Professional Documents
Culture Documents
On
Habib Bank Limited
By
AhsanAsghar
Roll No.55
Session 2013-2017
Specialization in Finance
Muzaffarabad
LETTER OF TRANSMITTAL
Dear Sir,
This report is in response to the instructions of your letter No. B Admin/482 /2016 dated
05-05-2016. In which you have confirmed me the nomination of my internship at HBL Narr
Branch Kotli A.K. I have completed my six week training from 11-07-2016 to 22-08-2016 at
2016 .In which you have confirmed me the nomination of my internship at HBL Narr Branch
Kotli A.K. My finding and related recommendations are given in detail in this report, which is
enclosed.
It would be pleasure for me to hear your comments after you have gone through this
report. Though while reading if you like to discuss any point with me, I shall be happy to do so at
Yours truly,
AhsanAsghar
Roll No.55
BBA (Finance)
Session 2013-17
i
Internship letter
ii
Acknowledgements
I am thankful to Almighty Allah Who gave me the strength, patience, courage and enthusiasm
needed to write and complete this report then to my friends who assisted me in this effort and
we worked day long to accomplish this assignment and to my parents who supported me
financially and encouraged me morally. I have a debt of gratitude to all my teachers who taught
It was pleasure for me to be sent to the HBL Nar Branch KotliA.K I am very thankful to the
honorable Internship In charge. I learnt a lot from this training program and this would guide me
a lot while selecting my career. I learnt how to face the problems, how to find out the ways for
The preparation of this report was a massive undertaking but the highly competent and
experienced bankers of HBL Nar Branch Kotli A.K.Provided me with all assistance,
Information, advice and suggestions that I needed which contributed importantly to this report.
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EXECUTIVE SUMMARY
It is well known that time and tide waits for none. Due to this rapid change in time and era we
have to cope with it. During this era the student got an ample opportunity of getting practical
knowledge about the Banking system in Pakistan. So to quench the thirst of practical exposure
and for getting the basic knowledge about Bank the student joinedHBL Nar Branch Kotli A.K.
During six week in HBL all necessary information were gathered about HBL.
Efforts have been made to compile this report in such a way that activates its features not only
for students but also for the layman. This report has been divided into different chapters.
First chapter is about introduction of HBL, Historical evolution of the organization, current
performance and future directions. Second chapter is about Operations of the Organization,
Departments and Products and services of HBL. Third chapter discusses the Porters five forces
which I have worked, Problems encountered and new knowledge acquired. In fifth Chapter
Conclusion and different type of recommendations has been given to different problems.
At last I must say that this text is designed to stimulate the curiosity about management practices
of Habib Bank Limited of Pakistan and to raise readers consciousness about the banking system
iv
List of Acronyms
Acronyms Meanings
v
Contents
Chapter 1 ......................................................................................................................................... 1
1 Introduction ............................................................................................................................. 1
1.1 Introduction to Organization ............................................................................................ 1
1.2 History of HBL................................................................................................................. 2
1.3 Mission and vision of HBL .............................................................................................. 2
1.3.1 Mission...................................................................................................................... 2
1.3.2 Vision ........................................................................................................................ 2
1.3.3 Our Brand.................................................................................................................. 3
1.4 Values of HBL ................................................................................................................. 3
1.4.1 Excellence ................................................................................................................. 3
1.4.2 Integrity ..................................................................................................................... 3
1.4.3 Meritocracy ............................................................................................................... 3
1.4.4 Team work ................................................................................................................ 3
1.4.5 Culture of Innovation ................................................................................................ 4
1.4.6 Progressiveness ......................................................................................................... 4
1.5 Objectives of HBL ........................................................................................................... 4
1.6 Current performance ........................................................................................................ 5
1.7 Future directions ............................................................................................................... 6
Chapter 2 ......................................................................................................................................... 8
2 Operations of Organization ..................................................................................................... 8
2.1 Departments ..................................................................................................................... 8
2.1.1 2.1.1 Accounts Opening Department ........................................................................ 8
2.1.2 Cash department...................................................................................................... 11
2.1.3 Credit Department ................................................................................................... 12
2.1.4 Bills Clearing Department ...................................................................................... 15
2.2 Product and Services of Habib Bank Limited ................................................................ 17
2.2.1 Deposit Accounts .................................................................................................... 17
2.2.2 Loans and Advances ............................................................................................... 19
2.2.3 HBL Credit Card ..................................................................................................... 21
2.2.4 HBL Banc assurance ............................................................................................... 22
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2.2.5 HBL Visa Debit Card.............................................................................................. 22
2.2.6 HBL Fast Transfer .................................................................................................. 23
2.2.7 Lockers .................................................................................................................... 23
2.2.8 HBL ATM ............................................................................................................... 24
2.2.9 Internet Banking...................................................................................................... 25
Chapter 3 ....................................................................................................................................... 26
3 Organizational and Industry Analysis ................................................................................... 26
3.1 Porter's Five Forces Model............................................................................................. 26
3.1.1 Rivalry among Competitive Firms.......................................................................... 26
3.1.2 Potential Entry of New Competitors ....................................................................... 26
3.1.3 Potential Development of Substitute Products ....................................................... 27
3.1.4 Bargaining Power of Suppliers ............................................................................... 27
3.1.5 Bargaining Power of Customers ............................................................................. 27
3.2 SWOT Analysis.............................................................................................................. 28
3.2.1 Strengths ................................................................................................................. 28
3.2.2 Weaknesses ............................................................................................................. 29
3.2.3 Opportunities........................................................................................................... 30
3.2.4 Threats..................................................................................................................... 30
3.3 Financial Statements of Habib Bank Limited ................................................................ 32
3.4 Financial Ratio Analysis ................................................................................................ 35
Chapter 4 ....................................................................................................................................... 40
4 My Internship Responsibilities .............................................................................................. 40
4.1 Departments of Organization in which I have worked .................................................. 40
4.1.1 Deposit Section ....................................................................................................... 40
4.1.2 Clearing Section ...................................................................................................... 41
4.1.3 Remittance Section ................................................................................................. 41
4.1.4 Inland remittances ................................................................................................... 42
4.1.5 Account Section ...................................................................................................... 43
4.2 `Problems Encountered .................................................................................................. 44
4.2.1 Problems ................................................................................................................. 44
4.3 New Knowledge Acquired ............................................................................................. 44
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4.3.1 Account opening section ......................................................................................... 45
4.3.2 Clearing section ...................................................................................................... 46
4.3.3 Remittances section ................................................................................................ 46
Chapter 5 ....................................................................................................................................... 48
5 Conclusion and Recommendations ....................................................................................... 48
5.1 Conclusion...................................................................................................................... 48
5.2 Recommendations .......................................................................................................... 48
Bibliography ................................................................................................................................. 51
viii
Chapter 1
1 Introduction
1.1 Introduction to Organization
Habib Bank Limited was established in Pakistan in 1947. It was the first commercial bank
established in Pakistan. Over the years HBL has expanded its branch network. With over 1600
branches across the country and a customer base exceeding over six million it become largest
private bank. With the presence in more than 20 countries mainly in Hong Kong and United
Kingdom affiliates customers in Nepal, Nigeria, Kenya, Kyrgyzstan and representative offices in
Iran and China. HBL is also largest domestic multinational bank. Now bank is expanding its
presence in big International markets including South and Central Asia, Africa, United Kingdom,
United States of America and far East. Main operations of HBL encompass products offerings
and services in retail banking. Habib bank has the largest Corporate Banking portfolio in
Pakistan with an active Investment banking arm. Small and medium enterprise, agriculture
lending programs and banking services are offered in both rural and urban centers. While In UK
HBL focuses on trade finance and remittances for South Asia in addition with basic banking
facilities. HBL has always been a bank and a brand for masses with a history inextricably linked
with the history of Pakistan itself. As it continues to grow both locally and globally it strives to
embody its brand personality: honest, approachable and inclusive. HBL has currently rated AA+
long term and A1+ short term. It was the first Pakistani bank to raise Tier II capital from external
sources.
1
1.2 History of HBL
Habib Bank Limited was established by Mr. Ismail Habib (Late) on August 25, 1942 at Bombay.
It was the first Muslim Bank of Sub-continent. It was established with paid up capital of RS. 2.5
million. At its early stage the number of its branches was only 12. HBL established its
operations in Pakistan in 1947 and moved its head office in Karachi. First International branch
was established in Colombo, Sri Lanka in 1951. Habib Bank Plaza was first built in 1972 to
commemorate the banks 25th Anniversary. HBL was nationalized in 1974 with domestic market
share of over 40 %. 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 USA, Singapore, Oman, Belgium, Maldives and
Netherland. On December 29, 2003 Pakistans Privatization Commission announced that the
Government of Pakistan had formally granted Agha Khan Fund for economic development
billion (USD 389 million). Management control was handed over to AKFED on February 26,
2004. Board of directors were reconstituted to have four nominees including Chairman and
1.3.1 Mission
To make our customers prosper, our staff excel and create value for shareholders.
1.3.2 Vision
2
1.3.3 Our Brand
Our brand to Identity is the outward expression of what we staff for as an organization. This is
Our values are the fundamental Principles that define our culture and are brought to life in our
attitude and behaviors. It is these values that make us unique an unmistakable. Values of HBL
1.4.1 Excellence
This is at the core of everything we do. The markets in which we operate are becoming
increasingly competitive and giving our customers an abundance of choice. Only through being
the very best in terms of services we offer our products and premises we can hope to be
1.4.2 Integrity
For us integrity means a synergic approach towards abiding our core values. United with the
force of shared values and integrity we form a network of well integrated team.
1.4.3 Meritocracy
At every level from selection to advancement we have designed a consistent system of human
Our team strives to become a cohesive and unified force to offer you, the customer a level of
services beyond your expectations. This force if derived from participative and collective
3
Endeavours a common set of goals and spirit to share glory and strength to face failures
together.
We aim to be proactively responsive to new Ideas with respect and reward to agents, leaders and
creators of change.
1.4.6 Progressiveness
First Objective of HBL is to mobilize private savings and public funds for diverting them
into productive channels and ensure their availability. To promote Industrial agriculture
and socioeconomic process through active participation of private and public sector in
Province.
To help under developed areas and create employment opportunities especially in rural
areas province. Further to guide and assist the people of Pakistan serving overseas to
effectively and profitably invest their foreign savings in the province as well as in other
parts of Pakistan.
To create a diversified and sound portfolio for utilization of Idle funds and their
4
To participate and seek share of country in the capital market of Pakistan by way of
subscription through local people resources in leading stock exchange of country and
eventually paving the way for establishing a stock market in the province.
The Habib Bank Group is leader in Pakistans service Industry. Today HBL has more than 1500
branches all over the Pakistan and presence in 26 countries across five continents. With a
revamped customer oriented philosophy HBL is pursuing new avenues of leadership through
innovation as it gear up to face the challenges of new millennium. A huge network of more than
1500 domestic branches with largest bank in Pakistan and more than 60 International branches
have enabled HBL to provide comprehensive services that meet customer needs. The bank has
one of the most extensive International network amongst the emerging market banks. HBL has
ability to operate successfully in diversified markets and cultures in a function of long history in
International banking. HBL opened first International branch in 1951 and established customer
base. International presence spans major financial centers as well as developing countries. This
has ensured thriving client relationship that forms the backbone of banks operations. Today
HBL plays a central role in Pakistans economic and financial development. It has come a long
way from its modest beginning in Bombay in 1941 when it commenced operations with a fixed
capital of 25000 rupees. Impresses by its initial performance Quaid-e-Azam Muhammad Ali
Jinnah asked the bank to move its operations to Karachi after creation of Pakistan. HBL
established itself in Quaids city 1943 and became symbol of pride and progress for people of
Pakistan. Habib bank has pioneers in providing the innovative banking services. These have
included the installation of first main frame computer in Pakistan followed by first ATM and
5
HBL won Global Finance Awards in 2008 and 2010. In 2010 HBL won Best Bank Pakistan and
Best Trade Finance Provider Pakistan awards. HBL also won best emerging market banks award
in Pakistan in 2010. Global Finance presented HBL with Best Emerging Market Banks award in
Pakistan 2010. This award was conferred on HBL in recognition of its superior performance,
enhanced profitability, expanding asset base and innovative products and services. Habib Bank
Limited is rated AA+ for its long term and A1 for its short term. It is the only Pakistani bank to
Currently the banking network has expansion plans for potentially profitable markets which are
basically inclusive of important markets on global front such as United Kingdom, United Arab
1.8.1 Chairman
Sir Mohammed Anwar Pervez, OBE HPk is the Chairman of the Board of Directors of United
Bank Limited since December 2013. He is also the Chairman of Best way Group UK & its
subsidiaries, which include Batleys Limited and Bestway Cement. He is also Chairman of Best
6
1.8.2 Directors
Mr. HaiderZameerCh
Mr.ZaheerSajjad
Mr. WajahatHusain
7
Chapter 2
2 Departments of Organization
2.1 Departments
Various departments are working in all the branches of Habib bank to facilitate the customers.
Following are the banking departments functioning in HBL Nar Branch Kotli Azad Kashmir.
2. Cash department.
3. Credit department.
Basic function of the accounts department is to open new account and facilitate the customer for
the account opening purpose. There are certain formalities which are to be observed for opening
i. Formal Application
The customer is to fill "Account Opening Form. It is a formal request by a customer to the bank
Copy of CNIC
8
iii. Specimen Signature
When the Banker is satisfied about the integrity of the customer he agrees to open the account.
The Banker obtains the specimen signatures of the customer on the signature book or on card.
After that officer has to post the new account on computer system for further processing. During
the process customer Id and account number is generated. New account remains active for one
day after that it is blocked by the head office until CNIC of the customer is verified from
NADRA.
After the CNIC verification account opening officer has to issue a cheque book to customer so
that he can be able to make withdrawal from his account. Now a day in Habibbankcheque book
vi. Secrecy
The secrecy of depositors account is the responsibility of every official engaged in the Bank
service.
i. Individual Account
Individual accounts are the most common personal investment accounts. Opened by single
person.
9
ii. Joint Account
A joint account occurs when two or more than two customers have one account. The parties to a
Business accounts can be opened by institutions, companies, partnerships, trusts and nonprofit
organizations.
The banker may close the account of the customer due to following reasons
i. Notice by Customer
The banker closes the account of the customer on the application of the customer for closing his
account.
On death of his customer, the bank must stop payment on cheques drawn on him by the deceased
customer because the death revokes his authority to pay such cheque. The heirs or the executors
of the deceased customer are not authorized to operate on the account; it can act only in
accordance with provisions mentioned in the letter of probate issued by a competent courts.
If the customer becomes insane or mental it terminates the bankers authority to act as his
customers agent. Since the banker customer relationship comes to end in such a situation it is
usually considered that the bankers authority to pay his customers cheques is revoked by notice
10
of insanity. However, the bankers treat their customers as it unless a fairly inclusive evidence of
A court of law may serve a banker with an order in garnish proceeding in execution of a decree
Cash Department is very sensitive and risky part of the bank. Very causations and competent
personnel are needed for the Job. HBL has really such a diligent staff with appreciable
competencies and will to do work. Main function of cash department is to deal with cash
The customer fills the pay slip. The cashier receives the pay slip and cash. He counts the cash
and makes the detail of the notes at the back of the pay slip. Then he compares the detail with
amount written on slip and signs the pay Slip. Then he credits the entries in the computer by
serial No, account type, Account number and amount. Puts the stamp of the cash Received on
the payment slip. The first portion is for bank record while other one is given to the customer.
When a customer comes to withdraw a certain amount from his account, he brings a Cheque
along with him. In this case the following steps are taken. The cashier receives the cheque and
checks it whether it is post-dated or predated. Cheque can be cashed within six months. A
predated cheque cannot be cashed. He takes two signatures at the back of the cheque from the
11
bearer. He gives the cheque for posting at the computer. The computer checks out whether there
is balance in the account or not. Other instructions are also received e.g. blocked, frozen, Etc. the
posting is done in the computer and the cheque is stamped posted with the serial number and
date. He gives the cash to bearer and the respected account is debited.
Customer has given filled remittances form with cash or without cash (from account transfer) to
the cashier in cash department who will then credits the beneficiary account.
At the day end cash department is responsible for balancing the cash. Physical cash should be
balanced with the amount in the computer. Nar Branch Kotlibranchs limit for cash is 34million
which it can keep within the branch over the night excess cash is transferred to NBP.
The function of credit department is to lend money in the form of clean advances against
promissory notes as well as secured advances against tangible and marketable securities. The
bankers prefer such securities that do not run the risk of general depreciation due to market
2.1.3.1 Securities
i. Guarantees
When an application for advance cannot offer any tangible security, the banker may rely on
personal guarantees to protect himself against loss on advances or overdraft to the applicant.
12
ii. Mortgage
A mortgage is the transfer of an interest in specific immovable property for the purpose of
security the payment of money advanced or to be advanced by way of loan, and existing or
future debt, or the performance of an engagement which may rise to a pecuniary liability. The
iii Pledge
In a pledge the ownership remains with pledge, but the pledge has the exclusive possession of
property until the advance is repaid in full. While in case of the default the pledge has the power
Sometimes promissory note is also accepted as a security, "A promissory note is an instruments
a fixed or determinable future time a certain sum of money only, to or to the order of certain
persons, or to the bearer or the instrument." A promissory note is incomplete until has been
delivered to payee or the bearer. Moreover, the sum promised in a promissory note may be made
by two or more makers who may be liable there on jointly and severally.
The advances which are given by Habib Bank Limited are as under
Demand Finances are those advances which are allowed in lump sum for a fixed period and are
13
ii. Running Finance (Overdraft)
Running finance (old name overdrafts) are advances, which are generally, given to meet
temporary requirements of the customers. A good customer use the banks running finance limit
as a mean of protecting his credit in the market and as a line of security defenses to meet his
commitments.
The advance facility is allowed both to local foreign bills and is classified as under
FAFB (Local) advance against Railway receipts and truck receipt, a company with bills of
FAFB (Foreign) advances against foreign bill, covering bills of exchange bills of lading airway
Loans to the farmers with holding up to 25 acres for meeting their short terms, medium and long
Agricultural inputs
Tube wells
Live-stock framing
Land improvement
v. Industrial Loans
14
Besides the short-term loans which play a part in working capital medium and long term loans
are also given to industrial sector for purchase of machinery and other capital nature goods.
Paying Bank
Collecting Bank
Here in theory no legal obligation on a banker to collect cheques, drawn up to other banks for a
NIFT is a joint venture between a consortium of six major banks and private sector. It is
To accept transfer deliveries and clearing cheques from the customer of the branch and to
To arrange the payment of cheque drawn on the branch and given for collection to any
other branch of Habib Bank of Pakistan or any other members, or sub-members of the
15
To collect amounts of cheques drawn on members, sub-members of the local clearing
house, sent for collection by those Habib Bank Limited, branches which are not
Whenever a customer wants to deposit cheque etc., he fills a pay in slip and hands it over the
counter along with the instruments he wants to deposit with bank. As far as possible the
customer desire that on of the staff member fill in a slip for him he should be obliged promptly.
One portion of the perforated pay in slip is handed over to the depositor and the portion becomes
Transfer Cheques
Transfer cheques are those cheques, which are collected and paid by the same branch of bank.
Transfer Deliver cheques are those cheques, which are collected and paid by two different
Clearing Cheques
16
Clearing cheques are those cheques in which the payee (Person who deposit cheques for
collection) and the drawer of a cheque maintain the account with different banks.
These clearing instruments are handed over to NIFT after posting necessary stamps and checking
them for any errors. Then further process of clearing is carried on the behalf of NIFT.
HBL has currently the following Accounts in operation for the household or individual
customers.
Current Accounts
No profit on these deposits is given, and customer is required to maintain a minimum balance,
failing which services charges are deducted from such accounts. HBL is currently offering three
types of accounts in current account category. Their detail and name is as under.
i. Current Account
Savings Accounts
Avail the flexibility of making transactions while earning profit on daily/monthly basis. HBL is
currently offering five types of accounts in savings account category. Their detail and name is as
under.
17
iv. HBL Value Account
v. PLS-Savings Account
Terms Accounts
Invest your savings in HBL term deposits for a fixed duration and earn profit while keeping your
savings secure. HBL is currently offering two type of account in terms account category. Their
HBL offers Foreign Currency Accounts in multiple currencies as savings and term accounts.
i. FC-SB
HBL ID
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An account designed to cater the needs of the youth of 19 to 24 year age. HBL ID gets Account
holder ready for the real world. With the features open an account with any amount and enjoy the
flexibility of no minimum balance, Stop carrying cash and start carrying an HBL Debit Card
instead. This will allow Customer to make purchases anywhere that VISA is accepted, Enjoy
discounts of up to 20% at select restaurants when Customer pay with HBL Debit Card.
Customer can withdraw cash from any HBL ATM at any time so Customers HBL Debit Card is
great for any cash emergency. Customer can have up to 2 Savings Buckets at a time. Earn Profit
rate up to 9% p.a. Customers profit is calculated daily & paid monthly directly to Customers
Savings Bucket.
An account designed for the customers under the age of 18, with an account opened in name of
minor having age under 18 and the guardian. The account is operated by the guardian.
Personal Loan
With the rising cost of living, it is becoming increasingly difficult to make expensive purchases
or meet unexpected expenses. HBL is helping customer finance them with Habib Bank personal
Loans (old name flexi loan). Customer may avail a personal loan of up to SIX TIMES of his net
approved by HBL.
19
HBL Easy Loan
Make your life easy when you are taking care of business expenses, supplier payments,
upgrading your production line, disbursing staff salaries, or starting an entirely new venture. All
you need is savings in the form of fixed deposits or government securities to avail the loan
services:
HBL Small Business Finance provides you Running Finance for your working capital
Features
20
HBL Car Loan helps customers to get their preferred car through a simple and hassle-free
process, backed by superior service and support. Now customer can drive a car he always
wanted.
Features
iv. Insurance at all times for complete peace of mind and security.
v. Round the clock support available through HBL Phone Banking; you can place your requests
and queries, track the status of your repayment/loan account and avail other value-added services
By the help of HBL credit card customer enters into the world of convenience and flexibility.
Accepted at over 29 million merchants worldwide, HBL Credit Card makes shopping fun and
paying simple. So that a customer can make the most of his shopping experience.
Benefits
Customer can buy what and when he want and pay for it later. A credit card statement
will be sent to him every month with details of all his purchases. He will have 21 credit
21
A customer can pay the entire or as little as 5% of the outstanding balance in his
statement. The unpaid amount will be transferred to his next months statement along
Customer can go to any specified HBL branch and withdraw cash at the counter. He can
also go to any 1Link ATM in Pakistan and more than 1,000,000 ATMs worldwide
displaying the Visa/Plus logo. Withdraw cash up to the available cash advance limit on
his HBL Credit Card for a charge applicable from the withdrawal date.
Card holder can pay off balances he owes to other banks through his HBL Credit Card at
Card holder cannot lose cash if he doesnt carry it. In the event that his card gets stolen
or lost, he should call HBL Phone Banking to have his card blocked immediately.
HBL and New Jubilee Life Insurance Company Limited (NJLI) introduce Amaan (Retirement
Plan) and Tabeer (Child Education & Marriage). These products have been designed keeping
HBLs customer base as the focus and will provide life insurance along with an investment
option
HBL Visa Debit Card allows a card holder to pay for his purchases directly from his bank
account. He doesnt have to carry cash and his monthly statement provides him with a complete
record of all his transactions so he can manage his expenses with ease.
22
Features
i. No Interest
HBL Fast Transfer lets you send your remittance instantly and absolutely free. HBL Pakistans
largest banking network - provides unmatched convenience and a confirmation SMS to inform
i. Fast Cash Send cash up to PKR 500,000 that can be collected instantly from any HBL Branch
in Pakistan.
ii. Fast Direct Credit instantly send money to any HBL account.
iii. Fast Draft Non HBL account holders can get their account credited the same day.
2.2.7 Lockers
Lockers are available in many of the HBL branches in different sizes like small, medium and
large; some branches also have extra-large and cubical lockers. Except rural areas because of
23
security reasons. Key deposit is refundable at the time handing over the locker to bank. For the
staff of HBL key deposit is not required and also the annual rent is very low for them.
HBL has a vast network of ATMs operating in various areas of Pakistan. With ATM the debit
Funds Transfer (HBL accounts and third party account under 1 Link network)
i. Utility Bill payment -Kesc, Gepco, Lesco,Fesco, Hesco, Iesco, Mepco, Pesco, Qesco, Lwasa,
ii. Mobile post pay bill payment and top-up- Warid, Ufone, Telenor
24
2.2.9 Internet Banking
To attain the benefits of technological and telecommunication advances HBL provides its
customer the facility of Internet Banking. By registering for internet banking the customers can
i. Funds Transfer (HBL accounts and third party account under 1 Link network)
iv. Purchase mobile prepaid vouchers - Mobilink, Ufone, Warid, Telenor, Zong, V-PTCL , PTCL
25
3 Chapter 3
I choose Porters Fives Forces Analysis and SWOT Analysis to analyze where organization
stands in Industry, who is its competitors and what opportunities and threats available to
organization.
The Porters five forces model is generally used for competitive analysis.
There is influential power the competitive forces. The strategies used by one firm might be
fruitful just to degree that the firms have competitive advantage over the competitors. These
competitive strategies may include best quality management and offering low cost. The HBL is
offering low charges on interest draft, mail transfer and provide other extra customer services to
As competition has expanded it is no more difficult for firms to enter a specific Industry. As
banking Industry is concerned business is now extremely arranged in Pakistan. During last few
decades banking Industry grows. There are many banks with quality services and low charges.
The restrictions, taxes, license and so forth can stop new firm to enter into the business. So there
26
3.1.3 Potential Development of Substitute Products
This is the third variable which influences the rivalries. There may be some other products or
items that could be substitute product of that Industry. Case in point banks offering saving plans
in Pakistan and these plans are likewise offered by GPO in Pakistan so they must contend them
in this field. Customers focus high interest rates this is the reason saving PLS accounts are more
than current account. The second example is ATM which substitutes cherubs at counter and cash
it. HBL is stronger in this field. It must further enhance in this field to compete rivals.
The bargaining power of suppliers influences the competition particularly when there are an
extensive number of suppliers in the market. In the case of bank suppliers are clients or
customers which supply cash to the banks. So it is necessary for banks to provide good services,
quality, security and low charges to clients. In this field HBL is good as it offers quality services
to clients. They charge low charges on remittance with the goal that it is a rival to different
banks.
When customers are concentrated their bargaining power represents a major force that greatly
affects Intensity of competition. Presently the number of clients for banks in Pakistan is high.
Banks are offering mixed bag of products and services to their clients. HBL have an extensive
number of traditions. It must offer great products and services to their clients to pull them to
come to HBL.
27
3.2 SWOT Analysis
SWOT Analysis is used to analyze strengths, weaknesses, opportunities and threats available to
3.2.1 Strengths
HBL has been extremely successful in controlling expenses as it effectively rebuilt itself
after its privatization. During this process 1600 employees were relieved under a golden
HBL is the biggest private bank in Pakistan now and clients trust is high. It has the
Excellent branches appearance gives an edge to HBL over different banks. The branches
HBL has brought innovative products and services like personalizes services, electronic
The Banks Rupee Traveler Cherubs have been market pioneers from past six years.
28
3.2.2 Weaknesses
disadvantage in correlation to its rivals. In view to above definition HBL has accompanying
following weaknesses.
Lack of correspondence in the middle of bank and clients about terms and conditions of
Employees at branch level are not legitimately propelled to work by heart. They take the
Most of the workers need managerial preparing as they are not properly taught. Because
of rank they have climbed on the progression line to Grade I, II or III positions having
barely bachelor degree. This kind of senior staff cannot matter the cutting edge and
Though HBL is biggest bank in Pakistan yet the certainty remains that it is not showcase
pioneer as NBP.
Now as it is a privatized bank that is the reason Government backing to HBL decreased
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3.2.3 Opportunities
with the strength of organization will result in enhanced sales, income or market share. HBL
Growing approaches of Government on business and trade area give HBL opportunity of
these arrangements to meet effectively with the representatives to tackle their issues of
Large international network which primarily concentrates on trade finance with Pakistan
might be used to tap exchange exercises in different markets. In addition services for
example cross border or offshore financing for corporate clients might be improved.
Customer input on distinctive items can really improve the bank performance and
3.2.4 Threats
Threat can be defined as change in outside environment which if not met with proper strategies
will result in loss of revenue, market share or income. In context of HBL the accompanying
Political instability.
Afghan wan and Iraq war has a profound impact on the economy of Pakistan which has
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Other private banks with sound benefit is likewise a danger to HBL e.g. MCB, Alfalah,
Increased regulations from State Bank of Pakistan may also affect banking industry.
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3.3 Financial Statements of Habib Bank Limited
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Source: www.hbl.com
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Source: www.hbl.com
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3.4 Financial Ratio Analysis
It shows the ability of management to acquire deposits at a reasonable cost and invest them in
profitable investments. This ratio indicates how much net income is generated per Rs, of assets.
The higher the ROA, the more the profitable the bank.
Result
Return on assets has increased from 2015 to 2016. It means that assets of the bank are giving
more return over period of time. Increase in return on assets is due to major increase in net profit
after tax. Investor will observe it as a positive trend in the banks management of assets.
ROE is the most important indicator of a banks profitability and growth potential. It is the rate
of return to shareholders or the percentage return on each Rs. of equity invested in the bank
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Result
Return on equity is increasing from2015 to 2016 which is due to increase in the profit after tax of
the Habib Bank. Increase in the return of equity builds confidence among investors. Increased
return on equity shows increasing trend in 2016 .So investors will come and invest in the bank.
A ratio that depicts each rupee earned on the behalf of each share of companys shareholders.
Result
Earnings per share have increased this year as compared to previous year which means bank is
This ratio indicates the percentage of short term obligations that could be met with the banks
Liquid assets to deposit-borrowing ratio (LADST) = (liquid asset/customer deposit and short
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Ratio 2015 2016
Result
The ratio has increased over the period because fixed deposits were more in previous year as
compared to 2016 .
5. Capital Adequacy Ratio = Total eligible regulatory capital held / total risk weighted asset
Result
The capital adequacy ratio shows that firm have sufficient capital to meet its capital
requirements. This ratio has been increased almost 1% then previous year.
This ratio indicates the percentage of the total deposits locked into non-liquid assets. A high
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Loan to Deposit Ratio = (Net Loans / Total Deposits) X 100
Result
Deposits of the bank are liability. These should be managed properly are invested in profitable
sectors. If advances to deposits ratio increases it shows that more customers are obtaining Loans.
In the case of Habib Bank Limited percentage of advances to deposits is decreasing and there is a
Due to poor economic conditions and energy crisis in the country, business houses are suffering
with less utilization of their capacity so they are not getting long term Loans.
Result
This ratio represents that how much efficiently bank is utilizing its total assets to generate sales.
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8. Total Risk Weighted Assets to Total Assets= (total Risk weighted assets/ Total Assets) X
100
to Total Assets
Result
As the ratio has increased over the period, it represents that bank has started to invest in most
risky projects. There is always positive relationship between risk and return. This would result in
high return.
A ratio explaining the portion of loans which are issued against the assets of the company.
Income Ratio
Result
This ratio has decreased because more loans were issued in 2016.
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4 Chapter 4
My Internship Responsibilities
First day when I went in bank everything was new to me in Habib Bank limited though I have a
good Bookish knowledge but truthfully speaking it was totally different from the practical
knowledge of the banking. But with the grace of Allah Almighty who make me able to learn
Deposit Section
Clearing Section
Remittances Section
There are two types of deposits i.e. current deposits and saving deposits.
Current deposits are those deposits on which no Interest is given to depositor. The main benefit
of currents deposits is saving. Bank only take or charge service charges on current account
while on the other hand Interest is given by bank on saving account. Depositors open saving
account for profit earning on their savings. A customer or a firm can open Individual, Joint or
business account.
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4.1.2 Clearing Section
Every Bank performs the paying and receiving functions. Cheques are collected which are drawn
up to Banks for customers. Similarly the cheques drawn on different Banks and deposited by
Banks own customers for collection within the city are known as clearing. The functions of
receiving andpaying are mostly done through the clearing house. A clearing house can be
defined as "A place where that representatives of all Bank get together to settle the receipts and
payment of cheques drawn on each other" Clearing House provides the facility which can hardly
be dispensed with especially in case of crossed cheques. There are two main types of clearing.
Outward clearing
Inward clearing.
It includes those cheques and other instruments which are sent by the Bank to the Banks for
payment on behalf of its own clients. Cheques are sent to clearing house through local main
branch.
The cheques drawn are called inward clearing drawn on Habib Bank through its representatives.
On the Bank presented by other Banks for payment it includes those cheques and other
instruments of Pakistan branches which other Banks present at the clearing house.
Remittance means transfer of money from one place to another place. It is of two kinds.
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I: Inland remittance.
An inland remittance means a transfer of money payable at a certain place within the country.
I: Within locality.
Within place
When a branch situated in Kotli is required to send drafts to any other branch situated in the
same city the process is known as within locality. For example HBL main brancd Ali Raza sends
Outside Locality
Outside locality is an important type of inland remittances, which means the transfer of money
payable outside the city. For example HBL main branch Mr. Ehsan sends any draft to a branch
Demand draft is a written order by a branch of a specified Bank drawn on another branch of the
same Bank to pay a certain sum of money only to or to the order of the Payee. Demand drafts are
purchased by the clients and after receipt of money Bank issues and delivers the D.D. to the
purchaser who himself sends it to the payee. In D.D. the Banks do not recover postal charges as
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it is payable by the purchaser. The Bank, after deliver of D.D. to the purchaser also sends its own
advice called IBCO (Inter Branch Credit Order) to the drawer branch mentioning therein all
Every Business organization deals in money matters. Bank also deals in money and more over
since the money belongs to the depositors therefore it is of utmost importance to keep systematic
Further-more the Banks are commercial institutions and its main objective is to earn profit
therefore then record of all incomes and expenditures are kept correctly and systematically. In
HBL the responsibility for maintaining necessary accounting data and to keep up to date records
in a systematic manner has been assigned to the Accounts Department. The Branches of Bank
perform their daily routine work and deal in money that belongs to depositors. Here account
department hold great importance in banking because it keeps all the accounting records
properly. The account department maintains all the accounting records properly there are certain
4.1.5.1 Account
A summary of all debit and credit transaction pertaining to a similar nature or to an individual or
4.1.5.2 Vouchers
Written evidence recorded on a piece of paper in respect of money transaction is called voucher.
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4.2 Problems Encountered
During my four weeks stay in (HBL Nar Branch KotliA.K) I found various problems which I
think should be resolved for the better functioning of the Bank. Some of these problems are of
such nature that their solution will help the Bank and its workers in cooping in this complex
world of globalization.
4.2.1 Problems
There is a lack of on-line information in the Bank about the changes taking place in the
world of Banking.
In early days of month there is a great rush of customers which cause inconvenience for
Attitude of bankers with all their customers is not same they pay more attention and good
service to some of their customers. Some customers have approach to officials due to
The most important things which I have learnt during my internship are
Customer dealing
Clerical work
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During my Internship period I have learned how to deal with customers. As most of the people
are uneducated in Kotli so it is a bit difficult to deal with such type of customers to make them
understand about your products and services. Sometimes customers get rude or angry for variety
of reasons then such customers should be dealt in a polite manner. How you respond can make
difference between customers who feel satisfied with your answer or not.
Clerical work
I spent the 1st three days in account opening section. As the area where I did my internship, the
people are not well educated that is why whenever a person will come for opening an account
than the manager referred that man towards me. Then I guide that man and the form of opening
an account will be filled by me and the entire legal requirement is completed by me. In past the
Habib Bank use old type of forms but now they are using new forms of opening an account.
There were five sign required on old type of form but now the new form requires only one
Name of person
Father name
Type of account
Postal address
Contact number
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Signature of Applicant
Amount deposited
If a person cannot do signature two passport size photos are required with thumb impression.
I have also worked in clearing section. During my work I have learned how to collect the
different cheques of different banks. Then I learnt how cheques of different banks mutually
transfer. For mutual transfer everyday a meeting held in NBP mani branch Kotli. The
representatives of UBL, ABL , Bank of Khyber, Bank Alfalah and HBL participate and thus
I also worked in remittances section. In remittances section I learned how to transfer money from
Online transfer: Electronic transfer of money from one bank account to another without
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Working for four weeks in HBL Nar Branch KotliA.K as an Internee was very informative
experience for me. During my Internship period I have learnt many new things which are surely
going to help me in my professional career. It was a good experience for me to observe and to be
the part of practical work of an organization like HBL. During my internship period I got a
chance to understand general consumers behavior and their needs and wants related to banking
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Chapter 5
4.4 Conclusion
Now a days HBL is leading bank in Pakistan. In terms of profitability bank ranks amongst the
top entities in Pakistan. It has progressed and improved tremendously since its establishment
and has a customer based exceeding 5 million. But it can still advance further if it adopt new
changing Information technologies as there is still room for Improvements. It is clear that it is the
first choice of every customer who believes in qualitative approach of banking an environment
of highly responsible people. In terms of operative features and customer support bank is
enjoying a healthy market share and taste of good status. HBL is clearly the best bank operating
experiencing a good reputation and reasonable markup with respect to prevailing markets
markup with assurance of satisfaction and support. HBL has more customers as compared to
other banks.
4.5 Recommendations
As from the previous analysis of the financial statements I have realized that Habib Bank is
performing very well since its inception. It is quite difficult to give suggestions to improve
banking conditions of HBL. But as we know that nothing is perfect there is always a room for
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i. All customers are not treated equally in the bank. The attitude of the bankers with all of
their customers is not same they pay more attention and good services to some of
customers and neglect a major portion of customers. The customers with big deposits are
given more attention and importance as compared to low deposit customers. Some of the
customers have approach to the bank official and get their work done before others
which is not a good practice. This difference of behavior makes most of customers to
behavior and treat all customers equally and give importance to all customers whether
poor or rich. As well as HBL should increase its communication with customers about
terms and condition of its products and services to increase customer awareness. All
ii. Second problem which I have noticed during my Internship in HBL is burden of work on
employees. Certain needs of employees are not considered for example banking timing 9
a.m to 6 p.m which is long duration of work. Due to burden of work employees dont
feel happy or satisfied. So work burden should be reduced because with fresh mind
employees can perform their duties better, easily and effectively. Certain needs of
employees should also be considered like bank timings should be acceptable and
employees should be given importance and must be consulted in decision making. This
will make the employees work better for their organization. To motivate employees to
work efficiently and effectively salaries of employees should be increased over time.
iii. Habib Bank is going towards mobile banking. Mobile banking is a system that allows
device such as a mobile phone or tablet. But the problem is that a common client has no
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idea of its usage due to lack of marketing. To increase customers awareness regarding
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Bibliography
Emerging Nations Bloc to Open Development Bank .(n.d.). Retrieved July 29, 2016 ,
Fall in SBP`s foreign exchange earnings. (n.d.). Retrieved August 3, 2016 , from DAWN
News: http://epaper.dawn.com
http://www.hbl.com
encyclopedia.: http://en.wikipedia.org
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