Overview Of Askari Bank Limited

Published Date: 02 Nov 2017

I will take this opportunity to thank Allah Pak for giving me strength to do this project. I would like to thank Sir Syed Touqeer and Prof. Fareedy for guiding me throughout this project. Without their guidance and help this project wouldn’t be possible for me. They along with my family helped me and encouraged me to do this project.

I would also like to thank my teaching associate Ms. Haadia Qaiser. She updated me with all the deadline and her reminder messages helped me remembering the deadlines. Last but not least, I would thank all the Faysal bank officials from different branches of Lahore and Karachi for giving me time in order to take interview. In addition I would like to thank all customers of Faysal Bank.

Thank You all!!!

Executive Summary

The bank I have choosen for my BBA final research report is Askari Bank Limited.The problems faced by Askari Bank employess are highlighted in this project.now a days in increased competition in the market the war is not to explore new employees but to maintain the market share and taking away other’s market share

sample size is the limitation involved in this research .th bank has a has large number of branches all over Pakistan. Sample size of 30 are taken which is very less for a bank which has such a huge network

Literature review, interviews and questionnaires have filled out for a better understanding of the problem faced by the employees and to get in depth knowledge as well as insight of problems that are or were creating hindrances in integrating systems. Moreover, different managerial, concerns are highlighted so that problems can be identified.

CHAPTER 1: INTRODUCTION

The chapter consist the purpose of the research, research’s scope, research issue, and research’s objectives, limitation of the research, research methodology and scheme of the research.

Purpose Of The Research:

The key purpose of this report is to gather information to compile thesis on the problems faced by the employees of Askari due to the poor performance appraisal methods used in the bank. To observe, analyze and interpret the relevant data completely and in a useful manner.

Scope Of The Research:

The main purpose of my research was to know the effect of employees performance if they are dissatisfied with the poor appraisal method of and unfair practices used at their work place.

Rational of the study:

The rational of this research study is to conduct the in depth analysis of ASKARI BANK. To understand the working procedures of all the departments of ASKARI BANK. We also try to understand how the management keeps check and control on all the activities and personnel. Another purpose is to understand the recruitment process of ASKARI BANK, especially how leaders motivate their employees, what benefits and rewards they are given

Research Objectives:

There are the main objectives of this research study.

To do the management analysis of Askari bank.

To identify the major problems that Askari bank is currently facing.

To analyze the problem and search its causes.

To conduct the competitors’ comparative analysis.

To conduct the SWOT Analysis of the Askari bank.

Finally, to give conclusion, recommendations and suggestions to the company about the solution of the problem.

Problem Statement:

While doing the detailed analysis we also come across the major problem that BANK is currently facing and also find the reasons that are causing the problem. So the problem identified is that employees are not satisfied.

Hypothesis:

Employee dissatisfaction may be due to low pay scale, work overload due to fewer employees and lack of recognition. Keeping in mind these reasons the following hypothesis have been made for the study:

Hypothesis: 1

Null Hypothesis: Employee dissatisfaction is not due to low pay scale

Alternate Hypothesis: Employee dissatisfaction is due to low pay scale

Hypothesis: 2

Null Hypothesis: Employee dissatisfaction is not due to lack of recognition

Alternate Hypothesis: Employee dissatisfaction is due to lack of recognition

Hypothesis: 3

Null Hypothesis: Employee dissatisfaction is not due to work overload

Alternate Hypothesis: Employee dissatisfaction is due to work load

Research Methodology:

Step 1:

Interviews with the employees working in Askari Bank

Step 2:

Secondary data from the websites of Askari Bank

Step 3:

Formulation of questionnaires for Askari employees working there at different posts.

Step 4:

Sampling: Random sampling

Target Area: Lahore.

Sample Size: 30 Employees

Step 5:

SPSS has been used to check the validity of the hypothesis.

Analysis techniques:

Two techniques have been used for analysis:

Descriptive statistics (through graphs, charts etc.)

Inferential statistics (through chi-square testing)

Chi-square:

A chi-square test (also chi squared test or χ2 test) is any statistical hypothesis test in which the sampling distribution of the test statistic is a chi-square distribution when the null hypothesis is true, or any in which this is asymptotically true, meaning that the sampling distribution (if the null hypothesis is true) can be made to approximate a chi-square distribution as closely as desired by making the sample size large enough.

So, Chi-square test will be applied to test the hypothesis.

Source: http://www.easycalculation.com/statistics/chi-square.php

Research Plan:

Research plan articulated to achieve the objective of the study is as follows.

An in-depth detailed management analysis of the organization was undertaken by observing, interviewing and interacting with higher officials.

Mission, vision and company objectives are discussed.

Managerial functions, departmental functions, staffing procedures, leading functions, controlling functions are discussed.

SWOT analysis of the organization was undertaken and then the competitors’ comparative analysis will be provided.

Major problem and weaknesses of the organization were identified and its causes investigated.

The problem faced by the organization is that employees are not satisfied with their pay scale, there are less facilities and too much work overload which causes lack of motivation in employees of the organization.

Its causes were studied with the help of a questionnaire.

A questionnaire was formulated and filled in by 30 employees of the organization.

The feedback collected was analyzed through the use of SPSS.

Chi square test was applied to test the hypothesis and conclusion drawn according to accept or reject criteria.

INTRODUCTION OF THE ORGANIZATION

Company Profile

OVERVIEW OF ASKARI BANK LIMITED

Askari Bank was incorporated in Pakistan on October 9, 1991 as a public limited company. It commenced operations on April 1, 1992 and is principally engaged in the business of banking, as defined in the Banking Companies Ordinance, 1962. The Bank’s shares are listed on Karachi, Lahore and Islamabad stock exchanges.

Askari Bank has since expanded into a network of 245 branches / sub-branches, including 31 dedicated Islamic banking branches, and a Wholesale Bank Branch in the Kingdom of Bahrain. A shared network of 5,319 online ATMs covering major cities of Pakistan, internet banking (i-net) and call centers operating on 24/7 basis supports the alternate delivery channels for customer service.

As at December 31, 2011 the Bank had equity of Rs. 17.8 billion and total assets of Rs. 343.8 billion, with 919,096 banking customers, serviced by 5,994 employees. Askari Investment Management Limited and Askari Securities Limited are subsidiaries of Askari Bank primarily engaged in managing mutual funds and share brokerage, respectively. [1] 

Askari bank enjoys the privilege of being one of the best banks of Pakistan. It has its presence all across Pakistan. It’s backed by Army Welfare Trust which has many other businesses under its name. Due to the backing of AWT, Askari banks enjoy strong financial position in the banking sector.

VISION

"To be the bank of first choice in the region" [2] 

MISSION

"To be the leading bank in Pakistan with an international presence, delivering quality service through innovative technology and effective human resource management in a modern and progressive organizational culture of meritocracy, maintaining high ethical and professional standards, while providing enhanced value to all our stakeholders, and contributing to society" [3] 

CORE VALUES

Commitment

"Passionate about our customers’ success, delighting them with the quality of our service"

Teamwork

"Caring for our people and helping them to grow"

Service

"Dedication towards social development and improvement in quality of life"

Fairness

"Exemplary compliance, governance and business ethics"

Integrity

"A distinctive investment, delivering outstanding performance, return and value" [4] 

.

PRODUCTS AND SERVICES

BRANCH BANKING

Through a branch network in major cities, towns and cantonments, made up of conventional, corporate, consumer, Islamic, as well as agricultural banking service branches, we aim to provide our customers with a wide array of offerings catering to all their banking needs.

Mahana Bachat

Askari Mahana Bachat Account is a term deposit designed for individuals with a short to medium term investment appetite. It offers customers the option of investing for one to three years tenures and has been designed keeping in view savings needs of customers who want profit on a monthly basis. With competitive rates of return paid monthly on the 1st of every month and the option of getting a financing facility of up to 90 percent, Askari Mahana Bachat Account caters to customers saving needs without blocking their funds for a longer duration.

Paishgi Munafa

Askari Paishgi Munafa Account is a unique term deposit designed to meet the immediate financial needs of individual investors / savers who want to invest their funds for a medium term. The most significant feature of this product is that the customer receives the entire profit upfront at the time of placing the deposit in a way that the investors / savers can fulfill their financial needs of today without depleting their savings.

Value Plus Deposit

Askari Value Plus Rupee Deposit Accounts offers value and flexibility. This product promises greater financial freedom and security with matching flexibility. Now customers can open a "Value Plus Account" while enjoying the features of a normal checking account. Askari Value Plus Deposit has been enriched during 2011 with added benefits for individuals and business accounts.

Current Account

Current accounts cater to the variety of financial needs of our diverse customer base with added benefits of free ATM card, cheque book, issue of demand drafts / payorders and much more. These products include value plus current accounts, basic account with no minimum balance requirement.

Savings Account

A range of savings accounts offered by the Bank to both individual and institutional customers include Askari Special Deposit, Value Plus Savings besides normal saving account based on profit and loss sharing basis. Askari savings deposits offer attractive features and competitive returns and certain flexibility similar to current accounts.

Investment Certificates

Askari Bank’s Investment Certificates provide the added security, investment and monthly return to the customers. These certificates are negotiable and can be transferred to third parties. Investment Certificates are available for a three month period and profit is payable on a monthly basis through preprinted tearoff coupons.

Rupee Traveler Cheques

Askari Bank offers customers a widely accepted ‘Rupee Traveler Cheques’, which eliminates all financial risks while traveling. It is a safe and secure way to make payments nationwide.

Bancassurance

The Bank offers innovative banking solutions with a touch of insurance in it by fusion of banking, wealth management and insurance products. In partnership with Eastern Federal Union (EFU) Life, the Bank is positioned to offer its customers with value added life insurance and wealth management products tailored to suit their long term financial requirements and protection plans through select branches. As an extended feature of bancassurance, the Bank has also pioneered a co-branded credit card ‘Askari EFU Life co-Brand Credit Card’. This feature offers benefits such as cash back facility, standing charge option, reward points for each retail transaction conducted and much more.

CORPORATE AND INVESTMENT BANKING

At Askari, we understand the unique business requirements of our corporate and institutional clients, and accordingly the Bank’s Corporate and Investment Banking Group (CIBG) strives to meet their expectations through provision of customized and relationship based banking approach.

Corporate Banking

Corporate Banking works on a long-term relationship based business model to provide a single point within the Bank for meeting all business requirements of its corporate and institutional customers, including public sector enterprises, with the primary objective of enhancing customer service.

Dedicated relationship managers for each of our corporate client ensure customer satisfaction, which remains top priority. Our relationship oriented outlook focuses upon providing a complete array of tailored financing solutions, that are practical and cost effective, some of which include:

• Working Capital Facilities

• Term Loans

• Structured Trade Finance Facilities

• Letters of Guarantee

• Letters of Credit

• Fund Transfers / Remittances

• Bill Discounting

• Export Financing

• Receivable Discounting

Investment Banking

Investment Banking focuses on origination and execution of a range of financial advisory and capital raising services to corporate and institutional clients as well as actively managing the Bank’s proprietary investments in the local equity and debt markets. Investment Banking offers various and tailored financial solutions including debt syndications, project finance and advisory services, debt placements through capital markets as well as structured trade finance facilities.

Whether a company is seeking to access the local or cross border syndications and debt capital markets, project financing needs, advisory services related to M&A or the local equity capital markets for raising capital, Askari Bank’s CIBG is well positioned to provide due assistance. We can create and tailor the right structured solutions for business needs in order to enhance shareholders’ wealth and market competitiveness.

CONSUMER BANKING

Askari Bank’s consumer finance is focused on enhancing retail portfolio through new and improved initiatives and products. Special attention is given to business opportunities involving strategic alliances to earn sustainable returns, with greater emphasis on secured form of consumer lending and an aim to increase product offerings while improving and maintaining quality of asset portfolio.

Ask4Car

It is a product for vehicle financing for both new and used vehicles at affordable and competitive mark-up, easy processing without any hidden costs.

Personal Finance

With unmatched financing features in terms of loan amount, payback period and most affordable monthly installments, Askari Bank’s personal finance makes sure that the customer gets the most out of his / her loan; the product tenure ranges from one to five years and is designed primarily for salaried individuals.

Mortgage Finance

Whether our customer plan to construct a house, buy a constructed house, or renovate his / her house, Askari mortgage finance enables him / her to pursue their goal without any problems. Mortgage is a premium home financing product for customers belonging to the upper, upper middle and middle income groups, residing in the urban areas of Pakistan.

Agricultural Banking

Agricultural banking products and services are specifically designed for Pakistan’s crop farming, other farming and rural business segment. Such products and services, some of which are listed below, offer improved and efficient delivery and control mechanism for meeting increased demand for credit by the farmers in easy, accessible and affordable manner.

• Kissan Ever Green Finance

• Kissan Tractor Finance

• Kissan Livestock DevelopmentFinance

• Kissan Farm Mechanization Finance

• Kissan Aabpashi Finance

ISLAMIC BANKING

With the help of Shariah advisor and professional bankers, Askari Islamic banking provides Riba free and Shariah Compliant solutions to various customer segments through a modest branch network in major cities of Pakistan. It offers following main products:

Ijarah Vehicle Finance

Ijarah is a rental agreement, under which the usufructs of an asset are transferred to the client on agreed terms and conditions. It is a Shariah compliant mode of finance, adopted by Askari Islamic Banking to meet the vehicle financing needs of its Islamic customers.

Home Musharkah

Askari Islamic Banking offers Shariah compliant home financing to purchase, construct, improve and transfer of the property under the concept of Diminishing Musharakah. This means being able to cope with other financial commitment, while still having money left over for extras and unexpected expenses.

ALTERNATE DELIVERY CHANNELS

Internet (I.NET) Banking

Askari’s I.Net banking assures convenient banking from the comfort of your home. Now, customers are no longer required to wait in long and worrisome queues to request a financial transaction, 24/7 balance inquiry, statement of accounts, fund transfer, utility bill payment etc.

Automated Teller Machine (ATM)

Askari Bank is a member of two electronic ATM inter-bank connectivity platforms i.e., MNET and 1-link. Through this shared network of online 5,319 ATMs including Askari Bank’s 256 dedicated ATMs covering major cities in Pakistan supports the delivery channels for customer service. It provides services of e-banking and payment system products. [5] 

NETWORK

North Region

Central Region

South Region

Wholesale Bank

Branch

Islamabad

18

Lahore I

13

Karachi I

10

Bahrain

1

Rawalpindi I

17

Lahore II

13

Karachi II

12

Rawalpindi II

16

Sahiwal

7

Karachi III

11

Peshawar

12

Faisalabad

12

Karachi IV

12

Azad Kashmir

9

Gujranwala

11

Hyderabad

15

Corporate

1

Multan

12

Quetta

10

Islamic

8

Corporate

1

Corporate

1

Islamic

13

Islamic

10

81

82

81

Total branches / sub-branches 245 [6] 

The network of Askari bank is increasing day by day and it has its presence all over Pakistan showing its commitment.

Board of DirectorsORGANOGRAM

Country Head International Banking

Country Head Consumer Banking Services

Country Head Special Asset Management

Country Head Islamic Banking Services

Global Treasurer

Group Head Operations

Chief Information Officer

Group Head Commercial Banking

Group Head Corporate and Investment Banking

Country Head Compliance and Data

Country Head Audit and Inspection

Country Head Human Resource

Executive In charge President Support Office

Chief Credit Officer

Country Head Risk Management

Group Head Marketing and Strategic Planning

Group Head Business Transformation

Company Secretary

President and Chief Executive

Human Resource Committee

Budget Committee

Executive Committee

Information Technology Committee

Risk Management Committee

Audit Committee

Committee

Annual Report of Askari Bank Limited for 2012, Organogram, http://www.askaribank.com.pk/Reports/Askari%20AR%202012%20ALL.pdf

LITERATURE REVIEW

BANKING INDUSTRY:

Banks are required all over the globe for managing transactions and ensuring smooth monetary flow in every country. They have always been used as facilitators in terms of extending credit to promote business activity. Loans can either be extended to individual consumers or corporates and the returns gained are then invested to make and earn profits.

BANKING INDUSTRY OF PAKISTAN

In the infant years of Pakistan’s banking sector, the industry was majorly dominated by five state owned commercial banks. However, because of nationalization, Pakistan’s banking industry could not grow rapidly and therefore it was felt that these banks should be privatized. This was a part of the banking reforms of 1990’s. Two state owned banks, Muslim Commercial Bank and Allied Bank Limited were privatized on the priority basis and that is when the era of nationalization began to end in the banking industry. Later, when another major bank United Bank Limited was privatized, a severe blow struck to the banking industry’s nationalization and privatization began ruling the sector. Ever since then, immense growth was witnessed by the country in this particular sector. According to a report issued by International Monetary Fund in 2004, due to the increased strength of State Bank of Pakistan, the banking industry grew stronger and became more resistant to shocks. That is when, the banks emerged as a sound component of the entire financial sector. Not only banks, but other financial institutions also began growing stronger due to prudential regulations of State Bank of Pakistan. Some of the major events and changes that mark the history of banking evolution are summarized below:

Unlike the early years, where majority of the assets were held by the nationalized banks, currently approximately 80% banking assets are with the banks of the private sector. Because of privatization, the negative environment of bureaucracy subsided and professionalism began seeping into the system.11

The risk management practices of the commercial banks have also been improved. This is ensured by increasing the minimum capital requirement for banks. Initially, MCR was merely rupees 500 million and over a period of time has been increased to rupees 10 billion. This has been done through the profits earned by the banks which had become inefficient in the period of nationalization.12

With the introduction of online reports issued by the Credit Information Bureau, the loan giving policies have been improved and more stringent. Through these measures and newly introduced policies, an efficient check can be maintained about the consumers’ credit history. This ECIB report has also helped in the reduction of non-performing loans and has helped in building the trust of individuals in the banking sector and vice versa.13

Over the period of time, the improvement in banking technology has lead to the facilitation of banking clients and thus brought in the concept of convenience, flexibility and efficiency. The introduction of credit cards, debit cards, ATMs and RTGs ( Real Time Gross Settlement Systems) the banking sector’s technological environment has been completely revolutionized.14

The business of banking sector has witnessed immense diversification in terms of products and services that it offers to its individual clients. Banks are currently engaged in almost all kinds of businesses. They have their expertise in giving out loans, insurance management, investment banking, SMEs, mortgages and housing finance.

CURRENT SITUATION OF THE BANKING SECTOR

Even though the introduction of banking reforms and other evolutional banking policies brought immense profits and success to the banking sector, there are certain issues that still need to be resolved.

Since, minimum capital requirements have been increased; there are nine banks which are still facing problems for raising deposits to meet these requirements. Most of the banks that are facing these problems are majorly banks that are small or medium sized. This problem has surfaced as a problem of immediate concern because a huge part of these deposits lie with banks that are large in size. The growth is shown prominently by those five banks which are considered to be largest in the banking industry of Pakistan. Apart from these banks, the only banks that show some growth are large foreign banks, others are facing serious problems in raising deposits.15

Another issue of immediate concern for the banking industry is currently regarding the economic and political environment which is posing serious threats to the society. A number of foreign banks are leaving the country and wrapping up their operations in Pakistan. Even though the overall profitability of the banking sector has been improved, and these foreign banks are earning large profits too, however, these profits rae not large enough for these banks to continue operating in Pakistan. Also because of the global European crisis, foreign banks had to do a lot of restructuring in their international operations, for their profits at home had to be reduced.

Board of Directors

Lt Gen. Javed Iqbal

Chairman

Lt Gen. (R) Tahir Mahmood

Malik Riffat Mahmood

Mr. Zafar Alam Khan Sumbal

Dr. Bashir Ahmad Khan

Mr. Ali Noormahomed Rattansey, FCA

Mr. Shahid Mahmud

Mr. Muhammad Riyazul Haque

Mr. Wazir Ali Khoja

Khawaja Jalaluddin Roomi

Mr. M. R. Mehkari

President & Chief Executive

Audit Committee

Dr. Bashir Ahmad Khan

Chairman

Mr. Ali Noormahomed Rattansey, FCA

Mr. Wazir Ali Khoja

Khawaja Jalaluddin Roomi

Chief Financial Officer

Mr. Saleem Anwar, FCA

Company Secretary

Mr. M. A. Ghazali Marghoob, FCA

Auditors

KPMG Taseer Hadi & Co

Chartered Accountants

Legal Advisors

Rizvi, Isa, Afridi & Angell

Shariah Advisor

Dr. Muhammad Tahir Mansoori

Registered / Head Office

AWT Plaza, The Mall,

P.O. Box No. 1084

Rawalpindi-46000,

Pakistan.

Tel: (92 51) 9063000

Fax: (92 51) 9272455

E-mail: [email protected]

Registrar & Share

Transfer Office

THK Associates (Private) Limited

Ground Floor, State Life Building No. 3,

Dr. Ziauddin Ahmad Road,

P.O. Box: 8533

Karachi-75530

Tel: (92 21) 111 000 322

Fax: (92 21) 35655595

Entity Ratings

Long Term: AA

Short Term: A1+

by Pakistan Credit Rating Agency (PACRA)

Website

www.askaribank.com.pk

Source: www.askaribank.com.pk