Soneri Bank Internship Report Summary

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HAILEY COLLEGE OF COMMERCE
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EXECUTIVE SUMMARY:
Soneri Bank limited is engaged in banking services and operates 118 branches, including four Islamic banking branches in Pakistan. The Bank operates in four segments: corporate finance, trading and sales, retail banking and commercial banking. Corporate finance includes syndicated financing and services provided in connection with mergers and acquisition, underwriting, privatization, securitization, research, debt, equity, syndication, initial public offering (IPO) and secondary private placements. Trading and sales segment includes fixed income, equity, foreign exchanged, commodities, credit, funding, own position securities, brokerage debt and prime brokerage. Retail banking segment includes retail lending and deposits, banking service, private lending and deposits, trust and estates investment advice and merchant/commercial/corporate cards. Commercial banking includes project finance, real estate, export finance, factoring and leasing. The essence of our business philosophy is to cater to the banking requirements of small and medium sized entrepreneurs, providing them qualitative & competitive services with emphasis on encouraging exports. Nearly forty percent of our credit portfolio is related to export financing and credit decisions are taken within 48 hours that is why we say We have more time for you
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PREFACE
In todays competitive age of knowledge & skill the application of knowledge has gained utmost importance. The theoretical knowledge is not an end itself, but is a tool to provide information about the application of knowledge in the real business. Research projects and their reports is very vital tool to gain the practical exposure. While working on this report I have learned a lot about the banking sector in Pakistan and their products and services in general and about Soneri Bank Limited in particular. This report has given me the opportunity to polish my knowledge and to gain in depth learning about my field of specialization i.e. Finance. During my internship I have worked in various departments of Soneri Bank Limited and learnt a lot working of various departments. I am thankful indeed to the staff of Soneri Bank Limited for their support and guidance.
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ACKNOWLEDGEMENT
With humble & sincere words I am thankful to Almighty Allah (Most Merciful & Beneficial) who bestowed the potential and ability upon me to contribute a drop in the ocean of knowledge. I invoke peace for Hazrat Muhammad (PBUH) who is forever torch guidance and knowledge for Humanity as a whole. MY TEACHER: I am highly indebted to my respectable teachers for their encouragement, cooperation and continuous valuable guidance during our course of studies. Their untiring attitude towards work has given me the enthusiasm to become a better professional and human being in the times to come. MY PARENTS: And, of course, I am most indebted to my parents. Without their support encouragement and DUA this work would have never been possible.
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COPY OF COLLEGE PERMISSION CERTIFICATE:
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INTERNSHIP CERTIFICATE:
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TABLE OF CONTENTS
Contents

Page 06 08 08 11 11
History of SBL Management Fields of Activities Work by the student Financial Analysis Concluding remarks Observation, Dilemma faced by the organization Brief recommendation for importance Conclusion 73 References 75 Necessary Annexure & documents suggested
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HISTORY OF BANK:
Soneri bank was incorporated on September 28, 1991, by taking the advantage of the financial deregulation of the economy and the governments invitation to reputed business groups for participation in banking. The first branch of bank was formally opened doors of operatio0ns in Lahore on April 16, 1992, with paid-up capital of Rs.300 million (US $ 11.938 million; each @ 1 US $=Rs.25.1299 as of April 1992). After that, the bank has since then opened branches in Karachi, Peshawar, Quetta, Mirpur (AJK) Gujranwala, Hyderabad, Sialkot, Gilgit and Faislabad. Its capital and reserves have grown by 75% to Rs.550 million (US $ 17.715 million; each @ 1 US $=Rs.30.9848 as of December, 1994) in under three years of operations. The Bank is managed by professional bankers of excellent reputation and enjoys facilities totaling US$ 40 million from international banks including Citibank, NA, ABN AMRO, NV, Standard Chartered and American Express. The Bank earned a pre-tax profit of Rs.220.617 million (US $ 7.120 million; each @ 1 US$=Rs. 30.9848 as of December 1994) in the year of 1994. With the grace of ALLAH, Soneri Bank has growth of Pakistans economy and has established a niche position in foreign trade financing of the country and the bank is now operating with 42 branches with emphasis on greater automation. The business expansion through increasing branch network is underway. The Bank management, however, prefers the slow and steady growth. STATUS AND NATURE OF BUSINESS: Soneri Bank Limited incorporated in Pakistan on 28 September 1991 as a public limited company under the company ordinance 1984 with registered office in Lahore, Punjab. Its shares are quoted in all stock exchanges of Pakistan. This Bank is engaged in banking service as describe in the Banking Companies Ordinance 1962 and operates 42 branches in Pakistan. MAIN SPONSOR: The sponsor directors of the soneri bank Limited are from M/S Rupali Polyester Limited, who enjoy excellent reputation in the country both professionally and financially and who have invested more than Rs.10 Billion up to 1998, in various industrial and commercial projects of the country.
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ENTITY RATING: Soneri Bank has the following Entity Ratings from the Pakistan Credit Rating Agency Limited (PACRA): Short Term A1+ Long Term AA Term Finance Certificate A+ Definitions by PACRA: A1+: Obligations supported by the highest capacity for timely repayment. AA: 'AA' ratings denote a very low expectation of credit risk. They indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. A plus (+) appended to a rating denotes relative status within major rating categories.
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CORPORATE INFORMATION: MANAGEMENT:

BOARD OF DIRECTORS: CHAIRMAN: Mr. Alauddin feerasta CHIEF EXECUTIVE OFFICER: Mr. Safarali K. Lakhani DIRECTORS: Mr. Nooruddin Feerasta Mr. Inam Elahi Mr. S. Ali Zafar Mr. Abdul Hayee Mr. Shahid Anwar (NIT Nominee) Mr. Manzoor Ahmad (NIT Nominee) COMPANY SECRETARY Mr. Abdul Hayee AUDIT COMMITTEE Mr. Nooruddin Feerasta Mr. S. Ali Zafar (Member) Mr. Abdul Hayee Mr. Shahid Anwar (NIT Nominee) AUDITORS: KPMG Taseer Hadi & Co. Chartered Accounts LEGAL ADVISOR: Manan Associates, Advocates
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FIELD OF ACTIVITIES:
The Bank basically works under four groups named as CONSUMER BANKING COMMERCIAL BANKING ISLAMIC BANKING ONLINE BANKING
CONSUMER BANKING:
1) ACCOUNT OPENING:
If any person wants to open an account with the bank the account opening officer first of all get the photo copy of CNIC of the customer and get it verified through NADRA. After get verification from NADRA the officers give application from the customer. Customer fills the form and gives back to officer with the required document. After analyzing the document the officer make entries into the account opening register and issue account number to the customer. Now the customer can operate his account after depositing certain amount. Current account Profit and loss saving account Basic banking account Soneri saving account CURRENT ACCOUNT: Current is a non profit account. Flexible account with a great convenience for individual (in singles or joint names), minor ( to be operated by the guardian). Current account can be opened with a minimum amount of Rs.10000/-( ten thousand rupees) Rs.50 will be deduct per month from account if balance decrease from Rs.10000/PROFIT AND LOSS SAVING ACCOUNT: PLS saving account is a simple, straight forward saving account with a great convenience for individual ( in single or joint names) minors ( to be operated by the guardian). The account can be opened with the minimum amount of Rs 5000/- (five thousand rupees). Rs.50 will be deduct per month if balance decrease from Rs.5000/BASIC BANKING ACCOUNT: Basic banking accounts may be opened by individuals including minors under guardianship. The account opened with the minimum amount of
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1000/- (one thousand rupees). Rs.50 will be deduct per month if balance decrease from Rs.1000/- 4 withdrawals from a BBA through cheques is one calendar month are free of service charges basic banking account in non profit bearing account. SONERI SAVING ACCOUNT Soneri Savings Account is a flexible and fast growing cumulative profit account with a great convenience for individuals (in single or joint names), minors (to be operated by the guardian), the account can be opened with the minimum amount of Rs.5000/- ( five thousand rupees), Rs.50 will be deduct per month if balance decrease from Rs.5000/-. 2) CONSUMER FINANCE: Consumer finance means any financing allowed to individual for meeting their personal, family or house hold needs. It is offered to salaried, self employed person and business person. Following products categorized as consumer financing. GHAR FINANCE CAR FINANCE PERSONAL FINANCE GENERATOR FINANCE GHAR FINANCE Purchase / construction of property for self-occupancy. Extension / renovation on self-occupied residential property. The finance is provided for following purposes provided it is used for self occupancy. Purchase up to Rs.10M and up to 20 year Construction up to Rs.10M and up to 20 year Renovation up to Rs.03M and up to 07 year Balance transfer facility up to 10M and up to 20 year
PURCHASE of pre-constructed residential property. CONSTRUCTION of residential property on self-owned plot of
land. RENOVATION on self-self owned and occupied property. BTF for any of the above finance. MARK UP RATES 1 year KIBOR + 2% p.a. to be revised on each anniversary of finance.
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CAR FINANCE Purchase of brand new: un registered cars for private use and un registered light commercial vehicles for private use .Maximum repayment period is 5 years. Financing amount is for cars up to 2000 CC: Rs1.0M and for cars exceeding 2000 CC: Rs.2.0M. Down payment up to Rs1.0M minimum 15% of the vehicle price. And on finance over Rs1.0M :minimum 20%of the vehicle price. MARK UP RATE 1 year KIBOR + 3% p.a. to be revised on each anniversary of finance. PERSONAL FINANCE It is personal loan facility introduced by SBL in 2003.and the facility is allowed against assignment of salary. characterized by flexibility and easy accessibility. Amount of loans is calculated on the basis of take home salary and DBR 40%. Maximum amount of loan is Rs.500, 000. Purpose of finance To meet medical expenses for self of applicant. To meet educational expenses of applicants children. To meet travel expenses for self family member. To meet domestic needs. MARK UP RATE 1 year KIBOR + 6% p.a. to be revised on each anniversary of finance. GENERATOR FINANCE For purchase of brand new Electric Power Generator to be installed at residential / commercial / industrial property owned by the borrower. Maximum repayment period is 3 years .Financing amount Minimum Amount of Finance :Rs.0.1 Million Maximum Amount of Finance: up to Rs.1.0 Million Down Payment A minimum of 20% of price of the Generator (as per Quotation / Invoice) being financed shall be paid by the borrower. Mark-up Rate ** 1 Year KIBOR + 3% p.a., to be revised on each anniversary of finance. 3) LOCKERS: Specially designed lockers of various sizes to meet the requirements of applicants are available at our designated branches. The lockers may be operated during the banking hours of the branch. Only Account holders of our branches are eligible to apply for renting the Safe Deposit Lockers.
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4) ATM: ATMs across Pakistan owned by soneri bank and other banks. Shopping/ purchasing/ payments through outlets displaying ORIX sing. Free 24/7 online funds transfer to any customer of soneri bank through ATMs owned by soneri bank. Free cash withdrawal on ATMs owned by soneri bank. Soneri bank ATM card holders can pay their bills using ATM services. Easy way of paying bills for you and your dear ones. Bills once paid are automatically registered in our system. ATM service is currently available for payment of KESC, LESCO, GEPCO, SNGPL, SSGC, warid and ufone.
COMMERCIAL BANKING:
1)
BUSINESS FINANCE:
2)
3)
Business finance enhance to the business and existing business to require the capital. It is offered to the individual, SME and corporate loan. repayment period of 1years or demand. Mark-up Rate ** KIBOR +2.5% p.a. it depend on security. SME ( Small medium and enterprises) Means an entity, ideally not a public limited company, which does not employ more than 250 persons (if it is a manufacturing concern) and 50 persons (if it is a service concern) following criteria of either a and c or b and c as relevant. a) A service concern with total assets at cost excluding land and building up to Rs.50 million. AGRICULTURE FINANCING: Following agriculture finance facilities are provided by Soneri Bank Limited at its selected branches:PRODUCTION LOANS: Production loans are offered to meet the input and other working capital requirements for farming, orchards and nursery, tunnel farming, storage of raw material, transportation marketing grading and packing etc., by farmers. Note: Financing facilities for all other purposes as detailed in SBPs list of eligible items for Agricultural Credit are also available.
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DEVELOPMENT LOANS: Development loans are offered for the purchase of tractors, trolley, thrashers, ploughs, cultivators, laser levelers, combine harvesters, processing machinery, transport for delivery of dairy, poultry, fisheries. Installation of tube-wells, turbine, land leveling, soil improvement, land reclamation, seed processing units and for god owns silos and cold storages. LIVESTOCK: To meet the fixed cost and working capital requirements for cattle farming, cattle feed units, dairy farming, poultry farming; poultry feed units and fish farming. REPAYMENT PERIOD: Principal amount of Finance plus mark-up thereon is repayable depending upon nature of business ranging from one to five years. Revolving facility is also available under specific terms. MARK-UP RATE: All Type of Agriculture Loans upto Rs. 100,000/- : 6M Kibor + 2% Production Loan under Revolving Credit Scheme: 6M Kibor + 3% Working Capital for Live Stock i.e.(Dairy, Fisheries and Poultry etc) : 6M Kibor +3.5% Development Loan (All kinds) : 6M Kibor + 4%
ISLAMIC BANKING:
1)
SONERI JARI ACCOUNT (CURRENT A/C): Soneri Jari Account, on the basis of Qardh may be opened by individuals, partnerships, Joint Account holders, Companies, Corporate, Trusts est., with following unique facilities: No limit for minimum or maximum balance. No limit for minimum or maximum withdrawal amount within the available balance. Country wide cash deposit / withdrawal facility. Personalized Cheque book facility with no restriction on number of transaction. Fund utilized by the bank in accordance with Shariah Principles under the supervision of proficient Shariah Advisor. Pay orders and demand drafts payable country wide.
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2)
3)
Telephone banking, *E-Banking, *GSM Banking, *Web Banking, On-line Banking, ATM Card / Debit Card and Utility Bills Payment. Hold Mail Instructions. Personal Financial Consultancy Services for Islamic Banking Products. SONERI BACHAT ACCOUNT (SAVINGS A/C): Profit & Loss Sharing Soneri BACHAT Account may be opened by individuals, partnerships,Joint Account holders, Companies, Corporate, Trusts e.t.c, on the basis of Shariah Principles of Musharaka with the following unique facilities. Minimum amount for account opening Rs. 100/=. Profit calculated on monthly average and distributed on quarterly basis. Profit calculated on the basis of weightages for different tiers to benefit higher balance with higher return.-Extra premium on deposits of Rs. 10 Million and over. Weightages declared at periodically intervals to be announced on the web-site, and will be displayed on notice board. Soneri Bachat account with special operational facilities of Current Account. No limit for minimum or maximum withdrawal amount within the available balance. Country wide cash deposit / withdrawal facility. Personalized Cheque book facility with no restriction on number of transaction. Fund utilized by the bank in accordance with Shariah Principles under the supervision of proficient Shariah Advisor Pay orders and demand drafts payable country wide. Telephone banking, *E-Banking, *GSM Banking, *Web Banking, On-line Banking, ATM Card / Debit Card and Utility Bills Payment. Hold Mail Instructions. Free Statements of Account after every six months. Personal Financial Consultancy Services for Islamic Banking Products. SONERI MUNAFA ACCOUNT (SAVING A/C): Profit & Loss Sharing Soneri BACHAT Account may be opened by individuals, partnerships, Joint Account holders, Companies, Corporate, Trusts e.t.c, on the basis of Shariah Principles of Musharaka with the following unique facilities.
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4)
No Minimum amount for account opening. Profit will be calculated on daily products. Profit calculated on the basis of weightages for different tiers to benefit higher balance with higher return. Extra premium on deposits of Rs. 10 Million and over. Weightages declared at periodically intervals to be announced on the web-site, and will be displayed on notice board Soneri Munafa account with special operational facilities of Current Account. No limit for minimum or maximum withdrawal amount within the available balance. Country wide cash deposit / withdrawal facility. Personalized Cheque book facility with no restriction on number of transaction. Fund utilized by the bank in accordance with Shariah Principles under the supervision of proficient Shariah Advisor Pay orders and demand drafts payable country wide. Telephone banking, *E-Banking, *GSM Banking, *Web Banking, On-line Banking, ATM Card / Debit Card and Utility Bills Payment. Hold Mail Instructions. Free Statements of Account after every six months. Personal Financial Consultancy Services for Islamic Banking Products. * Will be provided soon. SONERI MEAADI ACCOUNT (TERM DEPOSITS): Profit & Loss Sharing Soneri BACHAT Account may be opened by individuals, partnerships, Joint Account holders, Companies, Corporate, Trusts e.t.c, on the basis of Shariah Principles of Musharaka with the following unique facilities. Minimum deposit Rs.10,000/= for a fixed period of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years and 5 years. Profit payment at the option of client i.e., monthly, quarterly, half yearly, yearly or on maturity. Profit declared quarterly. Net profit (after deduction of expenses & management fee) to be shared on the basis of weightages. Weightages on the basis of tenor and option of profit payment will be announced quarterly.
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Fund utilized by the bank in accordance with Shariah Principles under the supervision of proficient Shariah Advisor Some of the facilities for Jari account are also applicable here. Important Note: Extra Premium on actual profit will be given on special deposits. IB SCHEDULE OF CHARGES Hold Mail Instructions. Personal Financial Consultancy Services for Islamic Banking Products.
ONLINE BANKING:
On-Line Banking Services are available for all chequing account holder of our Soneri all branches. SERVICES: Cash Payments of cheques drawn on any of our all branches. Cash Deposits in to customers account maintained at any of our all branches. Balance inquiry. Account statement production. SERVICE CHARGES: Transacting branches and account holders branches located in the same city. Cash Deposits/Withdrawals: Rs. 50/- per transaction Cheques under Collection: No Charges Cheques under Collection: As per Schedule of Charges in-force. GOVERNMENT TAXES/DUTIES: Cash Cheques or Cheques Applicable Government Taxes/duties Under Collection if payable recoverable as per rules to third parties CASH WITHDRAWALS: Cash Withdrawals from accounts shall be subject to availability of sufficient balance which must not be at the time of withdrawals below Rs. 100,000/- in the case of Current/Saving Accounts. Per day Cash Withdrawals limit is restricted to Rs. 1 Million. Cash Cheques tendered by other than the account holders in person are subject to levy of Govt. Taxes as per rules. CASH DEPOSITS: Deposits made by third parties into accounts of customers maintained at all branches are subject to recovery of applicable with-holding tax, as per rules from the depositors. CHEQUES UNDER COLLECTION: Proceed of Cheques drawn on our all branches are immediately credited to depositors account subject to fulfillment of other conditions governing
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payment of cheques. Govt. Taxes as per rules are recoverable on outstation collection cheques. DEPARTMENTS OF BANK: Account opening. Clearing department. Advance department. Cash department. Foreign currency department. Remittance. ATM.
ACCOUNT OPENING
If any person wants to open an account with the bank the account opening officer first of all get the photo copy of CNIC of the customer and get it verified through NADRA. After get verification from NADRA the officers give application from the customer. Customer fills the form and gives back to officer with the required document. After analyzing the document the officer make entries into the account opening register and issue account number to the customer. Now the customer can operate his account after depositing certain amount. Current account Profit and loss saving account Basic banking account Soneri saving account CURRENT ACCOUNT Current is a non profit account, flexible account with a great convenience for individuals (in single or joint names), minors (to be operated by the guardian), charitable institutions, autonomous corporations, limited companies, firms, associations, educational institutions, etc. Current account may be opened with any amount. Current Account entitles account holder to avail amazing facilities such as: Chequing Account facility with no limit on a number of transactions Free Cash Deposit and Withdrawal facilities through your bank branch Free Clearing facility to deposit cheques of other banks within the city Online Funds Transfer through Cheques to any account across Pakistan through your bank branch
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Online Cash Deposit, Withdrawal and Funds Transfer through cheques from any of our branch across Pakistan Remittance facilities such as Payment Orders, Demand Draft, Telegraphic Transfers and Free Rupee Travelers Cheque through your bank branch Import, Export and other business transactions Standing Orders facilities Safe Deposit Locker at designated branches Statement of Account on six monthly basis Usage of Electronic Banking through: o ATMs across Pakistan owned by Soneri Bank and other banks o Shopping/purchasing/payments through outlets displaying ORIX sign o Free Online Cash Withdrawal facility upto Rs. 300,000/- from designated branches without Cheque Book o Free 24-hours Telephone Banking and Call Centre facility o Free 24/7 Online Funds Transfer to any customer of Soneri Bank through ATMs owned by Soneri Bank o 24/7 Online Inter Bank Funds Transfer through ATMs owned by Soneri Bank to any account of increasing list of enabled 1 LINK member banks o Free 24/7 Internet Banking to view Statement of Account No one-time and renewal fee on Soneri Banking Card All purchases and cash withdrawals made with the Soneri Banking Cards is deducted directly from your bank account Free Cash Withdrawal on ATMs owned by Soneri Bank Facility of Running Finance can be requested for specific purpose against collaterals and nominal markup rates being charged on quarterly basis Govt. Withholding Tax apply on all cash withdrawals PROFIT AND LOSS SAVING ACCOUNT PLS Savings Bank Account is a simple, straight forward Savings Bank Account with a great convenience for individuals (in single or joint names) minors (to be operated by the guardian) charitable institutions, provident fund and other funds of benevolent nature local bodies, autonomous corporations, limited companies, firms associations, educational institutions, etc. The account may be opened with any amount; however accounts with balance below Rs.5000- on any day shall be subject to Service Charges as per our Schedule of Charges in force
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The PLS Savings Account entitle Account Holder to avail amazing facilities such as: Chequing Account facility with no limit on a number of transactions Free Cash Deposit and Withdrawal facilities through your bank branch Free Clearing facility to deposit cheques of other banks within the city Online Funds Transfer through Cheques to any account across Pakistan through your bank branch Online Cash Deposit, Withdrawal and Funds Transfer through cheques from any of our branch across Pakistan Remittance facilities such as Payment Orders, Demand Draft, Telegraphic Transfers and Free Rupee Travelers Cheque through your bank branch Standing Orders facilities Safe Deposit Locker at designated branches Statement of Account on six monthly basis o Usage of Electronic Banking through: o ATMs across Pakistan owned by Soneri Bank and other banks o Shopping/purchasing/payments through outlets displaying ORIX sign o Free Online Cash Withdrawal facility upto Rs. 300,000/- from designated branches without Cheque Book o Free 24-hours Telephone Banking and Call Centre facility o Free 24/7 Online Funds Transfer to any customer of Soneri Bank through ATMs owned by Soneri Bank o 24/7 Online Inter Bank Funds Transfer through ATMs owned by Soneri Bank to any account of increasing list of enabled 1 LINK member banks Free 24/7 Internet Banking to view Statement of Account No one-time and renewal fee on Soneri Banking Card All purchases and cash withdrawals made with the Soneri Banking Cards is deducted directly from your bank account Free Cash Withdrawal on ATMs owned by Soneri Bank Govt. Withholding Tax apply on all cash withdrawals and profit credited into account Zakat is deductable from Account however Zakat exemption forms are accepted
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SHARING PROFIT/LOSS: No minimum balance is required to qualify for profit Provisional rates are announced on a six monthly basis however profit/loss earned/incurred on PLS Savings Bank Accounts are determined by the Bank at its sole discretion on the basis of its net working result at the end of each halfyear/ year Calculation of products on PLS Saving Bank Accounts is computed for each calendar month on the lowest credit balance in an account between the close of business on 6th day and the last day of the month Profit/loss earned/incurred on PLS Savings Bank Accounts are credited/debited on a six monthly basis within a reasonable time from the date of the close of half-yearly/ yearly books of accounts of the Bank Provisional Rates ANNUALISED RATES OF EXPECTED PROFIT FOR DIFFERENT TYPES OF PLS DEPOSITS. Effective: 01.July.2009 Period: JULY - DECEMBER, 2009 PLS SAVINGS ACCOUNTS Rate of Return 5.00% p.a. Rs. 5,000/= minimum balance requirement. Regular Chequing Account. Profit paid bi-annually. SPECIAL NOTICE DEPOSITS
Period 7 days 30 days Rate of Return 6.00% p.a 8.00% p.a
BASIC BANKING ACCOUNT Soneri Bank Limited introduces Basic Banking Account Scheme with effect from July 01, 2006. Salient feature of the Scheme are: Basic Banking Accounts may be opened in the Pak Rupees by individuals including minors under guardianship. The accounts may be opened by initial deposit of any amount. No minimum balance requirement is applicable. Basic Banking Account is non-profit bearing account.
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4 withdrawals from a Basic Banking Account through cheques in one calander month are free of service charges. Additional withdrawals through cheques in a calander of month shall be subject to service charge @ Rs. 25/- per additional cheque. Soneri Banking Cards for the use of Bank's Electronic Banking Service are issued without charges for one time issuance of the cards. unrestricted number of withdrawals from the account through ATMs are permissible subject to applicable per day withdrawal limit for amounts in force. Cash withdrawals from Soneri Bank's ATMs are free of Service Charge. Use of another bank's ATMs shall be subject to Service Charges applicable. Basic Banking Account holders may also use Soneri Bank's other Electronic Banking Services subject to completion of applicable formalities which shall be subject to applicable Service Charges. Account have -NIL- balances for six consecutive months shall be closed without prior intimation. Statement of Accounts are provided once a calander year at the year end. Individuals who already maintain PLS Saving Accounts/ Current Accounts with Soneri Bank's branches may convert their accounts into Basic Banking Account. Please contact any Soneri Bank branch for further details. Govt. Withholding Tax apply on all cash withdrawals SONERI SAVING ACCOUNT Soneri Savings Account is a flexible and fast growing cumulative profit account with a great convenience for individuals (in single or joint names), minors (to be operated by the guardian), charitable institutions, provident fund and other funds of benevolent nature local bodies, autonomous corporations, limited companies, firms associations, educational institutions etc. The rate of Profit in this savings scheme increases as your balance increases without demanding and negotiating with us. The account may be opened with any amount. Soneri Savings Bank Account entitles Account Holder to avail amazing facilities such as: Chequing Account facility with no limit on a number of transactions Free Cash Deposit and Withdrawal facilities through your bank branch Free Clearing facility to deposit cheques of other banks within the city
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Online Funds Transfer through Cheques to any account across Pakistan through your bank branch Online Cash Deposit, Withdrawal and Funds Transfer through cheques from any of our branch across Pakistan Remittance facilities such as Payment Orders, Demand Draft, Telegraphic Transfers and Free Rupee Travelers Cheque through your bank branch Standing Orders facilities Safe Deposit Locker at designated branches Statement of Account on six monthly basis Usage of Electronic Banking through: o ATMs across Pakistan owned by Soneri Bank and other banks o Shopping/purchasing/payments through outlets displaying ORIX sign o Free Online Cash Withdrawal facility upto Rs. 300,000/- from designated branches without Cheque Book o Free 24-hours Telephone Banking and Call Centre facility o Free 24/7 Online Funds Transfer to any customer of Soneri Bank through ATMs owned by Soneri Bank o 24/7 Online Inter Bank Funds Transfer through ATMs owned by Soneri Bank to any account of increasing list of enabled 1 LINK member banks o Free 24/7 Internet Banking to view Statement of Account No one-time and renewal fee on Soneri Banking Card All purchases and cash withdrawals made with the Soneri Banking Cards is deducted directly from your bank account Free Cash Withdrawal on ATMs owned by Soneri Bank Govt. Withholding Tax apply on all cash withdrawals and profit credited into account Zakat is deductable from Account however Zakat exemption forms are accepted SHARING PROFIT/LOSS: No minimum balance is required to qualify for profit Provisional rates are announced on a six monthly basis however profit/loss earned/incurred on Soneri Savings Accounts are determined by the Bank at its sole discretion on the basis of its net working result at the end of each half-year/ year Calculation of products on Soneri Savings Accounts is computed on daily product basis
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Profit on Soneri Savings Accounts is credited on a monthly basis on the provisional rate of Profit Provisional Rates ANNUALISED RATES OF EXPECTED PROFIT FOR DIFFERENT TYPES OF PLS DEPOSITS. Effective: 01.July.2009 Period: JULY - DECEMBER, 2009 Minimum balance requirement 5,000/-. Operational facility like Current Accounts without any restriction on amount and number of Cheques. Profit paid on monthly basis on daily products.
Balance Upto Rs. 100,000 Over Rs. 100,000 but upto Rs.1.0 Million Over Rs. 1.0 Million but upto Rs. 5.0 Million Over Rs. 5.0 Million but upto Rs. 10.0 Million Over Rs. 10.0 Million
Rate of Return p.a 5.00 %. 7.00 %. 8.00 %. 9.00 %. 11.00 %.
CLEARING:
The basic function of the clearing department is to facilitate the customer; it provides them the services in collection of their cheque in other banks In stamping procedure, the pay-in-slip counter foil the following three stamps are used transfer, transfer delivery and clearing .If the cheques is for the same bank, and drawer and the payee both have the account in the same bank, the simple bank stamp is used, and this stamp indicates the transfer of cheques from one account to another account. This cheque is directly moves towards posting in computer terminal where the computer operator debit one account and credit the account of another party. This stamp is known as the Transfer stamp. if the cheque is for same bank but deferent branches, transfer delivery (TD) stamp is used and the cheques is different banks then used clearing stamp. Inward clearing cheque in our bank because of the clearing in my bank. Outward cheque in other bank because of the clearing in other banks. OBC (outward bill collection) there are two type of OBC direct OBC and indirect OBC. OBCs are those bills which came from different cities for collection through mail. The clearing officer collect the OBCs from dispatch at morning and enter them into the OBC register after entering vouchers and after this he enter those OBCs into the computer and logged them from clearing in NIFT.NIFT is working as clearing houses on behalf of state bank of Pakistan. At the end of the day the OBCs come back
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from NIFT. The OBCs which are realized the officer in register write realized in front of it after entering he make three journal credit voucher income commission, FED and courier charges. which are return he write return in front of it and the bill which are return due to any reason are sent back to the branch where it came from.
ADVANCE DEPARTMENT
CONSUMER FINANCE Consumer finance means any financing allowed to individual for meeting their personal, family or house hold needs. It is offered to salaried, self employed person and business person. Following products categorized as consumer financing. GHAR FINANCE CAR FINANCE PERSONAL FINANCE GENERATOR FINANCE
CAR FINANCE:
Purpose of Finance Purchase of brand new: Un-registered cars for private use. Un-registered light commercial vehicles for private use. Eligible Borrowers* Salaried Persons Self Employed Professionals Business Persons Financing Amount For Cars upto 2000 CC: Rs. 1.0 Million For Cars exceeding 2000 CC: Rs. 2.0 Million Down Payment On finance upto Rs. 1.0 M: Minimum 15% of the vehicle price. On finance over Rs. 1.0 M: Minimum 20% of the vehicle price. Tenure Maximum repayment period is 5 years Mark-up Rate ** 1 year KIBOR + 3% p.a., to be revised on each anniversary of finance. Processing Fee Rs. 2000/- per approved application. Service Length
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Minimum 2 years of confirmed service with present employer in case of Salaried Person.
Age At the time of Application for finance applicants age must not be more than; 55 years in case of Salaried Persons 60 years in case of Self Employed / Business Persons Debt Burden Monthly repayment installments not to exceed 40% of the net take home salary or 40% of declared monthly income (taking into account other financing facilities availed from other Banks/DFIs). Pre-Payment Penalty 2% pre-payment penalty on outstanding principal amount of finance being pre-paid. Late Payment Charges Rs. 500/- per installment per month. Insurance of Cars / Motor Vehicles Cars / Motor Vehicles financed are to be comprehensively insured with any of the Insurance Companies listed on the approved panel of Soneri Bank. Insurance Premium is payable up-front for each year during the life of the loan. Charges Documentation Charges at actual. Income Estimation Charges (if applicable). * Subject to fulfillment of our eligibility criteria. ** Subject to change and revised rates to be communicated from time to time. GHAR FINANCE: Purpose Purchase / Construction of Property for self-occupancy. Extension / Renovation on self occupied residential Property. Product Categories Purchase of pre-constructed Residential Property. Construction of residential property on self owned plot of land. Extension / Renovation on self owned & occupied property. Balance Transfer Facility (BTF) for any of the above finance.
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Eligible Borrowers* Salaried Persons Self Employed Professionals Business Persons Financing Amount Purchase Rs.Up to 10 Million Construction Rs.Up to 10 Million Extension / Renovation Rs.Up to 03 Million Balance Transfer Facility Rs.Up to 10 Million Tenure Purchase Up to 20 Years Construction Up to 20 Years Extension / Renovation Up to 07 Years Balance Transfer Facility Up to 20 Years (Calculated from the date of original finance) Mark-up Rates** 1 Year KIBOR + 2% p.a., to be revised on each anniversary of finance. Processing Fee Rs. 2500/- or 0.50% of the finance amount whichever is higher (refundable where case is not approved). Service Length Minimum 5 years of confirmed service with present employer in case of salaried persons. Age At the time of maturity of the Finance applicant's age must not be more than; 60 years in case of Salaried persons 65 years in case of self Employed / Business persons Debt Burden Monthly repayment installments not to exceed 40% of the net take home salary or 40% of declared monthly income (taking into account other financing facilities availed from other banks/DFIs). Moratorium A moratorium of 12 months is allowed in case of finance for Construction. Pre-Payment/ Partial Prepayments In case of Partial Payment / Balloon Payment / Full adjustment, no penalty will be charged.
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Late Payment Charges Rs. 500/- per Installment per month. Insurance Mortgage Protection Insurance cover through Banks designated Insurance Company. Insurance premium on the insurance cover payable upfront each year. Charges Documentation Charges at actual Valuation Charges Legal Opinion Charges Income Estimation Charges (if applicable) * Subject to fulfillment of our eligibility criteria. ** Subject to change and revised rates to be communicated from time to time. PERSONAL FINANCE: Purpose of Finance To meet medical expenses for self or dependants of applicants. To meet educational expenses of applicants children. To meet travel expenses for self and family members. To meet renovation expenses of self owned residential property. To meet advance rent payment for rented residential property occupied by the applicants. To meet domestic needs. Product Categories Maximum Type Financing***
Clean Financing Upto Rs. 0.5 Million Balance Transfer Facility (BTF) Upto Rs. 0.5 Million
Eligible Borrowers* Salaried Persons Self Employed Professionals Business Persons Tenure Maximum repayment period of 5 years. Mark-up Rate** 1 Year KIBOR + 6% p.a., to be revised on each anniversary of finance. Processing Fee
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No Processing Fee. Service Length Minimum 2 years of confirmed service with present employer in case of Salaried Person. Minimum 1 year of practice by Self Employed Professionals. Minimum 2 years of business association by Business Persons. Age
At the time of maturity of the finance applicants age must not be more than; 60 years in case of Salaried persons 65 years in case of Self Employed / Business persons Debt Burden Monthly repayment installments not to exceed 40% of the net take home salary or 40% of declared monthly income (taking into account other financing facilities availed from other Banks/DFIs). Pre-Payment Penalty No prepayment penalty Late Payment Charges Rs. 500/- per installment per month. Personal Loan Insurance Amount of Finance insured against life of borrowers, free of cost. Charges Documentation Charges at actual. Income Estimation Charges (if applicable). * Subject to fulfillment of our eligibility criteria. ** Subject to change and revised rates to be communicated from time to time. *** The total amount availed from other Banks / DFIs should not exceed the total clean finance exposure. GENERATOR FINANCE For purchase of brand new Electric Power Generator to be installed at residential / commercial / industrial property owned by the borrower. Maximum repayment period is 3 years .Financing amount Minimum Amount of Finance :Rs.0.1 Million Maximum Amount of Finance: up to Rs.1.0 Million Down Payment A minimum of 20% of price of the Generator (as per Quotation / Invoice) being financed shall be paid by the borrower. Mark-up Rate ** 1 Year KIBOR + 3% p.a., to be revised on each anniversary of finance. BUSINESS FINANCE
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Business finance enhance to the business and existing business to require the capital. It is offered to the individual, SME and corporate loan. repayment period of 1years or demand. Mark-up Rate ** KIBOR +2.5% p.a. it depend on security. SME ( SMALL MEDIUM AND ENTERPRISES) Means an entity, ideally not a public limited company, which does not employ more than 250 persons (if it is a manufacturing concern) and 50 persons (if it is a service concern) following criteria of either a and c or b and c as relevant. b) A service concern with total assets at cost excluding land and building up to Rs.50 million. c) A manufacturing concern with total assets at cost excluding land and building up to Rs.100million. d) Any concern with net sales not exceeding Rs.300million as per the latest financial statement. LOCKERS Specially designed lockers of various sizes to meet the requirements of applicants are available at our designated branches. The lockers may be operated during the banking hours of the branch. Only Account holders of our branches are eligible to apply for renting the Safe Deposit Lockers.
FOREIGN CURRENCY DEPARTMENT

We deal in ERU,DOLLAR and POND. There is outward and inward remittance in foreign department. Inward remittance is coming from foreign country Outward remittance, we send money foreign country. We launch to the main branch and foreign currency is dealing with two days i.e. Monday and Thursday. USD open in current and saving account ERU and POND open only current account. International transaction we, maintain account and there are three account Nostro, loro and wostro. our account is attach with the foreign account is known as nostro. Foreign account attach with our account is known as wostro our account and foreign account is open to the other bank is known as loro. Inward and outward remittance report we, make in monthly basis. DEPOSITS Deposits represent saving of the people and organizations which are deposited with bank. Basic function of all commercial banks in mobilization of deposits and use these funds in lending to business and industry as well as investing in shares and securities.
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TYPE OF DEPOSITS There are two types of deposits 1) Demand deposits current deposits saving deposits sundry deposits call deposits 2) Time deposits term deposits special notice time deposits soneri saving certificate soneri diamond deposit certificate soneri premium deposit certificate SONERI SAVING CERTIFICATE Soneri bank 3 years soneri saving certificates provide investment opportunities to small and medium income group investor. Annualized rate of expected return 11.50%p.a. Profit paid on completion of 6 months from date of investment. The certificates are issued in multiples of Rs 10,000/= Acceptable as security against finance SONERI DIAMOND DEPOSIT CERTIFICATE Annualized rate of expected return 14% p.a. Profit payable at monthly intervals. Minimum investment Rs.10,000. SONERI PREMIUM DEPOSIT CERTIFICATE Annualized rate of expected return 13% p.a. Profit payable after 12 months on maturity Minimum investment Rs.25,000. Acceptable as security against finance.
CASH DEPARTMENT
The cash department collected to the utility bills, cash payment and cash receipt, cash on hand. We sale and purchase of national prize bonds and we deal in ERU, DOLLAR, POND and PKR. Previous ending balance is opening balance to the next day.
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REMITTANCE
In the SBL, the remittance department is headed by one person who is responsible for looking after the accounts of the branch and forming pay order, demand draft. Remittance is transfer of funds from one city to another city or within the city. 1. Pay Order: A pay order is an instrument in writing issued by bank for a certain sum of money payable on demand to the order of the payee mention within the city, where as pay slip is used for banks internal use. 2. Demand Draft: A demand draft is an instrument in writing drawn by one branch of a bank on another branch of the same bank for a certain sum of money; payable on demand to the order of the payee mention therein the draft.
ATM
Soneri Banking Card offers convenient and 24-Hours-a-day, 365 days a year access to ATMs across the country. When traveling within Pakistan, use the Card at Soneri Banks own network of ATMs and hundred of ATMs displaying either the 1-link or M-Net symbols. ELIGBILITY: You can also apply for a Debit Card services. If you are having Soneri Banking Card, if you are maintaining a Soneri Bank PKR Current or Savings account Single or Joint account with either signatory authorized to operate the account, a further supplementary card can also be issued to the second account holder. All Soneri Banking Card holders use debit card facility. ATM ACCESS ACROSS ALL OVER PAKISTAN: Now cash withdrawals and Balance Inquiry services are available by any of the ATM in Pakistan. AVAILABLE SERVICES: AT ALL ATMs Cash Withdrawal: You can withdraw cash from your account(s) up to Rs.25,000 per day in multiples of Rs.500, and Rs.1,000 currency notes. Balance Enquiry: You can see the available balance in your account displayed on the screen or obtain a printed advice AT Soneri Bank ATMs: Fast Cash: You can withdraw up to Rs.1000, 3000, 5000, 7000 and 10000 cash from your account(s). .
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Mini-Statement: The ATM shall provide you with an instant ministatement of your ATM linked accounts (declared by you on the application) listing 10 last transactions in the account(s). Request for Cheque Book: Request for fresh chequebook may be made through the ATM. The Cheque book may be collected from your branch after 3 working days against surrender of duly signed cheque book Requisition slip. Request for Statement of Account: Request for a detailed statement is processed at the push of a button. Requested statement shall be dispatched by your branch at your Registered Address within 4 working days. Pin Change: You may change the Personal Identification Number (PIN) through the own ATMs any number of times. Smart Option: 1. Fund transfer 2. Utility bill payments Funds Transfer facility: You have the power to transfer money from your account to any account of Soneri Bank anywhere in Pakistan. SONEI VISA DEBIT CARD: SONERI Debit Card brings to you the ultimate facility of spending and making payments. You are privileged to avail the unmatched opportunities and benefits of the CLASSIC Card and GOLD Card. With the Buy Now Pay Now facility, you pay directly from your bank account. Use your SONERI Debit Card wherever you are and whenever you want. Safer than Carrying Cash Pay dining, shopping, traveling, hotel and other bills at over 24 million outlets displaying sign locally and internationally Worldwide cash withdrawal facility at over 1 million ATMs displaying the sign Ease of Cash withdrawal on 1 LINK and ATM networks across Pakistan Credit facility available for GOLD Card Holders Accessibility of multiple accounts from a single card Makes money management easier 24/7 Automated Telephone Banking 24/7 Call Centre facility Cheque-free banking Funds Transfer facility between participating 1LINK member banks
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Attractive rewards on spending Gold & Classic Debit Card SCHEDULE OF CHARGES Description Charges l VISA GOLD Debit Card:
Joining Fee Annual Charges Supplementry Card Charges Card Replacement Charges PIN Re-issuance Charges NIL
Rs. 500 Per Card Rs. 500 Per Card Rs. 200 Per Card
Soneri
NIL NIL
Rs. 150 Per Card Rs. 150 Per Card Rs. 200 Per Card
VISA CLASSIC Debit Card: l

Joining Fee Annual Charges Supplementry Card Charges Card Replacement Charges PIN Re-issuance Charges
NIL
l
ATM Cash Withdrawal:

Local (at Soneri ATM) Charges Local (at 1-LINK/M.Net ATMs) Charges International Transactions (ATMs Displaying PLUS Logo)
NIL
Rs. 15 Per Card
Rs. 300 Per Transaction or 3% of transaction amount whichever is higher

l
Purchase: (Point of Sale Terminal)

Local International
NIL Rs. 300 Per Transaction or 2% of transaction amount whichever is higher

l
ATM Funds Transfer:

Within any Soneri Bank Branch With any participating 1-Link Member Bank
NIL Rs. 50 Per Transaction
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Other Charges
*Arbitration fee on disputed transaction
Rupee equivalent of US $ 500 Rs. 250 per retrieval Rupee equivalent of US $ 15 per retrieval
*Document Retrieval Charges Local *Document Retrieval Charges International
WORK DONE BY THE STUDENT:

I have done my internship at Soneri Bank Limited, Qurtaba Chowk, Lahore. The building of Bank is very beautiful. It is situated at the beautiful and calmful area of Lahore. The Internal environment of the bank branch is also very comfortable for staff and customers as well. There are many departments each assigned with separate responsibility so, thats why the customer knows that which person could solve his problem. This branch is establish after great analysis because each and every type of customer can withdrawal their money from their (e.g. Doctors, Computer Market, Bakeries, Medical Stores) are close to that branch.
LEARNING AS AN INTERNEE:
As every body knows that "Knowledge without practice is sterile "In this regard on 27th of July 2009, I was asked by Mr. Amjad Sherazi (AVP at main branch of Soneri Bank, Lahore) to go to Soneri Bank Qurtaba Chowk branch to start an internship of six weeks there. During this period I got a chance to work and learn in following departments of the bank: Foreign exchange department Bills clearing department Credit department I.T department Cash department Accounts, ATM and Lockers department Duties and learning in Foreign exchange department First of all I started my training in foreign exchange department of the bank under the supervision of Miss Farzana Nadir (Manager Forex department). I came to know about the different functions of foreign exchange department and how to perform these functions during my work in the department. My duties in the department were related to the followings: Foreign currency exchange rates.
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Letter of credit (L.C) both opening and negotiation. Letter of guarantee Issuing check books for foreign currency accounts Remittances applications. Learning Opening of letter of credit. Bank starts working on opening process after an application is received from the buyer (importer). I came to know about the process of opening of L.C, documents that bank demands from applicant, form used for that purpose, getting A.T (Availance Ticket) from regional head office and scanning and mailing the documents to head office Karachi for the purpose of getting approval, and payment on maturity date. Opening and negotiation both are centralized process in Soneri bank therefore approval from head office is required. Negotiation of L.C. Bank starts negotiation of letter of credit (which would be already opened by importers bank) after the application from seller (exporter). Before sending the documents for payment to importer bank negotiator bank must ensure that the entire document mentioned in Claus 46A of the L.C are attached and complete. During the week I also worked on Remittances application. An applicant who wants to transfer funds abroad must have a foreign currency account in the bank. Because State Bank of Pakistan only allow account to account transfer of funds abroad through banks. And I came to know about the process and information required to fill the form. I also came know about the process of issuing foreign currency accounts cheque book to customers. During the week I learn many things about the mechanism of foreign trade. Duties and learning in bill clearing department After Forex Department I went to Clearing Department.The basic function of the clearing department is to facilitate the customer; it provides them the services in collection of their cheque in other banks. First thing I lernt there was stamping Process. In stamping procedure, the pay-in-slip counter foil the following three stamps are used transfer, transfer delivery and clearing .If the cheques is for the same bank, and drawer and the payee both have the account in the same bank, the simple bank stamp is used, and this stamp indicates the transfer of cheques from one account to another account. This cheque is directly moves towards posting in computer terminal where the computer operator debit one account and credit the account of another party. This stamp is known as the Transfer stamp. if the cheque is for same bank but deferent branches, transfer delivery (TD) stamp is used and the cheques is different banks then
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used clearing stamp. Inward clearing cheque in our bank because of the clearing in my bank. Outward cheque in other bank because of the clearing in other banks. OBC (outward bill collection) there are two type of OBC direct OBC and indirect OBC. OBCs are those bills which came from different cities for collection through mail. The clearing officer collect the OBCs from dispatch at morning and enter them into the OBC register after entering vouchers and after this he enter those OBCs into the computer and logged them from clearing in NIFT.NIFT is working as clearing houses on behalf of state bank of Pakistan. At the end of the day the OBCs come back from NIFT. The OBCs which are realized the officer in register write realized in front of it after entering he make three journal credit voucher income commission, FED and courier charges. which are return he write return in front of it and the bill which are return due to any reason are sent back to the branch where it came from. Duties and learning in advance department After bill clearing department I started my work and learning in credit department of the branch. Mr. Usman Ansari (Credit Manager) told me about the terms and conditions of Personal Finance, Generater Finance, Car Finance and Ghar Finance. The First thing was Soneri Car Finance. The documents required for car finance are Copy of CNIC Employment Certificate with date of joining Most recent Salary Slip/ Salary Certificate Bank Statement for the last 6 months Two passport size pictures Quotation of Vehicle from authorized dealer So I have learnt to prepare the document regarding the Car finance. The other thing was personal Finance. This Finance is for the person to meet the medical expenses, to meet the educational expenses to meet travel expenses, to meet renovation expense and to meet domestic needs. The document required for this purpose are: Copy of CNIC Employment Certificate with date of issuing or joining Most recent salary slip /salary certificate Bank statement for the last 6 months Two passport size pictures Employer Undertaking
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Copy of paid Utility bills The other finace offered by the department is Generater Finance. It requires following documents: Copy of CNIC Employment Certificate with date of issuing or joining Most recent salary slip /salary certificate Bank statement for the last 6 months Two passport size pictures Quotation/ Invoice of generater Copy of paid Utility bills Duties and learning in Accounts, ATM and Lockers department Then I learned about ATM (automatic teller machine). I came to know about the functions and working process of ATM machine. Loading cash and balancing at the time of loading again. Next my main concern was to know about all the aspects of ATM card. I came know about the types, process of issuing ATM card to customers, filling forms, how to activate ATM card, charges of issuing and using ATM card. Then I spent my time in lockers department. I took all the information about the terms and conditions of allotting and operating a locker, types of locker like small, medium and large, charges of using lockers, key deposit (refundable), filling application forms, insurance amount for specific size of locker and etc. I also came to know about the process of operating locker by the customer, how to open the locker with the help of two keys. 1 key in the hand of bank officer (anticlockwise) 2nd key in the hand of customer (clockwise) Customer is allowed to operate the locker in full privacy. Only the customer himself or other person authorized by him can operate the locker. After that bank officer has to take the signature of the customers on attendance register maintained for this purpose. Then my duty was in Accounts department. I came to know the procedure for filling the form to open an account, different types of stamps required and about signature of the staff. Documents required to be attached with the form. Copy of CNIC Utility bill Provisional receipt KYC (Know Your Customer)
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And how to post an account on system after filling the form. Then I came to know about Saving accounts and different types of accounts in saving category and terms and conditions of each type.
INTRODUCTION TO ANALYSIS OF FINANCIAL STATEMENT

Financial Analysis refers to an assessment of the viability, stability and profitability of a business, sub-business or project. It is performed by professionals who prepare reports using ratios that make use of information taken from financial statement and other reports. These reports are usually presented to top Management as one of their bases in making business decisions. Based on these reports, Management may: Continue or discontinue its main operation or part of its business; Make or purchase certain materials in the manufacture of its product; Acquire or rent/lease certain machineries and equipments in the production of its goods; Issue stocks or negotiate for a bank loan to increase its working capital. Other decisions that allow management to make an informed selection on various alternatives in the conduct of its business. Goals of Financial Analysis: There are various goals due financial analysis of statement has done but mainly companies do financial analysis due to the following reasons. The main purpose of financial analysis include To determine the growth potential of the firm, To determine the level of risk within the firm, and To determine the financial flexibility of the firm
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Financial Statements: Financial statements are formal records of a business' financial activities. These statements provide an overview of a business' financial condition in both short and long term. There are four basic financial statements: Income Statement Balance Sheet Statement of Cash Flows Income Statement: An Income Statement, also called a Profit and Loss Statement (P&L), is a financial statement for companies that indicates how Revenue (money received from the sale of products and services before expenses are taken out, also known as the "top line") is transformed into net income (the result after all revenues and expenses have been accounted for, also known as the "bottom line"). The purpose of the income statement is to show managers and investors whether the company made or lost money during the period being reported. Charitable organizations that are required to publish financial statements do not produce an income statement. Instead, they produce a similar statement that reflects the fact that the charity is not operating to make a profit. Income statements should help investors and creditors determine the past performance of the enterprise, predict future performance, and assess the capability of generating future cash flows. However, information of an income statement has several limitations: Items that might be relevant but cannot be reliably measured are not reported (e.g. brand recognition and loyalty) Some numbers depend on accounting methods used (e.g. using FIFO or LIFO accounting to measure inventory level) Some numbers depend on judgments and estimates (e.g. depreciation expense depends on estimated useful life and salvage value). Income Statement of HBL has given on next page
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Consolidated Profit and Loss Account For the year ended December 31, 2008
2008 2007 Rupees in 000 Mark up / return / interest earned Mark up / return / interest expensed Net mark up / interest income Provision against non performing loans and advances- net Provision for diminution in the value of investments Bad debts written off directly 7822941 4878347 2944594 1240746 25000 196 1265942 Net mark up interest after provisions Non mark-up / interest income Fee, commission, and brokerage income Dividend Income Income from dealing in foreign currency (Loss)/ gain on sale on securities- net Unrealized gain/ (Loss)on revaluation for investment classified as held for trading Other income Total non mark-up /interest income Non mark-up / interest expensed Administrative expenses Provision against other assets Provision against off-balance sheet obligation Other charges Total non mark-up / interest expenses 1678652 358685 268016 279284 (238) 6271636 4334355 1937281 234815 234815 1702466 288205 32613 184181 299570
320459 1226206 2904858 1673590 134311 100000 43724 1951625 953233
263095 1067664 2770130 1278974 5871 8600 1293445 1476685 ------1476685 403000
Extra ordinary/ unusual items Profit before taxation Taxation- Current
-------953233 697000
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INTERNSHIP REPORT - Prior year - Deferred Profit after taxation Inappropriate profit brought forward Transfer from surplus on revaluation of fixed assetsnet of tax Profit available for appropriation Basic and diluted earning per share (Rupees) (437) (444371) 252192 701041 238775 35042 (9684) 83035 476351 1000334 400853 35042
974858 1.70
1436229 2.43
Balance Sheet: Balance Sheets basically mirror the financial health of an organization specifically at the end of the scheduled financial period. Balance sheets answer all questions regarding the financial condition and are extensively referred and analyzed by equity shareholders, banks, investors and vendors. Balance Sheet analysis also provides management with insights into income trends, debt standing and long-term financial consistency, all of which are crucial towards planning and execution of vital business policies. Balance sheet also functions as an indicator to the amount of debt that can be lent to the organization. In financial accounting, a balance sheet is a summary of the value of all assets, liabilities and Ownership equity for an organization or individual on a specific date, such as the end of its financial year. A balance sheet is often described as a "snapshot" of a company's financial condition on a given date. Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time, instead of a period of time. A company balance sheet has three parts: assets, liabilities and shareholders' equity. The main categories of assets are usually listed first and are followed by the liabilities. The difference between the assets and the liabilities is known as the net assets or the net worth of the company. According to the accounting equation, net worth must equal assets minus liabilities.
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Consolidated Balance Sheet As on December 31, 2008

Assets Cash and balances with treasury banks Balances with other banks Lending to financial institutions Investments-net Advances-net Fixed assets Deferred tax assets Other assets-net Total Assets Liabilities Bills payable Borrowings from financial institutions Deposits and other accounts Sub-ordinate loans Liabilities against assets subject to financial lease Deferred tax liabilities Other liabilities Total Liabilities Net Asset Shareholder's equity Share capital Reserves Unappropriated profits Surplus on revaluation of asset-net of tax 4114222 2016877 834650 6965749 147298 7113047 4114222 1876669 238775 6229666 380813 6610479 1254496 8441454 61634491 1640514 5865471 60150128
2008
5646755 3908859 3990269 14053177 47575364 3126857 125843 2550130 80977254
2007
5861205 4349673 3175009 19181562 40154449 2150955 1981207 76854060
Rupees in 000
1198320 -
1198800 425398
1335446
73864207 7113047
963270
70243581 6610479
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Cash Flow Statement: Cash flow is essentially the movement of money into and out of your business; it's the cycle of cash inflows and cash outflows that determine your business' solvency. Cash flow analysis involves examining the components of your business that affect cash flow, such as accounts receivable, inventory, accounts payable, and credit terms. By performing a cash flow analysis on these separate components, you'll be able to more easily identify cash flow problems and find ways to improve your cash flow. A company can use a cash flow statement to predict future cash flow, which helps with matters in budgeting. For investors, the cash flow reflects a company's financial health: basically, the more cash available for business operations, the better. However, this is not a hard and fast rule. Sometimes a negative cash flow results from a company's growth strategy in the form of expanding its operations. By adjusting earnings, revenues, assets and liabilities, the investor can get a very clear picture of what some people consider the most important aspect of a company: how much cash it generates and, particularly, how much of that cash stems from core operations.
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Cash flow Statement For the year ended December 31, 2008
CASH FLOW FROM OPERATING ACTIVITIES Profit before taxation Less: dividend income Adjustment for: Depreciation Amortization of intangible assets Operating fixed assets written off directly Provision for diminution in the value of investment Provision against non performing loans and advances Provision against other assets Provision against off-balance sheet obligation Gain on sale of fixed assets Bad debts written off directly 238960 8271 28 25000 1240746 134311 100000 (9486) 196 1738026 2423243 (Increase) / decrease in operating assets Leading to financial and other institutions Advances Other assets(excluding advance tax) (815260) (8661857) (808695) (10285812) Increase / (decrease) in operating liabilities Bills payable Borrowings Deposits and other accounts Other liabilities(excluding current taxation) 18396 (4977016) (413965) (5372585) 197020 234815 5871 (4846) 432860 1876932 2008 2007 Rupees in 000 953233 268016 685217 1476685 32613 1444072
(386018) 2575983 1484363 272176 3946504 (3916065)
682938 (3050966) 7149481 312487 5093940 1598287
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INTERNSHIP REPORT Income tax paid-net Net cash flows (used in) / generating from operating activities CASH FLOW FROM INVESTING ACTIVITIES Net investment in available for sale of securities Net investment in held to maturity securities Dividend income Investment in operating fixed assets Sale proceeds of property and equipment disposed-off Net cash flows from / (outflow on) investing activities CASH FLOW FROM FINANCING ACTIVITIES Payment of sub-ordinated loans Net cash outflows on financing activities Decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year (480) (480) (655264) 10210878 9555614 (480) (480) (1943427) 12154305 102108878 (584083) (4500148) (705474) 892813
Rupees in 000 2175135 (2661145) 2077049 260997 (681733) 13916 3845364 205743 32886 (421111) 7867 (2835760)
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Financial Ratios: Financial ratio analysis is the calculation and comparison of ratios which are derived from the information in a company's financial statements. The level and historical trends of these ratios can be used to make inferences about a company's financial condition, its operations and attractiveness as an investment Financial ratio analysis groups the ratios into categories which tell us about different facets of a company's finances and operations. An overview of some of the categories of ratios is given below. Ratio analysis was developed to determine the stability of various financial aspects of a business. It shows the relationship between two figures, or two aspects of your business. It helps you work out your business' financial weaknesses and strengths, so that you can take appropriate action. Ratio analysis also offers a view of your business' competitive performance in relation to similar businesses in your industry. We will only discuss a few ratios here, as some can become very complicated. Essentially, we will group the ratios we discuss into the following types:

Leverage Ratios which show the extent that debt is used in a company's capital structure. Liquidity Ratios which give a picture of a company's short term financial situation or solvency. Operational Ratios which use turnover measures to show how efficient a company is in its operations and use of assets. Profitability Ratios which use margin analysis and show the return on sales and capital employed. Solvency Ratios which give a picture of a company's ability to generate cash flow and pay it financial obligations.
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Trend Analysis: An aspect of technical analysis that tries to predict the future movement of a stock based on past data. Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future. This techniques also known as comparative analysis. It is conducted by consecutive balance sheet, income statement or statement of cash flow sideby-side and reviewing changes in individual categories on year to year or multi year basis. The most item revealed by comparative financial statement analysis is trend. In trend analysis we did three different types of analysis. Horizontal Analysis Vertical Analysis Common Size Analysis Horizontal Analysis: A comparison of statement over several years reveals direction, speed and extent of trends. The horizontal financial statement analysis is done by restating amount of each item as a percentage. A procedure in fundamental analysis in which an analyst compares ratios or line items in a company's financial statements over a certain period of time. The analyst will use his or her discretion when choosing a particular timeline; however, the decision is often based on the investing time horizon under consideration. Such percentages are calculated by selecting a base year and assign a weight of 100 to the amount of each item in the base year statement. Thereafter, the amounts of similar items or groups of items in prior or subsequent financial statement are expressed as a percentage of the base year amount. The resulting figures are called index number or trend ratio. The representing of balance sheet items as percentages of assets and of income statement items as percentages of sales. Common Size Analysis: Common-size analysis (also called vertical analysis) expresses each line item on a single year's financial statement as a percent of one line item, which is referred to as a base amount. The base amount for the balance sheet is usually total assets (which is the same number as total liabilities plus stockholders' equity), and for the income statement it is usually net sales or revenues. By comparing two or more years of common-size statements, changes in the mixture of assets, liabilities, and equity become evident. On the income statement, changes in the mix of revenues and in the spending for different types of expenses can be
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identified. Cross sectional comparison came from the problems in comparing the financial statement of firms that differ in size. In the balance sheet, for example, the asset as well as the liabilities and equity are each expressed as a 100% and each item in these categories is expressed as a percentage of the respective totals. In the common size income statement, turnover is expressed as 100% and every item in the income statement is expressed as a percentage of turnover( sales). An analyst can compare the percentage mark-up of asset item s and how they have been financed. The strategies may include increase/decrease the holding of certain assets. The analyst may as well observe the trend of the increase in the asset and liabilities over several years. As basis of analysis, the analyst may seek variables which seem to improve or deteriorate and bring a challenge to the stakeholders in their various decisions.
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FINANCIAL ANALYSIS OF SONERI BANK LIMITED Solvency Analysis Solvency: The ability of business to pay the long-term debts is known as solvency. Solvency is important for business because of two reasons. Ability to pay periodic interest Ability to pay original Amount
Year Concerned: Current Year: 2008 Base Year: 2007 Items Involved: Assets: Total Assets Liabilities: Total Debts and Total Equity
Debt Ratio: Ratios Total Debts Total Assets 2008 73864207 80977254 2007 70243581 76854060 Result
Debt Ratio
91%
91%
Favourable
Comments on Debt Ratio: The debt ratio indicates the firms long term debt-paying ability. This ratio shows the combination of debts in total resource of business. Lowe answer shows favourable results for solvency. This ratio helps to determine how well creditors are protected in case of insolvency. In the comparative analysis of Soneri Bank Limited financial statement the debt ratio in 2008 is 91% while in 2007 it was 91%. As debt ratio is favourable for the bank. Although the debt ratio is favourable in the
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comparison of 2007 but it is very high in the comparison of industry. It shows that any additional long term debts will further decrease the solvency of the bank. So it is suggested that company should not take any additional long term debts. Equity Ratio: Ratios Total Equity Total Assests 8.60% Equity Ratio Comments on Equity Ratio: This ratio shows the contribution of equity in total resources of business. Higher answer shows favourable results for solvency. This is also called proprietary ratio. Equity Ratio and Debt Ratio is very helpful in capital structuring. In the comparison of SBLfinancial statement Equity Ratio in 2008 is 8.60% while in 2007 it was 8.11%. It means Equity Ratio result is favourable for the SBL. The results of equity for SBL in the year of 2008 is favourable because Reserve and Unappropriated profit both are increased. Debt to Equity Ratio: Ratios 2008 Total Debts Total Equity 73864207 6965749 2007 70243581 6229666 Result 8.11% Favourable 2008 6965749 80977254 6229666 76854060 2007 Result
Debt to Equity Ratio
10.60
11.28
Favourable
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Comments on Debt to Equity Ratio: The debt/equity ratio is another computation that determines the entitys long- term debt-paying ability. This computation compares the total debt with the total shareholders equity. The debt/equity ratio also helps determine how well creditors are protected in case of insolvency. From the perspective of long term debt paying ability the lower this ratio is, the better the companys debt position. In the comparative analysis of SBL financial statement Debt to Equity Ratio in 2008 was 10.60 while in 2007 it was 11.28.
FINANCIAL ANALYSIS OF SONERI BANK LIMITED Profitability Analysis

Profitability: The overall effectiveness of management is known as profitability. Year Concerned: Current Year: 2008 Base Year: 2007 Items Involved: Assets: Total Assets Liabilities: Total Debts and Total Equity Income Statement: EBIT, Finance Cost ROA (Return on Assets):
Ratios Net Profit after tax Total Assets ROA 2008 701041 80977254 0.87% 2007 1000334 76854060 1.30% Favourable Result
Comments on Return on Assets: Return on Assets measures the firms ability to utilize its assets to create profits by comparing profits with the assets that generate the profits. The net profit margin the total assets turnover and the return on assets are usually reviewed together because of the direct influence that the net profit margin and the total asset turnover have on return
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on asset. When these ratios are reviewed together; it is called Dupont analysis. In the comparison of 2008 and 2007 the Dupont return on Assets for SBL. In 2008 the Return on Assets is 0.87% while in 2006 it was 1.30%. This shows that the result in 2008 is favourable as compared to 2006. It is because in 2008 net income after interest and tax has been increased. ROE (Return on Equity): Ratios Net Profit After Tax Share Capital ROE Comments on Return on Equity: This ratio measures the return to the common shareholder, the residual owner. It is very important to compare profit with equity because profit depends upon sales. Sales depend upon total Asset and total Assets depend upon equity. In the comparison of 2008 and 2007 it shows that the Return on Equity is not favourable for the bank. Because in 2008 return on equity is 10.06% while in 2007 it was 16.60%. The result is unfavourable because equity in 2008 has increased. 2008 701041 6229666 6965749 16.06% 10.06% Unfavourable 2007 1000334 Result
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FINANCIAL ANALYSIS OF SBL Marketability Analysis

Marketability: In consideration of Market Analysis for the perspective of investor, it is observed from calculations that the major indicators are favourable we will consider market analysis in three different ways but in bank analysis degree of financial leverage is not calculated. Degree of Financial Burden Marketability Return to the Investors But for bank analysis Degree of Financial Leverage is not calculated because in banks there is no issue of financial leverage. Therefore in bank analysis we did only Marketability and Return to the Investor Analysis. Year Concerned: Current Year: 2008 Base Year: 2007 Items Involved: Liabilities: Total Equity Income Statement: Net income available to Shareholder Other: Market price per share, No of shares, Dividend per share. Earning Per Share: Ratios Income Earned Total No of Shares 1.41 Diluted Earning per Share 1.49 Favourable 2008 2904858 4114222 2007 2770130 4114222 Result
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Comments on Earning Per Share: Earning per share the amount of income earned on a share of common stock during an accounting period applies only to common stock. While calculating earning per share for any firm diluted earning per share is preferred to use because it shows the true earning of the company which will occur again and again. The investor will prefer diluted earning per share instead of normal earning per share for his future investment. In the comparison Earning per share in 2008 is 1.41 while in 2006 it was 1.49 that indicate favourable results for the year 2008. Due to the increase in EPS investment potential increased which indicates growth of the company. Price Earning Ratio: Ratios Price Earning Ratio 2008 7.0 2005 6.7 Result Unfavorable
Comments on Price Earning Ratio: The price Earning Ratio expresses the relationship between the market price per share of a common stock and the stock current earnings. Price earning ratio shows the growth potential of any company in the Market. Higher answer will show high growth potential. Investors view the P/E ratio as a guage of future earning power of the firm. Companies with high growth opportunities generally have high P/E ratio, firms with low growth tend to lower P/E ratio. In HBL comparison price Earning Ratio in 2006 was 3.82 while in 2005 it was 5.08 that indicate unfavourable results and tend to low growth potential of the bank. There is decrease in the price earning ratio because in 2005market price per share is high as compared to 2006. Although EPS is high in 2006 but this is not created good effect on the growth potential of the bank. Book Value per Share: Ratios 2008 2007 Result
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Book Value Per Share
59.53
39.79
Favourable
Comments on Book Value per Share: A figure frequently published in the annual report is book value per share which indicates the amount if stockholders equity that relates to each share of outstanding common stock. When market value is below book value, investor views the company as lacking potential. A market value above book value indicates that investor view the company as having enough potential to be worth more than recovered cost. HBL book value in 2006 is 65.47 while in 2005 it was 47.42 which indicate favourable results for the company. The market value per share of HBL is Rs 70 in 2006 which it was Rs 70.5 in 2005. It means there was growth potential for HBL investors. Book value increased in the year 2006 because the equity of the bank increase 38% in the year 2006. In 2006 there was less gap between book value and market price per share that is good for the bank because wider the gap between book value and market value higher the risk for the bank.
FINANCIAL ANALYSIS OF HBL Specialized Analysis of Bank

11.10 Specialized Analysis: The Financial Statement of Bank is different from normal business financial statement therefore for bank analysis some specialized ratios are also calculated. The operating revenue and operating expenses of bank is different from normal business. There is no classification of current and fixed asset in the bank financial statement and also there is no difference in current and long term liabilities of bank Financial leverage is not the issue of bank Year Concerned: Current Year: 2008 Base Year: 2007 Items Involved: Assets: Total Assets Liabilities: Total Debts and Total Equity
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11.10.2 Return on Earning Assets: Ratios Net profit before tax Assets 54 Return on Earning Assets 1.18% Comments on Return on Earning Assets: This ratio explains the profitability of bank. Higher ratio will be Favourable for the bank. This is not the true comparison of the profitability of the bank because many non operating expenses are involved. Return on earning assets is the comparison between Net profit before tax and earning assets. In the comparison of financial statement of SBL for the year of 2008 and 2007 the Return on Earning Assets shows favourable results. In 2007 return on earning assets is 1.18% while in 2006 it was 1.92%. In 2008 the result is favourable because of the effectiveness of Management of SBL. In the year of 2008 there was a major increase in net profit before tax. 1.92% Favourable 2008 953233 809772 2007 1476685 76854060 Result
Trend Analysis It shows the trend over a period of time. It includes: Speed of the trend Direction of the trend Nature of the trend 11.11.1 Two types of trend analysis these are: 1) Horizontal analysis 2) Vertical analysis 58
INTERNSHIP REPORT Horizontal Analysis of Total Assets Items Cash and balances with other banks Balance With other Banks Lending to financial intuitions Investments Advances Other assets Operation fixed assets Deferred Tax assets 2003 100 100 100 100 100 100 10 100 2004 500.60 375.59 225.92 1101.19 4109.62 183 1998.98 18.64 2005 541.36 404.36 267.54 1494.15 4154.65 186 2054.64 26.65 2007 586.12 434.97 317.50 1918.15 4015.45 198.12 2150.95 2008 564.67 390.89 399.03 1405.31 4757.53 255.01 3126.85 12.58 Avg. Change 17.14 -8.7 25.68 -36 27.14 5.75 44.59 -56 Directio n +VE -VE +VE -VE +VE +VE +VE -VE Nature of trend Favorable Unfavorabl e
Favorable Unfavorable
Favorable Favorable Favorable

Unfavorable
Horizontal Analysis of Total Liabilities Items Bills payables Borrowings from other commercial banks Deposits and Other Accounts Other Liability 2003 10 100 2004 107.25 383.08 2005 130.28 477.13 2006 164.05 586.55 2007 125.45 844.15 Avg. Direction Nature of Change trend 31.2 +VE Favorable 44.03 +VE Favorable
100 100
6009.89 112.69
6123.29 125.69
6015.01 96.33
6163.4 133.54
2.46 40
+VE +VE
Favorable Favorable
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INTERNSHIP REPORT Horizontal Analysis of Equity Items Share capital Capital Reserves Surplus Minority interest 2002 100 100 100 100 2003 100 2004 56.65 2005 56.65 2006 56.65 Avg. Change -10.83 408.217 0.44 84.41 Direction -VE +VE -VE +VE Nature of trend Unfavorable Favorable Favorable Favorable
159.18 257.53 199.67 1732.86 92.96 111.91 105.34 101.77 437.67
111.66 400.33 405.79
Horizontal Analysis of Income Statement Items Interest expenses Interest income Provision against non performing loans provision against diminution in investment Net interest income fee, commission and brokerage income income on investment income from dealing in foreign currency other income 2002 100 100 100 2003 48.94 2004 38.61 2005 63.27 202.13 111.98 2006 114.02 246.30 107.78 Avg. Change 3.50 36.57 1.94 Direction +VE +VE +VE Nature of trend Unfavorable Favorable Unfavorable
109.92 110.91 183.69 71.05
100 100 100 100
-06.12 82.31 94.26
104.90 115.76 119.72
57.27 222.99 140.11 96.15
9.50 280.60 187.50 67.93
-22.62 45.15 21.87 -8.01
-VE +VE +VE -VE
Favorable Favorable Favorable Unfavorable
195.71 235.91
100 100
93.43
95.75
96.33 194.12
96.33 194.12
-0.91 23.53
-VE +VE
Unfavorable Favorable
104.21 175.42
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INTERNSHIP REPORT Total non interest income administration expenses other provisions / write offs other charges Total non interest expenses staff welfare fund Profit Before Taxation taxation Profit after taxation 100 100 100 100 100 100 100 100 100 125.39 159.36 82.84 -510.5 116.72 -391.6 126.92 119.37 -398.18 137.18 130.64 -195.88 9.29 7.66 -73.97 312.95 8.20 -225.29 206.57 49.73 -9.38 +VE +VE -VE +VE +VE -VE +VE +VE -VE Favorable Unfavorable Favorable Unfavorable Unfavorable Favorable Favorable Unfavorable Unfavorable
509.35 185.24 1686.35 1351.83 86.15 133.66 119.45 0 122.67 -744.75 680.14 203.86 474.27 132.80 -801.16 926.29 298.92 62.44
197.52 356.32 70.66 72.24
197.52 283.35
Comments Horizontal analysis is for examination the progress of the business. After calculation the progress of the business I find out inconsistency in the various items of the financial statements. In the balance sheet the most important assets of the bank are the advances, cash and balances with other banks, lending to financial institutions. while analysis of the progress of the bank it is observed that the year 2008 is comparatively better than the previous years. The cash and the advances have shown good progress over the past five years. But the investments were not increased as much from the previous years. Then in the liability portion the main thing is the deposits of the bank. The more will be the deposits the more the bank will invest in form of lending. On one side the deposits are favorable for the bank because from the deposits the bank invests in the other projects. If we see on the favorable side then the trend over the past five years or the progress is favorable but if we see on the unfavorable side then ultimately it is unfavorable for the bank because the liabilities have so much increased in the past five years. Similarly while analyzing the trend and progress of the equity of the bank, it is observed that the reserves of the bank remain positive during the five years.
Vertical Analysis Vertical Analysis of Income Statement
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INTERNSHIP REPORT Items Interest expensed Total non interest expenses Taxes Profit after taxation 2002 48.34 49.04 100 8.49 2003 29.41 52.52 7.53 20.84 2004 24.57 77.11 8.15 31.66 2005 22.65 44.56 12.94 29.82 2006 30.22 35.71 14.05 2.90 Avg. Change -4.52 -3.33 27 -1.39 Direction -VE +VE + VE -VE Nature of trend Favorable Favorable Favorable Favorable
Vertical Analysis of Balance Sheet (Assets) Items Other assets Operating Fixed Assets Total Assets (Base) 2002 4.50 1.78 100 2003 2.64 1.63 100 2004 2.44 2.27 100 2005 2.73 2.11 100 2006 190 2.02 100 Avg. Change 25 6.2 100 Direction + VE +VE Nature of trend Favorable Favorable
Vertical Analysis of Balance Sheet (liabilities) Items Bills payable Borrowing from financial institutions Deposits and other accounts Other liabilities 2002 1.52 9.92 85.61 2.93 2003 1.52 7.68 87.70 3.09 2004 1.66 6.43 88.78 3.11 2005 1.182 7.14 88.56 3.11 2006 1.06 10.50 85.52 2.90 Avg. Change
-0.11
Direction Nature of trend -VE Favorable +VE -VE -VE Unfavorable Favorable Favorable
0.14 -0.02 -0.01
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INTERNSHIP REPORT Total Liabilities 100 100 100 100 100 100
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SWOT ANALYSIS
An analysis indicating towards the organizations strengths, weaknesses, opportunities and threat is termed as SWOT Analysis. Such an analysis is very important for the management in retaining the strength, overcoming the weaknesses, capitalizing over the emerging market opportunities, and carving ways to successfully tackle with the threats and ultimately converting them in the strengths for the organization. During six weeks of my stay at Soneri Bank Limited, Qartaba Chowk Branch Lahore, I have come across the following SWOT analysis of the bank.
STRENGTHS
Soneri bank is the leading private sector bank in the banking network in Pakistan with many of them online branches in major cities of the country The operations performed by the bank are highly automated that result in assurance for the customers that their transactions are completed reliably, efficiently and securely. One can avail the benefit of the services provided at the bank till 5:00 P.m. which is highly useful for those customers who find it difficult to leave their officers in the morning.. The bank has the largest ATM Network cross the country. The customers of ACBL withdraw access their funds any time at all the ATM Sites with ASKCASH Logo. The management of the bank believes in customer focused banking rather than the product oriented banking. The products and services designed by the bank are specifically tailored to the individual needs of its customers. The priority banking centres of the bank offer an unmatched where the customer receives highly privileged services in a highly elegant environment. It gives the chance of experiencing new standards in banking. Designed specially for those who appreciate only the finest things in life, Priority Banking offers the very highest levels of personalized banking to match customers unique status. The revolution in the banking in the form of electronic banking operations have opened avenues of excellent, efficient and quick services saving the time and costs of the customers and fortunately SBL is among those few banks who are already reaping the benefits of electronic transactions. SBL management is quite prepared to adopt the latest advancements in technology resulting in revolution in the banking operations such as check clearing process, computer based teller equipment, automatic teller machines, and electronic funds transfers among the others. Phone banking service is very attractive for those classes of customers who dont have time to personally come to the bank i.e. banking on the phone line thus saving the precious time of the customers.
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INTERNSHIP REPORT The organizations showing concern for the people, ethics, and environment enjoy good public reputation and are able to reap the benefits in the long run. SBL management is quite sensitive to this issue.
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WEAKNESSES
In my opinions these are the points that might be detrimental to the efficiency and profitability of the bank. The bank has still some of the traditional ways of operations in this advanced technological environment. Although the bank has computerized accounting system but, still the bankers use to make their entries in the accounting register. Understanding and the effective management of the human resources is the most difficult challenge faced not only by the bank but by all the organizations. Even though the people have been sacrificed in the new organizational developments, it is becoming clear that the true lasting competitive advantage comes through human resources and how they are managed. SBL seems to not focusing on this highly critical issue as the job satisfaction level of the employees working at SBL, was quite low. This famous and useful concept given by Adam Smith in 1776 seems to be missing in the bank. The employees are constantly rotated from one job to another job of totally different characteristic in the view of giving them the know-how of the working in all the departments. But I think this is not a very good tactics used by the management. Otherwise the situation might be like this Jack of all and master of none. There is a high degree of centralisation in the bank. Almost all the decision-making is in the hands of the upper management. But centralisation is effective up to a certain level otherwise it becomes inefficient and at times costly too. I personally observed that delay occurred in the operations of the employees only due to the fact that they had not got any instructions from the head office. Presently there is no specific training program arranged for the new recruiters. They have to learn based on their observations and also their mistakes. It takes a bit time for the fresh one to learn the banking the result is huge amount of blunders, mistakes etc. resulting in monetary and non-monetary losses for the bank. There is pressure not only on the new learner but also on the person placed upon with this responsibility.
OPPORTUNITIES
Apart from the ones discussed in External Factors Evaluation Matrix, the bank is facing the following threats and opportunities currently: These are positive external environmental factors effecting the organization. It deals in bulk business. A large amount of foreign investment is attracted. Strong potential for growth Steady increase in Customer Deposits Overseas Operations
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INTERNSHIP REPORT Branches In Remote Areas Islamic Banking Sharp increase in imports and exports
THREATS
It has to face tough competition with other top banks in the market. Expectations of the common level public are very high. There is very slow and tedious procedure of the product development Increase in Non-performing loans. Adherence to KYC and anti money laundering measure
CONCLUDING REMARKS FOR ANALYSIS: OBSERVATION, DILEMA FACED BY ORGANIZATION:
As discussed above, the job satisfaction level of the employee is very low resulting in high turnover, which is bad for any organization as there are huge monetary and non-monetary costs involved in the fresh recruitments. Commercial banks face considerable competition in attracting deposits from individuals or small investors. In contrast, the Govt. of Pakistan national saving scheme offers attractive rates of return (approx. 16 to 18 percent annually) on 10-15 year fixed accounts, which banks find difficult to match. SCB is currently facing strict competition from the foreign banks especially the American who banks enjoy a good market position. Collectively U.S. banks hold approximately 9 percent of all commercial banks' assets. At present, three American banks are operating in Pakistan: American Express Bank; Bank of America and Citibank. It has to face tough competition with other top banks in the market. There are other banks which have a good repute and name in a market. So the general public have more trust on those banks as compare to the other banks like Soneri Bank Limited.
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Expectations of the common level public are very high. People demand more services and other facility. So the small banks like Soneri Bank have to face difficulties to fulfill this requirement. Although the bank has computerized accounting system but, still the bankers use to make their entries in the accounting register. The employees are constantly rotated from one job to another job of totally different characteristic in the view of giving them the know-how of the working in all the departments. But I think this is not a very good tactics used by the management. Otherwise the situation might be like this Jack of all and master of none. There is very slow and tedious procedure of the product development Increase in Non-performing loans. Adherence to KYC and anti money laundering measure
BREIF RECOMMENDATION FOR IMPORTANCE:

After spending six weeks at different departments of the bank, interacting with the employees, getting their views, observing the organizational structure and design, I have come up with the following suggestions that in my view, will definitely improve a few weaknesses observed in the bank by me. EXPANSION OF BUSINESS: My very first recommendation would be that Soneri Bank Limited should continue to expand its business, by increasing its deposit portfolio through aggressive market development strategies as I have suggested in the strategic management process for Bank. ADOPTION OF EFFECTIVE TECHNOLOGY: There should be adoption of computerized system so to reduce the manual work. It will be very better for Bank . Flexible Policies The bank should be adopt flexible policies, specially in the areas of the recruitment, promotions, evaluation of the employees otherwise the high turnover observed in the bank will continue to create problems for the bank now and in the future. Job security
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The employees in the organization should be insured job security so that there is no pressure on the employees while performing their tasks. Permanent Hiring The fresh hiring should be made permanent so that they are secured of their future. Further the allowances and perquisites attached with the permanent jobs will also increase the motivation level of the employees. Job Training Programs The bank should place emphasis on the organization of effective training and development programs for its new as well as existing employees so that these are gradually updated regarding the recent developments in the field of banking. Perquisites and Allowances
The number of allowances and perquisites for the employees should be increased to ensure that they put their body and soul in the jobs assigned to them.
Revival of the Charges

The rates for the various charges provided by the bank should be brought down a bit, as it would result in increase in the number of customers of the bank.
Decentralization
The higher authorities should form team-based management rather than centralized management. It would result in improvement in uplifting the morale of the employees. They will be more motivated and involved in all their operations resulting in overall effectiveness of the organization.
CONCLUSION:
If I have to express my experience of internship in Soneri Bank limited, I would briefly say: Soneri bank is a good organization in the way that any body can join it for his/her long-term career. Overall working environment is comfortable. Management of branch cares a lot of its employees and considers them as the asset of bank, Especially the operational manager Mr. Shahid Hafeez is a very good person. He cares his employees a lot and helps them regarding every thing. Behavior of senior executive of bank is very polite and they are caring about the individuals career and there growth. However management is very demanding about the target but good reward at the achievement of assigned targets is awarded.
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Employees at Soneri are quite efficient. Therefore, they work more than their working hours and it is all according to their will. It also shows their loyalty, commitment to organization. Employees are given the benefit like bonus, gratuity funds, loans, increments, and medical facility. All the customers are entertained individually. Same kind of behavior and attention is given to all the customers. Getting ideas for improvement from customer side is a new idea and that is working very well in Soneri Bank Limited. All the customers are asked to fill a suggestion form and the standards of the bank are improved through them. The other thing I observe closely is that there is a strict check and balance on the employees for good performance. All employees come on time nobody reach late. It provides equal opportunity to its employees. I observe that many employees are from different institutes with different degrees like some have MSc Banking Finance Degree, some have MCom degree MBA etc. In Pakistan some banks only encourage MBAs to join but they have a good employment policy. But if we observe it as a bank with camper to its competitors then result are satisfactory but not so good because Soneri Bank has not good opportunities to capture the market. During my internship period I observed that only some people are customer of Bank having trust on the organization as compare to its near Alflah Branch. The Branch is situated at a very good place but there are two other banks which are neighbors of bank these are Mezan Bank and Alflah Bank. But overall the Bank was very good. It provides a gateway to youngster and an insight of corporate world. It helps them in the orientation phase of their first job as well. After calculation the progress of the business I find out inconsistency in the various items of the financial statements. In the balance sheet the most important assets of the bank are the advances, cash and balances with other banks, lending to financial institutions. while analysis of the progress of the bank it is observed that the year 2008 is comparatively better than the previous years. The cash and the advances have shown good progress over the past five years. But the investments were not increased as much from the previous years. Then in the liability portion the main thing is the deposits of the bank. The more will be the deposits the more the bank will invest in form of lending. On one side the deposits are favorable for the bank because from the
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INTERNSHIP REPORT
deposits the bank invests in the other projects. If we see on the favorable side then the trend over the past five years or the progress is favorable but if we see on the unfavorable side then ultimately it is unfavorable for the bank because the liabilities have so much increased in the past five years. Similarly while analyzing the trend and progress of the equity of the bank, it is observed that the reserves of the bank remain positive during the five years. Working for 06 weeks in Soneri Bank Limited Qartaba Chowk branch as an intern was very informative experience for me. During the time I learnt many new things which are surely going to help me in my professional career. It was a good experience for me to observe and to be the part of practical working of an organization like Soneri Bank Limited. During the internship I got a chance to understand general consumers behavior and his needs and wants related to banking services and products.
REFERENCE: NECESSARY ANNEXCUREF & DOCUMENTS SUGGESTED:
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INTERNSHIP REPORT

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CORPORATE INFORMATION: MANAGEMENT:

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Rate of Return p.a 5.00 %. 7.00 %. 8.00 %. 9.00 %. 11.00 %.

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FOREIGN CURRENCY DEPARTMENT

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VISA CLASSIC Debit Card: l

ATM Cash Withdrawal:

Rs. 300 Per Transaction or 3% of transaction amount whichever is higher

Purchase: (Point of Sale Terminal)

NIL Rs. 300 Per Transaction or 2% of transaction amount whichever is higher

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WORK DONE BY THE STUDENT:

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INTRODUCTION TO ANALYSIS OF FINANCIAL STATEMENT

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320459 1226206 2904858 1673590 134311 100000 43724 1951625 953233

Extra ordinary/ unusual items Profit before taxation Taxation- Current

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Consolidated Balance Sheet As on December 31, 2008

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(386018) 2575983 1484363 272176 3946504 (3916065)

682938 (3050966) 7149481 312487 5093940 1598287

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