Financial Analysis of Bank Alfalah Limited. Bank Alfalah is the 5th largest bank of Pakistan in terms of its assets that are 6% of the total banking sector assets. The banking sector has expanded rapidly in Pakistan along with the fast paced economic grow

Authors Avatar

Stratford College of Management, London

                Research Project

Prepared for

Stratford College of Management

ATHE Awarding Body, London

Prepared by

Hassan Javed

PGD in Business Management (Group-3)

ID Number:  SCM\20101067\85

List of Contents


Bank Alfalah Limited was incorporated on June 21st, 1997 as a public limited company under the Companies Ordinance 1984. The bank is engaged in commercial banking and related services as defined in the Banking Companies Ordinance, 1962. The bank got privatized in 1997. The Abu Dhabi Group, owner of the bank, has invested in technology to have an extensive range of products and services.

They broadly include general banking, financial services, Islamic banking, consumer banking, treasury and international banking. Because of its superlative performance over the years the bank has been assigned short-term rating of A1+ and long term rating of AA. The bank is currently operating through 282 branches. This includes 48 Islamic banking branches and 7 foreign branches in Bangladesh, two in Afghanistan and one offshore banking unit in Bahrain.

Bank Alfalah has expanded its branch network and deposit base, along with making profitable advances and increasing the range of products and services. Bank Alfalah is the 5th largest bank of Pakistan in terms of its assets that are 6% of the total banking sector assets. The banking sector has expanded rapidly in Pakistan along with the fast paced economic growth. The increased competition in the banking sector has encouraged the Banks to come up with services that could satisfy the needs of a large consumer base. The result has been increased profitability of all banks.


Current share Price                                      11

Profit after Tax                                             1.301 Billion (CY 07: 3.506 billion)

ROA                                                            0.37%

ROE                                                            7.63%


Bank Alfalah Limited was incorporated on June 21st, 1997 as a public limited company under the Companies Ordinance 1984. Its banking operations commenced   from November 1st, 1997. The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance, 1962. The Bank is currently operating through 279 branches, with the registered office at B.A.Building, I.I.Chundrigar, Karachi Pakistan.

Since its inception, as the new identity of H.C.E.B after the privatization in 1997, the management of the bank has implemented strategies and policies to carve a distinct position for the bank in the market place.

Strengthened with the banking of the  Abu Dhabi  Group  and driven  by the  strategic  goals set  out  by  its  board of  management, the   Bank   has   invested   in   revolutionary technology to have an  extensive  range  of  products  and  services.

This  facilitates  their commitment to a  culture  of  innovation  and  seeks  out  synergies with clients and service providers to ensure  uninterrupted  services to its customers.  Bank perceives the requirements of their customers and matches them with quality products and service solutions. During the past five years, they have emerged as one of the foremost financial institution in the region endeavoring to meet the needs of tomorrow today.


PACRA, a premier rating agency of the country, has rated the bank ‘AA’ (double A), Entity Rating for long term and A1+ (A one plus) for the short term. These ratings denote a very low expectation of credit risk, strong capacity for timely payment of financial commitments in the long term and by highest capacity for timely repayment in the short term, respectively. The ratings of first and second and third unsecured listed and subordinated TFC issues of PKR 650 million, PKR 1,250 million and Rs.1,325 million have been maintained at AA- (Double A minus).


As far as Bank Alfalah Ltd is concerned, it is one of the top in all-domestic commercial banks in Pakistan. The rapid increase in branch network shows the Bank’s performance within seven years, which is worth considerable. BAL provides variety of services to its customers which fulfill the needs of all the segments i.e. from individual to a corporate client. BAL has a versatile product mix. Following are some examples of product line.

  1. Deposit Related Product
  2. Pay Order / Demand Draft / Call Deposit
  3. Post Paid Warid Connections to Account Holders
  4. Cash Services
  5. Royal Car financing
  6. Business Loans
  7. Credit card
  8. Trade financing

Bank Alfalah is trying to provide all banking solution under one roof. He has developed different products according to the needs of different segments and very successfully gains the market share. Different deposit related products are as follows.

Current Account

Saving/ PLS Account

Royal Profit Account

Term Deposit Account

Basic Banking Account

Alfalah Kiyafat Account

Alfalah Mahana Amadan Account

Alfalah Education Account


financial analysis

Balance Sheet

Data Source: Annual Accounts 2008 to 2004


Join now!


Ratios are invaluable aids to management and others who are interested in the analysis and interpretation of financial statements. Absolute figures may be misleading unless compared, one with other. Ratios provide a means of showing the relationship between figures. Though there is no special magic in ratio analyses, many prefer to base conclusions on ratios as they find them highly useful for making judgments more easily.

Liquidity Ratios:-

Liquidity represents the ability of a bank to efficiently and economically accommodate deposits withdrawal as well as fund increase in assets. A bank has a liquidity ...

This is a preview of the whole essay