Final Internship Report On Bop New 2003

An Internship Report on Bank Of Punjab
EXECUTIVE SUMMARY
Internship is considered to be a compulsory practical training for students of business administration at COMSATS institute of information technology, Wah Cantt. Its time is six weeks and has demonstrated to be an opportunity of training for the students. The main usage of such training is to make students endowed to relate the theoretical knowledge in practical environment. Students recognize about the practical knowledge. This is my internship report; I have completed my internship at BOP (Wah Cantt Branch). In this report there is introduction, background of study, banking overview and the purpose and methodology. In BOPs introduction, its past, the present and the future outlook are included, along with the vision, mission, goals and core values of BOP. This report show my analysis and my working in different finance areas and also introduction of the organization i.e. the business operations section, the major products, services, departments as a whole and the departments of the branch is discussed. The financial analysis of the financial statements that is balance sheet and the income statement of BOP has been conducted including the common size analysis, ratio analysis of five years. I have shown the basis of the business and how they have modified themselves to 21st century. I found strength and weaknesses of the BOP as a whole and of Wah branch. The report is then concluded and I gave some recommendations according to my knowledge. The purpose of the study is to get experience of the real life finance practices in order to bridge the gap between the theoretical and the practical approach and to gather the knowledge of the different aspects of the vast field of profession.
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Comsats Institute of Information Technology Wah Cantt
CHAPTER # 01 COMPANY BACKGROUND
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COMPANY BACKGROUND
Introduction: The Bank of Punjab is basically a commercial bank and provides commercial banking and related services. The services provide by the bank deposit in local currency, client deposit in foreign currency, remittances, and advances to business, trade, industry and agriculture. The segments that this bank includes are as follows: trading and sales, in which there is fixed income, equity, foreign exchanges, commodities, credit, funding, own position securities, lending and repose, and brokerage debt; retail banking, includes retail lending and deposits, private lending and deposits, trust and estates investment advice, merchant / commercial and private labels and retail; commercial banking, which includes project finance, real estate, export finance, trade finance, lending, guarantees, bills of exchange and deposits; payment and settlement, which includes payments and collections, funds transfer, clearing and settlement, and agency service, which has depository receipts, securities lending (customers), issuer and paying agents in it. The Bank of Punjab has entered a new era of science to the nation under experience and professional hands of its efficient management. The Bank of Punjab plays a vital role in the national economy through mobilization of rare as well as untapped local resources, promoting savings and providing funds for investments. The Bank of Punjab is privileged to be responsible for providing services to the nation that leads to national progress and prosperity. Within the couple of years of its scheduling, the bank has not only carved out for itself prominent niche in the mainstream banking of the country but is also leading in certain areas. In the short span of time the Bank has been able to evolve a distinct corporate culture of its owned-based policies, which are realistic and are on highly professional footings.
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Nature of the Organization: The Bank of Punjab is a commercial bank and performs all the functions that are attributed to the commercial banking institution in the area of resource mobilization as well as loans, and investment. The Bank is thus providing all type of advances to business, trade, and industry on seasonal and annual basis, and is ensuring, through the prudent policy, the safety and protection of its loan portfolios, as the resources base of the bank expands, project financing will also be brought into its fold.
History: The Bank of Punjab (BOP) was established in Pakistan on 15 Nov 1989, under the Bank of Punjab Act 1989 and was given the status of scheduled bank in 1994. The bank is listed on Lahore, Karachi & Islamabad Stock Exchange. The majority shares of the bank are held by the Government of the Punjab. The role of technology in effective/efficient operation of financial sector was recognized by the Bank of Punjab, and hence it has computerized all its branches which are inter-connected with online real time system. Banks customers are facilitated by shared network of online ATMs in all major cities of Pakistan. Substantial share in economic growth, especially of agricultural and SME sectors are possessed by the bank. Strategic positioning of branches and introduction of a number of Agri-based financing schemes as well as penetration into Agri-economic allowed the bank to play a vital role in the development of agriculture sector in Pakistan. The Bank of Punjab is working as a scheduled commercial bank with its network of 286 branches at all major business centers in the country having the employee strength of 35000. Customer confidence and satisfaction in the services of the bank is depicted by its increasing branches all over the country.
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Role of the BOP in Pakistan: The bank's major customer is the government. Other customers are various public sector enterprises from different segments of the economy including textile, real estate, transport, agriculture, financial institutions and individual customers. Currently, the bank operates with a network of 286 branches across the country. Bank of Punjab is amongst a few banks which enjoy better credit rating by Pakistan Credit Rating Agency (PACRA) like for long-term "AA-" and for short-term "A1+" Objectives of BOP: The Bank of Punjab being a commercial bank performs all those function as are attributed to such banking institutions. The primary objective of the BOP is to channel the resources into sectors, which have suffered neglect. Other objectives included: To expedite the banking services for the masses To provide the highest rate of return to the shareholders by achieving good profitable growth. To enter into financing contracts and to mobilize resources in local and now in foreign currencies consistent with the objects of the bank. To be perceived by the customers and step forward as the best in every operation. Have the staff of the highest caliber. To inspect, supervise and estimate credit of member societies. To help the growth of the cooperative movement. To afford financial assistance to members societies in such manner as required Excel in the way of working of together to make decisions, manage change and get things done.
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CHAPTER # 02 OVERVIEW OF ORGANISATION
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OVERVIEW OF ORGANISATION Vision: To be a customer focused bank with service excellence Mission: 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 programmed driven products and services in the agriculture and middle tier markets through a motivated team. Core Value: Our Customers, as our first priority Profitability, for the prosperity of our stakeholders that allows us to constantly invest, improve and succeed Corporate Social Responsibility, 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 dealings Respect, for our customers and each other Goal: The Bank of Punjab has overcome formidable odds to rise and set new goals for the future. Our hard work and sheer commitment has paid of and today the Bank is poised to achieve new heights. The challenges are formidable but in the BOP the spirit is to take these and convert them into opportunities.
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Board of Directors: Ghafoor Mirza (Chairman Board ,BOP) Mr. Naeemuddin khan (President) Mr. Tariq Mahmood Pasha (Director) Ms. Tariq Bajwa (Director) Mr. Rizwan ullah khan (Director) Mr. Junaid Ashraf Khawaja (Director) Mr. Farooq Ahmed Awan (Director) Mr. M. Naveed Masood (Director)
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Branch Networks: During the year 2011, in recognition of consistent improvement and sustained growth in all facets of operation, the State Bank of Pakistan granted additional 11 licenses for opening of new branches. Accordingly, the number of branches has increased from 273 to 284 at close of the year 2011. The Bank has planned to further open 22 branches in year 2012. The major branches are at Karachi, Lahore, Islamabad, Faisalabad, Rawalpindi, Multan, Gujarnawala, and Peshawar.
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Organization Chart:
Source: www.google.com
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CHAPTER # 03 BUSINESS OPERATIONS
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BUSINESS OPERATIONS
Products of BOP: Following are the major products offered by Bank of Punjab.
Agriculture scheme: There are many agriculture promotion schemes provided by BOP Agri finance branches Kisan Dost Running Finance Facility Kisan Dost Lease Finance Facility Kisan Dost Cold Storage Finance Facility Kisan Dost Green House Finance Scheme Kisan Dost Livestock Development Scheme Agricultural Schemes Markup
Consumer schemes: Aasaish loan Quick cash Car lease House loan Smart cash personal loan Motorcycle lease scheme Caravan fleet financing
Commercial schemes: CNG filling station Auto lease financing scheme Car dealers Page | 12
Karobar barhao scheme Fertilizer dealer financing scheme Financing scheme for the purchase of office/shop Women entrepreneur finance scheme
House loan: This loan is provided to salaried individuals, self employed professionals, and self employed businessmen. The amount of loan starts from Rs.200,000 and is up to Rs.300,000. The monthly installment is up to 50% of the net income of the individual The tenure of the loan is from 3 years to 20 years.
Car loan: The loan is provided for salaried individuals, self employed professionals, and self employed businessmen. The loan amount ranges from Rs.200,000 to Rs.5000,000 The tenure of these loans is from 1 year to 5 years. The monthly payment is up to 50% of the individuals salary.
Asaish Loan: The loan is provided for salaried individuals, self employed professionals, and self employed businessmen The monthly payment of the loan is not more than 50% of the salary of the individual
Smart Cash Personal Loan: This loan is provided to salaried individuals and self employed professionals The loan amount ranges from Rs.50,000 to Rs.500,000 The tenure of the loan ranges from 1 year to 5 years. Page | 13
The monthly payment of the loan should not more than 50% of the individuals salary.
Karobar Barhao Scheme: Loan is provided to meet working capital requirements of business The amount provided under the loan ranges from Rs.200,000 to Rs.50,000,000 The tenure of the loan is 7 years
Live Stock Development Scheme: The loan is provided to individuals who have their own self owned dairy farms. The amount of the loan is up to 80% of the cost of animals The tenure of the loan is 5 years. The repayment is of 20 quarterly payments
Kisan Dost Aabiari Scheme: The loan is provided to self cultivator having agriculture land minimum 5 acres and maximum 50 acres. The maximum loan amount is Rs.500,000 The tenure of the loan is 5 years There are ten semiannual payments to repay the loan in 5 years
Kissan Dost Green House Finance Facility: The applicant of the loan must possess the land to cultivate the green house The 70%-80% cost of construction of the green house would be provided by the bank The repayment of the loan would be made by 20 equal quarterly payments.
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Services at BOP: Along with above-mentioned products Bank of Punjab also provides numerous services. The difference between products and services is that products are offered while services are rendered, but as both serve the same purpose (satisfying financial needs); therefore, both are treated at equal footing. Major services being rendered by the Bank of Punjab main branch: Commercial Banking Corporate & Investment Cash Management Services Utility Bills Lockers Commercial banking: The commercial banking group has been developed to fulfill the needs of small & medium size customers for enhancing banks business significantly with clear focus, repositioning of resources and active marketing to increase banks profitability. Commercial banking deals with customers whose sales turnover and aggregate credit are exposed as per benchmarks prescribed in the sbps prudential regulations.
Corporate & investment banking: Corporate banking: The bop corporate banking seeks to attract new clients and retain the existing relationships and build market share by offering superior services, competitive pricing and wide product range to valued corporate clients including public sector entities as well as multi national companies. Bop facilitates its customers for all types of their banking needs including working capital, trade finance, and project financing etc. Bop has worked on some of the local markets largest and most complex transactions and infrastructure projects. The bop corporate banking group constitutes of seasoned relationship management team to meet the high service standards of large corporations. The group
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delivers a full range of high quality advisory, financing and operational service solutions in accordance to customers needs. Investment banking: The investment banking group is responsible for developing and executing investment banking strategy to enhance and maximize shareholder wealth and customer satisfaction. Ibg has the specialty in providing innovative and unique advice to its clients to facilitate them in meeting challenges in a dynamic market. The team of qualified and well trained professionals operates under a strict risk management framework, following best practices of their fields and continuously striving for excellence
Cash management service: The process of collection and payments on behalf of customers, using the branch network is known as cash management. The primary objective is to facilitate organizations with multiple collection points in gathering cash / funds and making them available in the customer operating account.
Utility service: The customers have the facility to pay the bills of telephone, gas and electricity at any branch from 9:00am to 5:00 pm. These bills can also be paid using the drop box facility which the individual can drop the check along with the bill at the branch and collect the receipt in the evening.
Bop locker: It is one of the utility services that bop provides to their customers for keeping Jewellery, important documents and other valuables. Other services provided by the bank are: Atm facility On-line banking Lockers facility
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Demand drafts Letter of credit Pay order Mail transfer Debit card Collection of utility
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CHAPTER # 04 DEPARTMENTS IN BOP
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DEPARTMENTS IN BOP Following are the key departments of BOP: 1. Cash department 2. Remittance department 3. Account opening department 4. Clearing department 5. Advances/Credit department 6. Bills remittance department Function and Purpose of Each Department in BOP 1. Account Opening Department Bank of Punjab has subsequent kinds of customers under this department. Some are as Companies, Businessmen, Firms, Trust, Professionals, staff, individuals etc. Functions of Account Opening department: Opening an account after verification of customer from NADRA database. Recording account number and name of applicant in account opening register. Issuing letter of thanks Recording first deposit with the bank by customer in general ledger. Closing account after receiving application from customer.
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2. Clearing Department Functions of this department The Bank of Punjab collects cheques on behalf of its customers and this system of collection of cheques is known as clearing. The representatives of all banks get together in the clearing house and settle the receipt and payment of cheques drawn on each other The main branch receives the cheques from all of its branches and arrange their collection Main branch sends these cheques to the state bank of Pakistan, where a clearinghouse exits In this clearinghouse, the representatives receive their cheques and go back to their bank's main branch Later on, the main branch sends these cheques to their relevant branches where the validity of these cheques is verified and the accounts of the relevant clients are affected.
Remittances Department: Functions of this department This department deals with the transfer of funds from one place to another place It is done through Demand draft, Mail transfer, Telegraphic transfer, Pay order etc.
3. Credit Department: Functions of this department The BOP credit department facilitates people by providing loans and financial facilities to them. The types of loans, their duration and conditions are various as well as different for every sector.
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BOP Quick cash, BOP Car loan, BOP House loan, BOP SME loan, BOP Aasaish loan, BOP House loan for federal government, running finance, cash finance, Agricultural finance.
4. Bill Remittance Department: Functions of this department This department deals with the collection of various utility bills like PTCL, WASA, SNGPL, LESCO PTCL telephone bills are collected by the bank. These bills are entered in the system with the consumer record and the bill earns a commission of Rs.2 per bill WASA, the water bill are also collected by the bank. They are also entered in system with consumer record and commission of Rs.2 per bill is earned. LESCO, the electricity bills are collected by the bank with the commission of Rs.2 per bill SNGPL, the sui gas bill are also collected in the same manner as mentioned above
: 5. Cash Department Functions of this department Cash department of BOP is given the complete responsibility of handling all receipts & disbursement of cash. As a result of transaction in both local & foreign currency. As a consequent it is also responsible for the book keeping of this transaction &the cash receipt for received deposits and encashment of cheques
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BOP Branch, Wah Cantt Detail:
Branch Name Branch Code Address Phone no. Fax no. Tehsil District Province Status Web mail
BOP, Wah Cantt 0177 Civic center, the Mall, Wah Cantt 051-4902261 051-490226 Taxila Rawalpindi Punjab Online bop.com.pk
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Departments of BOP Wah Cantt Branch Here, I will discuss those departments which I observed during my internship in BOP Wah Cantt branch. It is located in civic center the mall, wah cantt. This branch faces intense competition as there are other banks in similar area. Other banks located in this area are Habib bank, National bank, Silk bank, Muslim commercial bank. So there is intense rivalry and competition among all the branches in this area. Masses that belong to this area are salaried individuals and government employees. Jobs and Responsibilities: Mr. Tahir Hussain is the branch manager, and Mr. Ahmed Nadeem is the assistant branch manager of BOP Wah. He is a very responsible, kind and talented person. He is a good leader and motivates the employees and staff to work hard and is also very supportive. Following activities are performed at BOP by the branch manager. Reviewing reports Develops objectives for staff Performance evaluation of staff Supervision of all branch affairs Inspection of work to maintain effectiveness Developing strategy for marketing business/deposit development and public relations Operations Manager: Mr. Kamran Hameed is the operation manager at the BOP Wah. He oversees the working and operations of all the departments. He reports to branch manager and all the staff works under him. He is responsible for:
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Preparation of expense budget Review of all activity reports on a regular basis Ensuring check and control system Ensuring satisfactory customer service Ensures fulfillment of SBP and all other regulations Assigns duties and tasks to the staff Account opening Department: BOP, which is commercial banks, deposit accounts as they are the primary source of funds. The BOP Wah branch offers three types of deposit accounts to its customers, which are namely: 1. Current deposit account(CD) 2. Profit and loss sharing account(PLS) 3. Basic business account(BBA)
1. Current deposit account(CD):
The characteristics of this account are as follows: Minimum amount to open this account is Rs.125 No zakat deduction If deposited amount is below than Rs.10,000 then deduction of Rs.50 service charges per month No interest payment on this account
2. Profit and loss sharing account (PLS):
The features of this account are as follows: Minimum deposit amount of Rs.125 Page | 24
Zakat deduction on this account No service charge deduction even if deposited amount is below than Rs.10,000
3. Basic business account(BBA):
Following are the features of this account: Minimum start up deposit amount of Rs.1000 Can do two transactions per month i.e. either deposit or withdrawal No zakat deduction No interest payments No deduction of service charges even if deposited amount is less than Rs.10,000
Remittances Department: It is very important department of the bank. Remittance is a transfer of funds from one place to another or from one person to another. The BOP deals with the following type of remittances: Demand Draft (DD) Mail Transfer (MT) Telegraphic Transfer (TT) Pay Order Demand draft (dd): The demand draft is a written order that is given by the one branch of a bank on behalf of customer to another branch of the same bank to a certain amount to the certain person Page | 25
Mail transfer (mt): it is the transfer of money from one branch to another branch of the same bank through mail service is called mail transfer. Telegraphic transfer (tt): The most urgent method of remitting money from one place to another place. It is used when the sender desires to send urgently.
Pay order: Pay order is a written order issued by the bank on its own branch, payable by itself to pay a specified sum of money to the person. The purpose of pay order is to transfer the fund from one place to another Bills Remittances Department: This department deals with the collection of various utility bills like WASA, SNGPL, LESCO, and PTCL. This department facilitates people by providing them with the opportunity of submitting their bills with much ease. The bank earns a commission of Rs.2 per bill on the submission on each sort of these bills. Clearing Department: The BOP Wah branch also has clearing department where they collect cheques on behalf of customers, arrange the lot, send it to main branch of BOP from where they are sent to SBP clearing house. In this clearinghouse, the representatives receive their cheques and go back to their bank's main branch. Later on, the main branch sends these cheques to their relevant branches where the validity of these cheques is verified and the accounts of the relevant clients are affected.
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CHAPTER # 05 WORK DESCRIPTION
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WORK DESCRIPTION Learning as an Internee: I did my eight weeks internship in Bank of Punjab Wah Cantt branch, during the summer breaks.
Operations at BOPBranch: There are four main departments in BOP Wah branch 1. Account opening department 2. Remittances department 3. Clearance department
During my internship I mostly I worked in account opening department and opened the account of people in BOP which includes PLS account, current account and basic business account. I observe the working of all other departments and from which what I am able to understand, is below in the detail: Account Opening Department: It is very important department because of daily or monthly transaction people need to open their account. I am going to briefly explain the account opening procedure. As following are the requirements for account opening in BOP: Basic Requirements for Account Opening:
Copy of ID card of the individual. Verification of ID card from NADRA. ID card copy (mothers) ID card copy (kins) Copy of electricity bill or gas bill.
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Witness (guarantor) who should already have an account in the bank (for minor account holder). For salary individual, copy of pay slip Cheque book would be issued after 4-5 days Letterhead pad and stamp in case of a account for business/ organization Account opening procedure: Firstly account opening form is filled All required documents attached to the form Signature on form is taken by the person whose account is going to be open and on Specimen Signature Card (SSC) Signature of operation manager and branch manager Account opening form number is registered in record Authentication( generation of account number in system) done by operation manager Deposit slip handed over to customer Customer submit a copy of deposit slip on cash counter After one week issuance of cheque book. ATM and E-banking Services provided on option Formalities of account opening: Verysis, that is authentication of the individuals ID card from NADRA NAB, FAQ authentication KYC(Know your customer) analysis Issuance of Letter of Thanks on behalf of manager to the customer SSC scanned and uploaded in system in the customer account option.
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Bills Remittances Department: This department deals with the collection of various utility bills like PTCL, WASA, SNGPL, and LESCO. In addition this department also collects the annual fee payments of local schools and colleges. The bank earns a commission of Rs.2 per bill, and commission on fee collection is also earned. The records of all the bills and fee payment are maintained in the system of the bank.
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CHAPTER # 06 SWOT ANALYSIS
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SWOT ANALYSIS
SWOT analysis is done to measure or find out the strength, weaknesses, opportunity and threat of business venture or any project. This explains the favorable and unfavorable internal as well as external factors to achieve to objectives. The SWOT stands for the internal Strengths and Weaknesses of a business and environmental Opportunities and Threats faced by the business. This is based on the logic that an effective strategy maximizes the business strengths and opportunities and at the same time minimizes its weaknesses and threats. Environmental and industry analysis provide the information to identify key opportunities and threats of the firms external environment. Here with a particular reference to BOP, I am going to discuss the concept of SWOT analysis. STRENGTHS Biggest customer of BOP: The Government is the biggest customer of BOP. Bank handles all the transactions related to government. Act on the behalf of government for the daily money related
transactions. Pay money to other on the behalf of government and take money as well. Excellent customer services: The behavior of all the staff with the customer is very helpful and supportive. The customer is made to feel privileged and superior by treating them in a friendly fashion. ATM facility: One of its strength is ATM facility which is now provided by BOP to its customers. Due to this ATM machine installation, customer feels comfortable because he dosent need to take his cheque book with him everywhere.
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Credit rating: BOP is one of a few banks who have very good long run and short run credit rating Large customer base: BOP is government bank so it is enjoying the benefit of customer satisfaction. Customer mostly relies on bop as compared to other banks as it is supported by government of Pakistan. They feel secure for transacting with the BOP. Therefore it has a large customer base. Online banking services: BOP also provides the facility of online banking to its customers, which is a huge advantage in todays fast paced and high technology environment Innovation: The bank enjoys a strategic competitive position due a variety of products and services over all domestic players by virtue of its leadership and technological innovations. WEAKNESSES Lack of Rewards and incentives: BOP Wah branch does not provides enough bonuses and incentives to its employees due to which they are not highly motivated to do their jobs. Lack of Advertising and Promotion: BOP has formulized a lot of products and services for its customers, even more than other commercial banks, but any advertisement on electronic media has not been seen
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Working atmosphere: The working atmosphere at BOP Wah branch is not cooperative or supportive. The employees do not freely share information, expertise or knowledge with each other. There is a lack of team spirit and synergy. Work distribution: In BOP Wah branch I observed that some of the employees are overworked, and have too much work load on them while the others dont have that much responsibility. The tasks and duties are not properly distributed. OPPORTUNITIES Foreign operations: Bank has no foreign branches so it should open its branches outside the country BOP has government back: As it has support of government. It should cash this opportunity by utilizing the support of government to improve its position in market y increasing its share and their value. Enhance branch network: BOP can enhance its local operations by increasing its branches across the country. Not only in urban areas but in rural areas as well THREATS Increase in competition: Private Banks is increasing in numbers day by day which results in competition. All the Page | 34
private banks are providing same facilities to the customers. So it is a big threat for BOP to deal with. Lack of promotion and advertisement: The lack of proper advertisement can seriously undermine the competitive position of the bank, as well as its image. Employee turnover: Lack of job security and job dissatisfaction can be a leading cause for employee turnover.
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MY LEARNING EXPERIENCE
This internship was done by me as a requirement for BBA. I did the internship for 42 days and enjoyed the practical work and also learned how to behave in work environment. Following are some of the things that I learned during the course of my internship: Dealing with customer Practical exposure of workplace reporting to the boss A useful experience for future job How to manage work that is I learned how to create work life balance
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CHAPTER # 07 FINANCIAL ANALYSIS
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FINANCIAL ANALYSIS Analysis is done to examine systematically, breaking a complex substance into small parts to gain a better understanding of it and studying the interrelations. Evaluating feasibility, performance as well as profitability of business or a project is called financial statement analysis or financial analysis. Professionals take information from the financial statements and other sort of reports to execute financial analysis, which is presented to top management. This helps management to making decisions. Analysis is done for different sort of clients, as creditors concern about liquidity of firm and investors concern about long term profitability of firm. The concern of the management is the overall financial health of the firm, in order to deal with the outside stakeholders and potential investors of the firm.
Financial Analysis of BOP: Following are the BOPs 5 years (2007-2011) data consisted of balance sheets and income statements. This data is taken from annual reports from the main website of BOP. Financial Analysis will include following analysis 1. Common size analysis Horizontal analysis Vertical analysis 2.Ratio analysis
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Bank of Punjab BalanceSheet (Consolidated) As at December 31, 2011
Assets Cash and Balance with treasury banks Balance with other banks lending to financial institutions Investment Advances Operating Fixed Assets Deferred tax Assets Other Assets Total Assets Liabilities Bills payable Borrowing Deposit and other Account Subordinated loans
Dec31,2007 14,210,302 1,927,662 2,450,000 73,461,693 133,899,143 3,252,759 5,789,116 234,990,675 937,647 17,842,915 191,968,377 -
Dec31,2008 10,685,058 2,178,455 633,333 22,689,608 131,724,113 3,471,838 8,388,162 6,122,406 185,892,973 1,219,801 12,278,773 164,071,732 30,632 4,564,481 182,165,419 5,287,974
Dec31,2009 13,043,705 2,185,782 1,053,550 57,923,172 121,303,368 3,427,267 11,921,146 5,770,905 216,628,895 875,618 14,040,014 190,858,087 19,907 4,700,569 210,494,195 5,287,974
Dec 31,2010 14,069,601 3,276,234 7,309,587 56,359,404 120,796,694 3,534,660 14,063,694 9,721,900 229,131,774 581,100 11,526,783 208,176,902 13,887 5,223,152 225,521,824 5,287,974
Dec31,2011 16,698,333 3,607,107 7,447,375 92,581,306 127,129,501 3,597,483 13,886,769 16,049,657 280,997,531 850,569 24,963,566 237,896,700 7,831 6,506,275 270,224,941 5,287,974
Liabilities against assets subject to finance lease 40,321 Deferred tax liabilities 2,205,530 Other liabilities 2,983,977 Total 215,978,767 Share Capital 4,230,379
Reserves Inappropriate profit Share deposit money Surplus on revaluation of asset Total Liabilities/O.E
7,427,232 3,468,956 3,885,341 19,011,908
7,427,232 (7,674,257) (1,313,395) 3,727,554
573,779 (10,372,082) 10,000,000 645,029 6,134,700
2,012,492 (14,411,509) 10,000,000 720,993 3,609,950
1,914,956 (14,067,841) 17,000,000 637,501 10,772,590
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Bank of Punjab Profit and Loss Statement
Years Mark-up/return/interest earned Mark-up/return/interest expenses Net markup/interest income provision against loans and advances provision for diminution in the value of investment
Dec31,2007
Dec31,2008
Dec31,2009
Dec31,2010
Dec31,2011
17,539,538 13,939,377 3,600,161 1,616,421
17,752,652 16,614,000 1,138,652 18,863,580
15,640,701 19,022,494 (3,380,662) 9,241,653
18,217,583 18,801,642 (584,059) 559,604
20,682,061 21,073,271 (391,210) (3,164,234)
24,479
388,757
955,744
2,767,341
576,597
Bed debts
246,869
1,887,769
19,252,337 (18,113,685)
10,197,397 (13,579,190)
3,326,945 (3,911,004)
(2,587,637) 2,196,427
Mark-up income after provisions Non Markup/Interest Income Fee, income Dividend income Income from dealing with Foreign Currency Sales and redemption of securities Unrealized gain/ loss on revaluation of investment Other income commission and brokerage
1,712,392
659,488 1,812,870
579,520 2,025,160
657,114 920,943
562,469 404,111
724,499 286,375
377,233 2,039,535
324,327 733,787
247,570 (124,238)
134,488 293,303
160,089 330,025
547,635
526,186
(1,193) 518,553
18,020 473,055
(5,383) 494,103
Total No mark-up/interest income
5,436,761
4,188,980
2,218,749
1,885,446
1,989,708
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Non Mark-up/Interest Expense Administrative expenses Other provisions Provision obligation Other charges Total non markup/interest expenses against off B/Sheet
7,149,153 2,255,342 -
(13,924,705)
(11,360,441) 3,038,357 -
(2,025,558) 3,435,049 -
4,186,135
2,808,835 10,101
3,959,217
1,121
292 37,950 2,293,584
114,700 2,933,636 (16,858,341
794 3,039,151
740,000 1,605 4,176,654
(244,111)
205 3,716,432
Profit before Taxation Taxation current -prior year -deferred
4,855,569 170,700 (19,921) 250,772 401,551
) 207,600 1,052,000 (8,033,001) (6,773,401)
(14,399,592) 78,491 (4,383,406) (4,304,915)
(6,202,212) 1,461 (2,157,119) (2,155,658)
469,703 5 174,774 174,779
Profit after taxation
4,454,018
(10,084,94)
(10,094,677)
(4,046,554)
294,924
Common Size Analysis In the common size analysis vertical and horizontal analysis is performed. In the vertical analysis an item like total asset or net sales is taken as base value and all other values are compared to this value by dividing them from this base value. In the horizontal analysis one year is taken as base year and all other years data is compared with value by dividing the all years value by the base year values. I have done the following horizontal and vertical analysis of five years from 2007 to 2011 with the help of consolidated statements. Horizontal Analysis Vertical Analysis
Page | 41
Horizontal Analysis of Balance Sheet

Assets Cash and balance Balance with other banks Lending to financial institutions Investment-net Advances-net Operating fixed assets-net Other Assets-net Total assets Liabilities Bill payable Borrowings Deposits and other accounts Liabilities against assets subject to 100% 100% 100% 100% 76% 153% 85% 50% 158% 98% 35% . 175% 105% 20% . 218% 126% 100% 100% 100% 131% 69% 86% 94% 79% 100% 62% 65% 109% 91% 140% 124% 2007 100% 100% 100% 100% 100% 100% 100% 100% 2008 76% 114% 26% 31% 99% 107% 106% 80% 2009 92% 114% 43% 79% 91% 106% 100% 93% 2010 99% 170% 299% 77% 91% 109% 168% 98% 2011 118% 188% 304% 126% 95% 111% 278% 120%
finance lease Deferred tax liabilities Other Liabilities Total liabilities Owners Equity Share capital Reserves Inappropriate profit
100% 100% 100%
125% 100% (222%)
125% 8% (299%)
125% 28% (416%)
125% 26% (406%)
Surplus on revaluation of assets-net of tax Total O.E
100% 100%
(34%) 20%
17% 33%
19% 19%
17% 57%
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INTERPETATION: Horizontal analysis or trend analysis, in which values of balance sheet over a definite period of time. In the above table base year is 2007 as base year and divide the next four years with base year. The analysis shows the increasing and decreasing trend of each item with respect to the previous year.
Horizontal Analysis of Income Statement

Particulars Mark-up/return/interest earned Mark-up/return/interest expensed Net mark-up/interest income Provision against non-performing loans and advances Provision for diminution in the value of investments Bad debts written off directly Net mark-up/interest income after 100% (1058%) (793%) (229%) 129% 100% 100% 1589% 3905% 11305% 2356% 100% 1167% 572% 35% (196%) 2007 100% 100% 100% 2008 102% 120% 32% 2009 90% 137% (94%) 2010 104% 135% (17%) 2011 118% 152% (11%)
provisions Non Mark-Up/Interest Income Fee commission and brokerage income Dividend income Income from dealing in foreign currencies Sales and redemption of securities Unrealized gain on revaluation of
100% 100% 100% 100%
88% 112% 86% 36%
100% 51% 66% (7%)
86% 23% 36% 15%
110% 16% 43% 17%
investments classified as held for trading Other income-net Total non-mark-up/interest income Non Mark-Up/Interest Expenses Administrative expenses (Reversal) / Other provisions Provisions against off balance sheet items
100% 100% 100%
97% 78%
95% 41%
87% 35%
91% 37%
100% 100% 100%
125% -
135% -
153% -
176% -
253425% (83600%)
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Other charges Total non-mark-up/interest expenses Profit Before Taxation Taxation current year Taxation Prior years Taxation Deferred
100% 100% 100% 100% 100% 100%
303% 128% (348%) 122%
3% 133% (297%) -
5% 183% 128% (8%)
0.54% 162% 10% (0.02%) 70%
(5821%) (394%)
(3204%) (1748%) (861%)
Profit After Taxation Inappropriate profit brought forward Profit available for appropriation Basic and diluted earnings per share-after tax
100% 100% 100%
(227%)
(227%)
(91%)
7%
100%
INTERPETATION: Horizontal analysis or trend analysis, values of a base year are compared of Income Statement over a definite period of time. In the above table base year is 2007 and I divide the next four years with base year. This analysis shows the increasing and decreasing trend of each item with respect to previous year.
VERTICAL ANALYSIS
Vertical Analysis of Balance Sheet

Particulars Assets Cash and balance with treasury banks Balance with other banks Lending to financial institutions Investment-net Advances-net Operating fixed assets-net Deferred tax assets 6.04% 0.82% 1.04% 32% 57% 2% 5.74% 1.17% 0.34% 12.3% 71% 1.9% 4.51% 6.02% 1% 0.48% 27% 56% 1.58% 5.5% 6.14% 1.42% 3.19% 25% 53% 1.54% 6.13% 5.94% 1.28% 2.65% 33% 45.2% 1.28% 4.94% 2006 2007 2008 2009 2010
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Other Assets-net Liabilities Bills payable Borrowings Deposits and other accounts Liabilities against assets subject to
3%
3.3%
2.7%
4.24%
5.71%
0.4% 8% 82%
0.65% 6.6% 89%
0.40% 6.48% 88%
0.25% 5.03% 91%
0.30% 8.8% 85%
financial lease Deferred tax liabilities Other Liabilities Total liabilities Share capital Reserves Inappropriate profit Share deposit money Surplus on revaluation of assets-net of tax Total equity
0.01% 0.94% 1.3% 92% 1.9% 3.1% 1.47% 1.65% 8.09%
0.01% 2.5% 98% 3% 4% (4.12%) 0.70% 2%
0.91 2.16% 97% 2.44% 0.264% (4.78%) 4.61% 0.29% 2.83%
0.60% 2.27% 99% 2.30% 0.87% (0.28%) 4.36% 0.31% 1.57%
0.27% 2.31% 96.1% 1.88% 0.68% (5%) 6.04% 0.22% 3.83%
INTERPRETATION: In vertical analysis I divided all the items by total assets to measure the contribution of each item in companys asset side. In the liability side, I also measure the percentage of items in liability and owners equity by dividing the entire liability side items by total liability and owners equity. Vertical Analysis of Income Statement
Particulars Mark-up/return/interest earned Mark-up/return/interest expenses Net mark-up/interest income Provision against non-performing loans and advances 9.21% 106.20% 59.00% 2007 100% 79.40% 20.52% 2008 100.00% 94.00% 6.40% 2009 100.00% 122.00% 2010 100.00% 103.20% 2011 100.00% 102.00% -
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Provision for diminution in the value of investments Bad debts written off directly Net mark-up/interest income after provisions Non Mark-Up/Interest Income Fee commission and brokerage income Dividend income Income from dealing in foreign currencies Sales and redemption of securities Unrealized gain on revaluation of investments classified as held for trading Other income-net Total non-mark-up/interest income Non Mark-Up/Interest Expenses Administrative expenses (Reversal) / Other provisions Provisions against off balance sheet items Other charges Total non-mark-up/interest expenses Profit Before Taxation Taxation current year Taxation Prior years Taxation Deferred 13.00% 0.16% 0.21% 13.07% 28.00% 0.97% 1.42% 16.00% 0.05% 0.64% 17.00% 1.16% 19.40% 0.50% 19.43% 19.00% 4.06% 0.88% 23.00% 19.40% 0.54% 0.09% 18.00% 2.27% 0.24% 0.84% 3.12% 31.00% 2.96% 3.30% 0.09% 0.02% 2.38% 9.60% 3.76% 10.33% 2.15% 11.62% 3.26% 11.40% 1.82% 4.13% 4.20% 6.00% 1.60% 3.08% 2.20% 0.73% 1.60% 3.50% 1.38% 0.51% 1.59% 0.13% 1.40% 9.70% 2.18% 6.11% 15.19% 2.78% 10.61%
Profit After Taxation
25.39%
1.40%
Page | 46
INTERPRETATION: In vertical analysis I divide all the items of income statement by total markup/interest earned in order to measure the contribution of each item in companys Total sales. The analysis indicates the contribution of all income statements item in overall companys sales. RATIO ANALYSIS The ratio is a relationship between two numbers of the same kind or one number expressed in terms of another. This analysis is a tool used by individuals to conduct a quantitative analysis of information in a company's financial statements. The ratios that are calculated are as follows:
Debt to Equity ratio
year 2007 2008 2009 2010 2011
Ratio 14.27 36.13 38.34 78.06 26.95
Page | 47
INTERPRETATION: This ratio compares the total debt with the total shareholder equity. The lower this ratio, the better the company's debt position. This ratio for BOP is low in 2002 which indicates a good position of the bank but it increases substantially from 228 to 2010 up til 2011 where it finally drops indicating a sound debt paying ability of BOP.
Debt to total assets
years 2007 2008 2009 2010 2011
calculation 91.90% 97.99% 97.16% 98.42%9 96.20%
Page | 48
INTERPRETATION: The debt to total asset measures the firm's long term debt paying ability. It indicates how much of the total portion of assets is financed by debt. The debt ratio of BOP is high which shows that most of its assets are financed by debt and it has high risk because the lower the debt paying ratio the better the is the position of an organization which is not the case with BOP. It can be seen that the ratio is very high in all years. Advances to total assets
years 2007 2008 2009 2010 2011
Ratio 56.98% 70.86% 55.99% 52.71% 45.25%
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INTERPRETATION:
This ratio shows the what is the portion of loans and advances in the total assets of the bank. Through the years we can see that advances significantly increased from 2007 to 2008 but after 2008 there is a continuous fall in the amount of advances, which depicts that the total assets of the bank are declining
Return on investment
Years 2007 2008 2009 2010 2011
ratio 31.26% 12.20% 26.73% 24.59% 32.92%
Page | 50
INTERPRETATION:
Investment to total assets is basically indicates the portion of total assets used for invest in different venues. This ratio is useful for banks.This ratio shoes mix trends. It kept fluctuating during different years. In 2007 it was high than it decreased during the next three years, but again increased in 2011
Advances turnover
Years 2007 2008 2009 2010 2011
Ratio 13.09% 13.47% 12.89% 15.08% 16.27%
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INTERPRETATION:
Advances turnover indicates the interest earned with respect to advances. How much the bank received interest from general public and how much advances gets from general public. This ratio shows that the interests earned by the bank significantly increased in all years except in 2009 in which it was less as compared to other years. Otherwise it kept on increasing till 2011.
Earning assets to total assets
Years 2007 2008 2009 2010 2011
Ratio 95.06% 88.86% 89.05% 86.94% 86.93%
Page | 52
INTERPRETATION: This ratio shows how well bank management puts bank's assets to work. High performance banks have high ratios.The ratio is quite good for all the five years that is above 85% which shows that BOP has good performance in the last five years
Interest margin to average earning assets
Years 2007 2008 2009 2010 2011
ratio 1.61% 0.689% -1.75% -0.29% -0.61%
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INTERPRETATION: This ratio is the determinant of bank's profitability because it provides an indication of management's ability to control the spread between interest income and interest expenses.This ratio is not interpretable as the ratios in negative values do not provide any meaningful analysis.
Equity capital to total assets
Years 2007 2008 2009 2010 2011
Ratio 6.43% 2.71% 2.53% 1.26% 1.07%
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INTERPRETATION:
This ratio measures the extent of equity ownership in the bank It provides a cushion against the risk of using debt and leverage.The ratio declines from 2007 to 2011 which is not a good indicator and shows that the bank is at more risky position than the previous years.
Deposit times capital
Years 2007 2008 2009 2010 2011
Ratio 12.69 times 32.54 times 34.76 times 72.05 times 78.68 times
Page | 55
INTERPRETATION:
This ratio indicates a bank's debt position. More capital indicates greater safety margin and higher deposit indicates more money available for investment purpose. The higher this ratio the better the position of the bank. The ratio significantly rises from 2007 to 2011 which is an indicator of BOP sound position
Loans to deposits
Years 2007 2008 2009 2010 2011
ratio 80.69% 86.85% 70.72% 68.62% 63.76%
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INTERPRETATION: This is a type of debt coverage ratio. The lower this ratio the better it is for the bank from risk standpoint.The ratio decreases from 2007 to 2011 in which it falls down to 60% from 80% percent, indicating a sound position of the BOP
Current ratio
Years 2007 2008 2009 2010 2011
ratio 3.11 3.13 3.12 3.37 2.65
Page | 57
INTERPRETATION:
This ratio measures the ability to pay the current financial obligations. The higher the ratio the better is the ability of the bank to meet it's current financial obligations. The ratio is fairly well for all; years except for 2011 in which there is a bit of drop in it, depicting a decrease in the BOP ability to meet it's current obligations
Cash and balance with banks to total assets
Years 2007 2008 2009 2010 2011
Ratio 6.86% 6.91% 7.03% 7.57% 7.22% Page | 58
INTERPRETATION: This ratio indicates the portion of assets that is made up by cash and balances in other banks. Over the years it can be seen that the ratio increases which is an indicator of increase in the bank's total assets
Total deposits and other accounts to total assets
Years 2007 2008 2009 2010 2011
Ratio 81.69% 88.26% 88.1% 90.85% 84.69%
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INTERPRETATION: The ratio shows what percentage of total assets comprises total deposits and other accounts. The ratio increased significantly from 2007 to 2008 then dropped slightly in 2009 after which it increased in 2011 and then declined in 2011.
Sales to working capital
Years 2007 2008 2009 2010 2011
Ratio 19.23times 25.05times 17.89times 18.11times 19.25times
Page | 60
INTERPRETATION: This ratio indicates how efficiently the working capital is used in order to generate profits or sales. A low working capital ratio indicates the unprofitable use of the working capital. The analysis shows that the working capital ratio for the year 2007 and 2008 was good but it declined in the following years but it again went up in the year 2011 which shows that the bank is efficiently utilizing its working capital
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CHAPTER # 08 CONCLUSION AND RECOMMENDATION
Page | 62
RECOMMENDATIONS
After doing internship at BOP Wah I think that it is playing a vital role in serving our country by providing numerous kinds of services. BOP is significantly contributing in the economy of our country. But by removing certain flaws and weaknesses and improving certain factors it can play a more effective role in serving the nation. Hence following are some recommendations made by me based on my observation. Rewards and incentives for employees Employees should be given more attractive salary packages as well as bonuses and promotions in order to boost their morale. Advertisement More efforts regarding advertisement as well as promotion should be made so as to create an image and position in the market, and create awareness about the products and services of BOP Working atmosphere The workplace environment should be friendlier with open communication and sharing of ideas as well as expertise at BOP Wah. Team work should be promoted. Enhance branch network BOP can enhance its business by extending its branch network across other cities as well. Currently it has branches in all major cities but not in the mediocre or small cities. Foreign operations BOP can also expand its business by opening its branches abroad.
Page | 63
CONCLUSION
In this report I have tried to analyze all aspects of the Bank of Punjab. The factors that are in favor of this bank and can add value in this bank are that it has numerous products as well as services to offer its customer and attract a large customer base due to this component of variety of offerings. It has full fledged support of the government of Punjab on its back who also supported it right from the start. Customers have faith trust on the bank because of its services as well as the support of government. On the other hand BOP is not exerting much effort in marketing and promoting its products and offerings. It can attract a larger customer base by exerting more advertising efforts. Then it is not focusing well on its employees .The employees are not offered attractive salary packages and are not recognized and appreciated enough, which is extremely important to boost employee morale and enhance job satisfaction as well as to keep them motivated. So BOP should focus on this component for further progress and prosperity.
Page | 64
REFERENCES www.bop.com www.google.com Bank Manual Annual Reports
Page | 65

Final Internship Report On Bop New 2003

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An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

CHAPTER # 01 COMPANY BACKGROUND

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

CHAPTER # 02 OVERVIEW OF ORGANISATION

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

CHAPTER # 03 BUSINESS OPERATIONS

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

CHAPTER # 04 DEPARTMENTS IN BOP

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

BOP Branch, Wah Cantt Detail:

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

1. Current deposit account(CD):

2. Profit and loss sharing account (PLS):

An Internship Report on Bank Of Punjab

3. Basic business account(BBA):

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

CHAPTER # 05 WORK DESCRIPTION

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

CHAPTER # 06 SWOT ANALYSIS

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

CHAPTER # 07 FINANCIAL ANALYSIS

An Internship Report on Bank Of Punjab

An Internship Report on Bank Of Punjab

Bank of Punjab BalanceSheet (Consolidated) As at December 31, 2011

7,427,232 3,468,956 3,885,341 19,011,908

7,427,232 (7,674,257) (1,313,395) 3,727,554

573,779 (10,372,082) 10,000,000 645,029 6,134,700

2,012,492 (14,411,509) 10,000,000 720,993 3,609,950

1,914,956 (14,067,841) 17,000,000 637,501 10,772,590

An Internship Report on Bank Of Punjab

Bank of Punjab Profit and Loss Statement

17,539,538 13,939,377 3,600,161 1,616,421