Escolar Documentos
Profissional Documentos
Cultura Documentos
To identify the areas of the bank where there is some room for improvement.
CHAPTER- 02
INTRODUCTION TO HABIB BANK LIMITED
2.1 Evolution of Banking
Consensus on the organization of word Bank has not yet reached. According to some
authors this word is derived from the words Bancus or Banque that mean a bench. The
explanation of this origin is attributed to the fact that the jews in Lambard transacted
the business of money exchange on benches in the market place, and when the
business failed, public destroyed the Banco. Incidentally the word bankrupt is said to
have been evolved from this practice. The opponents of this opinion argue that if it
was so, then how is it that the Italian money changers were never called Banchierei in
the middle ages ?
Others authorities hold the opinion that the word Bank is derived from the German
word Back was Italianized into Bank. It is therefore, not possible to decide as to
which of the opinion is correct, for no record is available to ascertain the validity of
any of the opinion .
Personal Banking
Corporate Banking
Online Services
. Virtual Banking
Islamic Banking
4. HBLs Competitive Strategies
2.
3.
4.
5.
In early 90s after the failure of nationalization policy, Government went for
privatization of financial institution. In last ten to fifteen years banking sector in
Pakistan has shown tremendous growth. Due to its remarkable growth, banking sector
of Pakistan has become very attractive for foreign investors. Many investors have
already invested and still many more to come.
2.5 History Of HBL
Habib Bank Limited was established by Mr. Ismail Habib on August 25, 1942 on the
desire of Quaid-e-Azam Muhammad Ali Jinnah, father of the nation. It was
established with paid up capital of Rs. 2.5 million. It was the first Muslim bank of sub
continent. Quaid-e-Azam first of all opened his personal account.
The first branch of HBL started functioning on 30th August, 1942 at Muhammad Ali
Road Bombay, In 1942, on the desire of Quaid-e-Azam, Habib family migrated to
Pakistan and later on shifted the Bank's Head Office from Bombay to Karachi on 7 th
August, 1947 just one week prior to independence, to play its pivotal role in the
development of this newly born country.
At the time of independence, the areas which now constitute Pakistan were producing
only agricultural products raw material for indo-Pak subcontinent. Partially no
industries were there to process the raw material; therefore the raw material was
exported from Pakistan. There were 19 non-Indian foreign Banks which were engaged
in the export of crops from Pakistan with only two Pakistani Banks i.e. HBL and the
Australia Bank. The circumstances were completely un-certain. The confidence of the
people had been shaken by the un-friendly environment and till the time peace had not
been restored, people would naturally have been interested in other things. The nation
was quite young with extreme scarcity of resources and these definitely added to the
difficulties of the govt., to run its own Banking system immediately.
Following the announcement of the independence plan in June, 1947, the Hindus
residing in the territories now comprising Pakistan started transferring their assets to
India and vice versa. The Banks included those having their registered
Offices in Pakistan, transferred them to India in order to bring a total collapse of the
new state. It had been decided that the Reserve Bank of India would continue to
function in Pakistan so that the problem of demand and time liabilities, coinage,
currencies, exchange rate etc be settled between India and Pakistan and the Indian
Notes would continue to be legal tender in Pakistan till 30 th September, 1948. Again
due to certain differences between Indian Pakistan, the
India government withheld Pakistan's share of Rs.75 core in forward and subscribed
heavily to the government of Pakistan to the tide over the crises.
At a time when this newly born country was at whirlwind of crises, it was HBL which
fulfilled generously the financial needs of all its sectors, paid salaries to the
employees of all Govt. departments, helped in the establishment of State Bank of
Pakistan which the Quaid-e-Azam inaugurated on July 1 st, 1948. HBL after partition
opened its branches tFinanceoughout Pakistan to provide finance and other facilities
to the business community. In association with HBL, the Govt. sponsored Pakistan
Finance Corporation Limited for financing of cotton. The Bank helped handsomely in
the construction of WARSAK DAM PROJECT, WAPDA, & K.D.A. by provided
finance and other facilities.
Important Event
1941
Commenced operation.
1942
1943
1946
1947
1966
Silver Jubilee.
1974
1991
Golden Jubilee
1997
2004
2006
2008
2009
DEPOSIT
ADVAN
PROFIT (PRE-TAX)
Rs.
CES
Rs.
(in
Rs.
( in millions)
millions)
in
ASSETS
BRANCHES
Rs.
( in millions)
millions)
194
24.0
10.3
0.4
27.0
266.0
63.7
1.5
321.2
21
7579.8
4005.1
113.0
11679
749
1-42
194
7
197
3
197
8592.8
6212.4
211.8
15,531
1084
120680.2
81140.9
731.0
228,799
1904
283,445
167,225
2224
333,751
1516
328,182
167,523
4088
403,013
1473
360,648
183,654
5469
434,932
1470
404,629
258,306
7146
486,982
1469
432,545
316,681
13833
528,893
1425
459,140
349,432
20532
590,291
1425
517,481
354,980
10199
654,652
1477
437,098
74,622
16254
696,712
1464
4
199
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
Operational & Financial Aspects
MISSION:
To make our customers prosper, our staff excel and create value for shareholders
OR
10
VISION:
Our Brand
Objectives Of HBL:
Following are some of 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 opportunities to people.
To help in development and industrialization of the country.
To provide loan and advances to help out in self employment scheme
11
Humility
HBL encourages a culture of mutual respect and treats both their team members
and customers with humility and care.
Integrity
For them integrity means a synergic approach towards abiding their core values.
United with the 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
Teamwork
Their team strives to become a cohesive and unified force, to offer the customer, a
service beyond his expectations. This force is derived from participated and
12
collective endeavors, a common set of goals and a spirit to share the glory and the
strength to face failure together.
Culture of Innovation
Their aim is to proactively responsive to new ideas, and to respect and reward the
agents, leaders and creators of change
2.11 Corporate Banking
Only local bank with special focus on corporate Banking with a presence in all
major locations tFinanceough out the country, offering full range of Banking
products / services and one window interface tFinanceough designated
Relationship Managers. Our large equity base allows us to take longer per party
exposures to meet the needs of the largest corporate & our extensive local &
foreign network allows us to imperiously service our clients.
Corporate Manages well diversified portfolio, and include most of the top tier
names of the market . Corporate Banking offers tailor made products / solutions as
required by corporate customers which include:
Key Features Of Corporate Banking
Funded facilities, ranging from short to medium and long term lending
Trade related financing.
Foreign currency financing.
All sorts of non-funded facilities / services which include Cash receipts /
payments, Remittances, Collections, Guarantees, letter of credit etc ..
Customized products / solutions
2.12 AWARDS:
2011
'HBL wins Best Emerging Market Banks award in Pakistan 2011'
2009
'The Best Emerging Market Bank in Pakistan'
13
Catalyst of changes.
Professional management.
Credit cards.
Travelers cheques.
Promotion of sports.
in the prescribed form of business. In the light of this section HBLs functions can
be categorized as under:
Agency services.
PC via internet
ii.
iii.
Plain telephone
Graphical analysis
The bank has recently employed local fund transfer service system, which can affect
money transfer with in minutes. Similarly the system used for local transfer of money
transaction.
2.18 Fast Cash Facility
In the fast cash facility foreign fund transfer in the country in also money transfer
with in minutes.
2.19 Asset Product Division (APD)
Which is responsible for the development and management of retail credit schemes
and is presently offering several innovative credit products.
2.20 Investment Products Division (IPD)
It is responsible for developing and managing brands that serve the investment needs
of the consumer market and focus on deposit mobilization and provision of value
added services based on modern technology. This division continuously makes an
effort to provide value-added services and products to its clients.
2.21 Secure transfer of money
Public needs to transfer money from one city to another. The objective of HBL is to
ensure the safe and secure and efficient transfer
2.22 Corporate Banking
HBLs mission is to serve all corporate needs of its customers and ensure full
satisfaction tFinanceough products innovation, personalized banking tFinanceough
relationship banking, best customer services and key contracts.
2.23 HBL Investment Banking
HBL provide innovative and unique advice to its customer in meeting in an innovative
market. A healthy mixture of structuring, advisory and project finance business deals
in leading market firms.
16
Market research
17
19
CHAPTER 03
HABIB BANK STRUCTURE, PRODUCTS, SERVICES
AND DEPARTMENT
3.1 Structure of HBL
At the present the Bank operates tFinanceough one central and 23 Regional Offices
and 1439 branches, all over Pakistan. The president and Executive Committee look
after the affairs of the Bank. Each Regional Head Quarter is headed by a Chief
Executive and assisted by General Manager Operations and General Manager Support
Services. The Regional Head Quarter controls the branches in their area.
Overseas operations consist of 65 main branches, two affiliates, two representative
offices and two subsidiaries.
President, from Head Office at Karachi controls the officers of the Bank with the help
of the senior management. Functional responsibilities of the Banks are broken into
seven groups known as
1)
2)
3)
4)
5)
6)
7)
followed at HBL. No doubt its a very traditional approach but it can create problems
because it ignores the receiver of the communication because the issuer of policies
and procedures does not ensure communication. In reality may the message
communicated downward are not understood perfectly.
Chairman
President
Board of Director
Regional Chief
Zonal Chief
Branch Manager
Operations Manager
Bank Staff
22
23
BMTCS ur h a e d c e q u e C o l l e c t i o n , A / c O p e n i n g ,
ar&Cb n l e F a C r i , n g , F i x e d D e p o s i t s , R e m i t t a n c e e t c .
aAM g d a v a c
en rs a , g
OcHDe r a j j
pheO tpe cp
rMae a r ta t
tami io n
ones n
sat s
g
e
r
s
24
The chain of command is an unbroken line of authority that links all persons in an
organization and shows who reports to whom. By analyzing the organizational
structure it can be found that there is a scalar principle followed with in the Bank
because each and every person knows to whom can one report. The authority and
responsibility for different tasks and duties are different, as well as every one knows
the successive levels of management all the way to the top.
3.7Authorities and Responsibilites
The chain of command illustrates the authority structure of HBL. Authority is the
formal and lefitimate right of the manager to make decision, issue orders and allocates
resources to achieve organizational desired out comes. By the analyzing the chain of
command of HBL, one can come to the conclusion that, as there is scalar pattern
followed at the organizational setup of HBL therefore it is implied that everyone in his
position knows that what is ones authority and what is the responsibility and the
authority it allocated.
3.8 Delegation
Delegation is the process, which managers use to transfer the authority and
responsibility to position below in the hierarchy. Most organizations today encourage
managers to delegate authority to the lowest possible level to provide maximum
flexibility to meet customer needs and adapts to the environment. But at HBL no
such system prevails the managers try to keep as much of the authority as they can
and if some authority is delegated it is sure that it will be mis use
PRODUCTS OF HBL
3.9 PRODUCTS:
HBL i-Card
HBL E-Bank
It can be issued from more than 700 branches all over Pakistan
Keep alive the tradition of Serve you better charge nothing fo the
purchase and sale of Muhafiz.
3.9.2 HBL Auto Finance
26
Purchase of house
2.
3.
Self Construction
28
Financing limit of up to Rs. 7.5 million (Rs. 3.0 million for Home
inprovemnet / Renovation)
Quick processing
30
31
The operational policies of HBL deal with the method of provison of better
services to its customer. TFinanceough the introduction of new schemes as
means of satisfaction for their customers, the operational policy of HBL can be
divided into two spears.
Domestic operations.
International operations.
3.12 Domestic Operations
HBL is quite successfully operating its domestic business , Facilities at the
door step across the length and breadth of the country also in conformity with
the government,s socio-economic objectives. The number of operating
domestic branches total 1350.
3.13International Operations
HBLs overseas branches are continuously rendering satisfactory services and
are also contributing to the channeling home remittances of Pakistan working
abroad. HBLs international network comprises of 60 offices in 26 countries,
Operating in USA, Europe, UK, Middle Ease, Asian pacific Region and
Africa. It is also the largest Banking in financial services provider in Pakistan.
HBL concentrates on markets and business they understood. TFinanceough a
global network, the Bank provide a comprehensive range
of financial
32
3.14
Technology
HBL is enjoying the competitive advantage of vast operational area. There are two
types of branches come under HBL network. One type is the online branches whereas
other type is batch branches (offline branches). So obviously HBL uses two types of
different software. All batch branches use SIMEX software whereas online branches
use MYSIS.
MISYS
Cashier system
This system use only cash transaction like cash withdraw, deposited, Remittance,
Accounts opening, LFT etc.
Equation system
Clearing inward or out ward, special or intercity clearing, supervision
33
3.15DEPARTMENTS
& RESPONSIBILITIES:
3.15
During my internship, I came to known about the following departments
functioning in my branch
34
1.
2.
Cash department.
3.
Credit department.
4.
Lockers department.
5.
6.
7.
I.T department
Copy of CNIC
Utility bill
Student card
Provisional receipt
Address of customer
35
Individual account
2.
joint account
3.
. Business account
4.
Current account
5.
Saving account
Individual account:
Bank opens this account by individually. It involves single person only. Bank
opens this account for one person.
Joint account:
Bank opens this account by one or two person. The two people use
one account in the bank. Bank considers one account by two people. The two
people of joint account show one account according to the law.
Business account:
In this account, bank only business transaction. It is opened by
companies, institution, organization and partnership business. It is purpose of
deal with the businessmen.
Current account:
Bank opens current account to every person. Usually, some current
account have to pay interest by the customer but its rate is low other accounts.
36
Debit card
Overdraft facility
Death of a customer
2.
Notice by a customer
3.
Customer insanity
Death of a customer:
In the case death of the customer, bank may close the account and stop
all transaction related to the person. Bank stop further transaction such as
cheque issue, money transfer etc.
Notice by the customer:
Bank may close this account on the demand of the customer. Customer
gives application to the bank for closing this account.
Customers insanity:
37
Bank terminates this account due to mental of the customer. Bank stop
this transaction with this customer. It is all too easy for the customers needs
by the desires of others within a bank who interpret the customer needs
tFinanceough their own prism. His insanity of the customer, to the knowledge
of the bank, has the effect of revoking this authority, and the bank would not
be necessary in paying the acceptances. That the bank has not been officially
notified of the customer's insanity does not indicate
3.16 Cash Department
Cash department has vital role in the banking sector. All cash transaction
represent in this account such as cash received fro customer, import and export
transaction, bill payment etc. It involves cash payment and receipt transaction
in it.
These are following perform various function in this department:
Acceptance of deposit
Cheque payment
Collection of funds
Remittances
Verification of signature
Posting
38
Cash will be received by the Receipts from the customers in the bank. In the
receipts, the name of the account holder, account number, name of the branch,
dates etc are involved. Customer must also make certain that the receipts are
signed by the person which deposit cash. In some cases, cash is received from
receipt department.
Deposit cash in customer account:
When the customer wants to deposit amount in his account .The account in
which the cash will be deposited. Then customer will receive amount and
credit the customers account that shows increase in customers bank accounts.
Cheque encashment procedure:
The cash is paid to the customer in the cash department such as:
Payment of cash:
After posting the cheque the operation manager cancelled the cheque and
returned back to cashier. The cashier enters the cheque in cash paid registered
and pays against the second signature of receiver on the back of the cheque.
39
Packing credit
Loan to staff
1.
2.
3.
mortgage loan
Running finance:
It include old name overdraft which are meet requirements to the customer.
For example:
secured
share certificate
2.
deposits
3.
unsecured
41
Applicant
issuing branch
Drawee branch
Beneficiary
A demand draft may be issued against the written request of the customer
before
issuing
it
must
be
seen
that
the
demand
draft
is
in
order.
The DD application must be scrutinized by the counter clerk in respect of
following points.
42
Applicant
Drawing branch
Drawee branch
Beneficiary
Pay order:
Pay order is an instrument tFinanceough which payment can be made
from one bank to another bank. Pay order is meant for bank own payment but
in practice they are also issued to customers.
Following parties are involved in pay order:
43
Applicant
issuing branch
Payee
44
Imports and exports act 1950 have empowered the federal Govt to control
the import and export in Pakistan. Pakistan is developing country and like
other developing countries its imports exceeds than exports. To control this
situation the registration of import and export has been made obligatory under
the registration order 1993. The authority of registration has been given to
export promotion bureau. No importer and exporter who has no granted
registration shall indent, import and export of any good into or out of Pakistan.
The requirements for getting registration are as under:
Application form.
45
Fee payment.
Certificate of incorporation.
The major exports from Pakistan are surgical goods, sports goods hand noted
goods, leather goods, textile goods, etc.
Export procedure:
All the exports work under the imports and exports act that is changed by the
state in every year. When the importer send the L.C to bank in respect to
import or when the L.C comes to the advising bank from the issuing bank
then the concerned officer allot the number to the L.C and get registered. The
concerned officer write down the name of issuing bank and the party name in
a register and intimate the party about L.C. the exporter after receiving the L.C
from bank will prepare the documents as per the L.C usually the following
documents have to be prepared by the exporter:
Bill of lading
Covering letter
E- Form
Bill of exchange
Packing list
Commercial invoice
46
Certificate of origin
Duplicate copy is for the bank use that is upraised by the custom
authorities.
Triplicate for the use to report of SBP at the time of payment received.
47
Usage of E- FORM:
E- FORM is an important document for export. It has its own
importance such as this form is used as a checker means it monitor that what
things are going abroad and in return what things we are getting. So it creates
a check and balance on the foreign exchange. It shows the total quantity and
quality of the goods that is sending to another country. An E Form shoe the
party worth that is very helpful for the party and the bank. Bank can create a
party limit for the credit on the behalf of it and a party can arrange a loan for
its future requirements from the bank. It shows the terms of payment by the
importer and the delivery terms by the both parties that is helpful in case of
any discrepancy during the contact.
48
Registration of importers:
A person who wants to approach the bank for importing goods from
abroad, he should have to get himself registered with the export promotion
bureau under registration of imports and exports act. He must fulfill the
following conditions before getting himself registered:
NIC NUMBER
NATIONAL TAX NUMBER
MEMBER OF REGISTERED ASSOSITATION
Documentary letter of credit:
A documentary letter of credit is an instrument or document issued by the
bank on the behalf of a customer, authorizing a beneficiary to draw a draft and
drafts or sometimes the requirement of a draft, which will be honored, on
presentation by the bank if drawn accordance with the te3rm and condition
specified in the letter of credit.
It is the written undertaking by the bank (issuing bank) pay to the seller
(beneficiary) at the request or as per the instruction given by the opener
(applicant) pay at sight or at the future date, a stated sum of money against the
required documents. The documents include the commercial invoice,
certificate of origin, insurance policy or certificate and the documents of
transport relating to the mode sending goods. L/C is therefore is an
arrangement of security for the parties. The conditional guarantee is related to
the documents only and not on the underlying
goods or services.
49
The person applying for the letter of credit must be registered with the EPB.
The opening bank verifies this registration or otherwise exemption. This is
mentioned in the I form. The importer also shows the valid certificate of an
organization membership. A category pass book is issued by the EPB for
registered importer specifying his category. This book is centralized by the
centralized banks in the city. It is not necessary for the bank to hold the
original copy of the pass book of all the importers. But some times the
importer gets L.C from more than one bank so the bank have to hold the photo
copy of this pass book. The applicant can get the application from any branch
of the Habib Bank Limited. However only some branches are authorized to
open L.C. That branches how are not authorized have to contact with the
authorized branches to open an L.C. The authorized branches in such case
require the certificate from the applicant branch that the required formalities
are fulfilled and the approval was obtained with required margin.
For establishment of letter of credit, the importer requests the opening bank
with the following documents:
1)
Credit application form is an agreement between the bank and the customer on
the basis of which the letter of credit is opened. This form contains the
undertaking of the importer that get the documents from the bank at the mark
up price. It contains the following information:
50
Terms of credit.
Description of goods.
Origin of goods.
Forward booking.
Mode of transmission.
Detailed documents.
Shipment period.
4) Appendix B:
This Performa replaces the import license and is submitted along with L.C
application form duly filled in triplicate. It is conditional undertaking that the
imports goods are not banned, not smuggled. It is also an undertaking that if
the bank is unable to arrange the said currency the importer have to purchase it
from other banks or from any other place. It includes the details and
description of goods, codes, class, type, source of import, country of import,
Performa invoice no etc.
5) I FORM:
This form is used at the time of retirement of documents against L.C
established earlier for reporting to the transaction to SBP tFinanceough the bill
of entry deptt. It has four copies that is used as follows:
52
1)
53
An advising bank is a bank in the sellers country. The issuing bank forwards
the advice of the credit by mail or by any mode to the correspondent bank in
the exporter country as instructions of the opener.
Beneficiary (exporter):
The person or body receiving the letter of credit from the importer that is
opened in favor of him.
Confirming bank:
The bank that on the requests of the issuing bank adds confirmation to a
credit. It is definite undertaking of the confirming bank, in addition to the
issuing bank.
Negotiating bank:
It May or may not be the advising bank. An authorized bank that gives the
value to the draft for processing and payments.
Reimbursing bank:
Reimbursing bank is the bank, which on the behalf of the opening bank,
honors the Reimbursing claim lodged by the negotiating bank.
Modes of payment:
55
Importers risks:
Exporters risks:
He does not know the buyer.
56
Delivery at time.
Transfer of risk.
Division of cost.
Notice to buyer.
Proof of delivery.
Other obligations.
Buyers obligations:
Payment of price.
Transfer of risk.
Division of cost.
Notice to seller.
Proof of delivery.
57
Inspection of goods.
Non-payment.
Delay in delivery.
Currency restrictions.
Regulatory restrictions.
FUNCTIONAL RESPONSIBILITIES:
Expenses control
Security matters
58
Background:
Recruiting
Retention
59
Succession planning
Risk Management
Management information
Performance evaluation
Work-life initiatives
60
61
Purpose of credit.
Assessment of management.
Risks.
Financial analysis.
Then the RM sends it to the authorities who accept or reject the proposal. If
they accept the proposal they announced a credit range for the party. At the
end RM sends the proposal to CAD deptt custody and check.
62
fund based:
It is first type of credit facility. In this facility the bank actually provides fund
to customers.
2)
Second type of credit facility that does not provides fun but only give the
guarantee. If the customer is unable to make the payment at maturity date then
bank will be responsible to make the payment.
1. 1.
Every body knows that knowledge does not increase without practice
.practice is an important mean to improve the knowledge. Therefore university
provides internship programmed of six to eight week in different organization
during M.Com so that we could able to apply in theoretical concepts to
practical.
63
I started internship on 5th may to 25th June in water works road branch of habib
bank.
Work done by me in HBL in different departments:
1. 1.
2. 2.
3. 3.
Individual
2)
Firm
3)
Company
4)
Trust
5)
Staff
6)
Others
OPENING AN ACOOUNT:
In order to open an account first of all the customer has to fill a form
prescribed by the bank. The person is required to bring some reference or
introduction for opening the account. Introducer may be a person who has an
account with HBL.
64
One person can open only one account in the same branch with the
same category.
Services charges are not applicable on that accounts that are prescribed
as exempted.
The bank can close those accounts that are under the minimum limit of
the bank.
65
Account holder can only withdraw the sum of money by his own
account by cheque.
The account holder wishing to close the account must surrender the
cheque book.
Data punching
Data punching means feeding of data collected into the computer daily or
weekly. We punch data daily which include in the account. First, we enter
transaction of customer on the basis of buying and selling daily in the
customer account then we punch customer data one by one according to dates
and sequence. TFinanceough data punching, we can easily transfer the data
and money to another account and determine the account information. After
debt and credit amount, we punch data according to their account in the
computer so that we could check data easily. We make cash debit
vouchers.cash
credit
vouchers,sundry
debtor
and
sudry
credit
Public dealing
66
Public dealing means have good behavior with the public for increasing
efficiency and growth. Bank deals with the customer and provides information
of accounts and others which relates to the accounts. Bank guides that how to
open account and forms fill to open new account. Bank issues cheque to the
customer for opening new accounts. Bank asks to the customer about their
needs and requirements and fulfill on time.
Following are includes in public dealing: Accounts Opening, Check book
issuance, Standing instructions, Marking stock payments, Debit Credit card
issuance, Activation of dormant accounts, Making inoperative account into
operation, Recovering of multiple charges availing bank facilities, issuance of
bank account statements
Establish good behavior with the customer to increase our product and
services.
67
CHAPTER -04
FINANCIAL ANALYSIS
4.1 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED DECEMBER 31, 2014
Rs. In 000
Balance Sheet
2014
2013
Assets
135,476,68
Cash & Balances with Treasury Banks
135,276,934 7
67,691450
57341,769
34313560
35271477
826069230
Investments
924307285
Advances
595,295176 563700737
27309803
25706315
68
5103072
Other Assets
82809181
66609013
1,867003,38 171527137
9
21989658
19,422,316
Liabilities
Bills Payable
107,864,42
Borrowings From Financial Institutions
37,430,333
4
653,452,46
721,069,137 0
Subordinated Loans
4,281,835
4,212,080
24,971,618
26,204,580
Net Assets
170,102,575
157283712
4
142,434,25
4
Represented By:
Shareholder's Equity
Share Capital
10,018,800
9,108,000
Reserves
27,671,813
25,801,889
69
Un appropriate Profit
4 4,121,103 36,325,458
8 1,811,716 71,235,347
Minority Interest
7,713,023
7,860,200
142,434,25
4
70
2014
2013
25,057,281 19,485,741
(318,539)
(281,152)
(288,836)
(171,403)
(607,375)
(452,555)
24,449,906 19,033,186
Adjustment for:
Depreciation/amortization/adjustments 1,666,058
1,670,958
389,273
1,387,354
7,559,458
8,276,180
(65)
(268)
equipment-net
69,755
257,155
Miscellaneous provisions
(16,993)
(29,386)
Provision
against
Non-performing
of
premium
on
investments
Gain
on
sale
of
property
and
71
209,043
321,561
9,876,529
11,883,554
34,326,435 30,916,740
Increase/decrease in operating assets
Government securities
Landings to financial institutions
(24,986,471) 840,914
(10,274,430) (4,851,108)
Other assets-net
5,859,907
(1,951,264)
(29,400,994) (5,961,458)
Increase/decrease
in
operating
liabilities
Deposits and other accounts
67,616,677 81,053,273
(266,454)
260,126
Other liabilities-net
(1,350,947) 4,083,696
55,307,960 89,496,068
60,233,401 114,451,350
cash
flows
(10,137,565) (12,265,104)
from
operating
activities
50,095,836 102,186,246
72
Net
investments
in
securities,
319,465
624,628
(948,433)
(1,835,161)
51,667
104,288
308,619
1,689,707
(5,450,436) (4,173,059)
(5,450,436) (4,173,059)
8,419,684
20,007,742
108,541,351 84,639,657
546,149
4,440,101
109,087,500 89,079,758
Cash and cash equivalents at end of the
year
117,507,184 109,087,500
73
Liquidity Ratios
1867003389/1696900814
1715271378/1572837124
1.10
1.0
Comments:
The current ratio of 2014 and 2013 is quite acceptable.
74
It means that its current ratio is less liquid. There is small increase in
industrys ratio which can meet the short term obligations of 2014.
Acid Test Ratio:
Acid test ratio = current asset inventories prepaid
expanses/current liabilities.
2014 Rs. In 000
1867003389-5856878-
1715271378-5855845-
195547/1696900814
1987544/1572837124
0.5303176
0.4612744
C
o
m
m
e
nts:
The acid test ratio is slightly high in 2014 than 2013.
Debt Ratio:
Debt Ratio= Total liabilities/ total assets.
2014 Rs. In 000
0.8990762
0.9036745
Comments:
These values indicate that the firm has financed close to total of its
assets with debt. The higher this ratio, the greater the firms degree
of indebtedness and the more financial leverage it has.
75
Debt-Equity Ratio:
9.7483308
10.416626
Comments:
It is a ratio of amount invested by outsiders to the
amount invested by the owners of the business. This ratio indicates
the low margin of safety to the creditors.2013 and 2012 has high
ratio as compare to 2014. The firm would not be able to meet the
creditors claim because of low assets or shareholder equity.
1.2081
1.4687
[a1]797,527,672
Debt to total capital ratio =long term debt/ (long term debt
+shareholder equity).
2014 Rs. In 000
1.122379
1.1162772
Comments:
This ratio is relating the long-term debt to the
permanent capital of the bank. It shows that the fixed assets
decrease than previous years which show a good sign. This ratio is
considered to be satisfactory.
Profitability Ratios
Profitability measures enable the analyst to evaluate the bank or
firms profits with respect to a given level of sales, a certain level
of assets or the owners investment. Without profits, a bank or firm
could not attract outside capital
77
2014
2013
Rs. In 000
Rs. In 000
19.52%
16.45 %
Return on Assets:
2014
2013
Rs. In 000
Rs. In 000
2.69681
2.74106
2014
2013
Rs. In 000
Rs. In 000
1.7604
1.4975
78
2013
Rs. In 000
Rs. In 000
2.69681
2.74106
[a1]25,057,281
[a2]=
5,057,281+ 3
4,090,368
Comments:
This ratio indicates that banks growth is not good. It
can not cover all assets or expenses tFinanceough net profit before
tax easily. Its not able because its ratio is decreasing than previous
years.
2014
2013
79
Rs. In 000
Rs. In 000
19.08%
17.26%
Comments:
Return on equity indicates the net income by the total
equity of the owners. In the year of 2013, the total equity is
increasing than previous years and net income is also increasing. In
the year of 2014, the total equity is grater than net income. It means
that generally, the bank has high return, the better off are the
owners.
2013
Rs. In 000
Rs. In 000
57.39%
55.73%
Activity Ratios
Activity ratios measure the speed with which various accounts are
converted into sales or cash such as inflows or outflows.
These include:
Total Assets Turnover
80
2014
2013
Rs. In 000
Rs. In 000
0.0902
0.0910
2013
Rs. In 000
Rs. In 000
0.1082
0.1057
Market Ratios
2014
2013
Rs. In 000
Rs. In 000
0.5440
0.4582
81
2013
Rs. In 000
Rs. In 000
1.56
1.35
Comments:
This ratio is decreasing as compare to previous years.
In these ratios, net income is greater than no of shares outstanding.
Thats why, the earning per share is decreasing and growth rate as
well as. It shows low profitability between the shareholders.
82
CHAPTER 05
SWOT ANALYSIS OF HBL
HBL is considered to be a very sound bank in the financial circles. This is the bank
where customers can safely keep their money as long as they want.
In SWOT analysis the best strategies accomplish in organizations mission by:
Strengths
A skill or capability that enables HBL to conceive and implement its
strategies.
The officers of HBL are considered as one of the most able professionals in
the banking world.
I observed that HBL employees (except annoyed ones) interact with their
clients as if they are their personal friends and discuss about their problems as
their own.
HBL has got a reliable and easy to use internal computer system. HBL
maintained its data properly.
HBL has very good security system.
HBL is the larger commercial bank in Pakistan with the network of over 1466
domestic and international branches.
Being the pioneer of banking in Pakistan, HBL is the oldest and is the richest
in experience.
HBL focuses on consumer banking by lucrative schemes, products and
services suiting best to the wants and demands of the customers.
83
HBL has opened all its branches at commercial areas so that the customers or
clients face no problems in reaching to the bank.
The band is always on the look to improve its services both to the domestic as
well as overseas customers.
Human resources development and introduction of new technology towards
modern banking.
24 hours cash access and safe payment products for high value transaction.
Having potential to encounter the competitive environment in the market.
Veteran and experience private management group also involved in other
interests like, textile and cement industry.
Customer enjoys the services at the residential localities.
HBL enjoys deep relations with all most all industries in Pakistan
Weaknesses
There is week communication system in overall
branches.
Highest number of branches effecting the proper maintenance and difficulty in
providing same working environment at the each branch
Poorer system of recovery of the system is a tFinanceeat to bankruptcy.
Lack of customer feedback.
Low job satisfaction.
Poor ATMs Service
Inconsistency in efficiency and working atmosphere due to the largest of
branches.
Sense of insecurity in the employees serving at low profitable branches due to
the downsizing.
Females feel uneasy in an environment among the male workers.
Victim of political, legal and socio-cultural pressures
.Lack of professionalism in the branch employees mostly.
84
Opportunities
Huge untapped market potential in consumer banking as well as Islamic
Banking
Opportunity for developing value added services combined with corporate
banking relationships, cash management services to large and medium sized
corporate clients.
Growing policies of government on business and commerce sector provide
HBL opportunities to take advantages of these policies to meet efficiently with
the business people to solve their problems with the instant cash and financing
facilities.
Government is supporting very bold steps of bringing and promoting IT in
Pakistan. HBL has an opportunity to improve in technology.
Large international network which principally focuses on trade finance with
Pakistan can be utilized to tap trade activities in other markets. In addition,
services such as cross border / offshore financing for corporate customers can
be enhanced.
Customer feedback on different products and accounts has really improved the
bank performance and encourage the atmosphere for other future policies.
HBL also has an opportunity to expand its new technological advancement
more effectively like; phone-banking and internet banking facilities in order to
serve the customer more efficiently, specially
E-banking facility is also a new opportunity which is a flourishing business in
foreign countries and can also be here, if HBL takes the initiatives.
Further reduction in intermediation costs possible, with improving technology.
Due to efficient and veteran management group, HBL can also improve and
expand its foreign operation successfully.
Habib Bank Limited provides opportunity to utilize its skills and efficiencies
in leasing business.
85
TFinanceeats
Prevailing circumstances increases the difficulties the organizations achieving
high performance.
Consolidation in the banking sector resulting in increased competition.
Shortage of trained and specialized staff at lower executive and officer levels
The tFinanceeat of inconsistency and government policy regarding to business
and economics sectors, specially political and regional situation which makes
the environment uncertain.
Growing global technological advancement.
Strict regulation by government over credit facilities to the customers as well
as to meet the prudential.
Loss of confidence of overseas customers due to freezing of accounts.
Facing more competition by foreign banks in the market.
Foreign banks are flourishing in field of consumer financing.
Also the increasing operation of private banks.
Highly attractive and advance services by foreign banks to their customers.
86
CHAPTER 06
CONCLUSION & RECOMMENDATIONS
6.1 CONCLUSION
HBL is clearly the first choice of everyone who believes in qualitative approach of
banking an environment of highly responsible people. Bank is enjoying a healthy
market share and taste of good status in terms of its operative features and customer
support. HBL is clearly the best bank operating in Pakistan. Corporate and
commercial functions are distinguished features of HBL experiencing a good
reputation and reasonable mark up with respect to prevailing market mark up with
assurance of satisfaction and support. HBL has more customers as compare to other
banks, if they given proper attention to every customer then in few years it will be the
leading bank of the country (asset point of view)
RAFIQ has become a creditable name in the textile industry of Faisalabad. In a bid to
prepare itself for the challenges / opportunities of the barrier free trade Textile Vision
2005, their planned spinning unit will help them reap the benefits with competitive
edge of cost effective, quality products. The company has already started exporting
quality yarn to various buyers in the region. We may improve net return on funded
facilities from the relationship by rationalizing the credit portfolio in accordance with
their financial requirements as proposed. In view of the above, we recommend the
proposal for approval.
6.2 Recommendations:
Being a finance student, your main focus should be on finance related issues based on
your training experience and ratio analysis
During my internship, I have realized that habib bank is vast system and spread its
networking all over the world and performing very well. It is difficult to give
suggestion about improving condition of habib bank.
87
So, I will few suggestions to habib bank which are given below:
v
customer so that
They are introduced reasonable shares in the market.
Bank should provide interest free loan to the scholar students for their
encouragement.
v
TFinanceough it, bank can increase more efficiency in the work than without
it.
Habib bank should create plan for opening a customer account with bank
where he could easily know about the procedure of filling forms or cheque of
new accounts. It saves a lot of times of banks and staff who perform it.
Habib bank must introduce marketing programs for the clients so that they
88
Bank should have same behavior with the customer. Bank should not
adopt such a behavior which creates problems between the customer and
banker. For example, bank show good behavior with very close person and
bad behavior show with other person. It is not good position for the banking
growth.
89
REFERENCES
Books
HBL Corporate Profile 2011
HBL Annual Reports 2009and 2011 first Quarter
Articles & Documents
Banking sector reforms in Pakistan:
http://www.ishrathusain.iba.edu.pk/speaches/banking_sector_reforms.pdf
www.encyclopedia.com/doc/1G1-61864366.html
Websites
www.hbl.com
www.habibbankltd.com
www.hblasset.com
www.investopedia.com/articles/07/banking.asp
wiki.pediai.com/Q/ Evolution_of_banking
http://www.habibbankltd.com/index.php
www.corporateinformation.com/Company-Snapshot.aspx
www.linkedin.com/companies/habib-bank-limited
90