Banks

There are different views about the origin of the word Bank. According to some people the
word bank was borrowed in Middle English from Middle French banque, from Old Italian
banca, from Old High German banc, bank "bench, counter". They argue their point by this
example that Jews merchants transacted their business of money exchange on the benches. If
the money of any businessman failed his bench was destroyed by the people. Due to this
practice the word Bankrupt was also used. On the other hand some people say that the
word Bank is derived from German word back which joint stock fund. Some time the
word Back was replaced by the word Bank which is called Banco in Italian language.
According to Banking Companies Ordinance, 1962, section 5(6) Banking means acceptance
for the purpose of lending or investment, of deposit money from the public, repayable on
demand or otherwise.
According to Wikipedia, a bank is a financial intermediary that accepts deposits and channels
those deposits into lending activities, either directly by loaning or indirectly through capital
markets. A bank links together customers that have capital deficits and customers with capital
surpluses.
Oxford Dictionary defines a bank as "an establishment for custody of money, which it pays
out on customer's order."
According to Crowther, A bank is a firm which collects money from those who have it
spare. It lends money to those who require it.
Banking in Pakistan
At the time of independence there were practically no industries and resources so it was very
difficult of Pakistan to run its own banking system immediately. There were 487 offices of
scheduled banks in the territories now constituting Pakistan. Therefore in accordance with the
provision of India independence Act of 1947, and expert committee was appointed to study
the issue. The committee recommended that the Reserve bank of India should continue to
function in Pakistan until 30th September 1948. It was also stipulated that Pakistan would
take over
The management of public debt and exchange control Reserve bank of India on 1st April
1948. Then Indian notes would continue to be legal ender in Pakistan till 30th September
1948. By 30th June 1948, the number of offices of scheduled banks in Pakistan decline from
487 to 195. In order to establish a full-fledged control bank the Governor General of Pakistan
Quaid-e-Azam Muhammad Ali Jinnah, inaugurated the state bank of Pakistan on July1st,
1948.
Pakistan has a well-developed banking system, which consists of a wide variety of
institutions ranging from a central bank to commercial banks and to specialized agencies to
accommodate for special requirements of specific sectors. The country started without any
worthwhile banking network in 1947 but witnessed phenomenal growth in the first two
decades. By 1970, it had acquired a flourishing banking sector. From 1974, which was the
year of privatization, and 1977 the size of the bank deposits were doubled, however this pace
of growth became stagnant during 1977-80. The next five year from 1980 to '85 showed
some improvement but again suffered a slow growth rate from 1985 to 1988.
It was in 1990 when the wheel of banking sector started in reverse direction when Nawaz
Sharif government privatized public sector banks. First of them was Muslim Commercial
Bank (MCB) which was handed over to Mian Mansha.
The other bank privatized by Nawaz Sharif government was the Allied Bank, United Bank
Limited and the Habib Bank Limited has been privatized.
Introduction of HBL
HBL was the first commercial bank to be established in Pakistan in 1947. Over the years,
HBL has grown its branch network and become the largest private sector bank with over
1,500 branches and 1,300 ATMs across the country and a customer base exceeding five
million relationships.
The Government of Pakistan privatized HBL in 2004 through which AKFED acquired 51%
of the Bank's shareholding and management control. HBL is majority owned (51%) by the
Aga Khan Fund for Economic Development, 42.5% of the shareholding is retained by the
Government of Pakistan (GOP), whilst 7.5% is owned by the general public i.e. over 170,000
shareholders following the public listing that took place in July 2007.
With presence in 25 countries, subsidiaries in Hong Kong and the UK, affiliates in Nepal,
Kenya and Kyrgyzstan and rep offices in Iran and China, HBL is also the largest domestic
multinational. The Bank is expanding its presence in principal international markets including
the UK, UAE, South and Central Asia, Africa and the Far East.
Key areas of operations encompass product offerings and services in Retail and Consumer
Banking. HBL has the largest Corporate Banking portfolio in the country with an active
Investment Banking arm. SME and Agriculture lending programs and banking services are
offered in urban and rural centers.
HBL has a balance sheet size of USD 15.31 billion (FY13) and it is the first Pakistani bank
to raise Tier II Capital from external sources.
History of HBL
HBL established operations in Pakistan in 1947 and moved its head office to Karachi. Our
first international branch was established in Colombo, Sri Lanka in 1951 and Habib Bank
Plaza was built in 1972 to commemorate the banks 25th Anniversary.
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 expanded to include the USA, Singapore, Oman, Belgium, Seychelles and Maldives and
the 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 shareholding in HBL, against an investment of PKR 22.409 billion (USD
389 million). On February 26, 2004, management control was handed over to AKFED. The
Board of Directors was reconstituted to have four AKFED nominees, including the Chairman
and the President/CEO and three Government of Pakistan nominees.
Privatization
The year 2003 was marked by the implementation of the Government of Pakistans program
for privatizing the Bank. Amongst the qualified bidders, the Aga Khan Fund for Economic
Development offered the highest bid, which was accepted by the Government in December.
HBLs privatization is the largest in Pakistans history, and the management takes great
pride in the fact that the bidding took place within four months of the commencement of the
due diligence process in September 2003.
Our Brand
Our brand identity is the outward expression of what we stand for as an organization. This is
summarized in our vision, mission and is supported by our values.
Vision
Enabling people to advance with confidence and success
Mission
To make our customers prosper, our staff excel and create value for shareholders
Values
Our values are the fundamental principles that define our culture and are brought to life in our
attitudes and behaviour. It is our values that make us unique and unmistakable. Our values
are defined below:
Excellence: This is at the core of everything we do. The markets in which we operate are
becoming increasingly competitive, giving our customers an abundance of choice. Only
through being the very best - in terms of the service we offer, our products and premises - can
we hope to be successful and grow.
Integrity: We are the leading bank in Pakistan and our success depends upon trust. Our
customers - and society in general - expect us to possess and steadfastly adhere to high moral
principles and professional standards.
Customer Focus: We understand fully the needs of our customers and adapt our products
and services to meet these. We always strive to put the satisfaction of our customers first.
Meritocracy: We believe in giving opportunities and advantages to our employees on the
basis of their ability. We believe in rewarding achievement and in providing first-class career
opportunities for all.
Progressiveness: We believe in the advancement of society through the adoption of
enlightened working practices, innovative new products and processes, and a spirit of
enterprise.

Future Business Strategy
The bank would continue to maintain its primary focus on the middle market segment
essentially targeting the commercial banking business of this segment with a view to get in to
the consumer banking activities in a significant manner, the bank has secretly commissioned
an independent consulting study for this purpose. Two more consulting assignments have
been awarded to independent consultants to review the banks operating procedures, credit
processing and internal controls etc. these studies have been instituted in order to further
improve the quality of their operation prime bank is now poised to more into the next higher
growth phase high customer satisfaction development of human resource skills and superior
information technology are the cornerstones of its overall strategy to remain in the exclusive
club of winning banks of the future.
Board of Directors
Name Designation
Sultan Ali Allana Chairman
Nauman K. Dar President & CEO
Moez Jamal Director
Sajid Zahid Director
R. Zakir Mahmood Director
Agha Sher Shah Director
Dr. Najeeb Samie Director