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National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
National Bank of Pakistan-Strategic Management
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National Bank of Pakistan-Strategic Management

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Comparative Business Analysis of National Bank of Pakistan TOP TEN BANKS OF PAKISTAN -in Strategic Management

Comparative Business Analysis of National Bank of Pakistan TOP TEN BANKS OF PAKISTAN -in Strategic Management

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  • 1. Competitive Analysis National Bank Of Pakistan
  • 2. MASROOR ALI SOOMRO FAISAL AHMAD MUSTAFA TALIB AIJAZ ABDUL KARIM MAIMOONA KHAN HAMMAD SYED
  • 3. Bank Profile Key People, Financial, Products Market share, Branches Competitors Internal Factor Evaluation Major Areas To be covered External Factor Evaluation Poter’s Five Forces Competitive Profile Matrix Recommendations Conclusion
  • 4. Business Profile Products 1. Deposits 2. Corporate Advances 3. Remittances 4. Miscellaneous Location Head Office NBP Building I.I. Chundrigar Road, Karachi, Pakistan Financial Facts Revenue ▲PKR One Trillion Surpass Total assets ▲PKR Rs.1.035 trillion at the year end, up by 9.6% from year end 2009 Board of Directors Qamar Hussain President Nazrat Bashir Tariq Kirmani Haniya Shahid Naseem Pakistan National Bank
  • 5. Business Profile Branch Network Domestic network (1266 Branches) Agriculture branches ( 825 Branches) Market Share 22% of Total Market share in Pakistan, Including Government Entities Competitiveness All the Top Banks of Pakistan Personnel Permanent 13237 On Contract 842 Outsourced 2350 Total Staff Strength 16429 Pakistan National Bank
  • 6. Branches & ATMs Branch Networks Islamic network (5 Branches) Online network (156 Branches) Overseas network (32 Branches) Swift network ( 12 Branches) ATMs Network ATM network (ATMs 104) Army Cant. Areas (ATMs 136) Owned By NBP: (ATMs 107) In Near Future More to Come in near 2 to 3 months Franchised Accounts (ATMs 2000) More to come (ATMs 150)
  • 7. Rating List Financial Position of Commercial Banks As On Dec 2010 World Ranking http://www.sbp.org.pk/publications/c_rating/index.htm Name of Commercial Bank Paid up Capital Reserves Assets Deposits Advances Profit After Tax Earnings Per share Branch Network Credit Rating Short Term Credit Long Term (Rs. Bn) (Rs. Bn) (Rs. Bn) (Rs. Bn) (Rs. Bn) (Rs. Bn) (Rs) (Nos) Habib Bank 6.90 29.36 924.70 747.37 459.75 17.03 16.8 1400 A-1+ AA+ NBP 13.45 24.45 1035.02 832.15 538.61 17.74 13.2 1249 A-1+ AAA Allied Bank 7.65 6.53 449.93 371.28 253.10 8.23 10.5 757 A1+ AA MCB 7.60 40.16 188.75 2.10 274.14 0.12 22.2 1038 A1+ AA+ United Bank 1.22 2.41 69.88 56.28 37.65 1.77 9.0 1100 A-1+ AA+ First Women 0.28 0.23 12.70 10.20 6.31 -0.02 0.1 38 A2 BBB+ Bank of Punjab 2.27 0.00 0.19 0.16 0.13 -10.06 -19.0 272 A1+ AA - Soneri Bank 1.87 2.03 108.11 82.02 54.68 0.13 0.2 90 A1+ AA - Askari Bank 6.43 7.69 10.78 255.91 152.78 0.92 1.5 235 A1+ AA Bank Al- Habib 7.32 4.30 301.55 0.25 0.13 360.20 4.9 277 A1+ AA+ Bank of Khyber 5.00 0.55 9.40 36.98 18.24 563.00 1.1 119 A2 A- Bank Al- Falah 13.49 3.59 0.41 0.35 0.21 0.97 0.7 231 A1+ AA Faysal Bank 7.31 7.35 250.71 195.31 135.06 1199.00 1.6 225 A1+ AA KASB Bank 9.51 0.15 56.43 4.63 29.53 0.00 -2.9 41 A2 A - Meezan Bank 6.98 1.38 154.75 131.07 0.42 1.81 2.6 207 A-1+ AA - NIB Bank 4.04 8.46 13.66 99.17 74.57 1.49 0.2 240 A1+ AA - Mybank 5.30 0.32 39.48 29.48 1.95 -1.04 -2.0 69 Atlas Bank 5.00 0.58 28.97 18.65 20.55 -1.01 -2.0 31 Standard Chartered 3.87 0.02 0.32 0.22 0.14 0.00 0.9 162 A1+ AAA JS Bank 8.15 0.02 39.38 26.28 13.98 -0.41 -0.7 11 A1 A Habib Metropolitan 8.73 5.60 1.34 160.31 119.83 2.81 3.2 98 A1+ AA+ Domestic RatingExcel
  • 8. Top Competitors of NBP http://www.einfopedia.com/banks-in-pakistan.php
  • 9. Competitive Analysis 10% 20% 12% 18% 10% 11% 2% 11% 6% Paid up Capital Habib Bank NBP MCB United Bank Askari Bank Bank Al- Habib Bank Al- Falah Faysal Bank Standard Chartered
  • 10. Competitive Analysis 25% 20% 34% 2% 6% 4% 3% 6% 0% Reserves Habib Bank NBP MCB United Bank Askari Bank Bank Al- Habib Bank Al- Falah Faysal Bank Standard Chartered
  • 11. Competitive Analysis 33% 37% 7% 3% 0% 11% 0% 9% 0% Assets Habib Bank NBP MCB United Bank Askari Bank Bank Al- Habib Bank Al- Falah Faysal Bank Standard Chartered
  • 12. Competitive Analysis 29% 34% 17% 2% 10% 0% 0% 8% 0% Advances Habib Bank NBP MCB United Bank Askari Bank Bank Al- Habib Bank Al- Falah Faysal Bank Standard Chartered
  • 13. Competitive Analysis 24% 19% 31% 13% 2% 7% 1% 2% 1% EPS Habib Bank NBP MCB United Bank Askari Bank Bank Al- Habib Bank Al- Falah Faysal Bank Standard Chartered
  • 14. Competitive Analysis 24% 21% 17% 18% 4% 5% 4% 4% 3% Branch Network Habib Bank NBP MCB United Bank Askari Bank Bank Al- Habib Bank Al- Falah Faysal Bank Standard Chartered
  • 15. Competitive Analysis 31% 33% 0%3% 2% 7% 2% 22% 0% Profit After Tax Habib Bank NBP MCB United Bank Askari Bank Bank Al- Habib Bank Al- Falah Faysal Bank Standard Chartered
  • 16. Critical Analysis Evaluation Questionnaires
  • 17. Internal Constraints Obsolete Systems Lack Of automation Myopic(Outdates) Business Vision Bureaucratic Management Structure Heavy Reliance on Assets
  • 18. Internal Factor Evaluation IFE Strengths Western union facility ATM finder Government's bank Customer Satisfaction Online Banking Employee's loyalty Wide area of services Weakness Lack of communication between employees Punishment is not very strong for employees Public dealing is not very effective Staff shortage Lack of respect of seniors
  • 19. Key Internal Factors Weight Rate Weighted Score Comments “WHY??” STRENGTHS Large number of branches(1249 local + 22 int) 0.10 3 0.30 NBP is one of the oldest and first nationalized bank of Pakistan Alternate duties in SBP Absence 0.20 4 0.80 NBP is the only agent of SBP to collect Govt. dues from both Provincial & Central Govt. Deposits increasing 0.20 3 0.60 Due to its nationalization NBP has more deposits than any other bank. 87% growth in advances in 2010 0.10 3 0.30 NBP issue’s foreign currency bonds & loans against the gold to support Govt. to increase the foreign reserves. WEAKNESS Lack of marketing effort 0.20 2 0.40 Due to lack of marketing effort NBP does not promote its corporate image , services on a competitive way Inefficient counter services in the rush hours 0.10 2 0.20 As ATM substitutes presenting cheques at counter & en-cash it NBP does not have modern equipment in their branches to give connivance to their customers, Lack of modern equipment 0.10 1 0.10 Due to lack of financial products NBP fails to provide new & innovative schemes to their customers as other big guns doing these things in a very pretty manner. Total 1.00 2.70 Internal Factor Evaluation - IFE Conclusion: The company knows its strengths and utilizing them effectively and efficiently in order to conceal its weaknesses. Excel
  • 20. External Constraints National Bank Pakistan Political InterventionAggressive Development by Competitors Decreasing Market Share Rapid Product Substitution New Players entry Highly Regulated Environment
  • 21. External Factor Evaluation EFE Opportunities Growing banking system NBP have govt back Increase in economic activities Threats Increase in no of banks Modern type of banking Highly skilled people and management Online Banking
  • 22. Key external forces Weight Rating Weighted Score Comments OPPERTUNITIES More Significant continuous growth in ASSETS 0.02 4 0.08 As NBP is the only public sector bank so because of that reason no other new bank will take over it. Investment can increase with the rate deposits increasing 0.05 3 0.15 Can enter in Consumer banking 0.05 3 0.15 265% increase in borrowings, they can be decreased 0.05 3 0.15 Return on asset and return on investment can increase 0.02 4 0.08 ROA & ROI can be increase by gaining profit through improved electronic banking. can gain profitability through improved Electronic banking 0.10 4 0.40 Leasing business 0.05 3 0.15 proper use of Wide range of products and product line 0.05 4 0.20 New marketing strategies to invest money in new projects 0.05 3 0.15 Because of the need of micro financing in the market. NBP must realize it and take step to cater an ongoing demand for the agricultural & industrial sector. External Factor Evaluation Excel
  • 23. Key external forces Weight Rating Weighted Score Comments THREATS Merger of some of financial institutions 0.05 2 0.10 NBP faces threats of emergence of foreign banks as these banks are equipped with heavy financial powers & innovative ways to promote their services. Political pressure 0.10 1 0.10 Because of the change in political arena NBP have to forward loans to those political persons which creates a scene of insecurity & demoralization in the customers. 2350 employees outsourced from single source 0.01 1 0.01 265% increase in borrowings 0.05 1 0.05 Operating fixed assets increased 163% in 2007 0.10 1 0.10 Borrowings & operating Fixed assets are increasing dynamically form 2008-10. New products from private Pakistani and Foreign Banks. 0.05 1 0.05 Quality of human resources. 0.05 2 0.10 Too slow in HR up gradation 0.05 2 0.10 Only single source is used for employees outsourcing which effects quality of HR. Establishment of new private financial institutions and expansion 0.05 2 0.10 Return on asset and return on investment decreasing 0.05 1 0.05 Total 1.00 2.27 External Factor Evaluation The company is aware of the opportunities and taking suitable steps to cater them effectively and efficiently by avoiding threats. Excel
  • 24. Competitive Profile Matrix CPM
  • 25. Key Success Factors Weightings NBP HBL MCB UBL ABL SCB Rating Score Rating Score Rating Score Rating Score Rating Score Rating Score Financial Position 0.10 3 0.30 3 0.30 4 0.40 3 0.30 3 0.30 3 0.30 Management 0.10 3 0.30 4 0.40 3 0.30 3 0.30 3 0.30 3 0.30 Local Branches 0.10 4 0.40 2 0.20 3 0.30 3 0.30 2 0.20 2 0.20 Customer Loyalty 0.10 3 0.30 3 0.30 3 0.30 2 0.20 2 0.20 2 0.20 Foreign Branches 0.05 3 0.15 3 0.15 2 0.10 2 0.10 2 0.10 2 0.10 Employees 0.15 4 0.60 3 0.45 3 0.45 3 0.45 3 0.45 3 0.45 E-Commerce and Technlogy 0.10 2 0.20 4 0.40 3 0.30 3 0.30 3 0.30 3 0.30 Advertiement 0.05 2 0.10 4 0.20 2 0.10 2 0.10 2 0.10 2 0.10 Product And Price Competition 0.15 4 0.60 3 0.45 3 0.45 2 0.30 3 0.45 3 0.45 Market Share 0.10 4 0.40 3 0.30 3 0.30 2 0.20 2 0.20 2 0.20 Total 1.00 3.35 3.15 3.00 2.55 2.60 2.60 Competitive Profile Matrix Key Success Factors Weightings NBP SCB HBL UBL Rating Score Rating Score Rating Score Rating Score Equity 0.10 3 0.30 2 0.20 2 0.20 2 0.20 Deposits 0.20 3 0.60 2 0.40 4 0.80 4 0.80 Advances 0.20 4 0.80 3 0.60 2 0.40 1 0.20 Investment 0.15 3 0.45 3 0.45 3 0.45 3 0.45 Total Assets 0.25 4 1.00 4 1.00 4 1.00 4 1.00 No. of Employees 0.10 2 0.10 1 0.10 3 0.10 1 0.10 Total 1.00 3.35 2.75 3.05 2.75 Based on the General Management Perspective Based on the General KPIs Perspective Excel
  • 26. Threats Weaknesses Opportunities Strengths
  • 27. STRENGTHS - S 1. Largest number of branches. 2. Significant growth in assets. 3. Alternate duties in SBP Absence 4. More deposits than other bank 5. Employee benefits 6. 87% growth in advances. 7. Professional Competence. WEAKNESSES - W 1. Operating fixed assets increasing. 2. Lack of marketing effort 3. Inefficient counter services in the rush hours. 4. Lake of modern equipment 5. Investments problems 6. Long term contacts are not maintained with customers. 7. Liquidity issue. OPPORTUNITIES - O 1. Electronic banking 2. More Significant continuous growth in ASSETS 3. Entry in consumer banking 4. Leasing business 5. Wide range of products and product line can enhance the business. 6. New marketing strategies to invest money in new projects SO STRATEGIES 1. Investing in electronic banking.(6,1) 2. Growth in advances so investing in new projects. (6,6) 3. Professional competence can lead to new product lines. (7,5) 4. Large number of branches so efficient for entering in consumer market. (1,3) WO STRATEGIES 1. Leasing business can solve investment problems. (5,4) 2. Growth in assets leads to solve the problem of modern equipment.(4,2) THREATS - T 1. Merger of some of financial institutions. 2. Political pressure. 3. New products from private Pakistani and Foreign banks. 4. Quality of human resources. 5. Outsourced employees 6. Establishment of new private financial institutions and expansion. 7. ROA and ROI decreasing ST STRATEGIES 1. Employee benefits can solve union issues. (5,4) 2. More deposits can be utilize to increase ROI. (4,7) WT STRATEGIES 1. Pursue horizontal integration buying facilities of small competitors can resolve technology issues. (4,3) 2. Using new marketing strategies new product lines and markets should be introduced. (2,3) OR (2,6)
  • 28. Portor’s Five Factors EXISTING MARKET SCENARIO Consumer Banking Corporate Banking Agricultural Banking Islamic Banking Investment Banking Over Seas Money Transfer SUPPLIERS SBP & Gov. Pak CUSTOMERS 1)Gov. employees 2)Overseas Pakistanis 3)Agricultural Sector 4)Revenue Collection Agents (Got. Inst.) 5)institutional Investors THREATS (NEW ENTRANTS) Commercial Banks Islamic Banks Agricultural Banks Over Seas Money Transfer THREAT OF SUBSTITUTE PRODUCTS: Real State Gold Other Banks Excel
  • 29. 2010 Total Assets Deposits Advances Investments Shareholders' Equity Pre-Tax Profit After-Tax Profit Earnings Per Share(Rs.) Number of Branches Number of Employees 1,035,025 832,152 477,507 301,324 103,762 24,415 17,563 13.05 1289 16457 2009 Total Assets Deposits Advances Investments Shareholders' Equity Pre-Tax Profit After-Tax Profit Earnings Per Share(Rs.) Number of Branches Number of Employees 944,583 727,465 475,243 217,643 94,142 21,300 17,562 13.05 1,287 16,248 2008 Total Assets Deposits Advances Investments Shareholders' Equity Pre-Tax Profit After-Tax Profit Earnings Per Share(Rs.) Number of Branches Number of Employees 817,758 624,939 412,987 170,822 81,367 23,001 15,459 11.49 1,276 15,441 National Bank’s Annual Reports Financial Highlights Rupees in Million Excel Link
  • 30. - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 Deposits 2010 2009 2008 2007 2006 2005 2004 2003 2002 Descrp. (Rs. In Million) 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Deposits 832,152 727,465 624,939 591,907 501,872 463,427 465,572 395,492 362,866 349,617 Growth in % 14% 16% 6% 18% 8% 0% 18% 9% 4% -- Excel Link
  • 31. Descrp. (Rs. In Million) 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Advances 477,507 475,243 412,987 340,319 316,110 268,839 220,794 161,266 140,547 170,319 Growth in % 0% 15% 21% 8% 18% 22% 37% 15% -17% -- - 100,000 200,000 300,000 400,000 500,000 600,000 Advances 2010 2009 2008 2007 2006 2005 2004 2003 2002Excel Link
  • 32. Descrp. (Rs. In Million) 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Investments 301,324 217,643 170,822 211,146 139,947 156,985 149,350 166,196 143,525 71,759 Growth in % 38% 27% -19% 51% -11% 5% -10% 16% 100% -- - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 Investments 2010 2009 2008 2007 2006 2005 2004 2003 Excel Link
  • 33. Descrp. (Rs. In Million) 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Shareholder's Equity 103,762 94,142 81,367 69,271 53,045 37,636 24,900 18,134 14,279 11,959 Growth in % 10% 16% 17% 31% 41% 51% 37% 27% 19% -- - 20,000 40,000 60,000 80,000 100,000 120,000 Shareholder's Equity 2010 2009 2008 2007 2006 2005 2004 2003 Excel Link
  • 34. Descrp. (Rs. In Million) 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Pre-Tax profit 24,415 21,300 23,001 28,061 26,311 19,056 11,978 9,009 6,045 3,016 Growth in % 15% -7% -18% 7% 38% 59% 33% 49% 100% -- - 5,000 10,000 15,000 20,000 25,000 30,000 Pre-Tax profit 2010 2009 2008 2007 2006 2005 2004 2003 Excel Link
  • 35. Descrp. (Rs. In Million) 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 After-Tax profit 17,563 17,562 15,459 19,034 17,022 12,709 6,195 4,198 2,254 1,149 Growth in % 0% 14% -19% 12% 34% 105% 48% 86% 96% -- - 5,000 10,000 15,000 20,000 After-Tax profit 2010 2009 2008 2007 2006 2005 2004 Excel Link
  • 36. Descrp. (Rs. In Million) 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Earnings per Share(Rs.) 13.05 13.05 11.49 14.15 12.65 9.45 4.60 3.12 1.68 0.85 Growth in % 0% 14% -19% 12% 34% 105% 47% 86% 98% -- - 5.00 10.00 15.00 Earnings per Share(Rs.) 2010 2009 2008 2007 2006 2005 2004 Excel Link
  • 37. Descrp. (Rs. In Million) 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Number of Branches 1,289 1,287 1,276 1,261 1,250 1,242 1,226 1,199 1,204 1,245 Growth in % 0% 1% 1% 1% 1% 1% 2% 0% -3% -- 1,140 1,160 1,180 1,200 1,220 1,240 1,260 1,280 1,300 Number of Branches 2010 2009 2008 2007 2006 2005 2004 2003 Excel Link
  • 38. (Rs. In Million) 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 No. of Employees 16,457 16,248 15,441 14,079 14,019 13,824 13,745 13,272 12,195 15,163 Growth in % 1% 5% 10% 0% 1% 1% 4% 9% -20% -- - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 Number of Employees 2010 2009 2008 2007 2006 2005 2004 2003 Excel Link
  • 39. To Formulate Strategies Strategic decision options Matching Key Factors
  • 40. Internal External Resultant strategy Large number of branches(1249 local + 18 int) + Consumer banking = Should enter in consumer banking 87% growth in advances in 2010 + Leasing business = Entry in Leasing business Lack of technology + Exit of competitors = Pursue horizontal integration by buying competitors facilities Limited Investment.466 bn vs 173 bn + New marketing strategies for new products = invest money in new projects Employee benefits + One man show in branches = Developing new employee benefits packages to decrease union threats Matching Key Factors to Formulate Alternative Strategies
  • 41. It is strongly recommended that NBP should automate its branches and develop a powerful computer network for on-line banking. Govt. should take keen interest to recover its bad debts, which can improve its financial position. HRM department must have a proper plan for placement of employees NBP must give the proper attention toward increasing the customization. It should establish a customer-oriented section in each branch for receiving him respectfully and provide proper guidance that he requires. Along with the officers, the training must also be given to the clerical staff.
  • 42. There is also a need of proper recruitment and selection program. New young talent should be introduced to inject the new ideas. National Bank of Pakistan major fault is that wasn’t keep its pace with on going changing in banking industry unlike other bank. Latest reorganizing efforts are necessary to make it cost effective also making its facility accordingly to modern banking. . Bank management has to put its all efforts to introduce oriented culture in which employees give important to the bank and its consumers. The outlook and interior layout of the branches must be improved. The procedure of taking services from the bank must be made easier and straight forward

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