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SWOT ANALYSIS

To carryout the SWOT and Financial Analysis of NBP through the help of calculating necessary
ratios in this section.

SWOT analysis is an acronym that stands for strengths, weakness, opportunities, and threats
SWOT analysis is careful evaluation of an organizations internal strengths and weakness as well
as its environment opportunities and threats.

SWOT analysis is a situational which includes strengths, weaknesses, opportunities and threats
that affect organizational performance.

The overall evaluation of a company strengths, weaknesses, opportunities and threats is called
SWOT analysis.

In SWOT analysis the best strategies accomplish an organizations mission by:

1. Exploiting an organizations opportunities and strength.

2. Neutralizing it threats.

3. Avoiding or correcting its weakness.

SWOT analysis is one of the most important steps in formulating strategy using the organization
mission as a context; managers assess internal strengths distinctive competencies and weakness
and external opportunities and threats. The goal is to then develop good strategies and exploit
opportunities and strengths neutralize threats and avoid weaknesses.

STRENGTH

OLDEST INSTITUTION:

NBP is one of the oldest bank of Pakistan and first nationalized bank Hence its customer base is
strength from this plus point as customers have more confidence in the bank. The additional
value services as the privilege for the bank.
ALTERNATE DUTIES IN SBP ABSENCE

The NBP performs additional services for its customers as well as the other bank customer in the
absence of SBP.

MORE DEPOSITS THAN OTHER BANKS

NBP has the relative competence in having more deposits than the other bank. This is because of
the confidence the customer have in the bank. The bank being the privileged and oldest bank in
banking sector of Pakistan enjoys this edge over all others, lacking it.

EMPLOYEE BENEFITS

The employers at NBP are offered reasonable monetary benefit. Normally two bonuses are given
Eid-Ul-Fitar & Eid-Ul-Azha. This serves as an additional benefit and competency for the bank
and a source of motivation for the employees.

BROAD NETWORK

The bank has another competency i.e. it has broad-basses network of branches throughout the
country also more than one branch in high productive cities. The customers are provided services
at their nearest possible place to confirm customer satisfied.

STRICTLY FOLLOWED RULES & REGULATION:

The employees at NBP are strict followers of rule & regulation imposed by bank. The disciplined
environment at NBP bolsters its image and also enhances the over all out put of the organization.

PROFESSIONAL COMPETENCE

The employees at NBP here have a good hold on their descriptions, as they are highly skilled
Professionals with background in business administration, banking, economics etc. These
professional competencies enable the employees to understand and perform the function and
operation in better way.
HEALTHY ENVIROMNMENT

The working condition in the NBP branch here is very conductive and favorable for better
output. The informal environment affects the performance of the employees in a positive way.

RELATION BETWEEN STAFF AND OTHER EMPLOYESS

The bank enjoys a good plus point when it comes to the employee manager relationship the
hearing as removing of discrepancies if any, between the employees, and between the manager
and employees.

WEAKNESSES

LACK OF MARKETING EFFORT:

The bank does not promote its corporate image, services, etc on a competitive way. Hence lacks
far behind in marketing effort .A need for aggressive marketing in there in the era marketing in
now becoming a part of every organization.

NBP UNDER POLITICAL PRESSURE

The strong political hold of some parties and government and their dominance is affecting the
bank in a negative way. They sometime have to provide loan under the pressure, which leads to
uneven and adjusted feeling in the bank employees.

FAVORITISM AND NEPOTIS

The promotions and bonuses etc in the bank are often powered by seniors favoritism or
dependupon their wills and decision. This adds to the negative factors, which denominate the
employees thus resulting in affecting their performance negatively.

LACK OF FINACIAL PRODUCT


The bank falls far behind when the innovative and new schemes are considered. It has not been
involved in the tug of war between the competitors to the accounts and strengthens the existing
customer base. This stands out to be the major incompetence and weakness of the banks.

INEFFICIENT COUNTER SERVICES IN THE RUSH HOURS

During the rush hours, the bank is founded out to be a total flop to handle the mob of people
peaking from windows and doors. The bank has deficiency to operate in the stages of rush hours
where the people find them services entangled in a situation of nowhere because they are not
well served.

LACK OF COMPUTERIZED NETWORK

The bank lack the strength of being powered by the network of computers, which have saved
time, energy and would have lessened the mental stress, the employees have currently. This
would add to the strength if it were powered by network of computers.

LACK OF MODERN EQUIPMENT

The bank lacks the modern Equipment that is note counting machine computers. Even if there is
any equipment they lack to fall in the criteria of being rearmed as update and upgraded

UNEVEN WORK DISTIBUTION.

The workload in NBP is not evenly distributed and the workload tends to be more on some
employees while others aNBPond away from their responsibilities, which server as a
demotivation factor for employees performing above average work.

OPPORTUNITIES

ELECTRONIC BANKING

The world today has become a global village because of advancement in the technologies,
especially in communication sector. More emphasis is now given to avail the modern
technologies to better the performances. NBP can utilize the electronic banking opportunity to
ensure on line banking 24 hours a day. This would give a competitive edge over others.
MICRO FINANCING

Because of the need for micro financing in the market, there are lot of opportunities in this
regard. Other banks have already initiated, now the time has arrived when the NBP must realize
it and take on step to cater an ongoing demand.

THREATS

EMERGENCE OF NEW COMPETITORS

The bank is facing threats with the emergence of new competitors especially in terms of foreign
banks. These foreign banks are equipped with heavy financial power with excellent and
innovative ways of promoting and performing their services. The bank has to take initiative in
this regard or will find itself far back in competition.

POLITICAL PRESSURE BY ELECTED GOVERNMENT

The ongoing shift in power in political arena in the country effects the performance of the bank
has to forward loans to politically powerful persons which create a sense of insecurity and
demoralization in the customer as well as employees.

DOWNSIZING

The bank is currently acting upon the policy of downsizing which threaten the environment of
the bank Employees feel insecurity in doing their jobs and work, hence affecting the over all
performance of employees negatively.

CUSTOMERS COMPLAINTS

There exists no regular and specific system of the removal of customer complaints. Now a day a
need for total customer satisfaction is emerging and in their demanding consequences customer's
complaints are ignored.
COMPETITIVE ANALYSIS
Porters five forces model:

This approach is widely used for competitive analysis. It is because of the high intensity of
competition among companies there five main competitive forces.

Rivalry among competitive firms:

It is a very powerful force among the competitive forces the strategies pursued by one firm can
be successful only to extent that they provide competitive advantages over the competitor. These
competitive strategies may be lowering prices, best quality series. The NBP offering very low
charges an demand draft, telegraphy transfer, mail transfer and give other additional services to
the customers and to the Nation. Because NBP is a Nations Bank.

Potential entry of new competitors:

Whenever new firms ca easily enters a particular industry, the competition increases. The gout
restriction, tariffs, patents etc can stop new firm to enter into the business as per Banking
industry is concerned this market is already very situated in Pakistan and there are banks with
quality services and low charges. So there is no threat to NBP from potential entry and NBP is
also a public sector bank because of that no other new bank not takes over it.

Potential Development of substitute products:

This is the third factor affecting the competitions. There may be some other product can be
substitute the product of that industry. For example banks offering saving schemes in Pakistan
and these schemes are also offered by GPOs in Pakistan so they must compete them in this field.
If they offer low rates than GPOs so people will go to deposit in GPOs. People concentration
high rates so thats why saving PLS accounts are more then current accounts. The next examples
will ATM which substitute presenting cheques at counter and encash it. The NBP is lacking in
this field. It must improve in this field to compete the competitors.

Bargaining Power of Suppliers:

The bargaining power of supplier affects the intensity of competition, especially when there are a
large number of suppliers. In case of banks the suppliers are customers they supply the money to
banks. Now they must offer good services, quality, and safety. Low charges etc to customers. In
this field NBP is very good. They charge low charges on remittances. So thats it is a competition
to other banks.

Bargaining Power of Consumers:

When customers are concentrated or large, or buy in volume, their bargaining power represents a
major force affecting intensity of competition. Now the number customers in Pakistan for banks
are very high. Banks offering variety of products and services to their customers. NBP have a
large number of customs. Now it must offer good services and products to their customers to
attract them to come to NBP.

Summation

The summary of is SWOT Analysis of NBP. To know how NBP can compete well and how to
maintain its position in the market as a best services organization.

REFERENCES

1. National Bank of Pakistan (2009, 2010) Annual Report.

2. Van Horne James C and JR Wachowicz John M. (1998). Financial management. Prentice
Hall Publication. Page 126-150

3. Block, Stanley B and Hirt Geoffrey A (1994). Foundations Of Financial Management.


Page 121-148
4. WEBSITE:

www.onlinewbc.gov/docs/finance/fs.ratio/. Html

SHORT FALLS/ WEAKNESSES OF NATIONAL BANK OF


PAKISTAN
The National Bank of Pakistans Advance salary, which has long been the flag-ship
product for NBP, is replete with charges of corruption, default and inefficiency.
The National Bank of Pakistans huge number of borrowers is untraceable or correct
whereabouts are not known.
The housing finance product of NBP lacks proper infrastructure including database
support even after five years of post launch history. The similar products launched by
other commercial banks are much smaller in size are running on well-articulated systems
and are backed by proper policies and guidelines. The NBP product, despite boasting a
sizeable portfolio built around some reckless selling, is mostly infected.
The NBP Karobar scheme is designed around Presidents Rozgar scheme. The scheme
which had all the potential to become a landmark was so badly mishandled by National
Bank of Pakistan.
The Quality of infrastructure added by National Bank of Pakistan during the last few
years is quite substandard as compared to that of peer banks.
In NBPs five year strategic plan 2009-2011 approved by board of directors does not
address any serious thinking on
Productivity improvement and benchmarking with the competition.
Development required for serving major sectors of the economy.
Infrastructure to support planned growth and vision.
Inducting and leveraging specialized human capital.
Bringing the institution on international banking landscape in the coming five
years, not to speak of the seven years which the current management has already
served.
As for as public interest is concerned there were no service standards benchmarks and
guidelines available in NBP. There were only old documents that were crafted at least a
decade or more back.
Due to poor planning the bank had book losses of over 1.2 billion rupees in the Karobar
Scheme.
The National Bank of Pakistans outsourced employees (2350) was obtained from a
single source. Most of these are performing the core function of the bank outside their
assigned duties without any training and supervision.

The National Bank of Pakistan is incurred large expenses in running those branches,
which are not producing any income.
The up gradation of human resource is very slow in NBP. The branches of NBP have less
number of employees as their requirements. The concept of One Man Show is adopted
in many branches to save salary expenditure; even most of the branches use their security
guards for various tasks. The one reason for this is that the senior management is able to
decrease salary expenditure of the bank, which result an increase in the net profit. For
their performance they received handsome amounts of bonus. But in long run it has a
negative effect on banks productivity.
The pensions distribution service or payments to EOBI beneficiaries, utility payments;
workers remittances are occupied lowest priority level.
In NBP Karobar scheme the product selected by the NBP is of inferior quality and
develops faults in the first few months of delivery.
CONCLUSIONS
The National Bank of Pakistan plays a key role in the strategic national development. The
bank has historically been the financial arm of the government and has enjoyed the
blessings of state support in the form of huge public sector funds and deposits.
In contract to other banks populating the FSI sector, NBP is mandated to uphold public
interest. It is critical too as all other banks and NBFIs in public sector have been closed
down or merged with NBP.
In contract to other banks populating the FSI sector, NBP is mandated to uphold public
interest. It is critical too as all other banks and NBFIs in public sector have been closed
down or merged with NBP.
The current management of National Bank of Pakistan was hired purely for their
international experience, business orientation to turn around a purely public institution
into a sustainable and commercially viable bank serving public interest along the lines of
a large modern commercial bank.
The National Bank of Pakistan has effective budgeting system in place. Annual budget of
the bank is approved by the Board and monthly comparisons of actual results with the
budget are prepared and reviewed by the senior management.
The National Bank of Pakistan has a comprehensive framework of written policies and
procedures on all major areas of operations such as Credit, Treasury Operations, Finance,
Internal audit and Compliance approved by the Board.
The National Bank of Pakistan provides sustainable financing for growth of industries of
critical national importance such as energy, education, healthcare, transport, shipping,
Research & development.
RECOMMENDATIONS
The National bank of Pakistan should be fully prepared in its management of financial
crises and its business continuity planning, within the standing committee framework,
and should work with others to strengthen national crises management preparations.
The bank should improve the quality of training of its employees and the integrity,
controls and efficiency of its systems, processes and financial reporting.
The bank should improve its recruitment, retention and development and to reform the
Banks pension scheme.
The bank should renegotiate the Banks long term financial framework and to overhaul
the Banks financial system.
The Bank should improve IT capability in the analytical areas and to develop a medium
term strategy for banking and market operations.
The National bank of Pakistan should monitor the impact of its operations on the
environment, which is mainly through the use of power and the generation of waste.
NBP, being the only lending arm to the government for public sector development should
design, develop and deliver product and services for economic growth.
The bank should provide support to the Micro, Small and Medium enterprises thereby
reducing unemployment and helping to create a more equitable distribution of wealth.
The NBP should adopt modern banking tools and techniques. Quality leadership, clear
vision, investment in IT infrastructure and human resource development.
The bank should develop software for pension disbursement.
As for as Islamic Banking environment is concerned the management and employees of
NBP should work together for basic research for discovering their own laws, developing
theories or concepts for the better direction of their own business environment according
to Quran & Sunnah.
The branches should reduce its large expenses in order to increase the value of the bank.
The NBP should strengthen incentives and accelerate a results-oriented training and
communications programs for management and staff.

The National Bank of Pakistan should implement a financial inclusion program to meet
the needs of underserved economic subsectors, including outreach programs to meet the
requirements of the agriculture, housing, SME and microfinance sectors.
The National Bank of Pakistan should introduce a framework for consolidated
supervision and reorganize the regulatory architecture to allow better regulation and
supervision of financial control division of bank.