The Ultimate Guide to Writing a Winning UK Dissertation Proposal
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FIN619 Final Project Format for Banking Sector 2025-26
Estimated reading time: 7 minutes, 31 secondsFinal Project Format for Banking SectorBank Alfalah, United Bank, and National Bank of Pakistan for 2023, 2024, and 2025
A REPORT FOR THE DEPARTMENT OF MANAGEMENT SCIENCES, VIRTUAL UNIVERSITY OF PAKISTAN. THIS IS PART OF THE REQUIREMENTS FOR A MASTER’S DEGREE IN BUSINESS ADMINISTRATION
Financial ratio analysis involves calculating and comparing ratios. These ratios come from company financial statements and other financial documents. This analysis helps researchers meet their goals. Financial ratios of banks are calculated from one or more pieces of information from the banks financial statements. The result of ratios may help the mentioned banks to improve poor areas as control expenses. Ratio analysis gives very use full information of any company’s operations activities and financial condition. With the help of these analysis we can analyzed any company’s strength over other company or banks. When doing financial analysis of a company, the researcher must first gather data from banks or annual reports. Then, all calculations will be done. Many managers often use financial ratios to find their firm’s strengths and weaknesses. They also use these ratios to assess performance.
CHAPTER 1 INTRODUCTION
Financial ratio analysis involves calculating and comparing ratios. These ratios come from a company’s financial statements and other documents. This analysis helps researchers meet their goals. Financial ratios of banks are calculated from one or more pieces of information from the banks financial statements. The result of ratios may help the mentioned banks to improve poor areas as control expenses. Ratio analysis gives very use full information of any company’s operations activities and financial condition. With the help of these analysis we can analyzed any company’s strength over other company or banks. Whenever doing financial analysis of a company, the researcher must first gather data from banks or annual reports. Then, all calculations will be done. Most managers often use financial ratios to find their firm’s strengths and weaknesses. They also use these ratios to assess performance.
Financial period under consideration for analysis (2023, 2024, 2025)
Objectives
- To analyze the selected bank efficiency in managing their resource for generating profit
- To composition of capital structure of the selected banks, how much of the bank’s assets are financed through external and internal debt.
- To find out that how effectively selected banks are maximizing their profit by controlling their interest expenses.
- To compare the selected bank interest income with their interest expenses.
- Are banks able to pay the current liabilities from their cash equivalents?
The main purpose of this research is to present the ratio analysis of three selected banks which are Bank Alfalah, United Bank and National Bank. The ratio analysis will make it clear that which of these selected banks are performing better than others and ultimately helping the management to understand their weak performing departments so that they can take corrective actions to eradicate the root causes.
Additionally management will also be able to evaluate the performance of their employees, operations efficacy and credit policies. This research has one more benefit. Both management and readers will learn about the performance of banks. They will see which bank is paying its current debts using cash. From another angle, investors will gain insight into banking companies. We know that investment decisions based on these results.
This research will help find the ratio analysis of the banking sector. It will compare this sector with other banks. This way, we can broaden our view and compare performances. A wide range of analysis will be available. This will help bank management understand their weaknesses better. They can then find the right tools to fix them.
| Ratio | 2011 | 2012 | 2013 |
| Bank alfalah | =13% | =16.9% | =18.76% |
| Ubl | =20.94% | =22.65% | =19.14% |
| Nbp | =18.40% | =29.4% | =32.6% |
Result understanding written by Mian Aamir
Looking at above graph we see that alfalah have 13% net profit margin in year 2011 and then in 2012 it increases to 16.9%. And in year 2013 we see again an increase with 18.76%. This shows alfalah is producing higher net profit sales in 2013 than year 2012 and 2013. Now coming to UBL we se increase in 2011 and 2012 but in year we see a decrease in net profit margin from 22.65% in 2012 to 19.14% in 2013. For nbp we see a constant increase during three years starting with 2011 at 18.4%, 29.4% in 2012 and finally a significant increase in 32.6%.
- OCF= cash flow from operations/ current liabilities
| Ratio | 2011 | 2012 | 2013 |
| Bank alfalah | 5,757,333/ 5,691,864 =1.01 | 8,586,328/ 4,576,789 =1.87 | 9,322,355/ 6,164,867 =1.51 |
| Ubl | 25,666,277/ 9,775,093 =2.62 | 32,263,317/ 13,894,502 =2.32 | 31,350,298 / 18,943,207 =1.65 |
| Nbp | 7,713,192/ 4,118,791 =1.87 | 12,576,647/ 4,015,317 =3.13 | 11,297,009/ 6,203,051 =1.82 |
Result understanding written by Mian Aamir
The operating cash flow ratio is a measure of a company’s liquidity. We see that in 2012 the ratio for nbp peaked at 3.13 which shows a very good sign for investors but in 2013 it went down to 1.82. Similarly with UBL we see that result have not been steady as in 2011 it was 2.62 and in 2012 it went further down to 2.32 and we see similar trend in 2013 it went down to 1.65 thus lowest in 3 years. For alfalah we see an increase in 2012 but again in 2013 we see it decrease to 1.51. If the operating cash flow is less than 1, the company has generated less cash in the period than it needs to pay off its short-term liabilities. This may signal a need for more capital. Thus, investors and analysts typically prefer higher operating cash flow ratios.
Return on Equity (ROE) ratio
Return on Equity measures the amount of Net Income earned by utilizing each dollar of Total common equity. It is the most important of the “Bottom line” ratio. By this, we can find out how much the shareholders are going to get for their shares. This ratio indicates how profitable a company is by comparing its net income to its average shareholders’ equity. The return on equity ratio (ROE) measures how much the shareholders earned for their investment in the company. The higher the percentage ratio, the better management uses its equity. This leads to a better return for investors. Mian Aamir
| Ratio | 2023 | 2024 | 2025 |
| Bank alfalah | 3,740,855/52,100,069×100 =7.18% | 5,553,141/55,658,738×100 =9.97% | 6,045,864 /55,424,068×100 =10.90% |
| Ubl | 17,034,380/96,250,771×100 =17.69% | 22,333,022 /109,586,988 x100 =20.37% | 22,355,740 /133,037,760 x100 =16.8% |
| Nbp | 8,283,817/35,989,630×100 =23.01% | 15,257,865/43,479,358×100 =35.09% | 16,146,441 /51,263,554×100 =31.49% |
Result understanding written by Mian Aamir
Return on equity is an important measure of the profitability of a company. Higher values are generally favorable meaning that the company is efficient in generating income on new investment. According to above figures and calculations we see the is increase in alfalah ROE. As in 2023 it was 7.18% increased in 2024 to 9.97% and further increased 10.9% in year 2025. However we see a decrease in UBL in year 2013 from 20.37% to 16.8%. For nbp ROE increased during 2012 but decreased during 2013.
Comprehensive Findings Written by Mian Aamir.
The purpose of this study was to analyze the financial history of Bank Al falah, Ubl and Nbp since 2009. Bank alfalah, ubl and nbp are three major banks in financial sector. Data of Bank alfalah, ubl and nbp has been gathered from three years electronic annual reports. Data was then processed through using Microsoft Excel. Financial history of Bank alfalah, ubl and nbp has been analyzed by applying various analytical tests and techniques, which mainly consist of ratio analysis and trend analysis. Output of the said analysis was then compared with each other. There have been found significant variations and differences in financial history of the organizations under discussion. Analysis revealed that overall profitability of nbp is consistent and improving whereas regarding Bank alfalah, ubl, several discrepancies have been found during analysis.
Performance of bank alfalah, during the year 2011 was not good with regard to its profitability. Although operating and fixed assets slightly increased their contribution towards return but overall profitability of bank alfalah kept low during the year i.e. gross profit margin, net profit margin and operating income declined due to higher mark-up / interest expenses and higher administrative costs, low utilization of assets kept return on assets falling whereas, higher retention of reserves and un-appropriated profits kept pushing the return on equity down. Overall, bankalfalah underperformed in terms of profitability during the year 2011. Although the bank tried to restore and slightly increased its profitability during the year 2012, but that increase was not sufficient to recover low returns of 2011.
Similar to alfalah, UBL also underutilized its resources to generate profits for the bank since 2011. Several downfalls have been observed since 2011. In 2012, profit margins were low. This was due to higher interest expenses and a drop in non-interest income. The bank’s assets were not used enough, which lowered the return on assets. Also, not using total equity enough reduced the return on total equity. The operating assets turnover improved a little. However, higher interest expenses canceled out this improvement. As a result, the return on operating assets remained low. Fixed assets contribution towards sales was improved during 2012. During 2012, although, UBL improved its profitability, however improvement was insufficient to restore the lower returns of 2011.
Despite the low performances by Bank alfalah, ubl nbp, surprisingly did well since 2011. During 2012, Gross, net and operating margins were improved, total, operating and fixed assets increased their contribution. Hence, overall profitability of the bank was increased during 2012. In 2013, the bank did not keep the same growth rate as in 2012. However, even with lower growth, NBP still made more profit. This shows that the bank is improving and moving forward.
