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Copy of COOP
Transcript of Copy of COOP
Dr. Hesham Merdad
Done by: Abdullah Assari 200793010 FIN 350-351
NATIONAL COMMERCIAL BANK
NCB Outline About NCB About NCB About NCB Introduction
About National Commercial Bank ( NCB )
Corporate Banking Group ( CBG )
Financial Request Report
My tasks & work
Recommendations & Skills
Conclusion A. Foundation & growth:
- Established in 1953.
- The capital at inception was SR 30,025,123.
- The capital now is SR 15,000 million.
- At the end of 2011, total assets was SR 301,198 million and total equity was SR 35,585 million.
- Net profit was SR 6,012 million. B. Legal Form:
- From the beginning, NCB was a partnership (joint liability) until 1997.
- It was changed to a joint stock company in 1997.
- In 1999, the government purchased a majority interest in the bank. C. Key Facts:
- NCB has 288 branches providing Islamic Services.
- The number of NCB clients is more than 2.8 million.
- The bank has 5,879 employees, 90.0% of them are Saudi nationals.
- NCB has the largest capital market and foreign exchange operations (Treasury) in the kingdom. Vision NCB is the Premier Financial Services Group in the region. Mission - The Leading Islamic Retail Bank.
- The Market Leader in Consumer Finance.
- The Preferred Provider of Financial Solutions for Targeted Business Clients.
- The Leading wealth Manager.
- The first Choice investment House in the Region.
- Expanding geographically in Selected Markets. Purpose To increase shareholders total return and support the development of the country. Core Values - People
- Flawless Execution CORPORATE BANKING GROUP 1-Small Business Unit.(SBU)
2-Islamic Financing Group.(IFG)
3-Corporate Banking Group.(CBG)
4-Institutional Banking Group.(IBG) Operations steps to new accounts:
1-For a Limited Liability Company: stamped copy of commercial registrar, memorandum of association, IDs of the owners and authorized people for the account.
2-For an Individual Institutions: Stamped copy of commercial registrar and the owner ID.
3-For Holding Companies: Same as Limited Liability Companies but the authorized people must be Saudis. and the form Tasks in Operations: 1-Check that the client fills out all the pages and complete the other papers.
2-Print statements of accounts and send them to the client.
3-Check the signature for every transaction in any account. Documentation: The documentation keeps the files according to a check list. The list starts with the legal documents like commercial registrar, memorandum of association, IDs of the owners and authorized people. After that, we put all the agreements between the company and the Bank in date order. Tasks in documentation My task was checking all the files for the companies that belong to my team.
If a legal document is missing or if the commercial registrar is expired, I contact the client to provide us with what we need. I can get the other missing documents from the relationship managers. Financial Analysis 1-Profitability: The efficiency of a company of generating earning.
2-Solvency: The ability of the company to meet its long-term fixed expenses
3-Liquidity: The ability to convert assets to cash.
4-Stability: The ability of the company to remain in the business in the long run. Financial Request Report - analyzing the company in financial attitude and accounting scopes.
- clear idea about the performance of the company.
- three kinds of requests: new, interim and annual review.
- analyze the financial statements for the company Points in the request - the historical contracts .
- Financial highlights.
- current status of assets and securities.
- The company account strategy.
- keys of strengths and weakness.
- management and financial assessment.
- Overall banking Tasks & Work I was assigned to be Financial Analyst.
I got the chance to use my knowledge and information in Finance and Economics that I gain from my study at KFUPM in the real life work. The History between the Client and the Bank Financial Highlights give the bank a quick look about the performance of the company in the last years. Financial Assessments 1-Analysis: where we can indicate strength and weaknesses of the company or institution, such as cash adequacy, capital structure, efficiency in operation and returns.
2-Monitoring: that helps to identify possible problems that may face the company and help to follow up on the remedy of those problems.
3-Planning: to help to determine certain targets and work toward achieving those targets. Case Study - real example for one of our clients.
- calculate financial ratios.
- evaluation of the performance. Operating Results - sales growth by 21% and reached SR400.7
- assets turnover is 1.27 which shows the company’s success in utilizing their assets efficiently.
- Gross profit margin sustained last year’s growth rate of 18% due to the high increase in sales along with the stabilization of construction materials prices.
- Operating profit margin dropped to 9.3% due to the climb in SG&A mainly workforce related expenses as the company hired more labor for its billing and collection.
- Performance for 2011 was strong in view of the uptrend in sales for the last 3 years. Balance sheet Due to the increase in the projects on hand, sales rose with a corresponding rise in net receivable to SR 101MM.
the compositions of gross profit receivables are as follows: Balance sheet Aging of gross receivables in 2011: 96% of outstanding in 2011 receivables are within the targeted collection period of 180 days Balance sheet Inventory level increased reaching SR 24MM due to the increase of the company’s raw material needs as they are constructing more projects.
The advances represent payments to suppliers covering around 10% to 20% of the material’s purchase price. Advances to suppliers jumped to SR 11MM as more construction materials were acquired in preparation for the expected higher volume of projects in 2012. accrued revenues increased by 69% to SR 67MM.
Higher material requirements pushed up trade payable to SR 91MM.
The company has been very prudent in its loan dealings, with minimal loan exposure of only SR 787K in 2011 Balance sheet Liquidity Current ratio rose to 1.54x in 2011, due to the higher growth in current assets compared to current liabilities.
Current liabilities climb is due to the rise in trade payable and other liabilities.
net worth rose to SR 125MM which caused D/E ratio to recover to 1.51x .
At the end, the performances of the company look very good in the last years after all of the previous evaluations but there are other factors that should be considered also. Recommendations -Decentralizing the bank so it could be easier for relationship managers to make decision and not be delayed by the bank's main office.
-Putting more effort in the retail sector, NCB is focusing mainly on the corporate sector, which is creating a negative impact on the retail sector.
-Developing NCB's online system and making it more efficient, we have got complaints that the online system is too complicated and it is difficult for the clients to access their portfolio and trade in the stock market. Skills -I learned how to work under pressure and at the same time minimize the errors.
-I developed my communication skills and learned how to deal with the clients.
-I learned how to be punctual and how to meet deadlines and how to work within a time limit.
-I learned how to work in teams and developed some leadership skills and try to have the initiative in solving problems.
-I learned how to use financial tools with excel. THANKS