BOP

INTERNSHIP REPORT
ON
The Bank of Punjab

SUBMITTED TO:

Dr.Shaheera Amin

SUBMITTED BY

Aamar hanif

ROLL # MBS-15-30

SESSION (2015-2018)

MBA 5TH (MORNING)

DEPARTMENT OF BUSINESS ADMINISTRATION

BAHAUDDIN ZAKARIYA UNIVERISTY

SUB CAMPUS SAHIWAL

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Table of Contents
Executive Summary ............................................................................................................................. 1
Introduction to the Banking Sector .................................................................................................... 2
Introduction to the bank of Punjab ..................................................................................................... 3
Mission statement ................................................................................................................................ 4
Vision statement ................................................................................................................................... 4
Organizational hierarchy chart ........................................................................................................... 4
Marketing mix........................................................................................................................................ 5
SWOT analysis ..................................................................................................................................... 7
PESTEL analysis:................................................................................................................................. 9
Financial analysis .................................................................................. Error! Bookmark not defined.
Recommendations and suggestions ............................................................................................... 33
Reference ........................................................................................................................................... 35

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Executive Summary

Internship experience is very important and helpful before anyone goes looking for a
job. Employers want people who have experience. Internship gives students the opportunity
to grow, academically and personally. When anyone initially starts out he/she is going to do
the menial tasks that every new person has to do. However this is not necessarily negative as
it teach the person responsibilities at the smallest level.

I have completed my 8 weeks internship in the bank of Punjab. I was working under
the guidance of ma’am Qurat-ul-ain.

Bank has 344 branches in Pakistan and main objective is to provide its customers with
safe, secure and reliable service through wide range of products. The report covers the
product information provided by the bank and consists of profile of banking industry, profile of
company, company business process, and SWOT analysis of company, problems and
recommendations. I believe that this report will provide important information.

SWOT analysis is one of the most important steps in formulating strategy using the
organization mission as a context; managers assess internal strengths distinctive
competencies and weakness and external opportunities and threats.

PESTEL analysis stands for political, economic, social, technological, environmental

and legal. Describes a framework of macro level environmental factors used in the
environment scanning components of strategic management.

As per Marketing Mix Bank of Punjab objective has been to expand its branch network
to meet client needs. Bank is well positioned and geographically poised, to cater for increased
business demands, from its existing potential clients.

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Introduction to the Banking Sector

Banking is a pipeline through which money moves into and out of circulation.

Banking in Pakistan

Banking is one of the most sensitive businesses all over the world. Banks play very
important role in the economy of a country and Pakistan is no exemption. Banks are
custodians to the assets of general masses. The banking sectors play a significant role in a
contemporary world of money and economy. It influences and facilitates many different but
integrated economic activities like resources, mobilization, production and distribution of public
finance. For the purchase of car or buildings of home, banks are always there to serve us
better.

Pakistan has a well-developed banking system, which consists of a wide variety of

institutions ranging from a central bank to commercial banks and to specialized agencies to
cater for special requirements of specific sectors. The country started without any worthwhile
banking network in 1947 but witnessed phenomenal growth in the first two decades. By 1970,
it had acquired a flourishing banking sector. From 1974 which was the year of privatization,
and 1977 the size of bank deposit were doubled, however this pace of growth became
stagnant during 1977-80.the next five year from 1980 to 1985 showed some improvement but
again suffered a slow growth rate. It was in 1990 when the wheel of banking sector started in
reverse in reverse direction when Nawaz Sharif government privatized two public sector
banks.

The government of Pakistan permitted small private sector banks to operate, which
indulged in doubtful policies to promote business. The public sector banking, which constituted
the backbone, thus continued to suffer because of their approach, size and carried over
liabilities.

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Introduction to the bank of Punjab

The bank of Punjab was established in 1989 and was given the status of scheduled
bank in 1994.the bank of Punjab is working as a scheduled commercial bank with a network
of almost 344 branches at all over major locations in the Punjab. The bank provide all types
of banking services such as deposit in local currency, remittances, and advances to the
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 play a vital role in the national economy through mobilization of hither to
untapped local resources, promoting savings and providing funds for investments. The bank
offers attractive rates of profits on deposits, opening of foreign currency accounts and handling
of foreign exchange business for example imports, exports and remittances, financing, trade
and industry for working capital requirements and money market operations.

The lending policy of bank is not only cautious and constructive but also based on the
principles of prudent lending with maximum emphasis on security. The bank of Punjab at the
level of decision making and implementation, senior management of the bank is drawn from
highly accomplished bankers with reach 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. The sun rising over the five wavy lines
symbolizes the dawn of new era of progress and prosperity for the land of five rivers and hence
for Pakistan.

Core values of bop

Our customers As our first priority

Integrity In all our dealings

Excellence In everything we do

Respect For our customers and each other

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Mission statement

To exceed the expectation of our stakeholders by leveraging our relationship with the
government of Punjab and delivering a complete range of professional solutions with a focus
on program driven products and services in the agriculture and middle tier markets through a
motivated team.

Vision statement

‘’to be a customer focused bank with service excellence.’’

Organizational hierarchy chart

Board of
directors

CEO
Presid

Corporate Commercial Consumer

head head head

Head office

Regional
office

Branch

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Marketing mix
Product

The bank of Punjab provides different products to its customers.

Current account

Individual partners, companies associations, clubs, societies are eligible to open current
account.

PLS saving account

Saving account is designed to mobilizing saving primarily from a large number of individuals
and household.

Corporate premium account

This account has been introduced for business entities.

Senior citizen saving account

This is a saving bank product available for all senior citizen persons of 60 years.

Business Tijarat account

This account is specially designed to cater the need of business, individuals as well as
business entities.

Price

"The amount of money the customers pay for the product of a company". Bop provides
different products and services to its customers that have been discussed in previous section.
Pricing of products means the commission to be paid by the customer in return of services
provided by the bank. The commission paid for the services mainly includes: markup/interest
bank charges fees and bank commission etc. These charges and commissions are prescribed
on schedule of bank charges (soc) that keeps on changing time to time and issued by the
bank periodically .there has been a lot of controversy regarding the price of banking
companies. Some scholars argue that the mark up received by the bank is rent for capital that
issued by others. On the contrary, some call it purely Reba. This however is a very
controversial and sensitive issue and I would like not to give any comment on it.

Place

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Everything we do is for you

"The activities a bank undertakes to make products and services easily available or accessible
to the customers".

Bank of Punjab objective has been to expand its branch network to meet client needs. Bank
is well positioned and geographically poised, to cater for increased business demands, from
its existing potential clients. The bank of Punjab spread its branches all over Punjab covering
major business centers and principle cities. Bank plans to add more branches to his growing
network in the ensuing years. At present, bop has opened all its branches at commercial and
business as or near to commercial areas so that the customers or clients face no problem in
reaching the bank. Head office of bop is situated in Lahore.

Promotion

"All activities that a company undertakes to communicate and promote its products".

This is an age of competition. Numerous organizations are providing financial services to the
customer. These days everyone is facing pressure of competitors. In this world of growing
competition, the only way to survive and grow, for an organization, in the market place is the
proper marketing and promotion of its products. Same is the case with banking companies.
There is large number of foreign and local banks working in the country and it has been noticed
that they are emphasizing much on their marketing strategies. In this scenario, the key for a
bank to succeed and attract its customers is adequate promotion of its products & services.
The bank can attract and retain its customers through:

Sales promotion

Advertisement

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SWOT analysis

SWOT analysis is one of the most important steps in formulating strategy using the
organization mission as a context; managers assess internal strengths distinctive
competencies and weakness and external opportunities and threats. The goal is to then
develop good strategies and exploit opportunities and strengths neutralize threats and avoid
weaknesses

Strength

 Bop has 344 branches in all of the major cities of the country. It is good to expand the
network of its branches.

 Bop has opened all its branches at commercial areas so that the customers or clients
face no problems in reaching to the bank.

 As a result of the compassionate and personalized services of the officers, the clients’
perception for bop is very high. They have trust and feel themselves to be secure while
dealing with bop.

 Bop has diversified its investment to federal government securities, ordinary shares
and

Term financing certificates.

 Bop has got a reliable and easy to use internal computer system. Any information
 Regarding the transactions in customers’ deposits has been computerized. Data
is

Properly maintained.

Weakness

I observed during my internship that some of the employees were burdened with over work
so I think that the work should be distributed according to their capabilities.

 As each staff member performs many duties in one time so this captures extra time
which can slow down the performance.

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 Due to lack of workplace, staff members as well as the general public face
disturbance in the bank.

 Biased selection of employees.

 Rates of interest are very high due to inflation and economic instability.

Opportunities

The bank of Punjab compete its competitors by encouraging agriculture loans. So in such
a way it plays an important role for promotion of agriculture sector.

 Bank also encourages industrial sector. So in such a way most of industrialists

deal with Punjab bank as a result bank maintains large size of deposits.
 Management of the bank is committed to continue its efforts for outstanding
performance.
 To seek new customers this can build long-term relation with the bank.
 At the national level the biggest opportunity is to integrate into international
financial market.
 Proper advertisement of their products in proper Medias.
 Bop is surrounded by many investors and it has an aggressive marketing to
increase its business.

Threats

 Low security in terms of clients they can make frauds at any time.

 All banks are facing immense competition as well as challenges to provide better
customer services and to serve their customer for derivative banking products and
services.

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PESTEL analysis:

PESTEL analysis stands for political, economic, social, technological, environmental and
legal. Describes a framework of macro level environmental factors used in the environment
scanning components of strategic management.

Political factors

 The bank of Punjab follows all the policies implemented by the state bank of Pakistan.
 SBP’s monitory policy also affects the working of bop as SBP revises its interest rates
on monthly, quarterly, semiannually and on annual basis.

Economic factors

Economic factors such as interest rates, exchange rates and inflation rates also affecting the
working of bop.

 SBP has issued a new policy regarding discount rates that is -7 policies due to which
banks are bound to give loan 7% below on the normal interest rates.
 Exchange rates are changing on daily basis which also causes a major factor for the
increase in banks’ profits or expenses.

Social factors

Social factors like culture aspects, health consciousness, population growth rate and
emphases on safety also affect the working of an organization.

 It is conducting health programs for its employees.

 As its trade finance products are famous among corporate clients so it keeps good
relations with its customer.
 It is also recruiting its older workers in its different projects in Pakistan after they are
retired from bop.

Technological factors

 Bop is adopting the latest technologies to compete its operations.

 Rate of technological change is very fast.
 It uses bop direct software to keep in touch with its corporate clients 24 hours 7 days.

Environmental factors

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 Bop provide better infrastructure for customers.

 Bop changes their rules and regulation according to customers and SBP.

Legal factors

 Bop is paying its taxes regularly.

 Bop makes improvements in its advertisement strategy.
 Bop follows health related laws for employees.

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Financial Analysis
BALANCE SHEET 2012 2013 2014 2015 2016

ASSETS Rs. Rs. Rs. Rs. Rs.

Cash and balances with

treasury banks 14,069,601 16,698,333 17,298,251 23,820,864 23,622,411

Balances with other banks 3,276,234 3,607,107 3,101,170 4,265,296 2,239,170

Landings to financial
institutions 7,309,587 7,447,375 1,562,946 11,407,448 32,748,623

Investments 56,359,404 92,492,813 129,552,044 123,973,891 154,874,757

Advances 120,796,694 127,107,501 149,565,885 157,239,598 170,312,593

Operating fixed assets 3,534,660 3,597,483 3,473,491 3,514,801 5,490,121

Deferred tax assets 14,063,694 13,886,769 13,070,614 12,627,352 9,845,426

Other assets 9,721,900 16,052,311 14,486,073 15,825,007 21,237,087

TOTAL ASSETS 229,131,774 280,889,692 332,110,474 352,674,257 420,370,188

LIABILITIES

Bills payable 581,100 850,569 1,500,709 1,506,335 1,727,731

Borrowings 11,526,783 24,963,566 44,683,826 22,802,482 44,742,624

Deposits and other accounts 208,176,902 237,896,692 266,055,761 306,560,694 342,290,763

Sub-ordinate loans - - - - 2,000,000

Liabilities against assets

subject to finance lease 13,887 7,831 3,601 2,386 1,128

Deferred tax liabilities - - - - -

Other liabilities 5,223,152 6,510,013 7,495,928 8,345,203 10,281,235

TOTAL LIABILITIES 225,521,824 270,228,671 319,739,825 339,217,100 401,043,481

NET ASSETS 3,609,950 10,661,021 12,370,649 13,457,157 19,326,707

OWNER'S EQUITY

Share capital 5,287,974 5,287,974 5,287,974 10,551,132 15,551,132

Reserves 2,012,492 1,914,956 1,187,433 1,539,659 2,081,243

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Inappropriate
profits/Accumulated loss (14,411,509) (14,179,410) (12,743,218) (11,275,026) (9,113,154)

Share Deposit money 10,000,000 17,000,000 17,000,000 12,000,000 7,000,000

Surplus on Revaluation of
Assets 720,993 637,501 1,638,460 904,550 4,070,644

Discount on issue of shares (263,158) (263,158)

TOTAL OWNER'S EQUITY 3,609,950 10,661,021 12,370,649 13,457,157 19,326,707

TOTAL LIABILITIES +
OWNER'S EQUITY 206,127,387 254,353,438 314,780,129 343,865,720 353,211,274

VERTICAL ANALYSIS

Technique for identifying relationship between items in the same financial statement by
expressing all amounts as the percentage of the total amount taken as 100. In a balance
sheet, for example, cash and other assets are shown as a percentage of the total assets and,
in an income statement, each expense is shown as a percentage of the sales
revenue. Financial statements using this technique are called common size financial
statements
dividing each expense item in the income statement of a given year by net sales to identify
expense items that rise more quickly or more slowly than a change in sales. For example, an
analyst may study a firm’s balance sheet to compare the level of current assets with the level
of current liabilities in order to measure liquidity. Analyst often studies a firm’s income
statement to compare net income with total sales.

HORIZONTAL ANALYSIS

A procedure in fundamental analysis in which an analyst compares ratios or line items in a

company's financial statements over a certain period of time. The analyst will use his or her
discretion when choosing a particular timeline; however, the decision is often based on the
investing time horizon under consideration.

The process of dividing each expense item of a given year by the same expense item in the
base year. It allows assessment of changes in the relative importance of expense item over
time and the behavior of expense items as sales change.

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BALANCE SHEET VERTICAL ANALYSIS

BALANCE SHEET 2012 2013 2014 2015 2016

Assets % % % % %

Cash and balances with treasury banks 6.14% 5.94% 5.21% 6.75% 5.62%

Balances with other banks 1.43% 1.28% .93% 1.21% .53%

Landings to financial institutions 3.19% 2.65% .47% 3.23% 7.79%

Investments 24.61% 32.95% 39% 35.15% 36.84%

Advances 52.71% 45.24% 45% 44.59% 40.51%

Operating fixed assets 1.54% 1.28% 1.04% 1.00% 1.31%

Deferred tax assets 6.14% 4.94% 3.93% 3.58% 2.34%

Other assets 4.24% 5.71% 4.36% 4.48% 5.05%

TOTAL ASSETS 100.00% 100.00% 100.00% 100.00% 100.00%

Liabilities

Bills payable .26% .32% 0.47% 0.44% .43%

Borrowings 5.11% 9.24% 13.97% 6.72% 11.15%

Deposits and other accounts 92.31% 88% 83.21% 90.37% 85.35%

Sub-ordinate loans _ _ _ _ .50%

Liabilities against assets subject to finance 0.06% 0.002% 0.00% 0.00% 0.00%
lease

Deferred tax liabilities _ _ _ - _

Other liabilities 2.32% 2.41% 2.34% 2.46% 2.56%

TOTAL LIABILITIES 100% 100% 100% 100% 100%

NET ASSETS 1.60% 3.83% 3.72% 3.81% 4.59%

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Owner's Equity

Share capital 2.31% 1.88% 1.59% 2.99% 3.69%

Discount on issue of share _ (.07) (.06)

Reserves .88% .68% .36% .46% .49%

Accumulated loss (6.26)% (5.00)% (3.83)% (3.18)% (2.16)%

Share Deposit 4.36% 6.04% 5.12% 3.40% 1.66%

Surplus on Revaluation of Assets 0.31% 0.23% 0.49% 0.25% 0.97%

Total owner's equity 1.6% 3.83% 3.72% 3.81% 4.59%

Total liabilities + owner's equity 100.00% 100.00% 100.00% 100.00% 100.00%

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BALANCE SHEET HORIZONTAL ANALYSIS

BALANCE SHEET 2012 2013 2014 2015 2016

Assets % % % % %

Cash and balances with treasury banks 100.00% 118.68% 122.95% 169.31% 167.89%

Balances with other banks 100.00% 110.09% 94.65% 130.19% 68.34%

Landings to financial institutions 100.00% 101.88% 21.38% 156.06% 448%

Investments 100.00% 164.14% 229.63% 219.77% 274.58%

Advances 100.00% 105.22% 123.82% 130.18% 140.96%

Operating fixed assets 100.00% 101.77% 98.27% 99.44% 155.32%

Deferred tax assets 100.00% 98.74% 92.94% 89.78% 70%

Other assets 100.00% 165.19% 149.04% 162.84% 218.58%

TOTAL ASSETS 100.00% 122.60% 144.91% 153.88% 183.41%

Liabilities

Bills payable 100.00% 146.37% 258.25% 259.22% 297.32%

Borrowings 100.00% 216.57% 387.65% 197.82% 388.16%

Deposits and other accounts 100.00% 114.27% 127.8% 147.25% 164.42%

Sub-ordinate loans 100.00% _ _ _ _

Liabilities against assets subject to finance 100.00% 56.39% 25.93% 17.18% 8.12%
lease

Deferred tax liabilities 100.00% - - _ _

Other liabilities 100.00% 124.56% 143.51% 159.77% 196.84%

Total liabilities 100.00% 119.82% 141.77% 150.41% 177.82%

Net assets 100.00% 293.65% 337.24% 367.49% 526.83%

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Owner's equity

Share capital 100.00% 100.00% 100% 199.5% 294%

Reserves 100.00% 95.15% 59% 76.50% 103%

Accumulated Loss 100.00% (98.39)% (88.42)% 78.23% 63.23%

Share Deposit 100.00% 170% 170.% 120% 70%

Surplus on Revaluation of Assets 100.00% 88.4% 227.% 125% 564.6%

Discount on issue of Share - - 263 100%

Total owner's equity 100.00% 355.16% 307.58% 179.7% 868.3%

Total liabilities + owner's equity 100.00% 455.16% 407.58% 279.72% 968.36%

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PROFIT & LOSS STATEMENT OF BANK Of PUNJAB

PROFIT & LOSS ACCOUNT 2012 (Rs.) 2013 (Rs.) 2014 (Rs.) 2015 (Rs.) 2016 (Rs.)

Mark-up / return / interest earned 18,220,175 20685011 24666024 24195203 29521719

Mark-up / return / interest expensed 18,801,642 21073271 22522918 20176169 20525783

Net Mark-Up / Interest Income (581,467) (388,260) 2143106 4019034 8995936

Provision against non-performing loans

and advances – net (559,604) (3164234) (965430) (673081) 1118605

Provision / (reversal) for diminution in

the value of investments – net (2760724) 531654 337040 6643 110881

Bad debts written off directly - 0 0 241 -

Net Mark-Up After Provisions (3901795) (3020840) 2771496 4685231 7766450

Non mark-up / interest income

Fee, commission and brokerage income 561,688 724499 762490 775622 906494

Dividend income 402779 286375 220985 137512 33258

Income from dealing in foreign

currencies 134488 160089 162980 147417 183830

Gain on sale of securities – net 293,303 330,025 1449814 1391874 667322

Unrealized gain / Loss on revaluation of

investments 18020 (5383) 8620 (4296) (654)

Other income 473055 494,103 585856 1148097 1000180

Total Non-Markup Income 1883333 1989708 3190745 3596226 2790430

(2018462) (1031132) 5962745 8281457 10556880

Non Mark-Up / Interest Expenses

Administrative expenses 3426329 3954066 4430520 5199782 6215031

Provisions against other Asset - 1121 168419 32945 (2416)

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Provision against off Balance 740,000 (244,111) - 325 17875

Other charges 1605 205 (40590) 47123 19727

Total Non-Markup / Interest Expenses 4167934 3711281 4558349 5280175 6250217

(6186396) 2680149 1403892 3001282 4306663

Profit Before Taxation (6186396) 2680149 1403892 3001282 4306663

Taxation 2157119 174774 229949 1063275 1519214

Profit / Loss after Taxation (4029277) 2505375 1631841 1938007 2787449

Accumulated loss (10330839) (14352989) (14067841) (12724364) 11250885

Transfer from Statutory - (69595) (326769) (387601) (557490)

Transfer from General - - 11604 814 (980)

Transfer from Surplus 7127 6770 6801 10352 9858

Accrual Gain 8391 2514

Right Share (78484) (103,620)

(10323,712) (14415814) (14376205) 13188892 11900603

Accumulated Loss/Profit (14352989) 11910439 (12742364) (11250885) 14688052

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PROFIT & LOSS VERTICAL ANALYSIS

PROFIT & LOSS ACCOUNT 2012 2013 2014 2015 2016

% % % % %

Mark-up / return / interest earned 100.00% 100.00% 100.00% 100.00% 100.00%

Mark-up / return / interest expensed 103.19% 101.87% 91.31% 83.41% 69.52%

Net Mark-Up / Interest Income 3.19% 1.87% 8.68% 16.58% 30.47%

Provision against non-performing loans and

advances – net 3.07% 15.30% 1.36% .02% .37%

Provision / (reversal) for diminution in the value

of investments – net 15.15% 2.57% 3.91% 2.77% 3.78%

Bad debts written off directly 0.00% 0.00% 0.00% 0.00% 0.00%

Net Mark-Up / Interest Income After

Provisions 21.41% 10.85% 11.23% 19.33% 26.30%

Non Mark-Up / Interest Income

Fee, commission and brokerage income 3.08% 3.50% 3.09% 3.20% 3.07%

Dividend income 2.21% 1.38% 0.89% 0.56% .11%

Income from dealing in foreign currencies .74% .77% 0.66% .61% .62%

Gain on sale of securities – net 1.61% 1.59% 5.87% 5.75% 2.26%

Unrealized gain / Loss on revaluation of

investments 0.09% 0.03% 0.03% 0.00% 0.00%

Other income 2.59% 2.38% 2.37% 4.74% 3.38%

Total Non-Markup / Interest Income 10.34% 9.61% 12.93% 14.84% 9.45%

11.08% 1.24% 24.17% 34.18% 35.75%

Non Mark-Up / Interest Expenses

Administrative expenses 18.80% 19.11% 17.96% 21.46% 21.05%

Provision against other Assets 00.00 .68 .13 00

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Other provisions / write offs 4.06% 1.18% 0.00% 0.06%

Other charges 0.08% 0.00% 0.16% 0.19% 0.06%

Total non-markup / interest expenses 22.87% 20.29% 18.48% 21.78% 21.17%

33.95% 21.53% 5.69% 12.38% 14.58%

Extra ordinary / unusual items 0.00% 0.00% 0.00% 0.00% 0.00%

Profit Before Taxation 33.95% 21.53% 5.69% 12.38% 14.58%

Taxation

Current .56% 1.14 1.09

Prior 2.93%

Deferred 11.84 .84 1.43% 3.24 4.05

Profit After Taxation 22.11% 20.69% 6.62% 8% 9.44%

Accumulated Profit 56.69 69.38 57.03 52.59 38.11

Transfer from Statutory 1.32 1.59 1.88

.33

Transfer from General .027 .00 .03

Transfer from surplus .04 .03 .47 .04 .00

Actuarial Gain .03 .00

Right sale issue .32 .35

58.28 54.57

56.73 69.74 40.31

Actual Profit 78.84 90.43 64.9 62.57 49.75

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PROFIT & LOSS HORIZONTAL ANALYSIS

2015 2016(R
PROFIT & LOSS ACCOUNT 2012 (Rs.) 2013 (Rs.) 2014 (Rs.) (Rs.) s.)

100.00% 132.79 162.03

Mark-up / return / interest earned 113.53% 135.37% % %

107.31 109.17
Mark-up / return / interest expensed 100.00% 112.08% 119.79% % %

100.00% 691.18 1547.1

Net Mark-Up / Interest Income 66.77% 368.56% % %

Provision against non-performing loans and 100.00% 120.27 199.89

advances – net 565.44% 172.52% % %

Impairment loss on available for sale 100.00%

investments 0.00% 0.00% 0.00% 0.00%

Provision / for diminution in the value of 100.00%

investments – net 19.26% 12.21% .24% 4.01%

Provision against purchase under resale 100.00%

arrangement 0.00% 0.00% 0.00% 0.00%

Bad debts written off directly 100.00% 0.00% 0.00% 241% 0.00%

Net Mark-Up / Interest Income After 100.00% 120.07 199.05

Provisions 57.52% 123.49% % %

Non Mark-Up / Interest Income

100.00% 138.08 161.38

Fee, commission and brokerage income 128.98% 135.74% % %

Dividend income 100.00% 71.09% 54.86% 34.14% 8.26%

100.00% 109.61 136.68

Income from dealing in foreign currencies 119.03% 121.18% % %

100.00% 227.52
Gain on sale of securities – net 112.52% 494.30% 474.5% %

Unrealized gain / Loss on revaluation of 100.00%

investments 29.87% 47.83% 23.84% 3.63%

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100.00% 242.69 211.43

Other income 104.45% 123.84% % %

100.00% 190.95 148.16

Total Non-Markup / Interest Income 105.65% 169.42% % %

100.00% 410.28 523.01

209.76% 295.41% % %

100.00% 151.76 181.39

Administrative expenses 115.40% 129.31% % %

Other provisions / write offs 100.00% 32.98% - 0.04% 2.241%

Other charges 100.00% 12.77% 25.29% 29.36% 12.29%

Provision against other 100.00% - - -

100.00% 126.68 149.94

Total non-markup / interest expenses 89.04% 109.37% % %

100.00% 8.45% 22.69% 48.51% 69.61%

Extra ordinary / unusual items 100.00% 0.00% 0.00% 0.00% 0.00%

Profit Before Taxation 100.00% 8.45% 22.69% 48.51% 69.61%

Taxation 100.00% 8.10% 10.66% 49.29% 70.42%

Profit After Taxation 100.00% 8.63% 40.55 48.09 69.17

Accumulated Loss/Profit 100.00 138.93 136.17 123.17 108.90

Transfer from Statutory 100.00 - - - -

Transfer from General 100.00 - - - -

Transfer from Surplus 100.00 94.99 95.42 145.25 138.32

100.00 139.64 139.25 127.75 115.27

Accumulated Loss Carry /Forward 100.00 98.01 88.78 78.38 63.62

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i) Ratio Analysis

a) Liquidity Ratios

Liquidity ratios measure a firm’s ability to meet its short term (current) obligations. These include:

Current Ratio:

Current Ratio = Current Assets / Current Liabilities

This ratio indicates the firm’s ability to pay its short term liabilities by those assets expected to be
converted to cash in the near future. Current assets normally include cash, marketable securities,
accounts receivables, and inventories. Current liabilities consist of accounts payable, short-term notes
payable, current maturities of long-term debt, accrued taxes, and other accrued expenses. Current
assets are important to businesses because they are the assets that are used to fund day-to-day
operations and pay ongoing expenses.

Year 2014 2015 2016

Current Assets 33027.5 24325.5 21822.8
Current Liabilities 148076.2 213412.2 181406.3
Current ratio 0.22 0.11 0.12

0.25

0.2

0.15

0.1

0.05

0
2014 2015 2016

In all the year current ratio is unsatisfactory. It means that Bop has not made sufficient investment in
current assets. The reason behind that Bop business is based on large size of deposits so its current
liabilities has more than larger than current assets. Standard ratio is 2:1 but in banking sector short
term liabilities are greater than current assets.

Acid Test Ratio

Absolute liquid assets = cash & restricted cash, marketable securities

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Year 2014 2015 2016

Current Assets 91980 17138 12864
Current Liabilities 148076.2 213412.2 181406.3
Current ratio 0.22 0.11 .12

0.25

0.2

0.15

0.1

0.05

0
2014 2015 2016

All the years current ratio is unsatisfactory and below standard 2:1.my name is

Sales to Working Capital:

Sales to Working Capital = Sales / Working Capital

Sales to working capital give an indication of the turnover in working capital per year. A low working
capital indicates an unprofitable use of working capital.

Year 2014 2015 2016

Sales 14837 23501 22307.16
Working Capital -115048.5 -189087 -159583
Sales to Working Capital -0.12 --0.12 -0.14

Due to inappropriate use of working capital sales figure gives the negative ratio. In recent year there
is a a gross and net loss.

Working Capital:

Working Capital = Current Assets – Current Liabilities

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A measure of both a company's efficiency and its short-term financial health. Positive working capital
means that the company is able to pay off its short-term liabilities
Also known as "net working capital", or the "working capital ratio" .

Year 2014 2015 2016

Current Assets 33027.5 24325.5 21822.8
Current Liabilities 148076.2 213412.2 181406.3
Working Capital -115048.5 -189087 -159583

-50000

-100000

-150000

-200000
2014 2015 2016

In all the years BOP has Negative working capital it means that a company currently is unable
to meet its short-term liabilities with its current assets (cash, accounts receivable and inventory).

b) Leverage Ratios:

By using a combination of assets, debt, equity, and interest payments, leverage ratio's are used to
understand a company's ability to meet it long term financial obligations. Leverage ratios measure the
degree of protection of suppliers of long term funds. The level of leverage depends on a lot of factors
such as availability of collateral, strength of operating cash flow and tax treatments. Thus, investors
should be careful about comparing financial leverage between companies from different industries.
For example companies in the banking industry naturally operates with a high leverage as collateral
their assets are easily collateralized.

These include:

Time Interest Earned:

TIE Ratio = EBIT / Interest Charges

The interest coverage ratio tells us how many times the company can cover its interest charges from
its EBIT.The ratio is designed to understand the amount of interest due as a function of company’s
earnings before interest and taxes (EBIT). This ratio measures the extent to which operating income
can decline before the firm is unable to meet its annual interest cost.

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Year 2014 2015 2016

EBT 4771 4856 -16858
Interest Charges Nil Nil Nil
TIE ratio 4771 4856 (16858)

5000

-5000

-10000

-15000

-20000
2014 2015 2016

As the bank of Punjab uses no debt in its capital structure so the TIE ratio is hundred percent for the
years 2014, 0715 but in 2016 the BOP has to face an impairment loss of Rs.1119824000 on revaluation
of asset and hence Net loss Rs. 10085 (Million).

Debt Ratio:

Debt Ratio = Total Debt / Total Assets

The ratio of total debt to total assets, generally called the debt ratio, measures the percentage of
funds provided by the creditors. The proportion of a firm's total assets that are being financed with
borrowed funds. The debt ratio is calculated by dividing total long-term (debt) and short-term
liabilities (short term borrowing, a/c payable) by total assets. The higher the ratio, the more leverage
the company is using and the more risk it is assuming. Assets and liabilities are found on a company's
balance sheet.

Year 2014 2015 2016

Total debt 144743 209821 176362
Total Assets 164863 235018 185893
Debt Ratio 0.87 0.89 0.95

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0.96
0.94
0.92
0.9
0.88
0.86
0.84
0.82
2014 2015 2016

Calculating the debt ratio, we came to see that this company is highly leveraged one with increase in
short term borrowing.

Debt to Equity Ratio:

Debt to Equity Ratio = Long term debt / Total Equity

This ratio describes the capital structures of the company.

A high debt to equity ratio implies that the company has been aggressively financing its activities
through debt and therefore must pay interest on this financing. The bank of Punjab uses little or no
debt in its capital structure and has less financial risk.

Total debt = short term borrowing + long term debt.

Year 2014 2015 2016

Debt 18 10 11

Total Equity 16133 19012 3728

Debt To Equity Ratio 0.001 .0005 0.003

0.003

0.0025

0.002

0.0015

0.001

0.0005

0
2014 2015 2016

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 BOP

Bank of Punjab have less financial risk because it uses very little debt in its capital structure hence uses
about 100% equity so not highly leveraged one.

Current Worth / Net worth Ratio:

Current Worth to Net worth Ratio= Current Worth / Net worth Ratio

We can calculate current worth and net worth by using following formulas:

Current Worth = Total Current Assets – Total Current Liabilities

Net Worth = Total Assets - Total Liabilities

Year 2014 2015 2016

Current Worth -115048.5 -189087 -159583
Net worth Ratio 16134 19012 3728
Ratio -7.1 -10 -42
Theyratio gives negative values because its current assets are insufficient to meet current liabilities.
In recent year instead of improving the ratio is unsatisfactory which not a good sign is.

Total Capitalization Ratio:

Total Capitalization Ratio = Long-term debt / long-term debt + shareholders' equity

The capitalization ratio measures the debt component of a company's capital structure, or
capitalization (i.e., the sum of long-term debt liabilities and shareholders' equity) to support a
company's operations and growth. Long-term debt is divided by the sum of long-term debt and
shareholders' equity. This ratio is considered to be one of the more meaningful of the "debt" ratios -
it delivers the key insight into a company's use of leverage.

Year 2014 2015 2016

Long Term debt 18 10 11
Long term debt + Equity 1615 19022 3738
Capitalization Ratio 0.011 0.0005 0.003
worth Ratio

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0.035
0.03
0.025
0.02
0.015
0.01
0.005
0
2014 2015 2016

The ratios for the last 3 years show below standard (1:2). Because BOP uses little or no long term debt
in its capital structure.

Long term Assets versus Long term Debt

Long term Assets versus Long term Debt= Long Term Assets/ Long Term Debts

Year 2014 2015 2016

Long Term Assets 131308 210667 164051
Long term debt 18 10 11
L.T Assets /L.T Debts 7295 21067 14914
Debt:worth Ratio
25000

20000

15000

10000

5000

0
2014 2015 2016

Long term assts are in greater proportion than long term debt, tells us that assets are being financed
by equity rather than long term debt.

Debt Coverage Ratio:

Debt Coverage Ratio = Net Operating Income / Total Debt

The ratio shows the capacity of a firm to meet its total debt (Short+long term debts) by its operating
income.

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Year 2014 2015 2016

Net Operating Income 4771 4856 (16858)
Total Debt 144743 209821 176362
Debt coverage Ratio 0.033 0.023 -0.1

0.04
0.02
0
-0.02
-0.04
-0.06
-0.08
-0.1
2014 2015 2016

Ratio in 2016 is not satisfactory because of Operation loss and ratio is continuously decreasing.

Equity Ratio

Equity Ratio = Total Equity/Total Assets

Year 2014 2015 2016

Total Equity 16133.4 19012 3728
Total Assets 164863 235018 185893
Debt Ratio 0.87 0.89 0.95
c) Profitability Ratios:

Profitability is the net result of a number of policies and decisions. This section discusses the different
measures of corporate profitability and financial performance. These ratios, much like the operational
performance ratios, give users a good understanding of how well the company utilized its resources
in generating profit and shareholder value. The long-term profitability of a company is vital for both
the survivability of the company as well as the benefit received by shareholders. It is these ratios that
can give insight into the all important "profit". Profitability ratios show the combined effects of
liquidity, asset management and debt on operating results. These ratios examine the profit made by
the firm and compare these figures with the size of the firm, the assets employed by the firm or its
level of sales. There are four important profitability ratios that I am going to analyze:

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Recommendations and suggestions

Performance appraisal

During internship I felt that there is no or very less appraisal of any ones cool performance.
The manager should strictly monitor the performance of every staff member. All of them should
be awarded according to their performance and result in the shape of bonuses to motivated
and incite them to work more efficiently.

To overcome problem of space and furniture

In the critical analysis this, problem is discussed. To overcome this problem it is suggested
that a special section should be made inside the branch. Which should only handle the
treasury function, salaries and pensions of federal personnel or the bank should do these
functions in the evening time. Also management should purchase more furniture and arrange
them in such a way which provides maximum space and convenient especially in deposit
department and there should also be convenient sitting place for customers.

Technological advancement

I would like to suggest that at least all the main branches of bop should be fully computerized
in order to expedite the dealing process among bankers and their customers. Every
department should be provided a computer with adequate training (especially advances,
deposits and foreign exchange departments). Daily records should be entered directly into
these computers, (instead entering the overall daily transactions after the banking hours). It
will not only reduce transaction time, will increase accuracy but will also be efficient as well.

Not only it will be economical but will also reduce the extra burden of work of the bank. It will
also help in reducing the use of excessive paper work.

Staff relationship

Good relationship among staff member leads to the peak performances in any organization. I
observed that the staff relationship was normal otherwise but some time I noticed that there
exists little conformity among the staff members. Another syndrome from which the staff
suffered was that all of them considered themselves more important than others.

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What I have learnt:

I have been working in Paper work like:

 Account Opening
 Receipts
 Payments
 Customer Dealings
 Clearing work
 Loan scheme
 Online Funds Transfer

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Reference .
Oral:-

Ma’am qurat-ul-ain OG 1

Phone # 0457-371161

Email: qurat-ul-ain@bop.com.pk

Written

Annual report

o Records

o Internet

Websites

http://www.bop.org.com/index.php?id=additional-details

http://www.netishost.com/blog.php?bank-of-punjab=1

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