Eating Out: A Common Phenomenon Among Malaysians

Eating Out: A Common Phenomenon Among Malaysians Eating out is a common phenomenon among Malaysians. However, the selection of a restaurant is dependent on the restaurant variety, the consumer personality and the consumption context. With the increase in discretionary income and change in lifestyle, dining out has become a common experience among university students. People begin to have more experiences in dining that lead to customer expect more from the restaurants and are more difficult to satisfy. Restaurant consumption lifestyle is very related to food lifestyle. Kesic and Piri Rajh (1993) stated that food lifestyle can be desribed through behaviour of consumer as a function of individual characteristics and this can be create through the social interaction of psychological and also the past experience of consumer. Dine out is known as consumption of food and drink eaten outside the home which is not obtained from the households stocks. Dine out is easily accesible, as in expensive hawker centers, coffee shops, air-conditioned food courts and fast-food restaurants whereas consumers have the ability to choose types of food and price (Dittmer,2002) Restaurant consumption lifestyle among students depends on convenience of food and also restaurant itself, traditionality of food that they serve, concerning about health and nutrition, environment or atmosphere at the restaurant, the variety of menu that restaurants provided and also the price of food. Food-related lifestyle has five components fisrt is higher-order attributes of food products, second is consequences of using food product, third is shopping script, forth is meal preparation scripts and fifth is usage situations. The striking social, economic transformation, the increases in the types, the absolute number of retail venues and the greater variety of food products can influence the consumer purchasing behavior in restaurant consumption lifestyle. In the aspect of restaurant consumption lifestyle, the frequency that they dining outside of the home can give an idea what make them to dine out, with whom they usually go to dine out, where the location that they prefer and why they choose that place. Dine out is not an option for those who are only has a limited time, it is also has become the favorable choice for those who like to obtain new eating environmnet, changing of menu, and for people who want to spend time with friend, colleagues or family. In order to fulfill the needs, peoples will patronize foodservice establishment. People have certain evaluative foodservice establishment criteria in their mind, such as the quality of the food and service provided ambience and the price. 1.2 Problem Statement Restaurant consumption lifestyle is very general if we want to discuss among all types of consumers. However, in this research will try to understand about the restaurant consumption lifestyle between two major ethnic groups of university students. This research will come out what the motivation purchasing among two races in restaurant selection criteria. Besides that, this research will find out what type of trend nowadays consumers preferred to go to the restaurant, for example what the restaurant selection criteria of restaurant consumers more preferred, why they choose that restaurant, when usually they go there, what they expect when they go to the restaurant and with whom they usually go there. These studies have addressed issues such as the relationship between consumer behaviour, the demand pattern of restaurant consumption lifestyle and factors influencing consumer purchasing behavior. All of these issues are related with restaurant consumption lifestyle between two races of students because these issues are more to social science and behavior of consumers. 1.3 Objectives The objectives of this study are: To investigate the restaurant consumption lifestyle between two ethnic groups of university students. To examine the motivation purchasing in consuming their meal at restaurant. To determine the difference of restaurant selection criteria in normal and special dining out occasion. 1.4 Research Questions Specifically two basic research questions underline this study: Does the consumer behavior influence in the restaurant consumption lifestyle? Is it have differences between two ethnics group of university students in restaurant consumption lifestyle? What the motivation purchasing in restaurant consumption lifestyle between Malay and Chinese students? 1.5 Significance of the Study This paper consists of information on consumers consumption pattern and factors that influence consumers purchasing decision. Indirectly, can understand why university student select one restaurant over the other, the marketer can use marketing strategy effectively to gain market and profit. Besides that, managers also can understand the critical factors that influence customers behavior, loyalty and satisfaction in the food service industry and help them to improve in critical part or areas. All the factors that effect consumers eating out in food service establishment may also directly affect the profitability of the food service operations. Therefore, this study is important to investigate the factors contributing to overall customers satisfaction and repurchase behavior. A food service manager needs to understand this relationship in order to enhance their customers need and satisfaction. CHAPTER 2 LITERATURE REVIEW 2.1 Eating Out In this study, restaurant consumption lifestyle related with the contemporary patterns and the symbolic association of eating out and also related with patterns to social and demographic characteristics of households. Eating out has important implications for comprehensive understanding of nations diet. Eating out become famous trend in many peoples lives now (Koo et al, 1999). Eating out is familiar among single-parent household and also career woman (Elmont, 1995). According to Finkelstein (1989), eating out can give the leisure motive of what they seeing and being seen in public also it can give the entertained by others. Britain showed that consumers increasingly consume their food outside the home (Driver, 1983). As a proportion of food expanding, eating away from home has been increasing since 1950s. Food and its consumption can examine at several different levels and these will depend for ones purpose, whereas attention needs to focus of the following nutrients, ingredients, dishes, meals and cuisine. Eating out has both practical and symbolic significance. People eating out because sometimes out of their necessity and sometimes they eating out because of for pleasure. British Family Expenditure Survey had suggested that people eating out depends on their modes and could be expressed through food consumption (Warde Tomlinson, 1995). The recent official data in UK stated that difference in the social group will give the results difference in the frequency of eating out. The income, age, gender, region, class and household composition will influence consumer eating out. The major leisure motive of eating out can based on Mills belief which is relates to the psychological needs of human being (Mill, 2001). Eating out more than to preventing from suffering because of not enough food. In this research, results can support that people truly enjoy eating when psychologically as a part of leisure motive. In addition, the another aspect of motivation on what causes of behavior, Herzbergs two-factor theory such as hygiene factors and motivation can be apply in finding the results. Lack of concern about hygiene factors can cause of customer dissatisfaction. Eating out had its role in modern consumption (Warde and Martens (1998) and eating out also had its significant because eating out can increase the penetration of commodification and consumer culture in everyday life. Riley (1994) stated that in Britain there were no cultural and psychological factors because consumers tend to evaluate their meal experience at the restaurant they went to. Hygiene factor direct specialist to basic consumption on inexpensive food whereas, motivator give signal for self-identity will act to motivate the customer. People whos have different meal options for different motive will produce the relationship between different types of dining experiences. This is can emphasize that meal can influence the consumers choice of a restaurant meal (June and Smith, 1087). The frequency of eating out may vary, every age group, culture group, social class, and geographical community makes eating out an important from recreation. Eating out on a large scale is an interesting phenomenon of our changing society. Specifically, eating out is defined as patronize to any foodservice establishment by respondents of this study. In this modern society, people eating out for variety of reason, which included avoiding from boredom, to socialize, to have different type of food, taste and convenience ( Tom Powers. 2002). Lewis (1981) considered five factor for eating out which are food quality, menu variety, price, atmosphere and convenience factors. On the other hand, Jones (1996) identified six basic reasons as to why people eating out which are convenience, variety, labor, status, culture or tradition and impulse. Convenience This factor includes those people who are away from some reason, who are physically unable to return at home during normal time and out it conjunction with some other leisure activity. Variety Variety of food is an important factor to attract consumer to one food premise. People, who live in circumstances where the meal experiences are limited, such as in the hawkers stall, may choose to eat out for this reason. Labor The desire to have someone else to prepare food, cook, serve and wash up a meal most certainly influences some peoples decision to dine-out. Status Both for personal and business reasons people may choose to impress their guess by taking them out to a fashionable and expensive restaurant. Culture Eating can be described as a part of our culture heritage and a manifestation of kinship. For example, in Malaysia, celebration of special events such as anniversaries and birthday are often associated with eating out. Impulse This is rather like saying that sometimes people have to no particular reason for eating out, they do so on the spur of movement. However, impulse buying is very significant and that it contributes to sales in the food service industry. 2.2 A Theory of Motivation Consumption Values This theory will discuss about consumption values, explaining why consumer choose to buy or not to buy a specific product. Also discuss why consumers choose one product type over another and why consumers choose one brand over another. This theory consists of five consumption values that can influence consumer choice behavior. The five consumption values are functional value, social value, emotional value, epistemic value, and conditional value. In making a decision, any or all of the consumption values can influence of that. 2.2.1 Functional Value Functional value is defined as alternatives capacity for functional, profitable, or physical performance. An alternative receive the functional value through the utilitarian or profitable and also physical attitudes. Functional value can measured the profile of choice attributes. Generally, functional value is assumed to be the main driver of consumer choice. This assumption comes from Marshall (1890) and Stigler (1950), that strictly expressed in terms of rational economic man. Reliability, durability and price are characteristics that derived from alternatives functional value. For example, the decision to purchase food in the fine dining restaurant must based on their income and ability to buy it. 2.2.2 Social Value Social value is an alternatives association with one or more specific social groups and through positively and negatively stereotyped demographic, socioeconomic, and cultural- ethnic groups. The choice imagery can be measured in profile of social value. The choices involved tangible of highly products and also for goods or service need to be shared with others are often lead by social value. For example, consumer choose to eat at fine dining may be chosen more for social image than for their necessity. Hyman (1942) research about reference groups said that individual behavior is strongly can influence by their group membership. Rogers (1962) and Robertson (1967) also suggested that interpersonal communication and information dissemination can influence in consumer choice. 2.2.3 Emotional Value Emotional value is perceived from an alternatives capacity to arouse feelings or affective states. An alternatives get the emotional value when specific feelings continue those feelings. The feeling which associated with the alternative can be measured in profile of emotional value. Normally, goods and service are correlated with emotional responses and aesthetic alternatives. More tangible products have emotional value for example, some foods can rise the feeling of comfort through their correlated with childhood experiences. According to Dichter (1947) , carried out in motivation research that consumer choice may be lead by noncognitive and unconscious motives. A good and interesting of advertising and decoration of environment in marketing and promotion can enhance the emotional responses to marketed products (Martineau, 1958; Zajonc, 1968; Kotler, 1974; Holbrook, 1983; Park and Young, 1986). 2.2.4 Epistemic Value Epistemic value is an alternatives to enhance the curiosity, provide novelty, and satisfy a desire for knowledge. Epistemic value can get from questionnaire items referring to curiosity, novelty, and knowledge. Epistemic value usually provide the overall new experiences and the alternative can be chosen because consumer is already bored or satisfied with their current products or brand for example they want to try new type of coffee brand and they curious in visiting a new restaurant or they have desire to learn in experiencing another culture. According to (Katz and Lazarsfeld, 1955; Howard and Sheth, 1969; Hansen, 1972; Hirschman, 1980), concept of epistemic value has been influenced by theory of exploratory, novelty seeking, and variety of motives that suggested activating the product search, trial, and switching the behaviors. 2.2.5 Conditional Value Conditional value is a result by an alternative of the specific situation facing the choice maker. Conditional value presence of antecedent physical or social contingencies that can enhance its functional or social value. The choice contingencies are measuring profile of conditional value. The alternatives usually depend on the situation for example, some products of food only have when seasonal value or some of food only have once in a lifetime events. Many products of food have not more obvious conditional association. Hull (1963) and Howard (1969) recognized the importance of learning will take place a result of experience with a given situation. 2.3 Restaurant Attributes Customers have their own reason to want to return to any restaurant. They are constantly seeking quality, value and desirable environment away from the pressures of daily life. Offering good food and good service is not enough to attract and retain customers. To gain a competitive advantage, restaurants need to offer good value in a favorable ambience. According to Autys study (1992), there are ten factors influencing restaurant selection decision which are food type, food quality, and value for money, image and atmosphere, location, speed of service, recommend, new experience, operating hour and facilities for children. However, image and atmosphere were found to be the final choice between restaurants which were similar, and food quality and food type were the most important factor of restaurant selection. 2.3.1 Food Quality Quality of food which contain the fresh ingredients has already been rated as the most important reason why customers return to the restaurant (Brumback, 1998). Technology plays an important function to maintain the quality of food. It means computer chips in refrigerators or fryers or ice-makers need to always maintain the temperature to avoid from any waste of foods. 2.3.2 Price The price is to paid for a service is known as the level of quality to be demanded (Davis and Vollman,1990). Therefore, dining out becomes an integral part of consumers lifestyle, experienced consumers due to their expectations with regard to quality, while seeking a better value for their budget (Cullen,1994). 2.3.3 Environment Ambience may give restaurants competitive edge and restaurants need to update their dà ©cor and concepts if they want to attract more customers and compete with others successfully. Belman said that: Today, the most important thing is design and concept. The owner of restaurant need to invest money to create a good of decoration. It can be a good enjoyable and a fun dinner for social able people. 2.3.4 Location Location plays the main important factor in consumer decision making. It is a critical location aspect of marketing strategy. As Hughes (1996) said that: Good location allow ready access, can attract large numbers of consumers and significantly alter consumer purchasing patterns. As restaurant with very similar food offerings proliferate, even slight differences in location decision represent long-term financial commitments and changing poor locations can be difficult and costly. In a study by Bitner (1992) also found that convenience location and low prices are the top-ranked determinants of patronage. 2.3.5 Service Quality Nowadays, customers have also been concerned about the quality of service. Service quality is viewed as an antecedent to satisfaction. Since the customers interaction with the service provider and the service-producing process have a significant impact on the customers perception of service quality and subsequently influence customers satisfaction, marketing concept, such as customer satisfaction should be incorporated into the managements operational decision making process. 2.4 Factor Affect Restaurant Attributes Consideration The importance of the restaurant attributes according to three main factors which are restaurant types, dining out occasion and occupation, age and income. 2.4.1 Restaurant Types According to Lewis (1981), importance of restaurant attributes varied according to the four types of restaurant, which are categorized as fine dining, family, theme and convenience. Fine dining restaurant are friendliness of waiting staff, quality of food and environment. While family restaurant has top four choice variables are location, cleanliness, cost of food and speed of service. The theme restaurants are ambience factors, prestige, quality of food and location. 2.4.2 Dining Out Occasion Restaurant chosen according to dining out occasion which are categorized as a celebration for instance birthday, a special occasion and business meal. The top three determinants variables for celebration occasion are quality of food, type of food and menu item variety. Whereas for special occasion are cleanliness, service and type of food. On the other hand, for business meal are quality of food, prestige and ambience factors (Kivela, 1997). 2.4.3 Occupation, Age and Income Kivela (1997) has suggested that the determinant choice variables also changes according to occupation, age, and income segments. Financial people make their final restaurant choice on the basis of cost of food because of limited budget, location due to convenience, speed of service and quality of food. 2.4 Consumer Behavior in Food Service Industry Consumers have potentially to deals with all ways people that may act in their role according to study about the consumer behavior ( Schiffman and Kanuk, 1991). In practice of consumer behavior there are more tends to focus upon behavior that related to searching, buying, used the products and also services. Normally, consumer will be assumed as groups and they will be identified through geo-demographic noticeable quality and they also will take as true to have common attitudes. Food service literature consist example of segmentation surveys for example demand for different types of restaurant to different socio-economic segments. It shows that different of demographic and income will give the effect less of demand in consuming of food compared with population density of metropolitan areas. In this study the purchase behavior is related to the act of consumers towards restaurant consumption lifestyle and according to Blackwell (1998), consumer behavior in food service industry always related with how people buy, when they buy, what they buy and why they buy. He also stated that consumer behavior in food service is a subcategory of marketing that combines all the elements from psychology, sociology, socio-psychology, anthropology and economics. However, Gordon (1980) was used the behavioral sciences specifically for social psychology and sociology to understand more what customers wants and needs. He mentioned that through consumers psychological backgrounds can investigate the consumers in order to establish the extent to which factors like attitudes, motives and personality traits affect buying behavior. Whereas, social can influence such as class, status and also family. These were contributed to the understanding of consumer decision making. Mattila et al. (2002) had mentioned that the purchasing of food is a complex phenomenon. This is because the food must be available when consumer wants it, always at an affordable price and quality of food is in acceptable level. All of these will arrange consumer to select the right kinds of restaurant in order to eat their food for overall well being as well as to meet nutritional requirement. Food service industry has characteristics in an apart of the service sector which is in financial and professional services. However, Campbell-Smith (1967), it is much related with food choice and quality but at the same time food service offer meal experience to which many factors. Some of the restaurants characteristic in finding the consumers are choice and quality of food and drink, the price or value, service, atmosphere, location and convenience. (Auty, 1992; Gregoire et al (1995). However, Pettijohn et al. (1997) found the three most important for consumer in selecting the restaurant are quality, cleanliness and value. Whereas, the atmosphere in the restaurant and also the variety of menu which offered in the restaurant were not relatively important. Many studies showed that quality of food was very importance and consumers just see the service as several factors that influenced in quality of restaurant offered. According to Kara et al. (1995), demographic of consumer will give the different expectations of the type of food served, location of restaurants and also the cost of the food they spent. Not only the attribute values concerned with consumer satisfaction, but the wide value also can concerned in consumer satisfaction for instance, the choice making in the individual at the time they purchase is very significant point that can affect in restaurant consumers satisfaction. CHAPTER 3 METHODOLOGY 3.1 Introduction This research used the qualitative method which is individual interview. The information obtained from this research is beneficial to food service industry to understand what the consumers expect from them and can help food service industry to improve the satisfaction among consumers. In order to do so, methodology and procedure were designed to ensure high quality and standard of the study in obtaining reliable information. This study will include the location of the study, sampling procedure, data collection procedure, and research instrument and data analysis. 3.2 Location of the study This research need to compare the restaurant consumption lifestyle between student and working people, so the interview was conducted fully in Universiti Putra Malaysia. This place was used because there is a lot of Malay and Chinese students thus, reliable information can be obtained among the respondents. 3.3 Sampling Design The sampling method used in this study wwas convenience sampling. This sampling method is selected because it is convenience and relatively quick. The respondent will easy to get to do the interviewing. In this study, a total of respondents are 30. 3.4 Research Instrument In this study, the interview question was unstructured question and the answer will depends on the respondents. However, in this research there is still have question for the respondents. Respondents were asking about: Where and what kind of place or restaurant they eat most often. What type of food they eat often and why they choose that type. Respondents need to describe the food due to taste, colour and appearance. In what way the food is convenience for them. What the purpose or motivation factor they eating out? If they have special dish to eat, when they will go out, what they want to eat and why they want eat it. Did they will go only restaurant that sell of the food for example they will go Italian Restaurant or Pizza Hut if they want to eat Italy food. In one week, how many times they eating at the restaurant? What the criteria they will choose if they eating at the restaurant? Why? Price Quality Convenience Health 3.5 Data Analysis This research was analyzed through interview content. The data from interview need to transcribe carefully and then starting to analyze each of the respondent interview. The content analysis consists of reading and re-reading the transcripts looking for similarities and differences in order to find objective and to develop categories. DSLR or a Digital Camera? DSLR or a Digital Camera? The first mass use camera became available at the turn of the 20th century and can be traced back to the year 1900 and during the 20th century the pace of technology development in cameras and photography continued at an accelerated pace much like many other key technology developments, just like how a digital camera evolved into a DSLR. My question now is if you are willing to buy a camera, should you buy a DSLR or a Digital Camera? This is a question that you need to answer for yourself and this is why I am writing this essay, for you to decide. Let us now start with their picture quality, followed by their over-all performance, and finally their major differences. In DSLRs, one cannot always preview how a picture will be exposed; instead, metering and experience must be relied upon, unlike in digital cameras where in megapixel rating is the main thing to consider when determining a cameras quality. Digital cameras generally have small image sensors which mean that the quality that they produce is generally lower. This is slowly changing in some digital cameras but in comparison to DSLRs they still have a long way to go. Its worth saying however that if youre not planning on using your images for major enlargements or in professional applications that the quality of digital cameras can be more than enough for the average user, although based on the survey conducted a lot of people would rather prefer a DSLR than a digital camera regardless of their skills in photography. When it comes to over-all performance, a DSLR camera has a feature set that well suits both amateurs and more experienced photographers alike. Fast performance, incredibly detailed images, and a solid live view implementation making DSLRs an excellent choice for more experienced photographers. While DSLR cameras are perfect for professional photographers digital cameras on the other hand offers great ease of use for beginners for it packs long zooms, is compact and has a stylish body, and it is an excellent all around camera thats idea for travel and general purpose photography. Digital cameras are remarkably easy to use and produce great results when set to intelligent auto mode, but even though digital cameras seem to be easier, a majority of the people still prefers a DSLR. One of the major differences between a DSLR and a digital camera is what prevents people from buying a DSLR, its price. Even though DSLR prices have come down each and every year, they are still significantly more expensive than digital cameras considering that you might want to upgrade your lens or you may wish to add more lenses later and that this adds to the cost of a DSLR, but 19 out of 30 people still think that the DSLR is more cost efficient. Zoom is also one major difference, since all DSLR lenses can be removed from the camera body, the zoom mechanism are entirely manual. To change the view you have to twist a ring on the lens. This manual zoom actually results in a faster zoom. You dont have to wait for the motors to move the lens and out unlike that of the digital camera, you can just twist the zoom ring as fast or as slow as you like. You can clearly see the difference between a DSLR and a digital camera when it comes to size and weight because DSLRs are heavy and sizab le when you add a lens or two to your bag kit, you can end up with quite the load! Unlike in a digital camera, you are simply able to slip the camera in a pocket to the point of not even knowing youve got them with you! The strength of the conducted survey is that since a majority of the few people who answered the survey chose the DSLR as their best choice, it is possible that majority of the people will also choose DSLR as their choice since DSLRs are very popular to beginners and pros alike. The weakness of the survey on the other hand is that only a few people were able to answer it so we cannot fully investigate what the people really think about DSLRs and digital cameras. We cannot say that the DSLR is the best choice just because 30 people said so. Although the obvious choice for most is the DSLR but it is still best to ask individually rather than assuming that the DSLR is the best choice. If you want a portable camera that takes good enough pictures that youll mainly use for small prints, for uploading pictures on facebook, and one that youll mainly shoot in auto mode, Ill probably recommend a digital camera, but if youre after the image quality and youre desire is to use the manual settings, then I highly recommend a DSLR. I also recommend people to buy a digital camera first rather than jumping into a DSLR without even knowing the basic of taking pictures.

Introduction to the Study of Literature Essay

Rite of Passage is a poem written by the multi-awarded poetry writer Sharon Olds about a boy’s birthday party. By incorporating several literary elements, she was able to turn a simple and common theme into a more interesting one. In the first stanza of her poem, she writes â€Å"As the guests arrive at our son’s party† (line 1). From this line, one can assume that this poem is based on personal experience and she is referring to her son’s actual birthday party in the past. Thus, through this literary form, Olds retells that occasion in a more creative manner. See more: how to write an introduction paragraph for an essay Most verses in her poem are in a form of enjambment where the idea or thought in a certain line are interrupted and cut to be continued in the succeeding line: Hands in pockets, they stand around jostling, jockeying for place, small fights breaking out and calming. One says to another How old are you? —Six. —I’m seven. —So? (lines 5-8) Olds’ Rite of Passage is an embodiment of an irony, which is described as a conflict that exceeds the most ordinary and obvious connotation of words or actions. The irony of the poem is that the characters mentioned in her poem are little boys acting like brave grown-ups and pretending to be real men when they are actually playing a child’s game. Even if the little boys imagine themselves as adults, they are still perceived as children since they are engaging in an activity meant for the young of age. Walter â€Å"Walt† Whitman is an American poet who wrote the poem I Saw in Louisiana a Live-Oak Growing. It is a literary art composition inspired by the combination of nature’s beauty and the melancholic emotion of loneliness due to lack of friends or loved ones. As noticed in Whitman’s poem, it is written in first person where the speaker is narrating an event when he came across an Oak tree in Louisiana. One can assume that the person narrating the poem is the writer himself, retelling a past experience and relating emotions he felt at that time when he encountered an Oak tree. It can be observed that Whitman uses personification in his poem and describes the Oak tree in a manner that, if distinguished in the real world, would be impossible or contrary to reason. He writes that the Oak tree found by the character in the poem is â€Å"uttering joyous leaves of dark green† which suggests that the tree is feeling a human emotion of happiness or joy while it lets its leaves grow from its branches. Symbolically, it means that the tree is in good condition or in excellent health which makes it produce fresh dark colored leaves.

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Public And Private Sector Banks Essay Example Pdf - Free Essay Example

Sample details Pages: 12 Words: 3608 Downloads: 1 Date added: 2017/06/26 Category Finance Essay Type Compare and contrast essay Did you like this example? In this part we will comparatively analyze the public and private sector banks. So for the purpose of analysis we will use a sample of two banks from each public sector and private sector banks. Public sector banks Private sector banks National bank of Pakistan limited Habib bank limited Don’t waste time! Our writers will create an original "Public And Private Sector Banks Essay Example Pdf" essay for you Create order Bank of Punjab United bank limited As explained in the methodology part, we will analyze the bank by using the camel framework. And after analyze the bank we will rate each of them according to the results comes from analysis. In camel framework there are five different heads. We will take into consideration each of them one by one. Capital adequacy: In this part we have analyze capital portion of public sector anf private sector banks. Capital is most important part of banks balance sheet, because on the basis of capital banks issues the loans and advances. Capital portion also helps the bank in rainy days or recession. The Tier 1 capital postion of all four banks is shown in following chart. Tier 1 Capital: 2005 2006 2007 2008 2009 NBPL 32734347 48320611 64296830 73770137 85467027 BOP 5 6,585,03 10,475,865 14,357,020 3,361,351 - HBL 2 7,912,159 4 1,240,457 46,206,272 53,703,224 6 2,076,889 UBL 14,650,820 24,108,631 29,908,666 27,679,109 43,908,353 In public sector, NBP outperforms in tier 1 capital, as shown in the graph; tier 1 capital of the NBP is highest among the other three banks. In financial year 2009 the tier 1 capital of the is increased by 15.84%. NBP tier 1 capital is raised because in financial Year 2009 they have added the 9 billion inappropriate profits. On the other hand BOP Tier 1 capital is lower among the all, as we all familiar with the BOP is currently in different controversies due to which banks overall performance is under average so this all effect the banks Tier 1 capital .in financial year 2008 the bank Tier 1 capital is decreased by 76% because of the fact that 7 billion accumulated loss is deducted from Tier 1 capital. In private sector HBL, tier 1 capital is shows an continuous increasing trend over the five financial years. In financial year 2009 the tier 1 capital is increased by 15.59%. In HBL tier 1 capital, funds are t o raised through unapproapirte profit. In FY09 the 6 billion unapproate profit is added in tier 1 capital. In comparison with the public sector bank , HBL tier 1 capital is less as compared to NBP. But better as compared to the UBL and the BOP. The UBL tier 1 capital shows a mix trend over the five financial years. In financial year 2009 the tier 1 capital 58% , again due to the same reason unapproprited profit of 6 billion is added in tier 1 capital. Capital adequacy ratio: 2005 2006 2007 2008 2009 NBPL 15.59% 16.50% 17.72% 16.61% 16.88% BOP 12.78% 10.09% 9.69% 1.92% 0 HBL 9.93% 12.81% 12.33% 11.60% 13.07% UBL 9.25% 11.10% 10.85% 9.96% 13.18% CAR is a ratio of capital to risk weighted assets. The state bank of Pakistan in financial year prescribes a minimum CAR ratio of 10% to the banks. Capital adequacy ratio of the National bank of Pakistan is highest among the others in financial year 2009. From the financial year 2005 to 2009 the capital of the bank is increased with the average rate of 16%. And the risk weighted assets are also increased with same trend. Due to this CAR ratio will also show an increased trend over the year. The reasons to increase are the last year bank has raised an amount of 7 billion from unapropriated profit in capital. HBL has also maintained the higher ratio as compared to prescribe by the SBP. In financial year 2006 the ratio is increased by 29% due to the increase in the tier 1 capital. And in financial year 2009 again the ratio is increased by 12.6%. beacuaes of the increment in tier 1 capital by 6 billion. United bank limited has a CAR ratio of 9.25 % in financial year 2005 and its is increased to 13.18% in 2009.total capital is increased almost 2 times. The reason for the increment is the bank arranged funds through the revaulation reserve under the tier 2 capital head and the unapproaprate profit under the head of tier 1 capital. The bank of Punjab had a 12.78% CAR in 2005, but this was decreased to 1.92% in financial year 2009. The reason of decrese is the accumulated loss of 7 billion in financial year 2007. Which is to be carried forward in 2008 capital. Due to which capital is to be decresed by 58% in financial year 2008. This ulitimatily affects the CAR ratio of BOP. Debt to equity ratio: 2005 2006 2007 2008 2009 UBL 15.02 13.18 11.5 12.79 8.51 HBL 14.08541421 12.86186746 11.42424796 10.28144063 10.04877 NBP 8.27 6.69 6.05 6.22 6.94 BOP 14.12658301 13.65737077 13.94726359 35.11725574 The debt to equity ratio means that how much money bank is securely able to borrow over a longer period of time. According to general guidelines any bank debt to equity ratio above 50% should be looked more carefully that no liquidity problem arises. National bank of Pakistan debt to equity ratio shows a almost constant trend over the five years. And could not make any fluctuations above the average. In financial year 2005 the debt to equity ratio is 8.27% which is better than the industry average. Afterwards in financial year 2009 the ratio decreased by 16%. It was all due to increase in profits by 17%, these profits helps the bank to pay off its liabilities .If we compared the national bank debt to equity ratio with the private sector banks. In financial year 2009, the HBL debt to equity ratio is 10% and the debt to equity ratio of UBL is 8.51%. Bank of Punjab debt to equity ratio is almost constant till financial year 2007, after the year its will reached to highest level of 35%. And increased by 150% it was all due to loss of 7 billion in financial year 2007. Due to this loss capital decreased was also decreased by 56%. All these factors contribute to highest debt to equity ratio. In private sector the Habib bank limited, debt to equity ratio contiounly shows a decreasing trend over the five financial years. It was all due to increasing profits, this will help the bank to pay off its liabilities. From financial year 2005 to 2009 HBL profits are increased with an average rate of 11.90%. United bank limited, debt to equity ratio shows a mix trend over the five financial years. In financial year 2005, the ratio is 15% which is ultimately decreased to 8.51%. There is a continuous increment in reserves and surplus so that the ratio was continuously decreases and in the year 2009 it was decreased by 33%. Total advances to total assets: 2005 2006 2007 2008 2009 UBL 0.59014865 0.584289707 0.56468779 0.61290762 0.571351532 HBL 0.607829171 0.595803214 0.5523621 0.60744401 0.526544957 NBP 0.465345383 0.497707645 0.44649933 0.50502312 0.503125242 BOP 0.572391485 0.61459992 0.56975727 0.70857825 Total advances to total assets ratio shows that how much amount the bank hold in opposition to its assets. Here in NBPL, from 2005 to 2009, the ratio shows an increasing trend over the five financial years, except the FY07. The reason behind this the advances are shows an increases, but they could not meet up with the increasing rate of assets. In financial year 2007, the assets are increased by 20%. Except the financial year 2007, the ratio shows an increasing trend because of constantly increase in the advances. If we compare this ratio with private sector banks, overall private sector banks outperform this ratio. It was all due to better marketing skills and the customer service provided by the private sector banks. Bank of Punjab overall total advances to total assets ratio improved. But due to decrrrese in assets this ratio improved. In financial year 2007 assets are droped by the amount of 16 billion. Asset qualit y: NPL to advances: Asset quality of any bank is to be measured by the degree of nonperforming loans. This ratio clearly reflects the performance of the banks. A high level of NPLs ratio depicts the higher probability of credit defaults. National bank of Pakistan limited, NPLs to total advances ratio shows the mix trend over the five financial years. In finical year 2006, the ratio decreased by 16%. And afterwards in finical year 2009 the ratio shows an increase of 13.9%. if we compare this with private sector banks, it clearly depicts from the graph, that private sector banks will outperform in this ratio. Both the UBL and HBL NPLs to total advances ratio shows a decreasing return. BOP non performing loans shows a good percentage till financial year 2007. But afterwards due to haris steel mill case and due to such other cases. The ratio increased by 1600% and reached to the total level of 16.1% in financial year 2008. 2005 2006 2007 2008 2009 UBL 8.28 6.57 7.35 7.5 10.8 HBL 11.60% 8.00% 8% 7% 7% NBPL 14.26 11.97 11.35 12.58 14.34 BOP 1.3 1.13% 1.96% 16.31% Growth in non performing loans: Growth in non performing loans shows that every year how much loans adds to bad debts. National bank of Pakistan growth non performing graph shows a mix trend. In financial year 2005 the ratio decreased by 6.54% and afterwards shows an again upward trend. From 2007 onwards the state bank of Pakistan is asking different banks to implement the internal rating based approach under Basel accord II. But now of them with the exception of Habib bank limited have applied this approach till now.beacuse of the application of this approach habib bank limited is able control its non performing loans. In financial year 2009 habib bank limited has a lowest growth in non performing loans as compared to the industry. 2005 2006 2007 2008 2009 UBL -15.63% -4.16% 35.42% 26.47% 40.45% HBL -7.40% -24.40% 7.80% -1.20% 9.40% NBPL -6.54% 7.48% 5.68% 47.35% 25.61% BOP 60.75% 38.67% 129.10% 715% Management quality: The management quality of any bank is to be measured by decisions taken by the managements during the operations. Total advances to total deposit ratio: 2005 2006 2007 2008 2009 UBL 0.70813225 0.738066918 0.746567941 0.767515153 0.719646 HBL 0.738359363 0.68051225 0.711729091 0.761197203 0.661538 NBP 0.580110805 0.629862301 0.574952957 0.660843465 0.653287 BOP 0.719195934 0.735654652 0.697475366 0.802883678 This ratio shows the investment of the bank through approving the loans and through approving the loans against accepting the loan. In National bank of Pakistan , this ratio shows a mix trend over the years. In FY06 its is increased by 8%, due to the increase in the advances by 11%. Afterwards ratio shows the ups and downs over the years and in financial year 2009 the ratio again falls by the 3%. In financial year 2009 the advances shows an increase but can not match with rate of increase of deposits. If we compare NBPL ratios trend with the private sector banks. Private sector banks are outperform in this ratio, again due to better marketing skills and customer service helps private sector banks to gain more deposits and advances. Banks of Punjab this ratio is constantly increased except financial year 2007, in financial year 2007 this ratio shows an downturn of 5%.Afterwards in financial year 2008 the both the advnces and the deposits falls due to which this ratio shows a bett er results over the year. Business per employee: 2005 2006 2007 2008 2009 UBL 1892.03934 1658.94489 1894.996946 2042.389157 2270.593263 HBL 1753.26645 2090.81826 2386.89973 2615.383513 3200.221994 NBPL 2209.15227 2849.35174 3015.241139 2792.132334 2813.440801 BOP 274.595329 1745.18604 1830.829099 -3346.528393 Business per employee is a measure of how effienctily a bank is uilizizing its employees. Ideally every banks to be a highest Business per employee ratio because its donates a higher productivity. This is the positive sign for a bank that if business per employee ratio shows an increasing trend overtime. In National bank of Pakistan , this ratio shows an mix trend over the year. From financial year 2005 to 2007 shows an increasing trend. But after this till 2009, business per employee ratio drops by 6%. Even in financial year 2009 revenues are increased by 22%. But due to unnecessary hiring of employees companies overall productivity is decreased. In financial year 2009 , the no of employees are increased by 12%. If we compare, this performance with the private sector banks, private sector banks outperform in this ratio. In private sector banks mostly hiring is to be done on merit basis and hire the optimal number of employees, due to this overall productivity of the private sector banks is improved in FY09. The business per employee ratio of the Bank of Punjab shows a very different trend with the industry. From financial year 2005 t0 2007, the banks business per employee ratio shows an increasing trend. But after 2007 due to acculmatled loss of 7 billion companies overall business per employee ratio drops by 282%. It was all due to the internal controversies such Hamish khan case and due to the 150% increase in the non performing loans. Overall in this ration HBL outperform due to contiouns increasing trend over the five financial years. Then UBL also follows him in this ratio. Profit per employee: 2005 2006 2007 2008 2009 UBL 635.987973 616.060349 596.8172811 559.1196659 657.4657774 HBL 549.431261 555.039757 833.2998064 713.1840548 937.2536961 NBPL 919.375253 1214.23397 1351.926451 1251.89243 1118.388971 BOP 146.43881 146.43881 1140.779702 -2420.477623 Profit per employee is a measure of how resourcefully a particular bank is using its employees. In national bank of Pakistan, this ratio again shows an mix trend .due to unnecessary hiring in financial year 2007, the companys overall profit per employee ratio declines 7.4%. in financial year 2009 the companys overall number of employees are increased by 8%.If we compare this ratio with the private sector banks both the private sector banks shows less profit per employee ratio .But shows an overall increasing trend. HBL profit per employee ratio is 549 in FY05 which is to be increased by 70% in FY09. If we compare this performance with BOP, the BOP ratio again shows an downturn in FY07 and then in financial year 2008 the companys profit per employee turns to negative. UBL profit per employee ratio shows a mix trend over the years. In FY05 the profit per employee is 635 which is to be declined in FY06 and FY07 due to the extra hiring of employees. Ratio shows an downturn. But i n FY09 the banks profits per employee ratio shows an increased return of 17% . its was all due to improved profits in financial year 2009. Earning and profitability: Earning and profitability of bank is the very important measure, in order to know about the actual position of the bank. banks overall earning depends upon the advances and the investments made by the bank during the financial year. Return on average assets: 2005 2006 2007 2008 2009 UBL 1.71 2.24 1.59 1.38 1.48 HBL 1.84 2.67 2.9 2.99 3.12 NBPL 2.25 2.81 2.72 1.96 2.07 BOP 2.65 2.76 2.22 0.05 Return on average assets means how much profits is to be earned during the years with the average assets. Higher ROA is good for the bank , because if it is higher we can say that the return of the bank is high. In national bank of Pakistan , return on average assets shows mix trend over the years . in financial year 2006 the ratio is increased due to by the 24%. Because the profit after tax of the banks shows an increase of 5 billion. Than after wards the increase in profits could not match with the increase in average assets due to this ratio shows an declining trend over the next two financial years . In financial year 2009, the ratio shows an increase of 5% due to the increase in profits by 3 billion. If we compare NBPL returns with private sector banks. HBL shows an constantly increasing returns over the five financial years. In financial year 2009 the ROA is increased by 5%. HBL return on average assets returns are smooth with respect to other private sector banks. UBL overall returns shows a mix trend in financial year 2006 shows an increase of 30% due to the increase in profits after tax. After 2006 returns moves towards down phase and in financial year 2009 the return on average ass ets falls to 1.48%. BOP return on average assets shows a smooth return till 2007, but in financial year 2008 due to acculmated loss of 7 billion, the returns falls below average and return on assets reached to the level of 0.05%. Return on average equity: Return on equity means how much return is to be earned with the given equity. National bank of Pakistan, ROE shows an mix trend over the five financial years. In 2006 ROE drops by 13% and then shows an increase of 35%. In financial year 2009 ROE drops by the 3%.If we compare the performance of NBPL with private sector banks. Privte sector banks outperform in this average due better profits in private sector. And also the rate of increase of profits. BOP shows an better ROE than the industry till 2007, but the after 2007 due to downfall of profits by 7 billion the ROE fall below average and reached to the level of 1%. 2005 2006 2007 2008 2009 UBL 14.09 19 19.81 31.71 27.46 HBL 37.3 25 30.8 28.3 25.4 NBPL 16.41 14.13 19.2 21.58 20.82 BOP 42.03 43.64 34.5 1 Interest income to the total income: 2005 2006 2007 2008 2009 UBL 0.716748 0.72747491 0.66295105 0.64915587 0.632425076 HBL 0.747858 0.736826581 0.7777721 0.71816306 0.763233446 NBPL 0.692451 0.695509498 0.68093425 0.6137724 0.584726766 BOP 0.701361 0.555791363 0.23994536 1.30074592 Interest income to the total income ratio shows that how much income is to be earned through earning assets. This ratio was continuously decreased from financial year 2005 to 2009 in NBPL. Due to this its shows bad effects on profits because interest income is major income of the bank. the growth of net interest income is attributed from the earning assets. The NBPL earning assets are reduced over the five financial years, due to this it affects the overall interest income. In financial year 2009 the earning assets are increased but the interest bearing liabilities are also shows an increasing trend over the years due to this overall interest income shows a down turn. If we compare this ratio of NBPL with the private sector banks. HBL interest income to total income ratio shows an increasing trend over the years. Because of the fact that HBL overall earning assets are increased by 56% in financial year 2009. On the other hand UBL interest income to the total income ratio shows an decreasing return over the years. But still better than the industry average. And if we compare with the public sector banks. UBL interest income to total income ratio shows better results. BOP interest income to the total income ratio shows an decreasing return. Due to controversies attached with the BOP , this will seriously effect the banks overall interest income. And In financial year 2009 the banks ratio drops to the point 1.30% below than the average. Other income to the total income: 2005 2006 2007 2008 2009 UBL 0.283252 0.27252509 0.33704895 0.35084413 0.367574924 HBL 0.252142 0.263173419 0.2222279 0.28183694 0.236766554 NBPL 0.307549 0.304490502 0.31906575 0.3862276 0.415273234 BOP 0.298639 0.444208637 0.76005464 -0.30074592 Fee based income and dividend income is major banks other income portion. The bank generates high fee and commission income through innovative products and by adapting new technology. The higher ratio indicates higher fee based income. The ratio in NBPL increased from 30% to 41% in financial year 2005 to 2009 which shows an earning from government securities and through providing innovative products are to be increased. From financial year 2007 to 2009 this ratio increased by 30%. If we compare this ratio with private sector banks, its clearly shown in graph that NBPL out performs in this ratio. HBL, other income to total income ratio is improved over the financial years. But still falls behind the NBPL ratio. After NBPL the bank which performs better is UBL, UBL other income to total income ratio is improved over the five finical years. From financial year 2005 to financial year 2009. The ratio will increase from 28% to 36%. BOP again shows the same results, in financial year 2005 the ratio is 29%.and after wards in 2006 the ratio increased and reached to level of 44% . this shows that BOP interest income share drops 40% in just one year. After in financial year 2009 the ratio turns to negative portion in the graph. Due to decrease in total income by 205%. Liquidity: Liquidity for a bank means the banks ability to meet to financial obligations as they come due. In order to meet the short term obliagations its very necessary for every bank to maintain some ratio of liquid assets. Liquid assets to total assets: Liquidity for a bank means ability to meet the financial oblilagations. Higher the ratio higher the ability to manage liquidity risk. In NBPL this shows mix trend over the five financial years. In financial year 2006 due to the decrese in market tressury bills by 15%, the ratio falls by 23%. Afterwards in 2008 ratio increased by 53% due to the 55% increase in pakistan investment bonds and 34 % increase in the market tressuryy bills. If we compare this performance with the private sector banks, private sector banks can also depicts the same trend. From financial year 2005 to 2007 the ratio shows an increasing trend. After ulitimatily ratios falls. And in financial 2009 both the UBL and HBL ratio falls to 16%. BOP, liquid assets to total assets ratio shows a different trend with respect to the industry. In financial year 2005 the ratio is 4%. Which is to be increased to 21% in financial year 2007. But again in financial year 2008 drops to 3% below than average. In finical year 2008 ratio falls by 600% .it was all due to the fall of market tressury bills from 44 billion to 1 billion. 2005 2006 2007 2008 2009 UBL 12% 11% 18% 18% 16% HBL 17% 18% 22% 14% 16% NBPL 17% 13% 20% 16% 15% BOP 4% 8% 21% 3% Liquid assets to total deposits: The ratio shows how much part of the deposits is invested by the bank in the liquid assets. Again this is ratio is very important in order to know about the liquidity risk position of the bank. In NBPL, the ratio was 20% in financial year 2005 and after some flucations its was 19% in financial year 2009. The deposits were increased by 34% and the liquid assets are increased by 23%. Due to this ratio drops by 1.1 % in financial year 2009. If we compare this performance with the private sector banks. HBL liquid assets to total deposits ratio shows a mix trend over the year. In financial year 2005 ratio is 20% and after wards in financial year 2009 the again drops to 20.3%.UBL overall ratio shows a mix return over the years. In financial year 2005 the ratio is 14% and afterwards in financial year 2009 the reached to level of 20%. Bank of Punjab overall ratio trend as again opposite to the industry. In financial year 2005 the ratio is 5% and in financial year 2007, the ratio reac hed to the level of 25% due to the unexpected decrease in the deposits. The ratio increases and shows and unexpected result in 2007. After wards in financial 2008 the ratio again drops to 3%. 2005 2006 2007 2008 2009 UBL 14% 14% 24% 22% 20% HBL 21% 20% 28% 18% 20% NBPL 21% 17% 26% 20% 20% BOP 6% 10% 25% 3% Government securities to total assets: 2005 2006 2007 2008 2009 UBL 8% 9% 10% 11% 10% HBL 9% 11% 13% 14% 14% NBPL 10% 12% 13.50% 14% 14.90% BOP 6% 7% 19% 2.5% Government securities is the very important liquid assets for bank. This will help them to maintain the liquidity position of the bank. This ratio shows that percentage of government securities in total assets. If this ratio is higher its clearly shown that bank is investing more in government securities. In national bank, the ratio is 10% in financial year 2005 and constantly shows an increasing trend over the years .in financial year 2009 the ratio is 14.90 so this is clearly shown that national bank management is investing more in liquid assets in order to maintain liquidity position. If we compare the performance with the private sector banks, the ratios depicts that HBL is also constantly investing more towards government securities. From financial year 2005 to 2009 the ratio increased from 9 % to 14%. But still 6% less than the public sector bank. United bank limited, government securities to total assets ratio depicts mix trend over the five financial years . in financial year 2005 ratio is 8%.which is to be increased to 10% in financial year 2009. Bank of Punjab, ratio overall depicts different trend as compared to the industry average. In financial year 2005 ratio is 6% and financial year 2008 the ratio drops to 2.5%. Due to the drop in assets value by 21%.