EXECUTIVE SUMMARY
Banking is one of the most important sector in any countries economy. The role-played by banks in strengthening a countries outlook for investors is in one way aided by the banks. The report that I have compiled starts of by giving a brief history of the bank and an introduction about the operations of the bank and its financial viability. A little information about the SAUDI PAK Leasing company is given in the beginning as well.
Company’s management structure has been described as well. All the relevant people’ name have been given as well. Further more in the next chapters I have tried to tell about the general economic conditions of the country and its implications on the bank. A little bit has been told about the operations of the bank. Information about the existing branch network and future outlook for the bank and the financial viability of the bank has been highlighted as well.
An in-depth analysis of the companies’ ethics and business practices has been given. It has been explicitly states that what the management requires of its staff and what it hopes to provide to its customers and shareholders.
In the end I have stated the external and internal opportunities and threats that the bank might face. In the last I have given my suggestions and recommendations which I hope will be of advantage to the bank in general and in specific for the branch where I worked.
CHAPTER NO 1
Introduction of Saudi Pak Bank
Saudi Pak Bank is the vision of a group of Pakistani professionals with extensive domestic and international banking and finance experience. They teamed up in 1992 with a select group of successful and like-minded business houses in Pakistan and overseas. Some of the foreign investors belong to a highly regarded, very sizeable and well diversified business group of Saudi Arabia. During the initial years, Saudi Pak Bank’s strategy was focused on continuing improvement of internal procedures and operating structures, to ensure a greater control over the quality of its operations.
Commercial Banking activities were initiated at the time of inception in 1992. During 1993, two more business divisions i.e. Corporate Banking and Financial Services were added. By 1996, Saudi Pak Bank’s countrywide network of Branches was in place and Consumer Banking activities were accordingly launched. Under the Bank’s on going branch expansion program many new branches have been added during the years 2001 and 2002 while one more branch will open in December 2003. This would raise the total number of branches to thirty two focusing primarily on the middle market commercial banking segment while blending in the fast growing consumer banking market.
After ten years of well controlled, yet sure and successful operations, the Bank is now positioned to move forward rapidly to be at the cutting edge of financial services combining highly efficient delivery systems with continuous product innovation. Therefore, development of superior Human Skills and the latest Information Technology platform are the cornerstones of Saudi Pak Bank’s overall strategy to be in the exclusive club of winning banks of the future.
Saudi Pak Industrial and Agricultural investment Company (Private) Limited :
The company is a joint venture of the Government of Pakistan and the Kingdom of Saudi Arabia. The paid up capital of the company, which initially stood at Rs. 1,000 million has since been increased to Rs. 2,000 million. The equity of the joint venture is held by the two governments in equal proportion. The product range of the company is well diversified and comprises of Project Financing, Short Term Working Capital Loans,Equity Investments, Terms Finance Certificates (TFCs), Lease Financing, Underwriting of Public Issues, Guarantees and Money Market Operations. The company has been successful in maintaining the momentum of steady growth. Since its inception, the company has provided total financing of over Rs. 14billion to its customers and underwritten the public issue of shares and Term Finance Certificates amounted to over Rupees one billion. The total assets of the company amounted Rs. 10 billion as on December 31, 2002 and shareholders equity amounting to Rs. 3.2 billion.
The Head Office of the company is located in Saudi Pak Tower, Islamabad. The company has also a branch office in Karachi. The company has been awarded long ter entity rating of AA+(Double A pluc) and short term entity rating of A1+(A one plus) by JCR-VIS Credit Rating Company Limited.
The Board of Directors of the company comprises of three nominees each of the Government of Pakistan and Kingdom of Saudi Arabia. The Chairman of the Board of the company is Dr. Abdullah T. Al-Thenayan, who is also Director General of Arab Companu for Livestock Development (ACOLID). ACOLID has offices and subsidiaries in several countries in the Middle East.
An important strategic investment of Saudi Pak Industrial and Agricultural investment Company (Pvt) Limited is in the form of a building known as Saudi Pak Tower. It is a twenty storey high rise building in Islamabad. Saudi Pak commercial office building in the country which has been awarded ISO-9002/2000 Certification. A major portion of the building has been leased out. Recently, a Business Centre has been established in the Tower which is equipped with latest state of the art facilities.
Saudi Pak Leasing Company Limited :
Saudi Pak Industrial and Agriculstural Investment Company (Pvt) Limited acquired 30 percent stake in Standard Chartered Mercantile Leasing Company Limited now Saudi Pak Leasing Company Limited in 1997. The company is listed on the Stock Exchange and is fifth largest company in the leasing sector in Pakistan. The total assets of the company stood at Rs. 2,807 million as on June 30, 2002. The company generated total revenues of Rs. 390.5 million and earned net profit after tax of Rs. 13.7 million for the year ended June 30, 2002. The company has been awarded long term entity rating of A by JCR-VIS Credit Rating Company Limited.
History and Development
On July 3rd, 1916 a deal for purchase of land was executed between Graham property through its attorneys and Messrs Cox & Co. The lease was executed between Indian Premises company Ltd & Cox & Co. on April 1st, 1921 for a period of 50 years ending March 31, 1971. The building construction was completed in March 1922. The building was built with Jodhpur stone and thickness of the wall is around two feet. The building is well maintained and keeping in view the history and its design, this building was brought under the rule of Sindh Heritage Ordinance by Government of Sindh in 1988. Under the Heritage rules, no changes are permitted at the exterior of the building. This building was purchased by Saudi Pak Commercial Bank Limited in 2002. The central office of the bank, the regional office South and the main branch Karachi will be housed in the premises.
Board of Directors and Management
M.Rashid Zahir Chairman
Javed Anwar Vice Chairman
M.Nizam-ud –Din Mirza Director
Abdul jalil Sheikh Director
Abdus samad Khan Director
Javed Aslam Calia Director
Faiq Javed Director
Syed Hussan iqtedar President (CEO)
Company secretary
Asif Zubair
Auditors
M.Yousaf Adil Saleem & Company
Chartered Accountants
Legal Advisor
Cornelius, Lane & Mufti
Tax Consultant
A.F Ferguson & Company
Chartered Accountant
Registered Office
H-No 15, Street No 26
F-6/2 Islamabad .
Central office
Hasan Ali Street
Office,II Chundrigar Road
Karachi.
Management
President & Chief Executive Officer
Syed Hassan Iktedar
Senior Executive Vice Presidents
Anwar-ul-Islam Qureshi
Jamshaid A.Minhas
Faqir Ejaz Asghar
Executive Vice Presidents
M.Arif Ali Siddiqui
Minhajuddin Sheikh
Shoaib Ahmed
Mahmood Siddique
Huzair A. Soomro
Khawaja Muhammad Zahir
Zafar Zaman
Akbar Ali
Senior Vice Presidents
Ghulam Ali Khan
Munir Ahmed Khan
Shahid Ali Sheikh
Zil-ur-Rehman
Munawar-ud-Din Durrani
Mushtaq Ahmed
Subaktagin Saleemi
Malik Shahid Mahmood
Afzaal Ahmed Khan
Mission and Vision Statement
OUR MISSION
“To turnaround the Bank into a leading commercial bank by ensuring transparency, promoting technology, improving quality of human resource, providing premium services to customers, and adding value for all stakeholders.”
OUR VISION
To transform the Bank into a modern, dynamic and premier service oriented institution.
SAUDI PAK NETWORK
Saudi pak has emerged as a creditable name on the horizon of financial sector of the country. The Group has been diversifying its scope of activities within the ambit of financial services with the objective to reap the benefits of synergy and to cater to the growing needs of its customers. Saudi Pak Commercial Bank enjoys the support of the following group companies.
Branch Network
The branch network was expanded during the year through addition of eight branches increasing the network to twenty eight branches. The refurbishment work was completed in a number of branches to give them Saudi Pak identity and a friendly and service oriented look. During the year three branches were completely renovated while another three branches were shifted to new locations.
In order to project its image ;properly, the Bank acquired two landmark buildings one located at Chundrigar Road, Karachi adjacent to the main State Bank Building and the other at Egerton Road Lahore near Aiwan-e-Iqbal. The former will house Central Office and the Main Branch Karachi while the Regional Office and Main Branch Lahore have already been relocated in latter.
CHAPTER NO 2
Functions
Accounts Department
It consists of two main parts
1) Clearing
2) Collection
As we know that, one of the basic economic function of commercial banks is to receive deposits and to honour cheques drawn upon them. So, cheque is a most commonly used instrument for making payments by account holders. Along with the cheques, there are some other negotiable instruments like PO, DD,TC, PS, CDR etc. (discussed in the next part), that are used for making payments and are drawn upon a bank.
The question is that how these cheques & other negotiable instruments drawn on one bank are deposited in other banks and money is transferred from one bank to another.
Clearing House has provided this facility. Clearing house facilitates different banks, in one city, to get their cheques drawn upon other banks to be cleared.
Cheques lodged in clearing constitute two types of clearing:
Ø Outward Clearing
Ø Inward Clearing
LODGEMENT OF CHEQUES IN OUTWARD CLEARING
When cheques, TC’s and other negotiable instruments drawn upon other banks like MCB, ABN-AMRO of the same city(as Islamabad ) are presented in Prime Bank to deposit them in the respective payee’s accounts, these instruments are lodged in outward clearing(o/w clg) of Prime Bank.
STAMPS PUT ON THE CHEQUES:
When the cheques are presented in SAUDI PAK to be deposited in their respective payee’s accounts, different stamps are put on cheques before their lodgment in outward clearing.
I )CROSSING THE CHEQUES:
Crossing means two parallel transverse lines, drawn across the face of the cheques with or without words written in between them.
Crossing may be general or special. In clearing cheques are crossed specially. Cheques are stamped with bank’s name between two transverse parallel lines to constitute special crossing.
After the cheques have been crossed specially, the holder cannot receive payment except through the banker named on the cheque. Basic advantage of crossing is to save the instrument to go it from illegal hands. If, a crossed cheque is lost or stolen, there is no risk of wrong payment. So it is an effective means of minimizing the risk of loss or forgery.
ii) CLEARING STAMP:
After the cheques have been crossed specially, clearing stamp is put on the cheques and other instruments, with the following day’s date, as these cheques would have to be presented in their concerned drawee banks on the subsequent day.
iii) ENDORSEMENT STAMP:
The word endorsement is derived from Latin word ‘indorsum’ which means ‘on the back’. Ordinarily, it means anything written or printed upon the back of an instrument.
So, at the end, the cheques are endorsed in full (endorsed specially) by putting the stamp with words describing “ Payee’s account Credited in Prime commercial bank .
After putting these three stamps on cheques & other negotiable instruments, they are sent to NIFT (National Institutional Facilitation Authority) with Add List. NIFT after segregating the cheques of different banks delivers them to their concerned banks, which constitute the inward clearing for those (drawee) banks.
ACCOUNTING PROCEDURE
After lodgment of all cheques in outward clearing, Payee’s accounts are credited by the amount of their vouchers. Drawee banks will debit the drawer’s accounts in their inward clearing (discussed later).
As main branch of Islamabad (Saudi Pak) deals with other banks through inter-bank accounts and we deal with our main branch. So, we ( F-10 Branch) debit our main br. account, maintained with us, by the total amount of outward clearing and an IBDA (inter branch debit advise) with a debit voucher is sent to main branch ISL.
Account Titles | Debit | Credit |
Local Clearing Main branch | ||
Payee’s Accounts |
RETURN IN OUTWARD CLEARING:
Some of the cheques lodged in o/w clearing are dishonoured by the concerned branches due to some deficiencies and returned back through NIFT. This process is carried out under main branch’s governance.
Either, these cheques are again lodged in outward clearing or returned to customers by canceling bank’s all stamps, based on the reasons.
Now, the accounting entries opposite to first are passed i.e. Payee’s accounts are debited & main branch’s account is credited.
INWARD CLEARING
Cheques and other negotiable instruments (PO, DD, PS, CDR etc.) drawn on,Prime Bank( F-10 Markaz ) sent by other banks, constitute the inward clearing of.SAUDI PAK .
After having all the stamps and dates of cheques confirmed, the concerned drawer’s accounts are debited (in Prime Bank F-10 Markaz) and main branch’s account is credited by the total amount.
Account Titles | Debit | Credit |
Drawer’s Accounts | ||
Local Clearing Main branch |
RETURN IN INWARD CLEARING:
In case of cheques dishonoured (returned) due to some deficiencies, the main branch’s account is debited by the amount of cheques returned. As,
Account Titles | Debit | Credit |
Drawer’s Accounts Local Clearing Main branch | ||
Local Clearing Main branch |
COLLECTION
When cheques, TC’s and other negotiable instruments drawn upon other banks outside the city (ISL.) are presented in SAUDI PAK (F-10 MARKAZ) to deposit in payee’s accounts, then instead of clearing, these instruments are lodged in collection and constitute OBC’s (outward bills for collection).
Cheques of cities, where SAUDI PAK branch exists (e.g. Faisalabad), are sent to that branch where these cheques are lodged in outward clearing. Otherwise, they are directly sent to the drawee bank. Postage & other charges are deducted on account of payee according to SOC (Schedule of Charges).
ACCOUNTING PROCEDURE:
i) When a Cheque is lodged in OBC:
Account Titles | Debit | Credit |
Customer’s Liability on OBC | ||
Banker’s Liability on OBC |
ii) On Realization of OBC:
when this cheque is got cleared (through outward clearing) in the concerned SAUDI PAK branch (e.g. Faisalabad Br.), then IBCA is sent to our branch and thus an outstation cheque is deposited in payee’s account. So,
Account Titles | Debit | Credit |
Banker’s Liability on OBC | ||
Customer’s Liability on OBC |
Account Titles | Debit | Credit |
Concerned SAUDI PAK br.’s Account | ||
Payee’s Account |
REMITTANCES
(Negotiable Instruments)
Besides cheques, banker’s also handle Promissory Note, Bill of Exchange (will be discussed in later part), Bank Drafts, Pay Orders, , Pay Slips, Call Deposit Receipts; as negotiable instruments. Here, I have tried to describe PO, DD, PS & CDR and their processing in accordance with my observation, during first two weeks.
1) PAY ORDER (PO):
“Pay Order is a negotiable instrument made by the bank, on account of a customer, to pay on order the specified amount to the directed person (payee)”.
Pay Orders are used to make payment or to transfer money, with in the same city. Pay Order is always drawn on the bank that has issued it.
MAKING OF A PO:
When a person requires a Pay Order made by ( SAUDI PAK F-10 MARKAZ BRANCH.), he is asked to complete the prescribed application form in which the amount of pay order is to be stated. Pay orders are issued without charges and no commission is deducted for this particular purpose.
After having the total amount deposited in the bank (in cash or through cheque, in case of account holder), pay order is issued in the favour of payee.
Like cheques, when pay orders issued by SAUDI PAK (F-10 MARKAZ) , are presented in other banks to get them deposited in the payee’s accounts, they constitute the outward clearing for those banks and inward clearing for F-10 Branch.
ACCOUNTING PROCEDURE:
i) When a Pay Order is issued, cash department debits cash account & Pay Order issued account is credited as:
Account Titles | Debit | Credit |
Cash Deposits | ||
PO Issued Commission on Remittances Tax on DD |
ii) When Pay Order is received in inward clearing:
Account Titles | Debit | Credit |
PO Issued | ||
Cash Deposits |
2) DEMAND DRAFT (DD):
“A Demand Draft is a negotiable instrument issued by the bank, on account of a person, and drawn on its own branch in a specific city or on the branch of another bank in that city (in case bank doesn’t have any branch there), requesting it to pay the specified amount to the person named on it”.
Demand Drafts are used to make outstation payments or to transfer money, out of the city. Therefore, a DD is always made for a particular city.
MAKING OF A DD:
When a customer requests his banker to provide him a DD made on his account for a particular city like Faisalabad. Then, after having the total amount (including commission and advance tax) to be deposited with application form, demand draft is issued in favour of the specified person in Faisalabad (supposed) and is drawn on SAUDI PAK Faisalabad Branch.
So, when this demand draft is presented by payee in any bank, it constitute the inward clearing of SAUDI PAK (FSD Branch)
ACCOUNTING PROCEDURE:
i) When SAUDI PAK (F-10 MARKAZ) issues a Demand Draft drawn on SAUDI PAK Faisalabad Br. Then, an IBCA with DD advice is sent to Faisalabad Br. (letter is also sent for DD’s amounting more than Rs.100,000.)
ii) Upon receipt of advice in Faisalabad Br. they will credit DD Payable a/c.
iii) DD Payable Account is debited (in Faisalabad Br.) when DD is presented in inward clearing.
In case, advice is not received by SAUDI PAK Faisalabad Br. and DD is presented first, then instead of DD Payable, Suspense account is debited to make payment.
3) CALL DEPOSIT RECEIPT (CDR):
SAUDI PAK also issues Call Deposit Receipts (CDR). “It is an instrument like cheque issued by the bank on account of a customer & in favour of a person, to pay the specified amount”.
CDR’s are issued to make payments, especially when a company goes for some tenders or for purchase of government securities. The bank enjoys the benefit of keeping funds deposited until the payment is not made. During this time, the bank uses the deposit and earns income on that.
4) PAY SLIP (PS):
“It is a negotiable instrument like cheque issued by the bank on its own account to pay a specified amount to the directed person”.
Pay Slips are used to make payment by the bank itself against certain expenses incurred; like furniture purchased by bank, charges of Mucaddams etc.
For Example: If bank has purchased furniture (fixed asset) costing Rs.40,000 from a company. Then a pay slip in the name of that company is made and,
Account Titles | Debit | Credit |
Furniture | ||
PS Issued |
Instead of writing the issuing date on pay slip, date of encashment (realization) is written when it is presented in bank.
CANCELLATION OF PO, DD & CDR
After issuance of Pay Order, Demand Draft or Call Deposit Receipt by PCB (F-10 MARKAZ) when any one of these has to be cancelled by the customer and it is returned in the bank. Then, after deducting the cancellation charges Rs.100, the remaining (net) amount is paid to the customer through Cash Payment Voucher. Suppose a demand draft amounting Rs.5,000 has to be cancelled, then
Account Titles | Debit | Credit |
DD Issued | 5,000 | |
Cash Misc. Earning | 4,900 100 |
ADVANCE TAX AGAINST REMITTANCES
Advance Tax is deducted on issuance of PO & DD ( when customers don’t have tax exemption form) and credited in Tax on PO & DD account (discussed earlier).
Tax deducted has to be paid to State Bank of Pakistan (SBP) with in one week of issuance of these instruments. So to pay this tax, Pay Order in favour or SBP ( ISLAMABAD) is made, with a challan form. And
Account Titles | Debit | Credit |
PO Issued | ||
Tax on PO & DD |
ACCOUNT OPENING
Saudi Pakbank opens different types of accounts for its customers.
PROCEDURE OF ACCOUNT OPENING
Step 1-The Account Opening Form:
When a client comes to the bank, and makes a request for opening of an A/C. The officer says that first fill up a prescribed application form. If he/she wants to open a PLS A/C, then he/she has to fill a form according to the account.
Step II-Completion of The Form:
The name, occupation, and complete address of the person opening the account are written in the columns are provided in the form. One signature of the person is taken on the face of the form and one is taken on the backside. These signatures should be usual signatures and he would operate the account with them in future.
Step III-Introduction:
The introduction of a current account holder is accepted for the opening of either a current account or a solving account. The introduction of saving bank account is accepted only for saving bank accounts. The signature of the account-holder introducing the account is obtained at the place provided for in the account opening form.
Step IV: Specimen Signature Card:
The signatures of the client are obtained on a specimen Signature card. These cards are obtained in duplicate with two signatures on each card from the customer. Every time a cheque is received for a payment from the client, the signature on the cheque are verified by comparing them with the S.S. Card.
Step V-Account Number:
When all the formalities are completed then the final approval of account has to be taken from the Branch Manager. After obtaining approval of the branch manager an account number is allotted to the customer all the information is entered into the computer. Then that account number is printed on the cheque book, S. S. cards and account opening form.
Step VI- Issuance Of A Chequebook:
After opening an A/C with the bank, the A/C holder once again makes a request in the name of bank for the issuance of a chequebook. the A/C holder mentions title of A/C, A/C number, sign it properly and mentions the no of leaves he requires. Normally BAL issues a chequebook having at least 25 leaves. Every chequebook also contains one leaf that is used for another issue of a chequebook.
Step-VII Entry Of A chequebook:
Before issuance of a chequebook, the employee performs certain functions. They include:
· Stamping every leaf with specific A/C number.
· Enters it in the chequebook issue register.
· Check whether or not the signatures are verified by a senior officer, if no then first he gets them verified.
After entry in the manual register, the employee issues the chequebook to the A/C holder after his/her signature on the register.
Step-VIII Filling Of Account Opening Forms:
For current and saving account, separate files are maintained in which the forms are pasted or punched in numerical order and kept under lock and key in fireproof steel or safe. This is because these forms are the basic documents of the contract with the customer.
Step-IX Maintaining the Computer Record:
After opening of account, every information regarding the account is entered into the computer. Currently, a program named ‘auto bank’ is being used for this purpose. Record of all the transactions regarding the account of a customer is kept updated in the compute
CHAPTER NO-3
Financial Performance
Performance of the bank
The Economy: An Overview
The fiscal year 2002 was characterized by several positive developments. In the external sector, foreign currency reserves of Pakistan attained record level of US$ 10.0 billion. Foreign remittances more than doubled to US$ 2.7 billion.An appreciation of 6.7 per cent in Pak Rupee vis-à-vis US dollar was the natural outcome of these dramatic improvements.
On the internal fron,t Gross Domestic Product (GDP) grew by 3.6 per cent as compared to 2.5 per cent in the preceding year. Manufacturing sector recorded growth rate of 14.4 per cent, services sector 5.1 per cent and agricultural sector 1.6 per cent. Water shortage in the last three years has been the main reason for weak performance of agricultural sector. Industrial sector contributed 25 per cent, service sector 51 per cent and agriculture sector 24 per cent to GDP.
Monetary policy was easy and money market was liquid resulting into continuous decline in interest rates. Inflation rate decreased to 3.5 per cent. State Bank of Pakistan reduced thediscount rate from 10 per cent in January to 7.5 per cent in November. The stock market experienced bullish trend.
The major focus of the banking sector remained on improving the quality of assets and reduction in the Non Performing Loans (NPLs). In contrast to 14 per cent surge in the bank deposits and declining lending rates, the growth in net credit was relatively subdued in 2002.
September 11 events adversely affected export orders and appreciation of Rupee eroded the competitiveness of the export items. However, export earning at US$ 9.1 billion recorded only a small decline of 0.7 per cent over the last year. Fiscal year 2002 indicated continuation of the shift in export structure in favour of manufactured goods which reached all time high at 74.9 per cent. Semi manufactured and primary commodities accounted for 14.3 per cent and 10.8 per cent of total exports.
Imports depicted a decline of 3.6 per cent at US$ 10.3 billion. Reduction in oil prices and import of food items contributed to lower imports. Decline of imports at a higher rate narrowed trade deficit by US$ 322.4 million.
Pakistan’s external debt indicators presented significant improvement. There was first over reversal of external debt when total debt was reduced by 1.7 per cent from US$ 37.1 billion to US$36.5 billion. There was also a shift in exchange reserves bolstered the foreign exchange reserves to external debt ration to 13.5 per cent. Successful completion of IMF standby economic front restored Pakistan’s credibility.
By Operations
In 2002, the Bank achieved remarkable growth in business which was driven primarily by the dramatic improvement in its corporate image. Deposits increased by 156 per cent to Rs. 12340 million and advances by 95 per cent to Rs.9753 million in 2002. The credit deposit ration improved from 104 per cent to 79 per cent. Investments including lending to financial institution also rose by 166 per cent to Rs. 7410 million. The total assets base, which as on December 31, 2001. Was Rs 9513 million surged to Rs.19617 million as on December 31, 2002.
The Bank made concerted efforts to recover the non-performing advances. Aided by the newly set up Special Assets Management Division and Legal Division, non-performing advances of Rs.640 million were regularized. The ration of performing advances to total advances improved markedly from 29 per cent in 2001 to 69 per cent in 2002. The provisioning requirements declined from Rs. 1949 million on December 31, 2001 to Rs. 1370 million on December 31,2002.
Financial Results
Net mark up/interest income rose from Rs.48.1 million in 2001 to Rs.193.1 million in 2002 and fee based income from Rs.40.6 million Rs 105.4 million. Income from foreign currency dealings resulted in a gain of Rs.34.8 million as against a loss of Rs 58.6 million during the previous year.
Financial discipline, balanced sectoral exposure, prudent risk management and stringent expense controls helped the Bank in strengthening its financial position. Notwithstanding the softening in markup rate regime and the narrowing down of spreads, the Bank was able to earn net profit of Rs.202 million in 2002 as against net loss of Rs. 182 million incurred in the previous year.
Future Outlook
In 2003 we shall continue to pursue our policies of expanding business and maximizing the stakeholder’value. While we shall, at all times, ensure profitable growth through aggressive marketing, prudent risk management and reduction of intermediation cost, it is planned to introduce new services and competitively priced products broadent the customer base, expand the branch network , strengthen the technological base and upgrade skills of our employees.
In today’s financial world, technology is deployed to reduce cost and time associated to transactions. The Bank is endeavouring to establish itself as a modern and technology oriented institution. We have allocated an amount of Rs.100 million to build up the IT infrastructure in 2003. A banking application activities at the Bank. This will improve our operating efficiency through online connectivity. We intend to introduce WANs, ATMs and information via multiple channels through Web, SMS and Call Centers in 2003.
CHAPTER 5
SWOT ANALYSIS
STRENGTHS:
Huge Paid up Capital
Diversified Product Range
ISO Certified Head Office
Good Credit Rating
WEAKNESSES:
Limited Branch Network
Absence of ATM Operations
Limited Customer Base
OPPURTUNITIES:
Introduction of New Services
Consumer Banking
Credit Card Operations
Online Connectivity
THREATS:
International Political Conditions
Private Banks
Accumulated Losses
Economic Conditions
CHAPTER 6
FINAL SUGGESTIONS & RECOMMENDATIONS
Any report that does not specify the shortcomings of any ongoing operation is not complete. There is always room for improvement in any form of business. During my six weeks internship at Saudi Pak. I found that although the bank is doing fairly well they still need to do a lot to make themselves really a threat for other banks operating in the highly competitive market of Pakistani Commerce.
One of the suggestions that came to my mind was that the bank should venture into consumer banking as well as this field has just been introduced in Pakistani banking and there is a huge opportunity of growth in this sector. Moreover in one of the opportunities for the bank I have stated that they should also venture into aspects of banking like credit card operations and ATM facility.
The main hindrance towards the growth of any bank could be its limited branch network. As this bank comes in the category of private banks that have entered the Pakistani market and when we compare it with banks like BANK AL- FALLAH we find out that its branch network is too small so one of the things that they need to expand is their network.
References:
Annual Report of Saudi Pak Commercial Bank
Web Site of Saudi Pak Commercial Bank
