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03 November 2011

Internship Report Dubai Islamic

Bank For (B&F) Students

ACKNOWLEDGEMENT

First of all I am thankful to

"ALMIGHTY ALLAH" Who gave
me the strength, patience,
courage and enthusiasm needed
to write and complete this report,
and countless salutations to
upon the Holy Prophet
Muhammad (PBUH), the sea of
knowledge who has guided His
Ummah to seek knowledge from
cradle to grave.     
Then to my friends who assisted
me in this effort and we worked
daylong to accomplish this
assignment. I have a debt of
gratitude to all my teachers who
taught me throughout my
academic career.
The preparation of this report
was a massive undertaking but
the highly competent and
experienced bankers of DIBPL,
F-10 Markaz Branch Islamabad
provided me with all assistance,
information, advice and
suggestions that I needed which
contributed importantly to this
report.

                                                     
                 
                                                      
                                 
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1. EXECUTIVE
SUMMARY

As per the requirements for the

degree of MBA at AIOU, I got an
opportunity to get eight weeks
internship exposure. Dubai Islamic
Bank, F-10 Markaz, Islamabad
provides me the chance to have this
experience with a prestigious
institution. During my internship I
was rotated in the various
departments in order to get in depth
idea of how the bank functions. This
report thoroughly outlines and
explains my observations, findings
and analysis and my knowledge of
the banking sector in general and
Dubai Islamic Bank in particular.

In this report, there is an introduction

of Dubai Islamic Bank. In
introduction, there is history of Dubai
Islamic Bank, strong commitment
and loyal service, highly trained
professionals, and credit rating. The
report also includes the details of the
products offered by DIBPL which
includes Takaful plan and other
Islamic Compliance products. This
report also focuses the general
banking of DIBPL which includes
Cash department, Remittances
section, Account opening, Debt
cards etc.

Subsequent to it this report contains

my experience and learning that
what I have learned from this
internship and what was my
experience regarding this internship.
The report also contains my analysis
that I scrutinize in the organization
by using two method SWOT and
Financial analysis. With the help of
these methods I have some
suggestions and recommendations
to improve the performance of the
Bank, which also mentioned in this
report. By following these
suggestions bank can improve their
product market and can easily gain
the attraction and satisfaction of
customers. Not only the customers,
bank also can improve the
satisfaction and performance level of
its employees by these suggestions.

 2. OBJECTIVES OF
STUDYING THE
ORGANIZATION

Overview

After the completion of degree MBA

(Banking & Finance) I want to enter
and check the practical work
according to my specialization. For
that purpose I selected the banking
sector because I have done
specialization in banking and
finance.
Second and next main objective of
studying organization; I want to enter
in practical field and want to learn
that which discipline is required for
leading a successful future life. I
think I am very lucky person that I
selected Dubai Islamic Bank as my
learning organization.

 Objectives
that I want
to achieve

Objectives that I want to achieve by

studying the organization are as
follows:
● First of all I want to check the
practical work according to my
degree specialization. During
my internship in Dubai Islamic
Bank I have learnt that how to
use the knowledge in practical
field.
● Secondly I want to learn that
how to mange an organization
and how to mange the finance
for a financial organization, as
my degree is related to
Financial Management and
Banking and Finance.
● Customers dealing is another
major objective that I want to
achieve. During my internship
I learnt that how to deal with
 customer.
● Financial institution is a place
where every type of
businessmen visits, so during
my internship in DIBPL I met
with many businessmen and
learnt that how different
businesses run.
● And another main objective
that I want to achieve that how
an organization consist with
different departments and how
different functions are done in
different departments of an
organization.
Through this internship I learned
many things. It was a great
experience for me to
comprehend the working
environment. During this period I
face different types of working
conditions, which will help me to
know that, how to handle these
conditions in future. Through this
internship I am able to do work in
all departments of Bank because
I know all rules, policies, and
responsibilities, which mentioned
in DIBPL departments and
products of these departments
so I achieved 80% of my
objective

                3.
OVERVIEW OF
THE
ORGANIZATION
Dubai Islamic Bank is the
leading Islamic bank operating in
Pakistan. Its balance sheet size
is improving with the passage of
time. It has redefined its role and
has moved from a public sector
organization into a modern
Islamic bank. The Bank's
services are available to
individuals, corporate entities.
While it continues to act as
investor of public funds and it
has diversified its business
portfolio and is today a lead
player in the debt equity market,
corporate investment banking,
retail and consumer banking,
treasury services and is showing
growing interest in promoting and
developing the country's small
and medium enterprises and at
the same time fulfilling its social
responsibilities, as a corporate
citizen.
In today's competitive business
environment, DIBPL need to
redefine its role and shed the
public sector bank image, for a
modern Islamic bank. It is listed
in Securities and Exchange
Commission of Pakistan in 2006.
Dubai Islamic Bank is today a
progressive, efficient, and
customer focused institution. It
has developed a wide range of
consumer products, to enhance
business and cater to the
different segments of society.
Some schemes have been
specifically designed for the low
to middle income segments of
the population.
It has taken various measures to
facilitate overseas Pakistanis to
send their remittances in a
convenient and efficient manner.
More recently it has started
Electronic Home Remittances
Project. This project introduces
technology based system to
handle inward remittances
efficiently, by ensuring that the
Bank's branches keep a track of
the remittance received from
abroad till its final receipt. A
number of initiatives have been
taken, in terms of institutional
restructuring, changes in the field
structure, in policies and
procedures, in internal control
systems with special emphasis
on corporate governance,
adoption of Capital Adequacy
 Standards under Basel II
framework, in the up gradation of
the IT infrastructure and
developing the human resource.
Dubai Islamic Bank has built an
extensive branch network with 36
branches in Pakistan.  The
Bank's financial performance has
been remarkable. In 2006, total
assets are estimated at Rs
8434280000, while deposits
have grown to nearly Rs
4322621000. The increase in
profit was achieved through
strong growth in core banking
income. The Bank maintains a
sound loan portfolio diversified in
nature to counter the risk of
credit concentration.

 3.1 HISTORY OF
DUBAI ISLAMIC
BANK PAKISTAN
LTD.

Thirty years ago Dubai Islamic Bank

created history by becoming Worlds
first Islamic Bank. Today Islamic
Banking has become one of the
fastest growing economic sectors
with over 300 financial institutions;
with assets estimated over at 300
billion US Dollar providing Islamic
Financial Services. Despite huge
growth to the sector DIB is continued
to be the pioneer and leader to date.
Since its inception DIB has evolved
retail bank to a fully fledged bank
catering to almost all the
requirements of the customers in
providing to Sharia Compliant
solutions locally and internationally.
It has constantly upgraded its
services to individuals and
companies who always remain a
valuable asset.
By combining the best Islamic
traditional values with high standards
technology and innovation, DIB is
committed to comply with not only
fully transactions of financial
dealings. DIB is also committed to
provide customer-satisfaction
oriented job.
For its outstanding performance and
contribution for Islamic financing,
DIB received the best Islamic Bank
award in the Middle East Award
2006; by both Euro moneys Islamic
Finance Weekly and Gulf Wealth
Forum. DIB has also awarded the
bank of the year 2006 Banker
Awards.
DIBPL has started its operations
since 2005. At that time the scale of
business and number of branches
were very short. But just within the
time period of five years, now DIB
has an extensive network of
branches, a wide range of Islamic
Compliant Products, well-managed
communication system and good
return from operations.

                  3.2
Nature of the
organization

Dubai Islamic Bank Pakistan Ltd. is a

public Organization. It implements
the policies of SBP. Its basic
objective is to maximize the profit. It
has major impacts on Pakistan
economy with special emphasis on
fostering Pakistan's economic
growth through aggressive and
balanced lending policies,
technologically oriented products
and services offered through its
network of branches. It deals with
Revenue, collection and payments of
salaries. It is a complete Islamic,
retail and corporate bank as well.
The Dubai Islamic Bank is an Islamic
institute which offers a variety of
products according to the Sharia
principles and instructions. All the
products and services are regulated
by Sharia Board. If they find
someone violating the rules, they
penalize. The Dubai Islamic Bank
makes different adjustments to
update business operations.
The Bank has also played an
important role in financing the
country’s growing trade, which has
expanded through the years as
diversification took place. Dubai
Islamic Bank Pakistan Ltd. maintains
its position as Pakistan's one of the
premier bank determined to set
higher standards.
3.3 bUSINESS VOLUME

Dubai Islamic Bank’s business volume

is expanding day by day and now it
becomes leading bank of the Islamic
Banking Sector. The authorized
capital of the Bank is Rs.6776 million
divided into ordinary shares of Rs 10
each. The Bank is a subsidiary of
Dubai Islamic Bank PJSC, UAE (The
holding Company).

 FIVE Years
performance of DIB
                                   
Table: Business Volume
Years 2 2 2 2 2
0 0 0 0 0
0 0 0 0 0
5 6 7 8 9
Total Assets 4 8 2 3 3
9 4 1 2 5
7 3 3 0 3
4 0 5 6
8 0 8
Deposits (Rs - 4 1 2 2
in Million) 3 6 5 7
2 1 4 9
2 1 5 8
4 9 1
Advances (Rs - 3 1 1 2
in Million) 2 1 8 0
7 3 0 5
4 4 7 9
8 4 0
Investments     8 2 3 2
   3 9 0 8
- 3 7 1 2
4 9 3
Shareholder' 4    5 6 6
Equity 1 3 1 0 7
8 9 2 1 7
1 6 8 6
7
Pre-Tax - - - - 3
Profit/ (Loss) 6 5 2 5
(Rs in Million) 3 6 7 2
3 8 2
After-Tax - - - - 2
Profit/ (Loss) 4 3 1 7
(Rs in Million) 1 6 8 7
2 9 2
Earning Per - - - - 0
Share (Rs) 2 0 0 .
. . . 3
 0 8 3 8
9 9 5
Number of 5 1 1 2 3
Branches 0 7 5 6
Number of 1 2 3 4 7
Employees 2 2 5 7 2
0 5 0 0 2

Source: DIB annual report

2009

DIBPL top line (operating revenue) is

352 million in 2009 which is showing
a unique achievement of this
organization. In 2008, the DIB was
suffering loss of 272 million due to
heavy investment in infrastructure
and other resources. DIB has
improved its growth by over 200%. In
2007, the bank was suffering a loss
of 568 million which is more than
twice from 2008. These trends show
that how efficiently and effectively
working and improving its standards
by offering a wide variety of Islamic
Compliant products and by bringing
innovations. Despite of profitability
trends, here we can also see the
flow of deposits, advances and
investment. The earning per share
loss is recovered by the bank with
very rapid approach.

3.4 NUMBER OF
 EMPLOYEES
DESIGNA NO OF
TION EMPLOYE
ES
President 1
1
Senior
1
Executive vice
president 1
1
Executive vice 36
president
36
36
Vice president
15
36
Assistant vice
president 20
15
Branch 36
Manager
80
75
Manager
Operations 50
68
Credit Manager 94
95
Manager _______
 Finance 722

Manager
Marketing

Manager
Foreign
Exchange

Manager
Consumer
Finance

Legal Advisor

IT Officer

Cash Officer

Accounts
Officer

Clearing Officer

BDO
Teller
TOTAL
Figure:  organization
chart of DUBAI
ISLAMIC BANK
Pakistan LTD.

designation for higher level

office
president

🡻
senior executive vice
president

🡻
executive vice president

🡻
vice president

🡻
assistant vice president

🡻
GRADE I OFFICER
 🡻
GRADE II OFFICER

🡻
GRADE III OFFICER

3.5 PRODUCT LINES &

SERVICES

3.5.1 Products of dibpl:

Products of bank include all those

services which a customer can use
effectively in his general and
business. Dubai Islamic Bank
Pakistan Ltd. F-10 Markaz branch
offers a wide range of banking
services to public and private sector
corporations, partnerships,
individuals and others.
3.5.1.1 Current Account
Dubai Islamic Bank Pakistan Ltd. is
offering current account facility for its
valued customers. This type of
account is suitable for businessmen
and those customers who need
financing with regular intervals.
Because they make receipts and
payments in large quantity.

3.5.1.2 Regular Savings

Account
DIBPL is offering another type of
account which is named by regular
savings account. DIBPL is paying
profit on this type of account
according to volume of deposit. And
another attracting option is that profit
is offered on monthly, quarterly,
semi-annually and annually basis. 

3.5.1.3 Saving Plus Account

Another type of account which
DIBPL is offering is saving plus
account. On this type of account
DIBPL is giving profit on
comparatively higher rates than
regular. 

3.5.1.4 Saving Special

Account
This is another type of account is
offering by DIBPL to facilitate its
valued customers. This type of
account has some special
characteristics as compared to
regular and plus. The profit margin is
higher than other types of accounts.

3.5.1.5 Fixed Deposit/ Term

Deposit
DIBPL is offering fixed deposit account
according to the Sharia principles. Here
in fixed deposit account deposited
amount is invested and finally share of
profit or loss is distributed between bank
and customer.

Services of DIBPL

Services are output of the firm,

which are in intangible form and the
back bone of any organization to
earn profit. However, there are
some basic services which DIBPL,
F-10 branch at present offers to his
customers include:
❖▪ Receipts of customer's
deposits
❖▪ Collection of his cheques
drawn on other banks
❖▪ Making payments through
 cheques drawn on it
❖▪ Making remittances
❖▪ Foreign trade service

3.5.2 International
Banking

Dubai Islamic Bank Pakistan Ltd. is at

the forefront of international banking in
Pakistan, which is proven by the fact
that DIBPL has its branches in all of the
major financial capitals of the world.
Additionally, we have recently set up the
Financial Institution Wing, which is
placed under the Risk Management
Group. The role of the Financial
Institution Wing is: -
To effectively manage DIBPL exposure
to foreign and domestic correspondence
manage the monetary aspect of DIBPL’s
relationship with the correspondents to
support trade, treasury and other key
business areas, thereby contributing to
the bank’s profitability.

 3.5.2.1 DEMAND DRAFTS:

It is a safe, speedy and reliable way to

transfer money; customers can now
purchase DIBPL’s Demand Drafts at
very reasonable rates. Any person
whether an account holder of the bank or
not, can purchase a Demand Draft from
a bank branch.

3.5.2.2 MAIL TRANSFERS:

Money is safely and quickly moved by

using DIBPL Mail Transfer service. And
DIBPL also offered the most
competitive rates in the market.
3.5.2.3 PAY ORDER:
DIBPL provides another reason to
transfer money using its facilities. Pay
orders are a secure and easy way to
move money from one place to another.
And as usual, charges for this service are
extremely competitive.
 3.5.2.4 TRAVELER'S CHEQUES:
Negotiability: Pak Rupees Traveler’s
Cheques are a negotiable instrument.
Validity: There is no restriction on the
period of validity.
Availability: At 36 branches of DIBPL
all over the country.
Encashment: At all branches of DIBPL.
Limitation: No limit on purchase.
Safety: DIBPL Traveler’s Cheques are
the safest way to carry money.
3.5.2.5 LETTER OF CREDIT:
DIBPL is committed to offering its
business customers the widest range of
options in the area of money transfer. In
a commercial enterprise Letter of Credit
service is just what customers are
looking for. With competitive rates,
security, and ease of transaction, DIBPL
Letters of Credit are the best way to do
business transactions.

TRADE FINANCES &

OTHER BUSINESS
LOANS

3.5.3 CORPORATE
FINANCE:

3.5.3.1 Working Capital

and Short Term Loans:
DIBPL specializes in providing Project
Finance – Export Refinance to exporters
Pre-shipment and Post-shipment
financing to exporters – Running finance
– Cash Finance – Small Finance –
Discounting & Bills Purchased – Export
Bills Purchased / Pre-shipment.

3.5.3.2 Medium term loans

and Capital Expenditure
Financing:
DIBPL provides financing for its clients’
capital expenditure and other long-term
investment needs. By sharing the risk
associated with such long-term
investments, DIBPL expedites clients’
attempt to upgrade and expand their
operation thereby making possible the
fulfillment of our clients’ vision. This
type of long term financing proves the
bank’s belief in its client's capabilities,
and its commitment to the country.

3.5.3.3 Loan Structuring and

Syndication:

Dubai Islamic Bank Pakistan Ltd.

leadership in loan syndicating stems
from ability to forge strong relationships
not only with borrowers but also with
bank investors. Because syndicate
partners understand the asset criteria,
DIBPL help borrowers meet substantial
financing needs by enabling them to
reach the banks most interested in
lending to their particular industry,
geographic location and structure
through syndicated debt offerings.
Syndication capabilities are
complemented by capital strength and
by industry teams, who bring specialized
knowledge to the structure of a
transaction.
3.5.3.4 Cash Management
Services:
With DIBPL Cash Management
Services (in process of being set up), the
customer’s sales collection will be
channeled through networking of DIBPL
branched spread across the country. This
will enable the customer to manage their
company’s total financial position right
from desktop computer. They will also
be able to take advantage of outstanding
range of payment, ejection, liquidity and
investment services. In fact, DIBPL is
committed to provide everything, which
takes to manage cash flow more
accurately.
3.5.4 SHORT TERM
INVESTMENTS:
DIBPL now offers excellent rates of
profit on all its short term investment
accounts. Whether the funds are invested
for 3 months or 1 year, DIBPL’s rates of
profit are extremely attractive, along
with the security and service only
DIBPL can provide.

3.5.5 EQUITY
INVESTMENTS:

DIBPL has accelerated its activities in

the stock market to improve its
economic base and restore investor
confidence. The bank is now regarded as
the most active and dominant player in
the development of the stock market.
DIBPL is involved in the following:
⮚▪ Investment into the capital
market
⮚▪ Introduction of capital
market accounts (under process)
⮚▪ DIBPL’s involvement in
capital markets is expected to
increase its earnings, which
would result in better returns
offered to account holders.
4. ORGANIZATIONAL
STRUCTURE
4.1 STRUCTURE OF
THE DUBAI ISLAMIC
BANK PAKISTAN LTD.

In Dubai Islamic Bank, the head is

called “Chairman” of the Bank. And
after Chairman there is Six Broad of
Directors. Dubai Islamic Bank has
Eleven Groups which control the
working of the Divisions, Wing,
Department, Section and Regional of
the Dubai Islamic Bank. In DIBPL,
“Department” is called “Wings”.

 
           

4.2 Organization
Hierarchy of DIB F-
10MARKAZ BRANCH
I worked in Dubai Islamic Bank
Pakistan Limited as an internee for
two months. During internship, I
rotated in different departments
where I learned about these
departments. The branch manager
monitors the whole branch to
develop efficiency and effectiveness.
The different department's details
are listed below.
There are seven departments are
operating in F-10 Markaz Branch. In
deposits section, various kinds of
deposits are made in routine and
reported to head office. The deposit
section is very efficient and active. In
remittances section deals with
external and internal remittances to
facilitate the customers. Remittances
are transferred through pay order,
bank draft and telegram transfer. In
clearance department, cheques are
cleared through clearing house by
using the facility of NIFT.
In advances department, bank
makes different kind of advances
and offer attractive Islamic
compliance products to attract
customers. In other departments, HR
department functions the
recruitment, performance appraisal,
training and other relevant jobs.  In
cash department, the collection and
payment of cash is made.
(NOTE: Organogram is attached in
annexes.)

4.3 VARIOUS

DEPARTMENTS

DETAILS

DIBPL have a different department

so I am going to explain the
performance of every department.

4.3.1 CASH DEPARTMENT

Cash department performs the

following
functions                                             
                            

4.3.1.1 Receipt

The money, which either comes or

goes out from the bank, its record
should be kept. Cash department
performs this function. The deposits
of all customers of the bank are
controlled by means of ledger
accounts. Every customer has its
own ledger account and has
separate ledger cards.

4.3.1.2 Payments
It is a banker’s primary contract to
repay money received for this
customer’s account usually by
honoring his cheque.

4.3.1.3 Types of Cheques

Some specific types of cheque are

being entertained in the clearing
department of               DIBPL.

LOCAL CHEQUE

By local cheque we mean collection

of cheque from the banks which are
the members of the clearinghouse
and which are located within the city.

 OUT STATION CHEQUE

By out station cheque we mean

collection of cheque from the banks
which are situated outside the city. It
means that presenting bank and the
bank on which the cheque is drawn
are not situated in the same city.

4.3.2 CLEARANCE
DEPARTMENT

A clearing house is an association of

commercial banks set up in given
locality for the purpose of
interchange and settlement of credit
claims. The function of
clearinghouse is performed by the
central bank of a country by tradition
or by law. In Pakistan, the clearing
system is operated by the SBP. If
SBP has no office at a place, then
NBP, as a representative of SBP act
as a clearinghouse.

The easy, safe and most efficient

way is to offset the reciprocal claims
against the other and receive only
the net amount owned by them. This
facility of net inter bank payment is
provided by the clearinghouse.

The representatives of the local

commercial banks meet at a fixed
time on all the business days of the
week. The meeting is held in the
office of the bank that officially
performs the duties of clearinghouse.
The representatives of the
commercial banks deliver the
cheques payable at other local
banks and receive the cheques
drawn on their bank. The cheques
are then sorted according to the
bank on which they are drawn. A
summary sheet is prepared which
shows the names of the banks, the
total number of cheques delivered
and received by them. Totals are
also made of all the cheques
presented by or to each bank. The
difference between the total
represents the amount to be paid by
a particular bank and the amount to
be received by it. Each bank then
receives the net amount due to it or
pays the net amount owed by it.

 2.2.1 In-word clearing

Books:

The bank uses inward clearing

register for the purpose of recording
all the details of the cheques that the
other banks have issued on the
bank.

2.2.2 Out-Word Clearing

Books:

The bank uses outward clearing

register for the purpose of recording
all the details of the cheques that the
bank has delivered to other banks.

    

    4.3.3 ADVANCES

DEPARTMENT

DIBPL give loans to the borrowers

for different purposes. These loans
are given for various sectors for
different periods. Small Finance,
Cash Finance, Personal Loans,
Demand Finance, Running Finance,
Corporate Finance, Export Import
Financing, House Building Finance.
4.3.4 REMITTANCE
DEPARTMENT

Another important department in the

bank is remittances. People send
their money to the other persons and
organizations through various way
i.e. Bank draft, Telegraphic Transfer,
Mail Transfer, Coupons, Govt. Draft
and Western Union Money Transfer
etc. It works both inward and
outward.
 DIBPL offers the following forms of
remittances.

⮚▪ Demand Draft

⮚▪ Telegraphic Transfer

⮚▪ Pay Order

⮚▪ Mail Transfer

⮚▪ Safe custody of specimen

signature book

⮚▪ Preparation of periodical
statements

⮚▪ Any other work/ duty

assigned by manager

4.3.5 DEPOSITS
DEPARTMENT

Customers keep their savings in PLS

Saving Accounts and businessmen
save their money in bank Current
Accounts. DIBPL gives profit on
saving accounts and special saving
accounts.

4.3.6 FOREIGN
EXCHANGE
DEPARTMENT:

This department mainly deals with

the foreign business. The main
functions of this department are:

a)      L/C dealing.

b)      Foreign currency

accounts dealing.

c)      Foreign Remittance

dealing.

DIBPL is committed to offering its

business customers the widest range
of options in the area of money
transfer.  If you are a commercial
enterprise then our Letter of Credit
service is just what you are looking
for. With competitive rates, security,
and ease of transaction, DIBPL
Letters of Credit are the best way to
do your business transactions

This department deals with the

foreign currency accounts which
mainly include dollar account, euro
account etc.

4.3.7 PRIVILEGE BANKING

DEPARTMENT

4.3.7.1 Online Banking

This department is functioning only in
online branches in the bank. This is a
fast track banking system in modern
banking. DIBPL is also trying to
enhance this facility for their customers.
4.3.7.2 Utility Services
Keeping in view the difficulties faced by
general public DIBPL has taken the
initiative to provide service for
collection/receipt of utility bills on
behalf of WAPDA, Sui Gas and PTCL
from 9.00 am to 5.00 pm all the
branches through out the countries are
observing this practice to ease the long
queues lined-up at the counters of banks.

4.3.8 Compliance
department
Role of branch compliance
department is to reconcile the
prescribed frequencies, investigate
long pending reconciliation item, and
ensure correct treatment every half
year and clearing system service
branch-in major cities. Internal
control is the integration of the
activities, plans, attitudes, policies
and efforts of the people of the bank
working together to provide
reasonable assurance that the
organization will achieve its
objectives and mission.

4.3.9 Human Resources

Management department

Human Resources Management

Department works for the betterment
of the employees. Enhances skills,
training management, service
benefits, wages, medical facilities,
staff loans are basic functions of this
department.

4.3.10 INFORMATION
Technology Department

Bank’s data collection and

information system run by Regional
Data Collection Center. This
department manages staff training
programs regarding computer.
4.3.11 Islamic Banking

The year 2005 marked the first year

of Islamic banking operations. During
the year under review, in addition to
active participation in various Sukuk
transactions, DIBPL has extended its
Islamic Banking Operations Network.
5. Structure OF
FINANCE &
ACCOUNTS
department

Accounts department is a backend

department at Dubai Islamic Bank,-
10 Markaz; Islamabad performs the
following Accounting Operation:
Reports
It generates reports like Statement
of Account Activity (a report on the
activity of all accounts), Statement
of Affairs (a report on the assets
and liabilities), Statement of
Foreign Exchange (a report on the
foreign exchange currencies at the
bank) and Statement of Profit and
Loss (a report on the income and
expenditures of DIBPL, F-10 Markaz
Branch, Islamabad). These reports
can be generated at daily, weekly,
monthly, quarterly or yearly basis as
required by the bank.

Income and Expense

The department also needs to
calculate the revenues and
expenses, control expenditure and
forecast profits every month.
Budget
Formulation of yearly budgets &
targets in consultation with the
branch manager is also done by the
accounts department.

Activity Checking
Daily activity checking and
monitoring is done by the accounts
department of the whole bank.
Storage of Records
Accounts Department also has the
duty to store vouchers and system

generated reports.

Payments
The accounts department is
responsible to pay vendors on behalf
of the bank with authorization from
the branch manager. It also has to
amortize large payments and
calculate depreciation of branch
assets.

5.3 The role of

financial managers
in establishing
relationship
This is a senior role and the
Relationship Manager will manage a
portfolio of complex borrowing
corporate clients as well as being the
primary point of contact for the banks
relationships with the Hedge Fund
Sector.  The role will report to the
Head of Corporate Banking.
The ideal candidate will maximize
opportunities to strengthen and
leverage existing relationships as
well as continue to maintain and
ensure high levels of customer
satisfaction and retention all the
while generating new
recommendations.  The successful
candidate will be experienced in
developing growth plans and
expanding the divisions borrowing
and non-borrowing relationships
within the hedge fund sector.
Strong working knowledge of
commercial banking products, loan
agreements, security and other
credit requirements, particularly with
respect to the mutual and hedge
fund sectors is preferred.
Essential qualifications include at
least 10 years banking experience
with at least 5 years in a direct
commercial customer contact role: in
depth experience in structuring
financing transactions with the
mutual and hedge fund sectors;
experience in structuring financing
transactions with the property sector
will be considered an asset.
Financial manger in establishing
relationship always gives priority of
his organization these benefits:
⮚▪ Maximization of profit.
⮚▪ Earning per share
maximization.
⮚▪ Increase of sale
⮚▪ Welfare
⮚▪ Reduce in cost
⮚▪ Maximization of
shareholder’s wealth.

5.4 Use of Electronic

data in Decision-
making

In today’s contemporary business,

critical and timely decision making is
a must and important too. Today’s
bank use sophisticated software’s
that not only help in operations but
also improves decision making by
providing different reports, which can
produced at different periods of time,
that can help employees at every
level of the banks administration.
5.4.1 Technical
Methods that Affect the
Industry

The banking industry of Pakistan is

at the forefront of modernizing its
daily operations by introducing the
latest technologies in its operations.
Some of the technical methods that
are used and affect the banking
industry are as follows:
● Advanced technological
products and services
● Automation of operational
tasks
● Decision making tools

5.4.2 Advanced
technological products
and services

Automatic Teller Machines (ATM)

and ATM cards have been the
biggest innovations that have simply
changed the way people today are
now making their personal
transaction. With ATM cards, people
can take out money from their
accounts at any time, from any bank
that they want to, at their
convenience.

ATM cardholders can take money

out of their accounts, from any ‘1
link’ network ATM, the largest ATM
network of the country. Other ATM
networks include ‘Mnet’ and ‘Cirrus’.
Today all banks are members of ‘1
link’, while most of them are
members of Mnet and Cirus.

Internet Banking is another major

technological product introduced by
different banks of Pakistan. With the
help of internet banking, customers
with the convenience of their own
personal computers can transfer
money from their accounts, view
their balances and a lot more.

5.4.3 Automation of
operational tasks

Technical advancements have also

impacted the daily operations of
banks in Pakistan. Online transfer
of money between branches has
increased the efficiency of exchange
of money between different account

holders of the same bank.

Simple tasks such as balance inquiry
and bank statements have become
as easy as a click of a button with
highly sophisticated information
systems.

All banks today have their own

information systems that they can
use in almost all departments like
clearing, account opening, car

leasing and remittances.

5.4.4 Innovation 

Innovation is a must in modern

times, as it will help banks to
compete in today’s highly
technologically advanced industry.
Some of the innovations that the
banking industry is looking forward
are:

● More advanced means of

connectivity between branches
through better and advanced
software and hardware to
maintain connections with
banks in remote areas and
during natural calamities in
 Pakistan. These might include
better connection through WiFi
or WiMax, both new
technologies.

● More advanced information

systems in banks that are
more secured than before to
eliminate any chances of fraud
and which are even more user
friendly to help employees to
use them not only to make
critical decisions but also
satisfy customer need in a
more timely manner.

● Advancements in online
transfer from inter branch to
an even more helpful inter
bank transfers.

● Automation of simple
operations task that will not
only improve efficiency but
also
reduce costs like stationery
and courier services, like
automation of check books
etc.

5.5 SOURCES OF
FUNDS
                                               
    2005             2006           
2007           2008  2009 
   
3,091,135
   
8,394,130
239,509,39
1 
                   
 

   
4,138,243
 
21,230,697
273,173,84
1

   
3,452,031
 
13,690,222
300,732,85
8

      
3,733,124
      
5,844,389
  
222,345,067

2,233,671
  
12,723,830
  129,714,89
1

Bills Payable
Borrowings
Deposits & other accounts

                                                            
(Data Source: DIB Financial

Statements)

The analysis of the balance sheet of

the bank shows that current liabilities
increases over the period of time, the
increase in liabilities and increase in
loan shows that company wants to
have more cash in hand rather than
lending it to others and losing the
return on that investment. As for as
the fixed liabilities of company are
concern they are showing increasing
trend and same is case with the
current and long term liabilities but
the increasing trend in assets is
lower than the increasing trend in
liabilities which in not a good position
for the bank as shown in the table
borrowing are more increase in
2009.

5.6 GENERATION OF
FUNDS

                                               
    2005             2006           
2007           2008  2009 
   
43,788,628
     
6,144,628
        
627,618 
                   
 

  
50,569,481
    
6,781,683
       
147,363

  
60,940,798
 
7,925,370
    
1,245,369

      
33,633,735
       
4,926,604
       
1,573,905
   

    
20,947,333
      
5,099,195
        87
5,113

Mark-up income
Non-mark-up income
Other income

(Data Source: DIB Financial

Statements)

In generation of funds of DIB, the

most important source is mark-up
income. There are three earning
revenues. Banks earning are mark-
up income, non-mark-up income and
other income. In 2005, the mark-up
income is 20947333 which show a
good strength of DIBPL. With the
passage of time the revenue of
DIBPL is increasing with good
figures and market share. The
revenue generated by the DIBPL is
invested in the market to maximize
its market share and to increase its
profitability index. In last five years
the trends in generation of funds are
positive and remarkable.

5.6 ALLOCATION
AND MOBILIZATION
OF FUNDS
Allocation and mobilization of funds
refers to the composition of funds in
different sectors. How many funds
are used in acquiring assets, to pay
the short term and long term
obligations, for investment purposes,
to expand the business volume, to
acquiring latest machinery and
updated technology, to pay the
dividend etc. The finance department
of DIBPL allocates the funds in
different sectors according to the
policies of the management.
Allocation of funds provides a track
how funds shape inflow and outflow
in DIBPL.

                                            
       2005         2006         
2007       2008        2009
 27,859,360
 
12,731,952
 
12,456,653
 
56,502,210
149,999,32
5
 
10,502,990
       -
   
5,633,051

 
29,436,378
 
18,380,738
   
3,452,059
 
8,8491,564
171,198,99
2
 
11,922,324
          -
 
6,013,097

 
32,687,33
5
  21,581,0
43
   
3,315,500
  75,9732,
38
192,671,1
69
 
13,773,29
3
        -
   
8,989,186

     
24,789,070
       
9,713,369
     
27,050,493
     
57,416,255
   
118,864,010
       
6,620,067
               -
       
3,851,529
   
19,708,518
    
3,183,957
             -
  
35,503,196
  
83,931,400
    4,280,504
         -
    
3,226,959   

Cash & balances with treasury banks

Balances with other banks
Lending to financial institutions
Investments
Advances
Fixed assets
Deferred tax assets
Other assets

                                                            
                                                            
                                                            
                                       
                                                            
                                                        
            
                                                 
154,834,534       248,313,793      
275,685,541       328,895,152   
348,990,764                                    
                                                       
     (Data Source: DIB Financial
Statements)
In balance sheet of bank the most
important item is earning assets.
There are four earning assets. Bank
has strong earning assets like
advances investments and lending to
financial institutions has major
percentage in of assets of bank. In
liability and equity analysis the
borrowing from financial institutions
and deposits have major portion and
reserve and share capital has major
portion in equity. Out of the three
earning assets (lending to financial
institutions, advances and
investments) only advances have
recorded a growth while Lending’s to
financial institutions and Investments
fell respectively.

 Analysis of balance sheet shows

increase or decrease in each item as
a percentage of assets means that
assets are chosen as key figure. As
we have seen in the table the
interest expense is increasing with
the turnover so the bank is more
utilizing on advances. As for as the
fixed liabilities of company are
concern they are showing increasing
trend and same is case with the
current and long term liabilities.

6.0 FINANCIAL
ANALYSIS
 6.1 FIVE YEAR
BALANCE SHEET

                                        
       2005              2006
           2007       
    2008           2009
                                                   
                                     (Rupees in
000)
ASSETS
 27,859,360
 
12,731,952
 
12,456,653
 
56,502,210
149,999,32
5
 
10,502,990
       -
   
5,633,051

 
29,436,378
 
18,380,738
   
3,452,059
 
8,8491,564
171,198,99
2
 
11,922,324
          -
 
6,013,097

 
32,687,33
5
  21,581,0
43
   
3,315,500
  75,9732,
38
192,671,1
69
 
13,773,29
3
        -
   
8,989,186

     
24,789,070
       
9,713,369
     
27,050,493
     
57,416,255
   
118,864,010
    

6,620,067
               -
       
3,851,529
   
19,708,518
    
3,183,957
             -
  
35,503,196
  
83,931,400
    4,280,504
         -
    
3,226,959   

Cash & balances with treasury banks

Balances with other banks
Lending to financial institutions
Investments
Advances
Fixed assets
Deferred tax assets
Other assets

                                                            
                                                            
                                                            
                                        
                                                            
                                                            
          
                                                 
154,834,534       248,313,793
   275,685,541       328,895,152 
348,990,764                                    

LIABILITIES           
   
3,091,135
   
8,394,130
239,509,39
1
   
3,222,106
          -
   
1,921,338
   
7,305,496

   
4,138,243
 
21,230,697
273,173,84
1
   
3,220,858
           -
   
1,379,809
   
9,531,860

   
3,452,031
 
13,690,22
2
300,732,8
58
   
2,571,169
           
-                 
      
      
 208,465
 
11,291,28
0

      
3,733,124
      
5,844,389
  
222,345,067
      
3,223,355
             -
       484
,066
      
5,219,666
   

    
2,233,671
  
12,723,830
 129,714,89
1
    
1,899,480
              -  
     
275,834
  
2,275,344
Bills Payable
Borrowings
Deposits & other accounts
Sub- Ordinated loans
Lia against asset subj to finance lease
Deferred tax liabilities
Other liabilities
       
149,655,669         240,849,667       
263,443,596      312,675,308    

331,946,025                        NET
ASSETS                       5,261,484 
7,464,126            12,241,945       
16,219,844       17,044,739

PRESENTED
BY                    

   5,000,000
   2,749,533
   2,823,072
 10,572,605
   1,669,340

  
6,500,000
  
2,414,833
  
4,851,840
 13,766,67
3
  
2,453,171
  

 
7,995,000
 
3,166,056
 
3,447,467
 14,608,52 
                 
  
 2,436,216

     
      3,000,300
      1,851,218
      1,886,845
     7,464,124
     
6,738,063

    2,500,000
    1,008,772
       860,300
    6,387,372
    4,369,072

 
Share capital
Reserve
Un appropriated profit
Surplus on revaluation of assets-net of
Tax

                                          12241945  
   7,464,126      12,241,945          
16,219,844        17,044,739

(Data Source: DIB Financial

Statements)

6.2 FIVE YEAR

PROFIT AND LOSS
STATEMENT

                                        
        
2005        
2006               
2007           2008          
2009
                                                            
                                        (Rupees
in 000)

20,9 33,6   50,5 60,9

47,3 33,7 43,7 69,4 40,7
33 35 88,6 81 98
6,55 10,3 28 16,9 23,8
9,39 21,7   40,0 84,7
 8 68 13,6 11 68
14,3 23,3 34,9 33,6 37,0
87,9 11,9 12 29,4 58,0
35 67   70 30
3015
1,51 3,71
5,35 2,44 6  4,72 10,5
4 6,73 3,08 90,5
9 4 65
185,    
707 3,07
14,2 (245, 5,72 (40,2  373
97 881) 3 48) ,249
            -       -   
32,8         4,00
07 23,0    39,8 0
  69 (709, 99    ___
1,74 2,22 461) 4,72 _-
8,16 3,92        - 2,73 ___
5 7   5 10,9
12,6 21,0 5,28 28,9 70,8
39,7 88,0 4 06,7 14

70 40 2,37 35 26,0
1546 87,2
27,7 16
82,1
5,09 4,92 6,78
9,19 6,60 70 1,68
5 4 3 7,92
1,27 1,71 3,26 5,37
3,86 8,47 6,14 3,24 0
3 8 4,62 6 2,87
1,00 1,20 8 1,04 8,93
8,98 5,63 2,89 2,82 2
8 8 1,75 7 3,96
-       - 5 2,34 9,05
-       - 1,33 1,69 7
-       - 3,84 0   
     1,57 0 395,
875, 3,90 1,16 427
113 5 9,51   
8,25 9,42 5 (31,9
7,15 4,62 64) 1,70
9 5    7
20,8 30,5     147, 1,24
96,9 12,6 (4,46 363 5,36

29 65 4) 13,5 9
    44,8 16,4
627, 45 15,8
8,87
618 42,4 62
8,80 11,1
12,1 51,5 42,5
1 95,1
62,8 80 03,0
32,2 33
92 78
43     
      
39,9
198,
8,28 45,0
298 14,2
62 18,1
4_      05,9
71,1
   63,2 11
98
8,91 06     
     
9,32 11,4 13,4 168,
747,
8 56,6 43,4 027
521
11,9 37 41      
     
77,6 19,0      17,1
583,
01 56,0 (17,2 41
361
      28 83)  
19,5
-                 14,3
02,0
11,9          208, 91,0
80
- 327 79
77,6 23,0
 13,6  28,
01 19,0 00,9
34,4 060,
4,95 56,0 98
85 501
0,00 28         
26,3          
0   
10,5          
847, 7,15 23,0
77 -
958 4,00
00,9
2          28,0
  
98
(15, (1,09 60,5
11,7
729) 8,70 26,3 01
62,6
5,78 9) 10,5   
50
2,22      77 8,31
        
291,   1,50
9         
291 8,69 0
6,19 -
 5,37  6,3 5,59       (4,2
2 46,5 8 391, 20,2

84       497 40)

5,89 530,        

12,7
2,90 652 323, 7,54
09,4
2        731 2,40
44
61,9   8
      81 9,02 15,4
45,4 9,28 6,72
   58,5
96 8,23
8 90
9,16 1
12,1 19,0
1,74 17,0
33,7 7 33,7
22,3
70 73  45,
46
344,
10,4         188
8 43,2  
21 19,3
32,0
72,5
21,9 74,6      
23
14,4 77 130,
12 456
60,9
------
         33,2
------
39,0 34
21.5 --
07
1 36,3
51,1
94,8
47,4
69 17.4
57
8

20.8
23.3
8
4

 Mark-up / return / interest earned

Mark-up / return / interest expensed           
Net mark-up / return / interest income

Provision against non-performing advances

Provision for / (reversal of) diminution in the
value of
Investments
Provision against off balance sheet
obligations
Bad debts written off directly
 Net mark-up /interest income after
provisions

                             i)          Non mark-

up / interest income
Fee, commission and brokerage income
Dividend income
Income from dealing in foreign currencies
Gain on sale of securities-net
Unrealized gain/(loss) on revaluation of
investments
Classified as held for trading
Other income
Total non-markup / interest income

                           ii)          Non mark-

up / interest expense
Administrative expenses
Other provisions / write offs
Other charges
Total non-markup / interest
expenses

Extra ordinary / unusual items

                         iii)          Profit before
taxation
Taxation - Current
                - Prior years
                - Deferred
                         iv)          Profit after
taxation

Unappropriated profit brought forward

Transferred from surplus on revaluation of
     fixed assets on account of incremental
depreciation
Profit available for appropriation

Basic and diluted earning per share-after

tax

(Data Source: DIB Financial

Statements)

6.3 ratio analysis

Ratios provide the means of showing the

relationship, which exists between,
figures of the Balance Sheets and
Income Statements. The analysis is
undertaken to assess important
characteristics of business like liquidity,
solvency and profitability. A study of
these aspects enables drawing
conclusions as to financial requirements
and capabilities of business units. Ratios
may be classified in a number of ways to
suit any particular purpose. Different
kinds of ratios are selected for different
types of situations. Some of the ratios
calculated for DIBPL are given below.

6.3.1 liquidity ratio

Comparison gives an indication of the
short-term debt paying ability of an
entity. Since a bank is also a business
firm so to maintain adequate liquidity is
also crucial to carry out business
activity.

6.3.1.1 Current Ratio

It is used to measure the ability of an
enterprise to meet its current liabilities
out of current assets.

Current Ratio = Current Assets /

Current Liabilities
                                                      
(Rupees in’000)
200 200 200 200 200
5 6 7 8 9
Curre 340 7,5 19, 29, 33,
nt ,13 50, 425 526 228
Asset 4 223 ,60 ,71 ,53
s 8 0 0
Curre 119 4,9 16, 26, 29,
nt ,34 03, 952 983 328
liabili 0 849 ,90 ,94 ,62
ties 8 6 9
Curr 2.8 1.5 1.1 1.0 1.1
ent 5 4 5 9 3
Ratio

                                                            
 
 CURRENT RATIO

INTERPRETATION

The current ratio of DIBPL, for the year

2009, is 1.13 times of current liabilities.
It is good to meet the short-term
obligations, when compared with the
current ratio 2008, which is 1.09 times
of current liabilities. The company
should maintain minimum limit of
current ratio for Bank i.e.1.

6.3.1.2 Net Working

Capital

Working capital compares current

assets to current liabilities, and
serves as the liquid reserve available
to satisfy contingencies and
uncertainties. A high working capital
balance is mandated if the entity is
unable to borrow on short notice.
The ratio indicates the short-term
liquidity of a business and in
determining if a firm can pay its
current liabilities when due.

Net Working Capital = Current

Assets – Current Liabilities
(Rupees in ‘000)
200 200 200 200 200
5 6 7 8 9
Curre 340 7,5 19, 29, 33,
nt ,13 50, 425 526 228
Asset 4 223 ,60 ,71 ,53
s 8 0 0
Curre 119 4,9 16, 26, 29,
nt ,34 03, 952 983 328
liabili 0 849 ,90 ,94 ,62
ties 8 6 9
Net 220 2,6    2,5 3,8
Wor ,79 46, 2,4 42, 99,
king 4 374 72, 764 901
Capit 700
al

NET WORKING CAPITAL

INTERPRETATION

Net working capital of 2009 increases

from year 2008. This is safety cushion
to creditors. The volume of net
working capital is showing positive
trends.

6.3.2 debt ratios /

solvency rations
Solvency is a company’s ability to meet
its long-term obligations as they become
due. An analysis of solvency
concentrates on the long-term financial
and operating structure of the business.

6.3.2.1 Debt to Asset /

Debt Ratio
 Provides information about the
company's ability to absorb asset
reductions arising from losses
without endangering the interest of
creditors.
Debt Ratio = Total Liabilities /
Total Assets

(Rupees in ‘000)
200 200 200 200 200
5 6 7 8 9
Total 497 8,4 21, 320 35,
Asset ,39 34, 308 500 368
s 3 280 ,24 73 ,89
7 4
Total 119     16, 26, 29,
liabili ,34 4,9 952 983 328
ties 0 03, ,90 ,94 ,62
849 8 6 9
Debt 0.2 0.5 0.7 0.8 0.8
Ratio 399 814 956 419 292
DEBT RATIO

INTERPRETATION

Creditors prefer low debt ratio, debt

ratio shows that how much asset the
company has to honor their obligations.
This ratio is increased from 0.8419 to
0.8292. This is a good for the company
because the company has 1 asset to pay
0.8292 debts.

6.3.2.2 Debt to Equity

Ratio
Indicates how well creditors are
protected in case of the company's
insolvency. The debt to equity is a
significant measure of solvency
since a high degree of debt in a
capital structure may make it difficult
for the company to meet interest
chargers and principal payments at
maturity.

Debt to Equity Ratio = Total

Debt / Total Stockholder’s
Equity                       

(Rupees in ‘000)
200 20 200 200 200
5 06 7 8 9
Total 119 4,9   26, 29,
Debt ,34 03, 16,9 983 328
0 84 52,9 ,94 ,62
9 08 6 9
Total 418 3,9 5,12 6,0 6,7
Equit ,18 17, 6,23 17, 76,
y 5 48 0 780 030
0
Debt 0.2 1.2 3.30 4.4 4.3
 to 85 52 7 84 28
Equit
y
Ratio

DEBT TO EQUITY RATIO

INTERPRETATION

Debt to equity ratio is the relationship

borrowed funds and owner’s capital and
equity multiplier is the relationship
between total assets and total equity. But
it is good that the ratio is decreasing in
2009 than 2008. The overall leverage
position is showing better trend as
compare to previous years.

6.3.3 PROFITABILITY
RATIOS
 This ratio shows that what percentage
of net profit to the total income is.

6.3.3.1 Net Profit Margin

This ratio measures the firm’s
profitability of sales/ interest earned
after taking account of all expenses
and income taxes. This ratio can be
calculated as:
Net Profit Margin = Net Profit /
Revenue *100
(Rupees in ‘000)
200 20 200 200 200
5 06 7 8 9
Net 619 1,2 1,70 1,9 1,5
Profit ,53 70, 2,23 03, 45,
7 94 4 377 859
4
Reve 2,0 3,3 4,37 5,0 6,0
nue 94, 63, 8,86 56, 94,
733 37 2 948 079
3
Net 29. 37. 38.8 37. 25.
Profi 57 79 7% 64 37
t % % % %
Marg
in
NET PROFIT MARGIN

INTERPRETATION

From the calculation it is very much

clear that the performance of DIBPL
is very good still to 2007. And the
trend is upward. It tells us a firm’s
net income per rupee of revenue. As
the trend is upward it shows the high
profits in revenue per rupee in case
of DIBPL. It is because of high
advances the DIBPL has given to the
people but in 2008 the ratio trend is
downward which not good for DIBPL.
6.3.3.2 Return on Equity
Measures the income earned on the
shareholder's investment in the
business.
Return on Equity = Net Income /
Average Total Equity

(Rupees in ‘000)

200 20 200 200 200

5 06 7 8 9
Net 619 1,2 1,70 1,9 1,5
Profit ,53 70, 2,23 03, 45,
(After 7 94 4 377 859
Tax 4
Profit
)
Total 2,4 3,6 5,30 6,9 8,1
Equit 89, 15, 4,46 27, 36,
y 976 84 4 063 700
7
Retu 24. 35. 32.0 27. 18.
rn on 88 15 9% 48 99
Equit % % % %
y

RETURN ON EQUITY

INTERPRETATION
It is decreasing every year with different
rate. This condition is not good for
DIBPL because every investor want to
earn high income on his investment.

6.3.3.3 Return on Total

Assets
Measures the company's
ability to utilize its assets to create
profits.

            Return of Total Assets =

Net Income / Average Total Assets
*100

(Rupees in ‘000)

200 20 200 200 200

5 06 7 8 9
Net 619 1,2  1,7 1,9 1,5
Profit ,53 70, 02,2 03, 45,
(After 7 94 34 377 859
Tax 4
Profit
)
 Total 55, 57, 63,5 76, 81,
Asset 323 77 13,2 219 775
s ,14 1,9 71 ,35 ,83
6 11 9 2
Retu 1.1 2.2 2.68 2.5 1.8
rn on 2% 0 % 0% 9%
Total %
Asset
s
 RETURN ON TOTAL
ASSETS

INTERPRETATION

The results show that the Return on

Asset are decreased which show that the
DIBPL Assets are not properly utilize in
2009 or may be there are no proper
environment for Banking sector because
in 2008 Pakistan face the economic
crisis.

6.3.4 BANK SPECIAL

RATIO

6.3.4.1 Investment to
Asset Ratio
Investment to Total
Assets = Investment / Total
Assets
 (Rupees in ‘000)
200 20 200 200 200
5 06 7 8 9
Invest 113 83   3,0 2,8
ment ,93 2,9 2,97 19, 22,
0 25 4,08 266 723
7
 Total 497    21,3 32, 35,
Asset ,39 8,4 08,2 050 368
s 3 34, 47 ,07 ,89
28 3 4
0
Inves 0.2 0.1 0.14 0.0 0.0
tmen 2 0 9 8
t to
Total
Asset
s

INVESTMENT TO ASSET
RATIO

INTERPRETATION

This ratio indicates that out of total asset

how much bank utilize its asset for
further investing. This ratio in decrease
in 2009, which is not useful for the bank
to enhance its revenues.

6.3.4.2 Advances to
Deposit Ratio
Advances to Deposit Ratio = Total
Advances / Total Deposit

(Rupees in ‘000)
200 20 200 200 200
5 06 7 8 9
Total 3,1 3,2   18, 20,
Adva 95, 73, 11,3 073 589
nces 575 95 47,9 ,50 ,61
7 79 1 3
 Total 4,6 4,3 16,1 25, 27,
Depo 55, 22, 14,4 458 980
sit 717 62 61 ,91 ,90
1 0 6
Adva 68. 75. 70.4 70. 73.
nces 64 74 2% 99 58
to % % % %
Depo
sit
Ratio
 ADVANCES TO DEPOSIT
RATIO

INTERPRETATION

Loans or advances are the major assets

of a bank while deposits are major
liabilities of a bank. Higher ratio shows
the better solvency of bank.

6.3.4.3 Cash to Deposit

Ratio
Cash to Deposit Ratio = Cash /
Deposit

(Rupees in ‘000)
200 20 200 200 200
5 06 7 8 9
Cash 944 71    2,6 2,9
,46 9,8 1,99 91, 32,
5 33 2,42 572 264
5
 Total 4,6 4,3 16,1 25, 25,
Depo 55, 22, 14,4 458 980
sit 717 62 61 ,91 ,90
1 0 6
Cash 20. 16. 12.3 10. 11.
to 29 65 6% 57 29
Depo % % % %
sit
Ratio
CASH TO DEPOSIT RATIO

INTERPRETATION

This ratio shows that how much cash

you have to pay the liabilities (deposits).
As this ratio show that company has
fewer amounts of cash than deposits. It
also indicates that bank is investing so
the bank is enhancing its business. But at
the same time it could be risk for bank
for liquidation.

6.3.4.4 Equity to Assets

Equity to Assets =
Equity / Total Assets

(Rupees in ‘000)
200 20 200 200 200
5 06 7 8 9
Equit 418 3,9    6,0 8,1
y ,18 17, 5,12 17, 36,
 5 48 6,23 780 700
0 0
 Total 497 8,4 21,3 32, 35,
Asset ,39 34, 08,2 050 368
s 3 28 47 ,07 ,89
0 3 4
Equit 47. 46. 24.0 18. 19.
y to 50 45 6% 78 16
Total % % % %
Asset
s

EQUITY TO ASSETS

INTERPRETATION

This ratio shows the position of equity in

total assets of business. This ratio is in
increasing trend. But the bank should
increase its equity by increasing the
wealth of shareholders.

6.3.4.5 Equity to Deposits

 Equity to Deposit =
Equity / Deposits

(Rupees in ‘000)
200 200 200 200 200
5 6 7 8 9
Equit 248 3,9   6,0 8,1
y ,99 17, 5,12 17, 36,
7 480 6,23 780 700
0
 Total 655 8,3 16,1 25, 25,
Depo ,71 22, 14,4 458 980
sits 7 621 61 ,91 ,90
0 6
Equit 37. 47. 31.8 23. 31.
y to 97 07 1% 64 32
Total % % % %
Depo
sits

EQUITY TO DEPOSITS

INTERPRETATION

This ratio shows that how much equity

part is there in total structure. The
capital advocacy requirement is 28%.
The bank was not fulfilling the
requirement in 2005 & 2006 but now
bank has 31.32%, which is good.
6.3.4.6 Earning Per Share

Earning Per Share = Net Income / No

of Ordinary Shares

(Rupees in ‘000)
200 20 200 200 200
4 05 6 7 8
Net 619 1,2   1,9 1,5
Profit ,53 70, 1,70 03, 45,
(After 7 94 2,23 377 859
Tax 4 4
Profit
)
No of 49, 59, 70,9 81, 89,
Ordin 241 08 07,1 543 697
ary ,06 9,2 29 ,19 ,51
Share 2 74 8 0
s
Earni 12. 21. 24 23. 17.
ng 58 51 34 23
Per
Shar
e
(EPS
)

EARNING PER SHARE

INTERPRETATION

As their earnings per common share is

good year by year it mean that results of
the ratio indicate that firm has paid a
handsome return on investment showing
the profit generations. Because the
company’s net income is increasing
gradually. As shown above the bank
basic earning per share is increasing due
to increase in net income. This shows
how mush profit each share has earned
in any particular year. It is most
important ratio for peoples who decide
about investing their money. Although it
decreased in 2009 but the overall
performance is good.

6.3.3.3 Return on Total

Investment
Measures the income earned on the
shareholder's investment in the
business.

Return on Investment = Net

Income / Total Investment

(Rupees in ‘000)
200 20 200 200 200
5 06 7 8 9
 Net 619 1,2 1,70 1,9 1,5
Profit ,53 70, 2,23 03, 45,
(After 7 94 4 377 859
Tax 4
Profit
)
Total 2,4 3,6 5,30 6,9 8,1
Invest 89, 15, 4,46 27, 36,
ment 976 84 4 063 700
7
Retu 24. 35. 32.0 27. 18.
rn on 88 15 9% 48 99
Inves % % % %
tmen
t

RETURN ON
INVESTMENT

INTERPRETATION

It is decreasing every year with different

rate. This condition is not good for
DIBPL because every investor want to
earn high income on his investment.

6.3.3.3 Return on Fixed

Assets
Measures the company's ability to
utilize its fixed assets to create
profits.

Return on Fixed Assets = Net

Income / Average Fixed Assets
*100

(Rupees in ‘000)
200 20 200 200 200
5 06 7 8 9
Net 619 1,2  1,7 1,9 1,5
Profit ,53 70, 02,2 03, 45,
(After 7 94 34 377 859
Tax 4
Profit
)
 Total 55, 57, 63,5 76, 81,
Fixed 323 77 13,2 219 775
Asset ,14 1,9 71 ,35 ,83
s 6 11 9 2
Retu 1.1 2.2 2.68 2.5 1.8
rn on 2% 0 % 0% 9%
Fixed %
Asset
s

RETURN ON FIXED
ASSETS

INTERPRETATION
The results show that the Return on
Asset are decreased which show that the
DIBPL Assets are not properly utilize in
2009 or may be there are no proper
environment for Banking sector because
in 2008 Pakistan face the economic
crisis its assets to create profits.

6.4 VERTICAL
ANALYSIS
In vertical analysis a significant item
of a financial statement is used as a
base value, and all other items of the
financial statement are compared to
it. In balance sheet, total assets are
assigned 100%. Each asset account
is expressed as a percentage of total
assets. Total liabilities and
stockholder’s equity is also assigned
100%. Each liability and equity
account is then net income is given
the value of 100% and all other
amounts are evaluated in
comparison to net sales. The
resulting figures are then given a
common size statement.
 Dubai Islamic Bank
Pakistan Ltd.
Balance Sheet
Vertical Analysis (Rs 000)
For the year ended Dec 31,
200…

2 2 2 2 2
0 0 0 0 0
ASSETS
0 0 0 0 0
5 6 7 8 9

% % % % %

Cash 1 1 1 1 1
& balances 7 2 2 2 3
with treasury . . . . .
banks 0 3 3 4 0
Balanc 8 2 8 5 3
es with other 9 5 6 4 4
banks . . . . .
Invest 0 5 4 9 6
ments-net 0 6 0 2 9
Lendin 2 2 2 2 2
g to financial 6 7 2 7 0
institutions . . . . .
Advan 9 1 0 7 8
ces- net 9 7 3 0 9
Operat 1 2 3 2 2
ing Fixed . . . . .
assets 9 8 6 8 0
Deferr 0 2 2 2 9
ed Tax Assets 3 4 4 4 5
Other assets- 9 6 9 4 0
net . . . . .
9 4 7 6 5
2 3 7 5 0
3 4 1 3 2
. . . . .
4 1 5 4 9
5 0 2 0 6
1 1 - - 0
. . 4 4 .
6 6 . . 3
6 0 2 0 9
- 7 7 5
.
4
5

Total Assets 1 1 1 1 1
0 0 0 0 0
0 0 0 0 0

LIABILITIE
1 0 1 1 1
S
. . . . .
Bills Payable
4 3 9 0 4
Borrow
2 5 2 9 5
ings
2 1 2 1 5
Deposi
. . . . .
ts & other
1 7 1 6 6
accounts
9 2 2 8 5
Liabiliti
9 9 9 9 8
es against
1 2 0 1 7
asset subject
. . . . .
to finance
8 0 2 6 3
lease
4 6 . 5 6
Deferr
0 0 0 0 .
ed tax
. . 0 . 0
liabilities-net
0 0 2 0 0
0 0 0 0 3
Other 3 3 . 5 0
liabilities 0 0 4 0 .
. . 3 . 0
0 8 5 7 0
0 9 . 8 5
6 4 8 4 .
4 . 0 . 5
. 9 7 4
5 6 9
5

Total 1 1 1 1 1
0 0 0 0 0
liabilities
0 0 0 0 0

NET
1 7 8 7 8
ASSETS
0 . . . .
PRESENT . 9 6 0 7
ED BY 6 5 5 0 5
Share 5 1 1 1 1
capital 2 8 6 3 9
Reserv 3 . . . .
e . 2 9 5 4
Unapp 3 0 4 6 6
ropriated 8 2 3 3 5
profit                1 2 9 8 1
9 . . . .
Surplus on . 4 1 9 1
revaluation of 8 8 4 8 9
assets 1 4 6 5 7
5 8 4 9 9
3 . . . .
. 6 7 5 4
8 3 3 5 0
4 5 3 4 2
4 1 5 0 0
 6 . . . .
. 3 2 4 6
1 7 7 6 0
6
Total 1 1 1 1 1
0 0 0 0 0
Liabilities
0 0 0 0 0
and Equity

Dubai Islamic Bank

Pakistan Ltd.
Profit & Loss Account
Vertical Analysis (Rs 000)
For the year ended Dec 31,
200…

2 2 2 2 2
0 0 0 0 0
0 0 0 0 0
5 6 7 8 9

% % % % %

Mark-up / return 1 1 1 1 1
/ interest earned 0 0 0 0 0
Mark-up / return 0 0 0 0 0
/ interest 3 3 3 3 3
expensed 1 0 1 3 9
. . . . .
3 6 6 5 1
1 9 3 0 9
Net mark- 6 6 6 6 6
up / return / 8 9 8 6 0
interest . . . . .
income 6 3 3 5 8
9 1 7 0 1
Provision 7 7 6 9 6
against non- . . . . .
performing 2 2 9 3 9
advances 3 7 7 4 8
Provision for 0 ( ( ( 0
diminution in the . 0 1 0 .
value of 8 . . . 6
Investment 9 7 6 0 1
Provision against 0 3 1 8 0
off balance sheet . ) ) ) .
obligations 0 - - - 0
Bad debts 6 0
written off 8 0 0 0 6
directly . . .
0 0 0 0 -
. 7 1 8 7
1 6 5 9 .
6 . . . 9
8 9 3 3 6
. 7 7 4
3
4
8
Net mark- 6 6 6 5 5
up /interest 0 2 3 7 2
income after . . . . .
provisions 3 3 0 1 8
4 4 0 6 5

Non mark-up
interest 2 1 1 1 1
income 4 4 3 3 3
Fee, . . . . .
commission and 3 6 9 4 2
brokerage 4 5 3 1 1
income 6 5 6 6 3
Dividend . . . . .
income 0 1 5 4 1
Income 8 1 6 5 6
from dealing in 4 3 3 2 6
foreign . . . . .
currencies 8 5 0 0 6
Gain on 1 8 2 6 4
sale of - 2 2 4 1
securities-net . . . .
Unrealiz - 5 6 6 0
ed gain/(loss) 8 5 7 4
on revaluation 4
of investments . - ( ( 0
Classifie 1 0 0 .
d as held for 7 4 . . 2
trading 3 . 0 0 1
Other 9 6 1 6
income . 8 ) ) 0
Total non- 4 3 .
markup / 0 0 1 0 2
interest . . . 3
income 6 4 2 2
0 2 9 6
2 2 .
7 6 5
. . 4
5 7
7 8
9 9 9 8 7
9 2 0 3 0
. . . . .
7 9 5 9 6
4 4 8 5 4

Non mark-up /
interest expense 4 3 3 2 2
Administr 2 3 0 8 6
ative expenses . . . . .
Other 3 2 4 0 2
provisions / write 8 9 8 9 1
offs 0 0 ( 0 0
Other . . 0 . .
charges 1 5 . 3 4
Total non- 5 9 0 3 1
markup / 4
interest expenses 0 0 ) 0 0
. . . .
0 1 0 0 8
4 9 . 3 5
4 3 4 2 3
2 4 7 8 1
. . 3 . .
5 0 0 4 7
7 6 . 6 3
9
2
Profit before 5 5 5 5 3
Taxation 7 8 9 5 8
. . . . .
1 8 6 4 9
7 8 6 9 1

Taxation 2 2 1 1 1
– Current 3 1 9 6 9
                . . . . .
- Prior years 6 2 7 4 0
    - 3 1 2 4 3
Deferred 4 ( 1 0 -
. 3 . . (
0 . 2 7 6
4 2 0 7 .
( 7 0 0 9
0 ) . . 2
 . 0 1 6 )
0 . 4 4
7 8
) 7
2 1 2 1 1
7 8 1 7 2
. . . . .
6 8 0 8 1
0 7 6 5 1
Profit 2 4 3 3 2
After 9 0 8 7 6
Taxation . . . . .
4 0 6 6 6
3 1 0 4 8
Unappro 2 2 4 6 7
priated profit 8 7 4 3 4
brought forward . . . . .
Transferr 1 2 2 4 4
ed from surplus 3 4 4 2 0
on revaluation of 0 0 - 0 0
fixed assets     on . . . .
account of 2 1 0 2
incremental 2 3 8 1
depreciation
Profit 5 6 8 1 1
available for 7 7 2 0 0
appropriatio . . . 1 1

n 7 3 8 . .
8 8 4 1 2
4 9
In balance sheet of bank the most
important item is earning assets.
There are four earning assets. Bank
has strong earning assets like
advances investments and lending to
financial institutions has major
percentage in of assets of bank. In
liability and equity analysis the
borrowing from financial institutions
and deposits have major portion and
reserve and share capital has major
portion in equity. Out of the three
earning assets (lending to financial
institutions, advances and
investments) only advances have
recorded a growth while Lending’s to
financial institutions and Investments
fell respectively.

Vertical analysis of profit and loss

shows increase or decrease in each
item as a percentage of sales means
that sales are chosen as key figure.
As we have seen in the table the
interest expense is increasing with
the turnover so the bank is more
utilizing on expenses. Net Interest
income was 10% higher this year to
Rs 37.058 billion owing to volume
growth. The interest earned in the 12
months of 2008 is 21% higher than
that of 2008 but it was matched by
more than proportionate increase in
the interest expenses, which rose by
41%. So in vertical analysis the net
interest income is decreased in 2009
as compare to 2008.

DIBPL directors give some of

reasons in increasing in interest
expenses.

∙€€€€€€€ Firstly, the banks

have been imposed a
 minimum of 5% deposit rate
on all the savings schemes.
This had previously been left
at the banks' discretion as to
how much they have to pay.
A few of the banks have also
been penalized by the SBP
for acting like cartel in
deposits.

∙€€€€€€€ Secondly, there has

been other attractive scheme
from the National Savings,
which offered better rates
and drained the liquidity from
banking sector.

∙€€€€€€€ Furthermore, the

economy was going through
high inflation, so the people
were not too optimistic about
saving in banks as the
money was losing its value
very fast.

 Administrative expenses shows

decreasing trend also the profit after
tax is in decreasing position during
last two years, that position in not
good for the company. Only profit
available for appropriation is
increasing as compare to previous
years, which is 101.29% in 2009.

6.5 HORIZONTAL
ANALYSIS
In horizontal analysis different
period’s data is compared and in one
year item is selected and item is
compared with the same category of
item of next period. In this analysis
the year should be consecutive for
the analysis and then percentage
difference is taken to see the
performance over the period of time.
This analysis is used to evaluate the
trend in the accounts over the year.

Dubai Islamic Bank

Pakistan Ltd.
Balance Sheet
Horizontal Analysis (Rs
000)
For the year ended Dec 31,
200…

      2               

0    
ASSETS
20 0 2 2 2
05 6 0 0 0
0 0 0
7 8 9

2
0
0
7

B B  B    
as a a B B
e s s a a
20 e e s s
 05 2 2 e e
0 0 2 2
0 0 0 0
5 5 0 0
2 5 5
% 0
0
5
2
0
0
5

Cash      2 1 1
& balances 10 1 0. 2. 1.
with treasury 0 0. 6 2 3
banks    4 7 6 5
Bala 10 3 (7 2. 2
nces with 0    .8 3 0.
other banks    3 0) 2 4
Lend 10 1. (6 (2 1
ing to 0 0 .7 0. (4
financial    2 3) 0 0.
institutions 10    5 2) 2
Inve 0 4 0. (1 5)
stments-net    1. 8 9. (1
Adva 10 3 7 0 5.
nces- net 0 3 7. 9) 5
Oper      6 2 0)
ating Fixed 10 (1 5 1. 1
assets 0 0. 1 3 5.
Other    8 6 5 5
assets-net 10 5) 7. 6. 5
0    7 5 2
      1 4 8 4.
      7. 1 4 1

   5 4. 3. 2
8 3 7 7.
  1 3 6
 9
2.
4
1
  
1
3.
2
5
Total 10 9. 2 7. 2
Assets 0. 9 0. 2 3.
0 4 0 9 3
1 7

0 1
0 0
0

LIABILIT
10 5 (3 4 2
IES 0 3. 4.
0 4.
Bills Payable 10 9. 4 6
7
Borr 0 2 1) 0
1
owings 10 3 (6 (9
2
Dep 0 3. .9 0.
7
osits & other 10 6 9) 9
4.
accounts 0 6 1 0)
0
Liabil 10 8. 7. 2
9
ities against 0 3 9 5.
6.
asset subject 10 0 4 1
2
to finance 0     1 7
4
lease (2 5 (3
(2
Defe 0. 3. 2.
4.
rred tax 4 5 1
6
liabilities- 1) 2 5)
7)
net  ( 1 2
(1
Other 4 1 5.
0
6. 3. 1
liabilities 0)
5 5 4
2
1) 6 2
8.
   1 1 3.
6. 6. 7 4
4 0 5
9 7

Total 10    1 1 (
0. 9. 6. 0. 2
liabilitie
0 8 7 7 4.
s 9 5 5 6
.0 9
1
)
0
0
NET
ASSETS       2 1 1 1
PRESENTE    0. 5. 0. 9.
10 0 0
D BY 0 3
0
Shar 0 0 0 5
1
e capital 10 2. 2 3
3.
Rese 0 5 6. 0.
6
rve 10 4 4 2
4
Una 0 3 2
9 4
ppropriated 1 1
1. 1.
profit               10 5. 6.
9 3
  0 6 3
1 7
8 5
     3
Surplus on 1 2
revaluation 0. 5.
7.
of assets 4 5 3
4
6. 9 5
6
7 6 (4
(5
 ( 2. 1.
5.
2 8 8
1
4. 9)
1 8)
2
9)

Total 10 1 4 ( 4
 Liabilities 0. 0. 1. 1 9.
and Equity 0 2 9 1. 3
4 5 9 8
3
1 )
0
0

Dubai Islamic Bank

Pakistan Ltd.
Profit & Loss Account
Horizontal Analysis (Rs
000)
For the year ended Dec 31,
200…

2 2 2 2 2
0 0 0 0 0
0 0 0 0 0
5 6 7 8 9 
   
2    
0
  
0
7

B B B B B
a a a a a
s s s s s
e e e e e
2 2 2 2 2
0 0 0 0 0
0 0 0 0 0
 5 5 5 5  5
   
2     2
0
0    
0    0
5
5

2
2
0
0
5
0
5
2
0
0
2
5
0
0
5

Mark-up / 1 3 1 2 3
return / 0 1 4 0 5
interest 0 . . . .
earned 1 1 6 9 2
Mark-up / 0 2 7 3 3
return / 0 3 2 4 2
interest 5 1 0 2
expensed . . . .
1 4 9 4
2 6 6 8
Net mark-    2 1 1 3
up / return / 1 9 1 0 0
interest 0 . . . .
income 0 3 5 8 1
. 5 3 4 5 
0  6    
6    
 1 .
1 5
1 0
1
1
1
1
0
0
.
0
0
Provision     2 5 1 4
against non- 5 3 2 6
performing 1 . . 4 .
advances 0 7 5 . 2
Provision for 0 0 6 2 5 
diminution in 1 1 - 3    
the value of 0 8 9 -    
Investment 0 8 4 2  
Provision 1 . . 6 1
against off 0 5 3 5 7
balance sheet 0 4 3 . 5
obligations     2 5 2 .
Bad debts 5 3 2 2
written off 1 . . - 5
directly 0 7 5 9 4
0 1 6 2 0
    - 6 . .
7 5 1 3
1 7 5 3 5
0 . . - -
0 0 0 8 3
9 9 9 5
6 9 . .
 . 9 9 4
6 . 7 5
4 1    5
4 1 5
3 .
3 1
. 6
1
3
Net mark- 1 3 4 - 4
up /interest 0 1 . 9 0
income 0 . 0 . .
after . 7 5 1 7
provisions 0 4 4 5 
5
   
7
   
.
1
6

Non mark-up
interest 1 2 1 1 2
income 0 4 0 7 0
Fee, 0 . . . .
commission 1 7 3 7 8
and brokerage 0 2 7 5 9
income 0 6 1 ( 6
Divide 1 8 2 3 4
nd income 0 . . 6 .
Income 0 2 8 . 2
from dealing in 1 7 5 0 3
foreign 0 1 ( 4 2
currencies 0 0 2 ) 3
Gain . 1 2 6
on sale of 6 . 8 .
securities-net     3 8 5 2
 Unreali   ( 2 . 5
zed gain/(loss) 1 1 ) 6 (
on revaluation 0 4 1 ( 7
of investments 0 . 0 8 5
Classifi     3 0 3 .
ed as held for   7 . . 1
trading 1 ) 2 0 6
Other 0 3 4 )
income 0 1 )
Total non-     2 6
markup /   5 1  
interest 1 . 6 ( (
income 0 5 . 5 3
0 7 0 0 0
( 4 2 2
6 ( ) )
0 7 7 4
. 6 4 2
1 . 5 1
2 5 . .
) 2 1 2
2 ) 0 3
9 1    2
. 1 2 5
5 . 1 .
0 3 . 3
6 1 6
9
1 3 6 0 2
0 0 . . 7
0 . 2 1 .
. 9 7 2 2
0 1 6 
8
   
3
   
.
 9
5
Non mark-up /
interest 1 2 5 2 2
expense 0 0 . 9 4
Admini 0 . 6 . .
strative 1 0 7 2 2
expenses 0 8 1 7 5
Other 0 ( 0 3 3
provisions /   1 7 4 6
write offs 1 0 2 4 2
Other 0 8 . . .
charges 0 . 2 8 2
Total non-     7 1 8 1
markup / 2 ( 3 2
interest 1 ) 9 4 0
expenses 0 2 1 7 4
0 2 . . .
9 7 1 1
. 7 9 0
6 )     
0 5 3 6
1 . 6 0
9 5 . .
. 5 8 2
0 8 5
1
Profit         3 7
before 1 5 5 0
Taxation       0 8 5 . .
                   0 . 5 5 2
. 8 . 1 9
0 8 4
9
 Taxatio 1 2 ( 4 4
n – Current 0 1 4 1 0
               0 . . . .
  - Prior years 1 5 4 9 3
    - 0 5 2 5 6 
Deferred 0 ( ) (    
    1 ( 1    
4 2 0  
1 8 6 0 9
0 . . ) 0
0 3 2 ( .
0 2 1 2
) ) 4 5
4 4 0 (
6 2 3 1
. 2 . 2
3 . 6 5
5 3 2 4
1 ) )
Profit   3 1 ( 5
After 1 3 1 1 2
Taxation 0 . . 8 .
0 9 8 . 4
. 3 2 7 5 
0 3 3    
7 )    
.
6
 4
Unappropriated     1 6 4 1
profit b/f 1 5 1 0
transferred 1 1 . . 0
Trans from 0 . 5 3 .
surplus on 0 4 7 7 4
revaluation of 5 5
fixed  assets on     1 2
account of ( 0 3 1
incremental 1 1 0 4 7
depreciation 0 0 . 5
0 0 4 .
) 4 8
8
Profi   6 4 1 7
t available 1 6 0 9 2
for 0 . . . .

appropriati 0 0 3 1 6
. 7 8 3 5 
on
0 1    
0    
1
.
1
4

The horizontal analysis of the

balance sheet of the bank shows
that current assets increases over
the period of time, the increase in
cash and decrease in loan shows
that company wants to have more
cash in hand rather than lending it to
others and losing the return on that
investment. as for as the fixed assets
of company are concern they are
showing increasing trend and same
is case with the current and long
term liabilities but the increasing
trend in assets is lower than the
increasing trend in liabilities which in
not a good position for the bank .as
shown in the table borrowing are
more increase in 2009.

The horizontal analysis of Profit &

Loss account of years 2007-2009
shows a continuous decrease in
mark up, non mark up and also there
is a rapid and huge decrease in the
profits in 2008. The administrative
expenses have been decrease in
2008 but again it will increase in
2009.

The income after tax is decrease,

which was 19% lower than the
income earned in 2008. The bank
profits before tax are increasing
trend, which is 18% higher than the
previous year of 2008. The
management of the bank gives many
reasons of the radical change in
profitability. First of all, adverse
economic conditions domestically,
the law and order, power shortages,
record high inflation, liquidity in the
banking system, steep rise in interest
rates, increase in government
borrowing from the central bank,
rising import bill and resulting growth
in fiscal deficit.

The interest expense is also

increase in 2008-2009. The
management give different reasons
that the banks have been imposed a
minimum of 5% deposit rate on all
the savings schemes. This had
previously been left at the banks'
discretion as to how much they have
to pay. A few of the banks have also
been penalized by the SBP for acting
like association in deposits.
Secondly, there has been other
attractive scheme from the Savings,
which offered better rates and
drained the liquidity from banking
sector. Furthermore, the economy
was going through high inflation, so
people were not too optimistic about
saving in banks as the money was
losing is value very fast. The
provisions against non-performing
loans were 124% higher as
compared to 2007. The advances
recorded an increase because the
bank was lending though very
prudently due to increasing NPLs
(Non-performing loans). Along with
the increase in Advances, the
composition has also changed a bit.
A shift from long-term to short-term
loans is observed.

7.0 ORGANIZATIONAL
ANALYSIS WITH
REFERENCE TO THE
COMPETITORS IN
TERMS OF TOTAL
ASSETS, TOTAL
LIABILITIES AND
TOTAL REVENUE

DIBPL is one of the leading Islamic

Banks with Islamic compliant
products. It has earned a good
market share in a very short span of
time due to its efficient and effective
management and proactive market
approach. There are a lot of its
competitors in market trying to
dominate its market strength and
share. Here DIBPL is compared with
NBP and BAF in terms of its total
assets, total liabilities and total
revenue etc.

          Total
       Assets                               
       Total Liabilities                   
       Total
       Revenue                                
         
       Rupees in Millions
      
      
Ba                         
nks 200 200 20 2 2
9 8 2 08 0 0
 0 0 0
0 9   8
9     
    
  
2
0
0
9
NB                   
P 40, 32, 1 14 2 2
354 585 9, ,6 5, 0,
262 3 87 3 5
693 9 6 8
423 3 8   7
964
19, 2
503 5
3
6
5
4
2,
5
0
3
BA                    
F 21, 17, 1 12 2 1
937 858 5, ,3 1, 8,
3 24 8 5
6 5 7
5   4 4
4
1 3,
5 9
3 7
2 1
 3 
    
    
   
DI                      
BP 17, 12, 1 8, 1 1
L 781 565 0, 54 5, 2,
3 2 3 6
6 6 5
2   8 4
    
(Source: Annual reports of various
banks)

As per the table, the total assets of

NBP are 40354 million in 2009 which
are maximum in volume as
compared to BAL and DIBPL. In
2009, the total assets of DIBPL are
17781 which show a positive trend
as compare to 2008. Similarly the
trends of all banks from 2008 to
2009 are positive and show a good
change in terms of quantity.
The volume of liabilities of NBP is
higher as compared to other banks
due to its extensive branching and
networking. The volume of all the
banks shows positive trends from
2008 to 2009. This is because of
new projects, increase in short term
and long term liabilities.
The volume of NBP is high as
compared to other banks like BAL
and DIBPL in terms of quantity due
to its extensive products networking
and the other reason is that because
it plays the functions as an agent of
the government. DIBPLs volume of
revenue is comparatively lower as
compared lower then its competitors.
Because DIBPL has recently
established in 2005 that’s the reason
its volume of revenue is lower.

8.0 Future prospects

of DIBPL

DIBPL remains committed to the

interest of all stake holders including
its employees, owners, regulators
and Pakistani nation. DIBPL has
defined strategy on where and how
want to proceed in the years to
come. With the implementation of
the new ‘Core Banking Package’,
DIBPL will completely automate its
functions which in turn will
appreciably enhance work efficiency.
DIBPL will continue to diversify
customer segments thereby
increasing product offering. DIBPL
committed towards the employee’s
empowerment / development will
continue DIBPL believe that a
motivated and well trained work
force is necessary to ensure
sustenance and growth. On the
business side its main focus would
be to reduce non-performing loans
and increase deposits.
DIBPL remain committed to its
Vision, Mission & core values and its
strategy for the future includes
recovery efforts and revival of non-
performing loans, deposit
mobilization, consolidation of loans,
expense management and tapping
into untapped markets by increasing
our network both domestically and
internationally. Customer service will
remain its main focus of Operations
management.
Finally DIBPL extend its appreciation
to the bank’s staff for their
commitment, dedication and hard
work in achieving these excellent
results. DIBPL would like to express
its sincere reverence to the Board
members whose valuable guidance
has always enlightened in decision
making. Finally DIBPL would like to
express its appreciation to
stakeholders, regulators and its
valued customers for their support
and continued confidence in DIBPL.
(Source DIBPL annual report
2009)

9.0 WEAKNESSES OF
THE ORGANIZATION
WITH MAIN FOCUS ON
 FINANCIAL
MANAGEMENT

Customer Satisfaction: In
DIBPL customer dealing is well,
but during rush hour the
customer has to wait for a long
time for their turn. It’s quite hard
for a new customer or potential
customer to get the required
information.

Poor record management and

filing system: During my
internship I observed that filing
system of branch is not good.
When certain record is needed
the staff has to struggle to find it
out and a lot of time is wasted.

Unequal distribution of work:

Work is not equally distributed.
On one hand some employee
have to work all day without
relaxing while some others have
nothing to do at all. This not only
creates confusion among
employees but also hurting and
disturbing for overall setup of the
bank. And above all it results in
dissatisfaction among customers
as well.

Difference between theory

and practice: A vast difference
exists between theory and
practice and DIBPL has written
procedure but practical work
done by employees is a bit
different from written
procedures.

Bank duty to maintain

secrecy: They don’t care about
maintaining secrecy, especially
during the rush hours. They
speak loudly about the account
position and while getting
clearance of cheque the person
can easily get the whole
information from the ledge. The
deposit clerk must be careful
while passing any cheque. In
this regard another shortfall is in
giving the information about the
balance on telephone.

Excessive paper work: It is

notified that due to the lengthy
procedure of paper work the
bank employee are over
burdened. They are unable to
give proper attention to the
clients and face difficulties in
getting their job done. One
reason for lengthy procedure
and excessive paper work in the
bank is the lack of computerized
technology.
More accounts fewer
deposits: Efficient banking is
one, which does not emphasize
on number of accounts but on
greater amount of deposits.
DIBPL is more interested in
increasing its number of account
irrespective to its deposit.

Delegation of authority:
Manager has very limited
authority; he has to take the
approval from his management
authority i-e. In case of advance
he has to take the approval of
general and regional manager.
The other problem is created,
when the manager is not
present in his office, the
customer having to wait for
hours. This discourages both
customer and officers because
they have to suffer a lot.

Lack of specialized training:

DIBPL does not provide
adequate facility of specialized
training to their staff. Training is
generalized rather than
specialized. As the worker
finishes his training, he is
inducted into a specific field
without having great deal of
knowledge about the field.
 .

10.0 CONCLUSION

DIBPL is an effectively operating and

profit making organization and
carrying out its activities under a
specified system of procedure. The
main regulatory body is State Bank
of Pakistan, which provides policy
guidelines and ensures that the
money market operates on sound
professional basis. While the head
office specifies the whole procedure
of function and operations. This
procedure has been modernized with
the passage of time with a view to
streamline the approach and
underlying procedure for effective
overhauling of its own capabilities so
as to bring them at par with
international practices.

There are people who are motivated

towards their work but on the whole,
it seems like employees do not work
on time and enjoys wasting their
time, which is a big hurdle in its way
to progress. Also working at the
bank, I also found out that all the
departments are not linked together.
Employees usually hide their work
from other employees as its match
going on and whoever does the best
would be awarded. That should not
be the case. All the departments
should work as team not as
individuals, so that the whole branch
would get benefit out of it. So there
is a lack of teamwork, also due to
this weakness of the branch, its
customers are not satisfied. I talked
to many clients of the bank but most
of them were not satisfied with the
services provided specially in the
departments namely Account
department, Cash department and
Bill collection section. So I would
suggest to the employees to work
whole- heartedly and show keen
interest in their work.

11.0
RECOMMENDATIONS
AND SUGGESTIONS

Here I am giving some suggestions,

which in my view can add some
input for efficiency and better
performance of DIBPL as an
organization in general and F-10
Markaz Branch in Particular

The recommendations are as

follows:

⮚▪ In my opinion the process

of a transaction should be short
in order in save time for both
customers and the bank.
⮚▪ Staff strength should be
enhanced and professional
qualified persons should be
recruited.
⮚▪ It is recommended that
proper training be provided to
the staff members that will
ultimately increase the
performance of Bank over all.
⮚▪ It is suggested that
promotion be given to the staff
in due time and on the basis of
performance to provide job
satisfaction.
⮚▪ The bank should spend
more on renovation of the
branches to improve
environment and atmosphere to
attract the customers.
⮚▪ Sitting arrangement, air
conditioning and new furniture
should be facilitated
⮚▪ The Bank should introduce
the computers software to cope
the heavy load of work and
better control.
⮚▪ Extra counters should be
established in order to facilitate
during the rush days the
difficulties faced by the bank
staff as well as the customers.
⮚▪ All Branches of the Bank
must be online.
⮚▪ All the departments should
be established separately.
⮚▪ Bank can increase its profit
ratio by reducing extra
expenditures and to enhance the
volume of advanced especially
retail loans.
⮚▪ I done internship, I
recommend that security level in
the bank should be enhanced
especially where I got internship
and operation of Mobile phones
must not be allowed inside the
Bank.
⮚▪ Bank should take step to
establish separate counters for
the old age employees and
pensioners.
⮚▪ The Bank should locate
new market for its operational
activities in the country as well
as abroad.
⮚▪ The Bank should increase
profit rate on deposits and
saving schemes especially for
pensioners and old age citizens.
⮚▪ For improvement of internal
control and system the
compliance wing and surprise
inspection system should work
more effectively.
⮚▪ To avoid complaints and
leaving the bank job number of
 staff should be enhanced and
their salaries should be leveled
to the private/multinational
banks.
⮚▪ Double shift system should
be introduced to improve
attitude and behavior of the
employees.
⮚▪ Payment of salaries should
be made separately to
accommodate the valued
customers and depositors.
⮚▪ For collection of utility bills
i.e. Electricity bills, Telephone
bills, Water and Gas bills
separate cash receipt counter
must be established.
⮚▪ Procedure of receiving
loans should be easy and short
time to facilitate the borrowers
and enhance the profitability of
the Bank

 
 

12.0 REFERENCES

● www.dibpl.com.pk
● www.dibpl.com.pk/An_Report.
htm
● www.sbp.org.pk
● www.askarebank.com.pk
● www.mcb.com.pk
● www.bankalfalah.com
● www.hbl.com.pk
● www.ubl.com.pk
● www.abl..com.pk
● www.dailytimes.com.pk
● Irshad, M. (2007). Money
Banking and Finance, Nayyar
Asad Printers.
● Siddiqui, A. H. (1998). Practice
and law of Banking in Pakistan
(2nd Ed), Karachi Decent Print
Enterprises.
● Van Horne, J.C and J.M
Wachowicz, JR.11th Edition,
“Fundamental of Financial
Management” New Jersey:
Prentice-Hall, Inc.1998.
● Management Brief, January 2008
published by Human Resources
Management and administration
Group, Dubai Islamic Bank
Pakistan Ltd. Head Office
Karachi.
● Financials-Half Yearly Account
June 30, 2008.
● Economic Indicators Pakistan,
January 2008 published by
Economic Research Wing, Credit
Management Group, DIBPL
Head Office Karachi.
● Annual Report
2005,2006,2007,2008, 2009
published by DIBPL, Head Office
Karachi.
 ● Brochure- DIBPL Awards &
Achievements.
● Financial Review of Banking
Sector by State Bank of Pakistan
● Interviews of Bank staff of
DIBPL

ORGANOGRAM OF
DIBPL

 
           

 
 

Posted by Unknown at
Thursday, November 03, 2011

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