fasaal bnk 2

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Bahria University, Karachi campus

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ACKNOWLEDGEMENT

Now that its all done, theres finally time to reflect on the process. No report ever grows full-

bloom from a students head. It has hands to help it along the way: phone calls for advice,

serious review by professionals, critical notes and information from the World Wide Web, and

most of all the endless support of always available professor and friends at the other end.

First of all we are extremely thankful to ALLAH THE ALMIGHTY who has given the power,

strength and abilities to think and judge the matters and then providing the ways to make use of

these abilities.

It is an honor for us to prepare the report on management process at Faysal Bank which was

assigned by our respected instructor Maam Shauana Zafar we would like to thank Maam

Shauana for providing us the guidance all along in order to materialize our content for the report.

We would also like to thank the Branch Manager Mrs.Shaiza Khalid and the Relationship

Manager Mr.Syed Saad Uddin Raazi for providing us with valuable guidance and information


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Executive Summary

The report is about the management process of Faysal bank which is one of the leading

commercial banks in Pakistan. In the begging an over view of the organization is detailed in theintroduction of the company which covers the total portfolio, services and product range, newchallenges and size of the organization is described.

Mission and Vision statement of the company are prescribed. Later content wise entire product

rage of the bank is available. SWOT analysis shows some of the major Strengths, Weaknesses,possible opportunities and threats to the company.

Two major competitors profiles are detailed and an overall industrial competitor analysis shows

the position of the bank in the industry, enabling the reader to understand the growth andstanding of the company.

The organizational chart as per designation and organogram are graphed, showing the top

management of the companys structure. Then the compensation and benefits offered to theemployees are briefly described.

Visiting details and supplements are attached in the end of the report for reference.


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WHAT IS BANK?

In Simple words we can say that bank is a pipeline through which money moves into and out of

circulation. Bank accepts deposits and repays cash to its customers on demand. The bank

borrows money at a lesser rate of interest and lends it to the borrower at a higher rate.

Introduction to the Company

Faysal Bank Limited (Bank) was incorporated in Pakistan on October 03, 1994 as a public

quoted company listed on Karachi & Lahore stock Exchanges. The six Pakistan branches of

Faysal Islamic Bank of Bahrain E.C. amalgamated with the Bank when it commenced business

operations effective January 01,1995.The year 2002 is the 15th year for Faysal Bank serving the

Pakistani economy and market. Similarly, Al Faysal Investment Limited was incorporated in

Pakistan in 1991 as the investment arm of the group and make valuable contributions in the

public and private sectors based on Shariah approved modes of funding.

Faysal Bank is one of the leading commercial banks in Pakistan. The bank is owned by the

Ithmaar Bank of Bahrain. Nationwide Faysal Bank has a branch network of over 280 branches.

With paid up capital of 16.8 Billion PKR, they are maintaining a credit rating of AA for Long

Term and A1+ for Short Term as per PACRA and JCR-VIS for the financial year ending June

2011.

Faysal bank has recently acquired operations of Royal Bank of Scotland (RBS), which has

brought them to 8th

place in the standings of leading banks in Pakistan. Faysal Bank is currently

offering more than 11 products in Deposits, 5 different consumer banking, 6 types of retail and

corporate banking services, 7 Islamic banking scheduled products, 3 customized Bancassurance

plans and an exclusive Solitaire Priority Banking services.

Currently Faysal bank has over 5000 professionals employed. This large network of bankers is

considered as a fundamental pillar of theirgrowth and steady development. Their compensation

and benefit offered to those employed has helped the organization in maintaining a low level of

turnover ratio.The bank also offers regular training and development programs to enhance the

skill set of the work force employed.Other than fulltime employed permanent staff, Faysal bankalso has employed over thousand junior level staff.

The bank is also involved in CSR (Corporate Social Responsibility), recently they have runa

campaign of collecting blood for donation to Fathmid Blood bank, in which several employees

of the banks has participated. The bank also contributed to a great deal in the rehabilitation of


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flood victims in Pakistan.Faysal bank has also entered in to a partnership with IBA for

scholarship to deserving students.

They are also chief sponsors of Domestic cricket tournaments held in the country, namely Faysal

bank T20, Quaid e Azam trophy, and Petangular Cup. This has contributed very well the

promotion of sports activities in Pakistan.

Faysal bank also has a subsidiary in the name of Faysal Asset Management, who is functioning

in equity and asset funds market. Faysal bank is also liaison with EFU and NJI who are

underwriters of their Bancassurance products.

Mission Statement:

Achieve leadership in providing financial services in chosen markets through innovation.

Vision Statement:

Excellence in all that we do.


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Products and services offered

There are six major sectors which determine the service and product tree of Faysal bank are;

1. Deposit ProductsCurrent Accounts

Checking Account on no profit, no loss basis. Different rages of current accounts are;

o FaysalSahulato Faysal Business Firsto Faysal Basic Banking

Savings Accounts

Checking accounts on profit and loss basis. Different ranges of savings accounts are;

o Faysal Basic Savingso Faysal Anchor Savingso Faysal Moavino Faysal Premiumo Faysal Market Link

Faysal Izafa Term Deposits;

o Term based profit and loss fixed deposit.Foreign Currency Accounts:Checking accounts in foreign currencies can be opened in USD, GBP, EUR and JPY

categorieso Faysal FCY Savings Pluso Faysal MahfoozSarmayao Faysal Sahulat.

2. Consumer LendingFaysal bank KhushalKisan Scheme; Agricultural based financing solution.Faysal bank Home Financing; Financing for construction, purchase and renovation of

Houses.Faysal bank Balance transfer facility; Funds transfer solution to multiple accounts from

one account.Faysal bank Car Financing; Car financing facility for purchase and repurchase.

Faysal bank Credit Card; Rang of credit cards are;

o Faysal MC2, Silver and Gold Cardso Faysal bank Platinum Cards.

Faysal bank co-branded credit cards are;


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o Faysal bank Air Blue Credit cardso Faysal bank Ufone credit cards.

3. Value added Retail banking servicesFaysal bank Pocket mate ATM/Visa Debit Card;Classic and Gold cards available with SMS alerts options.

Faysal lockers are available in four sizeso Smallo Mediumo Largeo Extra-large.

Faysal bank Internet banking services;

o e- banking services for inquiryo balance transfer and utility payments.

Western Union Money Transfer.

Remittance can be received from all Faysal bank branches through Western UnionServices.

4. Corporate Bankingo Corporate Financingo SME Financingo Trade Financingo Investment Bankingo Treasury and capital market tradingo Cash Management Services

Batkat Islamic Banking:

o Current accountso Savings accountso Foreign currency accountso Investment Certificateso Mudarbah Certificates

5. Bancassurance SolutionsFaysal AikFaisla is a long term based investment and life insurance planwith a USP

of capital protection by the bank. EFU are underwriter of this plan. This plan isoffered in two ranges;


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i. Faysal AikFaisala Savings Planii. Faysal AikFaisala Education Plan.

Faysal bank also has a Family Assurance Plan with NJI as underwriters with USP

of terrorism cover.

6. Solitaire Priority Banking ServiceFaysal Bank for their preferred customer has launched this new state of the art banking

service, with a concept of personalized and luxurious banking services .

SWOT Analysis

Strengtho The bank is backed up by a very strong financial group, The Ithimar Bank of Bahrain.o High quality CRM banking systems implemented enabling real time online banking

and high quality customer oriented banking.

o Positive reputation in trade and finance market.o Gradual and steady growth since incorporation.o Lowest bad debts as compared to the other players in the market.o Large range of customized tailor made customer oriented products.

Weaknesso Smaller branch network as compared to the other top 10 competitors.o Delayed entry in technology based services, resulting in lower market share.o Branch network limited to domestic market, resulting in dependency on international

correspondent banks.

Opportunityo High rate of inflation in the country has brought up higher returns to the banking

industry.

o High quality professionals and infrastructure taken from Royal Bank of Scotland,who may be utilized for high quality banking culture.

o Centralized banking operations resulting in cost reduction.


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Threatso Bank is undergoing a merger of two entities, in which possibility of a fraudulent

activity.

o Although several branches are guard less, still several branches are still guarded withtraditional guard systems which can be threats for robberies.

o Uncertain political and economic conditions of the country.

DESIGNATION WISE ORGANOGRAM

BOARD OF DIRECTOR

Head EquityCapital

Market

HeadIslamic

Banking

HeadTreasury


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DEPARTMENT WISE ORGANOGRAM


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Competitors Analysis and Profile

o In the current banking industry, Faysal bank is considered as an upcoming Mid-sizedbank of Pakistan. They are catering all kind of customers in the industry. Leading top

5 Banks, i.e National Bank of Pakistan, Habib Bank Limited, United Bank Limited,

Muslim Commercial Bank and Allied bank are major players in the market. Their

presence in the country for over 5 decades has developed huge amount of trust and

faith to the masses at large, moreover they are also containing a large market share.

Faysal bank even with its lower market share is struggling to meet the giants.

o Mid-sized banks are often considered as the real competitors to them, they are,Standard Charted Bank and Bank Alfalah. They have nearly same range of product

and services, with more or less same tradition of banking services available. Here the

skill of personalized banking and good business relations are on test. Faysal bank has

a very sound relationship management system to meet this challenge.

o Other players where Faysal bank is ahead of are NIB, Habib Metropolitan Bank,Askari Bank, Bank Al-Habib and Silk Bank who are right behind Faysal Bank in

product line and services. They are trying hard to cross after Faysal Bank, by

increasing their product range, developing the branch network and improving services

levels.

o Islamic Banking entities especially Meezan bank, BankIslami, Dawood Islamic andAlbaraka Islamic Bank are also very good competitors to them in Islamic bankingsector. As they are fully commited to Islamic banking their focus is better off,

therefore Islamic banking channel of Faysal bank has to struggle more and more to

beat these competitors.

o Smaller banks like KASB, Summit, Soneri, My Bank and JS Bank do also threatbanks like Faysal bank as they offer higher interest rate, which tempts small investors

to be invested with them. This also results in attrition of small sized deposits.

o Foreign banks, Citi bank, HSBC, Samba and Barclays are also offering advancedlevel of products and banking service, however they are catering a small niche and

they have very limited exposure. Faysal bank being a complete package for its

customer are also serving to this specific market as well.


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Competitors Profile

As mentioned above, SCB and Alfalah are main competitors to Faysal Bank. There

overview are as follows;

Standard Charted Bank:The bank is backed by SCB international, based in UK. They have a branch network ofover 150 branches nationwide. They are offering similar designed bancassurance, deposit

products, consumer financing and corporate banking. SCB has its correspondents allaround the word which is their competitive edge over Faysal bank but there branch

network is nearly half of the size of Faysal bank.

Bank Alfalah:The bank is backed up by the investors from UAE and they have a larger branch network

of over 300 branches nationwide. Alflah also has the same range of deposit, consumerlending , corporate banking and bancassurance solutions. Their competitive edge is thelarger branch network as compapared to Faysal bank. However they also have the largest

amount of bad debts in the credit cards sector.

Compensations and Benefits for the Employees

A part from regular stipend Faysal bank employees are given several benefits for their service.

Salary Breakupo Basic Salaryo House Rento Utility

AllowancesMedical: All permanent employees and their direct family members are insured by the company

management.

Monthly Guaranteed Fixed Bonus upon performance.o Client Entertainment expenses are paid off by the company management.o Monthly LFA (Leave Fare Assistance) is paid on regular monthly basis.

Deductionso EOBI(Employee Old Age Benefit)o Flood Surcharge Taxo Income Taxo Provident Fund


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o Sports ClubCommissions

o Bancassurance Commission- Sales commission is paid to all employees contributingo Family Assurance Commission- Sales commission is disbursed every month on each unit

sale.o Sales Benefits- Upon sales promotion annual benefit is disbursed to sales employees

Bonuseso Annual Gross Salary Bonuso Performance Bonus

Loanso Personal Loans: Loans can be availed by the permanent employees for car financing,

house financing and personal cash requirements upon low interest rates.

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