Final Internship Report on Bop New 2003

7/27/2019 Final Internship Report on Bop New 2003

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An Internship Report on Bank Of Punjab

Page | 1Comsats Institute of Information Technology Wah Cantt

EXECUTIVE SUMMARY

Internship is considered to be a compulsory practical training for students of business

administration at COMSATS institute of information technology, Wah Cantt. Its time is

six weeks and has demonstrated to be an opportunity of training for the students. The

main usage of such training is to make students endowed to relate the theoretical

knowledge in practical environment. Students recognize about the practical knowledge.

This is my internship report; I have completed my internship at BOP (Wah Cantt Branch). In

this report there is introduction, background of study, banking overview and the purpose and

methodology. In BOPs introduction, its past, the present and the future outlook are included,

along with the vision, mission, goals and core values of BOP.

This report show my analysis and my working in different finance areas and also introduction

of the organization i.e. the business operations section, the major products, services,

departments as a whole and the departments of the branch is discussed. The financial analysis

of the financial statements that is balance sheet and the income statement of BOP has been

conducted including the common size analysis, ratio analysis of five years.

I have shown the basis of the business and how they have modified themselves to 21st

century. I found strength and weaknesses of the BOP as a whole and of Wah branch. The

report is then concluded and I gave some recommendations according to my knowledge. The

purpose of the study is to get experience of the real life finance practices in order to bridge

the gap between the theoretical and the practical approach and to gather the knowledge of the

different aspects of the vast field of profession.


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CHAPTER # 01

COMPANY BACKGROUND


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COMPANY BACKGROUND

Introduction:

The Bank of Punjab is basically a commercial bank and provides commercial banking

and related services.The services provide by the bank deposit in local currency, client

deposit in foreign currency, remittances, and advances to business, trade, industry and

agriculture. The segments that this bank includes are as follows: trading and sales, in

which there is fixed income, equity, foreign exchanges, commodities, credit, funding,

own position securities, lending and repose, and brokerage debt; retail banking, includes

retail lending and deposits, private lending and deposits, trust and estates investment

advice, merchant / commercial and private labels and retail; commercial banking, which

includes project finance, real estate, export finance, trade finance, lending, guarantees,

bills of exchange and deposits; payment and settlement, which includes payments and

collections, funds transfer, clearing and settlement, and agency service, which has

depository receipts, securities lending (customers), issuer and paying agents in it. The

Bank of Punjab has entered a new era of science to the nation under experience and

professional hands of its efficient management. The Bank of Punjab plays a vital role in

the national economy through mobilization of rare as well as untapped local resources,

promoting savings and providing funds for investments. The Bank of Punjab is privileged

to be responsible for providing services to the nation that leads to national progress and

prosperity. Within the couple of years of its scheduling, the bank has not only carved out

for itself prominent niche in the mainstream banking of the country but is also leading in

certain areas. In the short span of time the Bank has been able to evolve a distinct

corporate culture of its owned-based policies, which are realistic and are on highly

professional footings.


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Nature of the Organization:

The Bank of Punjab is a commercial bank and performs all the functions that are

attributed to the commercial banking institution in the area of resource mobilization as

well as loans, and investment. The Bank is thus providing all type of advances to

business, trade, and industry on seasonal and annual basis, and is ensuring, through the

prudent policy, the safety and protection of its loan portfolios, as the resources base of the

bank expands, project financing will also be brought into its fold.

History:

The Bank of Punjab (BOP) was established in Pakistan on 15 Nov 1989, under the Bank

of Punjab Act 1989 and was given the status of scheduled bank in 1994. The bank is

listed on Lahore, Karachi & Islamabad Stock Exchange. The majority shares of the bank

are held by the Government of the Punjab. The role of technology in effective/efficient

operation of financial sector was recognized by the Bank of Punjab, and hence it has

computerized all its branches which are inter-connected with online real time system.

Banks customers are facilitated by shared network of online ATMs in all major citi es of

Pakistan. Substantial share in economic growth, especially of agricultural and SME

sectors are possessed by the bank. Strategic positioning of branches and introduction of a

number of Agri-based financing schemes as well as penetration into Agri-economic

allowed the bank to play a vital role in the development of agriculture sector in Pakistan.

The Bank of Punjab is working as a scheduled commercial bank with its network of 286

branches at all major business centers in the country having the employee strength of

35000. Customer confidence and satisfaction in the services of the bank is depicted by its

increasing branches all over the country.

:


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Role of the BOP in Pakistan:

The bank's major customer is the government. Other customers are various public sector

enterprises from different segments of the economy including textile, real estate,

transport, agriculture, financial institutions and individual customers. Currently, the bank

operates with a network of 286 branches across the country. Bank of Punjab is amongst a

few banks which enjoy better credit rating by Pakistan Credit Rating Agency (PACRA)

like for long-term "AA-" and for short-term "A1+"

Objectives of BOP:

The Bank of Punjab being a commercial bank performs all those function as are

attributed to such banking institutions. The primary objective of the BOP is to

channel the resources into sectors, which have suffered neglect. Other objectives

included:

To expedite the banking services for the masses

To provide the highest rate of return to the shareholders by achieving good profitable

growth.

To enter into financing contracts and to mobilize resources in local and now in

foreign currencies consistent with the objects of the bank.

To be perceived by the customers and step forward as the best in every operation.

Have the staff of the highest caliber.

To inspect, supervise and estimate credit of member societies.

To help the growth of the cooperative movement.

To afford financial assistance to members societies in such manner as required

Excel in the way of working of together to make decisions, manage change and get

things done.


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CHAPTER # 02

OVERVIEW OF ORGANISATION


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Board of Directors:

Ghafoor Mirza

(Chairman Board ,BOP)

Mr. Naeemuddin khan

(President)

Mr. Tariq Mahmood Pasha

(Director)

Ms. Tariq Bajwa

(Director)

Mr. Rizwan ullah khan

(Director)

Mr. Junaid Ashraf Khawaja

(Director)

Mr. Farooq Ahmed Awan

(Director)

Mr. M. Naveed Masood

(Director)


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Branch Networks:

During the year 2011, in recognition of consistent improvement and sustained growth in

all facets of operation, the State Bank of Pakistan granted additional 11 licenses for

opening of new branches. Accordingly, the number of branches has increased from 273

to 284 at close of the year 2011. The Bank has planned to further open 22 branches in

year 2012. The major branches are at Karachi, Lahore, Islamabad, Faisalabad,

Rawalpindi, Multan, Gujarnawala, and Peshawar.


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Organization Chart:

Source: www.google.com


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CHAPTER # 03

BUSINESS OPERATIONS


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BUSINESS OPERATIONS

Products of BOP:

Following are the major products offered by Bank of Punjab.

Agriculture scheme:

There are many agriculture promotion schemes provided by BOP

Agri finance branches

Kisan Dost Running Finance FacilityKisan Dost Lease Finance Facility

Kisan Dost Cold Storage Finance Facility

Kisan Dost Green House Finance Scheme

Kisan Dost Livestock Development Scheme

Agricultural Schemes Markup

Consumer schemes:

Aasaish loan

Quick cash

Car lease

House loan

Smart cash personal loan

Motorcycle lease scheme

Caravan fleet financing

Commercial schemes:

CNG filling station

Auto lease financing scheme

Car dealers


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Karobar barhao scheme

Fertilizer dealer financing scheme

Financing scheme for the purchase of office/shop

Women entrepreneur finance scheme

House loan:

This loan is provided to salaried individuals, self employed professionals, and self

employed businessmen.

The amount of loan starts from Rs.200,000 and is up to Rs.300,000.

The monthly installment is up to 50% of the net income of the individual

The tenure of the loan is from 3 years to 20 years.

Car loan:

The loan is provided for salaried individuals, self employed professionals, and

self employed businessmen.

The loan amount ranges from Rs.200,000 to Rs.5000,000

The tenure of these loans is from 1 year to 5 years.The monthly payment is up to 50% of the individuals salary.

Asaish Loan:

The loan is provided for salaried individuals, self employed professionals, and

self employed businessmen

The monthly payment of the loan is not more than 50% of the salary of the

individual

Smart Cash Personal Loan:

This loan is provided to salaried individuals and self employed professionals

The loan amount ranges from Rs.50,000 to Rs.500,000

The tenure of the loan ranges from 1 year to 5 years.


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The monthly payment of the loan should not more than 50% of the individuals

salary.

Karobar Barhao Scheme:

Loan is provided to meet working capital requirements of business

The amount provided under the loan ranges from Rs.200,000 to Rs.50,000,000

The tenure of the loan is 7 years

Live Stock Development Scheme:

The loan is provided to individuals who have their own self owned dairy farms.

The amount of the loan is up to 80% of the cost of animals

The tenure of the loan is 5 years.

The repayment is of 20 quarterly payments

Kisan Dost Aabiari Scheme:

The loan is provided to self cultivator having agriculture land minimum 5 acres

and maximum 50 acres.

The maximum loan amount is Rs.500,000

The tenure of the loan is 5 years

There are ten semiannual payments to repay the loan in 5 years

Kissan Dost Green House Finance Facility:

The applicant of the loan must possess the land to cultivate the green house

The 70%-80% cost of construction of the green house would be provided by the

bank

The repayment of the loan would be made by 20 equal quarterly payments.


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Services at BOP:

Along with above-mentioned products Bank of Punjab also provides numerous services.The difference between products and services is that products are offered while services

are rendered, but as both serve the same purpose (satisfying financial needs); therefore,

both are treated at equal footing.

Major services being rendered by the Bank of Punjab main branch:

Commercial Banking

Corporate & Investment

Cash Management Services

Utility Bills

Lockers

Commercial banking:

The commercial banking group has been developed to fulfill the needs of small &

medium size customers for enhancing banks business significantly with clear focus,

repositioning of resources and active marketing to increase banks profitability.

Commercial banking deals with customers whose sales turnover and aggregate credit are

exposed as per benchmarks prescribed in the sbps prudential regulations.

Corporate & investment banking:

Corporate banking:

The bop corporate banking seeks to attract new clients and retain the existing

relationships and build market share by offering superior services, competitive pricing

and wide product range to valued corporate clients including public sector entities as well

as multi national companies. Bop facilitates its customers for all types of their bankingneeds including working capital, trade finance, and project financing etc. Bop has worked

on some of the local markets largest and most complex transactions and infrastructure

projects. The bop corporate banking group constitutes of seasoned relationship

management team to meet the high service standards of large corporations. The group


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delivers a full range of high quality advisory, financing and operational service solutions

in accordance to customers needs.

Investment banking:

The investment banking group is responsible for developing and executing investment

banking strategy to enhance and maximize shareholder wealth and customer satisfaction.

Ibg has the specialty in providing innovative and unique advice to its clients to facilitate

them in meeting challenges in a dynamic market. The team of qualified and well trained

professionals operates under a strict risk management framework, following best

practices of their fields and continuously striving for excellence

Cash management service:

The process of collection and payments on behalf of customers, using the branch network

is known as cash management. The primary objective is to facilitate organizations with

multiple collection points in gathering cash / funds and making them available in the

customer operating account.

Utility service:

The customers have the facility to pay the bills of telephone, gas and electricity at any

branch from 9:00am to 5:00 pm. These bills can also be paid using the drop box facility

which the individual can drop the check along with the bill at the branch and collect the

receipt in the evening.

Bop locker:

It is one of the utility services that bop provides to their customers for keeping

Jewellery, important documents and other valuables.Other services provided by the bank are:

Atm facility

On-line banking

Lockers facility


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Demand drafts

Letter of credit

Pay order

Mail transfer

Debit card

Collection of utility


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CHAPTER # 04

DEPARTMENTS IN BOP


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DEPARTMENTS IN BOP

Following are the key departments of BOP:

1. Cash department

2. Remittance department

3. Account opening department

4. Clearing department

5. Advances/Credit department

6. Bills remittance department

Function and Purpose of Each Department in BOP

1. Account Opening Department

Bank of Punjab has subsequent kinds of customers under this department. Some are

as Companies, Businessmen, Firms, Trust, Professionals, staff, individuals etc.

Functions of Account Opening department:

Opening an account after verification of customer from NADRA database.

Recording account number and name of applicant in account opening register.

Issuing letter of thanks

Recording first deposit with the bank by customer in general ledger.

Closing account after receiving application from customer.


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2. Clearing Department

Functions of this department

The Bank of Punjab collects cheques on behalf of its customers and this system of

collection of cheques is known as clearing. The representatives of all banks get

together in the clearing house and settle the receipt and payment of cheques

drawn on each other

The main branch receives the cheques from all of its branches and arrange their

collection

Main branch sends these cheques to the state bank of Pakistan, where a

clearinghouse exits

In this clearinghouse, the representatives receive their cheques and go back to

their bank's main branch

Later on, the main branch sends these cheques to their relevant branches where

the validity of these cheques is verified and the accounts of the relevant clients are

affected.

Remittances Department:


This department deals with the transfer of funds from one place to another place

It is done through Demand draft, Mail transfer, Telegraphic transfer, Pay order

etc.

3. Credit Department:


The BOP credit department facilitates people by providing loans and financial

facilities to them. The types of loans, their duration and conditions are various as

well as different for every sector.


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BOP Quick cash, BOP Car loan, BOP House loan, BOP SME loan, BOP Aasaish

loan, BOP House loan for federal government, running finance, cash finance,

Agricultural finance.

4. Bill Remittance Department:


This department deals with the collection of various utility bills like PTCL,

WASA, SNGPL, LESCO

PTCL telephone bills are collected by the bank. These bills are entered in the

system with the consumer record and the bill earns a commission of Rs.2 per billWASA, the water bill are also collected by the bank. They are also entered in

system with consumer record and commission of Rs.2 per bill is earned.

LESCO, the electricity bills are collected by the bank with the commission of

Rs.2 per bill

SNGPL, the sui gas bill are also collected in the same manner as mentioned above

:

5. Cash Department


Cash department of BOP is given the complete responsibility of handling all

receipts & disbursement of cash. As a result of transaction in both local & foreign

currency. As a consequent it is also responsible for the book keeping of this

transaction &the cash receipt for received deposits and encashment of cheques


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BOP Branch, Wah Cantt Detail:

Branch Name BOP, Wah Cantt

Branch Code 0177

Address Civic center, the Mall, Wah Cantt

Phone no. 051-4902261

Fax no. 051-490226

Tehsil Taxila

District Rawalpindi

Province Punjab

Status Online

Web mail bop.com.pk


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Departments of BOP Wah Cantt Branch

Here, I will discuss those departments which I observed during my internship in BOP

Wah Cantt branch. It is located in civic center the mall, wah cantt. This branch faces

intense competition as there are other banks in similar area. Other banks located in

this area are Habib bank, National bank, Silk bank, Muslim commercial bank. So

there is intense rivalry and competition among all the branches in this area. Masses

that belong to this area are salaried individuals and government employees.

Jobs and Responsibilities:

Mr. Tahir Hussain is the branch manager, and Mr. Ahmed Nadeem is the assistant

branch manager of BOP Wah. He is a very responsible, kind and talented person. He

is a good leader and motivates the employees and staff to work hard and is also very

supportive. Following activities are performed at BOP by the branch manager.

Reviewing reports

Develops objectives for staff

Performance evaluation of staff

Supervision of all branch affairs

Inspection of work to maintain effectiveness

Developing strategy for marketing business/deposit development and public

relations

Operations Manager:

Mr. Kamran Hameed is the operation manager at the BOP Wah. He oversees the

working and operations of all the departments. He reports to branch manager and all

the staff works under him. He is responsible for:


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Zakat deduction on this account

No service charge deduction even if deposited amount is below than

Rs.10,000

3. Basic business account(BBA):

Following are the features of this account:

Minimum start up deposit amount of Rs.1000

Can do two transactions per month i.e. either deposit or withdrawal

No zakat deduction

No interest payments

No deduction of service charges even if deposited amount is less than

Rs.10,000

Remittances Department:

It is very important department of the bank. Remittance is a transfer of funds from one

place to another or from one person to another. The BOP deals with the following type

of remittances:

Demand Draft (DD)

Mail Transfer (MT)

Telegraphic Transfer (TT)

Pay Order

Demand draft (dd):

The demand draft is a written order that is given by the one branch of a bank on behalf of

customer to another branch of the same bank to a certain amount to the certain person


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Mail transfer (mt):

it is the transfer of money from one branch to another branch of the same bank throughmail service is called mail transfer.

Telegraphic transfer (tt):

The most urgent method of remitting money from one place to another place. It is used

when the sender desires to send urgently.

Pay order:

Pay order is a written order issued by the bank on its own branch, payable by itself to

pay a specified sum of money to the person. The purpose of pay order is to transfer the

fund from one place to another

Bills Remittances Department:

This department deals with the collection of various utility bills like WASA, SNGPL,

LESCO, and PTCL. This department facilitates people by providing them with the

opportunity of submitting their bills with much ease. The bank earns a commission of

Rs.2 per bill on the submission on each sort of these bills.

Clearing Department:

The BOP Wah branch also has clearing department where they collect cheques on behalf

of customers, arrange the lot, send it to main branch of BOP from where they are sent to

SBP clearing house. In this clearinghouse, the representatives receive their cheques and

go back to their bank's main branch. Later on, the main branch sends these cheques to

their relevant branches where the validity of these cheques is verified and the accounts of

the relevant clients are affected.


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CHAPTER # 05

WORK DESCRIPTION


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WORK DESCRIPTION

Learning as an Internee:

I did my eight weeks internship in Bank of Punjab Wah Cantt branch, during the summer

breaks.

Operations at BOPBranch:

There are four main departments in BOP Wah branch

1. Account opening department

2. Remittances department

3. Clearance department

During my internship I mostly I worked in account opening department and opened the

account of people in BOP which includes PLS account, current account and basic

business account. I observe the working of all other departments and from which what I

am able to understand, is below in the detail:

Account Opening Department:

It is very important department because of daily or monthly transaction people need to

open their account. I am going to briefly explain the account opening procedure. As

following are the requirements for account opening in BOP:

Basic Requirements for Account Opening:

Copy of ID card of the individual.

Verification of ID card from NADRA.

ID card copy (mothers)

ID card copy (kins)

Copy of electricity bill or gas bill.


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Witness (guarantor) who should already have an account in the bank (for minor

account holder).

For salary individual, copy of pay slip

Cheque book would be issued after 4-5 days

Letterhead pad and stamp in case of a account for business/ organization

Account opening procedure:

Firstly account opening form is filled

All required documents attached to the form

Signature on form is taken by the person whose account is going to be open and

on Specimen Signature Card (SSC)

Signature of operation manager and branch manager

Account opening form number is registered in recordAuthentication( generation of account number in system) done by operation

manager

Deposit slip handed over to customerCustomer submit a copy of deposit slip on cash counter

After one week issuance of cheque book.

ATM and E-banking Services provided on option

Formalities of account opening:

Verysis, that is authentication of the individuals ID card from NADRA

NAB, FAQ authentication

KYC(Know your customer) analysis

Issuance of Letter of Thanks on behalf of manager to the customer

SSC scanned and uploaded in system in the customer account option.


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Bills Remittances Department:

This department deals with the collection of various utility bills like PTCL, WASA,

SNGPL, and LESCO. In addition this department also collects the annual fee payments

of local schools and colleges. The bank earns a commission of Rs.2 per bill, and

commission on fee collection is also earned. The records of all the bills and fee payment

are maintained in the system of the bank.


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CHAPTER # 06

SWOT ANALYSIS


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SWOT ANALYSIS

SWOT analysis is done to measure or find out the strength, weaknesses, opportunity and

threat of business venture or any project. This explains the favorable and unfavorable

internal as well as external factors to achieve to objectives. The SWOT stands for the

internal Strengths and Weaknesses of a business and environmental Opportunities and

Threats faced by the business. This is based on the logic that an effective strategy

maximizes the business strengths and opportunities and at the same time minimizes its

weaknesses and threats. Environmental and industry analysis provide the information to

identify key opportunities and threats of the firms external environment. Here with a

particular reference to BOP, I am going to discuss the concept of SWOT analysis.

STRENGTHS

Biggest customer of BOP:

The Government is the biggest customer of BOP. Bank handles all the transactions

related to government. Act on the behalf of government for the daily money related

transactions. Pay money to other on the behalf of government and take money as well.

Excellent customer services:

The behavior of all the staff with the customer is very helpful and supportive. The

customer is made to feel privileged and superior by treating them in a friendly fashion.

ATM facility:

One of its strength is ATM facility which is now provided by BOP to its customers. Due

to this ATM machine installation, customer feels comfortable because he dosent need to

take his cheque book with him everywhere.


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Credit rating:

BOP is one of a few banks who have very good long run and short run credit rating

Large customer base:

BOP is government bank so it is enjoying the benefit of customer satisfaction. Customer

mostly relies on bop as compared to other banks as it is supported by government of

Pakistan. They feel secure for transacting with the BOP. Therefore it has a large customer

base.

Online banking services:

BOP also provides the facility of online banking to its customers, which is a huge

advantage in todays fast paced and high technology environment

Innovation:

The bank enjoys a strategic competitive position due a variety of products and services

over all domestic players by virtue of its leadership and technological innovations.

WEAKNESSES

Lack of Rewards and incentives:

BOP Wah branch does not provides enough bonuses and incentives to its employees due

to which they are not highly motivated to do their jobs.

Lack of Advertising and Promotion:

BOP has formulized a lot of products and services for its customers, even more than other

commercial banks, but any advertisement on electronic media has not been seen


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Working atmosphere:

The working atmosphere at BOP Wah branch is not cooperative or supportive. The

employees do not freely share information, expertise or knowledge with each other.

There is a lack of team spirit and synergy.

Work distribution:

In BOP Wah branch I observed that some of the employees are overworked, and have too

much work load on them while the others dont have that much responsibility. The tasks

and duties are not properly distributed.

OPPORTUNITIES

Foreign operations:

Bank has no foreign branches so it should open its branches outside the country

BOP has government back:

As it has support of government. It should cash this opportunity by utilizing the support

of government to improve its position in market y increasing its share and their value.

Enhance branch network:

BOP can enhance its local operations by increasing its branches across the country. Not

only in urban areas but in rural areas as well

THREATS

Increase in competition:

Private Banks is increasing in numbers day by day which results in competition. All the


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private banks are providing same facilities to the customers. So it is a big threat for BOP

to deal with.

Lack of promotion and advertisement:

The lack of proper advertisement can seriously undermine the competitive position of the

bank, as well as its image.

Employee turnover:

Lack of job security and job dissatisfaction can be a leading cause for employee turnover.


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MY LEARNING EXPERIENCE

This internship was done by me as a requirement for BBA. I did the internship for 42

days and enjoyed the practical work and also learned how to behave in work

environment. Following are some of the things that I learned during the course of my

internship:

Dealing with customer

Practical exposure of workplace

reporting to the bossA useful experience for future job

How to manage work that is I learned how to create work life balance


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CHAPTER # 07

FINANCIAL ANALYSIS


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FINANCIAL ANALYSIS

Analysis is done to examine systematically, breaking a complex substance into small

parts to gain a better understanding of it and studying the interrelations. Evaluating

feasibility, performance as well as profitability of business or a project is called financial

statement analysis or financial analysis. Professionals take information from the financial

statements and other sort of reports to execute financial analysis, which is presented to

top management. This helps management to making decisions. Analysis is done for

different sort of clients, as creditors concern about liquidity of firm and investors concern

about long term profitability of firm. The concern of the management is the overall

financial health of the firm, in order to deal with the outside stakeholders and potential

investors of the firm.

Financial Analysis of BOP:

Following are the BOPs 5 years (2007-2011) data consisted of balance sheets and

income statements. This data is taken from annual reports from the main website of BOP.

Financial Analysis will include following analysis

1. Common size analysis

Horizontal analysis

Vertical analysis

2.Ratio analysis


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Bank of Punjab

BalanceSheet (Consolidated)

As at December 31, 2011

Assets Dec31,2007 Dec31,2008 Dec31,2009 Dec 31,2010 Dec31,20

Cash and Balance with treasury

banks 14,210,302 10,685,058 13,043,705 14,069,601 16,698,3

Balance with other banks 1,927,662 2,178,455 2,185,782 3,276,234 3,607,10lending to financial institutions 2,450,000 633,333 1,053,550 7,309,587 7,447,37

Investment 73,461,693 22,689,608 57,923,172 56,359,404 92,581,3

Advances 133,899,143 131,724,113 121,303,368 120,796,694 127,129,

Operating Fixed Assets 3,252,759 3,471,838 3,427,267 3,534,660 3,597,48

Deferred tax Assets - 8,388,162 11,921,146 14,063,694 13,886,7

Other Assets 5,789,116 6,122,406 5,770,905 9,721,900 16,049,6

Total Assets 234,990,675 185,892,973 216,628,895 229,131,774 280,997,

Liabilities

Bills payable 937,647 1,219,801 875,618 581,100 850,569

Borrowing 17,842,915 12,278,773 14,040,014 11,526,783 24,963,5

Deposit and other Account 191,968,377 164,071,732 190,858,087 208,176,902 237,896,

Subordinated loans - - - - -

Liabilities against assets subject to

finance lease 40,321 30,632 19,907 13,887 7,831

Deferred tax liabilities 2,205,530 - - - -

Other liabilities 2,983,977 4,564,481 4,700,569 5,223,152 6,506,27

Total 215,978,767 182,165,419 210,494,195 225,521,824 270,224,

Share Capital 4,230,379 5,287,974 5,287,974 5,287,974 5,287,97

Reserves 7,427,232 7,427,232 573,779 2,012,492 1,914,95Inappropriate profit 3,468,956 (7,674,257) (10,372,082) (14,411,509) (14,067,8

Share deposit money - - 10,000,000 10,000,000 17,000,0

Surplus on revaluation of asset 3,885,341 (1,313,395) 645,029 720,993 637,501

Total Liabilities/O.E 19,011,908 3,727,554 6,134,700 3,609,950 10,772,5


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Bank of Punjab

Profit and Loss Statement

Years Dec31,2007 Dec31,2008 Dec31,2009 Dec31,2010 Dec31,2011

Mark-up/return/interest earned 17,539,538 17,752,652 15,640,701 18,217,583 20,682,06

Mark-up/return/interest expenses 13,939,377 16,614,000 19,022,494 18,801,642 21,073,27

Net markup/interest income 3,600,161 1,138,652 (3,380,662) (584,059) (391,210)

provision against loans and advances 1,616,421 18,863,580 9,241,653 559,604 (3,164,234

provision for diminution in the value

of investment 24,479 388,757 955,744 2,767,341 576,597

Bed debts 246,869 - - - -

1,887,769 19,252,337 10,197,397 3,326,945 (2,587,637)

Mark-up income after provisions 1,712,392 (18,113,685) (13,579,190) (3,911,004) 2,196,427

Non Markup/Interest Income

Fee, commission and brokerage

income 659,488 579,520 657,114 562,469 724,499

Dividend income 1,812,870 2,025,160 920,943 404,111 286,375

Income from dealing with Foreign

Currency 377,233 324,327 247,570 134,488 160,089

Sales and redemption of securities 2,039,535 733,787 (124,238) 293,303 330,025

Unrealized gain/ loss on revaluation of

investment - - (1,193) 18,020 (5,383)

Other income 547,635 526,186 518,553 473,055 494,103

Total No mark-up/interest income 5,436,761 4,188,980 2,218,749 1,885,446 1,989,708


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Common Size Analysis

In the common size analysis vertical and horizontal analysis is performed. In the vertical

analysis an item like total asset or net sales is taken as base value and all other values are

compared to this value by dividing them from this base value. In the horizontal analysis

one year is taken as base year and all other years data is compared with value by dividing

the all years value by the base year values.I have done the following horizontal and vertical analysis of five years from 2007 to 2011

with the help of consolidated statements.

Horizontal Analysis

Vertical Analysis

Non Mark-up/Interest Expense 7,149,153 (13,924,705) (11,360,441) (2,025,558) 4,186,135

Administrative expenses 2,255,342 2,808,835 3,038,357 3,435,049 3,959,217

Other provisions - 10,101 - - 1,121

Provision against off B/Sheet

obligation 292 - - 740,000 (244,111)

Other charges 37,950 114,700 794 1,605 205

Total non markup/interest expenses 2,293,584 2,933,636 3,039,151 4,176,654 3,716,432

Profit before Taxation 4,855,569(16,858,341) (14,399,592) (6,202,212) 469,703

Taxationcurrent 170,700 207,600 - - -

-prior year (19,921) 1,052,000 78,491 1,461 5

-deferred 250,772 (8,033,001) (4,383,406) (2,157,119) 174,774

401,551 (6,773,401) (4,304,915) (2,155,658) 174,779

Profit after taxation 4,454,018 (10,084,94) (10,094,677) (4,046,554) 294,924


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Hori zontal Analysis of Balance SheetAssets 2007 2008 2009 2010 2011

Cash and balance 100% 76% 92% 99% 118%

Balance with other banks 100% 114% 114% 170% 188%

Lending to financial institutions 100% 26% 43% 299% 304%

Investment-net 100% 31% 79% 77% 126%

Advances-net 100% 99% 91% 91% 95%

Operating fixed assets-net 100% 107% 106% 109% 111%

Other Assets-net 100% 106% 100% 168% 278%

Total assets 100% 80% 93% 98% 120%

Liabilities

Bill payable 100% 131% 94% 62% 91%

Borrowings 100% 69% 79% 65% 140%

Deposits and other accounts 100% 86% 100% 109% 124%


finance lease 100% 76% 50% 35% 20%

Deferred tax liabilities 100% - - . .

Other Liabilities 100% 153% 158% 175% 218%

Total liabilities 100% 85% 98% 105% 126%

Owners Equity

Share capital 100% 125% 125% 125% 125%

Reserves 100% 100% 8% 28% 26%

Inappropriate profit 100% (222%) (299%) (416%) (406%)

Surplus on revaluation of assets-net of tax 100% (34%) 17% 19% 17%

Total O.E 100% 20% 33% 19% 57%


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INTERPETATION:Horizontal analysis or trend analysis, in which values of balance

sheet over a definite period of time. In the above table base year is 2007 as base year and

divide the next four years with base year. The analysis shows the increasing and

decreasing trend of each item with respect to the previous year.

Hori zontal Analysis of I ncome StatementParticulars 2007 2008 2009 2010 2011Mark-up/return/interest earned 100% 102% 90% 104% 118%Mark-up/return/interest expensed 100% 120% 137% 135% 152%Net mark-up/interest income 100% 32% (94%) (17%) (11%)Provision against non-performing loans

and advances 100% 1167% 572% 35% (196%)Provision for diminution in the value of

investments 100% 1589% 3905% 11305% 2356%Bad debts written off directly 100% - - - -Net mark-up/interest income after

provisions 100% (1058%) (793%) (229%) 129%Non Mark-Up/Interest Income

Fee commission and brokerage income 100% 88% 100% 86% 110%Dividend income 100% 112% 51% 23% 16%Income from dealing in foreign currencies 100% 86% 66% 36% 43%Sales and redemption of securities 100% 36% (7%) 15% 17%Unrealized gain on revaluation of

investments classified as held for trading 100% - - - -Other income-net 100% 97% 95% 87% 91%Total non-mark-up/interest income 100% 78% 41% 35% 37%Non Mark-Up/Interest Expenses

Administrative expenses 100% 125% 135% 153% 176%(Reversal) / Other provisions 100% - - - -Provisions against off balance sheet items 100% - - 253425% (83600%)


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Other charges 100% 303% 3% 5% 0.54%Total non-mark-up/interest expenses 100% 128% 133% 183% 162%Profit Before Taxation 100% (348%) (297%) 128% 10%Taxationcurrent year 100% 122% - - -TaxationPrior years 100% (5821%) (394%) (8%) (0.02%)TaxationDeferred 100% (3204%) (1748%) (861%) 70%

Profit After Taxation 100% (227%) (227%) (91%) 7%Inappropriate profit brought forward 100%

Profit available for appropriation 100%

Basic and diluted earnings per share-after

tax 100%

INTERPETATION: Horizontal analysis or trend analysis, values of a base year are

compared of Income Statement over a definite period of time. In the above table base

year is 2007 and I divide the next four years with base year. This analysis shows the

increasing and decreasing trend of each item with respect to previous year.

VERTICAL ANALYSIS

Verti cal Analysis of Balance SheetParticulars 2006 2007 2008 2009 2010

Assets

Cash and balance with treasury banks 6.04% 5.74% 6.02% 6.14% 5.94%

Balance with other banks 0.82% 1.17% 1% 1.42% 1.28%

Lending to financial institutions 1.04% 0.34% 0.48% 3.19% 2.65%

Investment-net 32% 12.3% 27% 25% 33%

Advances-net 57% 71% 56% 53% 45.2%

Operating fixed assets-net 2% 1.9% 1.58% 1.54% 1.28%

Deferred tax assets - 4.51% 5.5% 6.13% 4.94%


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Other Assets-net 3% 3.3% 2.7% 4.24% 5.71%

Liabilities

Bills payable 0.4% 0.65% 0.40% 0.25% 0.30%Borrowings 8% 6.6% 6.48% 5.03% 8.8%

Deposits and other accounts 82% 89% 88% 91% 85%


financial lease 0.01% 0.01% 0.91 0.60% 0.27%

Deferred tax liabilities 0.94% - - - -

Other Liabilities 1.3% 2.5% 2.16% 2.27% 2.31%

Total liabilities 92% 98% 97% 99% 96.1%

Share capital 1.9% 3% 2.44% 2.30% 1.88%Reserves 3.1% 4% 0.264% 0.87% 0.68%

Inappropriate profit 1.47% (4.12%) (4.78%) (0.28%) (5%)

Share deposit money - - 4.61% 4.36% 6.04%

Surplus on revaluation of assets-net of tax 1.65% 0.70% 0.29% 0.31% 0.22%

Total equity 8.09% 2% 2.83% 1.57% 3.83%

INTERPRETATION:

In vertical analysis I divided all the items by total assets to measure the contribution of

each item in companys asset side. In the liability side, I also measure the percentage of

items in liability and owners equity by dividing the entire liability side items by total

liability and owners equity.

Verti cal Analysis of I ncome StatementParticulars 2007 2008 2009 2010 2011

Mark-up/return/interest earned 100% 100.00% 100.00% 100.00% 100.00

Mark-up/return/interest expenses 79.40% 94.00% 122.00% 103.20% 102.00

Net mark-up/interest income 20.52% 6.40% - - -

Provision against non-performing loans and

advances 9.21% 106.20% 59.00% - -


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Provision for diminution in the value of

investments 0.13% 2.18% 6.11% 15.19% 2.78%

Bad debts written off directly 1.40% - - - -

Net mark-up/interest income after provisions 9.70% - - - 10.61%

Non Mark-Up/Interest Income

Fee commission and brokerage income 3.76% 3.26% 4.20% 3.08% 3.50%

Dividend income 10.33% 11.40% 6.00% 2.20% 1.38%

Income from dealing in foreign currencies 2.15% 1.82% 1.60% 0.73% 0.51%

Sales and redemption of securities 11.62% 4.13% - 1.60% 1.59%

Unrealized gain on revaluation of investments

classified as held for trading - - - 0.09% -

Other income-net 3.12% 2.96% 3.30% 0.02% 2.38%

Total non-mark-up/interest income 31.00% - - - 9.60%

Non Mark-Up/Interest Expenses

Administrative expenses 13.00% 16.00% 19.40% 19.00% 19.40%

(Reversal) / Other provisions - 0.05% - - 0.54%

Provisions against off balance sheet items 0.16% - - 4.06% -

Other charges 0.21% 0.64% 0.50% 0.88% 0.09%

Total non-mark-up/interest expenses 13.07% 17.00% 19.43% 23.00% 18.00%

Profit Before Taxation 28.00% - - - 2.27%

Taxationcurrent year 0.97% 1.16% - - -

TaxationPrior years - - - - 0.24%

TaxationDeferred 1.42% - - - 0.84%

Profit After Taxation 25.39% - - - 1.40%


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INTERPRETATION:

In vertical analysis I divide all the items of income statement by total markup/interest

earned in order to measure the contribution of each item in companys Total sales. The

analysis indicates the contribution of all income statements item in overall companys

sales.

RATIO ANALYSIS

The ratio is a relationship between two numbers of the same kind or one number

expressed in terms of another. This analysis is a tool used by individuals to conduct a

quantitative analysis of information in a company's financial statements. The ratios that

are calculated are as follows:

Debt to Equity ratio

year Ratio

2007 14.27

2008 36.132009 38.34

2010 78.06

2011 26.95


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INTERPRETATION:

This ratio compares the total debt with the total shareholder equity. The lower this ratio,

the better the company's debt position. This ratio for BOP is low in 2002 which indicates

a good position of the bank but it increases substantially from 228 to 2010 up til 2011

where it finally drops indicating a sound debt paying ability of BOP.

Debt to total assets

years calculation

2007 91.90%

2008 97.99%

2009 97.16%2010 98.42%9

2011 96.20%


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INTERPRETATION:

The debt to total asset measures the firm's long term debt paying ability. It indicates how

much of the total portion of assets is financed by debt. The debt ratio of BOP is high

which shows that most of its assets are financed by debt and it has high risk because the

lower the debt paying ratio the better the is the position of an organization which is not

the case with BOP. It can be seen that the ratio is very high in all years.

Advances to total assets

years Ratio

2007 56.98%2008 70.86%

2009 55.99%

2010 52.71%

2011 45.25%


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INTERPRETATION:

This ratio shows the what is the portion of loans and advances in the total assets of the

bank. Through the years we can see that advances significantly increased from 2007 to

2008 but after 2008 there is a continuous fall in the amount of advances, which depicts

that the total assets of the bank are declining

Return on investment

Years ratio

2007 31.26%

2008 12.20%2009 26.73%

2010 24.59%

2011 32.92%


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INTERPRETATION:

Investment to total assets is basically indicates the portion of total assets used for invest

in different venues. This ratio is useful for banks.This ratio shoes mix trends. It kept

fluctuating during different years. In 2007 it was high than it decreased during the next

three years, but again increased in 2011

Advances turnover

Years Ratio

2007 13.09%

2008 13.47%

2009 12.89%2010 15.08%

2011 16.27%


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INTERPRETATION:

Advances turnover indicates the interest earned with respect to advances. How much the

bank received interest from general public and how much advances gets from general

public. This ratio shows that the interests earned by the bank significantly increased in all

years except in 2009 in which it was less as compared to other years. Otherwise it kept on

increasing till 2011.

Earning assets to total assets

Years Ratio

2007 95.06%

2008 88.86%2009 89.05%

2010 86.94%

2011 86.93%


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INTERPRETATION:

This ratio shows how well bank management puts bank's assets to work. High

performance banks have high ratios.The ratio is quite good for all the five years that is

above 85% which shows that BOP has good performance in the last five years

Interest margin to average earning assets

Years ratio

2007 1.61%

2008 0.689%

2009 -1.75%

2010 -0.29%

2011 -0.61%


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INTERPRETATION:

This ratio is the determinant of bank's profitability because it provides an indication of

management's ability to control the spread between interest income and interest

expenses.This ratio is not interpretable as the ratios in negative values do not provide any

meaningful analysis.

Equity capital to total assets

Years Ratio

2007 6.43%

2008 2.71%

2009 2.53%2010 1.26%

2011 1.07%


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INTERPRETATION:

This ratio measures the extent of equity ownership in the bank It provides a cushion

against the risk of using debt and leverage.The ratio declines from 2007 to 2011 which is

not a good indicator and shows that the bank is at more risky position than the previous

years.

Deposit times capital

Years Ratio

2007 12.69 times2008 32.54 times

2009 34.76 times

2010 72.05 times

2011 78.68 times


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INTERPRETATION:

This ratio indicates a bank's debt position. More capital indicates greater safety margin

and higher deposit indicates more money available for investment purpose. The higher

this ratio the better the position of the bank. The ratio significantly rises from 2007 to

2011 which is an indicator of BOP sound position

Loans to deposits

Years ratio

2007 80.69%

2008 86.85%2009 70.72%

2010 68.62%

2011 63.76%


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INTERPRETATION:

This is a type of debt coverage ratio. The lower this ratio the better it is for the bank from

risk standpoint.The ratio decreases from 2007 to 2011 in which it falls down to 60% from

80% percent, indicating a sound position of the BOP

Current ratio

Years ratio

2007 3.11

2008 3.13

2009 3.122010 3.37

2011 2.65


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INTERPRETATION:

This ratio measures the ability to pay the current financial obligations. The higher the

ratio the better is the ability of the bank to meet it's current financial obligations. The

ratio is fairly well for all; years except for 2011 in which there is a bit of drop in it,

depicting a decrease in the BOP ability to meet it's current obligations

Cash and balance with banks to total assets

Years Ratio

2007 6.86%

2008 6.91%

2009 7.03%

2010 7.57%

2011 7.22%


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INTERPRETATION:

This ratio indicates the portion of assets that is made up by cash and balances in other

banks. Over the years it can be seen that the ratio increases which is an indicator of

increase in the bank's total assets

Total deposits and other accounts to total assets

Years Ratio

2007 81.69%

2008 88.26%

2009 88.1%

2010 90.85%

2011 84.69%


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INTERPRETATION:

The ratio shows what percentage of total assets comprises total deposits and other

accounts. The ratio increased significantly from 2007 to 2008 then dropped slightly in

2009 after which it increased in 2011 and then declined in 2011.

Sales to working capital

Years Ratio

2007 19.23times

2008 25.05times

2009 17.89times2010 18.11times

2011 19.25times


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INTERPRETATION:

This ratio indicates how efficiently the working capital is used in order to generate profits

or sales. A low working capital ratio indicates the unprofitable use of the working capital.

The analysis shows that the working capital ratio for the year 2007 and 2008 was good

but it declined in the following years but it again went up in the year 2011 which shows

that the bank is efficiently utilizing its working capital


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CHAPTER # 08

CONCLUSION AND RECOMMENDATION


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RECOMMENDATIONS

After doing internship at BOP Wah I think that it is playing a vital role in serving our

country by providing numerous kinds of services. BOP is significantly contributing in the

economy of our country. But by removing certain flaws and weaknesses and improving

certain factors it can play a more effective role in serving the nation. Hence following are

some recommendations made by me based on my observation.

Rewards and incentives for employees

Employees should be given more attractive salary packages as well as bonuses andpromotions in order to boost their morale.

Advertisement

More efforts regarding advertisement as well as promotion should be made so as to create

an image and position in the market, and create awareness about the products and

services of BOP

Working atmosphere

The workplace environment should be friendlier with open communication and sharing

of ideas as well as expertise at BOP Wah. Team work should be promoted.

Enhance branch network

BOP can enhance its business by extending its branch network across other cities as well.

Currently it has branches in all major cities but not in the mediocre or small cities.

Foreign operations

BOP can also expand its business by opening its branches abroad.


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CONCLUSION

In this report I have tried to analyze all aspects of the Bank of Punjab. The factors that are

in favor of this bank and can add value in this bank are that it has numerous products as

well as services to offer its customer and attract a large customer base due to this

component of variety of offerings. It has full fledged support of the government of

Punjab on its back who also supported it right from the start. Customers have faith trust

on the bank because of its services as well as the support of government.

On the other hand BOP is not exerting much effort in marketing and promoting its

products and offerings. It can attract a larger customer base by exerting more advertising

efforts. Then it is not focusing well on its employees .The employees are not offered

attractive salary packages and are not recognized and appreciated enough, which is

extremely important to boost employee morale and enhance job satisfaction as well as to

keep them motivated. So BOP should focus on this component for further progress and

prosperity.


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REFERENCES

www.bop.com

www.google.com

Bank Manual

Annual Reports
http://www.bop.com/http://www.google.com/http://www.google.com/http://www.bop.com/

Documents

Final Internship Report on Bop New 2003