinanceForm IX-XMonthly11FinanceNew Foreign Currency Accounts (FE-25 Deposits and its Utilization)Monthly12FinanceOld Foreign Currency AccountsMonthlyOnline 1st October 2005

REPORTING TO SBP..S. No.DepartmentName of ReturnsFrequency13FinanceBalances held abroadMonthly14FinanceWeighted Average Lending and Deposits Rates of Scheduled Banks & Rate of Return on Concessional LoansMonthly15FinanceReporting Chart of Accounts (Quarterly)Quarterly16FinanceBank investments in Sukuk,TFCsHalf Yearly17FinanceCollection of Scheduled Banks StatisticsHalf Yearly18FinanceCollection of Scheduled Banks Regional Statistics on Advances (Disbursements & place of Utilization)Half Yearly19FinanceForm XII (Statement showing Assets & Liabilities)Half Yearly20FinanceForeign Investment Survey / CDIS (as per letter)Annually21FinanceCoordinated Portfolio Investment Survey Abroad (as per letter)Annually22FinanceGovernment debt ownership survey (as per letter)Annually

REPORTING TO HO..S. No.Name of ReturnsFrequency1Profit and Loss StatementQuarterly2Deposits StatementWeekly3Advances StatementWeekly4Key RatiosQuarterly5Group Performance SummaryQuarterly6Administrative Expenses SummaryMonthly7Key Highlights Domestic RegionsMonthly8Key Highlights Overseas Branches.Monthly9Provisions SummaryQuarterly10Petty Cash SummaryMonthly

FINANCIAL HIGHLIGHTS..

IN A NUTSHELL (10 13)

PROFIT AND LOSS ANALYSIS

Markup / Returns / Interest earned.Markup / Returns / Interest expense.Net Markup / Interest income.Provisions.Net Markup / Interest income after provisions.Non Markup / Interest income.Non Markup / Interest expense.Profit before tax.Taxation.Profit after tax.Other comprehensive incomeTotal comprehensive income.13.Earnings per share.14.Spread ratio.15.Non-interest income to total income.16.Dividend per share.17.Net profit margin.18.Times interest earned.19.Return to total assets.20.Return to total equity.

ANALYSIS..

MARKUP.....DESCRIPTION2010 20112011 20122012 2013INTEREST EARNEDINCREASE - 7.75%INCREASE - 5%DECREASE - 1.06%INTEREST EXPENSEINCREASE - 7.22%INCREASE - 16.29%INCREASE - 7.81%NET INTEREST INCOMEINCREASE - 8.30%DECREASE - 6.70%DECREASE - 12.52%

2010 20112011 20122012 2013Issuance of loan and advances to customers.Increase in investment in held for trading securities, available for sale securities and held to maturity securities.Issuance of loans and advance to customers.Increase in investment on held to maturity securitiesMinor decrease2010 20112011 20122012 2013Increase in interest on customers deposits, securities sold under repurchase agreements and short term borrowings.Increase in interest on customers deposits and securities sold under repurchase agreements. Decrease in short term borrowings.Increase in interest on short term borrowings.2010 20112011 20122012 2013Increase in markup interest earned.Increase in markup interest expense.Increase in markup interest expense.MARKUP/ INTEREST EARNEDMARKUP/ INTEREST EXPENSE NET MARKUP/ INTEREST INCOME

NON MARKUP.....DESCRIPTION2010 20112011 20122012 2013INTEREST INCOMEINCREASE 9.67%INCREASE 23.34%INCREASE 7.21%INTEREST EXPENSEINCREASE 16.35%INCREASE 17.77%INCREASE 2.58%NET INTEREST INCOMEINCREASE 33.33%SAME 0%INCREASE 8.33%

2010 20112011 20122012 2013Increase in dividend income, income from dealing in foreign currency and compensation for delay refunds.Increase in dividend income, income from dealing in foreign currency and gain on sale and redemption of securities.Increase in each head i,e, dividend income, gain on sale and redemption of securities, other income and income from dealing in foreign currency.2010 20112011 20122012 2013Increase in administrative expenses in shape of salaries and allowances, charge for defined benefit plans, repairs and maintaince, advertisement and sponsorships, write offs.Increase in various administrative expenses.Increase in write offs.NON MARKUP/ INTEREST INCOMENON MARKUP/ INTEREST EXPENSE

PROFIT BEFORE TAX TAX PROFIT AFTER TAXDESCRIPTION2010 20112011 20122012 2013PBTINCREASE 6.54%DECREASE 17.81%DECREASE 68.89%TAXINCREASE 22.69%DECREASE 23.42%DECREASE 75.48%PATINCREASE 0.24%DECREASE 15.13%DECREASE 63.19%

2010 20112011 20122012 2013Excess of interest income over interest expense and provision.Excess provisions and interest expense.Increase in provisions.2010 20112011 20122012 2013Increase in PBT which results in greater current year tax charge.Reduction in settlement of deferred tax.Decrease in profit before tax which eventually reduces the current year tax charge.Decrease in profit before tax which reduces the current year tax charge.Increase in settlement of deferred year.2010 20112011 20122012 2013Minor increase.Decrease in profit before tax.Decrease in profit before tax.PROFIT BEFORE TAXTAXPROFIT AFTER TAX

OTHER COMPREHENSIVE INCOMEDESCRIPTION2010 20112011 20122012 2013INC / DECDECREASEDECREASEINCREASECHANGE7204.61%187.89%237.70%REASONSettlement of exchange adjustments on translation of net assets of foreign branches.Settlement of exchange adjustments on translation of net assets of foreign branches.Settlement of exchange adjustments on translation of net assets of foreign branches.

TOTAL COMPREHENSIVE INCOMEDESCRIPTION2010 20112011 20122012 2013INC / DECDECREASEDECREASEDECREASECHANGE4.77%25.66%28.15%REASONDecrease in profit after tax.Decrease in profit after tax.Decrease in profit after tax.

EARNING PER SHAREDESCRIPTION2010 20112011 20122012 2013INC / DECDECREASEDECREASEDECREASECHANGE7.22%16.29%7.81%REASONDecrease in profit after tax.Decrease in profit after tax.Decrease in profit after tax.

SPREAD RATIO (Interest Earned / Interest Expense)DESCRIPTION2010 20112011 20122012 2013INC / DECINCREASEDECREASEDECREASECHANGE0.51%10.15%7.91%REASONMinor increase.Excess in interest earned over excess in interest expense.Decrease in interest earned and increase in interest expense.

NON INTEREST INCOME TO TOTAL INCOME (Non-Interest Income / Total Income)DESCRIPTION2010 20112011 20122012 2013INC / DECSAMEINCREASEINCREASECHANGE0%11.76%10.53%REASONNothing.Increase in non-interest income.Increase in non-interest income.

DIVIDEND PER SHARE (Dividend Paid / No. of Ordinary Shares)DESCRIPTION2010 20112011 20122012 2013INC / DECDECREASEINCREASEDECREASECHANGE90%13.33%10.29%REASONReduction in profitability of the N.B.P and increase in number of ordinary shares of N.B.P. Reduction in profitability of the N.B.P and increase in number of ordinary shares of N.B.P. Reduction in profitability of the N.B.P and increase in number of ordinary shares of N.B.P.

NET PROFIT MARGIN(Net Profit after Tax / Net Sales x 100)DESCRIPTION2010 20112011 20122012 2013INC / DECDECREASEDECREASEDECREASECHANGE10%16.67%60%REASONIncrease is net sales without resulting in higher profitability.Reduction in profit after tax despite of an increase in net sales.Reduction in profit after tax due to heavy interest expenses and provisions.

TIMES INTEREST EARNED (PBIT / Interest Expense)DESCRIPTION2010 20112011 20122012 2013INC / DECSAMEDECREASEDECREASECHANGE0%10.39%18.84%REASONNothing.Increase in interest expense over increase in profit before interest and tax.Reduction in profit before interest and tax along with increase in interest expense.

RETURN ON TOTAL ASSETS(PBIT / Total Assets x 100)DESCRIPTION2010 20112011 20122012 2013INC / DECDECREASESAMEDECREASECHANGE14.29%0%16.67%REASONPBIT increases along with the increase in total assets which means assets were not properly utilize to earn the required return on total assets.Nothing.Reduction in profit before interest and tax.

RETURN ON TOTAL EQUITY(Profit After Tax / Total Equity x 100)DESCRIPTION2010 20112011 20122012 2013INC / DECDECREASEDECREASEDECREASECHANGE5.88%12.5%64.29%REASONIncrease in profit after tax but followed by higher increase in total equity.Decline in profit after tax.Decline in profit after tax.

MAJOR CAUSE..

PROVISIONSDESCRIPTION2010 20112011 20122012 2013INC / DECDECREASEINCREASEINCREASECHANGE6.33%14.45%82.35%REASONDecrease in provisions against non performing advances including foreign exchange adjustments and amount written off.Increase in provisions against non performing advances.Increase in provisions against non performing advances and provisions against off balance sheet obligations.Bangladesh branch result in heavy loss.

RECCOMANDATIONS..

Training should be given to NBP staff.Change the prevailing culture of the bank.Make extensive effort to give facilities of retail and consumer banking.Technology in the banking which will be necessary for future banking.Vigilant in the eyes of customer.Employees should learn the concept of responsibility accounting.Direct link with the head quarter in Karachi through Internet or Intranet.Start its operation in credit card.There should not be any abrupt policies change by the upper management.Outlook and interior lay out of the branches.Bank should increase the utility bills processing fees.Should reduce their administrative expenses.Branches that are not much used should be closed down.Loans to the small businessmen and the agriculture sector at the low markup rate.Procedure of taking services from the bank must be made easier and straight forward.