BANK PROJECT PRESENTATION ON "BANK ISLAMI PAKISTAN LIMITED"

HAILEY COLLEGE OF BANKING & FINANCE, PU, LAHORE : 

HAILEY COLLEGE OF BANKING & FINANCE, PU, LAHORE PROJECT BANK: B ANK I SLAMI P AKISTAN L TD. Group Members: F ARAN AMIN N OROZ IQBAL M UHAMMAD USMAN SAEED BANK PROJECT

Mr. RIAZ AHMAD MIAN: 

Mr. RIAZ AHMAD MIAN We are proud to be a student of Sir Riaz. Dedicated To

What is Islamic Banking?: 

What is Islamic Banking? “An Islamic bank is a financial institution whose status, rules and procedures expressly state its commitment to the principle of Islamic Shariah and to the banning of the receipt and payment of interest (Riba) on any of its operations.”

Philosophy of Islamic Banking : 

Philosophy of Islamic Banking Islamic banking system is based on risk-sharing, owning and handling of physical goods, involvement in the process of trading, leasing and construction contracts using various Islamic modes of finance.

Major Modes of Islamic Banking: 

Major Modes of Islamic Banking MUSHARAKAH Musharakah means a relationship established under a contract by the mutual consent of the parties for sharing of profits and losses in the joint business. MUDARABAH A form of partnership where one party provides the funds while the other provides expertise and management. MURABAHA Literally it means a sale on mutually agreed profit. Technically, it is a contract of sale in which the seller declares his cost and profit. IJARAH Ijarah is a contract of a known and proposed usufruct against a specified and lawful return or consideration for the service or return for the benefit proposed to be taken, or for the effort or work proposed to be expended.

A Confusion regarding Islamic Banking: 

A Confusion regarding Islamic Banking Is it permissible for an Islamic bank to impose penalty for late payment? In Islamic law it is permissible to penalize a debtor who is financially sound but delays payment of debt without any genuine reason. Such act of the debtor is unjust as the Prophet (PBUH) has said, "A rich debtor who delays payment of debt commits Zulm ". But proceeds of such penalty are to be used for charity purposes only .

There is a wrong perception in the West and the USA that Islamic banks finance terrorists.: 

There is a wrong perception in the West and the USA that Islamic banks finance terrorists. Islamic banks never finance terrorism .

BankIslami Pakistan Limited: 

BankIslami Pakistan Limited 2 nd Largest Full Fledge Islamic Bank of Pakistan……….

History and Landmarks of BIPL: 

History and Landmarks of BIPL Conceptualized by Jahangir Siddiqui & Company Limited and DCD Group in late 2003. A detailed business plan was then prepared and a formal application was submitted to the State Bank of Pakistan on May 26, 2004. Dubai Bank joined the Sponsors and became one of the founding shareholders of BankIslami by investing 24.82% in the total Capital. The State Bank of Pakistan issued a No Objection Certificate in no time on August 19, 2004 and BankIslami Pakistan Limited. Incorporated on October 18, 2004

History and Landmarks of BIPL: 

History and Landmarks of BIPL Initial Public Offering BankIslami Pakistan Limited made a public offering of Rs. 400 Million, at par, from 6th to 8th March. This was the first primary issue by a Bank in over a decade in Pakistan. The Initial public offering (IPO) of BankIslami received overwhelming response from the general public as the applications received were 9 times higher than offered, fetching nearly Rs. 3.5 Billion, against the demand of Rs. 400 Million . BankIslami started its Banking operations on 7th April 2006 with its first branch in SITE, Karachi. By the end of 2006, the Bank had 10 branches, nine in Karachi and one in Quetta. Bank opened 66 new branches nationwide which expanded its network to 102 branches in 49 cities and BankIslami Crosses .

SERVING YOU, THE RIGHT WAY: 

SERVING YOU, THE RIGHT WAY MARKETING SLOGAN

BOARD OF DIRECTOR: 

BOARD OF DIRECTOR C hief Justice (R) Mahboob Ahmed (Chairman) M r. Hasan A. Bilgrami (C.E.O) M r. Ahmed Randeree (Head of Risk Management ) M r. Ali Raza Siddiqui (HR HEAD) M r. Ali Hussain M r. Hicham Hammoud M r. Marwan Hassan Ali ElKhatib M r. Shabir Ahmed Randeree.

Management HIERARCHY: 

Management HIERARCHY

SHARIA’H SUPERVISORY BOARD: 

SHARIA’H SUPERVISORY BOARD Justice ( Retd .) Muhammad Taqi Usmani (Chairman) Mufti Irshad Ahmad Aijaz (Member & Sharia'h Adviser) 3) Professor Dr. Fazlur Rahman

SPONSORS : 

SPONSORS Majors Randeree family of the DCD Group Dubai Bank PJSC. Jahangir Siddiqui & Co. Ltd Shareholding Pattern

CREDIT RATINGS: 

CREDIT RATINGS

Products & Services: 

Products & Services Noroz Iqbal

Products : 

Products CONSUMER BANKING RETAIL BANKING INVESTMENT BANKING CORPORATE BANKING

Consumer Banking: 

Consumer Banking MUSKUN Home Financing Islami Auto Ijarah -New Vehicle Islami Auto Ijarah -Used/Imported Vehicle

MUSKUN HOME FINANCING: 

MUSKUN HOME FINANCING HOME PURCHASE HOME CONSTRUCTION HOME RENOVATION HOME REPLACEMENT ELIGIBILITY SALARIED PERSON Min Salary 35000 2. BUSINESSMEN Min Income 50000

ISLAMI AUTO IJARAH: 

ISLAMI AUTO IJARAH NEW VEHICLES USED/IMPORTED VEHICLE FEATURS BankIslami's Auto Ijarah facility is based on the concept of Ijarah . It is a Shariah compliant alternative to Conventional leasing where Bank acts as a Lessor and you act as a Lessee. The Bank requires you to pay a monthly rent for the use of the Vehicle.

RETAIL BANKING: 

RETAIL BANKING Islami Current Account Islami Foreign Currency Account Islami Bachat Account Islami Dollar Bachat Account Islami Mahana Munafa Account Islami Amadni Certificate Islami Sahulat Account

RETAIL BANKING: 

RETAIL BANKING ISLAMI CURRENT ACCOUNT HOW CURRENT ACCOUNT WORKS IN BANKISLAMI BankIslami's Islami current account is based on the Islamic principle of Qarz (loan) whereby you are the lender and the Bank is the borrower. These funds are invested in halal business ventures only so that you are 100% sure that your funds are managed in a Shariah compliant manner. The funds are payable to you on demand as and when required with neither any addition nor penalty. ISLAMI FOREIGN CURRENCY ACCOUNT (Available in USD, GBP & EURO)

Retail Banking SAVING ACCOUNTS IN BANK ISLAMI: 

Retail Banking SAVING ACCOUNTS IN BANK ISLAMI ISLAMI BACHAT ACCOUNT ISLAMI DOLLAR BACHAT ACCOUNT ISLAMI MAHANA MUNAFA ACCOUNT ISLAMI MAHANA MUNAFA ACCOUNT

HOW ALL SAVINGS ACCOUNTS WORK IN BANKISLAMI: 

HOW ALL SAVINGS ACCOUNTS WORK IN BANKISLAMI BankIslami's Islami Amadni Certificate is a profit bearing account developed on the basis of the modes of Mudarabah . In this arrangement, you will function as a Rabbul Maal (investor in Mudaraba) and the Bank will act as the Mudarib (Manager of the Mudaraba) The profit share of the Bank is called the Mudarib's share. This profit sharing ratio between the Bank and the Depositors is determined at the beginning of each month. In the case of a loss, as per the rules of Mudaraba, the loss will be borne solely by the Rabbul Maal .

CORPORATE BANKING: 

CORPORATE BANKING Account Services Trade Services Working Capital Finance Project Finance Musharakah Finance Mudarabah Finance Ijarah

INVESTMENT BANKING: 

INVESTMENT BANKING ADVISORY: Fund Raising Corporate Restructuring Mergers & Acquisition Infrastructure Development Project Financing TRUSTEESHIP: Trusteeship for SUKUKs Fiduciary Roles in Fund Raising SPECIALIZED ROLES Private Equity Special Projects Ijarah & Musharakah Syndication STRUCTURING: Securitization Distressed Asset Sales Initial public Offerings UNDERWRITING SUKUKs Equity Musharakah

VALUE ADDED SERVICES: 

VALUE ADDED SERVICES

PowerPoint Presentation: 

ONLINE BANKING VISA DEBIT CARD e STATEMENT SELF SERVING PHONE BANKING 24/7 PHONE BANKING BIOMETRIC ATM LOCKERS INTERNET BANKING INTER BANK FUND TRANSFER

BRANCH NETWORK: 

BRANCH NETWORK Corporate Headquarters BankIslami Pakistan Limited 11th Floor, Executive Tower One Dolmen City, Marine Drive Block 4, Clifton, Karachi, Pakistan UAN: (021)- 111-BIP-111 (111-247-111) Fax: (021)-5378373 E-mail: info@bankIslami.com.pk SWIFT Code: BKIPPKKA NETWORK ACROSS COUNTRY PUNJAB ----------------------------------------------------------------------------------------------44 SINDH ------------------------------------------------------------------------------------------------37 BALOCHISTAN --------------------------------------------------------------------------------------11 KHEYBER PAKHTOONKHWA ---------------------------------------------------------------------8 AJK ------------------------------------------------------------------------------------------------------2 TOTAL ----------------------------------------------------------------------------------------------102

FINANCIALS HIGHLIGHTS: 

FINANCIALS HIGHLIGHTS MUHAMMAD USMAN SAEED

INCOME STATEMENT HIGHLIGHTS: 

INCOME STATEMENT HIGHLIGHTS PROFIT & LOSS ITEMS( Figures in MILLIONS Rs.) Year Sep.2011 Dec.2010 Dec.2009 Dec.2008 Dec.2007 Return Earned by Bank 4,023 3,806 2,177 1,468.69 602.06 Profit paid to Depositors 2,099 2,057 1,222 729.53 303.84 Gross Profit/ Net Spread earned 1,925 1,748 955 739.16 298.22 Income from Core Banking 1,820 1,897 1,271 876.71 367.25 Profit before Taxation 337 44 -579 -229.15 -100.46 Net Profit after Tax 230 46 -490 -55 -39

BALANCE SHEET HIGHLIGHTS: 

BALANCE SHEET HIGHLIGHTS BALANCE SHEET ITEMS( Figurs in MILLIONS Rs.) Year Sep.2011 Dec.2010 Dec.2009 Dec.2008 Dec.2007 Total Assets 52,385 45,036 34,272 19,085 14,446 Cash & Bank Balances 3,273 3,604 6,276 4,382 4,020 Financings 15,360 16,670 10,457 6,343 3,931 Total Investments 17,778 13,732 6,813 5,020 3,864 Total Liailities excld. Shareholders Fund 47,326 40,269 29,546 13,897 10,603 Working Capital/Net Assets 5,058 4,766 4,725 5,188 3,843 Total Deposits 44,622 38,198 27,987 12,478 9,934 Share Capital 5,280 5,280 5,280 5,280 3,200 shareholders Fund 5,058 4,766 4,725 5,187 3,843 Reserves 9 9 0 0 0

Balance Sheet Highlights: 

Balance Sheet Highlights ASSETS LIABILITIES

Customers Deposit: 

Customers Deposit Deposits from Customers (In MILLION RS.) Deposit Type Sep.2011 Dec.2010 Dec.2009 Dec.2008 Dec.2007 Fixed Deposits 24,355 18,797 12,652 6,500 4,929 Savings 11,583 9,982 7,555 2,847 3,599 Current 8,327 8,976 7,265 2,865 1,373 TOTAL 44,311 37,913 27,879 12,402 9,933

Customers Deposits: 

Customers Deposits

Deposits in Currency: 

Deposits in Currency Deposits in Currency (IN Millions) Year 2011 2010 2009 2008 2007 In Local Currency DnA 37,620 27,410 12,265 9,861 In Foreign Currency DnA 578 577 212 73 DnA : Data not available.

DEPOSITS VS. WITHDRAWALS: 

DEPOSITS VS. WITHDRAWALS

PowerPoint Presentation: 

( Figure In Rs.) Year Sep.2011 Dec.2010 Dec.2009 Dec.2008 Dec.2007 Earning per share 0.435 0.09 -0.93 -0.11 -0.12 Market Value per Share 3.14 3.63 5.89 7.25 16.2 Break up value 9 9.03 8.95 9.83 12.01

RATIO AND TREND ANALYSIS : 

RATIO AND TREND ANALYSIS 5 YEARS Ratio Analysis on BankIslami

Trend in Total Asset to Total Liabilities: 

Trend in Total Asset to Total Liabilities

Trend in Return on Assets and Return on Equity: 

Trend in Return on Assets and Return on Equity

Trend in Financing to Deposit ratio : 

Trend in Financing to Deposit ratio

PROFITABILITY TREND: 

PROFITABILITY TREND Profitability lines are showing positive trend from 2009 to onward.

SWOT ANALYSIS : 

S W O T ANALYSIS

STRENGTHS: 

STRENGTHS Increasing domestic market having demands from both low-end and high-end segments for its products. Sound culture for the banking and diversified branches across the country. Strong Internal Control Acceptable as International investors who are interested in Islamic mode of banking. Facilitation in international trade. Advance technology Easy On-line access to account information Attractive products. Focus towards innovative and creative banking. Better focus on customer services and customization. More job opportunities than any other bank. More Employees Satisfaction Its start generating profit in just after 4 years of its inauguration.

WEAKNESSES: 

WEAKNESSES Very low numbers of branches. Not enough support policies for the agriculture sector by the bank. Hurdles to introduce new products. Weak Association. Low profits rates as compare to OTHER ISLAMIC banks More emphasis on deposit accumulation and less on their mobilization. Employees switch off to other banks. State Bank implies penalties two times.

OPPORTUNITIES: 

OPPORTUNITIES Pakistan is emerging as a major banking sector and have made rapid growth in the country. Great support from State Bank Of Pakistan Globalization and free trade. Product Marketing. Strong Potential For Growth Adoption of information technology will improve the customer services.

THREATS: 

THREATS Law and order situation in the country. Decrease in the per capita income of the individuals. High speculative stock market attitude. Ever changing State Bank of Pakistan’s policies. High interest rate and inflation rate discouraging the individuals for the deposits. Threat of merging or acquisition by any other institute Threat of Nationalizing by government. Strong Competitors.

PEST ANALYSIS: 

P E S T ANALYSIS

PEST ANALYSIS: 

P E S T ANALYSIS POLITICAL FACTORS Political instability Western’s wrong perception of Islamic Banks that they finance terrorism Our political parties either in government or in opposition not taking interest in banking setup. ECONOMICAL FACTORS High inflation. IMF influence. Monetary Policy

PEST ANALYSIS: 

P E S T ANALYSIS SOCIAL FACTORS Decreasing savings habit. Bank Theft Bank Frauds TECHNOLOGICAL FACTORS Use of Outdated technology as advanced technology. Low knowledge of ERP Software. Lack of adopting new technology. Lack of IT trained Staff.

RECOMENDATIONS: 

RECOMENDATIONS Introduction of new products and services in the market Hire new management Give importance to all customers Increase the branches all over the country Improve standard of banking

CONCLUSION: 

CONCLUSION After the comprehensive view of BIPL we conclude that it is rapidly growing Islamic bank in Pakistan Because of our beliefs and values as being Muslim country. Bankislami uses very advance technology as compare to other banks. Its products are very attractive and branches are at prime locations with attractive design and logo. But there emphasis on employees is not up to standard.