BANK AL-FALAH LIMITED 1

SUBMITTED TO

Madam Faiza Rehman

SUBMITTED BY
Rehan Aqeel
MBA-FA08-119
Sara Shahid
MBA-FA08-133
Tahira Shaheen
MBA-FA08-149

COMSATS Institute Of Information Technology

Lahore
BANK AL-FALAH LIMITED 2

Table of Contents

Company History………………………………………………1

Industry Analysis………………………………………………3

Company Analysis……………………………………………..4

SWOT Analysis………………………………………………..10

Competitive Analysis………………………………………….12

BCG Matrix……………………………………………………13

Problem Identification…………………………………………14

Solution to Problem……………………………………………14

Conclusion……………………………………………………..15

Recommendations……………………………………………...15

Bibliography…………………………………………………....16

References……………………………………………………...17

Annexure……………………………………………………….18

Evidence………………………………………………………..23
BANK AL-FALAH LIMITED 3

Bank Al-Falah Limited

Company Background and Introduction

Bank Alfalah Limited was incorporated in 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 45 branches in 21 cities, with the registered office at B.A.Building, I.I.
Chundrigar, Karachi.

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.

The bank perceived the requirements of customers and matches them with quality
products and service solutions. During the past five years, bank has emerged as one of the
foremost financial institution in the region endeavoring to meet the needs of tomorrow as
well as today. To continually upgrade the quality of service to the customers, training of
team members in all the integral aspects of banking, customer service and IT was
specially focused.

The portfolio concentrates on all aspects of conventional banking as well as the financial
needs of corporate sector. Dynamic and high value product includes Car Financing,
Home Financing, Rupee Travellers Cheques, Credits Cards, Debit Cards, On line
Banking, ATM and consumer Durables. In addition to this, Islamic Banking Division is a
recent initiative, which operates as separate branch. It offers Shariah Compliant products
through a network of five branches, which will increase to 50 by the year 2007.
BANK AL-FALAH LIMITED 4

Management

(See Table 1.1 in Annexure)

Goals & Objectives

Goals and objectives are factors through which the company’s devotion and commitment
to the job can be seen. If the goals are realistic and achievable, than surely that
organization is doing it’s job.

Bank Alfalah also has certain goals and objectives which it is trying to achieve, through
it’s various strategies and operations. The goals and objectives are mentioned below:

1. To create a sound base, and through efficient systems achieve modern

banking through out Pakistan.

2. By the end of every accounting year there is an increase in deposits. As

the deposit rate of during 2002 was approx 52 Million and the same has
been increased in 2003 by 77 Million.

3. To create unit banking network in all the branches of Bank Alfalah, the
end of the year. This means that all the operations of the bank, i.e. deposits
to advances, imports, exports, L/C Opening, foreign currency and many
more aspects under one roof, so that the customer can be facilitate in one
visit.

4. Islamic Banking is one of the goals of Bank Alfalah though it has been
initiated in the last fiscal year and it is very acceptable for general public.
However, there is lot of work to do for successful implementation of the
Islamic Banking Plan. In this regard the Bank is opening specific Islamic
Banking Branch under the supervision of its Islamic Banking Division.

Organizational Structure

Hierarchy(see hierarchy 2.1 in Annexure)

BANK AL-FALAH LIMITED 5

Industry Analysis

If we see the banking Industry in Pakistan, the overall industry is at the maturity stage.
The whole world is passing through the economic crisis, which has affected the banking
industry, the most. Many famous banks around the world got bankrupted. That’s why the
overall industry is at the maturity stage.

Company Lifecycle:

(See figure 3.1 in Annexure)

Bank al-Falah is in Growth stage of the company life cycle. The reason behind this is that
it was launched in Pakistan in 1997 and from that date onward it is progressing and
achieving its aims and because of that it is in growth stage.

The overall banking industry in Pakistan is at maturity stage, because of the recent
economic crisis and the current economic conditions of Pakistan.

External Environmental Analysis:

The external environment of Bank Al-Falah includes their external customers and
competitors etc. The country forces affecting the environment e.g. Political forces,
Economic forces, Socio-cultural forces, and Technological forces are the part of the
external environment.

Political Factors
Political factors in any countries affect the organizations and institutions greatly. If there
is a stable political environment, the organizations flourish successfully but if there is
instability in political environment, then there is a bad effect on all institutions and
organizations. If we look Bank Al-Falah with the aspect of political environment, there
are some rules made by the government to follow. A regulatory approval is necessary
from the State Bank of Pakistan in order to launch a bank. Further more there is a
requirement of State Bank of Pakistan that the paid up capital of Bank Al- Falah should
be Rs 10 billion by 2010, Rs 13 billion till 2011 and Rs 23 billion by 2013.
BANK AL-FALAH LIMITED 6

Economic Factors
As we know the economic conditions of the country at the current is not so good, and
there was a huge economic crisis recently which affected many banks. Bank Al-Falah
should consider short term and long term issues concerning economy of the country. It is
obvious that with the current situation, Bank Al- Falah like many other banks are being
affected by the challenges like inflation, unemployment and economic crisis.

Socio- Cultural Factors

Every country has its own social values and cultures. Bank Al-Falah is doing good by
keeping in mind the cultural values of Pakistan. As we can see from its advertisements
that it reflects the true cultural and social values. And by doing this, Bank-Al Falah is
attracting a great deal of customers. Because it is natural that when some organization
takes care of customer’s social and cultural values, then the customers are naturally
attracted towards that particular organization.

Technological Factor
The technology plays a very important role in today’s successful organization. Bank Al-
Falah is doing good in introducing technologies as and when required by the Bank.
Further it trains the employees to use those technologies.

Company Analysis

Internal Environmental Analysis

Internal environment is that environment which has an effect on the functions of the
bank. Internal environment of Bank of Alflah consiss of:

1. Deposits

2. Advances

3. Competitors
BANK AL-FALAH LIMITED 7

1.Deposits

Depositors are the main source of profit generation for the bank. Alflah offers depositors
number of incentive by virtue of which they too care make same money. Alflah relies on
depositors & workers to increase their volume every year. This is evident from the fact
that the growth rate increased 48.40% during 2002-03, as this growth rate is satisfactory
it is a must that this environment of deposit growth should not decline.

2.Advances

Advances are basically what Alflah give to people asking for money. If there shall be
more people depositing money. There will be more asking for advances as well. Banks
tend to make profit by giving advances at a rate higher than what they owe to the
depositors. The difference is the banks profit. If the environment is healthy then more &
more people will be asking for advances for business and other options. It is also evident
from the fact that during the year 2002-03 the advances growth rate is 71.12%.

3.Competitors

Competitors should always be studied with great care, because competitors, can greatly
influence an organization position. Bank Alfalah has a lot of competitors because in a
short span of 5 year it has achieved what not many banks had achieved. This leads to
competitions. Similarly Bank Alfalah should keep a tag on the competitors move or any
other new technology it is introducing, because to sustain in the micro environment, a
competitor has to be viewed with a lot of care.
BANK AL-FALAH LIMITED 8

Competitive Advantage

Bank Al-Falah has some competitive advantage over its competitors, like

• Superior services: Bank Al-Falah provides superior and quality services to its
customers by taking care of their needs. Bank al- Falah works hard to maintain its
customer loyalty. Bank al- Falah targets every type of customer in the society.
• Turn around time of 48 hours: This means that the when the customer complains
for any problem, to the bank, The Bank Al-Falah tries to fix tries at problem
within 48 hours. This is another competitive advantage for Bank al-Falah.
• No annual fee for the credit cards: Bank Al- Falah don’t charge any annual fee for
the credit cards . Where as other banks charge this fee.
• Number one portfolio in Pakistan: This means that Bank Al- Falah offers a wide
variety of products and services as compared to other banks.
• 280 branches Nationwide, with 8 to 9 branches worldwide: Bank Al- Falah is
currently operating in 8 to 9 countries.

Products and Services

Comprehensive and diversified product portfolio

With the mission to provide all-encompassing banking services to the customers,

Bank Alfalah has a uniquely defined menu of financial products. Currently it is one of the
most comprehensive portfolios of personalized financial solutions that are custom-
tailored to serve the requirements not only of conventional customers but also fulfill the
needs of the corporate sector:

 Car Financing
 Rupee Travellers Cheques
 Online Banking
BANK AL-FALAH LIMITED 9

 Credit Cards
 ATMs
 Home Financing
 Islamic Banking
 Corporate and Structured Financing

Car Financing

Car Financing is one of the major renowned product of Bank Alfalah and can be utilized
in terms of Financing of Used Vehicles, Loan against Car, Balance Transfer Facility,
Refinancing Facility (only for Alfalah Customers) and it is characterized in terms of:

 Lowest Mark up

 Lower Insurance

 Quick Processing

 Lower Down Payment

Home Financing

Major features of Bank Alfalh Home Financing are Lowest Mark-up, Quick Processing,
Multiple Repayment Options and Free Valuation. It has been bifurcated in terms of
“Home Buyer, Home Construct, Home Improver, Home Balance Transfer Facility”.

 Financing Limit : upto Rs. 10,000,000/-

 Tenure : upto 20Years

BANK AL-FALAH LIMITED 10

 Equity Participation : 30% Borrower / 70% Bank

Rupee Travelers Cheques

Rupee Travelers Cheques are as good as cash and are accepted at the major shops, travel
agents, hotels business establishments and all over the country and abroad. This service is
being offered to facilitate instant fund availability to travelers and business people who used
to carry a large sum of money with them.

Credits Cards

Bank Alfalah Visa Card is everywhere and globally acce pted and welcomed at locations
displaying the VISA logo. It is accepted at nearly 30 million merchants and 870,000
ATMs in more than 150 countries around the globe and over 10,000 establishments in
Pakistan. Alfalah VISA pays for shopping, travel, entertainment, meals and much more.

Debit Cards

Bank Alfalah Limited presents Alfalah HilalCard, the first Visa Electron International
Debit Card which gives an unlimited access to current / savings account with a simple
swipe, at millions of retail shops and ATMs, worldwide. The Alfalah Hilal Card comes
with a host of conveniences and benefits combined with the wide reach of Visa Network
enabling it to be accepted at more than 840,000 ATMs and 13 million retail outlets
around the world, making it the most acceptable Debit Card available in Pakistan.

On Line Banking

To provide enhanced and value added products to customer bank is constantly striving
for additional facilities. Bank provide fully automated on-line telephone banking facilities
to its customers enabling them to carry out banking transactions like balance inquiries,
statement requests, product information and exchange rate.
BANK AL-FALAH LIMITED 11

Automated Teller Machine (ATM)

The bank offers 24 hours self service banking facilities to it customers on country wide
basis through deployment of Automated Teller Machine. This system allows the banking
facilities such as cash withdrawls, cash deposits, funds transfer, balance inquiries,
account statements. Electronic cash dispensing facilities are available in major cities of
Pakistan. All ATMs are linked through a state-of-the-art Satellite Based Communication
System which offers 24 hours real time service.

Islamic Banking

A separate division is a recently initiated, which operates as separate branch. It offers

Shariah Compliant products through a network of five branches, which will increase to
50 by the year 2007. Islamic Banking has launched following products with the
perception that these are in accordance with the Sharia Principles.

a. Alfalah Masharaka Homes

b. Murabaha Finance

c. Aflalah Car Ijarah

Corporate and Structured Financing

The portfolio concentrates on all aspects of conventional banking as well as the financial
needs of corporate sector including dynamic and high value product.

 Loaning against securities

 Letter of Credit

 Letter of Guarantee

 Demand Finance

 Cash Finance
BANK AL-FALAH LIMITED 12

SWOT Analysis

Strengths

Since, inception of Bank Alfalah, it has moved rapidly in expanding branch network and
deposit base, along with making profitable advances and increasing the range of products
and services bank have made a break-through in providing premier services at an
affordable cost to our customers.

Bank Alfalah has been awarded an AA- (double A minus) and an A1+ (A one plus) in the
long and short term respectively by the PACRA. These rating denote very high credit
quality and very low expectation of credit risk.

The main source of a financial institution is public savings in this regard public
confidence plays a vital role. So, the confidence of customers are the main strength of
Bank Alfalah.

In order to maintain an effective communication of information regarding the need of

valued clients bank has designed its website to be as user-friendly as possible. This
facilitates to pursue the path of excellence and customer satisfaction through delivering
higher quality of services, thereby adding synergy to our existing management expertise,
financial strength and profitability. Hence, it’s a channel of communication for the
delivery of quality products and services that enhance value to our stakeholders.

Weaknesses

As per Bank policy, advertising and publicity is not extensively emphasized. Through
advertisement customers could be kept abreast with the products and services.

The main focus of Bank is major cities of Pakistan. It is direly needed to extend its
network and people should be educated about the functioning of bank. Since, Bank
Alfalah has strong set up in UAE and Middle East, therefore, specifically those areas of
Pakistan should be targeted where large number of people are working abroad. Hence,
bank could avail an excellent deposit rate by using its annual budget specified for
network extension.
BANK AL-FALAH LIMITED 13

Opportunities

The life cycle of an organization is comprised of threats as well as opportunities. If we

say, today the rates of challenges are too high but simultaneously the rate of opportunities
is also high. It is mandatory to try to make progress with consistency as well as to adapt
changes with the needs of time, in order to cope up with both conditions.

In the prevailing scenario, Bank Alfalah could penetrate further and could capture various
corporate customers in addition to the retail customers by expanding their network.

In addition to the excellent routine banking, it has earned a good name by offering special
products like car financing, home financing and credit card. So, the penetration of these
products could enhance the market share.

In the rapidly growing industry of Pakistan, launching of another SBU, Alwarid Mobile
will be an excellent addition towards the credibility as well as enhancement of Bank
Alfalah’s market share.

Bank Alfalah has launched another division known as Islamic Banking. This new aspect
will also attract a large number of people, who don’t want to deal with interest bearing
banking. Hence, it’s a new opportunity where competitors are limited.

Threats

While doing business, threats are part of the game. Especially, in this era, most of the
financial institutions are working as Private Limited Company and facing or have a fear
of threat from their competitor as well as new entrants.

In order to maintain as well as to enhance the market share, banks always try to introduce
new schemes / packages. Hence, the environment is very much innovative and adaptive
to the needs of customers.

Though Bank Alfalah has a strong footing and maintain a good number of loyal
customer, still bank has threats in various sectors:
BANK AL-FALAH LIMITED 14

a. In Car Financing MCB & UBL are threats however, the expected
car financing of ABN Amro could also be a threat for Bank Alfalah.

b. In Home Financing Union Bank or to some extent NBP are

threats.

c. In credit cards, Bank Alfalah captured the market share of Citi

Bank and Standard Chartered Bank. Till yet the bank has no prominent
threat. But, the launch of Askari Bank Master Card and Union Bank Card
might be threat after some time.

Competitive Analysis

Porter 5 Forces Model

(See figure 3.2 in Annexure)

The sole purpose of competitive analysis is to determine the organization’s or company’s

position when compared with its competitors in the industry environment.
Porter discussed five competitive forces in the competitive analysis of the company.
Here is Bank Al- Falah’s competitive analysis with respect to porter’s five competitive
forces.

Threat of New Entrant

It’s a threat of having the new entrance in the same industry. And for Bank Al-Falah this
threat is high as more new banks are being launched in the country. It’s negative for Bank
Al- Falah as they have now to more think about their product and services. The latest
entrance in this industry is of Barclays and RBS.
Bargaining Power of Customer
BANK AL-FALAH LIMITED 15

Customers are influenced by the brand name Bank al-Falah “The Caring Bank” The bank
sets its own prices, not influenced by the customer, due to the low bargaining power,
Bank Al- Falah gets high profit and has positive effect on the company.
Bargaining power of supplier

Bargaining power of supplier for bank Al-Falah is low. The suppliers for any particular
bank are their customers, investors and stake holders. Bank Al-Falah has many customers
and stake holders. Because its parent company is Abu Dhabi Company.

Threat of substitute

The threat in which customers move from your organization to another organization
bearing switching cost is called threat of substitute. The threat of substitute for Bank Al-
Falah is high and it creates negative effect on the company because the switching cost for
the customers is very low. Because it doesn’t cost much to open an account in another
branch. And now a days an individual person has many bank accounts. Due to which
there is a great threat of substitute for Bank Al- Falah.

BCG Matrix (See Figure 3.3 in Annexure)

Star: The star has a large market share. Warid is a star for Abu Dhabi Group because it
has a large market share in a rapidly growing industry.

Cash Cow: The cash cow for Abu Dhabi Group is Bank al-Falah and UBL, because
these two banks are generating much larger cash for the parent company. Further these
banks also need heavy investments.

Question Mark: Wateen is a question mark for Abu Dhabi Group because it has a small
share of market and further it is striving for its success in Pakistan. The product in
question mark can either fail or become a star.

Dog: The dog for Abu Dhabi Group is Taavun, because it has not been much successful
in Pakistan in the real estate industry.
BANK AL-FALAH LIMITED 16

Problem Identification

Customer Problems
It seems that the priority is given to the corporate customers in Bank Al Falah as the
individuals from middle class have to remind the management of certain branch to do the
needful for them.
Employees Problems

1 Insufficient Employees
To compete in the banking industry Bank Al Falah should have enough
employees to facilitate the customers.
2 Working Hours
Bank Al Falah although providing the customer service in better way but there
is a lot of work to do in a routine banking to the employees due to which they
work for long time.

Solution to the Problem

Customer Problems Solution
Customer is the king and customer always right. Bank is earning profit from the
customers. Bank should have a proper relationship with corporate as well as individual
customers. It is recommended that the management should stress on having satisfactory
relationship with individual customers because they can also provide the revenue in term
of profit.
Employee Problems Solution
Insufficient Employees
The Bank should divide the workload of the existing employees by hiring new people,
because the bank cannot use the alternative to reduce the number of customers and
loosing the market share.
Working Hours
BANK AL-FALAH LIMITED 17

Management should give relaxation to the employees by hiring new professionals and
reduce the working hours.

Conclusion
The bank Alfalah is leading bank in Pakistan and it is playing a vital role in the economy
of the Pakistan. There are different departments like trade finance and corporate finance.
The bank Alfalah it self is a nice bank but some problem are still here which I have
discussed in my SWOT analysis. The management of the bank must should over come
such type of deficiencies. And the expansion of the bank with a pace indicates that it will
be one of the best banks in the world.

Recommendations

 It is observed that the employees are less motivated because of static jobs. The
proper posting of employees were ignored.

 The employees should be post on a job for specific period and than they should
rotate to another department so that they gain knowledge of other jobs.

 Bank Alfalah Limited should properly advertise and Communicate to public about
the services provided by it, so that more customers will be attracted.

 The bank’s management should control the waiver of charges which is big loss
for the bank Alfalah limited.

 Job description of the employee should be pre define so that the interest of the
employee increase.
BANK AL-FALAH LIMITED 18

Bibliography

http://www.linkedin.com/companies/bank-alfalah-limited

http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=BAFL

http://en.wikipedia.org/wiki/Bank_Alfalah

http://findarticles.com/p/articles/mi_hb092/is_/ai_n29473120

http://www.arabianbusiness.com/index.php?
option=com_pressreleases&view=detail&pr_id=13928&Itemid=77&ln=en

http://www.cbronline.com/companies/bank_alfalah_ltd

http://www.brandsoftheworld.com/countries/pk/172522.html

http://www.world313.com/pakistan_bank_alfalah.html

http://wrightreports.ecnext.com/coms2/reportdesc_COMPANY_C586P0C00

http://www.zawya.com/cm/profile.cfm/cid1000838/
BANK AL-FALAH LIMITED 19

References

Mr. Mohammad Mudassar Aqil

General Manager
Human Resources & Quality Assurance
Bank Al-Falah Limited

Mr. Salman Rashid

Bank Al-Falah Limited

Mr. Mohammad Rizwan Idrees

Officer Consumer Banking
Bank Al-Falah Limited
BANK AL-FALAH LIMITED 20

ANNEXURE

Table 1.1

MANAGEMENT

Chief Executive Officer

Executive Incharge
Executive Incharge
Strategic Planning & Global
International &Treasury Division
Marketing
Executive Incharge Executive Incharge
Human Resources Division IT Division
Executive Incharge Executive Incharge
Credit Division System & Operation Division.
Executive Incharge
Executive Incharge
Credit Monitoring Division
Establishment & Administratration

Executive Incharge Executive Incharge

Business Development Division Legal Affairs Division.
S.A.M./ Car Finance/ Leasing
Executive Incharge
Executive Incharge
Finance Division
Audit & Inspection Division
Executive Incharge
Executive Incharge Islamic Banking Division
Corporate Banking,
BANK AL-FALAH LIMITED 21

SME Financing & Home Loans

Executive Incharge
Executive Incharge
New Products &
Cards Division
Service Quality Division
Hierarchy 2.1

President (CEO)

Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President

Assistant Vice President

Officers Grade I, II, III

Clerical Staff Non-Clerical Staff

Cashier Typist Clerks & Guards Messengers

Assistants
BANK AL-FALAH LIMITED 22

Figure 3.1

Company Life cycle

Bank Al-Falah and Warid

Overall Bank Industry in

Pakistan
 BANK AL-FALAH LIMITED 23

Figure 3.2 Porter’s 5 Forces model

Threats of new
entrants
Low
High

-ve effect +ve effect

High
Threats of UBL,HBL,MCB etc.
Bargaining Power
substitutes
low
of Customer
-ve effect + ve effect

-ve effect
Low +ve effect
High

-ve effect +ve effect

Bargaining Power
of Supplier
High Low
BANK AL-FALAH LIMITED 24

Figure 3.2

BCG Matrix for Abu Dhabi Group

MARKET SHARE
GROWTH RATE

HIGH LOW
Warid
HIGH

Wateen
LOW

Bank al- Taavun

Falah and
UBL
BANK AL-FALAH LIMITED 25

Evidence