Internship Report

National University of Modern Languages

Lahore Campus

Company: National Bank of Pakistan

Presenter: Rana Muzaffar Iqbal (M-8823)
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 Introduction to Banking
 Bank Description
• Banks are a fundamental component of the financial system
• The role of a bank is to connect those who have capital
(depositors) with those who seek capital (creditors)
 History of Banking in Pakistan
• There were only 38 banks at the time of independence
• Total deposits of Pakistan banks stood at Rs. 880.0 millions in
year 1947
• It was only the Habib Bank, which transferred its office from
Bombay to Karachi
• Up to the year 1974 all the banks were merged into 5 big
banks and the ultimate control was shifted to the hands of
government
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 National Bank of Pakistan

 Introduction
of NBP
 Branch Network
 Ownership
 Assets
 Deposits

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 Branch Network of NBP

 Domestic & Overseas Branches

• There are more than 1287 branches all over the world
• The bank is focusing mainly within the country
 Number of Branches
• There are 1254 Domestic Branches (As of December 2009)
• There are 22 Overseas and 4 Representative Offices
• There are 5 Subsidiaries and a Joint Venture
 Representative Offices
• Four Representative Offices are in the cities of Beijing,
Tashkent, Chicago and Toronto
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 Branch Network of NBP

 Subsidiaries
• CJSC Almaty, Kazakhstan
• NBP Capital Ltd.
• National Bank Modaraba Management Co.
• Taurus Securities Ltd.
• NBP Exchange Company Ltd.
 Joint Venture
• United National Bank Ltd., UK

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

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 Mission
NBP will aspire to the values that make NBP truly the Nation’s
Bank, by:
 Institutionalizing a merit and performance culture
 Creating a distinctive brand identity by providing the highest
standards of services
 Adopting the best international management practices
 Maximizing stake holder's value
 Discharging our responsibility as a good corporate citizen of
Pakistan and in countries where we operate

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 Core Values
 Highest standards of integrity
 Institutionalizing teamwork & performance culture
 Excellence in service
 Advancement of skills for tomorrow challenges
 Awareness of social & community responsibility
 Value creation for all stakeholders

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 Objectives
 Increase in Deposits
• By increasing its deposits, it can extend amount of loan
• Objectives are being achieved by improving the services and
courtesy
 Extension of Loans
• The profitability of a bank largely depends on the amount of
loan given to different customers
• Deposits are collected from the people and invested in
different projects
• Interest charged on the loans potentially contributes to higher
profits

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 Corporate Information

Board of Directors
 Syed Ali Raza Chairman
 Dr. Tariq Kirmani Director
 Mrs Haniya Shahid Director
 Ms. Nazrat Bashir Director
 Sikandar Hayat Jamali Director
 Azam Faruque Director

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 Organizational Hierarchy Chart

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 Departments in NBP Main
Branch Lahore

 General Banking Departments

 Credit Department
 Foreign Exchange Department
 Administration Department

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 General Banking Departments

1. Enquiry
Enquiry section deal with the two purposes;
 Dealing with new Account Holders and Customers
 Account Opening
Types of Accounts
Current Account, Saving Account, Term Deposit, NIDA, Call
Deposits, Foreign Currency Accounts etc.
2. Bills
 Individuals collect their money/amount through bills

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 General Banking Departments

3. Deposit
The following deposit sections are working at NBP;
 Cheque or Cash Deposit
 Clearing Process Department
 Pak-Railway Deposit Account
 Licenses Fees Deposit
 PTCL Account
 Subsidiaries Accounts
 Miscellaneous Activities (Utility Bills etc.)

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 General Banking Departments

4. Account
 It deal with different accounts of Govt. departments e.g. the
Accounts of Pension, Retirement and Benevolent Funds
 Accounts department also maintain and handle the record of
stationery used during the month

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 General Banking Departments

5. Remittance Department
There are Four main modes of Remittance;
 Demand Draft
 Pay Order
 Mail Transfer/Online Funds Transfer
 Telegraphic Transfer

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 Credit Department

1. Credit Administration Department (CAD)

 Loans are given for various sectors e.g. Small Finance, Cash
Finance, Agriculture Finance, Cash & Gold Loan, Personal
Loans, Demand Finance, Running Finance, Corporate
Finance, Export Import Financing, NBP Saiban and NBP
Karobar etc.
2. Credit Processing
 It is one of the most sensitive and important departments of the
bank
 The Credit Management Division of Head Office directly
controls all the credit/advances
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 Credit Department
Products of NBP Credit Processing Department are given as
below;
 NBP Advance Salary Scheme
 NBP Cash Gold Scheme
 NBP Kisan Dost Scheme
 NBP Premium Aamdani Certificate Scheme
 NBP Karobar Scheme

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 Credit Department

3. Saibaan Housing Finance

 It was introduced by NBP in year 2007
 The purpose of this scheme is to provide home to people with
low income
 Period of repayment ranges between 3-20 years.
 Loans available up to a maximum of Rs.10 million.
 Mark-up choices available. Rate ranges between 7.5% - 9.75%

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 Foreign Exchange Department

1. F.C A/Cs
 It deals with the foreign currency accounts which mainly
include dollar account, euro account etc.
 No Zakaat is deducted on the on currency account
2. Foreign Currency Remittance
 The main function of this department is transfer of funds
 The existing system with 15 overseas branches all over the
world

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 Foreign Exchange Department

3. Export Section / Import Section

 Export section of NBP act like a clearing house for the parties
 Import section is a contra section of the export
4. Bill of Exchange
 It is instruments act as "an instrument in writing purpose of
different demands
 Used for the purpose of smooth transaction
 It is most important instrumental document and essential for
importer

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 Foreign Exchange Department

SWIFT System
 It stands for “Society for Worldwide Inter-bank Financial
Telecommunication”
 Made for fast and quick remittance department transaction
 Headquarter of SWIFT is in Belgium
 Universal access number of NBP is NBP-APKKA

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 Administration Department

1. Reconciliation (Inter Branch)

2. Staff Loan / Welfare
3. Administration

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 Financial Analysis

1. Importance of Analysis
 Analysis is vital to evaluate the operating performance of the
firm
 These are also important for the investor’s point of view i.e.
investor can make their investment decision
2. Analysis of Financial Statements
 Financial analysis involves the use of various financial
statements e.g. balance sheet, income statement etc.

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 Financial Analysis

3. Ratio Analysis
 Liquidity Ratio
 Debt Management Ratio
 Profitability Ratios
 Bank Special Ratio

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 Financial Analysis

 Liquidity Ratio
• Current Ratio
 Debt Management Ratio
• Debt Ratio
• Debt to Equity
 Profitability Ratios
• Net Profit Margin
• Return On Equity
• Return on Asset

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 Financial Analysis

 Bank Special Ratio

• Investment to total assets
• Advances to Deposit Ratio
• Cash to Deposit Ratio
• Equity to Assets
• Equity to Deposits
• Earnings Per Share

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 Financial Analysis

Simple Ratios 2007 2008 2009

Current Ratio 9.74 5.35 7.35

Debt Ratio 0.8713 0.8709 0.8474
Debt to Equity 13.921 10.428 9.323
Net Profit Margin 37.79 % 38.60 % 37.64 %
Return On Equity 35.15 % 32.09 % 27.48 %
Return on Asset 2.20 % 2.68 % 2.50 %

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 Financial Analysis

Special Banking Ratio 2007 2008 2009

Investment to Assets 0.27 0.22 0.28

Advances to Deposit 58.01% 27.88 % 57.55%
Cash to Deposit 15.36% 15.67% 16.03%
Equity to Assets 6.26 % 8.35 % 9.09 %
Equity to Deposits 7.80 % 10.57 % 11.70 %
Earnings Per Share Rs. 23.34 Rs. 24 Rs. 21.51

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 My Learning and Experiences

1. Duties at NBP Main Branch Lahore

 Activities in General Banking Department
• My duties in General Banking Department
• My manual work i.e. filling vouchers, Applications etc.
• The most frequently open accounts
• Ccustomer Handling
 Activities in Remittance Department
• Here my basic tasks such as to guide the customer
• My working on terminal issuing DD and TT

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 My Learning and Experiences
 My Activities in Credit Department
• My duty was to check the document needed for loan scheme
• My working in Saibaan Finance Section
 Activities in Foreign Exchange Department
• Procedure of opening an L.C.
• I also work in the procedure for dealing with inward and
outward remittances
 Activities in Administration Department
• Here I was concerned to make scrolls of pension distribution
• I also made entries in the pension ledgers and in the book of
the pensioners
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 My Learning and Experiences

2. Implementation of Classroom Learning

• Comparison of theoretical and practical implementation
• Contribution of Economics, Principles of Management,
Principles of Marketing and IT subjects is in various trends
• Financial Risk Management and Corporate Finance help
me in assessing financial and risk handling i.e. in Credit
Department
3. My Experience in the Organization
4. How Experience Impacts my Career

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 Suggestion
 Bank should focus on improving the quality and effectiveness of
banking software and technology
 Bank should expand media marketing for promotion of its products
and services
 Regular bonuses and incentives should be given to the employees
of the bank
 The bank should increase the number of online branches in the
country
 Working conditions must be improved for the employees
 Govt. should also take keen interest to recover its bad debts
 Political influences in the bank should be eliminated

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 References

 Financial Accounting by Meigs & Meigs

 Principles of Managerial Finance 11th Edition by L. J. Gitman
 Annual Reports of National Bank of Pakistan 2007 and 2009
 www.nbp.com
 www.cssforum.com
 www.wikipedia.com

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