CHAPTER 01 INTRODUCTION 1.

1HBL Branch Tatta Pani

The student carried out his internship at HBL branch (1739) Tatta Pani. The branch Manager Mr. Muhammad Kabir appointed Mr. me a #ot o$ #earning a## operation o$ ban%. &uring internship' the internee got training in a## departments o$ ban%ing !ia account (pening' cash' c#earing' accounts' and remittance and credit departments. nsar Bashir as his super!isor "ho he#ps

1.2 Purpose o the Internship

The main purpose o$ the stud) in hand is together re#e!ant in$ormation to compi#e internship report on HBL. To obser!e' ana#)*e and interpret the re#e!ant data competent#) and in a use$u# manner. To "or% practica##) in an organi*ation To impro!e report "riting s%i##s To de!e#op interpersona# communication

1.! Learnin" as an Intern

s e!er)bod) %no"s that +Kno"#edge "ithout practice is steri#e +,n order to gi!e !ent to this idea an ,nternship program o$ si- to eight "ee%s has been arranged in di$$erent esteemed organi*ations during BB . ,n this regard on ./th o$ 0une .11.' he "as as%ed b) Mr. *ad (H2 o$$icer in HBL regiona# o$$ice Mirpur) to go to Habib Ban% Tatta Pani Branch to start an internship o$ si- "ee%s there. &uring this period he got a chance to "or% and #earn in $o##o"ing departments o$ the ban% i. ii. iii. Bi##s c#earing department 3redit department ,.T department 1

i!. !.

3ash department ccounts' TM and Loc%ers department

1.!.1 Duties an# Learnin" in Bi$$ C$earin" Depart%ent

The department in "hich internee got a chance to "or% "as bi## c#earing department. &uring the "or% in c#earing department internee came to %no" about the di$$erent $unctions o$ c#earing department and ho" to per$orm them. ,nternee came to %no" the process o$ recei!ing che4ues b) da%' ho" to chec% che4ues $or an) error #i%e' the che4ues shou#d be o$ the ban% "hich is the c#earing member o$ area "hich comes under tatta pani branch $or e-amp#e i$ the che4ue is o$ ban% a#5$a##ah Kot#i then it shou#d go to *ona# branch o$ #ahore region instead o$ *ona# branch o$ mirpur. Then chec%ing "hether the amount o$ che4ue and (B3 (out"ard ban% co##ections) !oucher attached to it is same or not. ,$ no error is $ound then ma%ing register entries b) noting do"n their obc number branch code and amount o$ the !oucher. Then i. ii. iii. i!. 3a#cu#ating the tota# amount o$ !ouchers b) summing indi!idua# amounts. 3a#cu#ating the tota# amount o$ che4ues b) summing indi!idua# amounts. Preparing an add #ist to be attached "ith c#earing instruments (che4ues). 6riting !ouchers $or demand dra$ts.

nd internee a#so came to %no" about the di$$erent t)pes o$ stamps and their use in particu#ar situation #i%e da% recei!ed stamp and c#earing stamp. $ter attaching add #ist' c#earing instruments are handed o!er to 7,8T $or $urther processing. These c#earing instruments are de#i!ered to their respecti!e ban%s $or c#earance b) 7,8T. ,nternee a#so #earnt in case o$ ban%er9s che4ues ho" to !eri$) signature $rom the boo% in "hich a## the signatures o$ authori*ed persons o$ HBL are gi!en "ith their speci$ic code. nd internee a#so "or%ed on (B3 (out"ard ban% co##ection) $or"arding schedu#e. ,nternee came to %no" the process o$ sending che4ues or other c#earing instruments $or c#earance to *ona# branch o$ another region. i. ii. 8i##ing !ouchers ssigning (B3 numbers .

iii.

Ma%ing entries in (B3 register

1.!.2 Duties an# Learnin" in Cre#it Depart%ent

$ter bi## c#earing department internee started m) "or% and #earning in credit department o$ the branch. Mr. Harpoon Butt (3redit Manager) to#d me about the terms and conditions o$ the commercia# #oan' t)pes o$ commercia# #oan #i%e industria# #oan and #oan $or merchants' ho" to ma%e proposa# $or commercia# #oan' document re4uired to ma%e a proposa#' mar%up o$ commercia# #oan (1:.; < annua##)). He a#so ga!e me chance to !ie" some o#d proposa#s and the proposa# on "hich he "as "or%ing. Mr. s i$ (assistant $or Mr. Haroon butt in credit department) "ho is dea#ing consumer

$inancing. He to#d me about di$$erent t)pes o$ consumer $inancing. i. ii. iii. 8#e-i #oan (persona# #oan) uto $inance Li$est)#e #oan

,n Mirpur region at this point o$ time $rom HBL on#) persona# #oan is acti!e "hi#e auto $inance is about to start again in near $uture and #i$est)#e #oan is inacti!e. ,nternee came to %no" about the terms and conditions o$ persona# #oan. (n#) the go!ernment ser!ant "ho has his sa#ar) account at #east si- month o#d in HBL can app#). &i$$erent mar%up $or di$$erent categories #i%e .1<' .3< and .;< i. ii. iii. .1< $or e-isting users9 up to 3 )ear duration .3< $or e-isting users $or / or ; )ears duration. .;< $or ne" customers

,nternee a#so did "or% on documentation process $or persona# #oan. ,nternee came to %no" about the di$$erent t)pes o$ document re4uired to comp#ete a case $or sending it to regiona# head o$$ice $or appro!a#. &ocument #i%e branch chec% #ist' app#ication $orm' 3op) o$ 37,3 o$ customer and t"o re$erences' 37,3 !eri$ication report $rom 7 &2 ' customer9s account statement' $inance agreement $orm etc

,nternee a#so came to %no" about di$$erent t)pes o$ securities "hich a ban% demands $rom customer "hi#e issuing #oan. =.g. >uarantees' Mortgage' H)pothecation and P#edge

1.!.! Duties an# Learnin" in Account& AT' an# Loc(er Depart%ent

Then ,nternee #earned about TM (automatic te##er machine). ,nternee came to %no" TM machine. Loading cash and ba#ancing TM card to TM

about the $unctions and "or%ing process o$

at the time o$ #oading again. 7e-t m) main concern "as to %no" about a## the aspects o$ TM card. ,nternee came %no" about the t)pes' process o$ issuing customers' $i##ing $orms' ho" to acti!ate card. Then internee spent m) time in #oc%ers department. internee too% a## the in$ormation about the terms and conditions o$ a##otting and operating a #oc%er' t)pes o$ #oc%er #i%e sma##' medium and #arge' charges o$ using #oc%ers' %e) deposit (re$undab#e)' $i##ing app#ication $orms' insurance amount $or speci$ic si*e o$ #oc%er and etc. ,nternee a#so came to %no" about the process o$ operating #oc%er b) the customer' ho" to open the #oc%er "ith the he#p o$ t"o %e)s. i. ii. 1 %e) in the hand o$ ban% o$$icer (antic#oc%"ise) .nd %e) in the hand o$ customer (c#oc%"ise) TM card' charges o$ issuing and using

3ustomer is a##o"ed to operate the #oc%er in $u## pri!ac). (n#) the customer himse#$ or other person authori*ed b) him can operate the #oc%er. $ter that ban% o$$icer has to ta%e the signature o$ the customers on attendance register maintained $or this purpose. Then m) dut) "as in ccounts department. ,nternee came to %no" the procedure $or

$i##ing the $orm to open an account' di$$erent t)pes o$ stamps re4uired and about signature o$ the sta$$. &ocuments re4uired to be attached "ith the $orm. i. ii. iii. i!. 3op) o$ 37,3 ?ti#it) bi## Pro!isiona# receipt K@3 (Kno" @our 3ustomer)

nd ho" to post an account on s)stem a$ter $i##ing the $orm' then ,nternee came to %no" about Aa!ing accounts and di$$erent t)pes o$ accounts in sa!ing categor) and terms and conditions o$ each t)pe. i. ii. iii. i!. !. HBL Ba#ue ccount PLA5Aa!ings ccount 2emittance Muna$a P#us Aa!ings ccount &ai#) Muna$a ccount &ai#) Progressi!e ccount

Then current accounts i. ii. iii. Term accounts i. ii. 83 accounts i. Aa!ings pound) i. H@88& (High @ie#d 8oreign 3urrenc) 8i-ed &eposit) 835AB HBL d!antage ccount ,n!estment p#us &eposit HBL Business Ba#ue ccount 3urrent ccount Basic Ban%ing ccount (BB )

ccount o$$ered in 3 currencies' ?A& (?A do##ar)' =?2 (=uros) and >BP (?K

!ai#ab#e in 1 month' . month' 3 month' C month and 1. Month in ?A&' =?2 and >BP

E)perience
6or%ing $or 1C "ee%s in HBL Tatta Pani Branch as an intern "as !er) in$ormati!e e-perience $or me. &uring the time ,nternee #earnt man) ne" things "hich are sure#) going to he#p me in m) pro$essiona# career. ,t "as a good e-perience $or me to obser!e ;

and to be the part o$ practica# "or%ing o$ an organi*ation #i%e HBL. &uring the internship , got a chance to understand genera# consumer9s beha!ior and his needs and "ants re#ated to ban%ing ser!ices and products.

1.* E+o$ution o Ban(in"

The "ord DBan%D is said to ha!e been deri!ed $rom the "ords Bancus or Ban4ue or Ban%. This histor) o$ ban%ing is traced to as ear#) as .111 B.3. The priests in >reece used to %eep mone) and !a#uab#es o$ the peop#e in temp#es. These priests thus acted as $inancia# agents. The origin o$ ban%ing is a#so traced to ear#) go#dsmiths. The) used to %eep strong sa$es $or storing the mone) and !a#uab#es o$ the peop#e. The persons "ho had surp#us mone) $ound it sa$e and con!enient o$ deposit their !a#uab#es "ith them. The $irst stage in the de!e#opment o$ modern ban%ing' thus' "as the accepting o$ deposits o$ cash $rom those persons "ho had surp#us mone) "ith them. The go#dsmiths used to issue receipts $or the mone) deposited "ith them. These receipts began to pass $rom hand to hand in sett#ement o$ transactions because peop#e had con$idence in the integrit) and so#!enc) o$ go#dsmiths. 6hen it "as $ound that these receipts "ere $u##) accepted in pa)ment o$ debtsE then the receipts "ere dra"n in such a "a) that it entit#ed an) ho#der to c#aim the speci$ied amount o$ mone) $rom go#dsmiths. depositor "ho is to ma%e the pa)ments ma) no" get the mone) in cash $rom go#dsmiths or pa) o!er the receipt to the creditor. These receipts "ere the ear#ier ban% notes. The second stage in the de!e#opment o$ ban%ing thus "as the issue o$ ban% notes.

1., Co%%ercia$ Ban(in" in Pa(istan

,t "as !er) di$$icu#t $or Pa%istan to bui#d up its o"n Ban%ing s)stem immediate#) a$ter independence "ithout su$$icient resources. 8o##o"ing the announcement o$ the partition p#an in 0une 19/7 there "as a haste mo!ement on the parts o$ ban%s to trans$er their $unds and accounts across the borders. The ban%s ha!ing their registered o$$ices in Pa%istan "ere trans$erred to ,ndia. ,n an e$$ort to bring about the co##apse o$ the ne" state b) the persecuting an internationa# po#ic) o$ "ithdra"a#' the ,ndian ban% o$$ices c#osed 4uic%#). Those ban%s' "hich sta)ed' "ere considering the "inding up o$ their business. B) 31th 0une 19/: the number o$ schedu#e ban%s in Pa%istan dec#ined $rom mere scratch C

1.- Histor. o Ban(in" in Pa(istan

The interesting point "hich , obser!ed during the span o$ mine internship "as the historica# bac%ground o$ Ban%ing F 8inancia# sector "hich is the one in "hich great impro!ement and gro"th is obser!ed since the $ormation o$ Pa%istan. 8or stud)ing the gro"th o$ this sector "e can di!ide it into three stages' "hich are as $o##o"s a) b) c) Pre57ationa#i*ation =ra 7ationa#i*ation =ra Post 7ationa#i*ation =ra

1.-.1 Pre Nationa$i/ation Perio#

There "ere on#) t"o Mus#im ban%s in ,ndo Pa% be$ore partitionE the) "ere .Habib Ban% Ltd. (est. in 19/1 at Bomba)) F ustra#ia Ban% Ltd. (=AT. ,n 19// at Lahore). ## other ban%s' at that time' "ere either o"ned b) Hindus or 8oreigners. t the time o$ partition there "ere C31 ban% branches in area "hich came under Pa%istani contro#. But due to b#oodshed and !io#ence at #arge sca#e' most#) branches "ere c#osed and the disparit) can be assessed $rom the $act that on 0u#) 19/: there "ere 19; branches "ith deposits o$ 2s.:: crore (::1 mi##ion) on#). #so a $actor #agging in Pa%istani industr) "as a centra# ban% o$ its o"n' b) that time 2eser!e Ban% o$ ,ndia "as acting as centra# ban% $or both countries and same currenc) notes "ere used in both territories. But 2eser!e Ban% o$ ,ndia "as biased and Aet do"n Pa%istan on man) occasions such as the issue o$ $unds trans$er etc. ,n this period drastic steps "ere ta%en in go!ernment sector $or the impro!ement o$ o!era## position. The pri!ate sector a#so responded to these changes and some !er) positi!e changes "ere obser!ed. Aome o$ the steps ta%en b) the go!ernment in this regard "ere as under

1) ,nauguration o$ Atate Ban% o$ Pa%istan (ABP) on 1st 0u#)' 19/:. .) Aetting up o$ 7ationa# Ban% o$ Pa%istan in 7o!ember' 19/9 to contro# the DGuteD e-port in =ast Pa%istan and to act as agent o$ ABP.

3) Larger po"ers "ere gi!en to ABP through ABP purposes.

ct (19;C) $or contro##ing

/) Ban%ing 3ompanies (rdinance 19C. $or protection and guidance to ban%s. ;) =stab#ishment o$ specia#i*ed ban%s' such as &BP (19;.)E a) HB83 (7o!. 19;.)E b) P13,3 ((ct. 19;7) c) ,&BP ( ug. 19C1)E d) 7&83 (0an' 1973).
These "ere the steps' "hich bui#t a strong ban%ing sector in Pa%istan. This is a#so ob!ious $rom the $acts that b) 1973 there "ere a#most 11 $oreign ban%s "ere "or%ing in Pa%istan and a## o!er deposit position "as around 2s..311 crore (.3'111 mi##ion).

1.-.1 Nationa$i/ation Perio#

(n 0anuar) 11' 197/ a## Pa%istani ban%s "ere nationa#i*ed through 7ationa#i*ation 197/. ?nder this #a" a## Pa%istani ban%s became a pub#ic propert). ct

## sma## ban%s "ere

merged in bigger ban%s to create ; maGor Pa%istani ban%s Pa%istani ban%s. These ban%s "ere to contro# b) Pa%istan Ban%ing 3ounci#. There are sti## contro!ersies about this act o$ go!ernment as "hether it contributed in success o$ $ai#ure o$ ban%s. Ho"e!er the maGor changes a$ter nationa#i*ation "ere as $o##o"s i. ii. iii. 6or%ing o$ ban%s "as e-tended to under de!e#oped areas. Mar%et e-pansion $or credit and deposits. &ecrease in ser!ice #e!e# o$ ban% o$$icers.

1.-.! Post Nationa$i/ation Era

,n 1991 the go!ernment decided to denationa#i*e a## the nationa#i*ed institutes. Aome "as a#so suggested in ban%ing sector. 8or this purpose' amendments "ere made to 7ationa#i*ation ct 197/ and t"o nationa#i*ed ban%s "ere pri!ati*ed. #ong "ith this a permission to open ban%s in pri!ate sector "as a#so granted. The ru#es regarding :

estab#ishment o$ ne" ban%s and $or incoming $oreign ban%s "ere a#so re#a-ed. The5 pri!ati*ed ban%s areE

a) M3B ta%en up b) a pri!ate group in pri#' 1991 b) BL ta%en up b) its o"n emp#o)ees in Aeptember' 1991.

c) ?BL ta%en up b) ? = part) in .11..

d) &ecember .9' .113 HBL "as ta%en b) K8=& $ter these changes a #arge number o$ pri!ate and $oreign ban%s started their operations in Pa%istan and the present status can be seen $rom the $o##o"ing $igure.

Atructure o$ 8inancia# Aector in Pa%istan

0che#u$e# Ban(s (/7) 5 3ommercia# ban%s 5 Apecia#ised ban%s NB1Is 5 Modarabas 5 Leasing companies 5 Mutua# $unds 5 Apecia#ised $inancia# (&8,s) 5 ,n!estment ban%s 5 Housing 8inance 3ompanies

0pecia$ise# Ban(s

Co%%ercia$ Ban(s

1orei"n Ban(s 2223

Do%estic Ban(s 22,3

AourceH ABP report .111

1.4 Ha5i5 Ban( Li%ite#

HBL "as the $irst commercia# ban% to be estab#ished in Pa%istan in 19/7. (!er the )ears' HBL has gro"n its branch net"or% and become the #argest pri!ate sector ban% "ith o!er 1'/;1 branches across the countr) and a customer base e-ceeding $i!e mi##ion re#ationships. 6ith a presence in .; countries' subsidiaries in Hong Kong and the ?K' a$$i#iates in 7epa#' 7igeria' Ken)a and K)rg)*tan and representati!e o$$ices in ,ran and 3hina' HBL is a#so the #argest domestic mu#tinationa#. The Ban% is e-panding its presence in principa# internationa# mar%ets inc#uding the ?K' ? =' Aouth and 3entra# sia' $rica and the 8ar =ast. Ke) areas o$ operations encompass product o$$erings and gricu#ture #ending programs and sian &iaspora in addition to s it continues to 1I (Ahort ser!ices in 2etai# Ban%ing. HBL has the #argest 3orporate Ban%ing port$o#io in Pa%istan "ith inacti!e ,n!estment Ban%ing arm. AM= and ban%ing ser!ices are o$$ered in urban and rura# centers. ,n the ?K and >33' HBL $ocuses on trade $inance and remittances $or the Aouth basic ban%ing $aci#ities.HBL has a#"a)s been a ban% and a brand $or the masses' "ith a histor) that is ine-tricab#) #in%ed "ith the histor) o$ Pa%istan itse#$. approachab#e' and inc#usi!e.HBL is current#) rated gro"' both #oca##) and abroad' it stri!es to embod) its brand persona#it) honest' I (Long term) and term)J. ,t is the $irst Pa%istani ban% to raise Tier ,, 3apita# $rom e-terna# sources.

1.6 Histor. an# Bac("roun#

Habib Ban% Limited "as estab#ished b) Mr. ,smai# Habib (Late) on paid up capita# o$ 2s. ..; mi##ion. 1.. HBL estab#ished operations in Pa%istan in 19/7 and mo!ed its head o$$ice to Karachi. (ur $irst internationa# branch "as estab#ished in 3o#ombo' Ari Lan%a in 19;1 and Habib Ban% P#a*a "as bui#t in 197. to commemorate the ban%9s .;th nni!ersar). 6ith a domestic mar%et share o$ o!er /1<' HBL "as nationa#i*ed in 197/ and it continued to dominate the commercia# ban%ing sector "ith a maGor mar%et share in in"ard $oreign remittances (;;<) and #oans to sma## industries' traders and $armers. ,nternationa# ugust .;' 19/. at

Bomba). ,t "as the $irst Mus#im Ban% o$ the sub5continent. ,t "as estab#ished "ith a t an ear#) stage' the number o$ its branches "as on#)

11

operations "ere e-panded to inc#ude the ?A ' Aingapore' (man' Be#gium' Ae)che##es and Ma#di!es and the 7ether#ands.

1.7 HBL 8ision& 'ission an# 8a$ues 8ision

=nab#ing peop#e to ad!ance "ith con$idence and success

'ission
To ma%e our customers prosper' our sta$$ e-ce# and create !a#ue $or shareho#ders.

8a$ues
(ur !a#ues are the $undamenta# princip#es that de$ine our cu#ture and are brought to #i$e in our attitude and beha!iors. ,t is these !a#ues that ma%e us uni4ue and unmista%ab#e.

1.10 'ana"e%ent Hierarch.

P2=A,&=7T

B( 2& (8 &,2=3T(2

M=MB=2 =K=3?T,B= B( 2&

2=>,(7 L 3H,=8

L(7 L 3H,=8

B2 73H M 7 >=2A AourceH HBL corporate pro$i#e 11

1.11 Desi"nation
President

Aenior =-ecuti!e Bice President (A=BP)

Aenior Bice President (ABP)

Bice President (BP)

ssistant Bice President ( BP)

($$icers >rade 1

($$icer >rade ,,

($$icer >rade ,,,

3ashier

3#er%s

Peon AourceH HBL corporate pro$i#e

1.

1.12 Boar# o Director

NA'E

DE0I9NATION

Au#tan #i ##ana

3H ,2M 7

2. La%ir Mahmood

P2=A,&=7T F 3.=.(

Mushta4 Ma#i%

&,2=3T(2

hmed 0a"ad

&,2=3T(2

@asin Ma#i%

&,2=3T(2

Moe* 0ama#

&,2=3T(2

13

AourceH HBL corporate pro$i#e

1.1! Pro#uct an# 0er+ices

1.1!.1 9enera$ Pro#uct i. ii. iii. Letter o$ >uarantee (L>) Bid F Per$ormance Bonds Mobi#i*ation d!ance >uarantees 1/

1.1!.2 Other Pro#uct an# 0er+ices i. 3ommercia# &a) to da) ban%ing There are a "ide range o$ accounts and ser!ices to he#p )ou ii. iii. i!. 3urrent ccounts 7on5interest bearing account $or )our dai#) ban%ing needs. 3ash Management Aer!ices >i!ing )ou the con!enience o$ cash hand#ing. Habib Ban% =as) ccess 2ea# time Mon#ine ban%ingN at commercia# centers $or

customers on#ine trans$erOdeposit o$ pa)ments. !. HBL =5Ban%ing Habib Ban% Limited has #aunched a product MHBL e5ban%N "hich a##o"s ./ hour access to accounts through internet ban%ing' and P3 ban%ing.

CHAPTER 02 CRITICAL ANAL:0I0 2.1 Porter;s 1i+e 1orces 'o#e$

This approach is "ide#) used $or competiti!e ana#)sis. ,t is because o$ the high intensit) o$ competition among companies there $i!e main competiti!e $orces. 1;

2.1.1 Ri+a$r. a%on" Co%petiti+e 1ir%s ,t is a !er) po"er$u# $orce among the competiti!e $orces the strategies pursued b) one $irm can be success$u# on#) to e-tent that the) pro!ide competiti!e ad!antages o!er the competitor. These competiti!e strategies ma) be #o"ering prices' best 4ua#it) series. The HBL o$$ering !er) #o" charges an demand dra$t' te#egraph) trans$er' mai# trans$er and gi!e other additiona# ser!ices to the customers and to the 7ation. 2.1.2 Potentia$ Entr. o Ne< Co%petitors 6hene!er ne" $irms can easi#) enters a particu#ar industr)' the competition increases. The gout restriction' tari$$s' patents etc can stop ne" $irm to enter into the business as per Ban%ing industr) is concerned this mar%et is a#read) !er) situated in Pa%istan and there are ban%s "ith 4ua#it) ser!ices and #o" charges. Ao there is no threat to HBL $rom potentia# entr) and HBL is a#so a pub#ic sector ban% because o$ that no other ne" ban% not ta%es o!er it. 2.1.! Potentia$ De+e$op%ent o 0u5stitute Pro#ucts This is the third $actor a$$ecting the competitions. There ma) be some other product can be substitute the product o$ that industr). 8or e-amp#e ban%s o$$ering sa!ing schemes in Pa%istan and these schemes are a#so o$$ered b) >P(s in Pa%istan so the) must compete them in this $ie#d. ,$ the) o$$er #o" rates than >P(s so peop#e "i## go to deposit in >P(s. Peop#e concentration high rates so that9s "h) sa"ing PLA accounts are more then current accounts. The ne-t e-amp#es "i## competitors. 2.1.* Bar"ainin" Po<er o 0upp$iers The bargaining po"er o$ supp#ier a$$ects the intensit) o$ competition' especia##) "hen there are a #arge number o$ supp#iers. ,n case o$ ban%s the supp#iers are customers the) supp#) the mone) to ban%s. 7o" the) must o$$er good ser!ices' 4ua#it)' and sa$et). Lo" charges etc to customers in this $ie#d HBL is !er) good. BO3 at o$$ers good 4ua#it) TM' "hich substitute presenting che4ues at counter and encash

it. The HBL is #ac%ing in this $ie#d. ,t must impro!e in this $ie#d to compete the

1C

ser!ices to customers. The) charge #o" charges on remittances. Ao that9s it is a competition to other ban%s. 2.1., Bar"ainin" Po<er o Consu%ers 6hen customers are concentrated or #arge' or bu) in !o#ume' their bargaining po"er represents a maGor $orce a$$ecting intensit) o$ competition. 7o" the number customers in Pa%istan $or ban%s are !er) high. Ban%s o$$ering !ariet) o$ products and ser!ices to their customers.HBL ha!e a #arge number o$ customs. 7o" it must o$$er good ser!ices and products to their customers to attract them to come to HBL.

CHAPTER 0! CO'PETITOR0 ANAL:0I0 !.1 Loca$ Pri+ate Ban(s in Pa(istan

i. ##ied Ban% o$ Pa%istan Limited 17

ii. iii. i!. !. !i. !ii.

s%ari 3ommercia# Ban% Limited Ban% # Habib Ban% # 8a#ah Limited 8a)sa# Ban% Limited M3B Ban% ?nited Ban% Limited

!.2 1orei"n Ban(s in Pa(istan

i. ii. iii. i!. !. 3itiban% 7 HAB3 merican =-press Ban% Limited &oha Ban% Ban% o$ To%)o Mitsubishi Limited

Ho"e!er Habib Ban% $ee#s that its maGor competitors are as $o##o"s i. ii. iii. ?nited Ban% Limited (?BL) M3B Ban% s%ari Ban%

s $ar as ?BL is concerned' Habib Ban% $ee#s that it is a competitor because ?BL itse#$ is a sister HBL o$ Habib Ban% as the a#"a)s a comparison bet"een them. 8urthermore' s%ari Ban% is a competitor because o$ the $act that the product and bu &habi >roup has sta%e in ?BL and so there is

ser!ices that it o$$ers is $air#) simi#ar to that o$ Habib Ban% and its mar%up rates are simi#ar as "e##. M3B' a$ter being pri!ati*ed has a#so introduced a "ide !ariet) o$ ser!ices and "ith its #arge number o$ account ho#ders' it is a#so a big competitor. 3itiban% is a $oreign ban% that has been estab#ished in Pa%istan $or a #ong period o$ time and has introduced a number o$ $irst c#ass ser!ices and as Habib Ban% is a#so competing

1:

in the ser!ices industr)' it needs to benchmar% its product and ser!ices to a ban% "ith a stature to that o$ 3itiban%

!.! 9oa$s an# 0trate"ies

The goa# and strategies o$ ban% are $o##o"ing. !.!.1 Unite# Ban( Li%ite# ?BL "as estab#ished in 19;9' to pro!ide ban%ing $aci#ities to the nation' a$ter its nationa#i*ation in 1971' the ban% became an ine$$icient enterprise' ho"e!er a$ter its pri!ati*ation in .111E the "ho#e $ace o$ ?BL has been changed. Toda) ?BL stands on a so#id net"or% o$ more than 1111 branches nation"ide and 1; o!erseas branches and "ith an e-perience o$ /C )ears its main goa# is to become the #eading ban% o$ Pa%istan. To achie!e its goa#' ?BL has introduced inno!ati!e products in the ban%ing sector to $aci#itate the genera# pub#ic. ,t "as one o$ the !er) $irst ban%s to introduce internet and AMA ban%ing to its customers. ,t has di!ided its ban%ing into three di!isions' each ha!ing customi*ed products to satis$) the needs o$ that particu#ar di!ision i. ii. iii. 3onsumer $or indi!idua# customers 3ommercia# $or sma## and medium enterprises 3orporate $or #arge nationa# and mu#tinationa# companies

These strategies ha!e he#ped ?BL to raise its image in the ban%ing sector. ,ts #ong term credit rating is P I19.

!.!.2 'CB Ban( ,n 197/' M3B "as nationa#i*ed a#ong "ith a## other pri!ate sector ban%s. This #ed to deterioration in the 4ua#it) o$ the Ban%9s #oan port$o#io and ser!ice 4ua#it). =!entua##)' M3B "as pri!ati*ed in 1991. The !ision o$ M3B is P3ha##enging and 3hanging the 6a) )ou Ban%.9

19

The main strategies o$ the ban% ha!e concentrated on gro"th through impro!ing ser!ice 4ua#it)' in!estment in techno#og) and peop#e' uti#i*ing its e-tensi!e branch net"or%' de!e#oping a #arge and stab#e deposit base and managing its non5per$orming #oans !ia impro!ed ris% management processes. ,n .11C' M3B Ban% "as a"arded the =uro mone) "ard $or the Pbest ban% in Pa%istan9' "hich sho"s its commitment o$ changing the "a) )ou ban%. !.!.! As(ari Ban( s%ari 3ommercia# Ban% "as estab#ished in 199.' "ith the !ision o$ maintaining e-ce##ent standards o$ ban%ing 4ua#it) and ser!ice' so as to ser!e its customers better. 6ith time s%ari Ban% has a#so changed its identit)' changing its name to a shorter P s%ari Ban%9' a ne" #ogo and a ne" s#ogan P s% ?s9. s%ari Ban% has a "ide !ariet) o$ product and ser!ices that cater to need o$ a## t)pe o$ customers. ,t a#so de!e#oped a "ide !ariet) o$ products $or the PKsaans9 or $armers o$ Pa%istan' a segment o$ Pa%istani9s neg#ected b) the ba%ing sector o$ Pa%istan. s%ari ban% "as a#so the $irst ban% in Pa%istan to introduce basis. s%ari Ban%s #ong term rating o$ P ser!ices $or its customers. !.!.* Citi Ban( 3iti Ban% "as estab#ished in Pa%istan in 1991 and since then has been using its internationa# roots and %no"#edge to ma%e a name in the Pa%istani ban%ing sector. ,ts main !ision is to pro!ide right $inancia# so#utions 5 e!er) time' a## the time and to $u#$i## their !ision 3iti Ban% has used its abi#it) to identi$) mar%et needs and de!e#op products "hich are uni4ue in concept and $u#$i## customer re4uirements. =!er) customer is ser!ed b) a !ersati#e team o$ re#ationship managers "ho ensure in5depth %no"#edge o$ trends and opportunities "hi#e s)nchroni*ing their $inancia# acti!ities. Aome o$ the inno!ati!e products introduced b) 3iti Ban% or the !er) $irst time in the Pa%istani Ban%ing sector are as $o##o"s .1 I9 b) Pa%istan 3redit 2ating genc) Limited TM machines on a third part)

(P 32 ) a#so sho"s its commitment o$ de!e#oping e-ce##ent standard o$ products and

i. ii. iii. i!.

3iti >o#d Priorit) Ban%ing Photo 3redit 3ard 8irst to #aunch Persona# Loans in Pa%istan 8irst $oreign ban% to #aunch Master3ard in Pa%istan

CHAPTER 0* 0=OT ANAL:0I0 *.1 0=OT Ana$.sis

The acron)m A6(T stands $or a $irm9s interna# Atrengths and 6ea%nesses and its e-terna# (pportunities and Threats. The purpose o$ such ana#)sis is to bui#d on compan)9s strengths in order to e-p#oit opportunities and counter threats and to correct .1

compan)9s "ea%nesses. A6(T ana#)sis is based on the assumption that i$ managers care$u##) re!ie" such strengths' "ea%nesses' opportunities' and threats' a use$u# strateg) $or ensuring organi*ationa# success "i## become e!ident. Atrengths and "ea%nesses t)pica##) re#ate to the interna# en!ironment o$ an organi*ation' "hereas opportunities and threats are brought about b) the e-terna# en!ironment o$ an organi*ation. ,n the $o##o"ing section' both interna# and e-terna# ana#)ses o$ Habib Ban% Limited are out#ined

*.2 Interna$ Ana$.sis

,nterna# ana#)sis o$ a $irm is the ana#)sis o$ its strengths and "ea%nesses. ?n#ess a $irm has interna# strengths and contro#s its "ea%nesses' it cannot ta%e ad!antage o$ opportunities and escape threats "hich the e-terna# en!ironment presents. 8o##o"ing are the main strength and "ea%nesses o$ HBL.

*.2.1 0tren"th
Atrength can be de$ined as an area "here a compan) is best at doing something or a $eature that puts the compan) at an ad!antage in comparison to its competitors. HBL enGo)s the $o##o"ing strengths i. ii. HBL has !er) e$$ecti!e 7et"or% o$ branches a## o!er the countr). =!er) 11th Pa%istani is O3 ho#der o$ HBL has made huge in!estment in a#most

a## the important economic sectors o$ Pa%istan. iii. HBL not on#) has made in!estment in industr) but a#so in sma## sca#e industr) as "e##. i!. !. HBL has e$$icient F #ess bureaucratic set up. HBL has introduced month#) income scheme that pro!ides a#most highest interest rate. !i. !ii. TM "as introduced in Pa%. b) HBL Master card $aci#ities are a#so a!ai#ab#e to the c#ients.

*.2.2 =ea(ness
..

"ea%ness is de$ined as an area in an organi*ation "here the organi*ation is not as good at doing something as its competitors or a thing "hich an organi*ation #ac%s thus putting the organi*ation at disad!antage in comparison to its competitors. Based on the abo!e de$inition' HBL has the $o##o"ing "ea%nesses. i. 7o consumer ban%ing has o$$ered b) the HBL to its c#ients #i%e phone ban%ing e!ening ban%ing etc. ii. Bed &ebt rate is !er) high no specia# e$$ort has been made to reco!er the bed amounts. iii. 7o mar%eting set up or structure is there. Most o$ peop#e do not %no" ho" the) ha!e to promote their acti!ities.

*.! E)terna$ Ana$.sis

n organi*ation has to monitor its en!ironment constant#) to %eep up "ith ne" de!e#opments and changes in the en!ironment. change in the e-terna# en!ironment ma) be either an opportunit) or threat. ,n either case' the organi*ation has to proper#) use it strengths to a!ai# the opportunities and a!oid or minimi*e the negati!e e$$ects o$ threats. 8o##o"ing are the main opportunities and threats o$ HBL.

*.!.1 Opportunities
n opportunit) can be de$ined as a change in e-terna# en!ironment "hich i$ proper#) e-p#oited "ith the organi*ationa# strengths "i## resu#t in enhanced sa#es' mar%et share' or income. ?sing its strengths' HBL can a!ai# the $o##o"ing opportunities i. HBL is o#dest ban% in the countr) peop#e do re#) on this ban% "ith some additiona# e$$orts ban% can attract high deposit $rom Pa%istan and o!erseas. ii. ,nstead o$ emphasi*ing on big F #ong term proGects ban% shou#d concentrate on sma## sca#e in!estments hea!ing sma## maturit) period.

.3

iii.

7o"5a5da)s HBL. has been in!esting a#most 1:< o$ its tota# in!estment on cotton business' a#ong "ith in!estment in cotton it shou#d in!est in other cash crops' i.e. 2ice' Augar 3ane' Tobacco' 6heat etc and their re#ated agro based industr).

*.!.2 Threats
Threat can be de$ined as a change in e-terna# en!ironment "hich i$ not met "ith proper strategies "i## resu#t in #oss o$ re!enues' mar%et share' or income. ,n the conte-t o$ HBL9s e-terna# en!ironment' the $o##o"ing potentia# threats e-ist i. 8irst threat that ban% has to $ace is the Pri!ati*ation' do"nsi*ing F restructuring these changes cou#d ma%e drastic e$$ects as "e##. ii. 7e" incoming #oca# F specia##) $oreign ban%s those are main cause o$ sti$$ competition in the mar%et iii. &8,9s are going !er) "e## in $inancia# set up o$ Pa%istan. Ao' these are a#so e$$ecting on the operations o$ ban%. corruption has !ita# importance. #ong "ith other threats the threat o$

CHAPTER 0, RATIO ANAL:0I0 > RECO''ENDATION ,.1 1inancia$ Per or%ance

Tota# deposits o$ HBL stood at 1'.1; bi##ion as on &ecember 31' .11. sho"ing an impressi!e gro"th o$ 31< compared to corresponding period #ast )ear. The domestic ./

deposit at 2s.1'1/1 bi##ion "itnessed robust gro"th o$ 3.< "hich is much abo!e the industr) gro"th o$ 11<. 2etai# deposits contributed signi$icant#) in increasing the deposits base o$ HBL. The strong per$ormance b) 2etai# ban%ing he#ped HBL to cross 2upee (ne Tri##ion in domestic deposits' ma%ing HBL the $irst ban%ing compan) to ha!e achie!ed this mi#estone in the histor) o$ Pa%istan. The 3apita# de4uac) 2atio (3 2) impro!ed $urther and stood at 1;.:1< as on 31 &ecember .11. as against 1;.C.< as on &ecember 31' .111.The in!estment stood at 2s. 797 bi##ion "hi#e ad!ances at 2s. ;11 bi##ion as on &ecember 31'.11. as against 2s./19 bi##ion and 2s. /;7 bi##ion respecti!e#) in the pre!ious )ear.

,.1.1 Conso$i#ate# 0tate%ent o 1inancia$ Position Ha5i5 Ban( Li%ite# Conso$i#ate# 0tate%ent o 1inancia$ Position As on !1 Dece%5er 2012

.;

,.1.2 Conso$i#ate# 0tate%ent o Pro it an# Loss Ha5i5 Ban( Li%ite# Conso$i#ate# 0tate%ent o Pro it an# Loss 1or The Perio# En#in" !1 Dece%5er 2012

.C

,.1.! Conso$i#ate# 0tate%ent o Co%prehensi+e Inco%e Ha5i5 Ban( Li%ite# Conso$i#ate# 0tate%ent o Co%prehensi+e Inco%e .7

1or The Perio# En#in" !1 Dece%5er 2012

,.1.* Conso$i#ate# 0tate%ent o Cash 1$o< Ha5i5 Ban( Li%ite# Conso$i#ate# 0tate%ent o Cash 1$o< .:

1or The Perio# En#in" !1 Dece%5er 2012

,.2 Ratio Ana$.sis

,.2.1 Return on Assets 2ROA3 sho"s the abi#it) o$ management to ac4uire deposits at a reasonab#e cost and in!est them in pro$itab#e in!estments. This ratio indicates ho" much .9

net income is generated per 2s' o$ assets. The higher the 2( ' the more the pro$itab#e the ban%. Return on Assets 2ROA3 ? 2net pro it@A+era"e assets3 A 100 2012 2011

7et Pro$it

(2upees in P111) (2s.)

..'3;;'7/1 1'37/'931'3:: 1.C3

..'333'1.. 1'133'93C'.1/ ..1C

2eturn on ssets !erage ssets (2upees in P111)

,.2.2 Return on EBuit. 2ROE3 ? net pro it@ A+era"e eBuit.. 2(= is the most important indicator o$ a ban%9s pro$itabi#it) and gro"th potentia#. ,t is the rate o$ return to shareho#ders or the percentage return on each 2s. o$ e4uit) in!ested in the ban%. Return on EBuit. 2ROE3 ? 2net pro it@ A+era"e eBuit.3 A 100 2012 7et Pro$it a$ter ta- (2upees in P111) !erage =4uit) ..3;;7/1 119;:C9C1 2011 ..3331.. 11.9171;.

Q (=4uit) at end o$ period I =4uit) at end) O.R (2upees in P111) 2eturn on =4uit) .1./1 .1.71

,.2.! LiBui# assets to #epositC5orro<in" ratio 2LAD0T3. This ratio indicates the percentage o$ short term ob#igations that cou#d be met "ith the ban%9s #i4uid assets in the case o$ sudden "ithdra"a#s. LiBui# assets to #epositC5orro<in" ratio 2LAD0T3 ? 2$iBui# asset@custo%er #eposit an# short ter% 5orro<e# un#s3 A 100 2012 2011 31

Li4uid assets (2upees in mi##ions) deposit5borro"ing (2upees in mi##ions) Li4uid assets to deposit5borro"ing ratio

9.1'719 1'.1/'9C/ 7;.7:

;11'913 933'C3. ;/.:3

,.2.* Net Loans to tota$ asset ratio 2NLTA3 ? Net $oans@tota$ assets 7LT ban% is. 2012 7et Loans (2upees in P111) Tota# ssets (2upees in P111) /99.:17'91C 1'C11'31:';7. 31.13

measures

the percentage o$ assets that is tied up in #oans. The higher the ratio' the #ess #i4uid the

2011 /;7'3C7'C/C 1'139';;/'.1; /1.13

7et Loans to Tota# ssets ratio

,.2., Tota$ Assets 9ro<th Rate 2012 2011

3hange in tota# ssets ssets at beginning o$ period Tota# ssets gro"th rate

/717;/3C7 1'139';;/'.1; /1.31

3/.;C71:. 9:7C3;:9C .3../

,.2.- Tota$ Ris( =ei"hte# Assets to Tota$ Assets?2tota$ Ris( <ei"hte# assets@ Tota$ Assets3 A 100 2012 2011 31

Tota# 2is% "eighted assets Tota# ssets Tota# 2is% 6eighted ssets to Tota# ssets

777'131'3;7 1C1131:;7. /:..;

C77'1:C'/C. 1139;;/.1; ;9./3

,.2.4 NonCinterest Inco%e to tota$ Inco%e a ratio e-p#aining the portion o$ ban%9s income obtained $rom sources other than the interest $rom its #ending' the more the ratio is more stab#e the ban% "i## be in term o$ its income earnings. NonCinterest Inco%e to tota$ Inco%e Ratio ? 2nonCinterest Inco%e@ Tota$ inco%e3 A 100 2012 7on5interest ,ncome Tota# ,ncome 7on5interest ,ncome to tota# ,ncome 2atio 1;'/11'C9; 73'7.1'3/1 .1.C; 2011 1/.7:/'313 71'1:1'1/1 .1.77

,.2.6 Net Pro it 'ar"in ratio that is a measure o$ the pro$itabi#it) o$ the ban%s and obtained b) di!iding the net pro$it ater ta-ation "ith the net income. 2012 7et Pro$it Tota# ,ncome 7et pro$it Margin ...3;;.7/1 73'7.1'3/1 31.3. 2011 ..'333'1.. 71'1:1'1/1 31.33

,.2.7 Operatin" E)penses to Tota$ Inco%e ratio that sho"s the percentage o$ the operating e-penditures that the ban% current#) has to incur to earn the tota# income $or the period' #ess the ratio is more e$$icient the ban%9s "or%ing "i## be. 3.

2012 (perating =-penses Tota# ,ncome (perating =-penses to Tota# ,ncomeJ 31'7:/.:91 73'7.1'3/1 /..13

2011 31'11/'3/; 71'1:1'1/1 /1..C

Pro5$e% 0ou"ht
&uring m) Ai- "ee%s sta) in (HBL BranchTatta Pani) , $ound !arious prob#ems' "hich , thin%' so shou#d be reso#!ed $or the better $unctioning o$ the Ban%. Pro5$e%s > Reco%%en#ation These prob#ems are 5

33

i. ii.

There is a #ac% o$ on5#ine in$ormation in the Ban%. ,n ear#) da)s o$ month there is a great rush o$ customers' "hich cause incon!enience $or the o$$icer concerned and cashier as "e##.

iii.

Aeparate cabins are not a!ai#ab#e $or the sta$$.

, "i## gi!e $o##o"ing 2ecommendation $or the better $unction o$ the Ban% i. ii. iii. The management shou#d pro!ide better arrangement $or the emp#o)ees. The Ban% management shou#d be !er) care$u# "hi#e granting the #oans. Persona# interests shou#d not be gi!en importance and customers Persona# credit "orthiness must be care$u##) scrutini*ed pub#ic re#ation des% shou#d be estab#ished in each and e!er) branch $or guidance as "e## as redresses o$ grie!ance o$ customers at the spot. i!. !. (n#ine Ban%ing shou#d be introduced in a## the branches. 7e" ta#ent O pro$essiona#s shou#d be hired to coupe "ith the competiti!e demand in the industr). !i. The $inancia# statement shou#d be made more transparent and re#iab#e.

BIBLIO9RAPH:
>itman' L. 0. (.11:). Princip#e o$ Manageria# 8inance. &e#hi' ,ndiaH Pearson. Habib Ban% Limited. (.11.). nnua# 2eport. %arachiH HBL. HBL. (.113). """.hb#.com bout us. 2etrie!ed march .9' .113' $rom HBL corporate 6ebsiteH

3/

Products. (n.d.). 2etrie!ed apri# 1.' .113' $rom HBL "ebsiteH """.hb#.com Bash Mc. (1993). MMone) Ban%ing and ,nternationa# TradeN :th edition' 7e" @or%. Aiddi4ui' srar H. (19:3). MPractice o$ La" F ban%ing in Pa%istanN 3 rd =dition'

Karachi 2o)a# Boo%s compan). Habib Ban% Limited MHBL $inance. 8#ippo' =d"in B. (197C). MPrincip#e o$ Personne# ManagementN 1st edition' To%)o. >ardner' &c. (1991). MBan%ing and Mone) mar%etN 1st edition' London. &c >ardner >roup P#c. Meigs' 6a#ter B. (19:C). M8inancia# Hi## ,nc. Habib Ban% Limited. (.119). MHabib Ban% L,mited )ear boo%N 7ationa# ,nstitute o$ Ban%ing and $inance. Tannan' M.L. (1993). MBan%ing #a" and practice in Pa%istanN Masroor Boo% house. ccountingN 11 th edition' 7e" @or%. Mc>ra" nnua# 2eport .111N 7ationa# ,nstitute o$ Ban%ing and

3;