The events in the last couple of years; ever since the sacking of Chief Justice

IftikharChoudhary, Pakistan has faced crisis after crisis, including the lawyers’
movement,violence in Karachi, the Lal Masjid debacle, militancy in FATA and
NWFP and its impacton other parts of the country, the return of Benazir Bhutto and
her subsequentassassination, and current ongoing military operation in Swat– all the
above eventsindubitably made a huge impact on the economy.
Stability and law and order situation under the political regime is very important for
theeconomy as a whole. The present state of the government in Pakistan is directly
affectingthe policies of banks. Continuous political changes have disrupted the
policies andobjectives as each regime brings with it its own agenda. Organizations
need time to adjustto one regime and then work with it towards economic
enhancement. Due the wrongpolicies of the government, the talibanization also
develop in Pakistan and become theinternational issue in Pakistan and badly affected
the Pakistan repute in the world andpromote the uncertain conditions for the business
in the Pakistan. Due to this theinvestors are not interested in the Pakistan.
Economic Indicators
The economy of any country directly influences any financial organization.
Economicindicators include Gross Domestic Product (GDP), inflation, balance of
payment, debt ofthe government.
Pakistan’s economy has witnessed the most challenging period after posting
sixconsecutive years of healthy economic growth. However, the strong fundamentals
werecompromised to prevailing global crises that’s shacked the confidence of global
investorsand FDI flowing in the country. The steep rise in oil prices to U$ 147 a barrel,
soaringinflation hitting a 24% mark, huge fiscal deficits and balance of payments
issues coupledwith plummeting forex reserves added to the economy’s move to an
unstable growthtrajectory.
Also the load shading is another factor that affects the Pakistan economy badly. This
notthe end of the story after this Pakistan’ economy face lot of problems like bomb
attacks inPakistan no electricity and the unstable government, due to this the investor
are not investin the Pakistan and the existing business men are loosing their business
unit due to the loss.
Due to this poor economy, businesses are reaping low profits and stock market is in
great
danger. Pakistan’s foreign debts are rising day by day so such a situation is a big
53
challenge for banking institution to survive. The financial crisis in Pakistan has made
the
management of BAFL tensed to work in such an environment.
Socio cultural environment
A low saving culture has offset the huge population advantage this is enjoyed
byPakistan. Also culture is dedicated by the religion, and in Pakistan a significant
segmentof the population is reluctant to accept interest for their deposits due to the
negativereligious implications of such an act. About 70% of Pakistan’s population is
based onrural areas and literacy rate of the country is very much low, thus making it
harder forbanks to mobilize their deposits within these regions.
However, in today world, the customers are becoming more intelligent and
throughmedia they keep themselves up to date. Thus, the lifestyle and expectations of
thecustomers from the service provider is increasing day by day.
Technological Factors
Banks in the developed world have been turning to heavy IT investments,
whichdifferentiate their products, provide response times, enhance accessibility and
improvecustomer satisfaction. Though investing in state-of-the-art host banking
solution, ATMand POS (point of sale) networks, visa, MasterCard, and, smart cards,
telebanking,internet banking and now mobile banking are common IT investment in
the developedworld, it is now that these products and services are gaining faster
acceptance in Pakistan.
In BAFL technology has great effect on the working environment. BAFL is
alwayswilling to introduce new computer systems for keeping its staff up to date.
With thesuccessful implementation of new centralized database system, the bank also
achievedremarkable progress in business process re-engineering, turnaround time
compliance bycentralizing outward remittances, account opening and credit
administration.
54

Financial Analysis
Horizontal &Vertical Analysis
Balance Sheet of Bank Alfalah Limited
55
Income Statement of Bank Alfalah Limited
 56
2004
2005
2006
2007
2008
Assets
Cash and balances with
treasury banks
19,708,518
24,788,625
27,859,360
29,436,378
32,687,335
Balances with other banks
3,183,957
9,713,369
12,731,952
18,380,738
21,581,043
Lending to financial
institutions
-
27,050,493
12,456,653
3,452,059
3,315,500
Investments
35,503,196
57,425,700
56,502,210
88,491,564
75,973,238
Advances
88,931,400 118,864,010 149,999,325 171,198,992 192,671,169
Other assets
3,226,959
3,851,529
5,633,051
6,013,097
8,989,186
Operating fixed assets
4,280,504
6,620,067
10,502,990
11,922,324
 13,773,293
Deferred tax asset
TOTAL ASSETS
154,834,534 248,313,793 275,685,541 328,895,152 348,990,764
LIABILITIES & EQUITY
Bills payable
2,233,671
3,733,124
3,091,135
4,138,243
3,452,031
Borrowings from financial
institutions
12,723,830
5,844,389
8,394,130
21,230,697
13,690,222
Deposits and other
accounts
129,714,891 222,345,067 239,509,391 273,173,841 300,732,858
Subordinated loans
1,899,480
3,223,355
3,222,106
3,220,858
2,571,169
Liabilities against assets
subject to finance lease
-
-
-
-
-
Other liabilities
2,725,344
5,219,666
7,305,496
9,531,860
11,291,280
Deferred tax liabilities
275,834
484,066
1,921,338
1,379,809
208,465
 TOTAL LIABILITIES
149,573,050 240,849,667 263,443,596 312,675,308 331,946,025
REPRESENTED BY
Share capital
2,500,000
3,000,000
5,000,000
6,500,000
7,995,000
Reserves
1,008,772
2,351,218
2,749,533
2,414,833
3,166,056
Unappropriated profit
860,300
1,386,845
2,823,072
4,851,840
3,447,467
Surplus on revaluation of
assets
892,412
726,063
1,669,340
2,453,171
2,436,216
Total EQUITY
5,261,484
7,464,126
12,241,945
16,219,844
17,044,739
Total Liabilities and
Equity
154,834,534 248,313,793 275,685,541 328,895,152 348,990,764
Alfalah Bank Internship

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Add a Comment
sadya khan left a comment
plz send me a copy of this assignment ongulsadia83@yahoo.com plzz
12 / 15 / 2009
Reply

forquankhan replied:
hi sadiya how are you ? what are u doing now a days .mai is liye puch raha ho kiyu k
app bhi meri tarha financial institute ki visitor lagrahi hai
01 / 27 / 2010

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