Executive Summary

Internship report on HBL
An Internship report on
Habib Bank Limited
Submitted to: Sir Nazik Hussain

(Incharge internship and placement)
Submitted By: Maryam Saeeda

Roll No: 230
MBA (E) G2
Department Of Management Sciences
The Islamia University of Bahawalpur
Department of Management Sciences -1-



Preface
The amount of knowledge in the world has been doubled every ten year in last century,
and in turn of 21st century, it will be doubling every five years. This report actually
includes the complete knowledge of internship program.
DMS represents fully applied treasures of knowledge. A business graduate is never

restricted to what is written in the books. One key factor behind the success of
Department of Management Sciences, totally applied and practical knowledge is
delivered to the students of Business Administration. Students are directed to study
books and then apply all to the practical happenings in every area of life. To
accomplish the purpose tours and arranged, assignments are assigned and case study
are used and internship programs are healed.
Internship is one of the part of the MBA program and it providers the practical
knowledge of what students study about business in their books. This is the only field
experience that a student have before entering in to the market.
I have completed my internship in HABIB BANK LIMITED (farid gate branch)

BAHAWALPUR.during my internship I have been observing different departments
which provide a complete knowledge of their working .getting a chance of working in hbl
proves to be very beneficial for me.

Acknowledgement
Indubitably ALLAH ALMIGHTY is the absolute source of all knowledge bestowed

upon humanity and HOLY PROPHET MUHAMMAD (Peace Be Upon Him) is the torch
bearer of guidance towards that knowledge for the entire humanity.
In the first instance, we bow our heads with humble gratitude before ALMIGHTY
ALLAH for making us the part of this world, as Muslim of this sacred land-Pakistan, and
rendering us the inspiration and strength to complete this report.
I would like to say thanks to our supervisor Mr.Nazik hussain who gave us that
opportunity to have practical knowledge of banking sector and actually provided us a
platform, which will give us confidence, courage and capability in the current era of rapid
changes through internship program held in the month and July and augest.
I also feel highly obliged to our parents and the faculty of my department who
guide us at every stage of life.

Dedicated toTwo pillars of
patience and stability in the
era of turmoil…………………..my
parents

Table of contents
Executive summary 01
Introduction of the organization 03
Mission Statement 08
Vision Statement 09
Corporate, business, and developmental strategies 14
Organizational structure 17
Working of various departments 20
Summarized performance of organizations 38
Financial Analysis 41
SWOT Analysis 55
Suggestions and Recommendations 59
Conclusion 61

Executive Summary
HBL is a banking company which is engaged in commercial and retail

banking and related services domestically. And overseas, it is listed at all the stock
exchange of Pakistan. After privatization HBL has changed enough. The adoption of
new technology and offering new produces has made HBL one of the best
commercial banks of Pakistan. I worked in following departments in six weeks of my
internship program.
• Remittances department
• Flexi loans
• Cash department
• Deposit department
Clearing house is a place where representatives of all banks get together for the
purpose of setting the inter bank indebtedness. Arising from the transfer of deposit by a
customer of a particular bank to another bank. A clearing house is an organization of the
member banks, working under NIFT for the purpose of setting inter banks claim resulting
of transmission of funds from one bank to another. The branch cheque/instruments are
credited in to the account of the customer.
Remittance can also offer the accounting concept of a monetary payment

transferred by a customer to a business. A remittance is a transfer of money by a foreign
worker to his home country .during disasters or emergencies, remittance can be a vital
source if income for people whose other forms of livelihood may have been destroyed by
conflict or natural disaster.

Flexi loan is a special scheme of HBL for the employees of Gov.institute. No

security has been taken from the employees of the organizations. Foe flexi loans,
borrower should be account holder of HBL.
Habib bank has introduced ATM (Automated teller machines) in Pakistan for its
customers. ATM card is actually a debit card it has two main types, Gold ATM card and
Classic ATM Card.
The function of the deposit department is to collect cash from the customer and to
deposit it into accounts, maintained by them. Their classification is based on duration and
the purpose of which account is maintained.
The cash department is the most important department of the bank. It receives
cash from the customers and then deposits it into the account of the customer and
maintains their balances.
Total no of branches of HBL are 1489 and no of employees are 14552.Bank

showed a great deal of improvement after privatization. SWOT analysis of HBL shows
that it has a small no of strengths and a lot of weaknesses and threats.
Banks profit has been increased as compared to previous years.

Introduction of the organization
The term bank is derived from an Italian word "BANQUE" which means
"Bench", it means the place where the people meet and solve their financial matters. A
bank is a financial institute licensed by government. Its primary activity includes
borrowing and lending money. Many other financial activities were allowed over time.
For example banks are important players in financial markets and offer financial services
such as investment funds.
Following are the main types of banks.

• Central bank/State Bank
• Commercial Bank
• Exchange Bank
• Industrial Bank
• Agriculture Bank
Central Bank:
A central bank, reserve bank or monetary authority is the entity responsible for
the monetary policy of the country or of a group of a member states. It is a bank that can
lend money to other banks in times of need. Its primary responsibility is to maintain the
stability of the national currency and money supply, but more active duties include
controlling subsidized loan interest rates and acting as a leader of last resort to the
banking sector during times of the financial crisis. it may also have supervisory power, to
ensure that banks and other financial institutions do not behave recklessly or fraudulently.
Department of Management Sciences - 10 -

Commercial Bank:
An institution which accepts deposit makes business loans and offers related
services. Commercial banks also allow for a verity of deposit accounts, such as checking,
saving and time deposit. These institutions are run to make a profit and owned by a group
of individuals, yet some may be the members of the Federal Reserve System. While some
commercial banks offer services to individual, they are primarily concerned with
receiving deposit and lending to business.
Exchange Bank:
The main function of exchange bank is to finance the foreign trade by the
purchase and sale of the foreign currencies in the form of draft, bills of exchange, and
telegraphic transfers. They also perform the function of commercial bank, receiving
deposits and advancing loans.
Agriculture bank:
In Pakistan agriculture bank is named as agriculture development bank of
Pakistan (A.D.B.P) and it was established in 1951. It provides short term, medium and
long tem loans for meeting day to day and permanent needs of farmers.
Industrial Bank:
The industrial bank receives long term deposit and finance. The industries by
providing them long term credits. In Pakistan industrial bank is named as (I.D.B.P) was
established for that purpose.

History of HBL
HBL established operations in 1947 and moved its head office in Karachi. First
international branch was established in Colombo, Sirilinka, 1951and Habib bank plaza
was built in 1972 to commemorate the bank's 25th anniversary.
With the domestic market share of 40%, HBL was nationalized in 1974 and it
continued to dominate the commercial banking sector with the major market share in
inward foreign remittances (55%) and loans to small industries, traders and farmers.
International operations were expanded to include the USA, Singapore, Oman, Belgium,
Seychelles and Maldives and Netherlands.
On December 29, 2003 Pakistan's Privatization Commission announced that the

government of Pakistan had formally granted the AGA khan fund for economic
development(AKFED) rights to 51% of the share holding in HBL, against an investment
of PKR 22.409 billion (USD 389 Million). On Feb. 26, 2004 Management control was
handed over to AKFED, the boards of director was reconstituted to have four AKFED
nominees, including the chairman and the president/CEO and three government of
Pakistan nominees.

Habib plaza was built in 1972 to commemorate the bank's 25th anniversary, tallest
building in Pakistan, is the proud symbol of HBL's leadership in Pakistan's corporate
arena.

Habib bank is working foe the last 50 years and become the largest commercial
bank in the country. It has the authorized capital of Rs.500 million with a paid up capital
and reserves of Rs.858 Million and its deposits are more than Rs.213 Billion in
Approximately 10.7 million accounts. It has the advances of 131 Million.
Habib bank has innovated a number of financial schemes like term deposits,
special notice term deposits, ATM etc. As government are hoping to be liberal and their
policies are innovative and liberal the scope of banking is increasing and Habib bank is
on step ahead if the growth and participating very much in the economic growth of
Pakistan.
Habib bank headquarter is situated in Karachi that building has highest no of

stories in Pakistan. Habib bank has basically 18 regions all over the country those control
the entire activity of Habib bank operations is countrywide.

Vision statement
HBL's vision statement is to be a leading financial institution

and their focus is on improving performance in each of their
businesses to achieve consistent and superior returns for their
highly valued clients. And their focus is also on enabling people to
advance with confidence and success.

Mission Statement
To increase the profitability of our customers through

investing in financially sound and profit earning projects, to make
our customers prosper, our staff excels, and creates value for
shareholders. Along with this opening new horizon and fresh
perspective of trust, dependability and service through 1439
branches and 112 overseas offices with a comprehensive range of
financial products.

Objectives OF HBL
Following are the main Objectives of HBL:
• To earn profit for the bank itself and for its shareholders.
• To promote and boost up business sector inside the country.
• To provide employment opportunity to the people.
• To help in development and indestrlization of the country.
• To provide loan and advances to help out in self employee schemes.
Symbols OF HBL:
BISMILLAH Islamic Culture and values
SWARD Power
LOIN As a symbol of strength

Core Values of HBL
HBL is firmly grounded with a corporate philosophy that incorporates five solid
values which each individual associated by the bank abides by:
Humility:
HBL encourages a culture of mutual respect and treats both their team member
and customer with humility and care.
Integrity:
For HBL, integrity means synergic approach towards abiding their core values,
united with a force of shared values and integrity. They form a network of a well
integrated team.
Meritocracy:
At every level, from selection to advancement they have designed a consistent
system of human resource practices, based on objective criteria throughout all the layers
of the organization. HBL is therefore, able to achieve a specific level of performance at
every layer of the organization.

Team Work:
Their team strives to become a cohesive and unified force, to offer to customer, a
service beyond his expectations. This force is derived from participative and collective
endeavors, a common set of goals and a sprit to share the glory and the strength to face
failures together.
Culture of Innovation:
Their aim is to be a proactively responsive to the new ideas, and to respect and
reward the agents, leaders and creator of change.

Culture of HBL
At HBL we have created a challenging environment that encourages creativity

and commitment. In our pursuit of excellence, we are focused on attracting, developing
and retaining the best talent in the marketplace. Our dynamic culture offers diverse
growth opportunities across Pakistan and in 25 countries around the world.
HBL fosters a work environment where employees can realize their potential
whether locally or in the international arena. Thus, we enable our employees to achieve
their professional goals while keeping in synch with the bank’s overall objectives.
We encourage you to explore this section to find out about current job openings
and how to submit your resume.

Corporate level strategies
HBL has following corporate level strategies

.
Growth strategy:
HBL has adopted growth strategy by expanding its operations. HBL actually have
different products and services for both individuals and business customers. HBL product
and services for individual customers are credit cards, debit cards, and deposit accounts.
HBL product and service for business customer are commercial banking, cash
management and asset management.
Related Diversification:
HBL has also adopted related diversification strategy, because at first function of
HBL was only accepting deposit and advancing loans but now HBL has many related
functions like flexi loans, ATM and credit cards.

Business Level Strategy
Cost Leader Ship strategy:
At business level HBL has adopted cost leadership strategy in a way that cost of
advancing loans is less as compare to some other well reputed banks like Alfalfa, bank
Alhabib, MCB.
Differentiation Strategy:
At business level, HBL has also adopted differentiation strategy by introducing

some new products into the market earlier to other banks like debit cards.

Divisional level strategy
Following are the main divisional level strategy fallowed by HBL
To establish sound relationships with top industrial groups and various multinationals.
• To maker the bank customer focused

• To increase the no of online branches
• To increase the ATM network to further improve the bank market shares.
• To implement the performance appraisal process to provide motivation and merit
oriented culture in the bank
• To improve extensive tanning to the employees in the process, products,
marketing and selling skills.
• Upgrading skills level of employees.

Organizational structure
All of the affairs of HBL are run by the boards of directors, headed by the
chairman and the chief executives, who are responsible for all the matters happened in
the company.
The Management:
R. Zakir Mahmood, President & CEO
Shahid Ghaffar, Chief Risk Officer
Sohail Malik, Chief Internal Auditor
Towfiq Habib Chinoy, Head Global Operations
SadiaKhan,Head Corporate &Investment Banking
Mr.Abid Sattar, Head Retail & Customer Banking
HBL'S management is known for its hard work, product innovation and dedication to
make sure that the development and modernization process keeps the bank in
competition. With a team of talented, service dedicated professional bankers, HBL
commits all of its energies, resources and time to cater banking and financial need of its
valued clients.

Board of directors
• Following are the functions of the board of directors.

• To make the policies for the welfare of the bank employees.
• To declare the profit on deposits.
• To make the policies in order to promote the business of the bank.
• To announce the rate of interest on advances and loans.
Sultan Ali Allana Ahmed Jawad Sajid Zaid Sikandar Mustafa

Chairman Director Director Director
Mustafa Malik R.Zakir Mehmood Moez Jamal

Director Presedent & CEO Director

Manag
er
Sub Manager
Assistant
Cashier

Working of the Departments

Clearing Department
Clearing house is a place where representatives of all banks get together for the
purpose of setting the inter bank indebtedness. Arising from the transfer of deposit by a
customer of a particular bank to another bank.
In clearing department there is no cash involvement, all the transactions are done
through cheques. Actually in clearing, all banks are linked by NIFT (National Institute of
Facilitation Technology). NIFT works under the supervision of SBP.
Form of Clearing
• Simple clearing or normal clearing

• Same day clearing
• Intercity clearing
Simple clearing is the form of clearing in which clearing is done within 24 hours.
There are no charges of simple clearing.
Same day clearing is the form of clearing in which clearing is done within two hours.
Charges of same day clearing in HBL are 550 Rs. Per clearing.
Intercity clearing is made between the banks of different cities. Charges of this
clearing are 330 Rs. Per clearing.

Types of Clearing
• Inward clearing
• Outward Clearing
Inward clearing is the type of clearing in which cheques of other banks came in HBL
and HBL is responsible for clearing these cheques. The answer of these inward clearing
is received from HBL at 12am.
Outward clearing is the type of clearing in which HBL sends its cheques to other
banks for clearing. Other banks are responsible for clearing these cheques. The answer of
these outward clearing is received by HBL from other banks.
Main function of clearing department is to deal mainly in following.
• Outward bills for collection

• Inward bills for collection
Outward bills for collection are instruments drawn on outstations branches of the
bank, sent for collection on the behalf of customer.
Inward bills for collection are the bills received locally. They are received from
outstation b ranches of the banks and parties drawn on recipient banker or other banks.

Function of clearing department
• To accept transfer delivery and clearing cheques from customers of the

bank and to arrange for their collection.
• To arrange the payments of the cheques drawn on branch and given

for collection to the other branches of HBL or other member banks.
• To collect amount of cheques drawn on members of the local clearing house, sent
for collection for those HBL branches which are not represented at the local clearing
house.

Procedure of clearing
In HBL when customer submits his or her cheque for clearing purpose, receipt is
given to customer after stamping discharge stamp on it. Banker checks the amount and
the figures and the branch name also. At first cheque is stamped with crossing stamp to
show that now this cheque is the property of HBL. After that the banker stamps a clearing
stamp on the front side of the cheque and a disbursement guaranteed stamp on the back
side of the cheque.
Than banker puts the cheques in the NIFT bag and close it with seal. NIFT member
comes and take that bag. These cheques are received by the correspondent banks and
converted into the cash and than received by HBL in inward type of clearing. Some
cheques are returned to HBL with an objection memo. Objection memo is a document on
which cheque members of those cheques are mentioned which is returned and reason for
their return is also mentioned.
Reason For Cheques Returned:
• Cheques may be returned due to following reasons.

• Drawee signature differs from the specimen supplied.
• Amount in words and figures differ.
• Funds insufficient.
• Payee's identification required.

Remittance Department
Remittance means "to send money"
Remittance Charges:
Minimum Remittance charges are 143 Rs per Remittance. In case of Cash

Remittance Charges is 0.065% of the total amount of the money. In case of account
Remittance charges are 0.055% of the total amount of the money.
Ways of Remittance:
• Banker's cheque with in city

• Banker's cheque intercity
• Local funds transfer within city
• Local fund transfer intercity
• Foreign fund transfer
Documents invited in bills and Remittance department
Following are the main documents invited in bills and remittance department
• Demand Draft
• Pay Order
• Pay Slip
• Mail Transfer

Demand Draft:
Demand draft is an instrument which is drawn by one branch to another branch of
the same bank. If any person wants to make payment from one city to another city, he can
make payment through demand draft. Bank charges a commission for this kind of service
according to bank rate schedule which is revised after six months.
Pay order:
Pay order is just like cash. If someone wants to make payment to some other
person. He can make payment through pay order slips.
Pay slips:
For payment of internal expenses of a bank, the pay slip is used. For example for
tax payment, repair and maintained expenses.
Mail Transfer:
Bank to Bank Remittances are transferred through mail. It charges are same as of
demand draft plus additional 60 Rs.

Types of Cheques
There are mainly three types of cheques

• Bearer Cheques
• Order cheque /Cross Cheque
Bearer Cheque:
It is also called open cheque. Anyone who has that cheque can withdraw money
by means of that cheque, but the signature of that person is necessary.
Order Cheque:
This cheque is only cashed by the owner of the cheque. Nobody except the
owner of that cheque can withdraw money by means of that cheque.
Cross Cheque:
Cash payment can not be done of cross cheques
It has following types.
• Simple cross cheques like bearer cheque
• Payees account only.
Simple cross cheque can be endorsed, transferred and negotiate. Payees and co
cheque must be endorsed and can be negotiated also. But in payees and co cheque
acceptance and permission of both endorsement and endorsee is necessary.

Payees account only is like order cheque. It cannot be endorsed, transferable and
negotiated.
Flexi Loans
Special Scheme of HBL for the employee of govt. and semi govt. institutes. No
security has been taken from the employees of the organizations. For flexi loans,
borrower should be account holder of HBL.
Basic requirements of flexi loans
• He must be employee of the listed organization

• He must be account holder of the bank
• His job duration should be of one year.
• His retirement period should be greater than the period of the loan.
Document required for flexi loans:
• Letter from employer

• His last month salary slip
• His account statement
• 60post dated cheques
• Promissory notes

Automatic Teller Machine
Habib bank has introduced ATM (Automatic teller machine) in Pakistan for its
customers. ATM card is actually a debit card.
It has two main Types

• Gold ATM Cards
• Classic ATM card
Gold ATM Card:

It is a type of ATM by mean of which, an ATM card holder can withdraw 100000
Rs. In a day.
Classic ATM Card:

It is another type of ATM by mean of which, An ATM card holder can withdraw
maximum 25000 Rs. In one day.
Procedure of getting an ATM Card:
• Customer should be an account holder of HBL

• Application form must be filled .this application form contains detail of personal
particulars. It should also be necessary to mention on that form that either you
want to gain a classical ATM or GOLD ATM. The second portion of that
application form contains supplementary card applicant details. Two

supplementary cards may be issued to the relatives of the classical ASTM card
holder and maximum four supplementary cards can be issued to the relatives of
GOLD ATM Card holder by the permission of that ATM card holder.
• Application is forward to head office .within ten to fifteen days bank receives the
ATM Cards and PIN codes, than bank hands over that card to the customers.
Bank charges 200Rs. per anum.
Working of ATM card:

When client enters his card in machine, it asks for the pin code. If he enters
the pin code three times, the machine captures the card. So pin code increases the safety
of the ATM card of the costumer. But when client enters the correct pin code, then the
amount of money demanded by the costumer is debited from his account. After getting
the amount from machine, the costumer gets a receipt from the machine. This machine
contains the following
• Previous balance
• Transaction amount
• Current balance
• Date
• Time of transaction
• Account number
• Name of costumer
Other Functions of ATM card:

• Utility bills can be paid by the means of ATM Card.
• Money can be deposited by means of ATM Machine.
• An ATM card holder can transfer any amount of money from his account to
another account.

• An ATM card holder can know about the amount of money in his account.
Drawbacks of ATM Machine
In Pakistan online banking is not well developed, some defects are created in ATM
Machine, due to which an ATM card holder cannot withdraw money from it, so ATM
becomes useless in this situation.
Secondly a Gold ATM card holder cannot withdraw more than one 100000 Rs. In
one day and a classic ATM card holder cannot withdraw amount greater than 25000 Rs.

Credit Cards
HBL offers a range of credit cards, accepted in thousands of locations in Pakistan.

These cards facilitate the small financial needs of costumer like shopping of goods or any
short term financing. Limit of credit cards depends on the average balance of account and
monthly income. One of the requirements to issue credit card is that, applicant must be an
account holder of the bank.
Documents required for the credit card:
• Application form of credit card

• Photocopy of CNIC
• Passport size photograph
• Salary certificate
• Last 6 months income certificate

Deposit Department
The function of the deposit department is to collect cash from the costumers and
to deposit it to accounts, maintained by them. Their classification is based on duration
and the purpose for which the account is maintained.
Following types of accounts are maintained for that purpose.
• Current Account or CD
• Saving accounts
• Fixed accounts
• Current Accounts
Current Account:
A current account is actually a running account which is continuously in

operation. The costumer can withdraw the amount from the bank without the prior notice.
The banks don’t pay any type of interest to these account holders. The code which is
mentioned at he last of account number of current account is 03.
Saving Accounts:
A saving account is actually profit and loss account, in this account; account
holder is partner in profit and loss with the bank.
PLS account was introduced in Pakistan in1982. The bank has full right to invest all the
deposits in PLOS saving accounts.

Fixed or Time deposits:

Fixed or time deposits are the major sources of funds for commercial banks. The
rate of interest on fixed deposit is higher than that of current account or a PLS account.
The longer the period for which amount is kept higher is the rate of interest.
Supper Saver:
This account is actually opened for the business people, wealthy people and for
those local firms and business houses which are working in Pakistan. To open and
maintain this account minimum cash is required is RS. 1000000. If the balance falls
below 1 million than No. profit is paid for that particular period. The profit paid on this
account is on daily basis. Profit on the supper saver is subject to with holding tax @ 10 %
as per GOP regulation. Zakat is also deductible form this account.

Types of Fixed Account
• Value account
• Supper value account
The rate of interest on a value account is 12 % and to initiate that account minimum of
10000 Rs. are necessary.
The rate of interest on a Supper value account is 12.5 % and to initiate that account
minimum of 100000 Rs. are necessary.
Joint Account:
Joint account is a special bank account which is opened in the name of two
persons. For withdrawing amount all persons whose name the account stand should sign
the cheque.

Cash Department
The cash department is the most important department of the bank. It receives
cash from the customers and then deposits it to the account of customers and maintains
their balances.
Cash Department
It provides its users with the following facilities

1. Make payments on cheque
2. Accept deposits
3. Collect utility bills
Payment of Cheques:
Ways to make the payment of checques
The checque may be paid by one of the following ways
• By cash payment over the counter

• By transfer from one account to another
• By collection / clearing

Accept deposits:
When a customer wants to deposit any amount to his account it goes to the
relevant officer who accepts deposits and gives a receipt to the customer. The cashier, in
cashier long book enters the amount deposited by the customer on its credit side.
Collection of Utility Bills:

The branch also provides the facility of utility bills collection of electricity Gas
and telephone. The branches collect utility bills during banking hours. Bills could be paid
through cash or checques.

Summarized Performance
HBL has been selected as "The Best Emerging Market in Pakistan' by Global
Finance Magazine. Global Finance Magazine has named the "BEST EMERGING
MARKET BANKS IN ASIA" in an exclusive survey to be published in the May 2009
issue. Global Finance editors with inputs from industry analysts, corporate executives and
banking consultants, selected the best emerging market bank in the region and also in 20
countries.
Global Finance report on the international finance sector , covering topics such as
corporate finance , joint ventures and M& A , country profiles , capital markets , investor
relations , currencies, banking , risk management , custody, direct investment and money
management.
The HBL Board met on Feb. 20, 2009 at Karachi and announced its results for the
year 2008, which show a strong growth in all areas. Deposit growth for the year has been
12.5 % and the net asset growth of the bank has been 19 % over 2007. HBL consolidated
pre-tax profit for 2008 is Rs. 22.03 billion and the profit after tax is Rs. 15.61 billion,
which translates into an earning per share of Rs. 20.47.
As per the circular of SBP (BSD 4 of 2009), wherein the regulators have
encouraged banks to record full impairment, the bank has compiled and in this regard 100
% of the impairment loss to the investment held by the bank, have been routed through
the profit and loss account.

The chairman of HBL, Mr. Sultan Ali Allama presides over the board meeting
and said that the bank's performance, despite the difficult conditions both globally and in
Pakistan, is very encouraging. The bank will continue to focus and invest in technology,
branch upgrades and human resource In order to deliver a higher standard of services to
customers.
The bank announced a final cash dividend of Rs. 5.50 per share (55%) and bonus
share of 20 %. In Oct 2008, HBL received the best bank in Pakistan award in recognition
for its continuous effort in providing world class products and services to customers.
Revelation Inc, a Pakistan based brand development Company, carried out a poll among
marketing and advertising representatives, as well as panel of judges to pick the most
active brand in Pakistan. HBL was received the Busiest Brand award in the Banking and
financial institutions Category.
HBL was competing with strong consumer brands like Olpers and Coca-Cola yet
accomplished third position among top five brands in the entire advertising industry.

Financial Reports
The selected balance sheet and income statement items are showing the financial
positions of HBL.
Consolidated financial highlights of HBL
Description Million in Rupees Million in US$

1998 1999 1998 1999
Shareholder equity 9313.85 705.23 179.46 13.59
Total assets 289862.4 305217.26 5585.15 5881.01
4
Deposits and other 237964.2 250857.78 4585.16 4833.60
Accounts 1
Loans and advances 137123.8 154373.81 2642.14 2974.52
0
Investments(Net of 70676.71 64277.75 1361.82 1238.52
provisions)
Pre-tax Profit/ Loss 1229.97 5262.73 23.70 101.40
Staff Strength 23096 23033
Branches 1773 1760
Domestic Branches 1708 1705
Overseas Branches 65 55
Note: - Conversion Rate Rs. 51.90

Financial Analysis
The ratio analysis and industry analysis tools are very useful for individuals to
instantly assess a company or industry by making two basic types of comparisons. First,
the analyst can compare a present ratio with past (or expected) ratios for the organization
to determine if there has been an improvement or deterioration or no change over time.
Second, the ratios of one organization may be compared with similar

organizations with or industry averages at the same point in time. This is a type of
"Benchmarking" so that one may determine whether the organization is "average" in
performance or doing better or worse than others. For the professional, conducting such
in depth analysis is critical, allowing an analyst to make an informed business or
investment decision.
Following ratios will help us in conducting financial ratio analysis.
 Current ratio
 Advance to deposit ratio
 Networking capital
 Return on assets
 Assets turn over ratio
 Debit ratio
 Advanced to deposit ratio
 Return on deposit

Current Ratio
Years 2005 2006 2007 2008 2009

Ratios 1.77 1.59 0.96 1.1 1.46
1.46 1.77
1
2
3
4
1.1
5
1.59
0.96
Interpretation:
Current ration actually tells us about short term debt paying position of any
organization. About 2:1 current ratio is acceptable. In the financial analysis of HBL
current ratio is decreasing from 2005 to 2006, reason is the increase in current liabilities
but in 2009 current ratio is increasing due to increase in current assets.

Quick Ratio
Years 2005 2006 2007 2008 2009

Ratios 0.94 1.47 2.32 1.35 0.58
Quick Ratio
0.58 0.94
1.35
1.47
2.32
Interpretation:
This ratio is used to check that how much inventory is unsold and includes in current
assets. Because current assets may include inventory in large amount which would
increase the current assets. From the above computation it is observed that the value of
quick ratio is 0.94 in year 2005 while it has increased in the next two years by 1.47 and
2.32 in years 2006 and 2007 respectively. While it is observed that it has again decreased
to 1.35 and 0.58 in year 2008 and 2009 respectively.
Advances to deposit Ratio

Years 2005 2006 2007 2008 2009

Ratios 64.56% 73.58% 74.69% 69.98% 69.72%
Advances to deposit ratio
69.72% 64.56%
69.98% 73.58%
74.69%
Interpretation:
Advances to deposit ratio shows that how much advances we are providing our
customers for deposits. This ratio is increasing from 2005 to 2007 due to increase in
advances and decreasing from 2007 to 2009 due to increase in deposits.

Net working Capital
Years 2005 2006 2007 2008 2009

Ratios 58389842 68290456 78845234 76693124 76756870
Net working capital
2009 2005
2008 2006
2007
Interpretation:
Net working capital can be calculated by subtracting the current liabilities from
current assets. It is also determined for knowing the short term position of any
organization. Net working capital is increasing from 2005-2007 due to increase in
current assets but the value of networking capital is decreasing from 2007-2008 but to
increase in current liabilities.

Return on assets
Years 2005 2006 2007 2008 2009

Ratios 1.8% 1.20% 2.07% 1.05% 1.73%
Return on Assets
1.73% 1.80%
1.05% 1.20%
2.07%
Interpretation:
Return on asset ratio actually tells us that hoe efficiently and effectively we are
using our assets. ROA actually decreases from 2005-2008 due to decrease in net
profit but the value of ROA is increasing from 2008-2009 due to increase in net
profit.
Assets turnover Ratio

Years 2005 2006 2007 2008 2009

Ratios 0.01 Times 0.025 Times 0.02 Times 0.001 Times 0.0125 Time
Asset Turnover Ratio
0.0125 0.01
0.001
0.025
0.02
Interpretation:
This ratio also expresses the efficiency with which a firm is using its assets in
order to generate sales. asset turnover ratio is increasing from2005-2006 due to
increase in total income but decreases from 2006-2007 due to decrease in total
income and the value of asset turnover ratio is showing an increasing trend from
2008-2009 due to increase in total income.
Debt Ratio

Years 2005 2006 2007 2008 2009
Ratios 93.67% 91.99% 91% 89.97% 90.78%
Debt Ratio
90.78% 93.67%
89.97% 91.99%
91%
Interpretation:
Debt ratio shows the proportion of the total assets financed by creditors. In other
words it also shoes that the funds of creditors are safe or unsafe. Debt ratio is
decreasing from 2005-2008 due to decrease in Total liabilities but the value of debt
ratio from 2008-2009 is showing an increasing trend due to increase in total
liabilities.
Debt Equity Ratio
Years 2005 2006 2007 2008 2009

Ratios 0.377 0.31 0.235 0.246 0.222
Debt Equity Ratio
0.222
0.377
0.246
0.235 0.31
Interpretation:
The debt equity ratio indicates the relationship between the long-term funds provided by
creditors and those provided by the firm’s owners. The standard debt equity ratio is
60:40. From the above graph hence it is observed that the value of debt equity ratio
shows a decreasing trend in years 2006,2007,2008,2009.
Return on deposits
Years 2005 2006 2007 2008 2009

Ratios 1.45% 2.65% 4.35% 2.64% 2.93%

Return On Deposits
1.45%
2.93%
2.65%
2.64%
4.35%
Interpretation:
Return on deposit is actually calculated for calculated change in net profit before
tax. Return on deposit is decreasing from 2005-2006 due to decrease in net profit. But
from 2006-2007 ratios is increasing due to decrease in deposit. Ratio is further
decreasing from 2007-2008 due to increase in deposits.
Consolidated Balance Sheet

As at December 31, 2009
2009 2008
(Rupees in '000)
ASSETS:
Cash and balances with treasury banks 40,366,687 39,364,297
Balances with other banks 5,352,873 6,193,787

Lending to financial institutions 216,467,532 129,833,446
Investments 454,662,499 456,355,507
Advances 41,116,582 34,588,444
Other assets 16,766,668 14,751,252
Operating fixed assets 9,205,944 12,186,848
863,778,621 749,806,715
Liabilities:
Bills payable 10,041,542 9,828,082

Borrowings from financial institutions 52,542,978 46,961,165
Deposits and other accounts 682,750,079 597,090,545
Sub-ordinate loans 4,212,080 3,954,925
Liabilities against assets subject to finance lease - -
Other liabilities 29,862,144 25,663,411

- - Deferred tax liability - -
779,408,823 683,498,128
NET ASSETS 84,369,798 66,308,587
Shareholders' equity
Share capital 9,108,000 7,590,000

Reserves 27,527,380 23,656,044
Unappropriated profit 38,498,335
31,933,178
Total equity attributable to equity hd of Bank 75,133,715 63,179,222
Minority interest 1,143,241 890,099
Surplus on revelation of asset 8,092,842 2,239,266
84,369,798 66,308,587
Consolidated Statement of Comprehensive Income

For the Year Ended December 31, 2009
2009 2008
(Rupees in '000)

Profit for the year 13,400,749 10,864,112
Other comprehensive income
Minority share of HBL funds transferred to other liab. 78,933 (10,519)

Effect of translation in foreign branches, subsidiaries 2,695,330 2,996,018
Comprehensive i/n transferred to equity 16,175,012 13,849,611
Components of comprehensive income not reflected in equity
Surplus on revaluation of fixed assets 1,885,159 -

Deferred tax on revaluation of fixed assets (376,827) -
Surplus / (deficit) on revaluation of investments 6,363,436 (7,137,641)
Deferred tax on revaluation of investments (1,793,471) 2,134,415
22,253,309 8,846,385
Attributable to:
Equity holders of the Bank 22,066,998 8,893,541

Minority interest 265,244 (57,675)
Minority investor (78,933) 10,519
22,253,309 8,846,385
Consolidated Cash Flow Statement

For the Year Ended December 31, 2009
2009 2008
(Rupees in '000)
Profit before taxation 21,381,636 16,931,932

Divid income &share of profit of asso& joint venture (751,599) (1,111,810)
Loss / (gain) on sale of investments – net 167,618 (197,242)
(583,981) (1,309,052)
20,797,655 15,622,880
Adjustment for:
Depreciation / amortization / adjustments 1,736,708 1,625,943

Provision against diminution 346,495 1,909,887
Exchange loss on sub-ordinate loans 257,155 854,925
Gain on sale of property and equipment – net (29,410) (41,840)
Miscellaneous provisions 158,794 572,761
11,251,265 11,834,672
32,048,920 27,457,552
Increase) / decrease in operating assets
Lending to financial institutions 840,914 (4,565,657)

Loans and advances (7,101,552) (81,087,692)
Other assets – net (1,128,283) (6,355,923)
(7,388,921) (92,009,272)
Increase / (decrease) in operating liabilities
Deposits and other accounts 85,659,534 65,792,418

Borrowings from financial institutions 5,581,813 (12,033,444)
Bills payable 213,460 (5,590,148)
Other liabilities – net 4,641,308 5,657,085
96,096,115 53,825,911
120,756,114 (10,725,809)
Income tax paid - net (13,002,981) (11,600,790)

Net cash flows from / (used in) operating activities 107,753,133 (22,326,599)
CASH FLOWS FROM INVESTING ACTIVITIES
Net investments in securities (80,372,778) 37,444,490

Dividend income received 269,200 237,291
Fixed capital expenditure (1,948,372) (2,662,833)
Proceeds from sale of fixed assets 105,051 108,033
Exchange adjustment of bal in foreign branches
Joint venture and associates 2,608,858 3,037,018
Net cash flows (used) / from investing activities (79,338,041) 38,163,999
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend paid to minority interest by Modaraba (17,868) (17,868)

Minority interest impact of exchange adjustment on translation of
balances in subsidiaries etc. 86,472 (41,000)
Dividend paid (4,174,604) (2,730,251)
Net cash flows used in financing activities (4,106,000) (2,789,119)
Increase in cash and cash equivalents during the year 24,309,092 13,048,281
Cash and cash equivalents at beginning of the year 89,451,959 75,518,830
Effects of exchange rate changes on cash 6,445,472 7,330,320
95,897,431 82,849,150
Cash and cash equivalents at end of year 120,206,523 95,897,431
SWOT Analysis
Strengths:
• The staff of the bank is skilled, well trained and competent.

• HBL is having Centralized decision making.
• HBL is the Pioneer in introducing the ATM in the country and are widely
used in the business transactions.
• HBL is the fourth largest bank in Pakistan, having 1449 branches divided in to
19 regions.
• HBL is having extensive branch network throughout the country .it has now
680 online branches in Pakistan.
• The reserves of bank are higher.
• Employees are the valuable assets of HBL.
• HBL has the fastest mode of home remittance of 3 days.
• HBL provide courteous services to its customers.
• Every 10th Pakistani is the account holder of HBL.
• I have also observed that the employees of the bank are dealing with their
clients so friendly as if it is their own problem.
Weaknesses:
• Marketing department of HBL is not so effective.

• Bad debt rate is very high.
• Poor system of recovery.
• Sense of insecurity in employees due to downsizing.
• HBL has become victim of political, legal and socio cultural pressure.
• Employees are not satisfied due to unfair promotion system. There is not a right
criterion for promotion; many vacancies are filled at approach basis.
• Advances of HBL are also very low with respect to its competitors.
• Non popularity of travelers cheques, deposits of having a large network of
branches.
• Administrative cost is very high.
• Employees have lethargic attitude especially in main branches.
• Some branches are using manual system.
Opportunities:
• IT can establish their branches online.

• Bank can open more branches in foreign countries in order to make it more stable
and strong.
• HBL is the oldest bank in the country; people can rely on that bank.
• The presence of more technical and professional staff can help the bank in making
progress especially in marketing department.
• Although ATM and online banking has started but can be make more effective by
applying its own ATM network.
• Steps should be taken to increases banks deposits and as these are less than other
competing banks such policies should be adopted to attract customers and the rate
of deposit can increased.
• There is an opportunity to open an entirely separate section for ladies which is a
new idea and will attract female customers.
• HBL has also an opportunity to expand its tale banking and internet banking
facilities in order to serve the customer more efficiently.
Threats:
• Profit is becoming low due to higher cost.

• Poor policies of HBL as compare to other banks are also a threat for HBL.

• Financial environment is changing day to day, new technologies are introduced by
foreign banks that provide customer efficient and quick service.
• Due to low entry barriers, there are more competitors, so the global competition
has increased.
• Branches are not paying sufficient role in competition due to manual system.
• Because of unfair promotion system and absence of proper and recruitment
techniques competent persons may move to other banks.
• The working condition and the outlook of the building can be a threat for HBL.
• Growing global technological advancement.
• Loss of confidence of overseas customers due to freezing of accounts.
Suggestions and Recommendations

HBL established operations in Pakistan in 1947 and moved its head office to
Karachi. First international branch was established in Colombo, Sri Lanka in 1951 and
Habib bank plaza was built in 1972 to commemorate the bank's 25th anniversary.
HBL is providing its customers with value, quality and distinctive level of services
and high ethical standards in all dealings with them. But there is always need of
improvement and need to identify new ways. Here are some suggestions and
recommendations for the improvement of the bank.
• HBL is rated among first 500 banks of the world but now HBL is not progressing
due to inefficient employees. So employees should be hired according to specific
well defined criteria.
• Although ATM and online banking has started but it is not in accordance with
banks large network of branches. Not even half of the branches are equipped with
these facilities, so there is a need to modernize all branches to attract more
customers.
• Advance for non productive projects should be stopped.
• Training should have proper time period.
• Right person on right job should be placed.
• A network of foreign branches should be established to compete the competitors
and to save the huge charges being to the corresponding banks.
• There is a need to improve loaning and finance structure of the bank.

• Proper staff should be in the branches.

• HBL not yet entered in the business of car financing. It can capture market and
easily earn profits by it because it has large no of branches all over the Pakistan.
• Inter link of branches should be made by taking advantage of present
technological advancement.
• There is a need for human recourse development by hiring professional and
competent persons and training the existing force. It will contribute a lot more in
progress of bank.
Conclusion

I have completed internship of six week in HBL, and according to my
observations HBL is performing at satisfactory level. HBL has been declared as no 1
commercial bank of Pakistan. According to my observation, at HBL growth is not a
function of time but rather of performance. As performance of employees improves, the
role that they play within the organization will accelerate to reflect their input.
HBL's performance management reward system ensures that goals are met in an
effective and efficient manner. HBL define a clear path for its worker to contribute to the
organizations overall goals, peppered with regular reviews. HBL focus is on attracting,
developing and retaining the best in the business by offering market driven compensation
and benefit packages.
HBL compensation and benefits strategy combine the needs to maintain a high
performance culture along with market competitiveness. Annual benchmarking exercises
are conducted to stay abreast with industry standards.
With a domestic market share of over 40% HBL was nationalized in 1974 and it
continued to dominate the commercial banking sector with a major market share in
inward foreign remittances (55%) and loans to small industries, traders and farmers.
International operations were expended to include the USA. Singapore, Oman, Belgium,
Seychelles and Maldives and the Netherlands.
HBL has been selected as "The Best Emerging Market Bank in Pakistan" by
Global Finance Magazine. Global Finance Magazine has named the "The Best Emerging
Market Banks in Asia" in an exclusive survey which is published in May 2009 issue.

Global finance editors with input from industry analyst, corporate executives and
banking consultants selected the best emerging market bank in the region and in 20
countries.
HBL announced its result fo the year 2009, which shows a strong growth in all
areas. Deposit growth for the year has been 12.5 % and the net asset growth of the bank
has been 19% over 2008. HBL 'S consolidated pre tax profit for 2009 is rs.22.03 billion
and the profit after tax is rs.15.61 billion, which translate it into an earning per share of
Rs. 20.47.
The customers of bank are increasing every year and that is why the deposit of the
bank is increasing every year but HBL should concentrate on advances. Now HBL is
giving loans for productive projects and non productive loans are completely banned in
HBL for the sake of its progress.
HBL received the Most Innovative GTFP (Global Trade Finance Program) award
The award was received at international finance corporation annual trade conference in
Paris where 126 issuing and 145 conforming multinational banks that were present. This
recognition has raised HBL's profile among a large forum of international banks. In Oct,
2008. HBL received the "best bank in Pakistan" award in recognition for its continuous
effort in providing world class products and services to customers.
I observed that HBL's management is known for its hard work, product
innovation and dedication to make sure that the development and the modernization
process keeps the bank in the competition. With a team of talented, service dedicated
professional bankers, HBL commits all of its energies, resources and time to cater to
banking and financial needs of its valued clients.

HBL recruit experienced professionals in all areas of the bank and encourage the
creation and pursuit of innovative ideas. HBL's dynamic work environment offers diverse
opportunities to stimulate ongoing employee needs and support career enhancement
opportunities.
In HBL employees created a challenging environment that encourages creativity

and commitment .in HBL's pursuit of excellence, HBL has focused on attracting,
developing and retaining the best talent in the marketplace. . HBL's dynamic culture
offers diverse growth opportunities across Pakistan and in 25 countries around the world.
HBL foster a work environment where employees can realize their potential
weather locally or in the international arena. Thus, HBL enable its employees to achieve
their professional goals while keeping in synch with the banks overalls objectives.
In implementation of the structural reforms in the banking sectors, HBL identified

loss making branches and decided to merge such branches with the nearest profit
generating once. Approximately over 120 identified losses making branches were closed
or merged during the last two to three years.
HBL has been a pioneer among banks in Pakistan, particularly introducing a no of

innovative banking products and services. HBL has also attached top priority to
personalized services to clients.
The project of online banking has been successfully introduced and provide
customer with the facility to operate from any branch customer on the network. Over
50% of the branches are computerized and over 50% of the branches have been
connected to the HBL data network among Karachi, Lahore, Rawalpindi, and Islamabad.

The bank has also started replacing system for fund transfer A/C opening etc. by
connecting online with the worldwide inter bank financial telecommunication network
(SWIFT).
According to my observation, meritocracy is an integral part of HBL's recruitment
policy. HBL's merit based recruitment process incorporates the principal of equal
opportunity and leads to the appointment of the most capable candidate. This ensures
openness and transparency, allowing greater confidence in the outcome of the selection
process.
The merit principle at HBL aims to identify the most suitable person for the job
assessed on the basis of the following parameters:
• Educational backgrounds
• Skills and competences
• Experience
• Interpersonal / communication skills
• Abilities and attitude
HBL's size gives it is the unique ability to provide fast growth and significant
responsibility early on in the career with multiple avenues to reach the top. As part of the
HBL's human resources strategy, HBL HR staff visit various universities across the
country to induct and groom fresh business graduates every year. Enthusiastic and
talented youth from the back bone of banking operations and are nurtured to become
future leaders at HBL.

To attract the best young talent, HBL's human resource department employees a
pro active strategy, HBL's recruiting staff actively participate in campus seminars giving
presentations that highlights HBL's background , vision, mission, values , recruitment and
selection process, future career prospectus and overall business strategies. HBL hire fresh
talent on a permanent basis and offer a wide range of career opportunities across all
functions, including finance, marketing, operations, information technology and human
resources.
In short we conclude that despite keen competition among banks operating in
Pakistan and rapid changes in banking and economic scenario, both local and
international, HBL made remarkable performance in every sphere of its activity.

Executive Summary

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Executive Summary

Hochgeladen von

Copyright:

Verfügbare Formate

Internship report on HBL

Habib Bank Limited

Submitted to: Sir Nazik Hussain

Submitted By: Maryam Saeeda

Department Of Management Sciences

The Islamia University of Bahawalpur

Department of Management Sciences -1-

Department of Management Sciences -2-

Department of Management Sciences -3-

DMS represents fully applied treasures of knowledge. A business graduate is never

I have completed my internship in HABIB BANK LIMITED (farid gate branch)

Department of Management Sciences -4-

Indubitably ALLAH ALMIGHTY is the absolute source of all knowledge bestowed

Department of Management Sciences -5-

Dedicated toTwo pillars of

patience and stability in the

Department of Management Sciences -6-

Introduction of the organization 03

Corporate, business, and developmental strategies 14

Working of various departments 20

Summarized performance of organizations 38

Suggestions and Recommendations 59

Department of Management Sciences -7-

HBL is a banking company which is engaged in commercial and retail

Remittance can also offer the accounting concept of a monetary payment

Department of Management Sciences -8-

Flexi loan is a special scheme of HBL for the employees of Gov.institute. No

Total no of branches of HBL are 1489 and no of employees are 14552.Bank

Department of Management Sciences -9-

Introduction of the organization

Following are the main types of banks.

Department of Management Sciences - 10 -

Department of Management Sciences - 11 -

On December 29, 2003 Pakistan's Privatization Commission announced that the

Department of Management Sciences - 12 -

Department of Management Sciences - 13 -

Habib bank headquarter is situated in Karachi that building has highest no of

Department of Management Sciences - 14 -

HBL's vision statement is to be a leading financial institution

Department of Management Sciences - 15 -

To increase the profitability of our customers through

Department of Management Sciences - 16 -

Following are the main Objectives of HBL:

BISMILLAH Islamic Culture and values

LOIN As a symbol of strength

Department of Management Sciences - 17 -

Core Values of HBL

Department of Management Sciences - 18 -

Department of Management Sciences - 19 -

At HBL we have created a challenging environment that encourages creativity

Department of Management Sciences - 20 -

Corporate level strategies

HBL has following corporate level strategies

Department of Management Sciences - 21 -

Business Level Strategy

Cost Leader Ship strategy:

At business level, HBL has also adopted differentiation strategy by introducing

Department of Management Sciences - 22 -

Divisional level strategy

Following are the main divisional level strategy fallowed by HBL

• To maker the bank customer focused

Department of Management Sciences - 23 -

Shahid Ghaffar, Chief Risk Officer