INTERNSHIP REPORT

2021
SUBMITTED TO
SIR RIAZ HUSSAIN ANSARI
SUBMITTED BY
ARSLAN AKRAM
BBS-17-01

Department Of Business
Administration
 ARSL
INTERNSHIP REPORT
2021 AN
SUBMITTED TO
AKRA
SIR RIAZ HUSSAIN ANSARI
M
BBS-17-
01

Department Of Business
Administration
 ACKNOWLEDGEMENTS

By the grace of ALLAH the almighty, who has enabled me to do this entailing hard
work. The business internship report is prepared under the supervision of respected
faculty members of University of Sahiwal. I would like to extend my gratitude’s to my
teachers for their advice, encouragement valuable suggestions which made it possible for
me to complete my Business Internship Report.

I would also like to have a word of thank to the people of BOP DEPALPUR ROAD BRANCH,
OKARA, who shared their knowledge and experience with me to complete my period of
internship there.

Last but not least, my parents, who are in continuous phase of brining me up, in every
aspect of my life by providing their moral help and resources.

Internship Report 2021 I

 EXECUTIVE SUMMARY

Internship is an important part of BBA program and provides opportunity to all

students to learn about the partial working of organization and improves their personal
skills, Business problems are becoming more complex with the passage of time due to
the achievement in world. Students really get many benefits through this practical
knowledge during studies. This internship is not only helpful for making this report but
this education gives a general knowledge about the business, decisions and policies. In
this report I tried to explain all my learning and experience at The Bank of Punjab during
my Internship. Internship training at the bank of Punjab is aimed at providing the
students a major unique opportunity to learn what bank is all about. I try my level best to
produce a most comprehensive internship report to bank of Punjab by compiling all
Practical learning in a systematic way, hence making report unique. All information’s
this effort and my interest in internship can evaluate me in true prospective.

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ACKNOWLEDGEMENTS----------------------------------------------------------------------------------------------------------------------- I
EXECUTIVE SUMMARY---------------------------------------------------------------------------------------------------------------------- II
WHAT IS BANK--------------------------------------------------------------------------------------------------------------------------------- 1
CHARACTERISTICS & FEATURES OF BANK---------------------------------------------------------------------------------------------- 1
HISTORY OF BANKING IN PAKISTAN----------------------------------------------------------------------------------------------------- 1
TYPES OF BANKS------------------------------------------------------------------------------------------------------------------------------ 2
THE BANK OF PUNJAB BOP----------------------------------------------------------------------------------------------------------------- 3
PRIVATIZATION OF BANK OF PUNJAB--------------------------------------------------------------------------------------------------- 3
SOURCES OF FUNDS-------------------------------------------------------------------------------------------------------------------------- 4
NATURE OF ORGANIZATION--------------------------------------------------------------------------------------------------------------- 4
VISION & MISSION---------------------------------------------------------------------------------------------------------------------------- 5
CORE VALUES---------------------------------------------------------------------------------------------------------------------------------- 5
GOALS-------------------------------------------------------------------------------------------------------------------------------------------- 6
AWARDS AND ACHIEVEMENTS------------------------------------------------------------------------------------------------------------ 6
DEPARTMENTS-------------------------------------------------------------------------------------------------------------------------------- 8
GENERAL BANKING--------------------------------------------------------------------------------------------------------------------------- 8
COMMERCIAL FINANCE--------------------------------------------------------------------------------------------------------------------- 9
BRANCHES NETWORK----------------------------------------------------------------------------------------------------------------------- 9
BRANCH DEPARTMENTS------------------------------------------------------------------------------------------------------------------- 10
INTERNSHIP EXPERIENCE------------------------------------------------------------------------------------------------------------------ 14
MARKET STRATEGY------------------------------------------------------------------------------------------------------------------------- 15
DATA ANALYSIS------------------------------------------------------------------------------------------------------------------------------ 20
PEST ANALYSIS------------------------------------------------------------------------------------------------------------------------------- 22
FINANCIAL ANALYSIS---------------------------------------------------------------------------------------------------------------- 25
INTERPRETATION (VERTICAL ANALYSIS)---------------------------------------------------------------------------------------------- 26
INTERPRETATION (HORIZONTAL ANALYSIS)------------------------------------------------------------------------------------------ 28
RATIO ANALYSIS----------------------------------------------------------------------------------------------------------------------------- 30
RECOMMENDATIONS AND SUGGESTIONS------------------------------------------------------------------------------------------- 35
GLOSSARY------------------------------------------------------------------------------------------------------------------------------------- 36
CONCLUSIONS-------------------------------------------------------------------------------------------------------------------------------- 37
REFERENCES---------------------------------------------------------------------------------------------------------------------------------- 38

Internship Report 2021 III

 WHAT IS BANK

Finance is the life blood of trade, commerce and industry. Now-a-days, banking sector acts as the
backbone of modern business. Development of any country mainly depends upon the banking
system.

Banking in fact is as primitive as human society itself, since man came to realize the importance of
money as a medium of exchange, the necessity of a controlling or regulating agency or institution
was naturally felt. Perhaps it was the “Babylonians” who developed Banking system as early as
2000 BC. It is evident that the temples of Babylon were used as Banks because of the prevalent
respect and confidence at the clergy.

A bank is a financial institution which deals with deposits and advances and other related services. It
receives money from those who want to save in the form of deposits and it lends money to those
who need it.

Definition of a Bank

Oxford Dictionary defines a bank as "an establishment for custody of money, which it pays out on
customer's order."

CHARACTERISTICS & FEATURES OF BANK

o Dealing in Money
o Acceptance of Deposit
o Giving Advances
o Payment and Withdrawal
o Agency and Utility Services
o Connecting Link
o Name Identity

HISTORY OF BANKING IN PAKISTAN

A brief look at the history of banking in Pakistan reveals that the banking sector has made
impressive achievements but still has a long way to go.

Pakistan’s financial sector evolved very differently from banks in the developed world. Before
independence on August 14, 1947, the Reserve Bank of India was the central bank of what is now
Pakistan. After independence, Muhammad Ali Jinnah took actions to establish a central bank in

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Pakistan which resulted in the establishment of the State Bank of Pakistan, with its headquarters to
be based in Karachi, The State Bank of Pakistan (SBP) was set up in 1948.

Nationalization

Commercial banking grew favorably in Pakistan until 1974. Under the nationalization policy
implemented by Zulfiqar Ali Bhutto’s government, thirteen banks were brought under full government
control. The considerations behind nationalization were:

 For uniformity in the policy of the commercial banks.

 To make the credit policy of the commercial banks more purpose full and effective. It acts as
an agent of the state bank of Pakistan.
 To make best use of the funds available at the disposal of these banks for the economic
development of the country.
 To eliminate unhealthy and uneconomic commercial banks.
 To develop strong money market in the country.

The government didn’t pay any attention to develop the banking sector, lending decisions were not
always commercially motivated, and many billions of rupees were funneled out of the financial
system as “bad loans”.

Privatization

In 1991, the Bank Nationalization Act was amended, and 23 banks were established – of which ten
were domestically licensed. The Government of Pakistan was not satisfied with the performance of
nationalized banks. The areas which were severely criticized are the falling standard of banking
service. The complaint about the services like delay in home remittances, dispatch of cheques,
drafts, inefficient counter services, overstaffing, bad debts, unionism of the banks, number of bad
debts etc.

The Government, therefore, decided to privatize the banks. A Privatization Commission was set up
on January 22, 1991.

Banks supervision was strengthened substantially. Lending to small and medium enterprise had
previously been neglected, whereas consumer and mortgage finance had not developed prior to
reforms. Legal impediments and delays in recovery of bad loans were streamlined in 2001. There
are now 9,348 bank branches spread throughout the country, catering to the needs of some 28
million deposit account-holders.

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 TYPES OF BANKS

o Saving Banks
o Commercial Banks
o Industrial Banks / Development Banks
o Central / Federal / National Bank
o Co-operative Banks
o Exchange Banks
o Consumers Banks

THE BANK OF PUNJAB BOP

The Bank of Punjab was founded by Tajammal Hussain in 16th November, 1989 under The Bank of
Punjab act 1989. The first Branch opened was the Main Branch, Lahore. In 1989 BOP was formed
as a non- scheduled bank in the province of Punjab. BOP was given the status of a retail bank in
1994 and it continued to dominate the commercial banking sector with a major market share in
inward foreign remittance (55%) and loans to small industries, trades and farmers. International
operations were expanded to include the USA, Singapore, Oman, Belgium, and the Netherlands.
The Bank of Punjab is a leader in Pakistan’s services industry. BOP has more than 460 domestic
branches and 55 international branches to meet customer needs. Today, The Bank of Punjab is truly
a bank of the people, providing its customers convince and services, all over the world. The Bank of
Punjab HQ, one of the tallest buildings in Pakistan is the proud symbol of BOP’s leadership in
Pakistan.

PRIVATIZATION OF BANK OF PUNJAB

On December 29, 2003 Pakistan’s Privatization Commission announced that the Government of
Pakistan had Aga Khan Fund For Economic Development (AKFED) right to 51% of the shareholding
in BOP, against an investment of PKR 22.409 billion (USD 389 million). On February 26, 2004
Management control was handed over to AKFED. The Board of Directors was reconstituted to have
four AKFED nominees, including the Chairman and the President or CEO and three Government of
Pakistan nominees.

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 SOURCES OF FUNDS

The bank of Punjab receives funds for the purpose of their business from the following sources:

o Capital
o Reserve
o Liquid Assets
o International Bank
o Interbank.

NATURE OF ORGANIZATION

BOP is basically a financial organization. The bank is concerned about the commercial banking and
related services in Pakistan and abroad. The nature of the operation of the bank is different and
unique from other banks/financial institutes working in Pakistan. After redefining its role BOP
became a modern commercial bank rather than a public sector organization.

Bank services are accessible to people, the government, and the business sector. BOP also deals
with treasury operations of the Government of Punjab as an agent for the state bank of Pakistan.
BOP has a diversified business portfolio and is now a front-end player in the market of debt
securities, agriculture finance, corporate investment banking, retail and consumer banking, treasury
services and is taking a growing interest in development of small and medium business. It is also
fulfilling its social responsibilities as a corporate citizen.

The Bank’s CSR initiatives are directed to attain a balance or integration of economic,
environmental, and social imperatives while at the same time addressing shareholders’
expectations. The Bank has also established a state-of-the-art learning and development center to
meet ongoing training requirements of the staff members.

Care for Elderly and Special Persons: Besides offering personalized and priority services to the
senior citizens, the Bank ensures hazard free services to the special persons visiting the Bank.
Senior citizens, pensioners and disabled persons are duly taken care of in line with the directives of
Government of Pakistan and State Bank of Pakistan.

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 VISION & MISSION

Vision Statement

To be customer focused bank with service excellence.

Mission Statement

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

CORE VALUES

Our Customer: As our priority

Profitability: For the prosperity of our stakeholder that allows us to constantly invest, improve and
succeed.

Corporative Social Responsibilities: To enrich the lives of community where we operate.

Recognition and Reward: For the talented and high performing employees.

Excellence: In everything we do.

Integrity: In all our dealing.

Respect: For our customer and each other.

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 GOALS

 Ensure that its performance in all facts of its operations more than matches that of its
competitors.
 Be innovative progressive and the need of its customers with in the framework of operational
and prudent risk taker.
 Maintains a comprehensive range of domestic and international activities.
 Maximize contributions from its key sources of personal machines brands representation and
capital.
 Act as a reputable efficient and responsible organization.
 Pursue personal policies which recognize the aspirations and performance of individual and
which are suited to the devise levels of skills.

AWARDS AND ACHIEVEMENTS

 Excellence Awards by the Central Board of Revenue

 3rd Kissan Time Awards
 Best Corporate Report Award
 15th Bolan Excellence Award
 Achievement Award

Role of BOP in Pakistan

 BOP creating employment opportunities by increasing its number of branches and extending
its reach to for off areas of Punjab.
 BOP is playing very positive role in the economy by mobilizing the resources and
channelizing the fund.
 Agriculture is the backbone of our country’s economy. BOP is faciliting the agriculture sector
by providing a number Kisan dost scheme which are helping the lower and middle class of
our villagers.
 BOP is committed to provide excellent services to the customer at very reasonable cost.
 BOP is playing a critical role in increasing the GDP.
 BOP is providing different types of loans to the industrial sectors which are also helping the
country’s output to increase.
 The foreign exchange trade department is functioning very efficiently which is facilitating the
businesses to import and export the merchandise.
 BOP financing the ideas of female Entrepreneur which is producing fruitful results.

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  The BOP is also providing loans to the middle class people by providing loans to the People
for their shops and offices.

HIERARCHY

BOARD OF DIRECTORS

PRESIDENT

COUNTRY HEAD

REGIONAL MANAGER

AREA MANGER

BRANCH MANAGER

Deputy Branch & Operations Manager

Relations
RTO Teller Cashier
Manager

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 DEPARTMENTS

Introduction to All Departments

 Retail Banking Division

 Special Assets Management Division
 Credit Administration Division
 Human Resource Division
 Finance division
 Information Technology Division
 Operations Division
 Credit Risk Management Division
 Corporate Banking Division
 Control and Compliance Division
 Training, Research, Communication and Public Division
 Consumer banking Division
 Audit and Inspection Division
 Law Division

GENERAL BANKING

The general banking activities of BOP are:

Deposit banking

The Bank of Punjab is offering different schemes in all over province. Here is the detail list of the
products and services offered by BOP.

Deposit products

 Current accounts
 BOP basic banking account
 BOP Tijarat account

Profit & loss sharing accounts:

 BOP Pehlai Munafa Scheme

 Corporate premier term account

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Profit loss sharing chequing Accounts

 PLS saving Accounts

 Senior citizen saving account
 Gharayloo Saving Account
 Ziada Munafa saving account

COMMERCIAL FINANCE

 Running Finance
 Demand Finance
 Cash Finance

Agriculture credit

 Green tractor Lease finance scheme

 Agri Finance Branches
 Agriculture finance scheme
 Kissan Dost Tractor scheme
 Second Hand tractor lease finance scheme
 Kissan Dost Abiari scheme
 Kissan Dost Mechanization support scheme
 Kissan Dost Farm transport scheme

Trade Finance

 Trade processing Centers

 Functions of Trade processing Centers

BRANCHES NETWORK

 Lahore central-I Region

 Multan Region
 Lahore Central-II Region
 Faisalabad Region
 Lahore north Region
 Gujranwala Region
 Lahore south Region
 Gujrat Region
 Peshawar Region

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  Bahawalpur Region
 Islamabad Region
 D.G. Khan Region

BRANCH DEPARTMENTS

During my internship I worked in some of the departments of BOP i.e.

 Accounts Department
 Deposit Department
 Credit Department
 Clearing Department
 Remittance Department

Accounts Department

The department that deals with the customers opening and maintaining their accounts. This
department is responsible for opening the accounts of the customers. Opening an account is a
contract that a customer makes with the bank by filling a form of agreement provided by the bank,
having multiple conditions. BOP has a well-established accounts department, working day and night
to enhance the sales of the bank. They communicate appropriately with the customers and try to
solve the problems as their own.

Types of account

There are four types of account in BOP.

 Current accounts
o BOP basic banking account
o BOP Tijarat account
o BOP Current Account
 Saving accounts
o BOP Pehlai Munafa Scheme
o PLS saving Accounts
o Senior citizen saving account
o Ziada Munafa saving account
 Term accounts
o Corporate premier term account
 Foreign currency accounts

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Deposit Department

Acceptation of deposit is the real source of income of a bank. Deposit department is the backbone
of the banking. Deposit is often to describe the money, which customers of all kinds leave with the
banks. When one brings currency in the vault, it may put a small fraction of the currency in the vault
as reserves but it will lend most of deposit to someone else or buy an investment. The entire
banking system is based upon borrowing In order to attract funds banks have introduced various
types of deposits schemes that may suit the needs and taste of the large body of depositors.

Types of Deposits

Deposits are classified into three categories:

 Demand deposits

 Saving deposits

 Time deposits

The types given above are already discussed in the account opening and closing section of this
department.

Credit Department

The function of credit department is to lend money in the form of clear advances, against promissory
notes, as well as secured advances against tangible and marketable securities. The bankers prefer
such securities which do not run the risk of general depreciation due to market fluctuations.
Common securities for the banker’s advances are as under:

 Banker's lien is an enforceable right of a bank to hold in its possession any money or
property belonging to a customer and to apply it to the repayment of any outstanding debt
owed to the bank, provided that, to the bank's knowledge, such property is not part of a trust
fund or is not already burdened with other debts .

 Guarantees A guarantee is undertaking given by a person to be answerable for the debt,

default or miscarriage of another person. It arises only when the borrower is not able to offer
any tangible property as a security.

 Pledge The transfer of possession of personal property from a debtor to a creditor as

security for a debt. In a pledge the ownership remains with the banker, but he has the
exclusive possession of property until the advance is repaid in full. In case of default the
banker has the power of sale after giving due notice.

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Clearing Department

To make arrangements for the speedy and economic collection of cheques , drafts or other
documents payable or deliverable at or through offices of members of clearing house, clearing
services are provided in all big cities by State Bank of Pakistan or National Bank of Pakistan, where
State Bank has no office.

There are two types of clearing:

 Inward Clearing

 Outward Clearing

Inward clearing:

The banks clearing representative receive instruments drawn on our bank presented by other banks
through clearing under the clearing schedules. After the receipt of instrument from other banks, the
banks representative enters them in the summary sheet under the columns pertaining to inward
clearing. The entire instruments received in inward clearing are entered individually in the inward
clearing registered and totaled for customer checking. Signature and balance.

Outward clearing:

All the cheques received for outward clearing to be deposited by the customers are accepted on the
bank’s relevant pay-in-slip duly filled in the depositor as per printed columns of the pay-in-slip. The
depositor writes the instrument number, name of branch and sign on the prescribed column. On
receipt of the instrument the receiving official of the bank affixes the banks crossing and clearing
stamps on the face of the instrument. Bank’s discharge is given on the back of the instruments.
The pay-in-slip is stamped on both parts, with the clearing stamp dated for next working day, putting
his signatures beneath the stamp. The pay-in-slip along with the instrument is passed on to the
concerned authorized checking officer for his signature on the pay-in-slip and discharge.

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Remittance Department

Transfer of money or equivalent to money from one branch to another branch of the same bank is
called remittance. This service is specially provided to the regular customer of the bank.

The main function of this department is transfer of funds.

The Bank of Punjab deals with the following type of remittances

1. Demands Drafts / Traveler Cheque (Universal Cheque)

2. Pay Order

Demands Drafts

Demand Drafts is a written order given by the one branch of a bank on behalf of customer to another
branch of the same bank to pay certain amount to the certain person.

Pay Order

A pay order is a written order issued by the bank on its own branch, drawn upon and payable by
itself to pay a specified sum of money to the person. The purpose of a pay order is to transfer the
funds from one place to another.

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 MARKET STRATEGY

In the word of business literature, concepts of marketing strategy are very important. Market
strategies consist of number of marketing elements according to the situation. The marketing
strategy helps us stay, compete and earn large profit in the market. If these elements not working
well and integration of these marketing elements is defective, than organization cannot fight with
its competitors and may face great losses in the business. So all the elements should work well and
in integration to each other to earn a larger amount of profit, to beat their competitors and to stay
in the market. Marketing strategy is defined as

“The set of all controllable tactical marketing tools that the firm blends to produce in response to
wants in the target market.”

Four types of market strategies are:

1. Product
2. Place
3. Price
4. Promotion

Product Strategy

BOP offers various products and services to its customer. Customers can take benefits from these
products and services. This is the products strategy of BOP that they offer a large number of products
and services in less time and lower costs than competitors to fulfill the needs of customer and to
attract the customers. These products and services are always available for customer in BOP.

Consumers Products

 Saving Account
 Fix Account
 Current or Demand Account

Services

There are the services provided by the BOP

 ATM
 Pay Order

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  E-Banking
 Debit Card
 Consumer Financing
 Commission Free Remittance
 Demand Drafts
 Collection of Utility Bills
 Locker Facility
 Money transfer though Western Union
 E-Stamping

ATM
Head office issue ATM cards with their Pin codes and when the customer claims for their ATM cards
they are checked from the list that is also issued from the head office. Customer can draw money
form their accounts form any ATM machine.

Online banking

BOP is currently offering the online banking facility, you just have to fill the form of online banking
and they give your username and will access your account.

Pay Order

BOP is providing the pay order facility in which you transfer your money. Pay order is a safe and
secure way to move the money from one account to another.

Lockers

It is one of main facility that BOP is providing at this time so the customer can keep their valued
things like gold in safe place.

Demand Draft

Bop gives you the safe, speedy and reliable way to transfer money at very reasonable rates. Any
person with any account holder of the bank or not, can purchase a Demand Draft from a bank
branch.

Western Union

Western Union is a company which deals with foreign countries and international companies.

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  Every company offers a specific pin code.
 Western Union has 10 number digits.
 ID card copy of receiver is necessary for using the services of Western Union.

To use it, you have to provide all information about the sender and receiver. It must include ID card
number, expiry date, issuance date, sender name, receiver name, address of both sender and
receiver, etc.

Xpress money

Xpress money is also called the UEA and UA exchange. When a person send some amount from one
country to another country to his or her relative then his or her relative can receive money through
Xpress money. Xpress money requires 16 digits pin code.

Placing Strategy

BOP has opened 620 branches in all commercial areas of whole country. BOP uses a strategy that it
opened its branches in different regions where people can easily access these banks at the time of
need and emergency. In all branches of BOP, all the facilities of products and services are available
for customers. BOP has opened number of branches into different areas. BOP has not only opened
branches in urban areas but also in rural areas to facilitate the people not having an easy approach
to commercial areas.

BOP has departmentalized its banks to better serve its customers. At BOP Liaqat Road branch
Sahiwal, I have worked in almost 04 departments. BOP has used strong strategy to promote their
business by attracting and helping customers and fulfilling the customer’s needs and wants.

Pricing Strategy

BOP has used such pricing strategy which attracts the customers. There are any strategies that
promote their business. There are:

 Earlier customers have to pay charges on every online transaction, but now BOP doses not
charge anything if the amount is PKR 25,000 or less. The charges for online transactions of
PKR 25,000 or more are PKR 166.
 No charges are applied when people take money, through Xpress money, western union.

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  When a person sends money through online services and if he is the account holder of the
bank and sending money into the account, no charges are applied even if the amount is
greater than 25000 rupees.
 BOP Liaqat Road does not charge any amount when a person opens new account. For
opening an account, initially amount that the person deposit into the account will remain into
the account of account holder. No tax will be deducted from this amount.

Promotional Strategy
BOP also uses many promotional strategies to promote their business.

 BOP banners are placed at different corners of each city on which products and services of
BOP are displayed in detail to attract the customers.
 BOP deals with the customers very well and tell them about the products and services with
details. By doing this they promote their business.
 BOP gives rewards to the efficient and hardworking employees.
 BOP’s employees attend all calls from customers and solve their problems, hence satisfying
customers and promoting the business.
 BOP issues letter of thanks to all its customers and takes care of the customers by
periodically calling customers personally.
 BOP provides quick services to the customers, which also attract the customer.

Competitor Strategies

Every organization is the competitor of the organization in the marketing industry. But in case of a
bank, competitor is the one that holds the stake, and which can affect the internal customers, external
customers, revenues, expenses and execution of the company strategies.

Major Competitor

The competitors of the Bank of Punjab are the other commercial banks in Pakistan are:

 Muslim Commercial Bank Limited,

 Soneri Bank Limited,
 United Bank Limited,
 Allied Bank Limited,
 Askari Bank Limited,
 Faisal Bank Limited,
 Standard Chartered Bank Limited,

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  Habib Bank Limited,
 Habib Metropolitan Bank Limited, And
 Bank Al-Habib Limited

Data Analysis
SWOT Analysis

The aim of any SWOT analysis is to identify the key internal and external factors that are important
to achieving the objective. SWOT analysis groups key pieces of information into two main
categories:

 Internal factors – The strengths and weaknesses internal to the organization.

 External factors – The opportunities and threats presented by the external environment to the
organization.

Strengths

Strength is a resource or capacity the organization can use effectively to achieve its objectives. BOP
enjoys the following strengths:

 BOP is a well-established bank enjoying long history of over 65 years of experience and
profitable operation. BOP is the largest private bank in Pakistan now and people trust is very
high. BOP has the largest customer base of more than 5 million customers.
 Focus on team based approach and continuous improvement. The employees work in the
team to get good results.
 The counter service of BOP is very fast. The staff responds quickly and the customers do not
have to wait for a long time.
 BOP has established a good reputation in the banking sector due to its quality management,
marketing and innovation in the products and services.
 BOP moves towards the modernized banking (online + Internet) and also started ATM facility
in most of its branches.
 BOP employees deal with their customer effectively and told about their terms and condition
and also solve the customer problems.

Weaknesses

A weakness is a limitation, fault, or defect in the organization that will keep it from achieving its
objectives. BOP has the following weaknesses.

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  All Staff is not well trained of using computers senior employees’ feels hesitation to use
computer.
 The bank has still some of the traditional ways of operations in this advanced technological
environment.
 Over load of work on employees reduced their efficiency and level of motivation.
 Tough competition pressure due to well established well reputed competitors in the market
who serve the same community with same services. BOP face the financial pressure due to
competition and still need a lot of finance to overcome this pressure.
 Union exists in BOP Liaqat Road Branch, Sahiwal. In the recent past the employees increase
their salary with the help of union.
 In BOP there is centralized management. It means that authority is not delegated to lower
level of management due to which branch level managers cannot take initiative regarding
different decisions.
 Most of the employees lack managerial training as they are not properly educated. Due to
seniority, they have moved up on the hierarchy line to Grade-I, II or III positions having hardly
bachelor degrees. This type of senior staff cannot apply the modern and innovative
techniques of management in decision making.

Opportunities

An opportunity is any favorable situation in the organization’s environment. It is usually a trend or

change of some kind or an overlooked need that increases demand for a product or service and
permits the firm to enhance its position by supplying it. Using its strengths, BOP can avail the
following opportunities:

 E-banking facility is also a new opportunity which is a flourishing business in foreign

countries and can also be here, if BOP takes the initiatives.
 Govt. is taking very bold steps to promote IT in Pakistan, so BOP has an opportunity to
improve in technology.
 Extra advertising support will enable the BOP to improve its services.
 Opportunities for growth and expansion in the fields of online banking and cash
management.
 Large deposit base and funds flow can help to avail related market opportunities.
 Opportunity to secure real competitive advantage in the industry with the help of real product
or service differentiation through investment in technological resources.

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  Rates of Return / Profits on Deposits are so low and unattractive that very limited options are
available to the depositors. They do not match the current rate of inflation. So BOP can
differentiate and increase its deposits by offering attractive rate of return on deposits.

Threats

A threat is any unfavorable situation in the organization’s environment that is potentially damaging
to its strategy. The threat may be a barrier, a constraint, or anything external that might cause
problems, damage or injury.

 The schedules of charges indicate that the fees charged by the bank on the various services
it provides are extremely high. It may result in decrease in the number of its existing
customers.
 BOP facing more competition from other banks.
 For the last 2 to 3 years, Pakistan is facing economic and political instability which is a big
threat. Bank is facing some political threats like of heavy taxes.
 Adverse & unstable government policies.
 BOP face intense competition from other financial institutions like insurance companies that
attracts the customer’ savings at a higher interest rate as compare to banks. Banking
business is totally based on customer deposits, The SWOT analysis of the bank signifies that
its strengths overcome its weaknesses and its opportunities are more than its threats. This is
a positive sign for any organization.

PEST ANALYSIS

Political Factors

Political factors include government regulations and legal issues and define both formal and informal
rules under which the firm must operate. Some examples include:

 Government stability or political stability

 Tax policy
 Trade restrictions and tariffs
 Government policies
 Laws and regulations

These factors effect on BOP in the following ways:

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  In Pakistan there is no government stability or political stability this disturbs the working of
BOP because every coming government comes with its own agenda of taxation policies and
etc.
 Import and Export policies are changing rapidly in Pakistan this also affects the working of
BOP because it is providing Trade Finance Services to all major Pakistani Businesses.
 SBP’s monetary policy also affects the working of BOP as SBP revises its interest rates on
monthly, quarterly, semiannually and on annual basis.

Economic Factors

Economic factors affect the purchasing power of potential customers and the firm's cost of capital.
The following are examples of economic factors:

 Interest rates
 Exchange rates
 Inflation rate
 These factors have major impacts on the working of BOP.
 Interest rates affect a firm's cost of capital and therefore to what extent a business grows and
expands. The interest rates of loans and other financial products are raising high and high
day by day in Pakistan. Exchange rates are changing on daily basis which also causes a
major factor for the increase in bank’s profits or expenses.
 Inflation is also a major economic problem of Pakistan. Inflation also affecting BOP, Pakistan
because it is a foreign bank and it takes money in PKR and sends its final accounts in its
head office in foreign currency.

Social Factors

Social factors include the demographic and cultural aspects of the external macro environment.
These factors affect customer needs and the size of potential markets. Social factors also affect the
working of BOP as:

 BOP is conducting health programs for its employees.

 It is helping the flood victims of Sindh and other destroyed areas by giving them food,
clothing and such other things with the name of BOP Foundation, Pakistan. It is also helping
the cancer patients of Shuakat Khanam Hospital by attracting people to donate their money
through aggressive marketing.
 It is also recruiting its older workers in its different projects in Pakistan after they are retired
from BOP, Pakistan.

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Internship Report 2021 22 | P a g e
Technological Factors

BOP, Pakistan is adopting the latest technologies to complete its operations.

 BOP R & D department has unique value in the progress of an organization. In BOP of
Pakistan the R and D department has become very effective since its privatization. Due to
technological advancement various new products and services have been introduced during
the last 10 to 15 years e.g. ATM, internet banking, phone banking, debit card, credit card etc.
 Its offices are equipped with the latest hardware and software to connect BOP worldwide and
to its customers.

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 FINANCIAL ANALYSIS

2020 2019 2018 2017 2016

  Amount % Amount % Amount % Amount % Amount %
Balance Sheet Vertical Analysis
ASSETS                    
Cash and balances with treasury banks 69,272 6% 53,415 6% 43,589 6% 42,478 6% 35,756 7%

Balances with other banks 2,398 0% 10,311 1% 5,802 1% 6,077 1% 3,766 1%

Lendings to financial institutions 16,087 1% 4,060 0% 27,843 4% 24,571 4% 11,562 2%

Investments - net 567,789 52% 361,453 42% 210,071 29% 242,506 37% 199,742 36%

Advances - net 391,161 36% 383,313 44% 381,877 53% 295,752 45% 262,068 48%

Fixed assets 14,813 1% 15,219 2% 8,788 1% 7,890 1% 7,256 1%

Intangible assets 689 0% 793 0% 891 0% 629 0% 437 0%

Deferred tax assets - net 7,774 1% 6,568 1% 7,965 1% 10,725 2% 6,480 1%

ther assets - net 25,465 2% 33,797 4% 27,552 4% 27,109 4% 20,357 4%

  1,095,446 100% 868,928 100% 714,380 100% 657,737 100% 547,424 100%

LIABILITIES                    
Bills payable 4,169 0% 3,421 0% 3,578 1% 3,365 1% 4,183 1%

Borrowings 154,841 14% 77,045 9% 41,793 6% 38,949 6% 39,829 7%

Deposits and other accounts 835,068 76% 691,017 80% 595,582 83% 556,281 85% 453,220 83%

Subordinated debts 6,792 1% 8,794 1% 8,797 1% 4,499 1% 4,500 1%

Other liabilities 42,315 4% 41,968 5% 26,909 4% 24,911 4% 17,837 3%

  1,043,185 95% 822,245 95% 676,659 95% 628,005 95% 519,570 95%

NET ASSETS 52,262 5% 46,682 5% 37,720 5% 29,732 5% 27,854 5%

Share capital - net 26,174 2% 26,174 3% 26,174 4% 26,174 4% 15,288 3%

Share deposit money - 0% - 0% - 0% - 0% 7,000 1%

Reserves 8,029 1% 6,640 1% 4,991 1% 3,478 1% 1,301 0%

Surplus on revaluation of assets - net of tax 5,955 1% 5,371 1% 3,260 0% 2,887 0% 3,607 1%
Unappropriated profit / (Accumulated
12,103 1% 8,497 1% 3,296 0% -2,806 0% 659 0%
Losses)
  52,262 5% 46,682 5% 37,720 5% 29,732 5% 27,854 5%

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 2020 2019 2018 2017 2016
  Amount % Amount % Amount % Amount % Amount %

Income Statement Vertical Analysis

Profit & Loss Account                    

Mark-up / return / interest earned 86,019 87% 80,867 95% 46,893 93% 34,668 88% 29,676 85%
- -
-62,694 -54,110 -64% -26,840 -53% -19,095 -17,432 -50%
Mark-up / return / interest expensed 63% 49%

Net mark-up / interest income 23,325 24% 26,757 32% 20,053 40% 15,574 40% 12,244 35%

Non mark-up / interest incom 13,046 13% 3,940 5% 3,673 7% 4,591 12% 5,295 15%

Total income 36,371 37% 30,696 36% 23,726 47% 20,165 51% 17,539 50%
- -
-17,519 -14,876 -18% -12,666 -25% -10,132 -8,380 -24%
Non mark-up / interest expenses 18% 26%

Profit before provisions 18,852 19% 15,820 19% 11,060 22% 10,033 26% 9,159 26%
-
-6,862 -7% -1,776 -2% 1,148 2% -14,731 -1,109 -3%
Provisions and write offs - net 38%
-
11,989 12% 14,044 17% 12,208 24% -4,698 8,050 23%
Profit before taxation 12%
Taxation - net -5,046 -5% -5,795 -7% -4,645 -9% 1,376 4% -3,192 -9%

Profit after taxation 6,944 7% 8,249 10% 7,564 15% -3,322 -8% 4,858 14%

INTERPRETATION (VERTICAL ANALYSIS)

Investments & Advances remained major components of Asset Mix of the Bank. The Bank opted to
channelize incremental funds in Risk Free Investments and grow Advances Book in a very careful
manner. Accordingly, the mix of Advances reduced to 36% in 2020 as against 46% in year 2015,
while the mix of Investments improved to 52% as against 37% in year 2015.
Owing to Branch Expansion and products diversification, the Bank was able to post a steady growth
in Deposits with a CAGR of 17%. Borrowings were the second largest component of Liabilities which
stood at 14% as against 12% in 2015.
Markup Income has shown a steady growth with main contribution from income on Advances and
Investments. The contribution of markup income constitutes 87% of the total revenue for year 2020.
Markup Expense has also increased due to growth in Deposit base and change in minimum rate of
profit on PLS Deposits. Concentration of Non-Markup Income for year 2020 remained at 13% mainly
on account of realization of capital gains. The concentration of Non-Markup Expense remained at
18% for the year 2020 & 2019. The rise in Non-Markup Expenses is in line with Branch Expansion,
investment in new technologies and inflationary parameters.

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 2020 2019 2018 2017 2016
  Amount % Amount % Amount % Amount % Amount %
Balance Sheet Horizontal Analysis
ASSETS                    
Cash and balances with treasury banks 69,272 30% 53,415 23% 43,589 3% 42,478 19% 35,756 37%

Balances with other banks 2,398 -77% 10,311 78% 5,802 -5% 6,077 61% 3,766 -17%

Lendings to financial institutions 16,087 296% 4,060 -85% 27,843 13% 24,571 113% 11,562 89%

Investments - net 567,789 57% 361,453 72% 210,071 -13% 242,506 21% 199,742 13%

Advances - net 391,161 2% 383,313 0% 381,877 29% 295,752 13% 262,068 19%

Fixed assets 14,813 -3% 15,219 73% 8,788 11% 7,890 9% 7,256 13%

Intangible assets 689 -13% 793 -11% 891 42% 629 44% 437 757%

Deferred tax assets - net 7,774 18% 6,568 -18% 7,965 -26% 10,725 65% 6,480 -18%

ther assets - net 25,465 -25% 33,797 23% 27,552 2% 27,109 33% 20,357 -25%

  1,095,446 26% 868,928 22% 714,380 9% 657,737 20% 547,424 16%

LIABILITIES                    
Bills payable 4,169 22% 3,421 -4% 3,578 6% 3,365 -20% 4,183 122%

Borrowings 154,841 101% 77,045 84% 41,793 7% 38,949 -2% 39,829 -28%

Deposits and other accounts 835,068 21% 691,017 16% 595,582 7% 556,281 23% 453,220 21%

Subordinated debts 6,792 -23% 8,794 0% 8,797 96% 4,499 0% 4,500 125%

Other liabilities 42,315 1% 41,968 56% 26,909 8% 24,911 40% 17,837 4%

  1,043,185 27% 822,245 22% 676,659 8% 628,005 21% 519,570 15%

NET ASSETS 52,262 12% 46,682 24% 37,720 27% 29,732 7% 27,854 23%

Share capital - net 26,174 0% 26,174 0% 26,174 0% 26,174 71% 15,288 0%

-
- 0% - 0% - 0% - 7,000 0%
Share deposit money 100%

Reserves 8,029 21% 6,640 33% 4,991 43% 3,478 167% 1,301 -44%

Surplus on revaluation of assets - net of tax 5,955 11% 5,371 65% 3,260 13% 2,887 -20% 3,607 10%
Unappropriated profit / (Accumulated - - -
12,103 42% 8,497 158% 3,296 -2,806 659
Losses) 217% 526% 113%
  52,262 12% 46,682 24% 37,720 27% 29,732 7% 27,854 23%

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 2020 2019 2018 2017 2016
  Amount % Amount % Amount % Amount % Amount %
Income Statement Horizontal Analysis
Profit & Loss Account                    

Mark-up / return / interest earned 86,019 6% 80,867 72% 46,893 35% 34,668 17% 29,676 -5%
-
-62,694 16% -54,110 102% -26,840 41% -19,095 10% -17,432
Mark-up / return / interest expensed 14%

Net mark-up / interest income 23,325 -13% 26,757 33% 20,053 29% 15,574 27% 12,244 11%
-
13,046 231% 3,940 7% 3,673 -20% 4,591 -13% 5,295
Non mark-up / interest incom 31%

Total income 36,371 18% 30,696 29% 23,726 18% 20,165 15% 17,539 -6%

Non mark-up / interest expenses -17,519 18% -14,876 17% -12,666 25% -10,132 21% -8,380 13%
-
18,852 19% 15,820 43% 11,060 10% 10,033 10% 9,159
Profit before provisions 19%
- -
-6,862 286% -1,776 1,148 -108% -14,731 1228% -1,109
Provisions and write offs - net 255% 70%

Profit before taxation 11,989 -15% 14,044 15% 12,208 -360% -4,698 -158% 8,050 7%

Taxation - net -5,046 -13% -5,795 25% -4,645 -438% 1,376 -143% -3,192 15%
-
Profit after taxation 6,944 -16% 8,249 9% 7,564 -3,322 -168% 4,858 2%
328%

INTERPRETATION (HORIZONTAL ANALYSIS)

Bank's Asset Base has registered consistent growth during 2015-2020 and it crossed Rs. 1.0 Trillion
mark in 2020. During year 2020, Total Assets registered the highest growth of 26% while CAGR for
2015-20 remained at 18%.
Deposits also grew at a steady rate with a CAGR of 17%. Highest growth of 23% was registered in
year 2017 while YOY growth for year 2020 remained at 21%. During the period 2015-2020, 230
Branches were opened by the Bank.
Owing to consistent growth in profitability, the Equity registered a steady growth. The YOY growth
for year 2020 remained at 12%.
On profitability side, Markup Income of the Bank registered a CAGR of 22% during 2015-2020. The
main components were Markup earned on Advances & Investments. In line with Bank's strategy to
grow Advances portfolio cautiously and divert incremental funds towards investment in risk free
Government Securities, the major contribution came from Markup Income on Investments.
Markup Expense also registered a CAGR of 25% due to above stated growth in Deposits. It also
includes impact of change in Minimum Profit Rates on PLS Deposits in line with change in SBP
Policy Rate. The Cost of Deposits was effectively managed by the Bank through focus on low-cost
CASA Deposits.
Non-Markup Income registered as CAGR of 11% during 2015-2020. The main contribution was
made by Capital Gains realized on Securities during different years. The Fee Based Income also
registered as steady growth.

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Operating Expenses registered a CAGR of 18%. The rise is mainly on account of personnel/property
expenses in line with expansion in Branch network (230 Branches added), inflation and investment
in new technologies.
Provision Charge posted a CAGR of 13% with highest level of Rs.14.7 Billion during year 2017 to
retire LOCs issued by GOPb. The Charge of Rs. 6.9 Billion for year 2020 includes General Provision
of Rs. 3.3 Billion and Specific Provision of Rs. 1.7 on subjective basis.

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 RATIO ANALYSIS

2020 2019 2018 2017 2016 2015

Net Operating Margin A 19.09% 26.87% 31.88% -16.47% 27.70% 25.40%

Asset Utilization B 3.70% 3.88% 3.46% 3.35% 3.43% 4.18%

Return on Assets C=A*B 0.71% 1.04% 1.10% -0.55% 0.95% 1.06%

Leverage Ratio / Equity D 19.85 18.76 20.34 23.82 27.96 31.93

Multiplier

Return on Equity C*D 14.04% 19.55% 22.43% -13.13% 26.60% 33.91%

Net Operating Margin has shown consistent growth during 2015 & 2016. During 2017, due to charge
of provision amounting to Rs. 14.7 Billion for retirement of LOCs, the NOM remained in negative
zone. During year 2020, the NOM remained at 19% due to charge of General Provision of Rs. 3.3
Billion & Subjective provisioning of Rs. 1.7 Billion.
Asset Utilization has remained in the range of 3.46% - 4.18%. During year 2020, it remained at
3.70%.
Return on Equity during 2015 & 2016 remained on higher side due to recording of provision against
advances on staggered basis under LOCs issued by GOPb. During year 2017, due to charge of
provision for retirement of LOCs, ROE remained in negative zone. The ROE for year 2020 remained
at 14.04% due to charge of subjective and general provision against advances.

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 2020 2019 2018 2017 2016 2015

Profit and loss account

Mark-up/ return earned Rs. in Million 86,019 80,867 46,893 34,668 29,676 31,267
Mark-up/ return expensed Rs. in Million 62,694 54,110 26,840 19,095 17,432 20,217
Net interest margin Rs. in Million 23,325 26,757 20,053 15,574 12,244 11,050
Fee, Commission, brokerage & FX income Rs. in Million 4,442 3,614 3,564 3,184 2,709 2,584
Dividend and capital gains Rs. in Million 8,603 325 109 1,407 2,586 5,056
Total income Rs. in Million 36,371 30,696 23,726 20,165 17,539 18,691
Total Non markup expenses Rs. in Million 17,519 14,876 12,666 10,132 8,380 7,408
Operating profit before tax and provision Rs. in Million 18,852 15,820 11,060 10,033 9,159 11,282
WWF Rs. in Million 335 285 - - - -
Admin expenses Rs. in Million 16,880 14,453 12,613 10,089 8,346 7,388
Provisions / write-offs Rs. in Million 6,862 1,776 (1,148) 14,731 1,109 3,753
Profit before tax Rs. in Million 11,989 14,044 12,208 (4,698) 8,050 7,529
Profit after tax Rs. in Million 6,944 8,249 7,564 (3,322) 4,858 4,748
Cash dividend * Rs. in Million 2,644 1,983 1,983 - - -
Statement of Financial Position
Authorised capital Rs. in Million 50,000 50,000 50,000 50,000 50,000 50,000
Paid up capital - net Rs. in Million 26,174 26,174 26,174 26,174 15,288 15,288
Reserves Rs. in Million 8,029 6,640 4,991 3,478 1,301 2,329
Unappropriated Profit Rs. in Million 12,103 8,497 3,296 (2,806) 659 (5,220)
Shareholder's equity Rs. in Million 46,306 41,311 34,460 26,845 17,248 12,397
Surplus on revaluation of assets - net of tax Rs. in Million 5,955 5,371 3,260 2,887 3,607 3,282
Total Assets Rs. in Million 1,095,446 868,928 714,380 657,737 547,424 473,940
Earning Assets Rs. in Million 972,981 747,797 617,234 562,067 453,774 378,708
Gross Advances Rs. in Million 442,760 428,846 425,756 341,735 293,922 250,342
Advances - net of provisions Rs. in Million 391,161 383,313 381,877 295,752 262,068 219,399
Non-Performing Loans (NPLs) Rs. in Million 57,251 51,363 49,385 50,951 54,954 57,069
Investments Rs. in Million 567,789 361,453 210,071 242,506 199,742 176,043
Total Liabilities Rs. in Million 1,043,185 822,245 676,659 628,005 519,570 451,261
Deposits Rs. in Million 835,068 691,017 595,582 556,281 453,220 374,961
Current & Saving Deposits (CASA) Rs. in Million 545,920 471,581 383,859 368,554 317,286 240,140
Borrowings Rs. in Million 154,841 77,045 41,793 38,949 39,829 55,236
Interest bearing Liabilities Rs. in Million 583,269 426,088 362,367 328,583 371,886 334,178
Contingencies and Commitments Rs. in Million 213,750 195,225 145,808 134,778 76,547 57,597
Profitability ratios
Profit before tax ratio % 13.94% 17.37% 26.03% -13.55% 27.13% 24.08%
Gross Yield on Average Earning Assets % 10.00% 11.85% 7.95% 6.83% 7.13% 16.51%
Gross Yield on Avg. Earning Assets (incl. dividend
& capital gains) % 11.00% 11.90% 7.97% 7.10% 7.75% 19.18%
Gross Spread % 27.12% 33.09% 42.76% 44.92% 41.26% 35.34%
Net markup/ interest margin % 2.37% 3.38% 2.92% 2.58% 2.40% 2.47%
Non interest income to total income % 13.17% 4.65% 7.26% 11.69% 15.14% 19.64%
Return on average assets (ROA) % 0.71% 1.04% 1.10% -0.55% 0.95% 1.06%
Return on Capital Employed (ROCE) % 15.85% 21.77% 24.68% -15.07% 32.78% 45.98%
2020 2019 2018 2017 2016 2015
Profitability ratios
Interest Ratio % 72.88% 66.91% 57.24% 55.08% 58.74% 64.66%
Non markup/ interest income to Avg. total assets % 1.33% 0.50% 0.54% 0.76% 1.04% 1.71%
Net markup/ interest income (after provision) to Avg. total assets % 1.68% 3.16% 3.09% 0.14% 2.18% 1.63%
Admin expense to profit before tax Times 1.41 1.03 1.03 (2.15) 1.04 0.98

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 Non Markup Expense Ratio Times 1.46 1.06 1.04 (2.16) 1.04 0.98
Gain Ratio % 23.28% 0.72% 0.12% 6.53% 14.39% 26.78%
Net investment in Finance Lease to Avg. Total Assets % 3.21% 4.17% 5.11% 5.83% 7.74% 9.23%
Non-markup/ interest expense to total income % 17.68% 17.54% 25.05% 25.81% 23.96% 19.04%
Admin expense to non- markup income Times 1.29 3.67 3.43 2.20 1.58 0.97
Cost to income ratio % 48.17% 48.46% 53.38% 50.25% 47.78% 39.64%
Cost to income ratio (excluding WWF) % 47.25% 47.53% 53.38% 50.25% 47.78% 39.64%
Investment Ratios
Earnings per share (before tax) Rs 4.54 5.31 4.62 (1.78) 5.18 4.84
Earnings per share (after tax) Rs 2.63 3.12 2.86 (1.26) 3.12 3.05
Breakup value per share (excl. share deposit money):
- without surplus on revaluation of fixed
assets & investments Rs 17.52 15.63 13.03 10.15 11.09 7.97
- without surplus on revaluation of fixed assets Rs 19.05 16.93 13.55 10.49 12.03 8.76
- without surplus on revaluation of investments Rs 18.66 16.82 14.27 11.27 12.87 9.29
- with surplus on revaluation of fixed assets & investments Rs 19.77 17.66 14.27 11.25 13.41 10.08
Cash Dividend % 10.00% 7.50% 7.50% 0.00% 0.00% 0.00%
Dividend per share Rs 1.00 0.75 0.75 - - -
Dividend Yield ratio (based on cash dividend) % 10.19% 6.89% 6.69% 0.00% 0.00% 0.00%
Dividend Payout ratio % 38.07% 24.04% 26.21% 0.00% 0.00% 0.00%
Price to book value ratio Times 0.47 0.64 0.84 0.73 1.32 0.91
Price to earning ratio Times 3.74 3.49 3.92 (9.70) 3.55 3.07
Dividend cover ratio Times 2.63 4.16 3.81 - - -
Share Information
Market value per share - Dec 31 Rs 9.27 11.33 11.97 8.24 17.65 9.21
High - during the year Rs 14.33 14.57 13.85 18.65 18.65 11.18
Low - during the year Rs 6.52 6.97 8.1 7.3 7.71 6.82
Market Capitalisation Rs. in Million 24,507 29,953 31,645 21,784 27,448 14,323
Asset Quality and Liquidity Ratios
Gross Advances to deposits ratio % 53.02% 62.06% 71.49% 61.43% 64.85% 66.76%
Gross Advances to deposits & borrowings ratio % 44.73% 55.83% 66.80% 57.41% 59.61% 58.19%
Net Advances to deposits ratio % 46.84% 55.47% 64.12% 53.17% 57.82% 58.51%
Investments to deposits ratio % 67.99% 52.31% 35.27% 43.59% 44.07% 46.95%
Average Cost of Deposits % 7.04% 7.68% 4.17% 3.52% 3.89% 5.09%
CASA to total deposits % 65.37% 68.24% 64.45% 66.25% 70.01% 64.04%
Advances net to total assets % 35.71% 44.11% 53.46% 44.97% 47.87% 46.29%
NPLs to Gross advances ratio % 12.93% 11.98% 11.60% 14.91% 18.70% 22.80%
Provision to Gross advances ratio % 11.65% 10.62% 10.31% 13.46% 10.84% 12.29%
Coverage Ratio (specific provision/ NPLs) % 83.58% 87.84% 88.14% 89.42% 57.25% 53.30%
Coverage Ratio (total provision/ NPLs) % 90.13% 88.65% 88.85% 90.25% 57.97% 53.91%
Earning assets to total assets ratio % 88.82% 86.06% 86.40% 85.45% 82.89% 79.91%

2020 2019 2018 2017 2016 2015

Asset Quality and Liquidity ratio
Investment to deposit ratio % 67.99% 52.31% 35.27% 43.59% 44.07% 46.95%
Investments to total assets ratio % 51.83% 41.60% 29.41% 36.87% 36.49% 37.14%
Cash & Cash Equvilants to Total Assets % 6.54% 7.32% 6.88% 8.10% 7.20% 6.46%
Cash to Current Liabilities % 7.24% 8.16% 7.66% 8.04% 7.96% 7.11%

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 Deposits to total assets % 76.23% 79.53% 83.37% 84.57% 82.79% 79.12%
Total liabilities to total assets % 95.23% 94.63% 94.72% 95.48% 94.91% 95.21%
Earning assets to interest bearing Liabilities Times 1.67 1.76 1.70 1.71 1.22 1.13
Deposits to shareholders' equity Times 18.03 16.73 17.28 20.72 18.69 19.33
Assets to Equity Times 20.96 18.61 18.94 22.12 19.65 20.90
Risk Adequacy
Tier I Capital Rs. in Million 41,937 37,926 28,931 20,075 21,683 17,551
Total Eligible Capital Rs. in Million 57,207 49,669 38,662 25,666 28,330 21,815
Risk Weighted Assets (RWA) Rs. in Million 352,514 335,542 293,495 263,805 230,696 207,868
Tier I to RWA % 11.90% 11.30% 9.86% 7.61% 9.40% 8.44%
RWA to total assets % 0.03% 0.04% 0.04% 0.04% 0.04% 0.04%
Capital Adequacy Ratio % 16.23% 14.80% 13.17% 9.73% 12.28% 10.49%
Capital ratio (A/C) % 4.23% 4.75% 4.82% 4.08% 3.15% 2.62%
Industry Share*
Deposits % 4.51% 4.33% 4.18% 4.28% 3.84% 3.61%
Advances % 4.72% 4.65% 4.80% 4.54% 4.77% 4.56%
Investments % 4.76% 4.04% 2.65% 2.78% 2.66% 2.56%
Total assets % 4.36% 3.95% 3.63% 3.59% 3.46% 3.35%
Per Branch
Gross Advances Rs. in Million 696 687 739 638 649 617
Deposits Rs. in Million 1,313 1,107 1,034 1,038 1,000 924
CASA Rs. in Million 858 756 666 688 700 591
PBT Rs. in Million 11 13 13 (6) 11 12

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Results

All these ratios are pointing towards the growth of the bank and showing the following results:
The increase in spread ratio, Net Markup/Interest Margin, Return on Equity, Return on Assets, Non-
Markup/ Interest Income to Total Assets, and Net Markup/ Interest income to Total Assets show
favorable results as the bank is progressing positively towards success. Non-Markup/ Interest
expense to Total Income is increasing which is an unfavorable sign, Admin Expense to Profit before
Tax (Times) is decreasing which is favorable, and Admin Expense to Non-Markup/ Interest Income
(Times) is decreasing which is unfavorable. Investment to Total Assets, Deposits to Total Assets,
total Liability to Total Assets is decreasing which is not favorable but it is not such a huge amount
that can’t be tolerated, it could be easily corrected by taking small corrective measures. Cash &
Cash Equivalent to Total Assets is increasing showing favorable results.
EPS first declined but now is increasing that is a very good sign of the progression of the bank. The
Capital ratio is increasing showing the portion of the stockholder equity is increasing in the total
assets
Breakup value per share is increasing due to the no of shareholders have increased but the
shareholder wealth or the equity of the shareholder have increased more than the increase in the
shareholders, hence this is also an indicator of good performance of the bank. Deposits have
increased over time showing the increase in the deposits to equity ratio.
The cash flow ratio is decreasing mainly due to relief from government on many taxes, hence their
Net income after taxes has increased, decreasing the cash flow ratio.

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 RECOMMENDATIONS AND SUGGESTIONS

Following suggestions and recommendations are based on my observations during my internship

and on the information I collected.

 BOP should increase its deposits so that the cash reserves will increase.
 The online system of the bank should improve in all the urban as well as rural branches.
 BOP should offer more flexible and attractive loaning schemes for agriculture, otherwise the
other banks such could take the lead.
 BOP should give more incentives and benefits to its employees, if it doesn’t do so the
competitors can retain the employees of the bank.
 A strong research and training cell should be established at country level to overcome the
hurdles to conform that textile exporters as well as agriculture export.
 There is lack of commercial mindset which should be improved.
 Transportation facility is not provided to the whole employees, it should be provided to them.
 Top managerial personnel should be trained both at company premises and at the
international level.
 Managers are required to get training in the modern scientific management control methods.

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 CONCLUSIONS

I thoroughly checked the performance of the

BOP and I realized that it is becoming one the
most growing bank in our country. Also there
are some flaws in their operations which they
need to overcome, if they want to reach at top.
Internship is an interesting experience, which
gave me the practical knowledge about
banking field. I observed banking activities
very closely and become part of it. I learnt a lot
from my supervisor and understood the
operations of banking. This
internship enhanced my
experience and skills. The
BOP’s most activities are time
consuming, but the staff
members are very cooperative
and they work their level best in
order to keep the bank at the top
of competition. The staff is well
motivated by getting fair
remunerations and performance
appraisals.

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 REFERENCES

Deputy Branch and Operations Manager Mr. Arsalan Ahmad

Relations Manager Mr. Nadeem Akram
RTO Mr. Wajid Shah Bukhari
Annual Reports 2011-16
www.scribd.com
www.pba.com.pk
www.brecorder.com.pk‘Economic review of Pakistan’
http://en.wikipedia.org/wiki/Bank_of_punjab
www.bop.com/prducts/48

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