FINI 619 - Internship Reportapi.ning.com/files/8XKXHVkbAuC-MngEC44HQo73XvyWBeYQ5... · Web viewInternship report of National Bank of Pakistan Title Page: Name of the organization:

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Virtual University of Pakistan

Evaluation Sheet for Internship Report

Spring 2011

FINI619: Internship Report (Finance) Credit Hours: 3

Name of Student: Muhammad Afaaq

Student’s ID: MC090400284


Evaluation Criteria ResultReport writing PassPresentation & Viva voceFinal Result

1

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Finance (FINI-619)

Internship report of National Bank of Pakistan

1. Title Page: Name of the organization: National Bank of Pakistan

Name of the Internee: Muhammad Afaaq

Student ID: MC090400284

Session: 2009 - 2011

Submission date of the internship report: 07-07-2011

Name of the University: Virtual University of Pakistan

VU logo:

www.vustudents.ning.com 2




2. Letter of Undertaking

3. Scanned copy of the internship certificate

(provided by the organization)

4. Dedication

At first dedicating this work to Almighty ALLAH, without his mercy and sympathy

I was not able to accomplish this work Almighty ALLAH gave me power and





confidence to done my internship and also HOLY PROPHET HAZARAT

MUHAMMAD (Peace be upon him) who is a light for humanity. I also dedicate this

work to my lovely parents and also dedicating this work to our honorable instructor

of Fini619 who help me a lot to do my work accurately and guide me in my every

difficulty.

5. Acknowledgement

1st of all I thanks to my Almighty ALLAH who gave me power and confidence to done

my internship and HOLY PROPHET HAZARAT MUHAMMAD (Peace be upon him)

who is a light for humanity.





In starting am little bit confuse because its my 1st experience to work in practical life but

my 1st experience is vary good I many good peoples help me to do my work effectively

specially my instructor of FINI 619 help me a lot when I confuse in some parts of

internship I mail to instructor respected Sir were always ready to guide me during the

report work, which gave me a lot of back-up. I also thanks to my bank employees of the

NBP who remained supportive and cooperative throughout the report to complete it and

specially branch Manager Miss Asia Aslam.

My some senior friends also guide me to make my internship report I would like to say

thanks to all that peoples. Allah blesses them all and gives success all in every field of

life.

6. Executive summary

I am doing my internship in famous and reputed bank of Pakistan the name of that bank

is National Bank of Pakistan the report is based on my six weeks internship program in

National Bank of Pakistan. According to my observation during internship the NBP

maintains an excellent position in banking sectors in Pakistan and this is based on the

over all performance of National Bank of Pakistan. This report contains the detail of NBP

and the departments where I worked during internship and these departments includes

Account Opening Department, Bill Collection Department, Cash Department, Credit

Department and Remittance Department.

It also includes the Ratio Analysis and these ratios include all ratios that my university

required with complete formula, working, table, graph and interpretation.

I also mention my work experience during internship in different sectors. I also discuss in

my report the executive summary of NBP and Recommendations for Improvement and

the sources that I used to make this report. I have learned and informed about different





aspects specially about banking sector, it’s my 1st working experience so it will help me

while I will be professional.

NBP has 1254 nationwide and almost 25 branches operating in other foreign countries

including USA, China, France, Hong Kong, Azerbaijan, Bangladesh, and Hong Kong.

The objective of this Internship was to explore the issues relating to Finance and to find

out problems regarding the theoretical concepts with practical experience working in an

organization during the internship and study the system of National Bank of Pakistan.

According to my knowledge there is much possible perfections, which we can make

positive changes in the system of NBP in coming years.

In this my NBP report I also talk about the way of investment, rates of investment, all

types of financing and loans services the National Bank of Pakistan provides. The

problems of branch where I am doing internship F-10 markaz branch are also discussed.

7. Table of content

Lesson No. Title / Topic Page No.1. Title page 1a. Name of the organization 1b. Name of the Internee, Student ID and session 1c. Submission date of the internship report 1d. Name of the University 1e. VU logo 12. Letter of Undertaking 23. Scanned copy of the internship 34. Dedication 45. Acknowledgement 56 Executive summary 67. Table of contents8. Brief introduction of the organization’s business

sector9-10

9. Overview of the organization 11-21a. Brief history 11-13b. Organizational Hierarchy chart 14-15c. Business volume (Total number of stock, shares, bonds/

commodities, future contracts planned for a particular 16





period etc).d. Product lines (List complete range of products/ services of

the organization)17

e. Competitors 18f. Brief Introduction of all the departments 19-20g. Comments on the organizational structure 21

10. Plan of your internship program 22a. A brief introduction of the branch where you did your

internship17

b. Starting and ending dates of your internship 17c. Names of the departments in which you got training and

the duration of yourtraining

17

11. Training program 231st Account Opening Department 232nd Bill Collection Department 253rd Cash Department 264th Credit Department 275th Remittance Department 2812. Ratio Analysis 29a) Liquidity Ratios

Liquidity ratios measure a firm’s ability to meet its current obligations.

29

• Current Ratio 29• Acid Test Ratio 31• Working capital 33b) Leverage Ratios

Leverage ratios measure the degree of protection of suppliers of long term funds.

35

• Times Interest Earned 35• Debt Ratio 37• Debt / Equity Ratio 38

Debt to Tangible Net worth Ratio 40• Total Capitalization Ratio 41c) Profitability Ratios

Profitability ratios measure the earning ability of a firm.

43

• Net Profit Margin 43• Return on Assets 45• DuPont Return on Assets 47• Operating Income Margin 49





• Return on Operating Assets 50• Return on Total Equity 52• Gross Profit Margin 54d) Activity Ratios

Activity ratios measure a firm's ability to convert different accounts within their balance sheets into cash or sales.

55

• Total Assets Turnover 56• Fixed Assets Turnover 57e) Market Ratios

Market ratios are commonly used by the investors to assess the performance of a business as an investment and also the cost of issuing stock.

59

• Dividend per share 59• Earning per Share 61• Price/Earning Ratio 63

13. Future Prospects of the Organization 6514. Conclusion 66-6715. Recommendations for Improvement 68-7016. Reference & Sources used 7117. Annexes 71

8. Brief introduction of the organization’s business sector

Am doing my internship in NBP f-10 branch markaz Islamabad now I will discuss the

brief introduction of national Bank of Pakistan in business sector

The national bank of Pakistan was established in 9th November 1949 under the ordinance

XIX. The NBP commenced its operations from 20th November 1949. The Bank was

incorporated under the National Bank of Pakistan Ordinance 1949 and is listed there

Pakistani stock exchanges. The bank controls treasury dealings for the Government of

Pakistan as a representative to the State Bank of Pakistan. NBP offers a commercial

banking and interrelated services in Pakistan as well as out side of Pakistan. The business

sector of NBP is banking sector and the banks plays a vital role in an economy of country

NBP also played an important role NBP also provide banking or financial services in





Pakistan bank plays a major part in economy now a days the current economics crisis in

united stares and Europe as well as Pakistan as we see day by day down sizing and is

because the ongoing weakness of major bank and the result of all this is credit and

capital crush so we can say its prove from history that the banking sector is plays a vary

important role in national and global economy.

National bank of Pakistan provides to its customers the following benefits saving

accounts, home financing, personal loans, ATM and debit cards, financing facility for

stock investors, Internet based home remittance service, cash against gold, and personal

accident insurance these benefits is vary useful for customers.

In between 2002 to 2007 the accelerated economy growth of Pakistan was underpinned

by a strong banking sector the banking industry assets is above $60 its profit remain high

and its NPLS are low. Pakistan is Islamic country and the national bank of Pakistan offers

is Islamic banking services these services include deposit schemes, like current deposit

scheme and profit and loss sharing deposit scheme and also financing facilities and also

provided letters of credit facility, issuance of bank drafts and pay orders, handling of

remittances, government collections, collection of export bills and local bills, and utility

bills collection services. It also provided international banking trade that provide services

comprise letters of credit, trade financing, international payments and collection services,

structured trade finance, document presentation and payment services, pre– and post–

shipment financing, bank–to–bank reimbursements, documentary credits, import finance,

shipping guarantees, and cash management solutions. NBP is government bank so

peoples trust to NBP is high as compare other banks and NBP provides trustee services to

national investment trust, long-term credit fund, and endowment fund for student loans

scheme.





9. Overview of the organizationa. Brief historyHistory: NBP was established under the National Bank of Pakistan Ordinance in

November 8 1949 in Pakistan and wa s 100% gove rnmen t owned . The need for

the establishment came due to the reason of newly country with economics crisis. In July

1948 to carry on the responsibilities of issuing the currency and most importantly

controlling the flow of money in side the country.

Role: The Special Role of National Bank of Pakistan is occupies a unique position in the

financial sector of Pakistan. It also acts as an agent of the Central Bank wherever the

State Bank does not have its own Branch. It also undertakes Government Treasury

operations.





Ownership: NBP is 100% owned by the Government of Pakistan.

Branch Network: NBP has an extensive domestic branch network of over 1500 branches

located all over Pakistan. The Bank also has a presence in 24 international locations

including the USA, United Kingdom, Europe and the Far East.

Deposits of National bank of Pakistan: NBP holds 24.6% share of time and demand

deposits in the country. Local currency deposits comprise 67% of bank's total deposits

while foreign currency deposits account for the rest.

Head office and Branches: Head office of national bank is in Karachi with their 1431

branches local and 24 branches internationally.

Provincial Headquarters: Sindh 06, Baluchistan 02, Punjab 14, NWFP 05, Azad

Kashmir 02, total 29.

Awarded: National bank of Pakistan was given awarded of best bank of the year in 2001,

2002, and 2004 by the banker a publication of financial times London. In 2005 the

national bank of Pakistan is also given best bank of the year by the bankers by global

finance magazine. National Bank has earned recognition and numerous awards

internationally. It has been the recipient of The Bank of the Year 2001, 2002, 2004 and

2005 Award by The Banker Magazine, the Best Foreign Exchange Bank –– Pakistan for

2004, 2005, 2006 and 2007, Global Finance, Best Emerging Market Bank from Pakistan

for the year 2005, Global Finance, Kisan Time Awards – 2005 for NBP's services in the

agriculture field. It is listed amongst the Region's largest banks and also amongst the

largest banks in South Asia 2005, The Asian Banker. It has also been presented a

Recognition Award –– 2004 for having a Gender Sensitive Management by WEBCOP

AASHA besides other awards.

Precise Summary of National Bank of Pakistan year by year

The precise summary of National Bank of Pakistan regarding its countrywide and

overseas operations is as fallows:

In the year 1949 National Bank of Pakistan was established under the National Bank

of Pakistan Ordinance 1949 and was 100% govt.-owned.

In the year 1950 NBP established a branch in Jeddah, Saudi Arabia.

The Bank in 1950 had one subsidiary ‘The Bank of Bahawalpur’ on December4,

In the year 1947 by the former Bahawalpur State





In the year 1955 By this time NBP had branches in London and Calcutta.

In the year 1957 NBP established a branch in Baghdad, Iraq.

In the year 1962 NBP established a branch in Dar-es-Salaam, Tanganyika.

In the year 1964 The Iraqi government nationalized NBP's Baghdad branch.

In the year 1965 The Indian government seized the Calcutta branch on the outbreak of

hostilities between India and Pakistan.

In the year 1967 The Tanzanian government nationalized the Dar-Es-Salaam branch.

In the year 1971 NBP acquired Bank of China's two branches, one in Karachi and one

at Chittagong. At separation of East Pakistan NBP lost its branches there. NBP

merged with Eastern Mercantile Bank and with Eastern Bank Corporation.

In the year 1974 the government of Pakistan nationalized NBP. As part of the

concomitant consolidation of the banking sector, NBP acquired Bank of Bahawalpur

(est. 1947).

In the year 1977 NBP opened an offshore brain Cairo.

In the year 1994 NBP amalgamated Mehran Bank (est. 1991).

In the year 1997 NBP's branch in Ashgabat, Turkmenistan commenced operations.

In the year 2000 NBP opened a representative office in Almaty, Kazakhstan.

In the year 2001 State Bank of Pakistan and Bank of England agree to allow only 2

Pakistani banks to operate in the UK. NBP and United Bank agreed to merge their

operations to form Pakistan International Bank, of which NBP would own 45% and

United Bank 55%.

In the year 2003 NBP received permission to open a branch in Afghanistan.

In the year 2005 NBP closed its offshore branch in Cairo which opened in 1977.





b. Organizational Hierarchy chart

Syed Ali Raza Chairman NBP Board of Directors

Qamar Hussain President NBP

MR. Tariq Kirmni Director

Mrs. Haniya Shahid Naseem Director

Ms Nazrat Bsahir Director

Mr. Ekhlaq Ahmed Secretary Board of Directors

Organizational Hierarchy Chart at NBP Head Office Karachi





Organization Chart of NBP





c. Business volume

In Millions





Description 2006 2007 2008 2009 2010

Profit

before tax

26,311 28,061 23,001 21,300 2,4,415

Profit after

tax

17,022 19,034 15,459 17,562 17,563

Shareholder

’s equity

353,045 69,271 81,367 94,142 103,762

Advances –

net

316,110 340,319 412,987 475,243 477,507

Total Assets 635,133 762,194 817,758 944,583 1,035,025

Deposits 501,672 591,907 624,939 727,465 832,152

Investments 139,947 211,146 170,822 217,643 301,324

Earnings

per share

12.65 14.15 11.49 13.05 13.05

d. Product linesThe product lines is given below

PREMIUM AMDANI PREMIUM SAVER SAIBAAN ADVANCE SALARY CASH CARD INVESTOR ADVANTAGE CASH AND GOLD KISAN TAQAT KISAN DOST





PAK REMIT PROTECTION SHIELD

Services

Islamic Banking Student Loan Scheme Demand Drafts(DD) Equity Investment Commercial Finance Trade Finance International Finance Home Finance Foreign Currency Account Short Term Investment NIDA( National Income Daily Account) Foreign remittance Travelers Cheques Swift System Letter of Credit Pay Order (PO) Mail Transfer (MT)

e. Competitors

Now a day in this world of competition the NBP is facing much competition. The

competitors list of NBP is very large as there are many private and commercial banks

operating in the country. Competitors of the NBP which are given below

MCB Bank Limited Habib Bank Limited Habib Metropolitan Bank Limited Saudi Pak Bank Limited Atlas Bank Limited





SILKBANK Limited United Bank Limited Allied Bank Limited Askari Commercial Bank Limited Bank Al-Habib Limited Bank Al-Falah Limited. Standard Chartered Bank Limited First Women Bank The Bank of Khyber Bank of Punjab Faysal Bank Limited Atlas Bank Limited Bank Alfalah Limited Soneri Bank Limited Askari Bank Limited

f. Brief Introduction of all the departmentsThere are many departments of National Bank of Pakistan I will write the following main

departments of National Bank of Pakistan F-10 Markaz branch and where I got training

as internee are given below:

1st Account Opening Department

2nd Bill Collection Department

3rd Cash Department

4th Credit Department

5th Remittance Department

I already describe in detail of these entire department in my internship report One by one

I will summarize or over view all these again.





1 st Account Opening Department: In my 1st 2 weeks of internship I work as an internee in account opening department in

NBP. It’s a major department of NBP the basic purpose of Account Opening Department the relationship between banker-customer. Account opening department performs the

duty of opening accounts and issues checkbooks to clients. A person who requests to

open an account with the bank has to fill an account opening form obtained from any

branch of National Bank of Pakistan.

Types of accounts that are opened

I learned in my training in account opening department the following account is opened.

1. PLS Account or PLS Saving Account

2. Current Account

3. Fixed Deposit Account

2 nd Bill Collection Department: I also work in the bill collection department in NBP during my internship. The basic

purpose of bill collection department is collected utility bills from customers that he pays

at end of every month

These bills include

Water bills

Gas bills

Electricity bills

Telephone bills

3 rd Cash Department: I also work in cash departments during internship in NBP. Cash depart in vary sensitive

department o every bank as well as National Bank of Pakistan No body is allowed freely

like other department this department all depend on cash a security guard is also standing

for safe from theft and also sensitive department some times customer pays frauds are

made in this department so extra care needed in this department.

4 th Credit Department: In my internship program in NBP I also work in credit department. The basic purpose of

this department id to collect spare, extra or surplus money or currency from peoples or





customers at vary low rate and gives or provided lend this money at high rates to get

more and more profit. Now a days NBP gives a vary low amount to customer because in

Pakistan there is instability and day by day the investor go out from Pakistan because of

in security financial crises is also big cause of it so the loan ratio is vary low down day by

day with the passage of time.

5 th Remittance Department: Finally in my last week of internship as an internee in NBP I work in Remittance

Department. The remittance department transfers the money from domestic to

international level. According to my learning there are two categories of remittance

department 1st one is domestic or local remittance department and the 2nd one is foreign

remittance department. In local remittance the transfer money with in national or

domestic boundaries and in foreign transfer money out side from national or international

boundaries In my internship program the manager told me the main functions of

Remittance Department these main or important functions takes places in the following

ways I observed these are Closing and scrolling of government collections, issuing of

payment order, issuing of demand draft, issuing of call deposit, issuing of Mail transfer

and issuing of call deposit.

In NBP remittance takes places in the following ways. These ways are given below.

1st Telegraphic / Mail Transfers and its easy and fastest way

2nd one is Demand Draft / Pay Orders

g. Comments on the organizational structure

I understand during my internship program the Organizational Structure NBP is

centralized but need some changes with the passage of time because in this world day by

day technology changes and its necessary to change the Organizational Structure time by

time and I also observed the NBP is the oldest bank of in Pakistan and in last 62 years a

lot of changes in NBP Organizational Structure but I observed the Organizational

Structure is not professionally developed and implemented. In NBP F-10 Markaz Branch





where I work as internee in that department all employees in different department work

properly and here Organizational Structure but also need some changes.

10. Plan of My internship programIntroduction of branch

Name of branch: National Bank of Pakistan F-10 Markaz Branch

City: Islamabad

Branch Code: 1933

Branch manager: Miss Asia Aslam

Operating manager: Mr. Ali

Phone Number: +92-051-9218734





I did my internship or training from National bank of Pakistan F-10/4 Markaz Islamabad

and branch code is 1933.Under the branch manager Miss Asia Aslam. In this branch of

national bank the branch manager is Miss Asia Aslam and Mr. Ali is operating manager

both are superior working and very fair with their job. When I start my internship I face

many difficulties because its my 1st experience to do training or internship in any where

so I don’t have experience practical work before but here cooperative management

specially miss Asia Aslam Branch manager help me for my this 1st to complete my tasks

efficiently and I observed the other management members or staff is also vary

cooperative who also help me in a friendly manners. In start am little bit confuse but after

the observed the cooperation of staff I enjoy my internship I also appreciate and thanks

all management who help me to complete my tasks in good manners.

Duration of My training or Internship Program

The starting date of my Internship Program is May 9, 2011

The ending date of my Internship Program is June 22, 2011

Name of the Department in which I worked in my internship.

Name of the Department Duration

Account Opening Department 2 Weeks

Bill Collection Department 1 Week

Cash Department 1 Week

Remittance Department. 1 Week

11. Training programMy training or internship program from National Bank of Pakistan F-10 Markaz Branch

Islamabad I also mention the departments where I work as internee that is given below.

1st Account Opening Department

2nd Bill Collection Department

3rd Cash Department

4th Credit Department





5th Remittance Department

One By one I will describe in detail of all my training program departments

1 st Account Opening Department The account opening department is a first department where I learned and spent my

internship maximum periods 2 weeks as compares to other departments. In my vary 1 st

day I am little bit confused to start and learned about department because its my 1st

experience practically but the cooperative staff and branch manager help me to

understand all procedure now I observed how the employee work in this department and

what is the requirements to open the account and what is the rules and procedure to

follow the customer. In this department requires some basic requirements for open an

account of customer the customer must have the reference of any residence of Pakistan

who has already account holder of National Bank of Pakistan and when customer gives

reference of some ones who has account in NBP the bank confirms it with NADRA.

After 3 or 4 days I learned many things about opening account and rules and procedures

and also the requirements like what is the title of account, address of the customer, recent

ID card number, National tax number, PTCL and Mobile number amount deposit,

signature, Law must qualify the customer, Age of majority and must be of sound mind

Than I learned and opened a account of customer under supervision of staff and these

procedure must be followed the customer come to bank and meet the manager about

account opening procedure than manager guide him or her about the account he or she

wants to open in the bank than manager guide me and I follow the rules now give to

customer account opening form along with document like signature card and Pay-in-slip.

Than the customer fill the account opening from if he has any difficulty than management

or account opening officer guide him or her and when customer fill are form this form

sent to manager for approval than the concerned officer gives new account number and

guide to deposit initial deposit in cash counter. And check book gives to customer

according to customer need or requirement because some check books has 25, 50 and

more it’s depend on customer requirement. When I opened some accounts than I know





the procedure and after this it’s vary easy for me because I know now all procedures to

open a accounts and I opened some accounts

Types of accounts that are opened

I learned in my training in account opening department the following account is opened.

1. PLS Account or PLS Saving Account

2. Current Account

3. Fixed Deposit Account

The details of these accounts are given below one by one.

1. PLS Account or PLS Saving Account 1st I would like to discuss the PLS account or PLS saving account that I learned from

manager it is interest free account mostly the lower or middle income level or small

business man, Allam or Moulana or people who don’t like interest like usually make such

deposit in this account the transaction. In this account the transaction is not every day or

daily. Funds can normally deposited through pay order, cash, check etc.

2. Current Account 2nd I like to discuss the current account that I learned from manager this account or

current account it’s depend on daily bases normally through cheque, ATM, Pay order etc

drawn on the bank and these deposit stand the current liability of the bank. The bank keep

fund of his hand and customer normally use this account mostly now a days through

ATM because its vary easy and advanced method. And there is no limit for deposit.

3. Fixed Deposit Account 3rd I would like to discuss the fixed deposit account I learned from manager that this

account normally opened and high faculty or extra ordinary people or business man for a

long period of time and this type of account is less use as compare to other account. In

this account the customer invest in different sector for a long period of time where his or





her money is saved from theft and also with higher return. The other account I opened

because these are daily use accounts and normal or middle class peoples use but this fixes

account I don’t opened because in my in my period of internship there in only 1 or 2

peoples who opened this account I learned but not accurate so I got more information

from the manager of the bank.

2 nd Bill Collection Department In my internship program I also worked in Bill Collection department in one week.

In 1st day in bill collection department 1 get information from manager about the

function, rules and procedure involve in bill collection department after get information

from manager I see or observed bill collection department collects different utility bills

which peoples pay every months.

These bills include

Water bills

Gas bills

Electricity bills

Telephone billsI collect some bills according to instruction that manager gives me about bill collection

department and in bill collection department my duty is when collect bill is must see the

due date and what’s the amount collect in due date and these are written in every bill and

after date because after date extra amount paid or late payment charges paid by the

customer if bill not paid within due date. Also mention in bill manually if customer gives

big note like note of RS 5000 and bill id 1050 than in bill written manually 5000-1050 =

3950 it means customer give 5000 note and bill amount is 1050 we deduct from 5000 and

we gives 3950 the remaining amount to customer. The amount received like in due date

amount received circle the received amount within due date and if payment id after due

date circle after date and in after date late payment charges included and circle and

collect money and than bank stamp and also sigh on it is its guarantee that this means f-

10 markaz Islamabad branch received this bill. The bank also charges commission in

each bill that is revenue of the bank and also for government of Pakistan. At the end of





the day all amount counts count that received from from received against bill collection

from customers and gives by the relevant bill collection department and bill collection

department sends mail to the head office.

3 rd Cash Department In duration of my internship in NBP as internee I work in cash department fro 1 week. In

cash department 1st I try to understand working procedure in this department I also

observed that cash department is the most important section in the bank. Cash department

perform the function of bank payment and receipt, government receipt and payment and

collection of utility bills

The cash department is vary important and sensitive because in this department no body

is allowed freely like other department this department all depend on cash a security

guard is also standing for safe from theft and also sensitive department some times

customer pays frauds are made in this department so extra care needed in this

department.

And if closing the balance is not match than the cashier must match it before

leave this department some times hours takes to match cash in this

department if cash not match than cashier pay with its own pay or with own

recourses

So cash department is vary sensitive department mostly people come for the

purpose of cash in this department with drawn and deposit if any account holder comes to

draw the amount it must b checked the total amount on cheque, date, signature of the

account holder, and then he gets payment form the cash counter from the cashier and

some account holder comes for the purpose of deposit the money in cash department.

4 th Credit Department As an internee I work and observed in credit department for the duration of 1 week in

National Bank of Pakistan F-10 Markaz Branch Islamabad.

The basic purpose of this department id to collect spare, extra or surplus money or

currency from peoples or customers at vary low rate and gives or provided lend this

money at high rates to get more and more profit.





According to my observation and work as internee in NBP during my internship I

observe that the basic purpose of credit department is provide load to load seekers.

These peoples get loan from bank and fulfill our requirements and bank charges interest

against. I also observe now a days of technology every bank adopt this method to get

profit. I observed when national bank of Pakistan F-10 branch Islamabad when NBP

provide or gives to some one some basic information collect by the bank to reduce fraud

because now a days some fraud peoples gets illegally loan from bank and cant return to

bank some fraud peoples write wrong address and some are going out side of country and

that’s a big loss of bank so bank now a days bank confirm it with the customers near

police station about the reputation of customer and NBP required some basic information

and criteria before gives loan to peoples some basic information that banks gets like

customer name, National Identity Card, The required documents checked is it in original

from or not.

Now a days NBP gives a vary low amount to customer because in Pakistan there is

instability and day by day the investor go out from Pakistan because of in security

financial crises is also big cause of it so the loan ratio is vary low down day by day with

the passage of time.

5 th Remittance Department In my internship program and also last week of my internship I also worked in

Remittance department in one week .I observed or learned that main purpose of

Remittance department is to move money from one place to another place. The

remittance department transfers the money from domestic to international level.

According to my learning there are two categories of remittance department 1st one is

domestic or local remittance department and the 2nd one is foreign remittance department.

In local remittance the transfer money with in national or domestic boundaries and in

foreign transfer money out side from national or international boundaries In my





internship program the manager told me the main functions of Remittance Department

these main or important functions takes places in the following ways I observed these are

Closing and scrolling of government collections, issuing of payment order, issuing of

demand draft, issuing of call deposit, issuing of Mail transfer and issuing of call deposit.

When I work in this department I also observed the important particulars of demand draft

filled, Name of the branch on which draft is drawn, Address of the applicant, signature of

the applicant, exchange rates of the bank, Total amount in figure and also in words, name

of the person who receive the money. Under the supervision manager I fill some demand

draft that gives me some useful information about this department and I also want to get

more and more information about this department and manager help me a lot.

In NBP remittance takes places in the following ways. These ways are given below.

1st Telegraphic / Mail Transfers and its easy and fastest way and 2nd one is Demand

Draft / Pay Orders

Bank is responsible for remittance from one bank to another bank in case

This is my last week on internship in national bank of Pakistan and word in remittance

department I work hard also cooperative staff and manager really help me for this am

thankful to all management and staff of National Bank of Pakistan F-10 branch and also

thankful fro bank branch manager Miss Asia Aslam she help me lot in my all Internship

12. Ratio Analysis

a) Liquidity Ratios

Liquidity ratios measure a firm’s ability to meet its current obligations.

These include:

• Current Ratio





• Acid Test Ratio

• Working capital

Name of the ratio Current ratio

FORMULLA OF CURRENT RATIO

The formula of current ratio is given below

With the help of formula we calculate or find current ratio

Current Ratio = Current Assets / Current Liabilities

It means we add all current assets after add all current assets we add all current

liabilities and than divide current ratio with current liabilities

As we shown in given below

Show in table

YEARS 2008 2009 2010Current assets 584,977,140 645,064,165 693,463,980

Current liabilities 682,905,461 725,293,720 867,626,367

Current Ratio 0.86 : 1 0.89 : 1 0.80 : 1

Working:

Which short term advances and investments?

Only fixed deposits will not be considered here





Held for trading and available for sale will be considered as current

Current asset = Cash and balances with treasury banks + Balances

with other banks + Lending to financial institution-net + short term

Investment + Short term Advances + Other asset (Only Short Term)

After adding all current assets according to given format the

current assets of 2008 = 584,977,140 and 2009 = 645,064,165 and 2010

= 693,463,980

Current liability = Bills payable + Short Term Borrowing + Short

Term Deposit and other account + short term liabilities against

assets subjects to finance lease + other liability(Only short term)

After adding all current Liabilities according to given format the

Current Liabilities of 2008 = 682,905,461 and 2009 = 725,293,720 and

2010 = 867,626,367

Finally divide current assets with current liabilities answer is current ratio

Graphical Presentation of Current ratio





Interpretation

The current ratio shows in 2008 the current ratio of national bank of Pakistan

is 0.85 it means the current assets increases not much as compare to current

liabilities and in 2009 shows the incrasing trends as compare to 2008 the

current ratio of 2009 is 0.88 but again in 2010 it shows 0.79 that is much

less as compared to 2008 and 2009 .

Name of the ratio• Acid Test Ratio

With the help of formula we calculate or find Acid Test Ratio

Formula is given below

Acid Test Ratio = More liquid Assets/current liabilities





It means more liquid Assets / Current liabilities

Show in table

YEARS 2008 2009 2010More liquid Assets 582,255,871 630,040,628 691,160,473

Current Liabilities 682,905,461 725,293,720 867,626,367

Acid test Ratio 0.85 :1 0.87 :1 0.80 :1

Working:

More liquid Assets = Cash and balances with treasury banks + Balances with

other banks + Lending to financial institution-net + short term

Investment+short term Advances + Other asset(short term) -advance(deposits,

rent and other prepayments).

Current liability = Bills payable + Short term Borrowing + Short term

Deposit and other account+short term liabilitiesagainst assets subjects to

finance lease + other liability(short term)

Graphical Presentation of Acid Test Ratio





Interpretation:As we see the more liquid Assets are less than current liabilities in all three years 2008,

2009 and 2010 but in year. As we see in graph the Acid Test Ratio of 2009 is higher

as compare to 2008 and 2010 and we calculate Acid Test Ratio find all by subtract all

prepaid expenses from current assets to find it.

Name of the ratio• Working capitalTo find out working capital ratio we use the following formula that is given below

With the help of formula we calculate or find Working Capital

Formula: Working Capital ratio = Current Assets - Current Liability

Show in table

Make correctiosn as instructed aboveYEARS 2008 2009 2010

Current assets 584,977,140 645,064,165 693,463,983

Current liabilities 682,905,461 725,293,720 867,626,367

Working capital -97,928,321 -80,229,555 -174,162,384

Working

Current Asset = Cash and balances with treasury banks + Balances

with other banks + Lending to financial institution-net + Short

term Investment + short term Advances + Other asset(short term)

Current liability = Bills payable+ Short term Borrowing + Short

term Deposit and other account + Short term liabilities against

assets subjects to finance lease + other liability(Short term)





Graphical Presentation of Working capital

Working:

Current asset = Cash and balances with treasury banks + Balances with other

banks + Lending to financial institution-net + short term Investment + Short

term Advances + Other asset(Short term)

Current liability = Bills payable + Short term Borrowing + Short term Deposit

and other account + Short term liabilities against Assets subjects to finance

lease + Other liability(Short term)

Interpretation:We see in all three years 2008, 2009 and 2010 this can show the negative

trend which is the bad sign for the company. It due to the increasing of

current liabilities or the excess of liabilities over current assets. In 2010

negative sigh in to much high as compare to 2008 and 2009 so its vary bad

for company.





b) Leverage RatiosLeverage ratios measure the degree of protection of suppliers of long

term funds.

These include:

• Times Interest Earned

• Debt Ratio

• Debt / Equity Ratio

• Debt to Tangible Net worth Ratio

• Total Capitalization Ratio

Name of the ratio• Times Interest Earned

To find out Times Interest Earned we use the following formula that is given below

With the help of formula we calculate or find Times Interest Earned

Formula: Times Interest Earned: EBIT / Interest Expenses

EBIT = Profit before taxation + Markup Interest Expenses / Interest Expenses

Show in tableYears 2008 2009 2010

EBIT 46,885,766 61,789,822 69,665,595

Interest expenses 23,884,768 40,489,649 45,250,476

Total interest 1.96 Times 1.52 Times 1.53 Times





earned

EBIT/Interest

expenses

Working:

Profit before Taxation: Mark up income –Markup expencess= Gross profit

Gross profit - (Provision for advances + Provision for the value of

Investment + Provision against off balance sheet obligations + Bad debts

written off) = Net mark-up interest income

Net mark-up interest income+ Fee commission & brokerage income+

Dividend income +Exchange income+ + gain on sale of securities+ Other

income = Total non mark up interest income

Total non markup interest income- Administrative expense-Other provisions-

Other charges = Profit before tax

Interest expenses: Interest expenses given in profit and loss account on 2 nd

head as mark up return interest expense.

Graphical Presentation of Times Interest Earned

Interpretation:





As we see in table the Time interest ratio is decreasing over the time. In 2008

the time interest ratio is 1.96 but in 2008 its decrease it with 1.52 Time

interest can also show the decreasing trend in coming year and than increasing trend in

next year like In 2009 it little increase 1.53 as compare to 2009.

Name of the ratio• Debt Ratio

Formula: Debt Ratio = Total liabilities / Total Assets

Its simple calculate total liabilities of all year than calculate total assets

of all year and than total liabilities divide by total assets than we find

debt ratio

Show in tableYear 2008 2009 2010

Total liabilities 715,299,108 825,676,384 906,528,852

Total Assets 817,758,326 944,582,762 1035,024,680

Debt Ratio 0.875 Times 0.874 Times 0.876 Times

WorkingTotal Debts = Bills payable + Borrowing + Deposit and other accounts + Sub-

ordinated loans +Liabilities against assets subject to finance lease + Deferd

tax liability + Other liability

Total Assets: Cash and balances with treasury banks + Balances with other

banks + Lending to Financial Institution + Investment + Advances +

Operating fixed asset + Defferd tax asset + other assets

Graphical Presentation of Debt Ratio





Interpretation:As we see in table the debt ratio is not much increase or decrease it all same

in all three years. Here company have more assets then debt because debt ratio of

greater than 1 indicates that a company has more debt than assets; while, a debt ratio of

less than 1 indicates that a company has more assets than debt.

Name of the ratio• Debt / Equity RatioFormula: Debt to Equity Ratio = Total liabilities (Debt) / Shareholder equity


Total Liabilities 715,299,108 25,676,384 906,528,852

Shareholder Equity 81,497,458 94,265,853 103,880,048

Debt to Equity

Ratio

8.78 times 8.76 times 8.73 times

Working:





Total debts = Bill payable + Borrowings + deposits and other Account + Sub-ordinate

Loans Liabilities against Assets subjects to finance lease+ Deferred tax Liabilities +

Other liabilities

Share holder equity = Share Capital + Reserves + unappropriate profit + Surplus on

revaluation of fixed assets.

Graphical Presentation of Debt / Equity Ratio

Interpretation:As we see in table the ratio of 2008 shows 6.98 which is decreased in 2009 by 6.94 but in

2010 its again increase by 7.05. Its show that the company is finances its assets and

heavily relies on debt finances.





Name of ratio:

• Debt to Tangible Net worth Ratio:Formula: Total liability/(Net worth- Net intangible asset)


Total Liabilities 715,299,108 825,676,384 906,528,852

Tangible net worth 102,453,293 118,888,848 128,487,598

Debt to Tangible

Worth Ratio

6.98 Times 6.94 Times 7.05 Times

Working:Total Debts = Bill payable + Borrowings + Deposits and other Account + Sub-ordinate

Loans Liabilities against Assets subjects to finance lease + Deferred tax Liabilities +

Other liabilities

Net Worth = Total Asset - Total liability

Intangible asset = (Mention in notes of balance sheet 11.3)

Intangible asset of 2008 is 5,925, Intangible asset of 2009 = 17,530 and Intangible asset

of 2010 = 8,230

Graphical Presentation of Debt to Tangible Net worth Ratio:





Interpretation:The overall show the increasing trend of the company in 2008 it shows the 6.98 and there

2009 it decrease by 6.94 and again in 2010 it increase up to 7.05.

So in year 2010 it’s greater as compare to 2008 and 2009 and it’s less in 2009 as compare

to 2008 and 2010.

Name of ratio

Total Capitalization Ratio:

Formula: Long term debt / Long term debt + Share holder equity

Show in table

Year 2008 2009 2010

Long term debt 32,393,647 100,382,664 38,902,486

Share holder equity

+ long term debt

113,760,649 194,524,583 142,664,796

Capitalization

Ratio






Working:

Long term Debts = Long term borrowing + long term deposits and other

accounts + Sub-ordinated loans + Liabilities against assets subject to finance

lease +Deferd tax liability + Other liabilities(long term)

Share holder equity+ long term debts = Share capital + Resevers +

+unappropriated profit + surplus on revaluation of asset + Long term

borrowing + long term deposits and other accounts + Sub-ordinated loans +

Liabilities against assets subject to finance lease + Defferd tax liability +

other liabilities(long term)

Graphical Presentation of Total Capitalization Ratio

Interpretation :Total Capitalization Ratio is high in 2009 as compare to 2008 and 2010 the overall trend

of debt contribution towards financing shows the increasing trend of the company. In





2008 it shows the 2.5 and there is further increase 2009 & 2010 so the overall trend of

debt contribution towards financing is high.

c) Profitability Ratios

Profitability ratios measure the earning ability of a firm.

These include:

• Net Profit Margin

• Return on Assets

• DuPont Return on Assets

• Operating Income Margin

• Return on Operating Assets

• Return on Total Equity

• Gross Profit Margin

Name of ratio

• Net Profit Margin

Formula: Net Profit Margin = Net Profit /Net Sales*100Show in table

Year 2008 2009 2010

Net Profit ‘a’ 15,458,590 17,561,846 17,563,214

Net Sales ‘b’ 60,942,798 77,947,697 88,472,134

Net Profit Margin

ratio: a/b

25.4% 22.5% 19.9%

Working:





Net profit is the profit after tax which is obtained as: Mark up revenue –

markup expenses = Gross profit

Gross profit - (Provision for advances + Provision for investment +

Provision lending to financial institution + Bad debts written off) = Net

mark-up income

Net mark-up income + Fee & commission + Dividend income + Exchange

income + other income + Gain on sale of securities = Total income

Total income - Administrative expense - Other provisions - Other charges +

Share of income = Profit before tax

Profit before tax- tax = Profit after tax

And net sale = Mark up revenue

Graphical Presentation of Net Profit Margin

Interpretation:





The table shows that Net Profit margin is showing decreasing trend in 2009,

which again decreases in 2010 as compare to 2008 so NBP has not

significant improved net profit margin in the this years in coming years after

2008.

Name of ratio

• Return on AssetsFormula: Return on asset: (EBIT / Total Assets)*100


EBIT a’ 46,885,766 61,789,822 69,665,595

Total Assets ‘b’ 817,758,326 944,582,762 1,035,024,680

Return on Asset

Ratio ‘a/b’

5.73% 6.54% 6.73%

Working:Revenue – Markup Expenses = Gross Profit

Gross profit - (Provision for advances + Provision for investment + Provision lending to

financial institution + Bad debts written off) = Net mark- up income

Net mark-up income + Fee & commission + Dividend income + Exchange income +

other income + gain on sale of securities = Total income

Total income - Administrative expense - Other provisions - Other charges + Share of

income = Profit before tax

EBIT = Profit before Taxation + Interest expenses





Total Assets: Cash and balances with treasury banks + Balances with other banks +

lending to financial institution + Investment+ Advances + Other asset + Operating fixed

Asset + Defferd tax asset-net.

Graphical Presentation of Return on Assets

Interpretation:

The table shows that the return on assets of 2008 is greater as compare to 2009 and 2010

so the ratio analysis explains that Return on Assets is growing in the year 2008, which is

2.81%. But after this it increases from previous level and then it reached at 2.26% in

financial year 2009, again it decrease to 2.36% in year 2010.

Name of ratio

• DuPont Return on AssetsFormula: DuPont Return on Assets = Net Income/Net sales * Net Sales/ total Asset


Net 15,458,590/60,942,798 17,561,846/77,947,697 17,563,214/88,472,134





Income/

Net

Sales

‘x’

=0.254 =0.225 =0.199

Net

Sales/

Total

Asset

‘y’

60,942,798/817,758,326=

0.075

77,947,697/944,582,762

=0.083

88,472,134/1,035,024,680

=0.085

DuPont

Return

On

Assets

‘x*y

1.91% 1.87% 1.69%

Working:Net Income/Net Sale:Net Income:

Net profit or net income is the profit after tax which is obtained as mark up revenue –


Gross profit- (Provision for advances + Provision for investment + Provision lending to

financial institution + Bad debts written off) = Net mark-up income


other income + gain on sale of securities = Total Income

Total income - Administrative expense - Other provisions - Other charges + share of


Profit before tax - Tax = Profit after tax or net income

And net sale = Mark up Revenue

Net Sale/Total Asset:






lending to financial institution + Investment+ Advances + Other asset + Operating fixed

asset + Defferd tax asset-net

Graphical Presentation of DuPont Return on Assets

Interpretation: As we see in graph and table the DuPont Return on Assets ratio decreases in 2008 and

2010 as compare to 2009 it means in year 2009 the DuPont Return on Assets ratio is high

as compare to 2008 and 2010 it happens due to increase in mark-up revenue.

Name of ratio

• Operating Income Margin

Formula: Operating income margin = (EBIT/ Net Sales)*100

Show in table





Years 2008 2009 2010

EBIT ‘a’ 46,885,766 61,789,822 69,665,595

Net Sales ‘b’ 60,942,798 77,947,697 88,472,134

Operating

income margin

‘a/b’

76.93% 79.27% 78.74%

Working:

Revenue – Markup Expenses = Gross profit




other income + Gain on sale of Securities = Total income

Total Income - Administrative expense - Other provisions - Other charges + share of

income= Profit before tax


Net Sale= Mark up revenue

Graphical Presentation of Operating Income Margin





Interpretation:

As we see in graph and table the Operating income margin is decreasing over the year

2008 and 2010 as compare to 2009 it happens due to increasing of sale more quickly than

to operating profit.

Name of ratio

• Return on Operating Assets

Formula: Return on Operating Assets = (EBIT/ Operating Assets)*100

Show in table

Years 2008 2009 2010

EBIT ‘a’ 46,885,766 61,789,822 69,665,595

Operating Assets

‘b’

560,836,308 635,805,667 642,862,306

Return on Operating

Assets ‘(a/b)*100’

8.36% 9.72% 10.84%

Working:





Revenue – Markup Expenses = Gross profit



Net mark-up income + Fee & commission+ Dividend income + Exchange income +

Other income + gain on sale of securities = Total income

Total income- Administrative expense - Other provisions - Other charges + share of



Operating Assets = Cash and balances with treasury banks + Lending to financial

institutions + Advances – net + Operating fixed assets

Graphical Presentation of Return on Operating Assets

Interpretation:





As we see in table and graph the Return on operating asset is increasing every year so

Return on operating asset ratio is moving towards low which indicates that the Company

must give attention towards its usage of operational asset.

Name of ratio

• Return on Total Equity

Formula: Return on Equity = (Net income/Shareholder’s equity)*100

Show in table

Year 2008 2009 2010

Net income ‘a’ 15,458,590 17,561,846 17,563,214

Shareholder’s

equity ‘b’

81,497,458

94,265,853 103,880,048

Return on

Equity ‘a/b’

18.97% 18.63% 16.91%

Working:

Net profit or net income is the profit after tax which is obtained as Mark up Revenue -

Markup Expenses = Gross profit


financial institution + Bad debts written off) = Net mark - up income

Net mark - up Income + Fee & commission + Dividend income + Exchange income +

other income + Gain on sale of Securities = Total Income Total income - Administrative

expense - Other provisions - Other charges + share of income = Profit before tax

Profit before tax- tax= Profit after tax or Net income





Shareholder’s equity =Share capital+ reserves+ unappropriated profit + surplus on

revaluation of fixed assets.

Source:Change in equity statement under the head 20.2

Graphical Presentation of Return on Equity

Interpretation: Return on Equity (ROE) tells us how much profit a company earned in comparison to the

total amount of shareholders’ equity. In 2008 it was 18.99; it slightly decreases in 2009

by 18.65% and again decreases in 2010 by 16.93%.

Name of ratio

• Gross Profit MarginFormula: GROSS PROFIT MARGIN = (Gross Profit / Net Sales)*100 Show in table

Year 2008 2009 2010

Gross Profit ‘a’ 37,058, 030 37,458,048 43,221,658





Net Sales ‘b’ 60,942,798 77,947,697 88,472,134

Gross Profit

Margin Ratio

‘(a/b)*100

60.81% 48.06% 48.85%

Working:

Gross profit = Mark up revenue - Mark up expenses

Net Sale = Mark up Revenue

Graphical Presentation of Gross Profit Margin Ratio

Interpretation: In 2008 the profit margin ratio is 60.381 abut in 2009 and 2010 it shows decreasing trend.

It is due to increasing of mark up expenses more quickly than mark up revenue.





d) Activity Ratios

Activity ratios measure a firm's ability to convert

different accounts within their balance sheets into cash

or sales.

These include:

• Total Assets Turnover

• Fixed Assets TurnoverNAME OF RATIO

• Total Assets Turnover

FORMULA: TOTAL ASSET TURNOVER RATIO = Net sales / Total Assets

Show in tableYEAR 2008 2009 2010

Net sales ‘a’ 60,942,798 77,947,697 88,472,134

Total Assets ‘b’ 817,758,326 944,582,762 1,035,024,680

Total Assets

Turnover ‘a/ b’


Working:

Net sale = Mark up Revenue / Interest Earn / Return






lending to financial institution + Investment + Advances + Other asset + operating fixed

asset + Defferd tax asset-net

Graphical Presentation of Total Assets Turnover

Interpretation: Total Assets Turnover ratio of all three years shows the increasing trend in 2008, 2009

and 2010. The trend shows that bank is using its assets well because it is contributing

more towards sales. As we see in year 2010 the Total Assets Turnover is little bit increase

as compare to other two years.

Name of ratio

• Fixed Assets Turnover

Formula: Fixed Assets turnover = Net Sales / Fixed AssetsShow in table





Year 2008 2009 2010

Net sales ‘a’ 60,942,798 77,947,697 88,472,134

Fixed assets ‘b’ 24,217,655 25,147,192 341,560,700

Fixed Assets

turnover ‘a/ b’


Working:

Fixed Asset = Operating Fixed Assets

Net Sale = Mark up revenue / Return / Interest Earn

Graphical Presentation of Fixed Assets turnover

Interpretation: This Fixed Assets turnover ratio shows increasing trend in every year like in 2008 Fixed

Assets turnover is 2.52 times and its increases in 2009 up to 3.10 times and it also and

more increase as compare to 2008 and 2009 up to 3.29 times. Fixed assets usage is

satisfactory because these are contributing more towards sales.





e) Market Ratios

Market ratios are commonly used by the investors to

assess the performance of a business as an investment

and also the cost of issuing stock.

These include:

• Dividend per share

• Earning per Share

• Price/Earning Ratio

Name of ratio

• Dividend per share

Formula: Dividend per share = Dividend paid to share holder /

Average common share outstandingShow in table

Year 2008 2009 2010

Dividend paid to

shareholder

6,104,894 5,820,338 8,060,510





Avg. common

share outstanding

896975 1076370 1345463

Dividend per share 6.81 Rs. 5.41 Rs. 5.991 Rs.

Working

Avg. common share outstanding= Share capital amount / Par value of share

Year 2008 2009 2010

Avg. common

share outstanding

=8,969,751/10

=896975.1

896975

=10,763,702/10

=1076370.2

1076370

=13,454,628/10

=1345462.8

1345463

Graphical Presentation of Dividend per share

Interpretation: The given graph and table shows that in year 2008 the Dividend per share is 6.81 but

it decrease in 2009 and again increase in 2010. Dividend per share ratio informs about





the price of shares in the market also tells the value of the bank’s shares price. This

ratio for the bank is rising 2010 as compared to the 2008, 2009.

Name of ratio

• Earning per Share

Formula: Earning per Share = Profit Available to shareholders or Net income after tax/ No of shares outstanding

Show in table

Year 2008 2009 2010

Net income after

tax

15458590 17561846 17563214

No of shares

outstanding

896975 1076370 1345463

Earning per Share 17.23 Rs. 16.32 Rs. 13.05 Rs.

Working

Net Income:Net profit or net income is the profit after tax which is obtained as mark up revenue –








Net mark-up Income + Fee & commission + Dividend income + Exchange income +

Other income+ gain on sale of securities = total income

Total income - Administrative expense - Other provisions - Other charges + share of

income=profit before tax

Profit before tax- tax = Profit after tax or net income

No. of share Outstanding = Share capital amount / Par value of share

Graphical Presentation of Earning per Share

Interpretation

Earnings per share serve as an indicator of a company's profitability. The reason of

increase earning per share is to increase the net income of the company and the reason of

fallen earning per share is that net income is decreasing and the outstanding share of the

company. After 2008 its decreases in 2009 and 2010





Name of ratio

• Price/Earning Ratio

Formula: Price Earning Ratio = Current market Share price / Earning per Share

Show in table

Year 2008 2009 2010

Market value per

share

50.32 74.37 76.82

Earning per Shares 17.23% 16.32% 13.05%

Price Earning

Ratio

2.9205 Rs. 4.5570 Rs. 5.8866 Rs.

Working

Source:Current market Share price from http://www.kse.com.pk/

EPS is available in balance sheet.

Graphical Presentation of Earning per Share




http://www.kse.com.pk/


Interpretation

The Price Earning ratio is greater in 2010 as compare to 2009 and 2008. Price Earning

ratio doesn't tell us the whole story by itself. It is usually useful to compare the Price

Earning ratios of one company to other companies in the same industry

13. Future Prospects of the Organization





Am doing internship in national bank of Pakistan and observed during internship and see

detail in NBP websites and internet that the future of National Bank of Pakistan is vary

bright and the expansion of NBP is increasing day by day and during the calculation of

ratio I observed that the earning of NBP is high as compare to base or previous years. The

most three ratios to check the future prospects of the entity and all three ratios shows

increase every year these there ratios are current asset ratio, Working capital, Gross Profit

Ratio. But NBP is gearing challenges faced by the domestic banking industry due to

innovation and advancement in international banking.

The future of NBP is bright and NBP is maintaining its position to set higher standard of

achievement because when I calculate the ratios all represent increasing moment and all

are positive it means the bank has capability to pay off and its debt is also superb.The

actions taken by current management provide a great opportunity for NBP for making it

future prosper and can make NBP not less than any modern commercialize bank in

Pakistan.

14. Conclusion





I am doing my internship program in the largest Government bank of Pakistan its

National Bank of Pakistan. NBP is one of the leading banks in banking sector. During my

stay of 6 weeks at NBP it’s my 1st practical life experience, I learnt a lot of task, many

professional skills. I also learned about how to deal with public. NBP has 1254

nationwide and almost 25 branches operating in other foreign countries including USA,

China, France, Hong Kong, Azerbaijan, Bangladesh, and Hong Kong. National bank of

Pakistan is one of the biggest online banks in Pakistan. NBP is a government bank that

why it works according to rules set by the state bank of Pakistan. NBP is also involved in

commercial banking. It is a part of State Bank of Pakistan and it is its major strength.

National Bank of Pakistan establish in the National Bank of Pakistan ordinance 1949.

Am doing my internship in NBP if I say the future of NBP is bright it will not be wrong.

I observed during my training in NBP the paper work of NBP is awesome but now a day

of technology the technology is an impact to survive in the market and to be in

competition. Every organization has some weakness and during my internship in NBP F-

10 branch Islamabad I also observed it covers all its weakness and take opportunities at

right time surely it can be in the way of progress insh Allah and will contribute in overall

progress of NBP at national level as well as the international level.

When I calculate the Ratio analysis of National Bank of Pakistan it shows that NBP is a

most rising bank with highest return on capital, largest market share amongst all Banks in

Pakistan. NBP carries highest cost to Income ratio as compare to all other commercial

banks. But still thinks that there is need for development to overcome on weaknesses in

order to keep its position as an excellent in banking field.

Keeping in view the financial ratios it is observed that Net assets of the NBP are

increasing day by day. The net profit is also increasing which may attract the investors.

The profit of national bank of Pakistan is also increasing day by day that attract the

customers and investors. This ratio of NBP is increasing which shows large numbers of

the assets are financed by the debts which is not good. Positive working capital ratio





shows that its assets are more than liabilities, so the bank is capable to pay its liabilities.

Ratio shows that NBP is utilizing its Assets efficiently. NBP should fully concentrate to

improve its performance and standards to meet the challenges by the economy as well as

by the competitors and for this purpose it needs to overcome the problems and improve

the quality of services specially in advance section, that will prevent it from huge losses.

15. Recommendations for Improvement





Improve its EPS because its shows company

profitability.

Increase sale and reduce expenses to earn

better profit margin

Improve liquidity position by increasing its

sale

Increase the current assets as compared to

current liabilities

Proper training of staff members

Prevailing friendly environment

Complaint counter should be available

Working capital should be positive .





16. Reference & Sources used

Website of National Bank of Pakistan www.nbp.com.pk

Annual Report of National Bank of Pakistan

Newspaper Dawn

Newspaper The Nation




http://www.nbp.com.pk/


Newspaper Business Recorder

Miss Asia Aslam (Branch Manager)

Auditor’s report of National Bank of Pakistan

Searching from different websites from Internet

17. Annexes

http://www.nbp.com.pk/Publications/index.aspx

http://www.nbp.com.pk/Publications/AnReport2008.aspx









http://www.nbp.com.pk/Publications/index.aspx

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