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MBA-Finance www.vustudents.ning.com

Presentation Allied Bank Ltd. www.vustudents.ning.com

Brief Introduction of the Organization ABL was established in Lahore before independence in 1942 . It is one of the largest banks in Pakistan now with more than 800 Branches in over 300 cities. It is engaged in Commercial & Retail Banking and related services domestically and overseas. The bank leads the way by having the largest network of 560 ATM’s in more than 145 cities and towns across Pakistan. www.vustudents.ning.com

Competitors: Following are the competitors of Allied Bank Ltd. United Bank Ltd. Habib Bank Ltd. National Bank Ltd. Muslim Commercial Bank Ltd. Bank Al-Falah Meezan Bank Ltd. www.vustudents.ning.com

Business volume. Business volume of Allied Bank Ltd as on 31st December 2010n is as follows. (All amounts are in Million Rupees) Total Assets 449,931.526 Share Capital 7,821.009 Total Equity 35,974.857 Total Sales 44,992.696 Net Profit 12,343.106 www.vustudents.ning.com

Hierarchy Chart: President Senior Executive Vice President Assistant Vice President Grade I Officer Grade II Officer Grade III Officer www.vustudents.ning.com

Training Program I did my internship at Allied Bank Chowk Phullarwan from 04 May 2011 till 24 June, 2011 The assignments given to me during the session and the tasks done by me are as follows: www.vustudents.ning.com

Customer Service Department Filling-up the deposit slips Providing information regarding cheque books and ATM cards. www.vustudents.ning.com

Account Opening Department: Providing information regarding deferent type of accounts. Filling up the Account-Opening form. Issuing cheque books and ATM cards. Closing an account. www.vustudents.ning.com

Clearing Department: Filling up the deposit slips for the cheques. Pasting stamps on the cheques to cross the cheques in favor of branch. Keeping record of cheques sent through clearing. www.vustudents.ning.com

Government Service Department Making record of utility bills scrolls. Making payment orders in favor of income tax officer www.vustudents.ning.com

Financial Statements Balance sheet www.vustudents.ning.com

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Profit & Loss Account www.vustudents.ning.com

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Cash Flow Statements www.vustudents.ning.com

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Ratio analysis Financial ratios are useful indicators of a firm's performance and financial situation. With the help of ratio analysis conclusion can be drawn regarding several aspects such as financial health, profitability and operational efficiency of the undertaking. www.vustudents.ning.com

Ratios Analysis Following ratios are covered in ratio analysis: Liquidity Ratios Leverage Ratios Profitability Ratios Activity Ratios Market Ratios www.vustudents.ning.com

Liquidity Ratios www.vustudents.ning.com

Current ratio= current assets/current liabilities Ratio Analysis Allied Bank Ltd Current ratio= current assets/current liabilities 2008 2009 2010 Current Ratio 355,545,756 / 46,849,257 =7.59 405,927,583 / 59,539,316 =6.82 434,571784 /42,672,401 =10.18 www.vustudents.ning.com

Working of Current Assets 2008 2009 2010 Cash & balances with treasury banks 23,653,754 26,435,633 31,265,608 Balances with other banks 2,096,779 1,280,443 579,555 Lending to financial institutions 15,793,183 28,122,932 11,488,944 Investments 82,631,118 94,789,492 121,173,409 Advances 212,972,008 237,344,038 253,099,509 Deferred tax assets 1,029,223 - 484,387 Other assets 17,369,691 17,955,045 16,480,372 Total Current Assets 355,545,756 405,927,583 434,571784 www.vustudents.ning.com

Working of Current Liabilities 2007 2008 2009 Bills Payable 2,952,490 3,162,429 4,118,791 Borrowings 27,778,151 39,818,532 20,774,450 Sub ordinate loans 2,498,000 5,497,000 5,494,800 Liabilities against assets subject to finance lease - Deferred tax liabilities 1,871 Other liabilities 13,620,616 11,059,484 12,284,360 Total Liabilities 46,849,257 59,539,316 42,672,401 www.vustudents.ning.com

Acid Test Ratio = Liquid Assets / Current Liabilities Ratio Analysis Allied Bank Ltd Acid Test Ratio = Liquid Assets / Current Liabilities 2008 2009 2010 Acid test ratio 124,174,834 / 46,849,257 =2.65 150,628,500 / 59,539,316 =2.52 164,507,516 / 42,672,401 =3.86 www.vustudents.ning.com

Working of Liquid Assets 2008 2009 2010 Cash & balances with treasury banks 23,653,754 26,435,633 31,265,608 Balances with other banks 2,096,779 1,280,443 579,555 Lending to financial institutions 15,793,183 28,122,932 11,488,944 Investments 82,631,118 94,789,492 121,173,409 Total 124,174,834 150,628,500 164,507,516 www.vustudents.ning.com

Working Capital Ratio: Ratio Analysis Allied Bank Ltd Working Capital Ratio = Current Assets – Current Liabilities 2008 2009 2010 Working Capital Ratio 355,545,756 -46,849,257 =308,696,499 405,927,583 - 59,539,316 =346,388,267 434,571,784 - 42,672,401 =391,899,383 www.vustudents.ning.com

Leverage Ratios www.vustudents.ning.com

Times Interest Earned: Ratio Analysis Allied Bank Ltd Times Interest Earned = EBIT / Total Interest Expense 2008 2009 2010 Times Interest Earned 15,006,838 / 8,885,898 =1.69 20,160,239 / 9,624,119 =2.09 24,153,445 / 11,810,339 2.05 www.vustudents.ning.com

Working of EBIT EBIT 2008 2009 2010 PROFIT BEFORE TAXATION 6,120,940 10,536,120 12,343,106 Total non mark up/Interest expenses 8,885,898 9,624,119 11,810,339 Total 15,006,838 20,160,239 24,153,445 www.vustudents.ning.com

Debt Ratio = Total Assets / Total Debt Ratio Analysis Allied Bank Ltd Debt Ratio = Total Assets / Total Debt 2008 2009 2010 Debt Ratio 344,324,578 / 366,680,192 =0.94 388,412,482 / 418,374,331 =0.93 413,956,669 / 449,931,526 =0.92 www.vustudents.ning.com

Debt / Equity Ratio = Total long term debt / Equity Ratio Analysis Allied Bank Ltd Debt / Equity Ratio = Total long term debt / Equity 2008 2009 2010 Debt / Equity Ratio 344,324,578 / 22,355,614 =15.40 388,412,482 / 29,959,978 =12.96 413,956,669 / 35,974,857 =11.51 www.vustudents.ning.com

Debt / Tangible Net Worth Ratio: Ratio Analysis Allied Bank Ltd Debt / Tangible Net Worth Ratio = Total Debt / Tangible Net Worth 2008 2009 2010 Debt / Tangible Net Worth Ratio 344,324,578 / 22,355,614 =15.40 388,412,482 / 29,959,978 =12.96 413,956,669 / 35,974,857 =11.51 www.vustudents.ning.com

Working of Tangible Net Worth 2008 2009 2010 Total Assets 366,680,192 418,374,331 449,931,526 Less: Total Liabilities 344,324,578 388,414,353 413,956,669 22,355,614 29,959,978 35,974,857 www.vustudents.ning.com

Total Capitalization Ratio: Ratio Analysis Allied Bank Ltd Total capitalization ratio = Long term debt / (Long term debt + Equity) 2008 2009 2010 Total capitalization ratio 297,475,321 / 319,830,935 =0.93 328,875,037 / 358,835,015 =0.92 371,284,268 / 407,259,125 =0.91 www.vustudents.ning.com

Profitability Ratios www.vustudents.ning.com

Net Profit Margin = (Net profit / net sales) × 100 Ratio Analysis Allied Bank Ltd Net Profit Margin = (Net profit / net sales) × 100 2008 2009 2010 Net Profit Margin 41,56,686 / 30,570,540 =13.60% 7,122,167 / 41,121,503 =17.32% 8,225,332 / 44,992,696 =18.28% www.vustudents.ning.com

Return on Assets = (Net profit / Total assets) × 100 Ratio Analysis Allied Bank Ltd Return on Assets = (Net profit / Total assets) × 100 2008 2009 2010 Return on Assets 4,156,686 / 366,680,192 =1.13% 7,122,167 / 418,374,331 =1.70% 8,225,332 / 449,931,526 =1.83% www.vustudents.ning.com

DuPont Return on Assets: Ratio Analysis Allied Bank Ltd DuPont Return on Assets = (Net Income / Sale) × (Sale / Total Assets) 2008 2009 2010 DuPont Return on Assets 0.13597 / 0.08337 =1.13% 0.17319 / 0.09824 =1.70% 0.1828 / 0.0999 =1.83% www.vustudents.ning.com

Operating Income Margin: Ratio Analysis Allied Bank Ltd Operating income margin = (Operating income / Net sales) × 100 2008 2009 2010 Operating income margin 2,764,820 / 30,570,540 =9.04% 4,778,702 / 41,121,503 =11.62% 7,240,072 / 44,992,696 =16.09% www.vustudents.ning.com

Return on Operating Assets: Ratio Analysis Allied Bank Ltd Return on operating assets = Net profit / Net operating assets 2008 2009 2010 Return on operating assets 4,156,686 / 11,134,436 =37% 7,122,167 / 12,446,748 =57% 8,225,332 / 15,359,742 =54% www.vustudents.ning.com

Return on Total Equity: Ratio Analysis Allied Bank Ltd ROE = Net profit after tax / shareholders equity 2008 2009 2010 Return on Total Equity 4,156,686 / 22,355,614 =18% 7,122,167 / 29,959,978 =23% 8,225,332 / 35,974,857 www.vustudents.ning.com

Gross Profit Margin = (Gross Profit / Net Sales) × 100 Ratio Analysis Allied Bank Ltd Gross Profit Margin = (Gross Profit / Net Sales) × 100 2008 2009 2010 Gross Profit Margin 14,010,734 / 30,570,540 =45.83% 18,699,809 / 41,121,503 =45.47% 22,565,044 / 44,992,696 =50.15% www.vustudents.ning.com

Activity Ratios www.vustudents.ning.com

Total Assets Turnover Ratio: Ratio Analysis Allied Bank Ltd Total assets turnover ratio = Net sales / Total assets 2008 2009 2010 Total assets turnover ratio 30,570,540 / 366,680,192 =8.34% 41,121,503 / 418,374,331 =9.82% 44,992,696 / 449,931,526 =9.99% www.vustudents.ning.com

Fixed Assets Turnover Ratio: Ratio Analysis Allied Bank Ltd Fixed assets turnover ratio = Net sales / Fixed assets 2008 2009 2010 Fixed assets turnover ratio 30,570,540 / 11,134,436 =2.75 41,121,503 / 12,446,748 =3.30 44,992,696 / 15,359,742 =2.93 www.vustudents.ning.com

Market Ratios www.vustudents.ning.com

Dividend per share = Dividend amount / number of common shares Ratio Analysis Allied Bank Ltd Dividend per share = Dividend amount / number of common shares 2008 2009 2010 Dividend per share 1,615,913 / 646,365 =2.50 2,844,004 / 711,001 =4.00 3,127,504 / 781,876 www.vustudents.ning.com

Earning Per Share: Allied Bank Ltd Ratio Analysis EPS ratio = (Net profit after tax – preference dividend) / No. of common shares 2008 2009 2010 EPS ratio 4,156,686 / 646,365 =6.43 7,122,167 / 711,001 =10.02 8,225,332 / 782,100 =10.52 www.vustudents.ning.com

SWOT ANALYSIS www.vustudents.ning.com

Strengths: Strong financial basis Highly capable and committed management Fully computerized and online network www.vustudents.ning.com

Weaknesses: Non-mobilization of authority Slow and lengthy working process Heavy load of work on employees www.vustudents.ning.com

Opportunities: Global market New domestic markets Expansion of branch and ATM network Advertisement www.vustudents.ning.com

Threats: New entrants Contraction of markets Bargaining power of customers www.vustudents.ning.com

Conclusion: Highly capable management. Fully computerized and online network of branches. Allied Bank adopted bottom to top management style. ABL has huge amount in current deposits. Investments have raise in 2008 and also improved in 2009 contrast to year 2008 Increasing trend in net income. ABL is in the strong position to pay off its short term liabilities www.vustudents.ning.com

Recommendations The productivity can be increased by providing proper equipment to branches. IT problems can be solved by hiring new efficient IT staff. More customers can be attracted by proper advertisement. Business can be enhanced by exploring new business areas and opening branches there. Bad debts can be decreased by lending after careful evaluation of borrower credibility. Gross Profit margin can be increased by cutting off un-necessary expenditures. www.vustudents.ning.com

Thank you www.vustudents.ning.com