1. PRESENTATION ON
CAMEL ANALYSIS OF BANK ALFALAH LIMITED
Presented By:
Syed Nabeel Ali 1536
Syed Abdul Rehman 1819
Adnan Ahmed 1478

2. ACKNOWLEDGMENT
We have completed a report based on our familiarity with or studies in order to get a bit
familiar with the practical experiences in organizations. By the grace of Allah almighty
We have accomplished this report.
Sincerely, to our knowledge and exposure to this subject, we dedicated our little effort
to everyone who works for the cause of Pakistan. We express our appreciation to Iqra
University that scheduled and assigned us this report and we hope our efforts will be
duly regarded.

3. INTRODUCTION TO BANK ALFALAH
Bank Alfalah Limited is a private bank in Pakistan owned by the Abu Dhabi
Group. Bank Alfalah was incorporated on June 21, 1997 as a public limited
company under the Companies Ordinance 1984. Its banking operations
commenced from November 1, 1997. The bank is engaged in commercial
banking and related services as defined in the Banking companies ordinance,
1962.
Following the privatization in July 1997, Habib Credit and Exchange Bank
assumed the new identity of Bank Alfalah on February 25, 1998. It is now Abu
Dhabi based bank as the family of Sheikh Nahayan purchased 70% of its shares
and 30% remained with Habib Bank on behalf of Government of Pakistan. It has
115 branches in 46 cities of Pakistan.

4. CAMEL FRAMEWORK
During an on-site bank exam, supervisors gather private information, such as details
on problem loans, with which to evaluate a bank's financial condition and to monitor its
compliance with laws and regulatory policies. A key product of such an exam is a supervisory
rating of the bank's overall condition, commonly referred to as a CAMEL rating. The acronym
"CAMEL" refers to the five components of a bank's condition that are assessed:
1) Capital adequacy
2) Asset quality
3) Management
4) Earnings
5) Liquidity
CAMEL is basically a ratio-based model for evaluating the performance of banks. Here we will
explain Bank Alfalah Camel Analysis.

5. CAPITAL ADEQUACY
Capital adequacy ratio (CAR) is a specialized ratio used by banks to determine the adequacy of their
capital keeping in view their risk exposures. Banking regulators require a minimum capital adequacy
ratio so as to provide the banks with a cushion to absorb losses before they become insolvent. This
improves stability in financial markets and protects deposit-holders.
Explanation:
As per SBP BASEL 3 Requirement, the CAR should be 10.00 and banks with higher CAR have higher
resources.
RATIOS 2009 2010 2011 2012 2013
Capital Adequacy Ratio % 12.46 10.53 11.60 12.60 12.06

6. RATIOS 2013
Debt-Equity Ratio 20.47%
Total advance to total asset ratio 42.70%
Government Securities to Total Investments 2.71%
The Debt to Equity Ratio
The Debt to Equity Ratio measures how much money a bank should safely be able
to borrow over long periods of time.
Debt-Equity Ratio =Borrowings/Share Capital + Reserves
Debt-Equity Ratio =578713/13492+14774
Debt-Equity Ratio =20.47
In 2012 it is 19.86 , this ratio is lower in 2012 because debts in that year are lower.

7. Total Advance to Total Asset Ratio
Total Advance to Total Asset Ratio shows that how much amount the bank holds
against its assets.
Total Advance to Total Asset Ratio =Total Advance/Total Asset
Total Advance to Total Asset Ratio=260780/610614
Total Advance to Total Asset Ratio = 42.7%
In 2012 it is 43% because bank’s total advances are slightly higher as compare to
2013
Government Securities to Total Investments
This ratio shows the percent of investment ingovernment securities. Itis believed
that the more investment in government security is safer.
G-sec to Total Investment =Government Securities/Total Investment
G-sec to Total Investment =3620/219690
G-sec to Total Investment =2.71

8. ASSET QUALITY
The asset quality reflects the quantity of existing and potential credit risk associated with the loan
and investment portfolios, other real estate owned, and other assets, as well as off-balance sheet
transactions.
The asset quality of Bank Alfalah has seen significant improvement. The coverage ratio, which had
dropped to below 60 per cent during the preceding quarter, has again surged to 67 per cent
Asset Quality 2012 2013
NPL Ratio 8.90% 6.60%
Coverage 62.50% 69.30%

9. Gross NPL Ratio:
This ratio is used to check whether the bank's gross NPLs
are increasing quarter on quarter or year on year
Non-Performing Loans to Gross Advances= Total
NPL/Gross advances*100
NPL to Gross Advances= 6.6%
 NPL ratio improved
to 6.6% from 8.9% in
Dec‐ 12.
NPLs reduced to
PRs17.9bn from
PRs22.2bn, owing to
PRs2.43bn recoveries
& PRs2.35 write‐offs.
Coverage Ratio
Coverage Ratio= Loan Loss Reserves / Non-
Performing or Non-current Loans and leases
Coverage Ratio=69.3
Coverage increased
to 69.3% from 62.5%
in Dec‐ 12.

10. MANAGEMENT
Sound management is one of the most important factors behind financial institutions’ performance.
Indicators of quality of management, however, are primarily applicable to individual institutions, and
cannot be easily aggregated across the sector. Furthermore, given the qualitative nature of
management, it is difficult to judge its soundness just by looking at financial accounts of the
banks. Nevertheless, total advance to total deposit, business per employee and profit per employee
helps in gauging the management quality of the banking institutions. Here We will evaluate the same
with respect to Bank Alfalah.
Total Advance to Total Deposit Ratio
This ratio measures the efficiency and ability of the banks management
in converting the deposits available with the banks (excluding other
funds like equity capital, etc.) into high earning advances.
Total advance to total deposit ratio=total advance/total deposit
Total advance to total deposit ratio=260780/525526
Total advance to total deposit ratio=49.62%

11. Profit per Employee
This ratio shows the surplus earned per employee. It is arrived at by
dividing profit after taxearned by the bank by the total number of
employee. The higher the ratio shows goodefficiency of the
management.
Profit per employee=net profit/no. of employees
Profit per employee=4676/10598
Profit per employee=44.12%
Business per Employee
Revenue per employee is a measure of how efficiently a particular bank
is utilizing its employees. In general, rising revenue per employee is a
positive sign that suggests the bank is finding ways to squeeze more
sales/revenues out of each of its employee.
Business per employee=24120/10598
Business per employee=2.27
Total income=post provisions interest income+ non-interest income
Total income= (15841+8279) =24120

12. EARNING & PROFITABLITY
Earnings and profitability, the prime source of increase in capital base, is examined with regards to
interest rate policies and adequacy of provisioning. In addition, it also helps to support present and
future operations of the institutions. The single best indicator used to gauge earning is the Return on
Assets (ROA), which is net income after taxes to total asset ratio.
Dividend Payout Ratio
Dividend payout ratio shows the percentage of profit shared with the
shareholders. The more the ratio will increase the goodwill of the bank
in the share market.
Dividend pay-out ratio = dividend/net profit
Dividend pay-out ratio = 483/4676
Dividend pay-out ratio = 10.32%

13. Interest Income to Total Income
The interest income total income indicates the ability of the bank in
generating income from its lending.
Interest income to total income= interest income/total
income
Interest income to total income=15841/24120
Interest income to total income=65.67%
Return on Assets (ROA)
Net profit to total asset indicates the efficiency of the banks in utilizing
their assets in generating profits. A higher ratio indicates the better
income generating capacity of the assets and better efficiency of
management in future.
Return on asset= net profit/total asset
Return on asset= 4676/610614
Return on asset=0.76%

14. LIQUIDITY
An adequate liquidity position refers to a situation, where institution can obtain sufficient funds,
either by increasing liabilities or by converting its assets quickly at a reasonable cost.
An asset is liquid if it can easily be converted to cash.The liquidity of an institution depends on:
• The institution's short-term need for cash;
• Cash on hand;
• Available lines of credit;
• The liquidity of the institution's assets;

15. Investment and Total Assets
Investment and Total Assets = Total Investment / Total Assets *100
Investment and Total Assets = 219,690/ 610,614 =36%
Cash and Cash equivalent Ratio
Cash ratio is the ratio of cash and cash equivalents of a company to its
current liabilities. It measures the ability of a business to repay its
current liabilities by only using its cash and cash equivalents and
nothing else.
Cash and Cash Equivalents to Total Asset= cash & cash
balances / Total Assets * 100
Cash and Cash Equivalents to Total Asset=61205/610614
Cash and Cash Equivalents to Total Asset= 10%

16. CONCLUSION
This critical analysis on Bank Alfalah in the previous section is the representation of its
past, mirror of its present, and an insight into its future. The past data of BAL enabled us
to study the bank’s financial condition and to monitor its compliance with laws and
regulatory policies. Study helped us evaluate the organization in comparison to its
future and competitors and We conclude that the company is having strong and healthy
financial position.