Ghulam Murtaza Final Report

8/12/2019 Ghulam Murtaza Final Report

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EXECUTIE !UMMA"#

". Habib Bank limited is a well#reputed organization and is leading bank of !akistan.

$ince its establishment, it has expended its network to great extent. HBL is performing

all the functions of the commercial banking and has based its management on the

functional basis.

%. &he main purpose of the study is to compile the internship report, and also to get some

practical exposure to the market. &o serve the main purpose of the study, to

compile the internship report in a shape, collected primary data as well as

secondary data.

'. (ain problems identified during the course of internship are as following

a) *bsence of proper information technology tools

b) Back of efficiency of employees.

c) !resentation styles of bank specially at retail level is not good.

d) (anagement style is centralized.

&he recommendations are as follow+

. establishment of -ata bank at onal office, so that information can be obtained intime.

/. !roper designing of the obs should be performed similarly clear#cut division of work

to increase efficiency.

0. $pecial attention should be given to exterior1interior layouts, cleanliness and office

futures.

-ecentralization of authority at different level to fasten the decision making process.

ii



TA$LE OF CONTENT!

!.No To%i& 'a No

Acknowledgement I

Executive Summary Ii

Table of Contents Iii

List of Acronyms Vii

Cha%tr INT"ODUCTION TO T*E "E'O"T +

"." Background of internship "

".% !urpose of $tudy "

".' $cope of $tudy "

". 2esearch (ethodology %

"./ $cheme of study %

Cha%tr ,- INT"ODUCTION TO $ANK

%." 3volution of banking

%.% 4rigin and development of banking

%.' (odern definition of bank /

%. Banking in developing countries 0

%./ -evelopment of banking in !akistan 0

%.0 History of habib bank limited 5

%.5 6ontribution to national development "7

%.8 2ole in private sector "%

%.9 :rowth stages "%

%."7 :rowth $tages "'

%."" (ission $tatement "

%."% ;ision $tatement "

C*A'TE" ,/ O$0ECTIE!1 'OLICIE! AND FUNCTION! OF T*E

*A$I$ $ANK LTD

"/

'." 4bectives of Habib Bank ltd "/

iii



'.% !olicies of habib bank ltd "/

'.' 4perational policies "0

'. marketing policies "5

'./ (*<*:3(3<& !4LI6I3$ "5

'.0 functions of habib bank limited "8

'.5 =inancing "8

'.8 discountirng bills of exchange "9

'.9 agency services to customers "9

'."7 general utility services %7

C*A'TE", *$L AT A GLANCE %%

." organization structure %%

.% an overview of management %%

.' retail banking group %

. organizational set up of Habib bank limited %/

./ organizational structure of HBL %5

C*A'TE" ,2 DE'A"TMENTALI3ATION -4

/." deposit department %8

/.% 6L*$$I=I6*I&4< 64<<36&3- >I&H -3B2I$ '7

/.' 6*$H -3!*2&(3<& '7

/. remittances department '%

/./ accounts department '/

/.0 *-;*<63$ -I;I$I4< '0

/.5 foreign exchange department '9

C*A'TE",5 FINANCIAL ANAL#!I! /

0." 2atio *nalysis '

0.% 2*&I4 *<*L?$I$ /

0.' ;32&I6*L *<*L?$I$ /%

iv



0. H42I4<&*L *<*L?$I$ /8

C*A'TE",6 CONCLU!ION AND "ECOMMENDATION! 5/

5." 6onclusion 0'

5.% 2ecommendations 0'

"EFE"ENCE! 05

v



LI!T OF AC"ON#M!

A7C A&&ount

*&( *utomated &eller (achine

-- -emand -raft

-=Is -evelopmental =inancial Institutes

=6? =oreign 6urrency

=&$ =unds &ransfer $ystem

HBL Habib Bank Limited

IB&$ Inter Branch &ransaction services

L6? Local 6urrency

(-I (anagement -evelopment Institutes

(& (ail &ransfer

2= 2unning =inance

$$6 $pecial $avings 6ertificate

$B! $tate Bank of !akistan

$;! $enior ;ice !resident

$(3 $mall @ (edium 3nterprise

&& &elephonic &ransfer

A$ Anited $tates -ollar

vi



vii



C*A'TE" , +

INT"ODUCTION TO T*E "E'O"T

1.1 BACKGROUND OF INTERNSHIP

&he prime purpose of this internship is to get practice of what we have learned in business

administration, this report is based on HBL which was established in "9" and now till this time

it is most large sector in commercial banking in !akistan, with different products and services.

1.2 PURPOSE OF STUDY

&he main purpose of this study is to get the overview of the HBL and complete the report withdifferent data.

" &o analyze how to have a customer service and when to adopt which strategy.

% *nother purpose to get the practice what we have learned in the whole course.

' &o improve the communication and create innovative thinking about the management

&o create the analytical skills and develop the $>4& analysis in order to improve the

working standards and tries to cover the :ap developed by the strategies.

1.3 SCOPE OF STUDY

&he HBL operates with general banking systems .*nd their operations include

"+ 2emittances

%+ -eposits

'+ =oreign exchange

+ *dvances.

1



1.4 RESEARCH METHODOLOGY

&his report is based on 8 weeks of internship. It defines the procedures to be followed during the

course of internship report. I have used different sources of data i.e. both primary and secondary

sources of data to develop the internship report. &he main source of data collection was my personal observation and discussions with my other internee. >andering within different

sections of the bank helped me out to cover this report with the proper information.

1!1 "rimary #ata collection tec$ni%ue

• !ersonal udgment

• By asking the Cuestions from the management

• practical experience with staff

• By understanding from the staff

1!& Secondary #ata collection tec$ni%ue

• (anuals

• Dournals

• (agazines

• *nnual reports

• 2eference books

• Brochures

1.5 SCHEME OF STUDY

&his report is composed of 8 chapters. 6hapter " is based on the introduction of study, which

includes Background of study, purpose of study, scope of study, methodology of study and

scheme of study.

%nd chapter is based on the Introduction of Bank, which include evaluation of Banking 4rigin of

Banking, banking in developing countries, development of Banking in !akistan. History of

2



Habib Bank Ltd, contribution to <ational development, role in both !rivate and !ublic sector and

its growth up %777.

'rd chapter consists of obectives, policies and functions of HBL, bank policies, Eoperational,

(arketing and management) and the description about function.

th chapter is composed of FHBL at a :lanceG, which include the organizational structure, an

overview of (anagement, 2etail Banking :roup and organizational setup of Habib Bank Ltd.

6hapter#/ is composed of F-epartmentalizationG which includes the -eposit department, cash

department, remittances department, clearing accounts department, advances department and

foreign exchange department.

6hapter 0 is composed of financial analysis which include ratio analysis.

6hapter 5 consists of critical analysis and $>4& analysis and in chapter 8 I have discussed

conclusion and recommendations.

3



C*A'TE"8 -

INT"ODUCTION TO $ANK

-.+ EOLUTION OF $ANKING

ItJs not too a lot been recently determined regarding the way the phrase bank started. $everal

experts say that this phrase is derived from the word what bancus or perhaps banCue which

suggests some sort of bench. &he explanation of this source will be attributed to the fact the

particular ews inside lombardy transacted the business of dollars swap in benches out there

place. *s an aside the word bankrupt will be asked are actually progressed because of this train.

&his oppositions of this thoughts and opinions state that in case it absolutely was so, after that

precisely how this that this italian language dollars changers were never is referred to as

banchierei in the centre a long timeK

*dditional researchers retain the thoughts and opinions that this phrase bank is derived from

the particular in german or perhaps genoa phrase back, which suggests oint inventory fund.

-own the road, once the germans busy key part of madeira, the word bank has been italicized

directly into bank. However no exact source will be is available, along with which in turn

implies that precisely how previous most of these procedures tend to be.

2.2 ORIGIN AND DEVELOPMENT OF BANKING

Banking as profession is very old in history, as early as %777 B.6 some sort of banking had been

developed by the Babylonians. &hey used their temples as their banks and the priests acted as the

financial agents. But the spread of disbelief in religion destroyed the public confidence in

depositing money and valuable in temples.

In the middle of "%the century banks were established at ;enice and :enoa. *gain in "th

century, their campus number of money lenders in =lorence. &hey receive money on deposits

and were lenders of money.

:enerally your message FBankG may be arose in (adeira. In the heart of twelfth one hundred

year there was clearly a terrific financial doom and gloom throughout (adeira as a result of war.

4



&o meet the war expenditures the us government from the period enforced a new reCuired bought

bank loan in citizens from the country for the curiosity associated with /M year. &his kind of

loans ended up appreciates while FcomparaG (intuo and so forth.

?our advancement associated with financial may be split directly into various periods. It isadditionally mentioned which the word Bank may be produced from the Italian word FBancoG

which means a new part. ?our Dews income loan companies throughout (adeira used to transact

their own enterprise settings in offices with various marketplace sites, whenever at least one used

to forget to meet up with his or her bills, his or her FBancoG or perhaps part can be broken with

the angry credit card companies. ?our message FbankruptG looks like itJs originated from broken

Banco. 6onsidering that the financial system may be originated from income loaning enterprise,

it can be deservingly fought which the word FbankG may be originated from word Banco.

&he "st stage throughout advancement associated with financial seemed to be acknowledging

associated with remains associated with cash via men and women. ?our :oldsmiths used to

difficulty standard bank notes your money can buy put into the account with these. &his is the

next stage inside the advancement associated with financial. :etting curiosity from the

depositors started to let them have curiosity. *nd inside the final stage, they helped the

depositors the overdraft features.

>ith the verse of time, the activities associated with commercial banking companies possessdrastically improved.

2.3 MODERN DEFINITION OF BANK

Banks are the companies Fwhich transact the business of bankingG. &he companies operate in

accordance with the provisions of the Banking companies ordinance, "90% section /Eb), which

states that Fbanking means the accepting, for the purpose of lending or investment, of deposits of

money from the public, repayable on demand or otherwise, and withdrawal by cheCues, drafts,

and order etc.

2.4 BANKING IN DEVELOPING COUNTRIES

&he national financial system of which characterizes developing nations around the world has an

essential position inside finding out the type in the bank system. >ith capitalist nations around

5



the world a method of individual company inside bank prevails, in a number of socialist nations

around the world Efor illustration, 3gypt as well as $udan) most banks are nationalized. $ome

other nations around the world have patterned on their own following your liberal socialism of

3urope, inside !eru as well as Nenya, for instance, government#owned as well as independently

owned banks coexist. In lots of nations around the world the particular bank system developed

beneath colonialism together with banks owned by means of organizations inside the parent

nation. Asing some, for example ambia as well as 6ameroon, this particular customs extended,

despite the fact that changed, after declination. >ith other nations, for example <igeria as well

as $audi *rabia, the particular rise of nationalism resulted in mandates intended for bulk

property from the native inhabitants.

Banking institutions inside developing nations around the world act like their counterparts inside

developed nations, business banks accept as well as shift debris and is effective financial

institutions, specifically short#term reCuirements. $ome other personal intermediaries, specially

government#owned development banks, organize long#term lending options. Banking institutions

are often used to financial federal costs. &he actual bank system can also play a serious position

inside funding exports.

In the less well off nations around the world a wide#ranging but simple non#monetary industry

commonly continues to occur. It does not take exclusive process in the bank community in order

to inspire the use of funds as well as produce bank behavior on the list of community.

2.5 DEVELOPMENT OF BANKING IN PAKISTAN

In order to regulate the growth of banking on sound footings, the following measures were taken

to develop the banking system in !akistan.

• &he state Bank of !akistan, which is the central bank of the country, was established on

"st

, Duly "98.

• &he <ational Bank of !akistan was established on <ov. %" st, "99. &his bank is to serve

as an agent to the $B!.

6



• &he industrial -evelopment Bank of !akistan EI-B!) was set up on *ugust " st, "90" with

a paid up capital of 2s./crore. &he agricultural -evelopment Bank of !akistan E*-B!)

was set up in "90". It provides short. (edium and long#term loans to the farmers.

•

In Danuary "95 all the commercial banks were nationalized. &he weaker commercial banks were merged with the stronger ones and in all / maor banking companies were

formed. (6B and HBL have again been privatized "99".

• &he !akistan Banking 6ouncil was set up for coordinating the activities of the

nationalized commercial banks. &he banking council formulates policies and guidelines

for the banks.

• Interest has been eliminated from the banking transactions from Duly " st, "98/. &he banks

are now accepting saving deposits on profit and loss sharing basis. (udarabah and

leasing companies are also operating in !akistan.

• &he nationalized banks due to many weaknesses such as overstaffing, deterioration in

customers service, rising bad debts, loans on political basis etc, are being gradually

denationalized. (6B was privatized in *pril "99".

• &he permission to open investment bank will go a long way in providing capital for the

industrial proects.

• &he government of !akistan has also liberalized the exchange and payments procedure.

&he !akistanis, firms, companies can now maintain foreign currency accounts in !akistan

on the same basis as non#!akistani can.

2.6 HISTORY OF HABIB BANK LIMITED

HBL was established on %"st, *ugust "9", a very important day in the economic history of the

(uslims of India.

=our Habib brothers, Hamad Habib, -awood Habib, (uhammad *li Habib and :hualm *hamd

Habib, formed it. Like all the great people and institutions it had a very humble beginning.

In "95, HBL shifted its registered office to Narachi. It was a time when the independence plan

of India had been already announced. 6onseCuently there was a serious risk on the banks for

7



transfer of funds of accounts. !akistans banking system at that time consisted principally of

about "9 non OIndian foreign banks, no higher in status they small branch offices, whose policies

were controlled by their Head 4ffice.

&hese banks were engaged solely in the movement of export crops and had only limited interest

in the fortunes of new born state. &he only !akistan institution was the Habib Bank, which had

transferred its head office from Bombay to Narachi and the *ustralia Bank, which had been

functioning in the !akistan territories prior to Dune "95. 4n *ugust %/, "99", Habib Bank

completed its /7 years of service. &he bank has now framed into one of the most dynamic

financial organization having "%/ domestic branches and // international branches enabled

HBL to provide comprehensive services to meet customers need. &he history of HBL can be

divided into following "7 phases.

+. Th Fir9t 'ha9

&he "st step including eight a long time through "9"#5 had been the most crucial which has a

very humble commencing. &his labored inside a pre udicial society, doing work since (uslim

=inancial institution, experienced complications but proceed success..

-. Th !&on: 'ha9

&he second phase is important because HBL shifted its Head 4ffice from Bombay to Narachi

according to the desire. Its of Puaid#e#*zam (.* Dinah to work for the namely independent

(uslim $tate.

/. Th Thir: 'ha9

&he idea observed an immediate expansion of it is branch circle from the state. * number of

typical of program had been established such as improving services, increasing bank time and

enhancing the overall look of the offices. (ost of these actions popularized bank between men

and women from most guides of lifestyle..

. Th Fourth 'ha9

In "9/', marked the construction of the first Head 4ffice building at Habib $Cuare Narachi along

with continued solid business and profitability.

8



2. Th Fi;th 'ha9

HBL Eoverseas) merger with HBL in "9/5. In "9/8, witnessed the consolidation and beginning

of mechanization and modernization of branches.

5. Th !i<th 'ha9

>ith "900 was the season regarding $terling silver Dubilee get together. &his particular got a

significant influence on the regular man that the traditional bank emerged throughout !akistan

and when previously the divisions controlled abroad, that has a fresh graphic regarding FBest

illustration regarding greater services.G.

6. Th !=nth 'ha9

4n the occasion of its '7th *nniversary marked the shifting of the Head 4ffice from Habib

$Cuare to Habib Bank !laza, the tallest building in !akistan E%' floor)

4. Th Eihth 'ha9

>hile using the nationalization connected with !akistan bank on initial Dan "95 the full notion

of business oriented bank throughout !akistan was updated to provide all the important be an aid

to smaller industrialists, buy and sell and also maCui berry farmers. In "95/ normal bank was

combined along with HBL..

>. Th Ninth 'ha9

6ommences with all the /7th many years their everyday living entitled your 4lder Dubilee yr

E"99") Habib =inancial institution seemed to be the best !akistan lender operating around the

world wide having a good functionalistic out there appear along with organizing identified along

with acclaimed each nationally for the best amounts along with worldwide..

+?. Th Tnth 'ha9

?our tenth stage creatures using adustments within leading supervision within "995 intended for

task specific tasks ust like proper sizing, recovery regarding financial obligations, fixing

efficiency and so forth. completely new supervision provides completed the particular main part

of the given ob resultantly progress can be viewed within functions of the financial institution in

9



addition to ideally the financial institution shall demonstrate breathtaking changes within nights

into the future..

&he banks steady growth not only signified the implicit confidence and trust placed in the

integrity and dedication of the Habib family but also was a victory and confirmation of their

vision, foresight, acumen and exeriserr in field of banking.

&he role of Habib Bank EHBL) has played in making the (uslims familiar with banking

profession and practices, the method of large#scale commerce and industry and the intricacies of

financials for big business is too well known to need any first general manger recapitulation.

&he fact is that EHBL) has performed a great service to the (uslims of this sub continental in

more ways then one in ordinarily known and accepted.

2.7 CONTRIBUTION TO NATIONAL DEVELOPMENT

&'1 (anking

&he !akistan banks associations were registered in "90' as a trade association with the ministry

of commerce. It remained fairly active until "95 but has been dormant since. In "99/ a new

3xecutive 6ommittee has been elected headed by (r. *bbasi as chairman. &he chief 3xecutive

of I6!, ABL, (6B and I-B! also serve on this panel !B* has "' financial institutions.

E=oreign and local) as members. $ince becoming president. &hese include establishment of a

bankers club, bankers foundation. $tudy on pay and perCuisites of executives Puarterly bulletin

and seminars1workshops. &he foundation will provide an effective platform for financial

institutions to discuss policy issues with government agencies and formulate action plans for the

development of the profession and banking industry.

&'& Environment

Habib bank Ltd. !akistan is in the forefront of efforts aimed at protecting the environment from

degradation. In collaboration with !akistan 3nvironmental protection council it is a part of an

overall plan for the forestation of more than "%7,777 acres. HBL has taken responsibility for

FgreeningG or designated areas in the districts of <awabshah and (ansehra through a campaign

of tree plantation.

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&') *ealt$ Care

&he bank is conscious of the inadeCuate health coverage available in developing country like

!akistan. In order to play its due part in development of this vital sector, HBL has recently

contributed 2s." million to assists Lady 2eading Hospital, !eshawar with its work, in the same

spirit, 2s. 877,7771# have been made available to the =atima foundation Narachi to aid its blood

transfusion and other patient welfare activities.

&'! S+orts

Habib Bank Ltd. !akistan is undertaking the construction of 2s./7 million sports complex. * six

acres site has been produced at 6lifton, Narachi for this purpose. &he complex Qwill include

modern cricket ground with a seating capacity of 0,777. * gymnasium, s swimming pool,

sCuash1tennis courts and other infrastructure of international standard form an integral part of the

complex. &he work on the complex already afoot and the anticipated period of completion is two

years.

HBL has reached an understanding with the :overnment of N!N to assist in the development of

a 57 acre site at Hayatabad E!eshawar) for a multipurpose community center1park for the youth

of the area.

HBL has also sponsored among others, such events as the !akistan masters 4pen "99/ as part

of the *sian circuit of the *sian !rofessional :olfers *ssociation. &he annual tours de !akistan

cycle race E"99/) and the first ever camel race in the country. In these activities the bank has

been involved in provision of prize money *wards1trophies and kits for participating sportsmen.

2.8 ROLE IN PRIVATE SECTOR

Habib bank seemed to be the particular leader, which often started out twigs all over !akistan as

a way to provide fund and other establishments towards the company local community.

HBL provides unveiled specific brand#new products and services after starting its operations

with !akistan. It turned out first commercial standard bank to be able to transfer the particular

automated eCuipment which can be utilized within the maor finance institutions associated with

enhance places. &hese types of eCuipment possess facilitated to the standard bank to handle its

growing company and also Cuickly expanding customers.

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&he HBL provides unveiled brand#new establishments similar to night consumer banking gift

cheCues, rupee travelers cheCues, plastic card program, temporary and also extended techniCues

for marketers, center patti plan, sntd monthly cash flow plan. >ith regard to maor benefit of

buyers associated with its posts regular stock exchange prices averages. *dditionally, it

problems some sort of monthly publication through title associated with company brand#new

support. *dditionally, it reveals a residence vacation. Habib bank can be thoroughly geared to

monitor the united states financial system and also perform its credited purpose with delivering

prosperity towards the land.

2. ROLE IN PUBLIC SECTORS

HBL usually added towards the open industry in the country. Habib lender is playing a vital part

in the open industry. $oon after partition, the very first important connection regarding HBL with

all the federal government has been your sponsoring of the !akistan money firm ltd. 6ollectively

with all the main and also provisional federal government regarding financing regarding natural

cotton. &he lending company usually presented personal and also tech support team in order to

open industry financial institution likewise affiliated itself together with large#scale tasks for

instance >arsak dams undertaking, >apda. &hal progress 3xpert, N-*, by giving budget and

also other facilities.

2.1! GRO"TH STAGES

>hen Habib Bank Ltd. >as established in "9" it had only ' offices in undivided India at

Bombay, 6alcutta @ -elhi. *t the time of partition, the bank decided to transfer its Head 4ffice

EH4) from Bombay to Narachi. &he gigantic movement of men and money was in a state of

doubt and confusion. But, with clear sightedness and true signify, the bank gave immigrants the

boldest remittance facilities which save (uslims wealth in India from greater annihilation.

*nother important service that this timely influx performed was to fill the intensifying vacuumsthat the exodus of Hindu >ealth from !akistan ruthlessly created.

>hile !akistan was getting on its economics feet, the bank played the most creditable role. Its

large subscription to :overnment loans, its generous support to institutions, like the !akistan

Industrial -evelopment corporation Enow the industrial development bank of !akistan) in it

12



nascent stage and its continuous and uninterrupted support to every form of industry and nation

building proects are the story of singular decimation. &he reward is the satisfying knowledge of

the good that has been achieved and the increased opportunity to serve.

<ew !akistan bank secured their early nucleus of officers and staff largely from trained

personnel of Habib Bank.

&his is itself was a service to banking in !akistan in general apart from the many first that it

secured on the banking horizon of the country such a school banking schemes. *gricultural

6redit, -eposit :rowth 6ertificate, 6redit 6ards not to mention the towering contribution of

introducing automation through computers on the banking scenario.

&he story of the banks growth fills every nationals heart pride. It has achieved fourth place

amongst the banks world, which have shown larger growth.

In its tradition of enlightening and total competence it is to climb greater highs and acceptance

the humility and devotion with which it serves.

Habib Bank has today 1708 branches, 48 zones, 9 regiona genera !anager head "#arters and

2 s#bsidiaries$ % &art 'or! these the bank(s overseas o&erations in 25 co#ntries inc#de 65

branches, 2 s#bsidiaries, 2 )oint vent#res and 2 re&resentative o''ices$

2.11 MISSION STATEMENT

&o be the dominant, financial institution in !akistan and a leading international bank in the

emerging markets, providing a premier set of innovative products and services to our target

markets, and providing superior value to our stakeholders, shareholders, customers and

employees.

alu D;inition

Humility *n institution, which encourages culture of mutual respect and treats

its employees and customers with humility and care.

Integrity *n unswerving commitment by the individual towards the shared

values of HBL

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(eritocracy * consistent system of human resources practices from selection to

advancement based on obectives criteria throughout all the layers of

HBL

&eam work * cohesive unified force derived from participates and collective

endeavors guided by a common set of goals and having the spirit to

share the glory and failures

6ulture of

innovation

* culture of innovation to be proactively responsive to new ideas and

to respect1reward the agents1leaders and creators of change.

2.12 VISION STATEMENT

3nabling people to advance with confidence and success O inspiring all our products and service

offerings.

C*A'TE" , /

O$0ECTIE!1 'OLICIE! AND FUNCTION! OF T*E *A$I$

$ANK LTD

/.+ O$0ECTIE! OF *A$I$ $ANK LTD

4bectives are the ends towards which activity is aimed. &hese are the result to be achieved.

*s a commercial bank the primary obectives is to earn profit and maximize it as far as possible,

keeping in view the society.

4bectives can be expressed either in behavioral items or in end#result terms Eby end of the nest

fiscal year, five new retail stores should be open, and each should be stopped by a manger, an

assistant manager and three clerks) &o ensure the targets would be the stops in direction of which

the group and also person activities tend to be guided. &he goal of each director is usually to

build surplus and also obvious and also verifiable targets help the particular description

associated with success and also proficiency associated with managerial steps...

14



*s a commercial business the Habib Bank Ltd. has following main obectives.

• &o take measure to promote business in the country.

• &o procure beforehand self#employment schemes to the people.

• &o supply or provide employment opportunities to the people.

• &o earn profit for the bank itself and for its shareholders.

• &o help in development and industrialization of the country.

3.2 POLICIES OF HABIB BANK LTD

!lans tend to be normal transactions or maybe the actual understanding that guidebook or maybe station

thinking inside determination making.

It offers route for action as well as regularizes. &he decision making in certain circumstances.

6overage defines area inside which a decision shall be manufactured, as well as make certain that the

decision will probably be constant as well as help with aim. !lans help decide difficulties ust before that

they become complications. &herefore, guidelines provide possibility to manger for you to use

outsourcing for specialist advertising nevertheless keep management above what exactly their particular

subordinates carry out. !lans everyday is present by any means degree of the actual agencies, as well as

amounts via office guidelines for you to modest or maybe type guidelines, pertinent for you to littlest area

of firm. 6onseCuently guidelines tend to be defined as guides for you to thinking inside determination

making. &hat they presume that whenever options are made that will tumble inside selected limitations.

!lans tend not to call for steps nevertheless tend to be designed to guidebook administrator in their

determination responsibilities when they carry out mistakes.

3.3 OPERATIONAL POLICIES

4perational policies deal with the running or operation of the bank. It is about introducing new

schemes in order to improve HBL operations and to take measure for better service. &hese

operations may be divided into

+. Intrnational O%ration9

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&he lending company in another country limbs are generally regularly manifestation sufficient

program and therefore are additionally adding significantly toward channeling residence

remittances involving !akistani expatriates. &he HBL possesses 0/ limbs in other countries. It

offers two affiliate marketers and two representatives workplaces.

HBL has additionally two subsidiaries, with their very own, in Hong Nong and *ustralia of

which demonstrated increased detailed results. &he lending company possesses two mutual

proects in <igeria and <epal, Himalayas Bank Ltd. has shown great advance during several

years involving procedures.

16



-. Dom9ti& O%ration9

HBL making successful domestic operations, it has a regional head Cuarters comprising of 8

zones and ",578, branches under these zones. HBL also established corporate centers in various

regions to caller industrial clients and serve them better. <umbers of corporate centers are "% and

sub#corporate centers are 0.

&he bank has presently one wholly owned subsidiary Habib Bank =inancial $ervices. E!vt.) Ltd.

It has shown improved operational results during the year.

3.4 MARKETING POLICIES

*dvertising will be the techniCue of playing in addition to carrying out the actual pregnancy,

costs, campaign in addition to submitting of concepts, beneficial in addition to solutions to

produce transactions in which fulfill personal in addition to organizational ambitions.

HBL additionally adopts a number of promoting processes to enhance the photograph in the

standard bank. *lmost all of the promoting occurs by means of various remains mobilization

schemes by means of promoting with announcement papers and also other media in addition to

there may be more focus on customer solutions to possess more content consumer who can

advise on their associates in addition to close friends.

3.5 MANAGEMENT POLICIES

(anagerial policies are those, which deals with the management issues and formulation of

strategies.

HBL is headed by a president, and then there are / banking groups, each one headed by a group

executive. 3ach group executive has the client responsibilities for his group. $imilarly these

groups are also responsible for developments in their respective fields. &his new structure wasdeveloped "995, prior to which bank was working on geographical basis. >hile afterwards, it is

working our functional basis.

17



3.6 FUNCTIONS OF HABIB BANK LIMITED

=unctions of Habib Bank Limited are summarized as+

Acce+ting #e+osits

&he principle perform connected with any commercial traditional bank is always to be given

surplus amounts coming from folks in addition to businesses.

&he funds deposited with HBL are as follows+

),& Current #e+osits

Latest deposits usually are people deposits, and this can be taken anytime by means of

illustrating the check around the traditional bank..

),) "rofit and Loss S$aring Account -Saving.

&hese are savings accounts. &he bank undertakes to repay deposits on demand up to certain

limit. 4n such deposit they pay interest to the customers.

),! /ixed #e+osits

(ost of these remains are generally repayable simply as soon as the expiry in the interval which

is why there is deposited. &he financial institution makes it possible for substantial interest on

them with regards to the time frame..

3.7 FINANCING

&he other important function of HBL is to provide finances or advances to the individuals and

business houses against securities at a certain fixed rate of interest. =ollowing 5 types of

financing takes place a HBL.

a. -emand =inance.

b. 2unning =inance.

c. 6ash =inance.

d. =ixed *ssets =inance.

e. 3xport 2efinance.

f. Local (anufacturing (achinery.

g. &emporary 4verdraft.

18



3.8 DISCOUNTIRNG BILLS OF E#CHANGE

&he bank employs their extra funds inside one more crucial techniCue. &hat they low cost the particular

costs associated with trade with their market worth, my spouse and i. age. they pay towards holders in the

costs a good bracket corresponding to their experience importance following deducting attention at the

niche rate for your period of time the particular costs should fully developed. &he actual costs associated

with deals are extremely liCuid property with regard to financial institution to carry. &hese types of costs

are usually utilized with regard to three months and therefore are for financing inner as well as outer

industry.

3. AGENCY SERVICES TO CUSTOMERS

=ollowing *gency $ervice of HBL+

i. Coll&tion o; Ch@u9

HBL acts as an agent to its customers in the collection and payment of cheCues, bills and

promissory notes.

ii. Coll&tion o; Di=i:n:

&he bank comes with a very useful support in bunch of payouts or even attention gained with

stocks and shares since shows presented by their buyers. *bsolutely free themes are simply ust

to share with the problems with the sec which the attention with the sec might be awarded for

you to their bill inside bank. $tandard bank fees '7M for this variety.

$$$. P%&'()*+ , S)-+* / S+'%&$0$+*

HBL also if authorized by its customers can purchase or sell securities for them.

19



i=. Tran9;r o; Fun:9

HBL in addition does this function regarding switching funds of the customers in one bank to an

alternative bank, that many people impose payment, however a reduced rate.

=. A&t9 a9 an An&

HBL also acts as an agent for his customers at home and abroad.

3.1! GENERAL UTILITY SERVICES

• Forin E<&han $u9in99

HBL work forex trading small business simply by discounting overseas payments involvingchange as a way to facilitate the loans involving overseas deal.

• A&t9 a9 a ";r

HBL comes with a useful service to be able to his 1 her customer simply by operating like a

referee for his 1 her credit worthiness. &he information is supplied inside nearly secrecy and is

dependent impartially for the respectability of monetary standing up of customers.

• A&&%tin $ill9 o; E<&han

HBL furthermore handles approval associated with payments associated with swap and so

permits it is shoppers within having the sought after credit rating.

i. my spouse and i. !roblem associated with &ourists 6heCues

ii. HBL furthermore problem &ourists 6heCues to the comfort to the vacation goers the

HBLs vacationer cheCue is referred to as (uhafiz 2upee &raveller 6heuCe.

20



• Coll&tion o; A&ti=it $ill9

3lectricity, telephone and $ui :as other such bills can also be deposited with the HBL.

• Lo&Br9

HBL also provide locker facilities to its clients where valuable of people can be kept.

21



C*A'TE"8

*$L AT A GLANCE

.+ O"GANI3ATION !T"UCTU"E

*rranging can be a purpose regarding administration. Business will be end result regarding

planning. $o planning will be an element of administration that concerns establishing intentional

construction regarding functions to the people to fill a good organization. ItJs a procedure for

deteriorating the complete tasks on the organization in person assignments1 actions and then

having these assemble inside products as well as office as well as groups with the delegation

regarding expert to some administrator of your unit1 department1 group.

4rganizational construction signifies the official colon construction regarding 2oles1 situation.

ItJs not the end inside the do it yourself rather suggest that really help obtain specific ambitions.

&he well#developed as well as effectively synchronized construction is definitely an extremely

important dependence on your effective operation regarding any group. *n excellent the

cornerstone composition together with by which capabilities as well as treatments tend to be

executed. &he provider construction regarding Habib =inancial institution will be defined below.

*t present the Habib Bank Ltd. 4peration through <ine E9) 2egional HeadCuarter, 8 zones,

"578 branches, "% corporate centers and 0 corporate sub#centers.

4.2 AN OVERVIE" OF MANAGEMENT

&hroughout %nd one fourth "995, this Banks <ationalization *ct seemed to be amended having

a see to help inculcate some sort of retail driven culture from the nationalized business =inancial

institutions. ?our important adustments as a result of this modification had been this advantagesof your impartial !anel regarding Home through government entities along with full

manifestation from your 3xclusive $egment in addition to regarding specialized elderly

administration. &his specific adust seemed to be a rest to inoculate business impression

throughout orthodox consumer banking system of the country, to help modernize the lender to

22



enhance this operations and to get ready your banker privatization from the shorts probable

stretch of time.

I $eptember "995, the bank was recognized throughout its domestic and overseas operations on

functional lives creating discreet business groups, to focus against the customer profile available

to the Bank. &hrough this process, the following business groups have been created+

• 2etail Banking :roup.

• 6orporate and Institutional Bank :roup.

• *sset 2emedial (anagement :roup E*2().

•

International operations and *dministration :roup and

• =inance and *udit :roup.

&he particular formation involving organization collection features permitted the lending

company to focus and produce solutions within ust these kinds of organization teams to its

shoppers. In addition to within the retail store checking collection, currently the lending

company have got efficiently presented 0 various solutions which include.+

• (ahafiz 2upee &ravelers 6heCue.

• 6onverted 2upee $aving *ccount.

• (onthly Income $cheme.

• <ew =oreign 6urrency *ccounts.

&he organization and also institutional standard bank group, have got bee effective in creating

important romantic relationships together with some of the leading rate commercial communitiesand also numerous multinationals, as well as 3ngro, $apphire, *l#Naram, :ul *hmed, $iddiCui

-aughterJs, I6I, Lever Inlaws and also <estle.

=or the reason that standard bank had been experiencing difficulties in handling the particular

recuperation of classified portfolio, a good !roperty 2emedial (anaging !arty was developed.

23



&he whole classified have been inaccurately rescheduled or maybe restructured in past times.

&hat unit has been staffed together with some of the best executive inside the standard bank as

well as maor target is the swift recuperation and also Cuality from the classified portfolio.

&he particular overseas procedures are combined underneath >orldwide !rocedures !arty.

&hroughout the calendar year, nearby markets inside greater procedures, by way of example

B2I&I$H, A*3 and also 4man have been examined and also nation particular company

methods are executed, so as to construct most of these important franchises. =urthermore,

emphasis has been put into strengthening the financial institution procedures in important cash

stores, by way of example $ingapore, Hong Nong, Bahrain, <ew york and also Birmingham.

&he particular (oney and also 3xamine !arty $tandard bank in addition to the company

communities and also takes care of the particular fiscal, regulating and also a managing reporting

from the standard bank. &he particular taxation procedure is being improved weighing the

character, complexity and also a higher level risk inside the company group.

&he groups are head by the :roup 3xecutives who are specialists in their relevant fields. &hese

groups have regional offices in all the 9 regions, from where they look after their respective

operations in each zone and branch under them. 2egions are headed by 2egional chief

executives, zones by zonal chiefs and branches by branch managers.

4.3 RETAIL BANKING GROUP

&he retail business compresses of the following+

• *ll existing and potential relationships with an exposure up to 2 s. 7, 77.

• 3xcluding 6ooperate and institutional relationship, advances against foreign currency

deposits irrespective of the amount of funded exposure.

• 3xcluding deposit of corporate and institutional relationships, solicitation of deposits

from all other existing and potential customers.

• $olicitation and surviving of all deposits booked in !akistan from non resident

!akistanis based in overseas countries.

24



• 2ationalization of all branches country avoids including renovations upgrades (arges

and closures.

• *ll institutional and product related marketing advertising, publicity media contact and

in O house newsletter related activities.

• !lan, develop and implement strategies leading to the launch and development of retail

corporate business.

• -evelop and implement comprehensive customers service strategy and culture.

• (anage all current consumer business related activities like credit cared.

•

-evelop and launch all new mass O market consumer products like credit cards,mortgage finance, auto financing and share finance.

$ervice 6ash (anagement products and services by leveraging the distribution network.

4.4 ORGANIATIONAL SET UP OF HABIB BANK LIMITED

!!1 (oard of #irector

<uman N -ar !resident and 634

$ultan *li *llana 6hairman

(oez Damal -irector

$aid ahid -irector

2. akir (ahmood -irector

*hmad Dawad -irector

(ushtaC (alik -irector

$ikandar (ustafa khan -irector

<ausheen *hmed 6ompany $ecretary

(anagement

25



$enior !osition !osition =unctional responsibilities

*bid $attar !resident International 4perations

(.$alahuddin (anzoor $enior 3xecutive ;ice

!resident

6orporate Bank @ &reasury

(ubashir (aCbool :roup 3xecutive 2etail Banking :roup

*yaz *hmad :roup 3xecutive 6orporate Banking :roup

*slam :adit :roup 3xecutive *ssets 2emedial (anager

$alim *mlani :roup 3xecutive *udit :en. *dministration

2izwan Haider :roup 3xecutive 6redit !olicy

26



4.5 ORGANIATIONAL STRUCTURE OF HBL

'"E!IDENT CEO

S%-0) A-$ A--))

$oar: o; Dir&tor9

Dir&tor

!ai:

3ahi:

Dir&tor

M+ ))-

Dir&tor

".3aBir Mahmoo:

Dir&tor

Aha !hr !hah

C*AI"MAN

N)%) K. D)&

E<&uti= Committ

Mmr Mmr Mmr Mmr Mmr Mmr

Aaz

Ahma:

!alim

Amlani

!ima Kamil 0amil I@al Ai: 9attar "izan *ai:r

!E' !E' !E' !E' !E' !E'

E..'.

!..'

.'.

A..'

OGI OGII OGIII Clri&al !ta;; N.C.!.

27



C*A'TE" , 2

DE'A"TMENTALI3ATION

Like every bank, HBL also has divided its functions into different departments in every branch to

carryout the activities on proper way.

=ollowing are the common departments.

". -eposit -epartment.

%. 6ash department.

'. 2emittances department.

. 6ollection cell, clearing department.

/. *ccounts department.

0. =oreign exchange department

5.1 DEPOSIT DEPARTMENT

3very single financial institution functions two basic capabilities you are receiving tissue as well

as the various other usually are financial associated with money, put in department functions

your function associated with receiving tissue through the customers.

R *ccount 4pening &reatment

&he actual financial historical past is usually repeated using numerous incorrect launching

associated with bill for that reason, your department supervisor along with other office was

reCuired to be careful along with practiced reCuired safeguards in the time launching associated

with bill. *t the time of launching associated with bill officers along with supervisor really

should fact fully acCuire ust as much information as possible about the figure along with ethics

of the man or womenK His1her proper label, tackle along with ob. &his kind of infact could be

the ust option once they is able to finish in order to would#be buyer within the welcoming along

with frank atmosphere. &he client might be labeled as follows.

28



R Individuals.

R !artnership Businesses.

R Doint Inventory 6ompany.

R *gents.

R 6lubs.

$ocieties *s >ell *s 2omantic 2elationships.

R 3xecutive *s >ell *s -irectors.

R &rust, 6ommunity $tatistics 3tc.

=or cracking open of bank account those must satisfy the using demands.

R He1$he (ust Be * $erious 4ne !articular.

R H31$H3 <33-$ *6HI3;3- *:3 "8 *<- *L$4 4B&*I<I<: :I;3< <I6 324.

R He1$he must be a similar person my spouse and i. *ge. He1she must recognize the phrase

and also conditions in the contract.

R He1$he (ust <ot Be * Bankrupt *nd *lso His1Her Liabilities $hould <ot $urpass In

6omparison >ith &hat >ill In &he Belongings -eclared By $imply Him1Her.

5. 2 CLASSIFICAITON CONNECTED "ITH DEBRIS

2emains might be categorized from the next.

6urrent deposits.

R !L$ deposits.

R &erm deposits.

&he !resent remains

&heyJre people forms of deposits that happen to be not remunerative with character i. *ge. ero

benefit can be provided about these deposits. &here is absolutely no control about disengagement

from the financial a long time client may found variety of cheCues. -ifferent types connected

29



with client conference the actual problems connected with amount beginning may available this

specific consideration. Asually business people as well as business opens these kinds of

accounts.

B. !lease remains Eprofit as well as loss sharing)

&hese kinds of accounts tend to be unveiled like a move to be able to islamabad connected with

financial with present cards "98%. &hese kinds of accounts tend to be exposed on the basis of

benefit as well as decline discussing concerning a couple celebrations.

&he kinds of deposits were begun to inoculate the actual habit connected with preserving

involving persons. &heyJre called remunerative deposits i. *ge. Benefit paying out to be able to

these account holders benefit can be compensated. $uch a consideration can be exposed through

those that have decrease incomes to be able to safe their particular income and obtain benefit

about it also lender transmits phrases regarding these kinds of accounts soon after a few months.

-. !eriod remains

!eriod deposits or even preset deposits include the deposits that deposits can be held for any

certain interval, to match the character on the plan, plus the client becomes benefit about their

down payment.

>ith hbl there are numerous forms of term down payment systems including every week to be

able to / years as well as above. &he harder the period connected with down payment, the greater

may be the benefit regarding customers.

2. / CA!* DE'A"TMENT

-ollars section executes Cuite functions connected with acCuiring the amount of money as well

as transaction connected with income invoices to be able to customers from their deposits.

30



+. $ill9

&he money that involves your banker, itJs documented through income section. &he deposits

coming from all customers on the lender tend to be managed by way of ournal consideration.

3very single, client offers a uniCue ournal consideration and also have individual ournal cards.

* 6ouple of. !ayments

!ayments of income section described under the next intending.

-. Ch@u

F6heCue is really a costs connected with exchange utilized on a specific bank instead of

indicated to get payable or else next about reCuirementG

Form9 o; Ch@u

I. $arr &h@u8

It 2eally Is 6ashable 4n the 6ountertop &his $pecific 6heCue 6an Be 4btained By (eans 4f

!aying 4ff

-. $u &h@u8

It is usually cashable on the countertop nevertheless their loop must fulfill the bank how the

correct man to accumulate the actual transaction on the cheCue as well as they have to exhibit

their id with an consideration loop on the lender. It is obtained by means of paying off.

/. Mi< &h@u8

ItJs not at all cashable on the countertop it could possibly merely be acknowledged towards

payees consideration.

31



I99uin th Ch@u E,$ooB

&he second principal purpose connected with consideration beginning section should be to

concern the actual cheCue books. If a client does apply for any brand new cheCue books, he1she

needs to found the actual cheCue e#book giving reCuisition slip having his1her a couple signatures

towards specialist worried, the actual specialist will probably authenticate the actual signature as

well as following your confirmation connected with signature cheCue e#book will be released.

5.4 REMITTANCES DEPARTMENT

&he %nd main purpose involving account launching section would be to matter this check

textbooks. 3ach time a purchaser is applicable for the brand new check textbooks, he1she should

found this check e#book giving reCuisition ease using his a pair of signatures on the policemantroubled, this policeman can authenticate this signature and after the proof involving signature

check e#book will be issued.

"mittan&9 Di=i9ion

It is ust a manner involving moving dollars from one branch to a different branch from the

city1outside the city as well as away from land. It really is an order by a traditional bank to be

able to its branch realtor as well as correspondent inside a overseas centre. It really is an order to

pay a new chosen sum of cash on the man or women known as from the musical instrument. It

really is posts simply by floor snail mail as well as airmail.

If your purchaser is an account holder involving traditional bank, then this traditional bank can

debit his account. &his troubled policeman can load three types to make this snail mail exchange

comprehensive. &hree types applied for this specific purpose are usually the following+

32



-ebit ;oucher6redit ;oucher (ail $hift 2egister

If your purchaser is ust not this account holder of the traditional bank, firstly he has to be able to

first deposit dollars and previously mentioned said method will be adopted to be able to

exchange his dollars.

&elegraphic $hift as well as &&

>hile using changing reCuirement of currently, this HBL offers introduced this fastest exchange

involving dollars we. age. &elegraphic $hift. It might be issued to be able to community on their

prepared reCuest and resistant to the worth obtained.

2egarding telegraphic exchange insurrections concerning payment are usually shipped to this

drawee branch telegraphically we. age. this order to pay is usually sent simply by cable

television. &hese kinds of telegrams which authorize payment on the payee should be shipped to

this drawee branch inside a coded dialect and below confidential range known as Ftest numberG.

"mittan&9 D%artmnt

It is ust a function regarding transferring funds derived from one of side branch completely to

another side branch within the city1outside metropolis or even beyond the land. It truly is a

purchase with a traditional bank for you to their side branch adviser or even reporter inside aunusual heart. It truly is a purchase to cover the particular amount of money on the individual

known as inside the guitar. It truly is directs by surface mail or even airmail.

If the consumer is definitely an bank account holder regarding traditional bank, next the

traditional bank will debit his bank account. ?our troubled policeman will load several varieties

to make the particular mail exchange complete. *bout three varieties employed for this specific

purpose are further down+

If the consumer is not the particular bank account holder of the traditional bank, to start with heJs

for you to down payment funds and then over explained course of action will likely be

implemented for you to exchange his funds.

&elegraphic $hift or even &&

33



>ith the changing dependence on currently, the particular HBL provides introduced the

particular most effective exchange regarding funds my partner and i. at the. &elegraphic $hift, It

usually is granted for you to general public on the composed ask and also from the benefit been

given.

In case of telegraphic exchange insurrections relating to repayment are deliver to the particular

drawee side branch telegraphically my partner and i. at the. the particular purchase to cover will

be routed by wire. &hese telegrams which often authorize repayment on the payee needs to be

deliver to the particular drawee side branch inside a coded words and also beneath private variety

called Ftest numberG.

It should also possibly be kept in mind that this check variety is ust indicates authentically

repayment instructions and also matches while using signatures regarding certified

representatives on the reCuirement draft. *s such the particular telegrams need to be prefixed

having a proper check variety or even the particular signal terms to the exact same.

?our assistance could possibly be enter into the particular drawee bank account. ?ou can find %

types of suggests, is the particular assistance and also credit score and also other is the assistance

and also shell out. Inside first event the particular bank account variety needs to be identified and

also throughout second item event there is no need for bank account variety. 6apital t. 6apital t.,

rate is obviously more than L. 6apital t. rate.

2eCuirement <fl draft or even <. <

2eCuirement <fl draft E-. -) will be one more strategy for exchange regarding funds derived

from one of back to one more traditional bank. It is ust a composed purchase, drawn by a single

business office Ebranch) of your traditional bank upon one more business office Ebranch) of the

exact same traditional bank, to cover a particular amount of money for you to as well as to the

particular purchase of your uniCue individual. Breezes are not granted, or even drawn with twigs

located within the exact same modern society.

*n individual, who wants to remit funds by drafts, pays the bucks and also commission rate on

the regional banker and also obtains the particular draft. &his is deliver to another party by

content which will income that by introducing that to this particular traditional bank. &herefore it

is ust like a check and is particularly granted in the event the consumer wishes to get the

34



particular drafts privately. &aking that approach at the rear of it can be of which for the reason

that income is not secure to get maintained coupled and a check inside the shape of the draft will

be less dangerous then one can easily receive income by introducing that inside the traditional

bank, a single as their prefer it is made.

HBL deals throughout % types of --$+

". *vailable --. It truly is the one which will be payable directly on the table and also you

shouldnJt have regarding crediting that on the bank account.

'. Bridging --. It truly is the one which repayment is done via bank account. &he number of

-- will be awarded on the favoring bank account and then heJll work throughout common

method via check.

$hell out 4rder

$hell out 4rder or even E!. 4) is the handiest, uncomplicated and also safeguarded strategy for

exchange regarding funds. It truly is used for regional exchange merely. *ny shell out purchase

can be a composed purchase granted with a traditional bank or even their side branch, drawn

upon and also payable by itself, to pay the particular amount of money for you to as well as to

the particular purchase of your individual.

5.5 ACCOUNTS DEPARTMENT

&he operate associated with *ccounts &eam is usually to publish lifestyle of the section. Dust

about every office is sending your in depth record associated with every day advance towards the

*ccounts &eam with regard to publishing exactly the same in the income ebook, furthermore

allowed your clean cash register. &he exchange after that will probably be changed to their

correct brains. 2ecords office discounts inside % kinds of signs up+

a new. Income Dournal+

m. 3xpenses Dournal+

In earnings ledger your dealings in relation to your earnings in the lender have to be put up,

including fee coming from get#togethers remittances for example. all the advancement charges in

the lender including income charges in the personnel, lease charges for example. have to be put

35



up in the charges ledger. 2ecords office furthermore retains your deposits, so that as prepares

your regular and also every day record in the extramarital relationships in the department. &hat

can be like a new harmony bed sheet.

5. 6 ADVANCES DIVISION

&his office discounts with all the current advancements, which often are made to the shoppers.

-evelopments are very important with regard to banking business, because it gives lender your

profit. HBL is additionally really effective inside progressing financial loans to help consumers,

so assisting your overall economy in the nation inside their advancement. It offers a superior

these finances.

A. Dman: Finan&in

-emand finance is ust about the long#term financial loans and it is make it possible for up

against the set belongings. It is also temporary. :enerally businessmen take advantage this

ability for your obtain associated with eCuipment @ additional installations. &his finance is

additionally provided to speculator and also with regard to professional financing and itJs supply

through versus through operating money and also set belongings. &his ability is additionally take

advantage through employees getting work done in the government businesses and also

permitting all of them in accordance with his 1 her capability, his 1 her income. !ayment plan is

differing with regard to various intervals.

$. "unnin Finan&

HBL gives the facility of drawing more then the balance to the reliable and established customer

by over drafting we mean that drawing more than the balance held with HBL. *fter over drafting

the bank will show debt balance of the customer, and will charge interest on the amount over

drawn.

C. MONE# FINANCING

(oney financial can be named functioning capital. It truly is short#term mortgage. &his

particular financial is usually solely with regard to production concerns. In this particular, lender

36



lends income to the individuals resistant to the real safety measures. &he total amount connected

with mortgage, which can be offered, seriously isnJt paid for in a single installing. &he

individuals must shell out awareness around the total borrowed. (oney credit ratings could be

the preferred mortgage with the big business and commercial concerns, ust one bank account

that the purchaser donJt need to acCuire simultaneously, the whole total he probably will call for,

however can pull like total while and reCuired. (oney financial is usually purchased either this

hypothecation or even promise.

'&uliariti9 &onn&t: ith h%oth&ation8

R 6ustody with the stock options is still with all the purchaser. $tandard bank lien around

the stock options.

R $tock hypothecated must be released in opposition to fireplace and many others.

R 6ustomer1 party ought to send this stock options survey on month to month groundwork.

R =reCuent stock options confirmation might be built on the branch.

R Bank may send officers or even workers with regard to supervise confirmation.

!eculiarities connected with promise+

R $tock 1goods are usually promises together with lender under lender lock and key.

R :ood1stock must be appropriately guaranteed in opposition to fireplace and theft.

R 4n month to month groundwork stock options survey has to be prepared by

borrower1HBL, appropriately incorporated supply connected with things in case any kind

of throughout thirty days.

R -elivery connected with things is manufactured in opposition to cash installments.

D. Ari&ultur Finan&

*griculture is the bank bone of our economy HBL also provides credit facilities to this segment

of economy. HBL provides two types of loans to the agricultures.

37



i. 'ro:u&tion Loan ## which is short term loan and is for the purpose of purchasing of

seeds, fertilizers etc.

ii. D=lo%mnt Loan ,, which is for the purpose of development of land or purchase of

machinery etc, related with the agriculture.

E. !ta;; Finan&

HBL is also providing its staff members in conunction with providing absolutely free themes. It

presents loans to be able to its staff members with regards to cars, developing connected with

households, generator rounds, for the marriages in the sons1 daughters in the staff members.

! oker. 6ourse of action connected with 4btaining =unds

*ny client whom applies for funds needs to have an account Eusually present account) together

with HBL side branch involved, along with it will be throughout ogging location.

&o start with the company need to to be able to submit the actual feasibility survey which can be

delivered to the actual large expert for recommendation, the actual expert make a uniCue

feasibility survey in the corporation after which it pay for the sanction expert which make

approval in which whether or not the money is actually launched or not.

*s soon as approval will come, standard bank presents fine print for the celebration. Bank wonJt

progress "77/ money some sort of security. Puite S '7M border is actually specific from many

funds.

38



Do&umntation8

• =acility Letter *greement of =inance E"B0 *#6)

• -emand !romissory <ote Letter 4f Lien E" B %8)

• Letter of Hypothecation E" B %/) Letter of &2 E " B %5)

• Letter of pledge E" B %0) Letter of L16 opening E" B 8)

• 3Cuitable (ortgage E" b %) 31(, legal mortgage E"B%)

• Letter of :uarantee E" B %9) *greement -eed

6harge form is taken from party if it turns bankrupt bank can go to court of law then these

agreements helps.

5.7 FOREIGN E#CHANGE DEPARTMENT

=oreign exchange department takes on a vital part from the global industry of any kind of state.

Become knowing and so, HBL has additionally centered as well as improved upon effectively it

foreign currency functions as for the performance of the staff members as well as shoppers

pleasure is anxious.

HBL foreign currency department performs following function.

R =oreign =oreign exchange Balances.

R 2emittances inside foreign currency.

R -eals inside buy of 4ugh. Ates. bonds.

*ny. =oreign exchange Balances

=oreign exchange inside HBL may be popped inside % main currencies in the world. (y spouse

and i. at the. A$ @ A<I&3- NI<:-4( Lb $terling. $imply sanctioned twigs of HBL can

easily cope inside fx bank account. !resently inside !akistan many twigs have that center.

=oreign exchange bank account may be popped both !akistan 2esident as well as foreigners

simply by launch as well as pursuing the procedure essential for normal records with one

39



particular exemption regarding foreigner that theyJll submit any copy with their passport. &he

actual bank account can be individual or shared.

*$L ;orin &urrn& a&&ount9 9ilnt ;atur98

T%9

i. $aving

ii. 6urrent

Currn&i98

a. A$ -ollar

b. !ound $terling

Who &an o%n th9 a&&ount9H

a. *ll resident !akistanis

b. *ll non#resident !akistanis

c. =oreign companies

d. 6haritable trusts

e. 2esident companies locally incorporated

Minimum Amount o; D%o9it8

a) A$ -ollar "777

b) !ound $terling /77

40



$. "mittan&9 in Forin E<&han

*s we realize that the money of a single nation seriously isnJt lawful soft throughout overseas

tables. &he particular monitory device containing already been progressed for those

intercontinental installments may be the forex trading from your exporter along with other who

may have that available for sale in addition to market the particular currency exchange towards

the importers along with other who reCuire it in their personal tables. &he particular

intercontinental payment can be impacted by the transport from the account inside the debtors

nation towards the creditors nation.

* couple divisions connected with same bank or perhaps connected with uniCue bank include

throughout overseas remittance. *n example may be named remitting part or perhaps bank

additional is called having part or perhaps bank. &hroughout currency exchange $B! features

granted common permission to be able to certified merchants throughout forex trading including

HBL, to be able to affect remittances intended for uniCue reCuirements without discussing that

E$B!) intended for uniCue, my partner and i. elizabeth. remittance because of schooling

registration, guides in addition to magazines connected with specialized nature.

• =oreign &elegraphic &ransfer.

•=oreign mail &ransfer

• =oreign -emand -raft

C. U! !%&ial Dollar $on:9

HBL foreign exchange department also performs the selling of A$ govt. special dollar bonds as

in accordance with the direction of $B!. &he bank gives profit in increase then the profit

increased by the bonds.

D. Forin Out War: "mittan&9

It is the mode of transfer funds to other branches of the bank outside the country. &he =.-.-.

resaved from our overseas branches i.e. only Anited Ningdom EA.N), $ingapore, Anited $tates

41



EA$*) etc, are collected and encasement is made at counter after proper identification form

national identify card or passport in this department.

E. Forin Tlra%hi& Tran9;r (F.T.T)8

In normal banking for this the work =.&.&. is used. In this case no physical instrument is used

and message is sent to the test department where coding and decoding of figure data is done

which is known as test number and under this specific number the massage conveyed to foreign

bank through telex1telegram.

42



C*A'TE" , 5

FINANCIAL ANAL#!I!

!ersonal Investigation is an analysis of your firms beyond efficiency and prospective customers

money. It is made of implementing analytical eCuipment as well as processes to monetary claims

and other relevant files to get helpful info. Its principal intent is usually to supply a apparent

photograph on the financial position of business.

6.1 RATIO ANALYSIS

2atio investigation is an crucial and age#old means of any economic investigation. It is

traditionally used device regarding economic investigation. &he idea is understood to be your

thorough using any relation to understand your economic claims so the advantages and some

weakness of your corporation together with it is fantastic performance and existing economic

circumstances, can be identified. &he idea simplifies economic claims, facilitates within

planning, and makes inter#firm comparison. Its allows and facilitates within investment decision

choices.

2ates help to make your connected data similar. Dust one amount by it personal has no this means

nevertheless as soon as depicted when it comes to any connected amount, it produces important

inference. * new economic expert utilizes your Cuotients to match up against it is previous and

envisioned foreseeable future Cuotients to find out if the companys economic problem will be

improving or deteriorating after some time. He 1 she utilizes your Cuotients to produce % sorts of

evaluations.

,11 Internal Com+arison0

* new firms provide proportion is actually weighed against it is beyond in addition to expected

foreseeable future percentages to find out if the companys monetary issue is actually increasing

or maybe deteriorating with time.

43



,1& External Com+arison

2ates of a firm are balanced with those associated with identical firms as well as with business

averages as well as norms to determine how a corporation is actually faring in accordance with

the rivals.

In this section we analyze the financial ratios of HBL Bank computed utilizing the information

given in its annual reports of the years %7""#%7"'. 4nly internal comparison of the ratios has

been made as the ratios for other banks are not available as well as time was also limited.

=inancial ratios of HBL Bank are given in table below showing the trend+

TA$LE,5.+8 FINANCIAL "ATIO! OF *$L $ANK LIMITED

-?++ -?+- -?+/

Li@ui:it "atio9

6urrent 2atio 7.5' 7.87 7.8

6ash 2atio 7." 7."% 7."/

<et >orking 6apital 2atio 7./ 7.5 7."%

ACTIIT# "ATIO

*sset &urnover 2atio 7.7 7.78 7.79

CA'ITAL !T"UCTU"E ANAL#!I!

"ATIO!

-ebt to *sset 2atio 7.59 7.58 7.87

-ebt to 3Cuity 2atio '.8/ './7 '.'/

Investment to &otal *ssets 2atio 7.%' 7.%" 7.%9

'"OFITA$ILIT# "ATIO!

2eturn on *ssets %./M %.5M %.8/M

2eturn on 3Cuity "/./7M "8.8M %%.%/M

3arning !er $hare 2atio "7.87 "".8' ".57

COE"AGE "ATIO

Interest 6overage 2atio 7.%% 7."/ 7.""

44



6.2 RATIO ANALYSIS

,&1 Li%uidity atios

5.-.+.+ Currnt "atio

=ormula

Currnt "atio Currnt A99t9

Currnt Liailiti9

Tal , 5.-8 Currnt "atio

#ar9 -?++ -?+- -?+/

6urrent 2atio 7.5' 7.87 7.8

Gra%h , 5.+8 Currnt "atio

INTE"'"ETATION

!resent percentage demonstrates the particular firms power to cover itJs current financial

obligations having its current resources. &he higher the present percentage the greater the

particular firms power to shell out itJs expenses.. &he HBL Banks current ratio has an

increasing trend from year %7"% to year %7"' i.e. it rises from 7.5' to 7.87 and from 7.87 to 7.8.

&his shows that its ability to cover the current liabilities has increased in the year %7"% as

compared to previous years.

5.-.+.- Ca9h "atio

=ormula

Ca9h "atio Ca9h an: Ca9h E@ui=alnt

Currnt Liailiti9

45



TA$LE , 5./8 CA!* "ATIO

#ar9 -?++ -?+- -?+/

6ash 2atio 7." 7."% 7."/

Gra%h , 5.-8 Ca9h "atio

Intr%rtation

6ash 2atio (easure the ability of the firm to pay its current liabilities from its available cash and

cash eCuivalents. &he overall cash position of the bank shows improvement from the year %7"%

to %7"' i.e. from 7." to 7."% in %7"% and from 7."% to 7."/ in the year %7"'.

5.-.+./ Nt WorBin Ca%ital "atio

=ormula

<>6 T <et >orking 6apital&otal *sset

TA$LE , 5.8 NET WO"KING CA'ITAL "ATIO

#ar9 -?++ -?+- -?+/

*ctivity 2atio 7./ 7.5 7."%

Gra%h , 5./8 Nt WorBin Ca%ital "atio

INTE"'"ETATION

Nt WorBin Ca%ital Currnt A99t9 J Currnt Liailiti9

&his <>6 shows the capability of an organization to pay all its current liabilities from its current

assets. >hereas the <>6 ratio shows the proportion of <>6 from the total assets. &he net

working capital ratio of HBL shows upward trend from the year %7"" to the year %7"% and shows

decline from %7"% to %7"'

46



,&& Activity atio

5.-.-.+ A!!ET TU"NOE" "ATIO

=ormula

A99t Turno=r "atio !al9

Total A99t

Tal , 5.28 A99t Turno=r "atio

#ar9 -?++ -?+- -?+/

*ctivity 2atio 7.7 7.78 7.79

Gra%h , 5.8 A99t Turno=r "atio

INTE"'"ETATION

&he asset turnover ratio tells us the relative efficiency with which a firm utilizes its total assets to

earn (arkup1return earned. &he asset turnover ratio of HBL Bank increased in year %7"" E7.78)

as compared to year %7"% E7.7) and increase in %7"' E7.79) compare to previous years as well.

&he reason behind this increase is an increase in both sales and total assets.

,&) Ca+ital Structure Analysis atios

5.-./.+ Dt to A99t "atio

=ormula

Dt to A99t "atio Total Dt

Total A99t

TA$LE , 5.58 DE$T TO A!!ET "ATIO

-?++ -?+- -?+/

6apital $tructure *nalysis 2atios 7.59 7.58 7.87

47



Gra%h , 5.28 Dt to A99t "atio

INTE"'"ETATION

-ebt to *sset 2atio shows the extent to which the companys assets are financed by debt. HBL

Bank debt ratio decrease a little in the year %7"% E7.58) as compared to the year %7"" E7.59) and

on the other hand increase E7.87) which is because of the increase in total debt of the bank in

%7"' as compared to the year %7"%.

5.-./.- Dt to E@uit "atio

=ormula

Dt to E@uit "atio Total Dt

Total E@uit

TA$LE , 5.68 DE$T TO EUIT# "ATIO

#ar9 -?++ -?+- -?+/

-ebt to 3Cuity 2atio '.8/ './7 '.'/

Gra%h , 5.58 Dt to E@uit "atio

INTE"'"ETATION

6reditors normally similar to this ratio to be minimal. &he low the particular ratio the higher the

degree of firms funding by means of shareholders. &hat ratio indicates the particular scope for

you to that the company can be backed up by means of debts. &he low the particular ratio the

higher the degree of the particular firms funding that is certainly being provided by the particular

shareholders. &he debt for you to eCuity ratio offers reducing trend, which often is due to the

particular enhance in total debts of the traditional bank though enhance inside eCuity can be

under proportionately..

48



5.-././ In=9tmnt to Total A99t9 "atio

=ormula

In=9tmnt to Total A99t "atio Total In=9tmnt

Total A99t9

TA$LE , 5.48 INE!TMENT TO TOTAL A!!ET! "ATIO

#ar9 -?++ -?+- -?+/

Investment to &otal *ssets 2atio 7.%' 7.%" 7.%9

Gra%h , 5.68 In=9tmnt to Total A99t9 "atio

INTE"'"ETATION

&his ratio shows the proportion of total investment the bank has made out of its total assets. &he

investment#to#total#asset ratio is decreasing from the year %7"" E7.%') to the year %7"% E7.%")

while increasing from the year %7"% E7.%") to the year %7"', which shows that the bank has

increased the proportion of its total investment in the year %7"'.

,&! "rofitability atios

5.-..+ "turn on A99t "atio

=ormula

"OA Nt In&om (lo99)

A=ra Total A99t

TA$LE , 5.>8 "ETU"N ON A!!ET "ATIO

#ar9 -?++ -?+- -?+/

2eturn on *sset 2atio %./M %.5M %.8/M

49



Gra%h J 5.48 "turn on a99t ratio

INTE"'"ETATION

&his ratio measures the profitability per rupee of investment in assets. 24* is also called returnon investment E24I). &he 24* ratio of the HBL Bank is showing increasing trend in gain from

the year %7"" E%./M) to the year %7"% E%.5M) and there is also an increasing due to gain from the

year %7"% E%.5M) to the year %7"' E%.8/M). >hich shows that the bank gets positive return on its

investmentsK

5.-../ "turn on E@uit "atio

=ormula

"OE Nt In&om

Total E@uit

TA$LE , 5.+?8 "ETU"N ON EUIT# "ATIO

#ar9 -?++ -?+- -?+/

2eturn on 3Cuity 2atio "/./7M "8.8M %%.%/M

Gra%h , 5.>8 "turn on @uit ratio

INTE"'"ETATION

*nother measure of overall performance of a company is 2eturn on 3Cuity E243). It shows the

profit as a proportion of the book value of common stock shareholders eCuity. &he 243 ratio

increased due to gain in the year %7"% E"8.8M) and in the year %7"' E%%.%/M) as compared to the

year %7" E"/./7M) which is because of the <et gain of the bank in the year %7"% and %7"'.

5.-.. Earnin 'r !har

=ormula

E'! 'ro;it (lo99) a;tr Ta<ation

Wiht: A=ra Numr o; Common !har9 Out9tan:in

50



TA$LE , 5.++8 EA"NING 'E" !*A"E

#ar9 -?++ -?+- -?+/

3arning !er $hare "7.87 "".8' ".57

Gra%h J 5.+?8 Earnin %r 9har

INTE"'"ETATION

&here is upward trend in 3arnings per share of HBL in the year %7"% E"".8') and %7"' E".57)

respectively as compared to %7"" E"7.87) because they have <et gains.

,&2 Coverage atio

5.-.2.+ Intr9t Co=ra "atio

=ormula

Intr9t Co=ra "atio O%ratin In&om

Annual Intr9t E<%n9

TA$LE , 5.+-8 INTE"E!T COE"AGE "ATIO

#ar9 -?++ -?+- -?+/

Interest 6overage 2atio 7.%% 7."/ 7.""

Gra%h J 5.++8 Intr9t &o=ra ratio

INTE"'"ETATION

Interest 6overage 2atio is an indicator of a companys ability to meet its interest payment

obligations. &he interest coverage ratio of the HBL Bank is showing a decreasing trend. &he

ratio is decreased in the year %7"% E7."/) as compared to the year %7"" E7.%%), while also

decreasing in the year %7"' E7."") as compared to %7"" E7."/). 4r simply we can say that the

bank is unable to cover their interest expense.

51



6.3 VERTICAL ANALYSIS

=or analyzing an organization, it is useful to express balance sheet and income statement items as

percentage, in addition to financial ratio analysis over time. &he percentage can be related to

some totals, such as total assets or total net sales or to some base year. 4ne of the techniCuesused for such an approach is called as Common !iz *pproach.

F*n analysis of percentage financial statement where all balance sheet items are divided by total

assets and all income statement items are divided by net sales or revenue is called as common

size analysis.G

4ne particular widespread disadvantage inside the evaluation can be that this incapacity

involving evaluation to be able to comprehend as well as create in your mind, the adust in

particular person things that have taken position through season to be able to season in relation tothe complete possessions, overall liabilities in addition to owners collateral, as well as overall

world wide web sales. &hat complaint is particularly genuine each time a evaluation has been

made from % or more businesses, as well as of a single corporation with all the transactions with

an total marketplace. &hus there is no widespread base intended for evaluation whenever

managing overall results. 3ven so in the event the $ense of balance published in addition to

profits assertion info are usually revealed in analytical percentage when i. electronic. proportions

involving overall possessions, liabilities in addition to operator collateral, in addition to overall

world wide web sales a common base comes. &his evaluation is named because up and down

evaluation involving financial transactions. Inside examination involving financial affirmation it

is often helpful to learn the particular ratio of a total collection or even subgroup, which one

particular product inside these signifies. >ithin a Harmony published the particular Belongings

as well as the Liabilities and (oney are generally portrayed because "77 M and every product

within these types of classes can be portrayed as being a fraction on the own totals. *lso inside

income affirmation Internet $ales are generally arranged on "77 M, this kind of group involving

sizing possesses generated these types of assertions being termed as F6ommon $izeG.

&hese types of analysis is extremely helpful in comparing firms whose data differs significantly

in size because every item on the financial statement get placed on a relative or standardized

bases.

52



&he comparative common#size balance sheet analyses of HBL Bank from %7"7 to %7"" of

Balance $heet @ Income $tatement are given below in a tabular form as+

53



BALANCE SHEET HABIB BANK LIMITED

A9 at D&mr /+1 -?+-7-?+/

D& /+9t1 -?+- D& /+9t1 -?+/

"u%9 ???

A!!ET!

6ash and balances with treasury banks /0,/'',"' 59,8'9,8'0

Balances with other banks '9,'0,%95 7,'00,085

Lendings to =inancial Institutions 0,"9',585 /,'/%,85'

Investments "%9,8'',0 %"0,05,/'%

*dvances /0,'//,/75 /,00%,99

4ther assets ',/88, ",""0,/8%

4perating fixed assets ",5/",%/% "0,500,008

-eferred tax assets "%,"80,88 9,%7/,9

6>14?516+2 45/166415-+

LIA$ILITIE!

Bills payable 9,8%8,78% "7,7",/%

Borrowing from financial institutions 0,90","0/ /%,/%,958

-eposits and other accounts /95,797,// 08%,5/7,759

$ub#coordinated loans ',9/,9%/ ,%"%,787

Liabilities against assets subect to financelease

# #

4ther liabilities %/,00',"" %9,80%,"-eferred tax liability # #

08',98,"%8 559,78,8%'

NET A!!ET! 551/?41246 41/5>16>4

!*A"E*OLDE" EUIT#

$hare 6apital 5,/97,777 9,"78,777

2eserves %',0/0,7 %5,/%5,'87

Inappropriate profit '",9'',"58 '8,98,''/

&otal eCuity attributed to the eCuity holders 0',"59,%%% 5/,"'',5"/

(inority interest 897,799 ","',%"

$urplus on revaluation of assets # net ofdeferred tax

%,%'9,%00 8,79%,8%

*ota 551/?41246 41/5>.6>4

54



BALANCE SHEET VERTICAL COMMON SIE ANALYSIS

A9 at D&mr /+1 -?+-7-?+/

D& /+9t1 -?+- D& /+9t1 -?+/

Common !iz Anal9i9 ()

A!!ET!

6ash and balances with treasury banks 5./ 9.%

Balances with other banks /.%/ .05

Lendings to =inancial Institutions 7.8' 7.0%

Investments "5.'% %/.70

*dvances 07.80 /%.0

4ther assets .0" .50

4perating fixed assets ".95 ".9

-eferred tax assets ".0' ".75

+?? +??

LIA$ILITIE!

Bills payable ".'" "

Borrowing from financial institutions 0.%0 "'

-eposits and other accounts 59.0' /9

$ub#coordinated loans 7./' %


# #

4ther liabilities '.% '

-eferred tax liability # #

NET A!!ET!

!*A"E*OLDE" EUIT#

$hare 6apital ".7" ".7/

2eserves '."/ '."9

Inappropriate profit .%0 .0

&otal eCuity attributed to the eCuity holders 7."% 7."'

(inority interest$urplus on revaluation of assets # net ofdeferred tax

7.'7 7.9

*ota +?? +??

55



INCOME STATEMENT HABIB BANK LIMITED

D& /+9t1 -?+- D& /+9t1 -?+/

2upees 777

(arkup1 2eturn1 Interest earned 0','50,75 50,750,'5

(arkup1 2eturn1 Interest expensed %0,/%/,//0 '',7/,8"'

<et (arkup1 Interest Income '0,8/7,9" %,057,/'

!rovision against non#performing loans andadvances # net

0,97,9"9 8,59,/07

!rovision against off#balance sheet obligations '5%,/98 E/",'90)

!rovision against diminution in the value ofinvestments

",979,885 '0,9/

Bad debts written off directly # #

<et (arkup1 Interest income after provisions %5,00',785 '',/87,85/

NON MA"KU'7 INTE"E!T INCOME

=ee, commission and brokerage income ,/"8,78 /,'"0,59

Income 1 gain on investments ",'77,95/ /95,7"8

Income from dealing in foreign currencies %,'5,'"8 ",9"',""/

4ther income ',788,99 ',''',777

&otal non#markup1 interest income "",%8%,09/ "","/9,0"%

/41>2164- 16?146

NON MA"KU'7 INTE"E!T EX'EN!E!

*dministrative expenses %",%/,'0" %%,5/,9//4ther provisions1 write off # net %77,"0' %"7,"97

4ther charges 0,5/" ',/7

>orkers welfare fund '%',/5/ '99,"00

&otal non mark# up1 interest expenses %%,7"',8/7 %','/8,8/"

'"OFIT $EFO"E TAXATION +51>/+1>/- -+1/4+15/5

Ta<ation

#6urrent 8,'78,0"" 8,79/,0%

# !rior years %'',"77 E",79/,'//)

# -eferred E%,5',89") 987,077 &otal taxation amount 0,705,8%7 5,987,885

%ro;it A;tr ta<ation +?1451++- +/1??16>

56



INCOME STATEMENT VERTICAL COMMON SIE ANALYSIS

D& /+9t1 -?+- D& /+9t1 -?+/

Common !iz Anal9i9 ()

(arkup1 2eturn1 Interest earned "77 "77

(arkup1 2eturn1 Interest expensed ".8/ <et (arkup1 Interest Income /8."/ /0

!rovision against non#performing loans andadvances # net

"7.97 "%

!rovision against off#balance sheet obligations 7./9 E7.75)


'.7" 7.0

Bad debts written off directly

<et (arkup1 Interest income after provisions '.7"


=ee, commission and brokerage income 5."' 0.99

Income 1 gain on investments %.7/ 7.58

Income from dealing in foreign currencies '.5/ %./"

4ther income .85 .'8

&otal non#markup1 interest income "5.87 ".05


*dministrative expenses ''.8" %9.974ther provisions1 write off # net 7.'% 7.%8

4ther charges 7."7% 7.77/

>orkers welfare fund 7./" 7./%

&otal non mark# up1 interest expenses '.5 '7.57

'"OFIT $EFO"E TAXATION -5.6- -4.++

Ta<ation

#6urrent "'."" "7.0

# !rior years 7.'5 E".)

# -eferred 7.97 ".%9

&otal taxation amount

%ro;it A;tr ta<ation +6.+ +6.5+

57



6.4 HORIONTAL ANALYSIS

Horizontal analysis is also called as Indexed *nalysis. &he actual contrast associated with fiscal

transactions is usually attained through establishing balance sheets in addition to profits

transactions, side by side in addition to researching your alterations who have happenedthroughout particular person classes at this time there throughout through yr for you to yr in

addition to in recent times. &his specific contrast associated with fiscal transactions above many

years also unveils your way, pace, degree along with the aptitude on the development as well as

your utter alterations. &he obective of your horizontally investigation is always to build

connection in between a single merchandise on the fiscal declaration using the exact same

merchandise associated with an additional years fiscal declaration, financial institution as well

as using the industry..

=or the personal research regarding HBL Lender we have now picked the particular personal

files for % several years through %7"% O%7"'. >ith regard to horizontally research there needs to

be any fixed1base yr for your yr regarding research or perhaps using the record eCuipment ust

about every former yr is usually picked any starting yr for your returning yr we. age. the year

regarding research. Dust about all personal statement components of the camp yr are usually used

while eCual to "77 Epercent). >e have picked %7"7 for the reason that starting yr along with the

goods with regard to pursuing yr are usually portrayed for list to that year E%7"')..

&he horizontal analysis of financial statements of HBL Bank is given below showing indexed

balance sheets and income statements along with regular statements+

58



BALANCE SHEET HABIB BANK LIMITED

A9 at D&mr /+1 -?+-7-?+/

D& /+9t1 -?+- D& /+9t1 -?+/

"u%9 ???

A!!ET!

6ash and balances with treasury banks /0,/'',"' 59,8'9,8'0

Balances with other banks '9,'0,%95 7,'00,085

Lendings to =inancial Institutions 0,"9',585 /,'/%,85'

Investments "%9,8'',0 %"0,05,/'%

*dvances /0,'//,/75 /,00%,99

4ther assets ',/88, ",""0,/8%

4perating fixed assets ",5/",%/% "0,500,008

-eferred tax assets "%,"80,88 9,%7/,9

*ota 6>14?516+2 45/166415-+

LIA$ILITIE!

Bills payable 9,8%8,78% "7,7",/%

Borrowing from financial institutions 0,90","0/ /%,/%,958

-eposits and other accounts /95,797,// 08%,5/7,759

$ub#coordinated loans ',9/,9%/ ,%"%,787


# #

4ther liabilities %/,00',"" %9,80%,"-eferred tax liability # #

*ota 08',98,"%8 559,78,8%'

NET A!!ET! 551/?41246 41/5>16>4

!*A"E*OLDE" EUIT#

$hare 6apital 5,/97,777 9,"78,777

2eserves %',0/0,7 %5,/%5,'87

Inappropriate profit '",9'',"58 '8,98,''/

&otal eCuity attributed to the eCuity holders 0',"59,%%% 5/,"'',5"/

(inority interest 897,799 ","',%"


%,%'9,%00 8,79%,8%

*ota 551/?41246 41/5>.6>4

59



BALANCE SHEET HORIONTAL INDE# ANALYSIS

A9 at D&mr /+1 -?+-7-?+/

D& /+9t1 -?+- D& /+9t1 -?+/

In:< Anal9i9 ()

A!!ET!

6ash and balances with treasury banks "77 ""

Balances with other banks "77 "7'

Lendings to =inancial Institutions "77 80

Investments "77 "05

*dvances "77 "77

4ther assets "77 ""9

4perating fixed assets "77 ""

-eferred tax assets "77 50

*ota +?? ++2

LIA$ILITIE!

Bills payable "77 "7%

Borrowing from financial institutions "77 ""%

-eposits and other accounts "77 ""

$ub#coordinated loans "77 "75


"77 #

4ther liabilities "77 ""0-eferred tax liability "77 #

*ota "77 ""

NET A!!ET! +?? +-6

!*A"E*OLDE" EUIT#

$hare 6apital "77 "%7

2eserves "77 ""0

Inappropriate profit "77 "%"

&otal eCuity attributed to the eCuity holders # ""9

(inority interest "77 "%8


# '0"

*ota +?? +-6

60



INCOME STATEMENT HABIB BANK LIMITED

D& /+9t1 -?+- D& /+9t1 -?+/

2upees 777

(arkup1 2eturn1 Interest earned 0','50,75 50,750,'5

(arkup1 2eturn1 Interest expensed %0,/%/,//0 '',7/,8"' <et (arkup1 Interest Income '0,8/7,9" %,057,/'

!rovision against non#performing loans andadvances O net

0,97,9"9 8,59,/07

!rovision against off#balance sheet obligations '5%,/98 E/",'90)


",979,885 '0,9/


<et (arkup1 Interest income after provisions %5,00',785 '',/87,85/


=ee, commission and brokerage income /,"8,78 /,'"0,59

Income 1 gain on investments ",'77,95/ /95,7"8

Income from dealing in foreign currencies %,'5,'"8 ",9"',""/

4ther income ',788,99 ',''',777

&otal non#markup1 interest income "",%8%,09/ "","/9,0"%

/41>2164- 16?146


*dministrative expenses %",%/,'0" %%,5/,9//

4ther provisions1 write off O net %77,"0' %"7,"974ther charges 0,5/" ',/7

>orkers welfare fund '%',/5/ '99,"00

&otal non mark# up1 interest expenses %%,7"',8/7 %','/8,8/"

'"OFIT $EFO"E TAXATION +51>/+1>/- -+1/4+15/5

Ta<ation

#6urrent 8,'78,0"" 8,79/,0%

# !rior years %'',"77 E",79/,'//)

# -eferred E%,5',89") 987,077

&otal taxation amount 0,705,8%7 5,987,885%ro;it A;tr ta<ation +?1451++- +/1??16>

61



INCOME STATEMENT HORIONTAL INDE# ANALYSIS

D& /+9t1 -?+- D& /+9t1 -?+/

In:< Anal9i9 ()

(arkup1 2eturn1 Interest earned "77 "%7

(arkup1 2eturn1 Interest expensed "77 "%0

<et (arkup1 Interest Income "77 ""0

!rovision against non#performing loans andadvances O net

"77 "%5

!rovision against off#balance sheet obligations "77 E")


"77 "8


"77 99

<et (arkup1 Interest income after provisions "77 "%"


=ee, commission and brokerage income "77 ""8

Income 1 gain on investments "77 0

Income from dealing in foreign currencies "77 8"

4ther income "77 "78

&otal non#markup1 interest income "77 99

+?? ++2


*dministrative expenses "77 "70

4ther provisions1 write off O net "77 "7/

4ther charges "77 /

>orkers welfare fund "77 "%'

&otal non mark# up1 interest expenses "77 "70

'"OFIT $EFO"E TAXATION +?? +-5

Ta<ation

#6urrent "77 95

# !rior years "77 E57)

# -eferred E"77) 7 &otal taxation amount

%ro;it A;tr ta<ation +?? +-/

62



CHAPTER 7

CONCLU!ION AND "ECOMMENDATION!

7.1 CONCLUSION

HBL was established in "9" as a commercial Bank. &he main obective of the Bank was to

attract customers of making deposits and the same is advanced to industrialist for improving the

country.

&he bank offers variety of services to its customers. &he most important to them are agency and

general utility services. &he bank is now having branches in all cities of !akistan offering

services to its accounts holders and also even to non#accounts holders.

HBL is offering innovative schemes these days. &he important among these are crore !ati

deposit certificate Ewhich has now discontinued), (uhafiz 2upee travel cheCues etc.

In conclusion one can say that Habib Bank has played a big role in the creation and the

development of the country. 4ne thing significant about this institution is that it has always

sacrificed monetary consideration over national interest. &his fact raises the Habib Bank above

all in the services of !akistan. In my opinion HBL is improving its performances at present for

the hope to succeed in future.

7.2 RECOMMENDATIONS

". (ost policies of the bank are not found in written form, it create problems for the bank as

employees as not aware of the banks policies, so here the recommendation is that the

policies should be in written form and should be present at different levels.

%. HBL need to take up once again intense tactic due to the fact the volume of it is

opponents is raising day#to#day..

'. $pecial attention should be exterior1interior layout, cleanliness and design of

furniture1fixture item of the branch. &he staff must be to wear decent and clean dress to

63



give smart out look to the visitors. &his will help to improve the corporate image

considerably.

. * bank is always profit conscious thus profitability of all branches as well as department

must be monitored closely and corrective measures should be taken to this end such loss

making branches which cannot be termed into income generating units may be closed if

necessary.

/. -ata bank can be established at onal offices12 H Ps and Head office to retain the data

once called for from the branches and the same can be had from the data banks instead of

calling for the same from the branches again and again. 6omputer can help a lot in this

regard which supply the reCuisite data immediately as and when desired by the

management.

0. *lthough at present performance targets are allotted to the bank staff. However the

system of allotting targets and evaluating performances these against need revamping.

$uch target should be decided on data basis and only realistic achievable targets should

be allotted. =urther the target must pertain to the areas of operation of the concerned staff.

5. HBL have to play a vital role in mobilizing foreign remittances. &he banks foreign

branches have to become more competitive and service oriented. Likewise, improving in

he local remittances business and utility bills with help to improve the inter mediation in

the bank.

8. HBL should take care while conducting marketing research and adopting new policies

and procedure for getting its marketing share regarding advances.

9. &he exiting policies should be reviewed and there should be permanent revision of these

policies from time to time.

"7. HBL need to take up once again intense tactic due to the fact the volume of it is

opponents is raising day#to#day..

"". &here should be clear cut delegation of authority and responsibility.

"%. *ll the department head should be given full authority regarding decision making.

64



"'. :iven that with HBL there is overlapping associated with functions, conseCuently ust

about every section needs to be functionally described, and the many business units needs

to be blend whose functions act like minimize charge..

". &he communication system of the bank should be improved by installing new

eCuipments.

"/. 6o#ordination can be improved among different department by adopting proper channels

of communications.

"0. $uitable customer survey in addition to study need to be conducted prior to intro of

virtually any brand#new systems we. elizabeth. price tag in addition to help research need

to be viewed..

"5. *ny risk#free method pertaining to shift regarding funds need to be founded and with out

and about the actual delivery regarding legitimate papers zero transaction need to be

made. &he actual test out critical reCuirements need to be changed from time to time and

really should always be maintained solution..

"8. >hile credit extension prudential regulations should be kept under consideration.

"9. Loan procedure should not be cumbersome and should be made easy, so as to ease the

customer.

%7. !rolonged documentation should be avoided.

%". 2ight market sensible loan must be disbursed so that each and every market need to get

correct portion and every one of these significant need to concurrently create..

%%. &o be able to offset inefficiency, the actual supervision really should undertake many

supervision concepts we, In order to mitigate inefficiency, the management should adopt

some management principles i.e. proper ob, clear cut division of work should be

introduced chronic. $uitable work, distinct minimize department involving work must be

introduced..

65



%'. HBL nevertheless features biggest multilevel connected with offices inside state,

however features reduced *&(s when compared having its large multilevel. &he

particular *&(s need to be enhanced, as a result of availability of dollars for the

customer %#hours per day capability. &herefore it will eventually then add additional

customers for you to their customers foundation..

• In cash department, refresher courses about detecting fake currencies and training to use

scanners and counting machines.

• =or advances department, the staff should be given training in the proper evaluation of a

borrowers financial position and the security he offers for the loans.

• In bills department, the staff should be trained in the careful preparation of the

documents plus carefully sending of the documents.

• In foreign exchange department training on the identification of foreign currency, use of

fax machines, $>I=& message identification and confirmation etc.

• =or (I$ of the bank, the bank should provide latest knowledge of the system designing

and information management.

". HBL should increase marketing activities, though reminder advertisements, increase

customer relations, promotional campaigns with products, and other tools of marketing,

this will increase the credibility and image of the band.

66



"EFE"ENCE!

• *bid akia E%7"7). Internship Report on Habib Bank Limited . Aniversity of 3ducation 4kara

campus.

• *uthor, immy wales E"999). History of Banking , *vailable http+11www.wikipedia.org.

• *slam, $ardar. (.. %778, “Easy way to banking and finance” p.p. %5.

• -ecenzo, -avid, *. 2obbins, $tephen, ! “Human Resources Management” 8th 3dition.

• History of Habib bank Limited . *vailable http+11www.hbl.com

• Habib Bank Limited, !resentation ;olume Narachi %779. !p. 5'# 8%

• Habib Bank Limited E%779) Annua report ,pp.09

• Habib Bank Limited E%778) Annua report , pp. 5'

• Habib Bank Limited E%775) Annua report , pp. 90

• Habib Bank LimitedE%770) Annua report , pp. 88

• History of HBL. *vailable http+11www.hbl.com

• http+11www!wikipedia!org

• Nevin. $. professor of 6ommerce university of Nerala &rivandrum. "ortfoio

management! !India !!p. %/

• (ehmood Hamid E%775). Internship Report on Habib Bank Limited . Institute of (anagement

$tudies university of .

• (ishkin, =rederic, $ F#he Economics of Money$ Banking and %inancia Market G 0th

3dition.

• $ B k f ! ki E%778)% i M '7

http://www.wikipedia.org/


http://www.hbl.com/

http://www.hbl.com/



http://www.hbl.com/

http://www.hbl.com/


Documents

Ghulam Murtaza Final Report