System for Occupational Health and Safety Management

System for Occupational Health and Safety Management 1.1 General Overview Agape Homes Trust provides intellectual disability level care for adults in residential and day care. The trust provides services to develop individuals skills, talents and interest and assist them to live a integrated life. The manager oversees to two care centres. There is a well established management team supporting the running of the centre. The service has a clinical coordinator, a team leader, four support workers. A shortfall identified in this audit around staff training and other records has been addressed. Health and Safety System Audit report Policies and Procedures Policies and procedures are reviewed on regular basis and updated to reflect best practice, standards and legislation. Policies are in placed and documented rationally to determine skill mix and staffing levels. Roster is provided for appropriate coverage for effective delivery of services to the client at all times. The trust uses a combination of computer based planning for cares and documentation based information. The long term care plan is computer based and a printed out summary placed in front of the clients file. There is a lifestyle questionnaire for residents which provides information regarding the residents past and present likes and dislikes. Intervention are planned round those hobbies with set timeframe. Certain activities are planned out as well. Food, culture, religious beliefs are also considered. Accident records Interview with the Team leader it was found that the trust has no incident and accident record file onsite. All accident and incident reports are documentation, investigated within 24 hours of occurrence. Reported to and reviewed by the clinical coordinator. Corrective measures initiated immediately and data compiled on the data base and the paper work sent to the main office where it is kept in file. Standards NZS8134:2008 Health and Disability Services Standards are followed in policies ensuring appropriate standard comply with clients rights and services provided in a manner that clients are respected, minimises harm, facilitate choice and acknowledges persons culture, value and beliefs. Also services are effectively communicated to the residents and their whanau. ISO standard is also followed in policies where there is food handling involved and to ensure services are reliable and of quality for residents, whanau and staff. Job Description Each and every person at Agape Trust is responsible to comply with current occupational Health and Safety (OSH) legislation and safety at work. Everyone works safely at all times; uses safety equipment provided; identify hazards and report instantly; encourage others to work safely; monitoring of own health and measures to improve when necessary. Also safe evacuation of residents and others during emergency; maintain safe environment for self, staff and residents. The General Manager is to be reported of any concern regarding security or any other issues. Training Records Was unable to site the training records as it kept in the office at all times. Interview with the team leader the following information was gathered. When required or requested by team leader, be involved in on the job training and service orientation of staff and volunteers. In house health and safety training in form of induction provided to new workers and volunteers. All staff to possess a valid First Aid Certificate, participate in refresher course, external training and qualification based on certified training. Manuals Manuals on how to use equipments available and kept in files. No written safety rules developed and posted around the equipment. Little attempt is made to control hazardous points on equipment. For example the treadmill is located near the door way to the laundry. Manuals on working with equipment and hazardous substances can easily be obtained at anytime. Hazard Register Hazard Register updated and accessed easily for handling common issues, hazards, causes with controls and options to assist control. It also has tools, resources and case studies. The register consist of hazard such as slips,trips,falls, manual handling, hitting stationery objects, challenging behaviours, exposure to trauma, stress, workplace violence, workplace bullying, security, shift work and hazardous substances. The hazards recorded were minimised, eliminated or isolated. It has been updated by the General Manager and initials of each worker after reading and understanding it. Inventories All inventories are hand written in books and updated bi monthly basis by the team leader and the clinical coordinator. Inventories expiry is checked and damaged equipment replaced or fixed. The data is then transferred to the computer for records. Health and Safety System Organisational Requirement Have they been met? (No, partly, mostly, fully) Policies and Procedures Fully met Policies and procedures are checked and updated. The safety procedures are in formats that are easily understood and special communication needs of people using the building taken into consideration as well. The staffs is familiar with the health and safety arrangements at the work place. There are policies and procedures around waste management, cleaning, laundry. Emergency management and the staff are fully aware of them. Policies and procedures also in placed for safe practice and staffs are closely monitored all times. Organisational Management Mostly met There is enough qualified staff on duty at the Trust all times. The trust provides cares for highly needy clients with intellectual disability so experienced and qualified staff should be available at all time. The staff rooster is updated weekly. So the staffs have received adequate orientation and training before starting work. Accident Records Not met There are no records of previous accident records at the Trust. All accident records are sent to the main office where data is transferred to the computer and the paper stored in file. Organisational requirement. The trust should have an accident record file with previous accident records present at the premises as this may help for future references. Standards Fully Met Checking with residents, interview with team leader, staff ensured that policies support consumer rights under this standard. Residents well informed of their rights; personal privacy is protected and suffers no discrimination. Organisational Requirements The standards have been approved by Ministry of Health under the Act and set the standards for health and disability services. Standards have been reviewed yearly which includes general standards, core standards, infection prevention and control standards, restraint minimisation standards, organisational management and providing of safe environment. Job Description Fully Met All staff at the Trust has clear roles and responsibilities and their use their knowledge and skills to promote a positive health and safety culture in the workplace. As organisational and legislative requirement, each worker has to comply with safety policies and practices and their help in planning, implementing and monitoring of protective and preventative safety measures at workplace. All staff has written job descriptions and written copy of their terms and conditions of employment before commencing with the job. Training Records Not met Staff files not updated. Document such as training undertaken and completed not found. Organisational requirement Long standing staff needs their competency and skills assessed to determine the need for further training. The trust needs staff training and development programmes to maintain skills, meet the changing needs of the residents, fulfil the aims of the Trust and understanding the policies and procedures of the organisation and suitable competent to carry out their roles. The Manager should ensure that minimum mandatory training requirements for all his staff are met and updated on regular basis and records are maintained Manuals Fully Met Manual of every equipment present for safety reasons. The manuals are updated by the management on regular basis. Copies of manual printed out and placed in areas where it can be easily accessed. Hazard Register Partially Met. The Hazard Register is not updated, certain risk was identified but corrective measures still needs to be in place. The register has written confirmation of all statutory relating to fire safety and standards complied during fire drill. Organisational requirement The manager has to ensure that the risk assessment is carried out for all areas of work. To manage the identified risk that have been recorded, corrective action has to be implemented and all staff to be aware of any hazards identified and a control put in place. The Manager has to review the risk management records on regular basis. He also has to see to the events including accidents injuries and incidents of fire records and fire drills. Staff uses appropriate protective clothing and equipment suitable for the work to reduce the risk of harm and injuries to others and also to themselves. Inventories Partially Met. All inventories are recorded and later data transferred to the computer for future reference. The organisation keeps all the required inventories for safety reasons. The broken and old equipment should be discarded and replaced with the new equipment. Organisational requirement To reduce the risk of harm and safety old, broken equipment should to be replaced. 1.2 Health and Safety Systems Legislative Requirement Organisational Requirements Policies and Procedures Fully Met Policies and procedures comply with health and safety legislation for maintaining and providing safety and healthy work place, minimise risk in work practise for welfare of everyone and environment The safety procedures are in formats that are easily understood and special communication needs of people using the building taken into consideration as well. The staffs are familiar with the health and safety arrangements at the work place. Emergency management and the staff are fully aware of them. Policies and procedures also in placed for safe practice and staff are closely monitored all times. Accident Records Partially Met All organisations should have an accident record put in placed at all times. Staffs are to fill any form of accident or incident occurring at the work place. An accident record file with previous accident records should be present at the premises as this may help for future references. All accident and incident reports are documentation, investigated within 24 hours of occurrence. Reported to and reviewed by the clinical coordinator. Corrective measures initiated immediately and data compiled on the data base and the paper work sent to the main office where it is kept in file. Standards Fully Met The standards are aimed to ensure respect, protection of the rights of people at the Trust and that the standards are qualitative which provides meaning to the residents life Standards have been reviewed yearly which includes general standards, core standards, infection prevention and control standards, restraint minimisation standards, organisational management and providing of safe environment. Job Description Fully Met Staffs are qualified, competent and experienced to manage needs of intellectual disabled clients and also meet the purpose, aims and objectives of the organisation. Job description enables an individual to have authority and take up responsibilities for duties assigned. The staffs have to ensure that all legally required certificate and licences are updated and displayed when required. The organisation ensures that each staff gets proper orientation before commencing of his or her duties. Manuals Almost Met. Manuals should be in place for all staff to refer to for procedures on health and safety and corrective measures of using certain equipment. Manuals on how to use equipments available and kept in files. No written safety rules developed and posted around the equipment. Copies of manual printed out and placed in areas where it can be easily accessed. Hazard Register Partially Met Hazard register is updated and kept to carry out risk assessment of the work area. Action taken around the identified risk. Clear procedure in placed setting out the action to be taken together with reporting requirements. Significant events such as accidents, injuries, dangerous occurrence and incidents of fire are recorded and updated. Staff wears appropriate protective clothing and equipment in times of emergencies. The manager has to ensure that the risk assessment is carried out for all areas of work. To manage the identified risk that have been recorded, corrective action has to be implemented and all staff to be aware of any hazards identified and a control put in place. The Manager has to review the risk management records on regular basis. He also has to see to the events including accidents injuries and incidents of fire records and fire drills. Staff uses appropriate protective clothing and equipment suitable for the work to reduce the risk of harm and injuries to others and also to themselves. Training Records Partially Met. Promotion of safe working practice through acknowledging provision of information, training, monitoring, supervision of staff under safe working environment, fire safety, infection control, manual handling, first Aid, food safety, maintaining of equipment, personal safety at work. The Manager should ensure that minimum mandatory training requirements for all his staff are met and updated on regular basis and records are maintained. Staff needs their competency and skills assessed to determine the need for further training. Inventories Partially Met. Organisation should be up to date equipped with necessary resources at the facility to maintain health and safety. An inventories record should available at all times with expiry dates for equipment. The organisation keeps all the required inventories for safety reasons. The broken and old equipment should be discarded and replaced with the new equipment. To reduce the risk of harm and safety old, broken equipment should to be replaced. Assessment Task 2 Develop a plan for improvement to Occupational Health and Safety systems. Health and Safety System Degree of Compliance Assessment of the significance of Hazards Cost Benefit Analysis Policies and Procedures Compliance No risk – organisation meets the requirements Nil Accident Records Non Compliance properly completed accident forms and records should be kept High risk of hazard No accident records present, staff may not know how to handle on similar types of accidents as no references available. Low cost – printing of materials, buying a file and filing of documents. Standards Compliance No risk – organisation meets with all requirement Nil Job Description Compliance No risk – organisation meets with all requirements. Nil Manuals Non Compliance High risk of hazard. Most manuals are old, torn and out dated. Low cost – reprinting of manuals. Benefit would be for safeguard. Hazard Register Non Compliance no records of eliminating, isolating or minimising on file. High risk of hazard – no proper records available for future references. Proper and corrective action taken should be in place and recorded in file. Low cost – buying a folder and filing of the documents. Benefit for safeguard Training Records Non Compliance High risk of hazard – long serving staff not aware of new ideas and manage changing behaviours of clients. Staffs not up to date with training, staff personal information not complete. Medium cost – in house training for staff. A yearly staff training calendar posted in staff room to ensure all staff receives proper training. Refresher course made available for long serving staff and that they are up to date with qualification. Inventories Record Non Compliance High risk of hazard – staff may be use expired and broken equipment which may cause harm and injuries to themselves as well as to the residents. Also to reduce the risk of infection at the facility it is best for the organisation to maintain adequate resources at all times Low cost – a proper exercise book bought and all data entered in the journal which later transferred to the computer. medium cost – for the right equipment and resources such as gloves, hand wash, soaps and toilet paper and cleaning material Element 3 Size and location of the workplace The Agape Homes Trust which is known as Agape Care is a charitable organisation which is supported by local churches and provides services to highly need adults who has intellectual disability. The organisation is based in West Auckland. It is a small organisation with about 15 staff and about 25 clients. The organisation can implement corrective measures but have problems with allocated budget and resources. Financial viability of the organisation The Agape Homes Trust is a Non Government Organisation which survives on charity and is supported by local community churches. Since the cost of the strategies are small and can be catered with allocated budget. The organisation is not financially stable since it runs of charity. It can only spend small amount on money on health and safety programmes. Existing Management systems The organisation have set up templates on the computer and available polices and procedures. The clinical coordinator, manager and the team leader have the right knowledge and skills of the existing organisation system around health and safety. Commitment to ISO or other quality management practices. The organisation follows ISO and New Zealand standards which is reflected in the policies and procedures and all programmes. Overall Strategies Corrective Action Accident Records Ensuring that there are two people signing off all accidents. The team leader ensures all documents are properly filled The manager and clinical coordinator amends policies for accidents and incidents register Monitoring of Hazards Modifying ways to monitor hazards and recording them. Assigning a person to be in charge of monitoring the register. Working with team leaders, clinical coordinator and manager to develop and implement ideas. Training Conducting in house trainings for staff infection control, fire control. External training – First Aid certification and CPR training. Refresher courses – handing washing, medication competency and manual handling. Professional development training – Diploma in healthcare, Mental health, Treaty of Waitangi, rights and ethics, leadership courses. Challenging behaviour management courses. Qualification based on certificates – Diploma, NZQA qualification and certification Modification of induction training – orientation at work, interviews and appraisal. Manuals Working with team leaders and management to improve the manuals, communication styles suitable for everyone to understand. Printing out simple procedures and making attractive charts with diagram illustrations. Inventories One of the staff is assigned to keep checks on supplies and resources. The team leader checks the inventory journal at all times. Devika Chandra Kumari

Final Reflection Essay

During week one, my initial definition of learning was listening to an instruction, studying and then rehearsing that information in my mind, or categorizing it in a way so I could remember most of what was taught in the course. The class has opened a new dimension for me in the learning process; from understanding how I process information to deciphering which learning processes I use in intentional learning or metacognition. Understanding my learning patterns form dynamic learning relationship is a key element to my view of how and why I process the learning experience, even relating it to every day life. Since discovering my learning patterns by administering the Learning Connections Inventory or LCI assessment, I have discovered my aptitude for using Sequence (20), Precision (23), Technical Reasoning (35) and Confluence (29) learning patterns. My â€Å"use first† patterns of Technical Reasoning and Confluence are now self-evident and shed light on why my career took the path it did, leading me to this point in life. Confronting each task as a Dynamic Learner, I subconsciously used my Technical Reasoning and Confluence learning patterns first and as needed used my Precision and Sequential learning patterns. Throughout my career in the Navy, Technical Reasoning was pronounced which led me to choosing a mechanical trade; then in the construction industry, using my hands as a carpenter to renew or erect buildings. Sequential and Precision patterns were used on an as needed basis when specific tasks required a structured approach like developing designs or repairing equipment. Throughout this course, different quizzes took Sequential learning to complete. I found it difficult to only use this pattern and my strong Technical Reasoning pattern was evident by my moving from question to question if I did not immediately know the answer; then going back to answer the questions I skipped using Precision learning pattern. Reading assignments were a struggle as well; I was accustomed to using Technical Reasoning, briefly reading through the chapter to pick out phrases I knew were important. The critical reading process drew me back to basics by redirecting my use of Sequence and Precision learning patterns to become the predominant patterns used. Sequence learning pattern was needed in the  completion of discussions; I needed to focus, not only on discussions but completing all my work and submitting it on time. Having high technical reasoning and confluence learning patterns are what shaped decisions and tendencies in this class; procrastinating and being late with assignments started early in the course. Learning how to â€Å"FIT† my patterns together is a new concept which was difficult to introduce not only in my college course but in my daily life as well. Forging, Intensifying or Tethering my learning patterns are a continual activity and now that I have begun to understand how to decode a task, it will enable me to recognize the learning patterns to use, strengthen and reduce. This course was extremely interesting to me; discovering the four different learning patterns, how they influence college coursework and my career path. I appreciated looking at the inter-working of how I learn and what I can do to enhance my learning capabilities. As the weeks went by, the on-line experience with Ashford University became easier to schedule; I used sequential and precision learning patterns to regulate my time, turning in assignments when they were due. In the past, on-line learning was tedious and difficult to manage. Ashford’s approach with an introductory course in personal learning is eye opening; understanding how and why I learn will carry over into future courses. The overall online college experience will be what I make of it. Interacting with instructors and peers is an aspect in my control. Challenging classes will be met with a different attitude and perspective, knowing the how’s and why’s of my learning patterns is key to being successful.

My First Day of School Essay

I have been reading in Beaconhouse Sri Inaigot up early in the morning of 8th July to get myself prepared. With my tutor I started towards my new school. On the way it began to rain. When we reached the school we were completely wet. Secondary School for four years. I still remember my first day at this school. On that fortunate day, I got freedom from the control of my tutor who loaded me with heavy home task. I had no holiday in a week. You can think of my joy when I was told that I would be sent to a new school. The sight of the grand building made me nervous. I was uneasy in mind. I entered the office where I found four people sitting behind the counter. My tutor got a form from one of them. Then we entered the Principal’s Office. My tutor gave the form to him. He looked at it carefully. He stuck a bell. At once a peon rushed in. He ordered him to take us to the staff room. The peon led us to the room where I found the teachers seated round a long table. He gave the form to one of them. The teacher put my knowledge to test my English. He found me up to the mark. Then another teacher gave me five sums to solve. I solved them with great ease. Both the teachers wrote some thing on the form. Again my tutor entered to the office and deposits my dues. I was sent to classroom with a chit. I reached the classroom and took my seat in the last row. In front of me there was a big blackboard on the wall. Near it there were descent chair and a table for the teachers. After a few minutes a teacher entered into the class. I gave the chit to him. He wrote my name in the register. To my good luck the teacher is an interesting fellow. He passed a few funny remarks. He also made some interesting and harmless jokes. As the recess bell rang, we rushed out of the class. It was the recess period. The playground becomes the centre of activity. Finding me alone some boys approached me. They cut jokes. One of them asked me â€Å"from which jungle are you coming†? I was salient. Fortunately three boys ran for my help. They took me round the school building. With them I saw the reading room and library. We also reached the hall. I found it decorated with pictures and paintings. In the meanwhile the bell rang and we were again in the class room. One by one other teacher come but none taught us. t 12:30 the last bell went. The classes were dispersed. When I reached home, my head was full of new ideas. I told my mother how great school was. She was very glad to hear the account of my first day.

Evolution Of The Summit Bank Finance Essay - Free Essay Example

Sample details Pages: 27 Words: 7964 Downloads: 4 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? Since the inception of the Summit Bank on 18th August 2010 the bank has focused on an aggressive growth strategy and reinvented its mission and vision statements, the bank was previously known as ArifHabib and was Partially acquired by Suroor Investments a stron financial group. Later took place the acquisition of Mybank this is where this research project has played the role. The Research project focuses on the post merger profitability analysis with two approaches (i) Financial comparison before and after the merger, (ii) Questionnaire data tabulation where qualitative data was measured. Once the results of the two approaches were obtained they were combined to reach an answer to the hypothesis of the research. Don’t waste time! Our writers will create an original "Evolution Of The Summit Bank Finance Essay" essay for you Create order The aim of the study was not to study this particular meger alone but was also to see what elements affected in making a merger result as a good/profitable/ efficient/ correct decision merger. It also opens way for opportunities related to future bank mergers. Actually the decision making of those mergers what should be the pre-requisites. Strategic management was well studied and discussed with the managers and employees, followed by an in-depth analysis of the organizational effects it had. INTRODUCTION Company Overview Summit bank which is the subject of our study is presently one of the fastest growing commercial bank. Coming to evolution of the Summit Bank The Pakistan operations of Rupali Bank Limited were acquired by Arif Habib Securities Limited under the Scheme of Amalgamation approved by the State Bank of Pakistan. The name of Rupali Bank Ltd was subsequently changed to Arif HabibRupali Bank Ltd and then finally to Arif Habib Bank Ltd in October 2007. On 31st March 2010, Suroor Investments Ltd,   a company incorporated in Mauritius, acquired 59.41% stake in Arif Habib Bank Ltd from Arif Habib Securities Ltd, and on 18th August 2010, ArifHabib Bank Ltd was rebranded as Summit Bank Ltd. Suroor Investments Ltd, also entered into share purchase agreements (SPAs) with majority shareholders of MyBank Ltd and Atlas Bank Ltd, who after completion of the transactions have merged in Summit Bank Ltd expanding the Banks geographical outreach with a network of 166 Real Time Online branches across the country. In line with the managements vision of making this bank a front runner amongst its peer banks, this merger has brought synergies and access to a wider range of markets and customers.[i] This is information shows that the bank went through several stages of acquisition and merger before becoming what it is today. This also shows that the bank had different management hence different decision makers at different steps, we cannot ignore the positions Mybank and Atlas Bank and the study must separately study the financial statements this will also allow us to study the synergies and burdens contributed by the merger which is part of studying the Profitability of the merger. Summit Bank Today After completion of merger with My bank on 30th December 2011 the bank is now operating with a branch network of 165 branches.[ii]As a result of merger multiple branches were located in the same vicinity which were re located strategically and were able to reduce rental costs by Rs.53 Million.[iii]This is a huge synergy that is observed in reduction of expenses and will affect the revenue of the Current Bank. Board of Directors of Summit Bank Mission Statement To be a financial institution based on Trust, Integrity and Good Governance. To deliver financial solutions to our customers. To provide equal opportunities professional working environment to our employees. To provide fair return to our shareholders on their investment. To serve the community at large. To discharge corporate social responsibility.[iv] Vision Statement To be the preferred provider of financial products services to the markets[v]. Comments From the above provided information we do realize that the banks approach is focused. The bank is clear of its objectives and of the path that needs to be followed in order to achieve the above stated framework. The first clause of the mission is regarding the work ethics of the bank the second half ensures hiring of competitive, effective and efficient management. The second clause ensures that the company want to give its employees a professional and yet comfortable environment. Third clause being most important in terms of profitability check and conflict of interest. The fourth is the purpose and survival of the organization and the last one is the realization of responsibility. Products and Services Offered The Banks Services may be divided in Six Core Services Comments There are six core services offered by the bank which is a competitive number for a bank of this size in the particular region. They are well distinguished from each other and cater to all segments and sectors from individuals to SMEs to large corporate organizations allowing a wide range of forms of transactions that may be made. Deposit Products Summit Classic Account Key Features: One account with a bundle of product Minimum monthly average balance as low as Rs. 50,000/- Up to 3 Visa Debit Cards free. Special Retirement Or Investment Insurance Plan at only Rs. 2000/month (bancassurance) Loan Facility (secured) with special rates[vi] Current Account Non-interest bearing Starter cheque book issued when the account is opened Unlimited  free-of-cost  transaction facility No deduction of Zakat Choice of periodic statements (monthly, quarterly, half-yearly and annual) by post Access to account statement anytime through Internet Banking facility Account transaction information through SMS Free issuance of VISA debit card Cash withdrawal through large ATM network[vii] Savings Account Starter cheque book is issued when the account is opened No penalty on minimum balance not being maintained Choice of periodic statements (on monthly, quarterly, half-yearly and annual basis) by post. Access to your account statement anytime through our Internet Banking and e-Statement facilities Account transaction information through SMS Free issuance of a VISA debit card Easy cash withdrawal through a vast network of ATMs[viii] Term Deposits Individuals (single or joint) Minors (to be operated by the guardian) Charitable institutions Provident fund other funds of benevolent nature Local bodies Autonomous corporations Limited companies[ix] Firms, associations, educational institutions, financial and other institutions who intend to retain their deposits for a fixed period in order to earn a higher rate of profit. MahanaAmdan Deposit Limits Rs. 50,000 up-to Rs.10 million Rate of Profit Term Deposits Expected Rate of Profit 3 Months 8.50% 6 Months 8.75% 1 Year 9.50% 2 Year 10.00% 3 Year 10.00%    Source Official Website Summit Bank dated 9/8/2012 Daily Product Account Here the interest is calculated on the daily closing balance. Hamara Summit Family Savings Account Key Features Grouped accounts for the family Initial Investment Requirement-Rs.5,000/- Minimum Balance Requirement-Rs.5,000/- Attractive return of 9% Additional 2% as bonus feature Up to Five free Visa debit cards Minors can make purchases and withdraw cash at ATMs via the Visa Debit Card[x] Summit Advantage Account Key Features: Maximum Loan up to 70% of the deposit  with no additional markup  (11.0% p.a.) Exceptional returns up to 11.0% p.a. Monthly profit payout Term: 1 year Minimum investment of Rs 100,000/- with a maximum limit of up to Rs 50,000,000 Access to a  range of value added facilities[xi] Summit Sixer Added Insurance Comments The above information describes the Key features of each product. In-depth study of the products makes the key differences evident of products under the same category. In this particular write up the differences in deposit products are evident. The different savings rates offered depending upon minimum deposits, on your income, on the time period of the deposits, if the rates are changing with every year or month then what conditions is to be met. The bank has made efforts to accommodate maximum deposit base through the variety of products and flexibility given to the consumer. This allows the consumers to choose according to their own deposit needs. Corporate and Investment Banking Commercial and SME Banking Commercial SME Division targets Medium Sized Companies with a turnover of at least PKR 25 50 million.   Financing is offered to the following Working Capital Financing Procurement of Inventory Receivables financing Procurement of Machinery Expansion of production facilities BMR Import / Exports Guarantees[xii] ConsumerBanking Home Finance These are mainly mortgage loans. These loans are offered for immovable property such as housing finance. The purpose is to allow Personal Finance The salient features of this plan are appended here-under: Loan Amount Minimum: Rs.25,000/-Maximum: Rs.1,000,000/- Loan Tenor Minimum: 1 yearMaximum: 5 years Type of Loan Term Loan Type of Facility Un-Secured Type of Markup Fixed During Loan Term Premature Payment Facility Available Loan Enhancement Facility Available  Ãƒâ€šÃ‚  (History / Income Based) Loan Top-up Facility Available Source: Official Website of Summit Bank as at 9/8/12 Bancassurance Bancassurance  is the distribution of insurance products by banks, through their own distribution channels. The Products and Sub-Products are listed below MetLife Alico The Graduate Plan The Wedding Planner Golden Age Plan Goals Jubilee Life Jubilee Life (formally New Jubilee Life Insurance Company Limited), a subsidiary of the Agha Khan Fund for Economic Development (AKFED), Switzerland, brings global experience to Pakistan. For over a decade, Jubilee Life has been in the business of providing customers with a better life; a life of security and safety. Jubilee Lifes clients can be secured in the knowledge that their operations are backed by an internationally acclaimed organization with global reach.[xiii] SuhanaKal A combination of savings and protection elements ensuring that the family is secured even after retirement. The salient features of this plan are appended here-under: Product Type Unit linked life insurance Policy Term Min 10yrs to max up to 57 yrs with retirement age 55 75 yrs choice Minimum Basic Premium Annual 24000/,   semi-annul 12000/, quarterly 6000/- Monthly 2000/- Premium Payment Method Direct debit from SMBL account Eligible Age for Enrollment Min 18yrs to Max 65yrs Unit Allocation 1yrs policy 30%   2yrs policy 85% 3yrs policy 90% 4yrs onwards 100% AVAP 100% Investment Stratigies Managed Fund   Yaqeen Growth Fund Meesaq Fund Capital Growth Fund Loyalty Bonus 5 yrs and onwards 3% Maturity Benefit At the end of the chosen term of the plan, the policy holder will receive the accumulated cash value of the plan. If the attained age of the policy holder at maturity is 55 yrs or above, he will also have an option to use the cash value, to buy a pension, especially tailored for individuals who prefer a steady stream of income instead of a lump sum amount, at the time of retirement. The Pension term and conditions will be defined at the time of the maturity. Free Look Period 14 days Partial Withdrawal If you need to withdraw cash for meeting some emergency needs, but do not want to surrender the policy, you can withdraw any amount provided that the residual cash value of your policy after withdrawal is greater than or equal to Rs. 24,000 (the residual cash value floor may be reviewed by Jubilee Life) Grace Period 30 days (renewal) Policy Surrender After completion of two policy years (given two years complete premiums have been paid), you can surrender your policy. At the time of surrender, you will be paid in full the cash value of your fund. However, surrender in early policy years may result in lower cash values. Non-Medical Limit PKR 2.0 Million upto Age of 44 yrs Optional Riders *Optional Riders available on request Source: Official website of Summit Bank as at 9/8/12 SunehraAaghaaz SunehraAaghaaz offers to make regular, systematic savings, and allows for protection to the family from uncertainties. The salient features of this plan are appended here-under: Product Type Unit linked life insurance Policy Term Min 10yrs to max up to 70 yrs Minimum Basic Premium Annual 24000/,semi-annul 12000/, quarterly 6000/- Monthly 2000/- Premium Payment Method Direct debit from SMBL account Eligible Age for Enrollment Min 18yrs to Max 65yrs Unit Allocation 1yrs policy 30% 2yrs policy 85% 3yrs policy 90% 4yrs onwards 100% AVAP 100% Investment Stratigies Managed Fund Yaqeen Growth Fund Meesaq Fund Capital Growth Fund Loyalty Bonus 5 yrs and onwards 3% Maturity Benefit Account value Payable in Lump sum Payment Free Look Period 14 days Partial Withdrawal If you need to withdraw cash for meeting some emergency needs, but do not want to surrender the policy, you can withdraw any amount provided that the residual cash value of your policy after withdrawal is greater than or equal to Rs. 24,000 (the residual cash value floor may be reviewed by Jubilee Life) Grace Period 30 days (renewal) Policy Surrender After the completion of two policy years (given two years complete premiums have been paid), you can surrender your policy. At the time of surrender, you will be paid in full the Cash Value of your fund. However, surrender in early policy years may result in lower cash values. Non-Medical Limit PKR 2.0 Million upto Age of 44 yrs Optional Riders *Optional Riders available on request Source: Official website of summit bank as at 9/8/12. Electronic Banking Our Mobile Banking allows customers to avail a variety of banking services of pure SMS-based technology, including mobile balance recharge and utility bill payments, as well as account information. Internet Banking is another channel on which we offer extensive banking services. Customers can view account information, pay bills, transfer funds, and conduct many other transactions through their account(s) Hence providing a fast, secure and convenient way to banking. Summit Bank is  a member of 1LINK Guarantee Limited. To learn about the products and services offered by 1LINK, please click on the link  https://www.1link.net.pk.[xiv] Remittance Summit Bank has designed and developed its own electronic interface by the name of Amanat Cash to facilitate various exchange companies and banks to send home remittance to Pakistan on real time basis. This has made possible, for all Pakistanis, to receive remittances by their loved ones for FREE, in a fast and fully secured manner. The service we offer is readily available to every one regardless of having account in Summit Bank.[xv] Salient Features Of Summit Bank Home Remittance includes: Fastest Account Credit Free Quick Processing Real Time Premium, exclusively dedicated friendly Customer Service for Home Remittance Customers. 24/7 Customer support through Contact Center. Trade Finance Trade Finance Trade Finance being the prime focus of our Management, we offer wide variety of Funded and Non-Funded Trade related facilities.[xvi] Other Services To become highly Competitive in the field Evening Banking Branches were highlighted these branches operate longer than the usual banking hours, to further enhance the experience e-banking services were introduced which did satisfy the needs of different segments of the consumers. The Saturday banking branches were also singled out as Saturday is holiday for other banks. The Bank was successfully able to become part of the VISA international network by August 2011.[xvii]This allows the bank to increase the source of foreign exchange as well as income not to forget it removes restriction from being able to obtain local currency from anywhere where ATMs are located. These policies show that the bank is ambitious to achieve its goals of widening and diversifying its customer base, continuous innovation and addition to product and services offered, also, to continue to increase its present e-banking and branching banking services. Literature Review Banking Banking is part of the financial systems; which has a vast number of institutions working under it for the allocation and mobilization of financial resources, is an integral part of the economy. Banking in my view is a phenomena itself no less a world of its own yet so closely related to the global economic phenomena, business cycles, and money supply. They act as intermediaries between the surplus units and the deficit units. Savers are mainly households, whereas borrowers are businesses, investors and firms As suppliers, households are depositors of savings; as users they are borrowers of the banking system, where banks are financial intermediaries.[xviii] When talking of the structure of the financial system it is divided in two parts indirect finance and direct finance it is the indirect finance where commercial banks play a role. The mechanism shows us how banks are driving forces for the economic development through economic growth when the borrowers have successful business ventures resulting in profits which result in corporate expansion increased income and increased employment reducing improving the countrys GDP. Now once we are through with the role of banks let us not forget that commercial banks are also businesses which need to be successful business ventures and failure to make profits can lead to their shutdown and deteriorate the trust of the savers from the banking system, especially in a developing economy such as Pakistan. Banks have their own products which are a source profits their balance is different yet the same if the products are understood well. Moving on banking in Pakistan is as much a baby as the country itself and with the many economic and other political and many more factors the banking system has suffered much, political influence in the wreckage of banks cannot be ignored. The relationship is explicit in the diagram on the next page. There is a list of Banking Risks faced by the banks whose in depth analysis is interesting and a new opening. FINANCIAL SYSTEM: Flow of funds Structure Operations Str[xix] Debt or Equity Funds Investment funds Investment Funds Surplus Units Savers Households Business Firms Government Foreigners Deficit Units Spenders Households Business Firms Government Foreigners Debt or Equity Funds Direct Finance Financial Markets Loan Funds Deposit Funds Indirect Finance Financial IntermediationBanking Sector in Pakistan When talking about banks it is the central bank which never loses its importance which in most part of the world is separate from the government which really doesnt mean it is separate from political influences. In Pakistan State Bank plays the role, gives all the advises and set all the rules and regulations not to forget offers investment opportunities to the banks in Pakistan to a high level that economic growth is actually reduced. Before we move on to the current banking structure lets see what history tells us at the time of partition all banks but two moved to India with all their major clients, the two banks which stayed included Habib Bank and all in all Pakistan had 70 branches of banks in all. At the time there was no central bank for Pakistan and Reserve Bank of India acted as the central bank as Pakistan did not have its own currency however India soon started to withdraw the currency. This gave the newly born country a huge set back as the Reserve Bank started withdrawing money Pakistan then came up with its own currency and in June 1948 Pakistan succeeded to do so. Then came development of the financial sector which was soon met by two wars 1965 and 1975 which were a set back to the system. Today, after much struggle the banking sector in Pakistan has made a stand and needs to improve further, foreign banks have come in after privatization of the banking sector was introduced the corporate sector was given credits which again further improved the positions and after this rapid decade long phase of privatization we recognize the 6 largest banks of Pakistan particularly in terms of deposit percentage. This introduced interest rate banking in more free and obvious ways. However currently in the year 2012 it is observed that many large foreign banks have wrapped up their system and plan to retrieve. The growth rate of the deposits say Financial savings also play a vital role, during the past decade this average growth rate of financial savings was 13% per year.[xx] Financial system deposits include banking system deposits and NBFIs deposits. NSS are not part of Financial System Deposits, these have increased from Rs 1174 Billion to Rs 4731 Billion over the past decade. And Banking Deposits were the largest being being 97%[xxi]. The banking sector of Pakistan consists of the total 40 banks in which there are 4 public scheduled banks operating, 25 local private banks, 7 foreign banks and 4 specialized banks[xxii]. Post-Merger Profitability Analysis As observed from the past studies it is seen that vast number of academic research analyze pre and post-merger efficiency and profitability however it is also observed that these studies are done with respect to a particular subject such as the wealth holder that is the equity holder, however this particular research paper will analyze efficiency and profitability in particular from the perspective of the institute itself and hence the shareholder. In order to evaluate the financial performance of an institute use of financial ratios is like a universal standard which will be the main research methodology used here. The research method has also been used by (Kemal, 2011) for RBS. In his paper he has mentioned Rhoades (1993) whose paper had 33 bank to bank mergers as a sample and he has discussed cost and profit efficiency with borders and cross borders and no cost efficiency was analyzed cross border mergers. Another paper Resti (1998) analyzed the paper with respect to performance, target markets of merged banks and reached to a conclusion that the efficiency did increase in the later years of the merger if the size of the bank was not too big. The article also concluded that it was better if the merged bank were of equal size. Challenges Issues The higher credit risk in the form of non-performing loans is affecting the performance of the bank in particular where we have government influence. Second major issue is that of performance is that the public banks are more affected by the adverse situations of the economy and non-satisfactory governance the higher degree of capital losses result in insolvency which is then covered by the SBP. To create a higher degree of competition and to increase the transparency in the management of the whole system privatization should be considered as a basic agenda. Proper diversification of the risk among all the sectors should be done e.g. restricting the flow of credit to just a few sectors which results in the earnings highly skewed to the performance of those sectors which can further be of high risk. The high liquidity requirements by bank can also be a source of inefficiency making its proper management a crucial task. As maintaining a higher level of liquidity the required means the bank is under utilizing its assets making the banking business cost ineffective by increasing the costs of funding There is a need to identify all the supervisory authorities; their responsibilities, effective implementation of the supervisory framework for which the trained staff is a prerequisite. Strict notice should be taken with respect to enforcement of law, implementations of the judgments of the courts on the basis of the disputes relating to the financial issues. Hence, the efficiency analysis of banks will help to identify the attainment of efficiency using rational resources which seem to be in accordance with the policies of the management and more importantly the function of bank in the economy; only if the banks will be operating in the efficient manner the efficient allocation of money can take place. Competitive Analysis For the purposes of competitive analysis NIB bank has been selected. NIB bank has a very similar history of mergers as Summit Bank and hence is a good benchmark for analysis of financial data not to forget that the NIB Bank size is also in the same bracket as Summit Bank. About NIB Bank NIB started operations in October 2003 with a paid up capital of Rs. 1.2 bn. Operations for NDLC, IFICs Pakistan and Credit Agricole Indosuez Pakistan were amalgamated with their assets and liabilities in April 2004. Temasek Holdings acquired 25% shareholding in NIB in March 2005 through Bugis Investments which was enhanced to over 70% in June 2005.NIB has branches all over Pakistan.[xxiii] We will focus on the Financial Analysis of the two Banks over the past three years. MyBank INTRODUCTION Company Overview My bank was launched in 2005 as a public limited company under the Companies Ordinance 1984. Its banking operations commenced from November 2005. The bank was involved in commercial banking and related services. Remittance Deposit schemes Foreign trade Utility collection bills Lockers Car financing MySahoolat (MyDream Home) home financing Easy credit scheme Agricultural finance schemes Online banking ATMs Mobile banking. Were the services offered by the bank. Vision Statement To be the best Customer Service bank in the country with the highest Economic Value Added through engaged and motivated people. Mission Statement Satisfying customers, building the productive everlasting relationship. Core values Comments The Core values of the two banks were coherent, which is very essential. FINANCIAL ANALYSIS BEFORE AND AFTER MERGER Earning Per Share As it may be evident the earning per share situation has improved after the merger it was negative 2 and this has most certainly declined even though Summit has not as yet announced any dividends. As for ROI we may see clerarly from the Financial Reports that the ROI has also improved over the past year this was attributed to the reduction in cost when the two banks merged and synergies enavbled them to layoff as well as close down unnecessary branches and strategically relocate wher they could pitch more number of Depositors. FINANCIAL ANALYSIS WITH COMPETITOR Financial Analysis Profitability Analysis Performance 2011 2010 2009 1 ROE -27.9% -83.98% -50.83% 2 ROA -1.28% -4.18% -5.41% 3 Pre-Provisions Operating Profit / Avg. Equity -56.84% -40.34% -12.04% 4 Pre-Provisions Operating Profit / Avg. Assets -2.69% -2.80% -1.28% 5 Personnel Expense to Total Net Revenue 327.20% 176.48% 127.93% 6 Cost to Total Revenue -448.79% -194.00% 483.50% 7 Other Operating Income / Total Net Revenue 56.22% 35.23% 30.30% 8 Taxes / Pre Tax Profit -49.50% -22.12% -9.57% 9 Net Non Earning Assets / Assets net of Non Interest Liabilities 25.17% 22.59% 16.10% Profitability Ratios for Summit Bank Source: The data to calculate values was taken from Annual Report of Summit Bank. Profitability Ratios for NIB Bank A PERFORMANCE 2011 2010 2009 1 ROE -15.05% -74.02% 1.66% 2 ROA -14.95% -74.01% 1.66% 3 Pre- Provision Operating Profit/ Avg Equity -5.24% -9.30% 6.70% 4 Pre- Provision Operating Profit/ Avg Assets -5.23% -9.32% 4.46% 5 Personnel Expenses- to Total Net Revenue 111.13% 149.12% 75.48% 6 Cost- to Total Net Revenue 120.47% 151.79% 84.00% 7 Other Operating Income/Total Net Revenue 50.86% 36.78% 23.75% 8 Taxes/Pre Tax Profit 41.27% 19.88% -7.29% 9 Net Non- Earning Assets/ Assets net of Non- Interest Liabilities 34.68% 33.05% 42.01% Source: The data to calculate values was taken from Annual Report of NIB Bank Comments As may observed from the above ratios the profitability ratios of NIB bank are better this may be due to the MBL merger as that introduced a lot of defaulter credit base which the bank was able to in 2011 however we see that Summit Banks position has improved contrary to NIB bank whose position has deteriorated over the past three years. The most important ratio here is ROE specially when our study is based upon analyzing the efficiency of the mergers. Capital Adequacy Ratio Analysis Capital Adequacy Ratios for Summit Bank B. CAPITAL ADEQUACY 2011 2010 2009 1 Equity / Total Assets 4.60% 4.97% 10.65% 2 Adjusted Equity ( including revaluation surplus ) / Total Assets 5.20% 4.67% 10.62% 3 Revaluation Surplus ( deficit ) / Adjusted Equity 11.58% -6.54% -0.28% 4 Capital Adequacy Ratio as per SBP 7.77% 5.35% 9.83% Source: The data to calculate values was taken from Annual Report of Summit Bank Capital Adequacy Ratios for NIB Bank B CAPITAL ADEQUACY   2011 2010 2009   1 Equity/Total Assets 8.78% 8.31% 20.01%   2 Adjusted Equity (Including revaluation impact)/Total Assets 8.83% 8.31% 19.95%   3 Revaluation Surplus/(Deficit)/Adjusted Equity 0.66% 0.01% -0.28%   4 Capital Adequacy Ratio as per SBP 7.77% 5.35% 9.83% Source: The data to calculate values was taken from Annual Report of NIB Bank Comments It is clearly evident that the equity for NIB is much stronger than that of Summit Bank however it may not be said that it is a good sign as it reflects the under utilization of Assets by NIB bank we need the Industry averages to make more appropriate conclusions. As the impact of stability will become more evident as NIB is more stable and less aggressive at the moment. Also the economic situation has to be kept in mind. LiquidityRatio Analysis Liquidity Ratios for Summit Bank    LIQUIDITY 2011 2010 2009 1 Liquid Assets / Deposits and Borrowings 39.47% 34.02% 36.91% 2 Finances / Deposits and Borrowings 43.98% 54.65% 56.31% 3 Finances / deposits 64.75% 71.05% 59.14% 4 Demand Deposits / Total Deposits 19.78% 13.06% 12.42% 5 Export Refinance / Advances 38.06% 11.83% 8.40% 6 Finance ( net of Export Refinance ) / Deposits 40.11% 62.65% 54.17% 7 Government Securities / Total Assets 25.83% 21.11% 23.33% 8 Finances / Total Assets 40.21% 49.81% 48.48% 9 Lending to Financial Institutions/Borrowing from FIs (net of ERF) 6.37% 0.00% 8897.41% Source: The data to calculate values was taken from Annual Report of Summit Bank C LIQUIDITY 2011 2010 2009 1   Liquidity Assets/Deposits and Borrowings            2 Finances/Deposits and Borrowings 38.60% 47.40% 50.59%   3 Demand Deposits/Total Deposits 30.39% 25.19% 26.40%   4 Export Refinance/Advances 16.00% 17.30% 17.01%   5 Finances (net of export refinance)/Deposits 50.41% 56.54% 71.20%   6 Government Securities/Total Assets 34.25% 31.08% 33.55%   7 Finances/Total Assets 45.53% 55.27% 54.71%   8 Lending to Financial Institutions/Borrowing from Fis(net ERF) 38.96% 21.82% 11.78% Liquidity Ratios for NIB Bank Source: The data to calculate values was taken from Annual Report of NIB Bank Comments In terms of Liquidity both banks have comparable ratios which shows that after all Summit is doing well within its branch size has sufficient depositors to keep up in the market even though deposits are never enough in a bank. The liquidity is in good shape Demand deposits portray a comfortable position. Loan Loss Coverage Ratios Analysis Loan Loss Coverage Ratios for Summit Bank D. Loan Loss coverage   2011 2010 2009 1 Impaired Lending / Gross Advances 48.75% 34.42% 31.25% 2 Loan Loss Provisions (Specific + General) / Impaired Lending 49.37% 50.24% 51.19% 3 Net Impaired Lending / Equity 206.05% 157.77% 60.22% 4 Net Impaired Lending / Adjusted Equity 182.20% 168.09% 60.39% Source: The data to calculate values was taken from Annual Report of Summit Bank Loan Loss Coverage Ratios for NIBBank D LOAN LOSS COVERAGE 2011 2010 2009   1 Impaired Lending/Gross Finances 64.73% 50.33% 28.87%   2 Loan Loss Provision/Impaired lending -69.10% -68.50% -68.20%   3 Net Impaired lending/Equity 447.91% 545.79% 201.76%   4 Net Impaired lending/Adjusted Equity 444.93% 545.76% 202.32% Source: The data to calculate values was taken from Annual Report of NIB Bank Comments Impaired Lending has been generally high in the year round for all the banks and in this respect we see that despite of all the impaired lending brought in by my bank Summit has been able to keep the figures under control unlike NIB Bank which has figures crossing 60%. Now this is alarming for the Banks. Growth Ratios for Summit bank F. GROWTH   2011 2010 1 Total assets 65.70% 89.32% 2 Gross Finances 38.91% 106.17% 3 Impaired Lending 96.75% 127.12% 4 Investments 93.91% 76.13% 5 Deposits 46.77% 61.91% 6 Equity 53.26% -11.61% Source: The data to calculate values was taken from Annual Report of Summit Bank Growth Ratio for Summit Bank F GROWTH 2011.00 2010.00 2009.00   1 Total Assets -5.81 -21.03 4.61   2 Gross Finances -14.11 -1.66 2.75   3 Impaired lending -1.49 48.15 4.33   4 Investments -4.23 -17.05 77.48   5 Customer Deposits 39.46 34.76 -10.20   6 Equity -0.57 -67.19 1.55 Source: The data to calculate values was taken from Annual Report of NIB Bank Comments The growth ratios also reflect that summit bank is doing what they want an aggressive growth with percentages 65% as compared to those of NIB Bank. MEGA ENVIRONMENT INDUSTRY ANALYSIS Mega Environment The Mega Environment of the Summit Bank involves economic, political, socio-cultural, technological environment and religion where Islamic Banking plays a role, Pakistan being Islamic Republic of Pakistan hence the constitution is in coherence with Shariah Law. Source: Adapted from Sadler and Craig (2003)Strategic Management, p.52 Political and Legal Environment Political environment and its impact on the banking industry, before the financial liberalization and privatization period commercial banks in Pakistan mainly catered to the borrowing needs of the Government. This way Banking credit was concentrated to a few public sector organizations and the growth of the private sector was not evident. This suited the banks requirement to take less risk and not to overlook the fact that it opened doors for many such political influencers the Mehran bank scandal to BCCI fraud all are evident results from the time. This way the financial system suffered, political interference in decision making related to lending created distortions in the system due to the excessively low recovery rates on such loans[xxiv]. The all time NPLs issue that we face today. Economic Environment The main factors in economic environment affecting the banking industry include GDP growth rate, inflation rate, changes in the level of interest rates, money supply, disposable income, unemployment rates. Considering the GDP growth rate as new jobs are created in the economy the income per capita will increase, people will have higher purchasing power and higher disposable income which will lead to high savings i.e.; the deposits for banks will increase and hence they will have more funds to lend out.[xxv] Technological Environment The technological environment plays a vital role in changing the dynamics of the banking industry, having both optimistic as well as the adverse impacts for the banking industry. Information technology help banks in such a way that it reduces the costs involved in the processing and management of the information, Socio-cultural Environment The most important factor observed in the last few years in Pakistan is the change of lifestyle of the people which has in turn affected their consumption patterns people are more inclined towards consumption and less savings. People tend to borrow more and more they want to consume today and pay tomorrow. It can become a major source of interest revenue for the firm as higher interest rate can be charged; higher risk premium involved. There is increased demand for services . Religion Religion as mentioned above for Pakistan has played a key role played a key role in changing how things work in the industry as well as increased the level of competition with introduction of Islamic banking and other Islamic products.. There has been observed quite high expansion in the Islamic banking especially in FY 2005-10. Islamic banking is widely practiced in various Muslim countries and it is regarded as the interest-free banking. The main difference/ conflict between the conventional and the Islamic banking are the interest rates. However the average annual growth of ten years FY 2000-11 of Islamic Banks has observed to be 46% as compared to the growth of commercial banks around 14% which is much less as compared to Islamic Banks[1]xxvixxvii. Porters Competitive Forces Source: Hill and Jones (2012), Strategic Management Theory: An Integrated Approach p.50 Michael E. Porter introduced the concept of how strategy is affected by the competitive forces of the industry in his article published in Harvard Business Review, March/April 1979[xxviii]. Despite the reported criticisms of the model, it is still effective as a foundation for industry analysis. Considering the banking sector of Pakistan, the Five Forces Model signifies attractiveness of the industry in which Summit Bank operates. Evaluation of these competitive forces will help shape the appropriate strategy for the organization. Bargaining Power of Suppliers Suppliers in case of banking industry are the service providers utilities, transportation, security, IT support, operations skilled workers, contacts, ability of customization of product. These liaisons are significant and impact the smooth operations of Summit Bank. Any discrepancy in these services gives rise to operational risk associated with the bank. Threat of New Entrants For banking sector, the threat of new entrants has been disproportionate[xxix], due to the minimum capital requirement (MCR) and capital adequacy (CAR) as required by the BASEL system. According to a prudential regulation circular issued by SBP, all locally incorporated banks are required to attain CAR of 10% and MCR of PKR 15 billion by the end of 2011, PKR 19 billion by the end of 2012, and PKR 23 billion by the end of 2013[xxx]. All banks (foreign or local) being incorporated after the issuance of circular i.e. after 2005, will be required to have the MCR of PKR 23 billion at the time of their incorporation. The foreign banks in Pakistan with their Head Offices holding paid-up capital, will have to attain approval from SBP regarding MCR and CAR, depending upon their branches in Pakistan. Similarly, the Direct Finance Institutions (DFIs) are required to attain MCR of PKR 9 billion by 2010. The aforementioned capital requirements raise the barriers to entry for local banks. However, the foreign groups having strong backing and necessary capital can diffuse in the banking sector of Pakistan which at the moment is not a feasible option as we see that many of the foreign bank which had come in recently are closing down their operations even citi bank one of the oldest foreign bank has shut down its operations in many parts. After all the foreign banks come across problems with respect to license acquisition and operations in Pakistan. Influx of Islamic banking institutions has been on the rise in Pakistan, while foreign banks like RBS, ABN-Amro, CitiBank, HSBC, etc. are either acquired by local banks or divesting their operations[xxxi]. Threat of Substitute Products Substitute products in case of banking sector could be the services of non-banking financial institutions (NBFIs) like insurance companies, credit unions, mutual funds, investment banks offering advisory services for IPOs, asset management companies, Islamic finance companies, mortgage and/or leasing institutions, etc. The strength of these substitute products are derived from the rate of return they offer and the quality of customer services that are being provided by them[xxxii]. Commercial banks are offering multifarious services to compete with these substitutes. Introduction of hybrid accounts, reduction in fees, and bundling of auxiliary services are few examples of such changes[xxxiii]. In Pakistans banking sector, commercial banks have the stronghold; however, Islamic financing and mutual funds are catching up in terms of reported profits and growth rates. To encounter this threat, Summit Bank will; have to move on and start Islamic Banking Operations. Bargaining Power of Buyers In case of general banking in Pakistan, the switching costs are low for most customers; hence they have more bargaining powers. Other components increasing their bargaining costs include the sources of publically available information, which allows them to compare the products of different banks. Degree of Rivalry The core of other four forces is the intensity of rivalry prevalent in the banking sector in Pakistan. The attributes of those factors act as the determinants of competitiveness in among the existing banks. As of June 2011, there are 32 local banks (with 9,431 branches nationwide) available in Pakistan, while 12 foreign banks are operational (with 32 branches across the country)[xxxiv]. The deposits of local banks (both private and public) grew by 17.60% on YoY basis, while those of foreign banks decreased -0.18%. Part of this impact has been due to the merger of RBS into Faysal Bank Limited in December 2010. HBL is the biggest player in the private banks with over 1400 branches across Pakistan. Other Top 5 banks of Pakistan include NBP, MCB, ABL, and UBL. External Factor Analysis After assessing the opportunities and threats external to the organization, the External Factor Analysis Summary is prepared[xxxv]. The first column consists of the Summit Banks strategic opportunities and threats, while the respective weights (0 to 1) are assigned according to the factors significance in the banking sector. Subsequent ratings (1 to 5) are given for each factor depending upon the organizations response to the external factors present. The next column shows the weighted score of the bank for each factor. The total weighted score calculated in the External Factor Analysis Summary Table shows that how effectively the organization is responding to the prevailing environmental conditions. External Factors Analysis Summary External Factors Weight Rating Weighted Score OPPORTUNITIES Demand for SME Financing 0.10 3 0.30 Increased Rural Demand 0.05 2 0.10 Expansion in Islamic Banking 0.2 4 0.80 Improved Technology 0.05 3 0.15 Change in Consumption Patterns 0.20 4 0.80 THREATS Differentiation on Services 0.05 3 0.15 Mobile Banking Security Threats 0.05 2 0.10 Branchless Banking 0.1 2 0.20 Competition from Islamic Banks 0.05 4 0.20 SBP Policy Changes 0.15 4 0.60 TOTAL 3.40 Source: Format suggested by R. Srinivasan (2005) in Strategic Management: The Indian Context Comments Opportunities Demand for SME Financing: In the current economic conditions there is a need for SME financing in order to move the business and inject cash flow so that the business may expand. The banking sector is not sufficiently catering to the SME sector due to high risks involved as such businesses are mostly un-documented, a few microfinance have recently come in emergence and are somewhat looking after the need like Kashaf Bank even though It raises the costs for banks to evaluate their credit worthiness. However, if Summit Bank focuses on such areas it can prove to be a profitable segment supported by large customer base. Presently, around 85% of the SME credit is given to the manufacturing and trading whereas while many potential areas remain untapped. The increased need of consumer financing can create greater opportunities for banks by increasing their exposure to consumer advances portfolio by charging higher interest rates on their advances due to risk premium they will be able to im prove their asset yield given the fact that NPLs stay within the tolerance level. Increased Rural Demand: There is a lot of demand in the agriculture Sector for loans particularly due to the floods which have ruined the soil in those areas and livestock, again Sindh Bank has tried to cater for it however political influences will never allow competition, besides influences banks are not currently catering to this sector due to the collateral problems available and hence there is a lot of scope for bank to cater to this particular segment which is evident from the share of agriculture in GDP which is still around 20%. Expansion in Islamic Banking: A dramatic increase has been observed in Islamic Banking the average annual growth of Islamic banking has been around 46% as compared to the commercial banks rate of growth of 14%[xxxvi]. Although the assets of the Islamic Banks have remained concentrated in the six dominant Islamic banks. This volatile growth was due to the new clientele network and inclination of people towards the Islamic banking rather than the conventional banking and by expanding into Islamic banking network Summit can avail the opportunities of increasing its fund base. Improved Technology: Through the use of improved and efficient information technology (IT) and risk management system the intermediation costs of the bank can be reduced; which will further lead to higher spread which in turn will translate into higher profitability. Change in Consumption Patterns: The socio-cultural changes are influencing the consumption patterns of the people. Even though the disposable income has not increased but people are using their future income for consumption through the use of credit cards i.e.; plastic money and currently the interest rate charged on credit cards is around 38-40% and by increasing its focus towards this segment and by launching various value-added services the bank can capitalize on this opportunity. Threats Differentiation on Services: The increase in the number of private banks has increased the competition within the banking industry, since banking is a service industry the only way to compete in it is through service, price wars tend to play a minimal role in banking industry and hence arises a need for differentiation of the products and in the service level for the bank to be remained as a preferred bank by the consumers. Mobile Banking Security Threats: As mobile banking and the e-banking has increased along with the technological implementations there exist certain loop holes in the system for hackers to exploit hence a high level of security is required to protect the consumers and the bank itself from getting into a law suit.. Branchless Banking: United Bank Limiteds Omni and Telenors easypaisa mimic branchless banking facilities which Summit Bank is currently not offering none the less Summit Bank is working with western union for international money transfers in particular which make it possible for consumers to make the transactions which otherwise would not be possible and consumers worth this particular need would switch. Competition from Islamic Banks: Islamic banks are currently offering high deposit rates as compared to the commercial banks; as the nominal weighted average return on commercial banks PLS deposits is around 4.76% including current accounts whereas in the case of Islamic Banks it around 5.50% in 2010, thus there is a threat that the depositors will toggle towards the Islamic banks in an attempt to earn more returns and consequently making it a threat for commercial banks. SBP Policy Changes: Changes in SBP monetary policy can lead to changes in interest rates which in turn causes change in the intermediation costs. Moreover the changes in the regulations regarding capital requirement and exposure limits can also affect the profitability level of the bank. INTERNAL FACTORS ANALYSIS SUMMARY INTERNAL FACTORS ANALYSIS SUMMARY Evaluating the strengths and weaknesses of Summit Bank will help identify the competencies which may be capitalized upon in the long run. Also, the deficiencies in the organizations could then be condensed through appropriate actions. Summit Banks internal factors were identified by analysis of financial statements, interviews with the operational as well as top management, and the insights offered by the banking sector experts for expert opinion some magazine cuttings were taken and have been referred to throughout. After assessing the strengths and weaknesses internal to the organization, the Internal Factor Analysis Summary is prepared[xxxvii]. The first column consists of the Summit Banks strategic strengths and weaknesses, while the respective weights (0 to 1) are assigned according to the factors significance in the banking sector. Subsequent ratings (1 to 5) are given for each factor depending upon the organizations position. The comments section following the Table elucidates the reasons for selecting each strength or weakness Internal Factor Analysis Summary Internal Factors Weight Rating Weighted Score STRENGTHS Branch Network 0.15 4 0.60 Strong Deposit Base 0.15 4 0.60 Established Clientele 0.1 4 0.40 Group-Backing 0.10 4 0.40 Low-Cost Funds 0.07 4 0.28 WEAKNESSES Customer Response Time 0.05 2 0.06 Decline in Advances 0.15 3 0.45 Impaired Lending 0.10 2 0.20 Risk Mitigation 0.10 2 0.20 Employee Turnover 0.05 3 0.15 TOTAL 3.34 Source: Format suggested by R. Srinivasan (2005) in Strategic Management: The Indian Context Comments Strengths Branch Network: Summit Bank is a medium sized bank when we talk about the Asset Base of the bank however the bank right now is following an aggressive approach to achieve its goals of an increased asset base. With respect to the branches of Summit Bank, are 166 operational presently. The Top 5 banks of Pakistan namely NBP, HBL, MCB, ABL and UBL are the prime competitors due to their asset base. However, other banks like Askari Commercial Bank, Standard Chartered, and Faysal Bank are gaining significance as competitors in regular banking. Strong Deposit Base: The deposits of Summit Bank includes Mybanks deposits too and hence has become huge CMH are also good clients.. Through opening of new branches, offering services that the clients require, and hiring skilled CROs, the bank is successful in attracting new deposits every year. Established Clientele: The prime customers of the banks consist of established businesses and multi-national corporations. Their transactions constitute significant share of business of Summit Bank. These clients keep the bank as an essential liaison in terms of trade financing, overdraft lending, letters of credit, deposits, etc[xxxviii]. Group Backing: Summit Bank is backed by Arif Habib group a leading name in Pakistan. And Suroor investments a group with the adequate equity. The strength of the parent company is evident in terms of raising funds to fulfill the liquidity required by the bank. Subordinated loans as the Tier II Capital in the balance sheet of Summit Bank is one example of such backing by the Abu Dhabi Group5. Weaknesses Customer Response Time: The customers seem happy with the branch network presence and with the EFFICIENCY there some of the customer interviews showed that certain customers had only recently moved to the new branch near their new location and were more satisfied with the service than the older bank service which were also namely old bank with an apparent excellent reputation. Decline in Advances: Summit Bank is inclined towards maintaining appropriate liquidity levels to match the withdrawals of the demand deposits, hence their advances have declined. Primarily, the respective funds are invested in the T-Bills as they have no credit risk and can be liquidated whenever required5. Impaired Lending: The degree of non-performing loans has risen in case of Summit Bank, despite its adherence to the SBP regulations regarding the maximum exposure in a given sector. The rate of repayment of loans given to related parties is lower, while the greatest portion of impaired lending is attributed to the Textile sector, with inadequate provisions. The second largest NPLs have originated from consumer loans offered to individuals (albeit credit worthy on paper)[xxxix]. These NPLs were mostly brought in by My Bank and Atlas Bank a gift of the mergers. Risk Mitigation: The b