Government College University Lahore Department of Economics Nature of Document

Government College University Lahore
Department of Economics

Nature of Document: Internship Report

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Name: Mohammad Waleed

Roll# 246-BH-BAF

Academic Program: B.Sc. (Hons)

Session: 2014-2018

Semester: 8th

Supervisor: Ma’am Nosheen Rasool

Date of Submission:

Declaration

I, Mohammad Waleed S/O Mohammad Mubeen. The students of B.Sc. (Hons), Semester 8, Session 2014-2018, hereby acknowledge that the printed material in this Internship Report on Zarai Taraqiati Bank Limited (ZTBL) represents my endeavors and hard work, and this has never been printed, published, submitted, used in any way
as research work.

Dated: Signature:

Name:Mohammad Waleed

Roll#:246-BH-BAF

Internship Completion Certificate

Organization Information

(As on 31.12.2017)

Organization: Zarai Taraqiati Bank Limited

Head Office: 1 Faisal Avenue Islamabad, Pakistan.

Legal Status: A Public Limited Company

Authorized Capital: Rs.125, 000,000,000

Paid-up capital: Rs.12, 522,440,670

Preference Shares: Rs. 54,461,536,320

Ordinary Shares: Rs. 40,155,991,742

Subsidiary: Kissan Support Service (KSS)

Company’s Website: www.ztbl.com.pk

Acknowledgement

I am thankful to ALLAH ALMIGHTY, who is very gracious and merciful. All praises belong to Allah. I would like to thank Government College University Lahore for giving me this opportunity to study at this historical institute and for opportunity of internship program which was very beneficiary for my career and practical life.

I am very thankful to all teachers of Economics department who supported me throughout this program of 4 years without their help I would not have been able to complete this degree and acquire such difficult knowledge.

I would like to add special name of my Supervisor MISS NOSHEEN RASOOL for supporting me in my study and always giving me suggestions for study planning and career.

I would like to dedicate this accomplished task to my Grand Parents and also to my beloved parents, members of family, teachers and friends who have supported me throughout this program so I can achieve aims of my life.

Contents
Internship Completion Certificate 3
Organization Information 4
Acknowledgement 5
List of Tables & Graphs 9
Introduction: 10
History: 10
Vision 11
Mission 11
ZTBL Core Values 11
ZTBL Board of Directors 12
Composition & Membership of Board Committees 13
Audit Committee 13
Human Resource Management Committee 13
Risk Management Committee 13
Nomination Committee 14
Procurement Committee 14
Investment Committee 14
Committee on Information Technology 15
Agriculture Technology Committee 15
Committee on NPLs & SAM 15
Shareholding OF ZTBL 16
ORGANIZATIONAL STRUCTURE 17
Business Volume of ZTBL 18
DEPARTMENTS OF ZTBL 22
Budget and Funds Management department: 22
Central Accounts Department 22
Regulatory Reporting Department. 23
H R Operations Department 23
IT Operations Department 23
Research & Planning Department 24
Product and Services of ZTBL 24
Kissan Dost Scheme (KDS) 26
Sada Bahar Scheme (SBS) 26
Govt. of Punjab Mark-up free Agri. E-Credit Scheme 27
Warehouse Receipt Financing Scheme 27
TOBACCO BARN FINANCING SCHEME 27
Latest Five Years Balance Sheet 29
Latest Five Years Income Statement 30
Ratio Analysis for last five years 32
Investment to Deposit Ratio 32
Cash and cash equivalents to total assets: 33
Investment to Total Assets 34
Advances Net of Provisions to Total Assets 35
Deposit to Total Assets 36
Total Liabilities to Total Assets 37
Net Advances to Deposit 38
Spread Ratio: 39
Net Markup/ Interest Margin Ratio 40
Return on Equity 41
Return on Assets 42
Non Markup/ Interest Income to Total Assets Ratio 43
Net Markup / Interest Income After Provisions to Total Assets 44
Earnings Per Share 45
Capital Ratio 46
Total Deposit to Total Equity 47
Gross Infection 48
Provisioning Coverage 49
Net Infection 50
Cost of deposits 51
Capital Adequacy Ratio 52
Horizontal Analysis Balance Sheet 53
Horizontal Analysis Income Statement 55
Vertical Analysis Balance Sheet 57
Vertical Analysis Income Statement 59
SWOT ANALYSIS OF THE ZTBL 61
Learning as a Student Inter ( Preferably in Accounting and Finance Department) 64
Duties 64
Accomplishments 65
Problems Encountered 65
Objectives of Internship 65
Bibliography/ References 66
Jargons 66

List of TABLES & Graphs ETC

Tables of business volume Page 18

Graph of Business volume Page 19

Table of Investments Page 20
Graph of Investments Page 20

Table of Advances Page 21

Graph of Advances Page 21

Table of Balance Sheet Page 28

Table of Income Statement Page 29

Table and Graphs of Financial Ratios Page 31-52

Table of Horizontal Analysis Balance Sheet Page 53

Table of Horizontal Analysis Income Statement Page 54

Table of Vertical Analysis Balance Sheet Page 55

Table of Vertical Analysis Income Statement Page 56

Introduction:
ZTBL is the only financial institution working towards the development of agriculture and rural sector by providing financial services to farmers as well as by granting loans and providing technical proficiency to the farmers by issuing loans on low interest rates to assist farmers in the development of agriculture sector. ZTBL provides its customers various products and services like Treasury, Bank Accounts, Many Agricultural Loan Schemes, Locker Facility, Home Remittances, Clearing Operations and Deposit Protection Mechanism. Zarai Taraqiati Bank Limited (ZTBL) older name was Agricultural Development Bank of Pakistan (ADBP)., ZTBL is AAA/A-1+ credit rating institution. ZTBL started its business as a Public Limited Company on 14th December, 2002 through repeal of ADB Ordinance of 1961. The rebuilding of previous ADBP is being completed with the intend to inspire the agriculture and rural segment by raising farm productivity, streamlining the institutional credit and increasing income generating capacity of the farming community. ZTBL is now registered as a public limited company registered under companies Ordinance1984 with an independent Board of Directors. The bank has a wide network of 32 Zonal Offices, 9 Audit Zones and 492 branches in the country as on 31 December 2017. More than half of the branches of ZTBL are located in Punjab which is approximately (54%) and in Sindh (21%). ZTBL is a key R.F.I of Pakistan providing affordable, rural and agriculture financial and non-financial services to the rural Pakistan, comprising 68 % of the total population. ZTBL has a nation-wide network of 492 branches and is offering loans to million of farmers annually and more than million accumulated account holders with the average loan size of around Rs.162331. The total assets of the Bank are Rs.123 billion with authorized capital of Rs.25 billion as of 31.12.2017. The bank has more than 5789 employees which are working in different departments all over the country doing field jobs or office jobs.

History:
In Pakistan, Agricultural Development Finance Corporation was established in 1952 for the intendment of financial sector and for revamp of agriculture in Pakistan. Agricultural Bank of Pakistan was established in 1957. The bank provided loans to farmers on both short and long term basis. Agricultural Development Finance Corporation and Agricultural Bank of Pakistan were merged as a public limited company and was named as Agricultural Development Bank of Pakistan in February 1961 On December 14, 2002, the Federal Government converted the Agricultural Development Bank of Pakistan (ADBP) into Zarai Taraqiati Bank Ltd (ZTBL). The bank was now formed as a public limited company with an independent Board of Directors. The Bank was registered under the Companies Ordinance 1984.

Vision

Dedicated to serve the needs of the farming community, by delivering financial products and technical services on a competitive and sustainable basis, in a convenient, efficient and professional manner, leading to success of the Bank and the farmers.

Mission

To play active role in the promotion of economic growth, by enhancing the availability of credit to the agriculture sector, through reliable access to sustainable financing, special lending programs, technical assistance, and other products & services, and to promote career development opportunities for increasing professionalism and technical precedencies of employees.

ZTBL Core Values

? Loyalty to ZTBL Vision and Mission
? Integrity and Meritocracy
? Quality and Efficiency
? Well- Trained Human Resource
? Credit with Technology

ZTBL Board of Directors

Syed Yawar Ali Chairman

Syed Talat Mahmood
(President/CEO, ZTBL) Director

Mr.Mohammad Tanvir Butt Director

Mr.Saeed Ahmad Director

Mr.Zia-ul-Mustafa Awan Director

Mr.Majyd Aziz Balagamwala Director

Mr.Abdul Bari Tareen Director

Mr.Zahid Idris Mufti Director

Sheikh Amanullah Chief Operating Officer:

Mr. Mehboob Hussain Chief Financial Officer:

Mr. Muazam Ali Company Secretary:

Composition & Membership of Board Committees
Audit Committee
Sr. No. Name of Member Designation
01 Mr. Zia-ul-Mustafa Awan Chairman
02 Mr. Majyd Aziz Balagamwala Member
03 Mr. Abdul Bari
04 Mr.TareenMember
05 Mr. Saeed Ahmad Member
06 Mr. Abdul Ghaffar Bhatti Secretary

Human Resource Management Committee
Sr. No. Name of Member Designation
01 Mr. Majyd Aziz Balagamwala Chairman
02 Syed Talat Mahmood Member
03 Mr. Abdul Bari Tareen Member
04 Mr. Abdul Ghafoor Mirza Member
05 Mr. Zahid Idris Mufti Member
06 Mr. Khalid Mehmood Gill Secretary

Risk Management Committee
Sr. No. Name of Member Designation
01 Mr. Saeed Ahmad Chairman
02 Mr. Zia-ul-Mustafa Awan Member
03 Mr. Mohammad Tanvir Butt Member
04 Mr. Abdul Ghafoor Mirza Member
05 Mr. Muhammad Shah Zaman Secretary

Nomination Committee
Sr. No. Name of Member Designation
01 Syed Yawar Ali Chairman
02 Mr. Saeed Ahmad Member
03 Syed Talat Mahmood Member
04 Mr. Muazam Ali Secretary

Procurement Committee
Sr. No. Name of Member Designation
01 Mr. Abdul Bari Tareen Chairman
02 Mr. Majyd Aziz Balagamwala Member
03 Mr. Zia-ul-Mustafa Awan Member
04 Mr. Abdul Ghafoor Mirza Member
05 Mr. Anwar-ul-Haq Secretary

Investment Committee
Sr. No. Name of Member Designation
01 Mr. Saeed Ahmad Chairman
02 Mr. Majyd Aziz Balagamwala Member
03 Mr. Zahid Idris Mufti Member
04 Mr. Mehboob Hussain Secretary

Committee on Information Technology
Sr. No. Name of Member Designation
01 Mr. Saeed Ahmad Chairman
02 Mr. Zia-ul-Mustafa Awan Member
03 Mr. Mohammad Tanvir Butt Member
04 Mr. Muhammad Nadeem Chohan Secretary

Agriculture Technology Committee
Sr. No. Name of Member Designation
01 Syed Yawar Ali Chairman
02 Mr. Saeed Ahmad Co-Chairman
03 Mr. Majyd Aziz Balagamwala Member
04 Mr. Abdul Bari Tareen Member
05 Mr. Zahid Idris Mufti Member
06 Mr. Farhat Karim Hashmi Secretary

Committee on NPLs & SAM

01 Mr. Abdul Ghafoor Mirza Chairman
02 Mr. Majyd Aziz Balagamwala Member
03 Mr. Abdul Bari Tareen Member
04 Mr. Muhammad Nadeem Chohan Secretary

SHAREHOLDING OF ZTBL

Shareholding OF ZTBL

Sr. No. Name of Share Holder Number of Shares Amount(Rs.)

01 Government of Pakistan 1,251,189,067 12,511,890,670

02 Government of Punjab 292,340 2,923,400

03 Government of Sindh 125,545 1,255,450

04 Government of Khyber Pakhtunkhwa 71,740 717,400

05 Government of Baluchistan 37,875 378,750

06 Government of Erstwhile East Pakistan * 527,500 5,275,000

Total: – 1,252,244,067 12,522,440,670

ORGANIZATIONAL STRUCTURE

Business Volume of ZTBL

The below mentioned tables and graphs are indicating the business volume of ZTBL Prior four years in terms of Revenue, Investments and Advances.

Revenue

Particulars 2017 2016 2015 2014
Mark-up / return / interest earned 22,141,868 19,631,421 18,259,348 15,495,473
Fee, commission and brokerage income 22,777 26,397 40,919 28,410
Dividend income 176,526 148,540 81,805 66,737
Income from dealing in foreign currencies – –
Gain on sale of securities – net 40,806 179,322 366,437 118,136
Other income 4,062,396 4,067,521 5,093,503 4,299,889
Total Revenue 26,444,373 24,053,201 23,842,012 20,008,645

Interpretation: The graph is indicating persisting increase in the total revenue throughout the nominated time period of four years. In 2017is is at maximum point.

Net Investments

Particular 2017 2016 2015 2014
Investments – net 70,169,233 37,118,541 19,765,649 29,337,315

Interpretation: The graph shows there is lot of fluctuation in investments during the time period. 2017 is the highest point whereas 2015 is the lowest.

Advances

Particular 2017 2016 2015 2014
Advances – net 140,878,314 135,765,150 129,552,744 108,553,958

Graph

Comments: The graph demonstrates the amount of advances that were made by ZTBL during the given time period from 2014 to 2017, the bars indicates the bank made the most number of advances during 2017. And over the years from 2014 number of advances amount kept on increasing over time.

DEPARTMENTS OF ZTBL

The main departments of ZTBL are discussed below:

Budget and Funds Management department:

The basic function of Budget and Funds management department is to allocate from where funds can be generated and where they can be invested and how much budget should to allocated to certain project. Budget and Funds Management department advise the company where reserves can be used or invested. Budget and Funds Management department set goals, objectives, rules, provide guidelines and monitor performance and progress of bank on certain project or overall performance of the bank.

Central Accounts Department
Central Accounts department main function is to monitor and record all cash inflows and cash outflows that are made by the bank during any period. It also formulates and maintains all accounting policies financial statements of the bank .There are five basic roles or functions of the Central Accounts department are:
? Accounts receivable
? Accounts payable
? Payroll
? Financial controls
? Financial reporting
Central Accounts department of ZTBL is divided into five sub-departments that perform different duties and function. Central Accounts department of ZTBL consists of Policy Unit, Accounts Unit, Corporate Unit, Fixed Asset Unit, Pre Payment Unit.

Regulatory Reporting Department.
Regulatory Reporting Department is liable for the preparation of all regulatory reports for the distinctive branches within the bank. Regulatory Reporting Department makes weekly, monthly, quarterly and annual reports. This department is also responsible for maintaining the accuracy of the client’s regulatory reporting, monitoring and ensuring that the data provided is complete and accurate.

H R Operations Department
The major function of HR Department of ZTBL includes staffing, development, health and safety, employee and labor relations and compensation to employees. HR hires and fires full-

time or part-time employees. They identify what type of employees bank needs so they can hire them through recruitment. HR trains new employees during their development activities. They provide proper training to new recruits during their internal training program and by conducting conferences They terminate contracts of employees which do not fulfill their duties. Salaries and compensations like health insurance, retirement plans and all other type of benefits are approved by HR department in ZTBL bank.

IT Operations Department

The following Software’s are used by ZTBL in their IT infrastructure:
? CDMS (Centralized Deposit Management System)
? CBAS (Centralized Branch Automation System)
? Oracle ERP-EBS (Oracle Enterprise Resource Planning; e-Business Suite)
? Di-MIS (Dynamic Integrated Management Information System)
Data of all branches of ZTBL all across Pakistan is connected to a centralized data center, located at the Head Office.IT Operation department keeps track of all day to day maintenance of system applications and software’s. They keep track of all backup stuff and maintenance so the data does not get leaked or get hacked by any person or be destroyed.

Research ; Planning Department

Research ; Planning Department of ZTBL works for the betterment and enhancement of the bank by finding new production methods by inventing in new technologies to meet their future needs.

PRODUCT AND SERVICES OF ZTBL

Agriculture Loan Schemes

Kissan Dost Scheme Sada Bahar Scheme SBP – One Window OP. Scheme

Govt. of Punjab Mark-up free Agri Scheme Kissan Assan Karobar

Development Schemes

Warehouse Receipt Financing Scheme Tahafuz-e-Ajnas Scheme

SOGHAT-E-SHIREEN SCHEME FOR “GUR MAKING”

TOBACCO BARN FINANCING SCHEME ASAN QARZA SCHEME

KHAWATEEN ROZGAR SCHEME KHUSHK RATAB SCHEME

Crop Insurance Scheme Establishment Of Model by ZTBL

RED MEAT FINANCING PACKAGE FOR SHEEP/GOAT REARES

Kissan Dost Scheme (KDS)

Under this scheme the bank provides loans to farmers for one particular season only it maybe for Rabi season or for Kharif season on very low interest rates so the farmers can buy crops for the production. Under this scheme the loans is granted to new borrowers only and after submitting of all required documents by the bank.
Sada Bahar Scheme (SBS)

Sada Bahar scheme was developed to grant farmers a loan for three years period. Under this scheme the farmers have the privilege to withdraw money from the bank in case of need or emergency and they can deposit the same amount of money after some time. In this scheme the loan is granted on special items like Seed, fertilizers, pesticides, Poultry, Dairy, Fishery ; for Yak Farming only

Govt. of Punjab Mark-up free Agri. E-Credit Scheme

This was a special scheme developed especially for the people of Punjab to expand agriculture throughout Punjab to small farmers who don’t have capital to invest for the production. This loan is free of cost. No markup is charges under this scheme. The loan is granted to the farmers if they meet the eligible criteria of the bank and Government of Punjab.
Warehouse Receipt Financing Scheme

It takes time in production process of some crops or some crops are cut down in a very long time. There is a huge time gap between production and final processing of any good. During this period the crop or products have to be stored properly. ZTBL under the scheme provides the farmers this facility of providing warehousing facility. The goods are insured and stored in a proper manner under the supervision of the bank.
TOBACCO BARN FINANCING SCHEME

ZTBL Branches falling under Peshawar, Abbottabad, and Mingora Zones are entitled to issue loan under tobacco barn financing scheme. This scheme is especially made with the objective to facilitate the tobacco growing community so they can get maximum profit out of it. Credit will be granted under this scheme after fulfilling all necessary requirements and procedures of the bank.

Bank Accounts

ZTBL provides following type of bank accounts to its customers:
? CURRENT Account
? BUSINESS DEPOSIT Account
? BASIC BANKING Account
? PLS-TERM DEPOSIT
? MUSTAQBIL MEHFOOZ Account
? ZARAI TERM DEPOSIT CERTIFICATE (ZTDC)
? ZTBL Junior Account (ZJA)
? ZARAI MUNAFA TERM DEPOSIT CERTIFICATE (ZMTDC)
? ZTBL Senior Citizen’s Account (ZSCA)

Locker Facility

Home Remittance (Western Union)

Deposit Protection Mechanism

Treasury

ZTBL Clearing Operations

Latest Five Years Balance Sheet
Particulars 2017 2016 2015 2014
ASSETS Rs in Mln Rs in Mln Rs in Mln Rs in Mln
Cash and balances with treasury banks 4,875,139 3,477,750 2,516,338 4,491,391
Balances with other banks 18,179,091 20,074,445 16,408,511 5,593,183
Lending’s to financial institutions 1,169,147 – – 820,190
Investments – net 70,169,233 37,118,541 19,765,649 29,337,315
Advances – net 140,878,314 135,765,150 129,552,744 108,553,958
Operating fixed assets 2,179,711 2,071,483 2,101,177 1,581,077
Deferred tax assets – net 898,749 604,948 446,941 1,528,810
Other assets – net 17,991,647 16,448,667 16,782,760 11,656,953
Total Assets 256,341,031 215,560,984 187,574,120 163,562,877
LIABILITIES
Bills payable 468,339 493,231 346,059 561,964
Borrowings 86,827,027 55,885,230 57,143,100 969,349
Deposits and other accounts 70,548,322 59,870,659 35,947,953 26,701,911
Sub-ordinated loan – 3,204,323 3,204,323 –
Liabilities against assets subject to finance lease – – – –
Deferred tax liabilities – net – – – –
Other liabilities 22,376,006 13,667,442 11,721,237 10,698,014
Total Liabilities 180,219,694 133,120,885 108,362,672 38,931,238
NET ASSETS 76,121,337 82,440,099 79,211,448 124,631,639
REPRESENTED BY
Share capital 52,678,433 12,522,441 12,522,441 12,522,441
Reserves 6,299,526 6,299,526 5,644,659 4,590,135
Unappropriated profit 13,953,195 21,034,629 18,716,929 14,553,175
72,931,154 39,856,596 36,884,029 31,665,751
Share deposit money – 40,155,992 40,155,992 89,490,985
Surplus on revaluation of assets – net of tax 22 3,190,183 2,427,511 2,171,427 3,474,903
Total Liabilities and Equity 76,121,337 82,440,099 79,211,448 124,631,639

Latest Five Years Income Statement
2017 2016 2015 2014
MARK-UP/ INTEREST EARNED INCOME
Mark-up / return / interest earned 22,141,868 19,631,421 18,259,348 15,495,473
Mark-up / return / interest expensed 8,123,526 5,455,481 6,016,569 2,399,949
Net mark-up / interest income 14,018,342 14,175,940 12,242,779 13,095,524
Provision for diminution in the value of investments – net – –
Provision against non-performing loans and advances – net 11.3.4 2,581,461 1,778,030 -573,110 1,381,324
Bad debts written off directly 280,416 206,861 160,009 113,663
2,861,877 1,984,891 -413,101 1,494,987
Net mark-up / interest income after provisions 11,156,465 12,191,049 12,655,880 11,600,537
NON MARK-UP / INTEREST INCOME
Fee, commission and brokerage income 22,777 26,397 40,919 28,410
Dividend income 176,526 148,540 81,805 66,737
Income from dealing in foreign currencies – –
Gain on sale of securities – net 40,806 179,322 366,437 118,136
Unrealized loss on revaluation of investments
classified as held for trading – (80)
Other income 4,062,396 4,067,521 5,093,503 4,299,889
Total non-mark-up / interest income 4,302,505 4,421,700 5,582,664 4,513,172
15,458,970 16,612,749 18,238,544 16,113,709
NON MARK-UP / INTEREST EXPENSES
Administrative expenses 10,996,732 9,849,061 9,800,810 7,786,170
(Reversal) / provision against other assets – net 14.7 (30,270) 3,290 34,936 -10,666
Other charges 3,419 214,348 23,974 11,099
Total non-mark-up / interest expenses 10,969,881 10,066,699 9,859,720 7,786,603
4,489,089 6,546,050 8,378,824 8,327,106
Extraordinary / unusual items 10,638,113 –
(LOSS) / PROFIT (6,149,024) 6,546,050 8,378,824 8,327,106
Taxation-Current Year 330,555 2,415,993 2,257,101 2,973,440
-Prior Year 275,556 989,128 361,424 4,245
-Deferred (343,701) (133,408) 487,678 -67,963
262,410 3,271,713 3,106,203 2,909,722
(LOSS) / PROFIT AFTER TAXATION (6,411,434) 3,274,337 5,272,621 5,417,384
Unappropriated profit brought forward 21,034,629 18,716,929 14,553,175 13,597,945
Profit available for appropriation 14,623,195 21,991,266 19,825,796 19,015,329

(Loss) / earnings per share – basic and diluted (Rupees) 31 (1.40) 0.72 4.211 4.326

Ratio Analysis for last five years
Investment to Deposit Ratio

IDR=Investments/Total Deposits *100

Years Investment to Deposit Ratio
2017 99.46%
2016 62.00%
2015 54.98%
2014 109.87%

Interpretation: Investment to Deposit Ratio indicates how much portion of the deposits have been invested in different portfolios. Above cited percentages shows that after 2014 ZTBL faced a huge decline. They did not invested much in different portfolios during 2015 as compared to 2014. But after 2015 the Bank again started making investments as the percentages started to rise during 2016 and 2017.

Cash and cash equivalents to total assets:

CTA: Cash and balances with other banks/Total assets*100

Years Cash and cash equivalents to total assets:
2017 1.90%
2016 1.61%
2015 1.34%
2014 2.75%

Interpretation: Cash and cash equivalents to total assets is also called Cash Asset Ratio. It tells about the liquidity of the firm to meet its short term obligations. According to the percentages cited above in 2014 Cash and cash equivalents to total assets is maximum while it gradually dropped in 2015 and in 2016 and 2017 it again started to increase

Investment to Total Assets

ITA: Investments net/ Total Assets*100

Years Investment to Total Assets
2017 27.37%
2016 17.22%
2015 10.54%
2014 17.94%

Interpretation: Investment to Total Assets demonstrates how much money has been invested by the bank. It is calculated to see how efficiently the bank has used its assets to generate earnings. During 2017 the bank has the highest percentage of 27.37% and the minimum percentage is during 2010 at 10.54%.

Advances Net of Provisions to Total Assets

ANTA: Net advances/ Total Assets*100

Years Advances Net of Provisions to Total Assets
2017 54.96%
2016 62.98%
2015 69.07%
2014 66.37%

Interpretation: This ratio shows provisions against total assets which are advanced by the general public. The graph shows there is not much variability throughout the time period of 5 years.

Deposit to Total Assets

DTA: Total deposits to other accounts/Total Assets*100

Years Deposit to Total Assets
2017 27.52%
2016 27.77%
2015 19.16%
2014 16.33%

Comments: The ratio shows what percentage of total assets contains total deposits and other accounts. During 2017 and 2016 the graph and table shows higher percentages while during 2015 and 2014 it was relatively low.

Total Liabilities to Total Assets

TLTA: Total liabilities/ Total Assets*100

Years Total Liabilities to Total Assets
2017 70.30%
2016 61.76%
2015 57.77%
2014 23.80%

Comment: Total Liabilities to Total Assets measures a leverage ratio that defines the total amount of debt relative to assets. In 2017 it had the highest point at 70% and in 2014 it had the lowest percentage at only 23.80%.

Net Advances to Deposit

NAD: Net advances/ Deposits and other Accounts*100

Years Net Advances to Deposit
2017 199.69%
2016 226.76%
2015 360.39%
2014 406.54%

Comment: Net advances to deposit ratio measures what portion of banks deposits have been invested as advances by the bank. ZTBL during 2014 made much advances as compared to its deposits by 400% which is a big risk by the bank. This ratio kept on decline over the time period.

Spread Ratio:

SR: Net Markup/Markup Interest Earned*100

Years Spread Ratio
2017 63.31%
2016 72.21%
2015 67.05%
2014 84.51%

Comments: The spread ratio is the difference between the average ratios of interest income to assets and the average ratios of interest expended on liabilities. There was not much variation in this ratio over time.

Net Markup/ Interest Margin Ratio

IMR: (Markup Interest Earned-Markup interest expensed)/Total Assets*100

Years Net Markup/ Interest Margin
2017 5.47%
2016 6.58%
2015 6.53%
2014 8.01%

Comments: This ratio calculates how much money the bank is making on its investing operations. The bank earned most money in 2014, whereas 2017 was the lowest point. The bank did not make higher profits from its investments.

Return on Equity

ROE: Profit and loss after Taxation/ Total Equity*100

Years Return on Equity
2017 -8.42%
2016 3.97%
2015 6.66%
2014 4.35%

Comments: The Return On Equity ratio essentially measures the rate of return that the owners of common stock of a company receive on their shareholdings. In 2015 the graph shows the highest point. The figures kept varying over the years.

Return on Assets

ROA: Profit and loss after Taxation/ Total Assets*100

Years Return on Assets
2017 -2.50%
2016 1.52%
2015 2.81%
2014 3.31%

Comments: Return on assets shows how much profit is earned against total assets. The graph and table shows downward trend. In 2017 it was -2.50% the lowest point and in 2014 with 3.31% is the highest.

Non Markup/ Interest Income to Total Assets Ratio

NMR: Interest Income/ Total Assets*100

Years Non Markup/ Interest Income to Total Assets
2017 5.47%
2016 6.58%
2015 6.53%
2014 8.01%

Comments:

Net Markup / Interest Income After Provisions to Total Assets

Net Markup/Total Assets*100

Years Net Markup / Interest Income After Provisions to Total Assets
2017 4.35%
2016 5.66%
2015 6.75%
2014 7.09%

Comments: This ratio refers to the interest earned on the total assets used for this purpose to determine whether the rate is good, too high, or too low in order for the responsible management to decide whether to continue leaving these assets as is or use them differently. Net markup kept on falling during the years.

Earnings Per Share

EPS: Profit or Loss after tax/ No of Ordinary Shares

Years Earnings Per Share
2017 -1.40%
2016 0.72%
2015 4.21%
2014 4.33%

Comments: Earning per shares ratio indicates what portion of profit or loss is distributed to banks shareholders against their number of shares. The bank suffered loss in 2017 that’s why the shareholders suffered great loss while in other years they gained loss

Capital Ratio

CR: Total Equity/Total Assets*100

Years
Capital Ratio
2017 29.70%
2016 38.24%
2015 42.23%
2014 76.20%

Comments: Capital Ratio demonstrates what part of equity is financed by total assets. The above mentioned graph shows falling trending. In 2014 the graph shows the highest point while in 2017 it shows its lowest point.

Total Deposit to Total Equity

TDTE= Deposits and other accounts/ Total Equity*100

Years Total Deposit to Total Equity
2017 92.68%
2016 72.62%
2015 45.38%
2014 21.42%

Comments: Total Deposit to Total Equity ratio is used to check what amount of debt and equity is used to finance banks assets. Throughout the years this ratio has kept on increasing. 2017 has the highest point at more than 92%.

Gross Infection

Percentage Year Gross Infection
0% 2017 15.50%
25% 2016 16.60%
50% 2015 15.80%
100% 2014 12.20%

Provisioning Coverage

Year Provisioning Coverage
2017 25.10%
2016 14.60%
2015 11.20%
2014 12.70%

Net Infection

Year Net Infection
2017 12.10%
2016 14.50%
2015 14.35%
2014 10.90%

Cost of deposits

Year Cost of deposits
2017
2016 5.30%
2015 4.50%
2014 3.10%

Capital Adequacy Ratio

Year Capital Adequacy Ratio
2017
2016 39.90%
2015 46.70%
2014 49.70%

Horizontal Analysis Balance Sheet

2017 17
VS
14 2016 16
VS
14 2015 15
VS
14 2014
Particulars Rs Mln % Rs Mln % Rs Mln % Rs Mln
ASSETS
Cash and balances with treasury banks 4,875,139 8.54 3,477,750 -22.57 2,516,338 -43.97 4,491,391
Balances with other banks 18,179,091 225.02 20,074,445 258.91 16,408,511 193.37 5,593,183
Lending’s to financial institutions 1,169,147 42.55 – – 820,190
Investments – net 70,169,233 139.18 37,118,541 26.52 19,765,649 -32.63 29,337,315
Advances – net 140,878,314 29.78 135,765,150 25.07 129,552,744 19.34 108,553,958
Operating fixed assets 2,179,711 37.86 2,071,483 31.02 2,101,177 32.90 1,581,077
Deferred tax assets – net 898,749 -41.21 604,948 -60.43 446,941 -70.77 1,528,810
Other assets – net 17,991,647 54.34 16,448,667 41.11 16,782,760 43.97 11,656,953
256,341,031 56.72 215,560,984 31.79 187,574,120 14.68 163,562,877
LIABILITIES
Bills payable 468,339 -16.66 493,231 -12.23 346,059 -38.42 561,964
Borrowings 86,827,027 8857.25 55,885,230 5665.23 57,143,100 5795.00 969,349
Deposits and other accounts 70,548,322 164.21 59,870,659 124.22 35,947,953 34.63 26,701,911
Sub-ordinated loan – 3,204,323 3,204,323 –
Liabilities against assets subject to finance lease – – – –
Deferred tax liabilities – net – – – –
Other liabilities 22,376,006 109.16 13,667,442 27.76 11,721,237 9.56 10,698,014
180,219,694 362.92 133,120,885 241.94 108,362,672 178.34 38,931,238
NET ASSETS 76,121,337 -38.92 82,440,099 -33.85 79,211,448 -36.44 124,631,639
REPRESENTED BY
Share capital 52,678,433 320.67 12,522,441 0.00 12,522,441 0.00 12,522,441
Reserves 6,299,526 37.24 6,299,526 37.24 5,644,659 22.97 4,590,135
Unappropriated profit 13,953,195 -4.12 21,034,629 44.54 18,716,929 28.61 14,553,175
72,931,154 130.32 39,856,596 25.87 36,884,029 16.48 31,665,751
Share deposit money – 40,155,992 -55.13 40,155,992 -55.13 89,490,985
Surplus on revaluation of assets – net of tax 22 3,190,183 -8.19 2,427,511 -30.14 2,171,427 -37.51 3,474,903
76,121,337 -38.92 82,440,099 -33.85 79,211,448 -36.44 124,631,639

Horizontal Analysis Income Statement

Particulars 2017 17
VS
10 2016 16
VS
10 2015 15
VS
10 2014
Mark-up / return / interest earned 22,141,868 42.89 19,631,421 26.69 18,259,348 17.84 15,495,473
Mark-up / return / interest expensed 8,123,526 238.49 5,455,481 127.32 6,016,569 150.70 2,399,949
Net mark-up / interest income 14,018,342 7.05 14,175,940 8.25 12,242,779 -6.51 13,095,524
Provision for diminution in the value of investments – net – –
Provision against non-performing loans and advances – net 11.3.4 2,581,461 86.88 1,778,030 28.72 -573,110 -141.49 1,381,324
Bad debts written off directly 280,416 146.71 206,861 82.00 160,009 40.77 113,663
2,861,877 91.43 1,984,891 32.77 -413,101 -127.63 1,494,987
Net mark-up / interest income after provisions 11,156,465 -3.83 12,191,049 5.09 12,655,880 9.10 11,600,537
NON MARK-UP / INTEREST INCOME
Fee, commission and brokerage income 22,777 -19.83 26,397 -7.09 40,919 44.03 28,410
Dividend income 176,526 164.51 148,540 122.58 81,805 22.58 66,737
Income from dealing in foreign currencies – –
Gain on sale of securities – net 40,806 -65.46 179,322 51.79 366,437 210.18 118,136
Unrealized loss on revaluation of investments
classified as held for trading – (80)
Other income 4,062,396 -5.52 4,067,521 -5.40 5,093,503 18.46 4,299,889
Total non-mark-up / interest income 4,302,505 -4.67 4,421,700 -2.03 5,582,664 23.70 4,513,172
15,458,970 -4.06 16,612,749 3.10 18,238,544 13.19 16,113,709
NON MARK-UP / INTEREST EXPENSES
Administrative expenses 10,996,732 41.23 9,849,061 26.49 9,800,810 25.87 7,786,170
(Reversal) / provision against other assets – net 14.7 (30,270) 183.80 3,290 -130.85 34,936 -427.55 -10,666
Other charges 3,419 -69.20 214,348 1831.24 23,974 116.00 11,099
Total non mark-up / interest expenses 10,969,881 40.88 10,066,699 29.28 9,859,720 26.62 7,786,603
4,489,089 -46.09 6,546,050 -21.39 8,378,824 0.62 8,327,106
Extraordinary / unusual items 10,638,113 –
(LOSS) / PROFIT (6,149,024) -173.84 6,546,050 -21.39 8,378,824 0.62 8,327,106
Taxation 330,555 -88.88 2,415,993 -18.75 2,257,101 -24.09 2,973,440
– 275,556 6391.31 989,128 23201.01 361,424 8414.11 4,245
– (343,701) 405.72 (133,408) 96.30 487,678 -817.56 -67,963
262,410 -90.98 3,271,713 12.44 3,106,203 6.75 2,909,722
(LOSS) / PROFIT AFTER TAXATION (6,411,434) -218.35 3,274,337 -39.56 5,272,621 -2.67 5,417,384
Unappropriated profit brought forward 21,034,629 54.69 18,716,929 37.65 14,553,175 7.02 13,597,945
Profit available for appropriation 14,623,195 -23.10 21,991,266 15.65 19,825,796 4.26 19,015,329

(Loss) / earnings per share – basic and diluted (Rupees) 31 (1.40) 0.72 4.211 4.326

Vertical Analysis Balance Sheet

2017 V.A in % 2016 V.A in % 2015 V.A in % 2014 V.A in %
Particulars Rs Mln Rs Mln Rs Mln Rs Mln
ASSETS
Cash and balances with treasury banks 4,875,139 1.90 3,477,750 1.34 4,491,391 2.75
Balances with other banks 18,179,091 7.09 20,074,445 9.31 16,408,511 8.75 5,593,183 3.42
Lendings to financial institutions 1,169,147 0.46 – – 820,190 0.50
Investments – net 70,169,233 27.37 37,118,541 17.22 19,765,649 10.54 29,337,315 17.94
Advances – net 140,878,314 54.96 135,765,150 62.98 129,552,744 69.07 108,553,958 66.37
Operating fixed assets 2,179,711 0.85 2,071,483 0.96 2,101,177 1.12 1,581,077 0.97
Deferred tax assets – net 898,749 0.35 604,948 0.28 446,941 0.24 1,528,810 0.93
Other assets – net 17,991,647 7.02 16,448,667 7.63 16,782,760 8.95 11,656,953 7.13
256,341,031 100.00 215,560,984 100.00 187,574,120 100.00 163,562,877 1528.91
LIABILITIES 0.00 0.00 0.00
Bills payable 468,339 0.26 493,231 0.37 346,059 0.32 561,964 1.44
Borrowings 86,827,027 48.18 55,885,230 41.98 57,143,100 52.73 969,349 2.49
Deposits and other accounts 70,548,322 39.15 59,870,659 44.97 35,947,953 33.17 26,701,911 68.59
Sub-ordinated loan – 3,204,323 2.41 3,204,323 2.96 –
Liabilities against assets subject to finance lease – – – –
Deferred tax liabilities – net – – – –
Other liabilities 22,376,006 12.42 13,667,442 10.27 11,721,237 10.82 10,698,014 27.48
180,219,694 100.00 133,120,885 100.00 108,362,672 100.00 38,931,238 100.00
NET ASSETS 76,121,337 100.00 82,440,099 100.00 79,211,448 100.00 124,631,639 100.00
REPRESENTED BY 0.00
Share capital 52,678,433 69.20 12,522,441 15.19 12,522,441 15.81 12,522,441 10.05
Reserves 6,299,526 8.28 6,299,526 7.64 5,644,659 7.13 4,590,135 3.68
Unappropriated profit 13,953,195 18.33 21,034,629 25.52 18,716,929 23.63 14,553,175 11.68
72,931,154 95.81 39,856,596 48.35 36,884,029 46.56 31,665,751 25.41
Share deposit money – 40,155,992 48.71 40,155,992 50.69 89,490,985 71.80
Surplus on revaluation of assets – net of tax 22 3,190,183 4.19 2,427,511 2.94 2,171,427 2.74 3,474,903 2.79
76,121,337 100.00 82,440,099 100.00 79,211,448 100.00 124,631,639 100.00

Vertical Analysis Income Statement
2017 V.A in % 2016 V.A in % 2015 V.A in % 2014 V.A in %
Mark-up / return / interest earned 22,141,868 100.00 19,631,421 100.00 18,259,348 100.00 15,495,473 100.00
Mark-up / return / interest expensed 8,123,526 36.69 5,455,481 27.79 6,016,569 32.95 2,399,949 15.49
Net mark-up / interest income 14,018,342 63.31 14,175,940 72.21 12,242,779 67.05 13,095,524 84.51
Provision for diminution in the value of investments – net – –
Provision against non-performing loans and advances – net 11.3.4 2,581,461 11.66 1,778,030 9.06 -573,110 -3.14 1,381,324 8.91
Bad debts written off directly 280,416 1.27 206,861 1.05 160,009 0.88 113,663 0.73
2,861,877 12.93 1,984,891 10.11 -413,101 -2.26 1,494,987 9.65
Net mark-up / interest income after provisions 11,156,465 50.39 12,191,049 62.10 12,655,880 69.31 11,600,537 74.86
NON MARK-UP / INTEREST INCOME
Fee, commission and brokerage income 22,777 0.10 26,397 0.13 40,919 0.22 28,410 0.18
Dividend income 176,526 0.80 148,540 0.76 81,805 0.45 66,737 0.43
Income from dealing in foreign currencies – –
Gain on sale of securities – net 40,806 0.18 179,322 0.91 366,437 2.01 118,136 0.76
Unrealized loss on revaluation of investments
classified as held for trading – (80) 0.00 0.00
Other income 4,062,396 18.35 4,067,521 20.72 5,093,503 27.90 4,299,889 27.75
Total non-mark-up / interest income 4,302,505 19.43 4,421,700 22.52 5,582,664 30.57 4,513,172 29.13
15,458,970 69.82 16,612,749 84.62 18,238,544 99.89 16,113,709 103.99
NON MARK-UP / INTEREST EXPENSES
Administrative expenses 10,996,732 49.66 9,849,061 50.17 9,800,810 53.68 7,786,170 50.25
(Reversal) / provision against other assets – net 14.7 (30,270) -0.14 3,290 0.02 34,936 0.19 -10,666 -0.07
Other charges 3,419 0.02 214,348 1.09 23,974 0.13 11,099 0.07
Total non mark-up / interest expenses 10,969,881 49.54 10,066,699 51.28 9,859,720 54.00 7,786,603 50.25
4,489,089 20.27 6,546,050 33.34 8,378,824 45.89 8,327,106 53.74
Extraordinary / unusual items 10,638,113 48.05 – 0.00 0.00
(LOSS) / PROFIT (6,149,024) -27.77 6,546,050 33.34 8,378,824 45.89 8,327,106 53.74
Taxation 330,555 1.49 2,415,993 12.31 2,257,101 12.36 2,973,440 19.19
– 275,556 1.24 989,128 5.04 361,424 1.98 4,245 0.03
– (343,701) -1.55 (133,408) -0.68 487,678 2.67 -67,963 -0.44
262,410 1.19 3,271,713 16.67 3,106,203 17.01 2,909,722 18.78
(LOSS) / PROFIT AFTER TAXATION (6,411,434) -28.96 3,274,337 16.68 5,272,621 28.88 5,417,384 34.96
Unappropriated profit brought forward 21,034,629 95.00 18,716,929 95.34 14,553,175 79.70 13,597,945 87.75
Profit available for appropriation 14,623,195 66.04 21,991,266 112.02 19,825,796 108.58 19,015,329 122.72
(Loss) / earnings per share – basic and diluted (Rupees) 31 (1.40) 0.72 4.211 4.326

SWOT ANALYSIS OF THE ZTBL
SWOT analysis are conducted to check the performance of an organization internally as well as externally. SWOT abbreviation is strength, weaknesses, opportunities and threats. Strengths and weakness analysis are conducted to check internal performance and opportunities and threats analysis are conducted to check external performance of any organization.

Strength

? The biggest strength of ZTBL is that it has branches all over the Pakistan especially in Rural areas where banks are not common

? For a very long time ZTBL is the only bank which is contributing and focusing to provide services to agriculture sector only.

? ZTBL has the finest Loan schemes which are beneficial for farmers as well as for banks

? ZTBL goodwill and Trust on bank by farmers is their biggest strength.

? ZTBL offers loans to farmers at very simple terms and conditions.

? ZTBL advance loans to the farmers at their door step after fulfilling the loans security requirements.

? ZTBL owns many lands in which they harvest crops and generate huge amount of money

? The bank provides many facilities to its employees and customers

? There is coordination and good communication environment between the departments of ZTBL.

Weakness

? Employees are untrained and unqualified.

? Accounting system of ZTBL is very weak and sluggish

? PC’s are not available for every employees

? Laziness and unmotivated employees

? ZTBL loan recovery system is very outdated and slow due to inefficient system.

? Officers are appointed on references basis.

? Employees are forced to do multi-tasking jobs at one time,

? Political involvement is very common due to Public Limited Bank.

? Employees are unskilled and unmotivated towards their duties and work.

Opportunities:

? ZTBL should install new Automatic Teller Machines throughout Pakistan.

? ZTBL should start investing some money in advertisement because many people in rural areas are not aware what ZTBL is offering to its customers.

? ZTBL should start hiring its new staff through proper channel not through reference basis.

? Non performing staff should be fired and newly skilled staff should be appointed.

? ZTBL should provide new and latest facilities and technological equipment’s to its staff

Threats

? Many branches of ZTBL in rural areas are not performing well and are under tremendous loss.

? Punjab Provincial Corporative Bank (PPCB) and The Bank of Punjab are the biggest threats to ZTBL. They both are trying to Invest in this sector.

? Cases pending in courts are taking very long time in finalization of its results due to which many lands kept as mortgage cannot be sold.

? There are many loans every year which are non-recovered due to which bank is facing heavy losses

? Also the rate of the agricultural crops is decreasing season by season.

Learning as a Student Inter ( Preferably in Accounting and Finance Department)
Duties

I did my internship at Zarai Taraqiati Bank Limited (ZTBL) at its Zonal Office in Model Branch at Mall road, Lahore. Every zonal office of Zarai Taraqiati Bank Limited has its own Model branch. There are 32 zonal offices of ZTBL across Pakistan. Model Branch performs same functions as of any commercial or retail bank. During my internship at Model Branch following duties were assigned to me:

? Responding of Demand Draft on Personal Computer through CBAS (centralized Branch Automation Computerized).

? Writing of Vouchers

? Credit Vouchers
? Debit Vouchers
? Transfer Voucher

? Counting of Vouchers. (Day to Day) and entering their number it in special voucher register.

? Sending Mails to different branches across Pakistan.

? Receiving Mails from other Branches.

? Sorting of Clearing Documents

? Inwards clearing
? Outwards clearing
? Within the city clearing
? Outside the city clearing

Accomplishments

Accomplishments refer “what did you achieve after performing some tasks, duties and responsibilities. First thing I learned about the environment in which business is conducted. I also got to know about the culture and working atmosphere of the bank. I achieved professional behavior in performing various duties at work place. With the help of this internship I enhanced my knowledge, self-confidence, ability to work under pressure, finishing task within prescribed time and doing multi jobs or tasks as well at one time.

Problems Encountered

I faced couple of problems during my internship at ZTBL Model branch involving I was not provided a personal computer and I had a limited access to system software due to secrecy.

Objectives of Internship

Some major objectives of internship are appended below:

o To fulfill the requirement of academic program
o To learn about professional business environment
o To enhance my knowledge
o To learn how to be responsible
o To be consistent in life and be punctual

Bibliography/ References

o http://www.sbp.org.pk/stats/Balance/2017/ZTBL.pdf
o www.ZTBL.com.pk
o www. Investopedia.com
o Financial Statements of Zarai Taraqiati Bank Limited 2017
o Financial Statements of Zarai Taraqiati Bank Limited 2016
o Financial Statements of Zarai Taraqiati Bank Limited 2015
o Financial Statements of Zarai Taraqiati Bank Limited 2014

Jargons

ATM Automatic Teller Machine
ZTBL Zarai Taraqiati Bank Limited
ADBP Agriculture Development Bank of Pakistan
TFR Term Deposit Receipts
BBA Basic Banking Account
HO Head Office