Complete Report on Askari Commercial Bank

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TABLE OF CONTENTS

SECTION 1

Introduction                                                                 1

SECTION 2

Vision                                                                         2

Mission                                                                         2

Objectives                                                                         3

Strategic Planning                                                         4

Business Ethics & Conduct                                                 5

Inspiring Relationships                                                 7

Nation-Wide Distribution                                                 10

Corporate Information                                                 11

Awards and Achievements                                                 12

Corporate Citizenship                                                         14

SECTION 3

Organizational Structure                                                 15

  • Organizational Structure Of Head Office                 16
  • Hierarchy In Bahawalpur Branch                                 18

SECTION 4

Groups and Divisions                                                         19

  1. Operations And Credit Group                                 19
  2. Corporate Banking Group                                          21
  3. Retail Banking Group                                                 23

Products of ACBL                                                         27

SECTION 5

Departments of ACBL                                                 29

  1. General Banking
  1. Account Opening                                         29
  2. Bills And Remittances                                 38
  3. Deposit Department                                         43
  4. Cash Department                                         48
  1. Credits And Advances Department                         51
  2. Foreign Exchange                                                 68

Online Banking                                                                 81

Internet Banking                                                                 82

SECTION 6

Summarized Performance                                                 88

A Decade of Performance                                                 90

SECTION 7

Financial Analysis                                                        94

SECTION 8

SWOT Analysis                                                                106

SECTION 9

Suggestions                                                                 112

Conclusion                                                                 113

Future Out Look                                                                 114

SECTION 10

Annexure

INTRODUCTION

Askari bank was incorporated in Pakistan on October 9, 1991, as a public limited company. It commenced its operations on April 1, 1992, and is principally engaged in the business of banking, as defined in the banking companies ordinance, 1962. The bank is listed on the KARACHI, LAHORE AND ISLAMABAD Stock Exchanges and its share is currently the highest quoted from among the new private sector banks in Pakistan.

Askari Bank has expanded into a nation wide presence of 98 Branches, and an Offshore Banking Unit in Bahrain. A shared network of over 1,100 online ATMs covering all major cities in Pakistan supports the delivery channels for customer service. As on December 31, 2005, the Bank had equity of Rs. 8.6 billion and total assets of Rs. 145.1 billion, with over 600,000 banking customers, serviced by our 2,754 employees.

Vision

To be the Bank of First Choice in the Region

Mission

To be the leading private sector bank in Pakistan with an international presence, delivering quality service through innovative technology and effective human resource management in a modern and progressive organizational culture of meritocracy, maintaining high ethical and professional standards, while providing enhanced value to all our stakeholders, and contributing to society.

Objectives

  • To achieve sustained growth and profitability in all areas of business.
  • To build and sustain a high performance culture, with a continuous improvement focus.
  • To develop a customer-service oriented culture with special emphasis on customer care and convenience.
  • To build an enabling environment, where employees are motivated to contribute to their full potential.
  • To effectively manage and mitigate all kinds of risks inherent in the banking business.
  • To maximize use of technology to ensure cost-effective operations, efficient management information system, enhanced delivery capability and high service standards.
  • To manage the Bank's portfolio of businesses to achieve strong and sustainable shareholder returns and to continuously build shareholder value.
  • To deliver timely solutions that best meet the customers’ financial needs.
  • To explore new avenues for growth and profitability.

Strategic Planning

  • To comprehensively plan for the future to ensure sustained growth and profitability.
  • To facilitate alignment of the Vision, Mission, Corporate Objectives and Corporate Philosophy, with the
  • Business Goals and Objectives.
  • To provide strategic initiatives and solutions for projects, products, policies and procedures.
  • To provide strategic solutions to mitigate weak areas and to counter threats to profits.
  • To identify strategic initiatives and opportunities for profit.
  • To create and leverage strategic assets and capabilities for competitive advantage.

Business Ethics & Conduct

Askari Bank seeks to maintain high standards of service and ethics enabling it to be perceived as impartial, ethical and independent. In addition to the general guidelines, the following are the salient features of the Bank’s code of ethics and conduct.

  • Presence of a corporate culture that seeks to create an environment where all persons are treated equitably and with respect.

  • Employees must carry out their responsibilities in a professional manner at all times. They must act in a prudent manner and must avoid situations that could reflect unfavorably on themselves, the Bank or its customers.

  • Employees must commit to the continued development of the service culture in which the Bank consistently seeks to exceed customers’ expectations. Fairness, Truthfulness and Transparency govern our customer relationships in determining the transactional terms, conditions, rights and obligations.

  • Employees must safeguard confidential information which may come to their possession during the discharge of their responsibilities. Respect for customers' confidential matters, merits the same care as does the protection of the Bank's own affairs or other interests.

  • Employees must ensure that know your customer principals are adhered by obtaining sufficient information about the customers to reasonably satisfy ourselves as to their reputation, standing and the nature of their business activities.

  • Employees must avoid circumstances in which their personal interest conflicts, or may appear to conflict, with the interest of the Bank or its customers. Employees must never use their position in the Bank to obtain an advantage or gain.

  • Employees must not enter into an agreement, understanding or arrangement with any competitor with respect to pricing of services, profit rates and / or marketing policies, which may adversely affect the Bank's business.

  • Employees must not accept gifts, business entertainment or other benefits from a customer or a supplier / vendor, which appear or may appear to compromise commercial or business relationship.

  • Employees must remain alert and vigilant with respect to frauds, thefts or illegal activities committed within the Bank premises.

Inspiring Relationships

Inspiring 600,000 relationships:

Knowing our customers and their needs is the key to our business success. Our products and services are as diverse as our market segments. Our client relationship managers are well equipped and well trained to provide the most efficient and personalized service to the customers. We have structured and syndicated financing arrangements, provided working capital and balancing-modernization-replacement (BMR) facilities, financed international trade, provided small business loans and cash management services, and develop innovative investment and loans products for the individual savers and households. Askari Bank is proud of its pioneering role in providing the most modern and technologically advanced services to its 600,000 relationships.

Inspiring employee relationships:

We strongly believe that the interests of the Bank and the employees are inseparable. At Askari, we try to create a ‘we’ culture where there is mutual trust and respect for each other. We encourage ownership behavior so that everyone feels responsible for the performance and reputation of the Bank. We are committed to develop and enhance each employee’s skills and capabilities through extensive in-house and external training programs and job rotation. The strong employee bank relationship is evidenced by the fact that Askari has a low employee turnover. Most of the top management today, have reached their present positions by growing within the organization.

Inspiring technological innovations:

Technology has played a pivotal role in meeting customer expectations, particularly with respect to speed and quality of service. We have fully automated transaction-processing systems for back-office support. Our branch network is connected on-line real-time and our customers have access to off-site as well as on-site ATMs, all over Pakistan. Our Phone Banking Service and Internet Banking Facility allows customers to enjoy routine banking services from anywhere anytime in the world. We also pioneered an e-commerce venture in Pakistan through a major retail distributor. Our mobile ATMs are the first in Pakistan.

Inspiring ethical values:

Integrity is the most valued standard in whatever we do. We understand that our commitment to satisfy customers’ needs must be fulfilled within a professional and ethical framework. We subscribe to a culture of high ethical standards, based on the development of right attitudes. The intrinsic values, which are the corner stones of our corporate behavior, are:

  • Commitment
  • Integrity
  • Fairness
  • Team-work
  • Service

Inspiring growth:

For us the challenge is to build a foundation of strong, consistent financial performance and focus on growing our balance sheet and revenues at low risk. During the year, we opened twenty four fully automated branches, increasing our branch network to 99, including an Offshore Banking Unit in Bahrain. Central to our growth strategy is a focus on specialization and transformation. We are reshaping our portfolio of businesses by investing in higher growth areas, extending and developing our core competencies and moving out of weak and non-core segments.

Inspiring shareholder confidence:

We believe that the bottom line of any business is creating shareholder value. To gain their trust and confidence, we believe in providing our shareholders timely, regular and reliable information on our activities, structure, financial situation and performance. At the same time, we try to give them one of the best earnings per share in the banking industry of the country.

Nation-wide Distribution of Branches / Regions / Areas and Operating Units

Corporate Information

Board of Directors

  • Lt. Gen. Waseem Ahmed Ashraf        Chairman        
  • Lt. Gen. (R) Zarrar Azim                Chairman Executive Committee
  • Mr. Shaharyar Ahmad                        President & Chief Executive        
  • Brig (R) Muhammad Shiraz Baig        Director        
  • Brig (R) Asmat Ullah Khan Niazi        Director        
  • Mr. Muhammad Najam Ali                Director        
  • Mr. Muhammad Afzal Munif                Director        
  • Mr. Tariq lqbal Khan                        Director (NIT Nominee)

Company Secretary

  • Mr. Saleem Anwar

Audit Committee

  • Brig (R) Asmat Ullah Khan Niazi        Chairman        
  • Brig (R) Muhammad Shiraz Baig        Member        
  • Mr. Kashif Mateen Ansari                Member

Auditors

  • A.F.Ferguson & Co.                Chartered Accountants

Legal Advisors

  • Rizvi, Isa, Afridi & Angell

Awards And Achievements

Over the years, ACBLA has received several awards for the quality of its banking service to individuals and corporate. These include:

Best Commercial Bank

Consumer Choice award 2005

by The Consumers Association of Pakistan

Best Retail Bank in Pakistan

Award 2004 & 2005

by The Asian Banker

Best Corporate Report

1st prize awarded for 2000, 01, 03 & 04

by Institute of Chartered Accountants of Pakistan (ICAP)and institute of Cost & Management of Accountants of Pakistan (ICMAP)

Corporate Excellence

Awards for 2002 & 03

The Management Association of Pakistan (MAP)

Best Corporate / Institutional Internet Bank in Pakistan

Award for 2004

by Global Finance magazine

Best Consumer Internet Bank in Pakistan

Award for 2002, 03 & 04

by Global Finance magazine

The Best Bank in Pakistan

Award for 2001 & 02

By Global Finance Magazine

Best Presented Accounts

Ranking prizes awarded from 1997 to 2002

By South Asian Federation of Accountants (SAFA)

Commercial Bank of the Year

Award for 1994 & 96

By Asiamoney magazine

Best Domestic Bank in Pakistan award for 1995by Euromoney

Over the years, Askari Bank has proved its strength as a leading banking sector entity, by achieving the following firsts in Pakistani Banking:

First Bank to offer on-line real-time banking on a country-wide basis.

First Bank with a nation-wide ATM network.

First Bank to offer Internet Banking Services

First Bank to offer e-commerce solutions

Corporate Citizenship

Today, Askari is a conscientious corporate citizen involved in social uplift, welfare, cultural and sporting activities across the country.

According to Askari Bank,

Askari Bank understands the need to be more than just a financial friend. Our commitment to the customers, employees and other stakeholders stems from our deep-rooted belief and the sense of responsibility to contribute towards different areas of the social sector. We see it as giving something back to the nation which helps us flourish. In this way, the society and the people we touch, grow with us.”

ORGANIZATIONAL STRUCTURE

Askari Commercial Bank LTD Bahawalpur branch is successfully meeting all its objective software programs that are installed for each department that has increased their efficiency and they can take any information which is no time from any of their branches/clients are getting quick response due to their efficient network and staff members.

Managers and auditors can take information easily about clients account and are completely secured by password controls.

This branch is very well managed and staff is working devote and should work for his/her personal work they are committed and loyal to their work everyone is ready to perform other work, if he or she is not there, to prevent customers from suffering the absence of an employee the other one perform his/her duty with whole heartedly.

Organizational Structure Of

Head Office

Hierarchy In Bahawalpur Branch

GROUPS AND DIVISIONS

There are three main groups in ACBL, which further comprises of fifteen divisions.

  1. Operations And Credit Group
  2. Corporate Banking And Financial Institutions Group
  3. Retail Banking Group

  1. Operation And Credit Group

This group is responsible for all operational as well as credit and risk management activities of bank. This includes development and implementation of systems, operational policies and procedures, process reengineering, automation, branch expansion, and acquisition of premises, regulatory reporting, compliance management and legal affairs.

The group comprises of the following divisions.

  1. Credit Division

The credit division (CRD) is responsible for ensuring identification, control and management of credit risk through prudent lending polices. Its focus remains on maintaining a well diversified, sound and remunerative credit portfolio. Prudent lending policies and effective appraisal and monitoring systems have helped in reducing the impaired loans from 14% to Rs. 1.101 billion, from Rs.1.278billion last year. The NPLs ratio as a percentage of gross advances also reduced from 2.76% to 1.54%.

  1.  Electronic Technology Division

The electronic technology division (ETD) is responsible for managing the bank’s technology needs. This includes not just establishing and maintaining technology infrastructure for providing operational support to all units of h bank, but also encompasses introducing latest state-of-the-art technology-driven products and service delivery systems.

The bank’s existing systems were also updated. The list covers a wide range from upgrading the SWIFT connectivity of the bank. State Bank of Pakistan reporting electronic bill payment system via the bank’s ATM network and the Internet. The bank’s achievement to date in this area won in the prestigious ‘’Best Consumer Internet Bank in Pakistan” global finance award for 2004.

  1. Systems and Operations Divisions

The systems and operations division (SOD) is mainly responsible for ensuring smooth and effective systems and operations of the bank. Its focus is on disseminating and facilitating implementation of the management policies is and decision of various operational activities of the bank.

  1. Compliance and Data Division

The Compliance and Data Divisions (CDD) is responsible for ensuring effective compliance with regulatory and data reporting requirements.

In view of the importance of the laws and regulations on money laundering, etc. Especially with regard to “Know Your Customer”, a manual has been developed to facilitate effective compliance.

  1. Legal Affairs Department

The legal affairs department (LAD) is responsible for effectively managing all legal matters pertaining to the bank, and to protect the bank’s and trusts in this regard in order to achieve the above, the functions performed by LAD cover a white spectrum: rendering opinions on applicable laws one-of special assignments, advice in the legal aspects of operational matters, pro-active pre-emptive preventive measures, legal compliance and remedial and litigation management.

  1. Corporate Banking And Financial Institutions Group

This group is responsible for serving the banking needs of large corporate clients, in the public and private sectors, managing correspondent banking relationships, overseas operation and undertaking money market/capital market transactions.

The group is organized in four divisions’ namely corporate banking, investment banking, international and treasury.

  1. Corporate And Investment Banking Divisions

The corporate and investment baking divisions (CBD&IBD) are strongly positioned across priority markets with a distinct strategy for developing corporate business.

Last few years were very challenging due to historic lows in interest rates, which squeeze margins. The bank undertook a number of debts pricing swap transaction, aimed at reducing the financial burden of its key clients' portfolio, and facilitated value-added transactions like commercial paper participation for helping some customers meet their short term borrowing needs. The bank has seen its role developed in syndicated consortium finance, from simply gain a participant or co-arranger, to increasingly becoming the arranger and lead manager.

Progress on the setting up of an asset Management Company was slow because of delays in receiving statutory approvals. However we now see the company becoming operational in the third quarter of 2005.

  1. International Division

The international division (I&D) plays a key role in extending support to the branches undertaking foreign trade and exchange business while managing business relationships with other valued correspondent banks, I&D remains on the look-out for opportunities of extending our operations and presence in the international markets.

The increased in overall foreign trade of the country during 2005 also enabled the bank to achieve the desired level of growth

  1. Treasury Division

The Treasury Division (TRD) is responsible for managing money market and forewing exchange activities for the bank.

Conditions in the money and foreign exchange market remained very competitive and challenging during 2005.The low interest rate environment that dominated the first half of 2005. The increase in the home remittances from abroad resulted in strengthening of the Pak rupee and excess liquidity in the money market.

 Similarly, the rupee/Dollar exchange rate witnessed a volatile situation, reflected by the fact that the rupee started the year 2004 at 57.40 against US Dollar, reached 61.00 in October and gradually receded to 59.46 in December. The main reasons for this volatility were the bulging trade deficit, higher oil prices and repayment of expanses foreign debts by the Government of Pakistan (GOP).

 

  1. Retail Banking Group

The retail-banking group is responsible for serving the banking needs of the retail market comprising of the individual consumers and small and medium size enterprises. These market segments are gaining increasing importance since the margins in the corporate and the commercial banking segments have reduce to unprecedented levels, while margins in the retail markets though considerably reduce, are still much better then the former.

Group is managed in the following divisions:

  1. Assets Products Division

Assets product division (APD) is responsible for the development and the managing of retail credit schemes and is presently offering several innovative consumer credit products. In order to cater for the increasing demand for retail credit, APD, during 2005, started 4 more retail asset unit, taking the total no to 14, countrywide.

  1. Investment Product Division

Investment product division (IPD) is responsible for the development and managing of brands that serve the investment needs of the retail market. It focuses on deposits mobilization and provision of value added services and products based on modern technology.

IPD offers a range of products design to carter for diverse customer needs, such as; ASK CARD (Debit Card) cash management services, Rupee Travelers Cheques and customer deposit products such as Askari Bank’s value plus.

New products introduced during recent years include:

ASK POWER (prepaid card), which enables the maki9ng of secure payments without the need to carry cash or debit or credit cards. It allows cash withdrawals from ATMs, transfer of balance to another card, and the refill option, as well as payment of utility bills through ATMs and Internet. Its special features are likely to make it popular with our customers.

Askari Banks Electronic Bill Payment System allows the customers of Pakistan Telecommunication Company Limited (PTCL) to pay their monthly telephone bills from Askari Banks ATMs, point of sale (POS) Terminals, through the Internet and also at the banks branches through direct debit to their personal accounts. Arrangements are underway to facilitate the electronic payments of electricity and gas utility bills. Askari banks investment certificate are profit bearing, negotiable and transferable instruments, available in three convenient denominations, with a maturity of up to three months.

  1. Credit Cards Division

The credit cards division (CCD) is responsible for managing the credit cards business of the bank. CCD is headquarter in Karachi as separate strategic business unit (SBU) of the bank with all internal functions including credit, operations, marketing, sales, finance and audit, perform independently. Its present focus is on managing the ‘Askari Master Card’’ brands, accepted worldwide also in 4000 locations in Pakistan.

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2005 was a significant year for the CCD, as it registered a three-fold profit increase over the preceding year, despite tough competition and decreasing margins. This was achieved through prudent risk management and effective control over operating expenses. It crossed the 78000 cards mark during the year- a significant achievement by any standards.

CCD plans to launch co-branded credit cards with major multinational and national financial institutions, and to introduce other products and services to further enhance to brand image and customer base of Askari Master Card.

For the first time in Pakistan, Askari bank introduces the ...

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