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REPORT ON THE BANK OF PUNJAB
NAME
HASHAM AHMED 2102055
SECTION B
Submitted to:
Mr. HAIDER MEHMOOD
Course:
Money and Banking
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INTRODUCTION
OF
THE BANK OF PUNJAB
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Introduction:
Established in 1989, in pursuance of The Bank of Punjab Act 1989 and was given the
status of scheduled bank in 1994.
The Bank of Punjab is working as a scheduled commercial bank with its network of 266
branches at all major business centers in the country. The Bank provides all types of
banking services such as Deposit in Local Currency, Client Deposit in Foreign Currency,
Remittances and Advances to Business, Trade, Industry and Agriculture. The Bank of
Punjab has indeed entered a new era of science to 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
savings and providing funds for investments. Attractive rates of profit on all types of
deposits, opening of Foreign Currency Accounts and handling of Foreign Exchange
business such as Imports, Exports and Remittances, 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 constructive
but also based on principles of prudent lending with maximum emphasis on security. As
agriculture is considered as backbone of our economy the Bank of Punjab has introduced
"Kissan Dost Agriculture Finance Scheme" to small farmers.
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History
The Bank of Punjab started functioning with the inauguration of its first branch of 7-
Egerton Road, Lahore on November 15, 1989. The architect of the bank Mr. Nawaz Sharifthen, the Chief Minister of Punjab, performed the inauguration.
In Pakistan, over long periods of time the gap in saving and investment and balance of
trade deficit has posed serious threat to the target levels of growth The ailments related to
the budgetary deficit and public debt, both foreign and domestic are in addition.
Interestingly even such adverse circumstances growth of real sector during the preceding
year registered a favorable change, which speaks of hidden potential and strength of
economy
Fortunately, the banking sector of the country has the well organized and properly
institutionalized system, which is the major vehicle not only for mobilization of resources
to finance trade, agriculture, and industry but also for the effective conduct of monetary
policy.
The emergence of new bank on the national scene in the early 1990s has done two
important services to the nation.
The saving base of the economy has effectively enlarged and hence the investment
opportunities have increased.
The services of the banks in the fact of severe competition have improved
considerably so that now consumer are left with extensive choice to do or undo
their business relations with these banks keeping in view quality of their services.
The Bank of Punjab is working as a scheduled commercial bank with its network of 266
branches at all major business centers in the country. The Bank provides all types of
banking services such as Deposit in Local Currency, Client Deposit in Foreign Currency,
Remittances, and Advances to Business, Trade, Industry and agriculture.
The Bank of Punjab has the privilege to discharge its responsibilities towards national
progress and prosperity. Within the couple of years of its scheduling, the bank has not
only carved out for itself prominent niche in the mainstream banking of the country but in
certain areas it has the distinction of taking the lead. .
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Constitutional Base:
The Bank of Punjab was established under the provisions of Section 28 of Federal List
included in the 4th schedule of the Constitution of the Islamic Republic of Pakistan 1973.
The Bank was established under the Act of Punjab Assembly viz. The Bank of Punjab Act
1989. The Bill to this effect was passed by the Provincial Assembly on July 3, 1989 and
was passed to, by Governor Punjab in accordance with the Provisions of the Constitution
on July 26, 1989.
The Act provided for the foundation on which the edifice of the bank was erected. It also
included and provided for various modalities concerning the structure, the organization
and scope of the bank laying down its objective share capital and principle of lending. The
Act defines rules for the following.
1. Short title, extent, and commencement.
2. Establishment and incorporation of the Bank.
3. Share Capital.
4. Register of Shareholders.
5. Qualification of Shareholders.
6. Government to be shareholders.
7. Head Office of the Bank.
8. Board of Director.
9. Managing Director.
10. Qualification and disqualification of the directors.
11. Removal of Directors.
12. Terms of office of directors.
13. Vacancies.
14. General and special meetings.
15. Votes of the shareholders.
16. Business, which the Bank is authorized to transact.
17. Business, which the Bank is not authorized to transact.
18. Auditors / Governments auditors.
19. Right and duties of the auditors.
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20. Liquidations of the Bank.
21. Powers of the Board to make byelaw.
SCOPE OF THE BANK OF PUNJAB
Being a commercial bank, The Bank of Punjab performs all such functions as areattributed to commercial banking institution both in the area of resources mobilization,
loans and investment. The bank is thus providing all types of advances to business, trade
and commerce on seasonal and annual basis, and is ensuring, through the product policy,
the safety and protection of its loan portfolios, as the resources base of the bank expands,
projects financing will also be brought into its fold.
Management of the Bank.
At the level of Decision-making and implementation, senior management of the
bank is drawn from highly accomplished bankers with rich experience in the banking
profession both domestic and international.
The entire responsibilities of policy formulation and management have been
placed, under the law, with the Board of Director. Furthermore it will be heartening to
know that Mr. Nawaz Sharif, during his chief Minister ship of the province of Punjab
issued special instructions to the political and executives echelons not to interfere in The
Bank of Punjab, thereby ousting the possibility any pressure which may be put on the
management of the bank in respect of recruitment of staff or provision of credit. These
instructions have become an essential part of the culture of the bank.
CORPORATE INFORMATION (The Bank of Punjab)
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Name: The Bank of Punjab
Registration # 00000013054/19891102
Registration Date: 15- 11 - 1989
CRO Lahore
Auditors
A.F. Ferguson & Co. Chartered
Registered Office
7-Egerton Road, Lahore
Pakistan
Mission Statement
To exceed the expectations of our stakeholders by leveraging our relationship with the
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43 ,62
34 ,93
3 05
6 6 , 3 2
5 4 , 7 2
4 , 4 2
1 1 1 , 1 5
8 8 , 4 6
6 , 7 7
16 4 ,8 5
13 7 ,7 2
1 0 , 6 5
2 3 4 , 9
1 9 1 , 9
1 5 , 1 1
0
5 0 , 0 0 0
1 0 0 , 0 0 0
1 5 0 , 0 0 0
2 0 0 , 0 0 0
2 5 0 , 0 0 0
3 0 0 , 0 0 0
3 5 0 , 0 0 0
4 0 0 , 0 0 0
4 5 0 , 0 0 0
Rs.
(M)
7
B a la n c e S h e e t O v
government of Punjab and delivering a complete range of professional solutions with a
focus on program driven products and services in the agriculture and middle tire markets
through a motivated team.
Vision Statement
To be a customer focused bank with service excellence.
Business VolumeThese are the quick facts of the business in October 2007. At that instant BOPs businessvolume is as under.
Assets(Current +Fixed)
US$ 2.7Billion PKR 164.7 Billion
LoansUS$ 1.7Billion PKR 103.7 Billion
DepositsUS$ 2.3Billion PKR 140.3 Billion
Business Volume in terms of Investment, Current & Fixed Assets, Share Capital,Revenues, Deposits, Advances, Income, and EPS for the last 5 years is as under:
2003 2004 2005 2006 2007
Total assets RS (M) 43,621 66,320 111,154 164,855 234,974
Revenue RS (M) 3,675 5,488 10,912 18,603 26562
Shareholder'sEquity RS (M) 3052 4,420 6,777 10,659 15,110
Investment RS (M) 11,458 16,198 18,026 28,233 73,462
Deposits RS (M) 34,938 54,724 88,465 137,728 191,968
Advances (net) RS (M) 18,344 39,439 63,624 101,320 133,894
Income RS (M) 831 1,368 2,353 3,804 4,446
EPS (Rs/share) Rs 6.86 9.08 10.01 13.14 10.51
ROI % 7 8 13 13 6
Over last five years, Pakistaneconomy grown with realpace. Because of which recordgrowth in Banking sector.
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3,6
75
1,0
02
831
5,4
88
1,7
36
1,3
68
10,9
12
3,1
65 2
,353
18,6
03
4,7
69
3,8
04
26562
4,8
46
4,4
46
0
5,000
10,000
15,000
20,000
25,000
30,000
Rs(M)
2003 2004 2005 2006 2007
Imcome Statement Overvi
BODs, Management and Employees
Staff Strength
The total number of employees in the organization is 3859. Which is increasing. Regular
hirings are taking place.
Core Values
IntegrityHasham Ahmed 10
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Dedication Transparency Team work
OBJECTIVES
The Bank of Punjab being a commercial bank performs all those function as are
attributed to such banking institutions both in the areas of resources mobilization and
investment. It is providing funds for commerce, trade, industry, and agriculture but its
main emphasis is on accelerated development of agro-based industry. So the main
objective of the bank is to channelize the resources into sectors, which have suffered from
neglect. Other objectives included.
1. To provide speedier services to the common man.
2. To provide the highest rate of return to the shareholders by achieving good
profitable growth.
3. To enter into financing contracts and to mobilize resources in local andnow in foreign currencies consistent with the objects of the bank
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ORGANIZATIONAL STRUCTURE
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Board of Directors (BOP)
01 MR. JAVED MAHMOOD CHAIRMAN
02 MR. SAJJAD HUSSAIN ACTING PRESIDENT
03 MR. SOHAIL AHMADDIRECTOR
04 MR. ALMAN ASLAMDIRECTOR
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-
-
-
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05 MR. ANEEQ KHAWARDIRECTOR
06 MR. SHAFQAT ELLAHIDIRECTOR
07 MR. SHAFQAT MAHMOODDIRECTOR
01 MR. RAZA SAEEDSECRETARY
TO THE BOARD
BOP Top Level Management
Mr. Naveed Hafeez Shaikh Acting General Manager HR
Mr. Nadeem Amir General Manager Finance
Mr. Sharjeal Masud General Manager OperationsMr. Muhammad Salim
MirzaGeneral Manager Treasury
Mr. Shaheen N. Qureshi General Manager Special Assets
Dr. Shahid A. ZiaGeneral Manager T.R.C. & P
Division
Mr. Feisal Azmat Khan General Manager IT
Mr. Muhammad Hanif Head Audit & Inspection
Mr. Salman Saeed Head Credit Policy
Mr. Moazzam M ManekaHead Agriculture Credit
Department
DIVISION DEPARTMENTS
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DIVISION AND DEPARTMENTS
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ADMINISTRATION
OPERATIONS
BUSINESS DEVELOPMENT
CREDIT
INTERNATIONAL
FINANCE
RECOVERY
AUDIT & INSPECTION
TREASURY
ORGANIZATION & METHODS
INFORMATIONAL & TECHNOLOGY
OFFICERS TRAINING INSTITUTE
SHARES
LAW
STATIONERY
PLANNING RESERCH & PUBLICATION
HEADED BY: -
GENERAL MANAGER
HEADED BY: -
CHIEF MANAGER
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REGIONAL CHIE
BRANCH
REGIONAL NET-WORK
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There are 266 branches of the BOP in all over Pakistan; the detail of the network isdescribed below:
Total Branches 39 Total Branches 66
Total Branches 46 Total Branches 62
Total Branches 06 Total Branches 42
Head office, 7-Egerton Road, Lahore 042 9200421-33
Officers Training Institute, Lahore
(042) 5714180 5755625
Main Branch, Lahore
(042) 9200419 9200383 -9200351
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FAISALABAD LAHORE
GUJRANWALA MULTAN
KARCHI / QUETTA RAWALPINDI
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Critical Analysis
eptsThis part of report is the essence of the internship, as this will help other students to betterunderstand the working environment of the bank by finding the relationship between what
is written in the books and what is actually going on in fields. The theory written in thebooks in cases is not implemented as it is. In some cases theory is implemented with alittle modification but in other cases theory has nothing to do with practice. In accounting,banks dont prepare worksheet, but part of worksheet is prepared like trial balance, butlittle differences, theory and practice has substantial relationship. The securities for theloans are handled in the same way as theory says like mortgage, pledge, hypothecation,advances against insurance policies or liquidation procedure is the same. The difference isthere in the case of loans. Theory talks about four or five terms of loans that is cashfinance, overdraft, loans etc., but in practice there are some more terms used like runningfinance, demand finance etc. All other concepts of remittances, bills, foreign exchangedeposits, letters of credit are in accordance with theory almost. So for a internee it is more
important to learn new things which he/she has never heard about in his/her course book.To me, Theory gives you the direction to understand the processes and the terminologiesgoing across the World using best business practices in a broader view covering each andevery aspect of possible business scenarios. On the contrary practical life is specific,enclosed in a jar. In practical professionalism and firms environment is each and everything. Professional life only builds on the knowledge based on books even though it mayonly use 1% of the theoretical knowledge.
Computer system
The system has not totally shifted on computer. Manual procedure is still there hencecomputer facility is not fully availed. There should be a system at each counter for quickprocessing.
Right person for right jobDuring my internship I have observed the person who has came as customer RelationshipOfficer was acting as Cashier. It should not be like this. The person should be postedaccording to his qualification, profession skills and experience.
Customer problemPeople have to wait for en-cashing their cheques for about 10-20 minutes, which is not
good for the reputation of bank, the delay is due to manual work. Therefore I suggest thatcomputers and other electronic machines should be installed in bank so that time could besaved.
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Deficiency in managementI felt at some places the BOP need to have employees, because a lot of work is to be doneby a single employee that will result in work overload and employee might not performhis/her job with full devotion.
To analyze the financial position of BOP, different tools are use, which includes RatioAnalysis, Common size Analysis of the last five years.
Introduction and Importance of Financial AnalysisFinancial analysis involves the use of various financial statements. These statements doseveral things. First the balance sheet and the second is income statement.The balance sheet summarizes the assets, liabilities, and owners equity of a business at apoint in time, while the income statement summarizes revenues and expenses of a firmover a particular period of time. A conceptual framework for financial analysis providesthe analyst with an interlocking means for structuring the analysis.
Financial Statements (2006-07)
Balance Sheet
Balance Sheet
As of DEC 31, 2007
2006 2007
Rupees in 000Assets
Cash and balances with treasury banks 14,054,859 14210302
Balances with other banks 3,722,089 1927662
Lendings to financial institutions 11,846,823 2450000
Investments 28,233,211 73461695
Advances 101,319,954 133893585
Operating fixed assets 2,068,744 3252759
Deferred tax assets - -
Other assets 3,609,457 5778192
164,855,137 234974195
Liabilities
Bills payable 856,448 937647
Borrowings 6,989,424 17842915
Deposits and other accounts 137,727,606 191968909
Sub-ordinated loans - -
Liabilities against assets subject to finance lease 40,988 40321
Deferred tax liabilities 298,616 2205530
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Other liabilities 2,816,341 2983079
148,729,423 215978401
Net Assets 16,125,714 18995794
Represented By
Share capital 2,902,490 4230379
Reserves 4,537,232 7427232Unappropriated profit 3,219,246 3452842
10,658,968 15110453
Surplus on revaluation of assets - net 5,466,746 3885341
16125714 18995794
Income Statement
Income Statement
As of the year ended Dec 31, 20072006 2007
Rupees in 000Mark-up/return/interest earned 11,579,036 17,539,094Mark-up/return/interest expensed 7,508,795 13,939,377
Net mark-up/ interest income 4,070,241 3,599,717
Provision against non-performing loans andadvances 340,626 1,616,421
Provision for diminution in the value ofinvestments 33,000 24,479Bad debts written off directly 100 246,869
373,726 1,887,769
Net mark-up/ interest income after provisions 3,696,515 1,711,948Non Mark-up/interest Income
Fee, commission and brokerage income 473,212 653,512Dividend income 1,385,875 1,804,878Income from dealing in foreign currencies 239,804 377,233Gain on sale and redemption of securities 389,063 2,039,535
Unrealized gain / (Loss) on revaluation ofinvestmentsclassified as held for tradingOther income 466,435 547,635
Total non-markup/interest income 2,954,389 5,422,793
6,650,904 7,134,741Non Mark-up/interest Expenses
Administrative expenses 1,751,970 2,250,777
Provision against lending to financialinstitutions 130,000 -Provision against off balance sheet items 175 292
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Operating Results
0
5,000
10,000
15,000
20,000
25,000
RSinMillions
Balance Sheet
0
50,000
100,000
150,000
200,000
250,000
RsinMillions
Investments
Rs in
m 11,458 16,198 18,026 28,233 73,462
Shareholders Equity
Rs in
m 3,052 4,420 6,777 10,659 15,110
Revaluation Reserve
Rs in
m 2,155 3,419 6,893 5,467 3,885
Deposits
Rs in
m 34,938 54,724 88,465
137,72
8 191,969
Borrowings from FIs
Rs in
m 2,684 2,832 6,791 6,989 17,843
Graphical Representation of Financial Summary (Income
statement)
BOPs income statement for thelast five years represents a highgrowth in it.
Its all due to the increase in equity, and increase in the deposits ofthe bank.
Rise in the Markup Interestearning income results rise up inthe profit of bank represents increase in lending by the bank.
Graphical Representation of Financial Summary (Balance
Sheet)
Deposits are almost rose uptoaround 300% in last 5 years.
As last 5 years were really good forbanking sector. Assets of the banksare risen upto 400% particularly in2007 just because of crescenttowers.
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Common Size Analysis
Horizontal Analysis
This type of analysis represents the percent change in specific line item of the Incomestatement or the balance sheet from the last year. This analysis is used to comment on thegrowth of specific line item in the industry or the firm.
2003 2004 2005 2006 2007
Operating Results
Markup/ return/ interest earned % -24.399 34.872858.2857
147.1025
1 33.98141
Markup/ return/ interest
expenses %
-105.78
5
32.6842
8
73.0610
7
64.4559
9 46.12956
Net markup income % 9.067835.7298
5 46.875 15.086 -13.0556
Non-markup based Income % 54.99424.2479
517.5807
754.9424
5 45.52831
Non-markup based expenses %4.0918
212.8695
710.9217
731.4027
6 17.78069
Provision against NPLs % -57582.9787
2 85.800611.4973
3 80.19068
Net profit before tax %56.886
242.2811
145.1500
833.6338
9 1.588939
Net profit after tax %58.780
8 49.634541.8614
538.1440
6 14.43995
Balance Sheet
Total Assets %32.296
434.2264
840.3350
332.5746
9 29.84117
Advances (net) %63.906
553.4876
638.0123
9 37.2049 24.3282
Investments %27.605
229.2628
710.1409
136.1527
3 61.56789
Shareholders Equity %22.575
430.9502
3 34.779436.4199
3 29.45731
Revaluation Reserve %55.916
536.9698
750.3989
6 -26.0838 -40.7207
Deposits %31.973
836.1559
838.1405
135.7683
3 28.25508
Borrowings from FIs %51.937
45.22598
958.2977
52.83302
3 60.83058
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Income Statement
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
180.00
2003 2004 2005 2006 2007
Percentage
Total Earnings (Markup/Non Markup) Total Expense Net profit after tax
Graphical Representation (Income Statement)
Total earnings mark-up & non mark-up were rising 33% from last year. Asdeposits and the lendings of thebanks are rising up.
Administrative expenses areincreased with a great pace in lastfew years because of high rate ofinflation.
Rise in expenses results decrease inthe 22% percent profit from lastyear.
Graphical Representation (Balance Sheet)
Total assets were increased in lastfew years. 22% increase in theassets from the last year representsgrowth in the Bank.
As bank increase their paid upcapital because of which SOEincrease at the end of 2006.
BOP is grabbing the confidence of
their customers results increase inthe deposits.
Vertical Analysis
It represents the percent of a line item (expenses, tax, interests, dividends) impacts on totalrevenues.
2003 2004 2005 2006 2007
Markup/ return/ interest
earned %66.6
9 69.96 82.15 79.67 76.38
Non-markup based Income %33.3
1 30.04 17.85 20.33 23.62Markup/ return/ interest
expenses %19.4
0 19.69 35.80 51.67 60.70
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Balance Shee
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
2003 2004 2005 2006 2007
Percentage
Total Assets Shareholders Equity Deposits
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Non-markup based expenses %40.1
6 31.49 17.31 12.95 9.97Provision against NPLs % 0.32 1.29 4.44 2.57 8.22
Net profit before tax %40.1
6 47.54 42.45 32.81 21.10
Net profit after tax % 27.62 37.46 31.56 26.17 19.36
Graphical Representation
Markup interest earned isincreased because of increase in30% lendings from the last year.
Net profit before and after tax is
decreased because of huge rise upin the admin expenses.
Ratio AnalysisRatio analysis is used to calculate the profitability, liquidity/leverage etc. of the firm.From ratio analysis it is possible to predict future variances.Following ratios of BOP has been calculated:
Ratios 2003 2004 2005 2006 2007
Gross spread ratio % 71 72 56 35 21
Profit before tax to total income % 49.8 59.19 66.11 67.89 53.71
Markup/ Interest cover ratio times 5.15 5.08 2.79 1.94 1.65
Profit after tax to total income % 34.26 46.65 49.16 54.16 49.27
Total assets turnover times 0.06 0.06 0.07 0.09 0.1
Return on avg total assets (after
tax) % 1.88 2.49 2.65 2.76 2.22
Price earning ratio times 5.09 7.25 10.23 7.71 9.31
EPS (Non dilutive) Rs./share 6.86 9.08 10.01 13.14 10.51
Dividend per share Rs./share 2.5 4 5.2 3.25 3.5Market value per share Rs./share 34.95 65.9 102.45 101.25 97.8
Capital adequacy Ratio % 15.5 12.83 12.78 10.09 9.69
No. of branches No. 241 253 266 266 272
Staff Strength No. 3,019 3,144 3,430 3,681 3,859
Gross margins % 4.00% 3.51% 4.19% 3.10% 3.30%
Net margin % 3.30% 3.41% 3.99% 3.03% 3.16%
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Vertical Analysi
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
2003 2004 2005 2006 2007
%age
Markup/ return/ interest earned Non-markup based Income
Markup/ return/ interest expenses Non-markup based expenses
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Net Interest Margin % 3.23% 3.34% 3.90% 2.95% 3.09%
Total revenue % 5.50% 5.34% 5.39% 4.81% 4.91%
Equity / Assets %11.60
%11.90
%12.10
%10.80
% 10.30%
RoE %
16.20
%
21.00
%
21.90
%
25.50
% 25.40%
Cost/Income %49.80
%38.10
%26.90
%26.40
% 24.70%
Gross spread ratio
Gross spread ratio defines the totalspread of interest betweenborrowing and lending.
Spread: Difference between fundedrevenue as a percentage of averageearning assets and the cost of fundsas a percentage of average payingfunds.
The higher the spread the higherwill be the profit margin.
GSR= Rev/CGS
GSR= (Mark-up earned Mark-up Expense)/Mark-up earned
GSR is 2nd
highest all over the globe in Pakistan. GSR of the bank is decreasing because of the decrease in margin, a SBP rise up the
interest rates on the deposits.
Profit before tax to total income
Operating income less operatingcost (profit before tax).
This ratio tells what percent oftotal income is earned beforepaying all the taxes.
BOP has a high value of profit before tax to total income and
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56
35
21
71 72
0
10
20
30
40
50
60
70
80
2003 2004 2005 2006 2007
Gross spread ratio
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5.15 5.08
2.79
1.941.65
0
1
2
3
4
5
6
2003 2004 2005 2006 2007
they are decreasing after 2006 because of increase in admin expenses and rightingoff the bad debts.
The main reasons for reduction in the profitability were additional provisionagainst NPL due to the elimination of benefit of FSV and downturn in consumerand individual banking.
Mark-up/ Interest cover ratio
This ratio tells what percent ofinterest is covered from the totalincome of a firm or a bank.
It tells the ability of a bank to pay
its mark-up to the depositors..
MP/Interest cover ratio=EBIT/Mark-up
Profit after taxto total income
This ratio analysis tells profitability of afirm after paying all the taxes to totalincome.
Profitability of BOP is increased becauseof decrease in the tax paid to the govtand of high spread ratio.
BOP negotiated their taxes with thegovernment and only paid 20% tax in2006 and only 8% in 2007 instead of 35%
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Pr ofit after tax to total incom
34.26
46.6549.16
54.16
49.2
0
10
20
30
40
50
60
2003 2004 2005 2006 2007
Pr ofit after t ax to total income
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0.06 0.06
0.07
0.09
0.1
0
0.02
0.04
0.06
0.08
0.1
0.12
2003 2004 2005 2006 2007
Total assets turnover
Total assets turnover
Asset turnover= Net Income/ Totalassets
This ratio tells the turnover of theasset to generate income.
This ratio is increased during last fewyears which represent increase in theturnover by assets.
Return on Total assets (after tax)
This ratio gives an idea of returningnet profit generated by the bank incomparison with assets.
Return on assets= Profit after tax /Total Assets
This ratio is decreasing in the last year because of decrease in Profit asexpenses raised up.
The decrease was mainly due to increased equity as a result of increase inminimum capital requirements and additional provision due to withdrawal ofbenefit of FSV for most types of advances.
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1.88
2.49
2.652.76
2.2
0
0.5
1
1.5
2
2.5
3
2003 2004 2005 2006 2007
Return on avg total assets (aft er tax)
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Price earning ratio
Price Earning Ratio= Market price ofa share/ EPS
From this ratio it is analyzed what %of EPS is the part of MPS. What percent earned from a shareequivalent to the worth of 1 RS MPSby the bank or a firm.
Earning Per Share
EPS = Net Income/ total shares
Through this ratio it can beanalyzed what percent of 1RSshare is earned.
Capital adequacy Ratio
Capital adequacy ratio informs lendingup to a certain ratio of equity.
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5.09
7.25
10.23
7.71
9.31
0
2
4
6
8
10
12
2003 2004 2005 2006 2007
Pr ice earning ratio
3.
34.95
65.9
102.45 101.2597
6.86 9.0810.01 13.14 10.
3.255.242.50
20
40
60
80
100
120
2003 2004 2005 2006 2007
Rs.PerShare
EPS Non dilutive Dividend er share
15.5
12.78
9.6
12.83 10.09
0
2
4
6
8
10
12
14
16
18
2003 2004 2005 2006 2007
Capital adequacy Ratio
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This ratio is set by the State Bank of Pakistan.
Net Interest
Income
Difference between funded revenue as apercentage of average earning assets andthe cost of funds as a percentage ofaverage paying funds.
Return on equity
Profit before tax as a percentage oftotal equity.
The decrease was mainly due toincreased equity as a result of increasein minimum capital requirements andadditional provision due towithdrawal of benefit of FSV for mosttypes of advances.
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3.303.41
3.99%
3.033.16
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
2003 2004 2005 2006 2007
Net Interest Margin
16.20
21.00%21.90
25.50 25.4
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
2003 2004 2005 2006 2007
RoE
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Cost/Income
Operating cost includes all expenses chargedto arrive at profit before tax excluding costof funds, provisions and head office
expenses. Head office expenses are notconsidered since all banks do not accountfor head office expenses in their financialstatements.
Operating income means funded and non-funded revenue less cost of funds andprovisions.
As administrative costs are increasedbecause of which results decrease in the cost to Income ratio.
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49.80
38.10
24.7
26.90 26.40
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
2003 2004 2005 2006 2007
Cost/ Income
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In the light of the Knowledge obtained during internship and studying the organization,
the following recommendations may prove to be successful to the bank.
In order to capture a considerable share in the banking sector of the country, the
prime objective should be awareness in the general public. For this it should
launch a well-planned advertising campaign in the general public.
Physical facilities in a bank also play their role in enhancing its grade and sound
image. The bank should keep these facilities like furniture, parking facilities for
the customer.
Salaries of the officers must be compatible to other private banks so that the BOP
can attract professionals, intelligent persons.
The Bank of Punjab should minimize its expenses.
Special awards should be given to the hardworking employees who performed
extra-ordinary in the bank.
The bank should come up with new and innovative products. It would be advisable
to make these products while keeping in mind the gap between what people want
and what their banks are providing them.
The Bank of Punjab should concentrate more on advances than on investments
The bank should come up with such products or services in which the customerswould not have to come to the bank at any stage i.e. Telephone Banking etc.
The Bank of Punjab should use the latest technology because the bank which can
provide speedy, accurate and standard services in the delivery of products, loans
etc. to the customers will be successful e.g. computerization, fax installation.
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The authority should be delegated to the manager level.
MIS should be improved by connecting all regional offices and branches to thehead office through a network for timely delivery of information.
Management of Bank of Punjab should try to avoid the political influences and
should give loans on merit.
The bank should make a plan to gear up its recovery function on war fooling and
recognize the recovery function.
The Bank of Punjab should give some extra credit to concern to professional
qualifications such as MBA(IT)s, M.B.As, C.As A.C.M.As at the time of
recruitment and selection.
Interview should be conducted while recruiting personnel, to consider the
personality characters, communications skills and sociability.
The bank should adopt a policy to accommodate and facilitate the research
scholars who want to study the banking affairs. The universities and other
institutions can help to launch the studies regarding banking business.
All possible efforts should be made to protect the bank from the interruption of
Provincial government.
There should be an association of employees to convey the voice of the employees
to the administration.
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