Final Report of Internship

Internship Report on HBL

AN INTERNSHIP REPORT

ON

SUBMITTED TO Sir .Zahid Ali

(INCHARGE INTERNSHIP& PLACMANT)

SUBMITTED BY

Muhammad Shahzad Niaz Roll # 06 B.com (Hon’s) MS-IT SESSION 2003-2006

DEPARTMENT OF COMMERCE ISLAMIA UNIVERSITY BAHAWALPUR

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IN THE NAME OF ALLAH, THE MOST BENEFICENT AND THE MOST MERCIFUL

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DEDICATIONS

This report is dedicated to my parents, friends and my teachers who all support me in times of intricacy and continuously appraise me.’ Therefore these people are the source of my inspiration and I would be forever thankful to them for keeping my morale high and encouraging me against all odds.

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Preface

Internship is an integral part of B.com (Hon’s) program. It is a mean of providing practical exposure to the student, of what they study Our teacher also managed an internship program for us. I had my internship in “HABIB BANK LIMITED BRANCH DAHRANWALA (1408), for Eight weeks. During this period of Eight weeks I work in all the departments of Branch, and learned a lot. As the period of internship involved working with the permanent staff of bank and assimilating into their routine it provided an experience and in depth review of how the employees of the bank coordinate one another and with their manager.. The daily difficulties that aroused out of the formal routines of the bank became evident and the draw back of the extremely formalized system of the bank became apparent during the internship period. The bank facing the difficulties of less staff and difficulties of operating the new simex system. Following is the generalized view of the bank as perceived by me during the period of my internship is presented for the readers before going into depth review of the report. As the generalization are based on the writer’s perceptions so they cannot be considered as the final word in this context as perception are different with different people. In this report, I have tried to present a complete picture of Habib Bank Limited. Including its market position, competitive production, working of bank, its various departments, and finally the SWOT analysis and financial analysis of Habib Bank Limited.

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Acknowledgements

I must offer my thanks to Allah Almighty by whose blessings I have been able to complete my internship report on HABIB BANK LIMITED.

I offer my thanks to Sir Zahid Ali for his valuable guidance and contribution in making my report meaningful and useful.

I also thank to the Branch Manager Mr. Abdul Qadeer, officers and employees

for their kind behavior and full cooperation during the internship period.

I also thank to the Branch operation Manager Mr. ULLAH KHAN Officers and employees for their kind behavior and full cooperation during the internship period and tell about the importance of customer in the banking field

I also thank to the Branch officer MR. Asghar Ali cooperation during the

internship period and tell about FLAXI LOAN.

In the last I like to thank all of the staff of branch for their valuable comments, cooperative behavior and friendly environment during the internship.

Muhammad Shahzad Niaz

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TABEL OF CONTENTS

serial No. Content Page #1

COMPANY INTRODUCTION11

2 COMPANY INFORMATION 15

3 FINANCIAL HIGH LIGHTS 18

4 MISSION STATMANTANDOBJACTIVES

22

5 OPERATIONS OF THE BANK 276 WORK DONE BY ME DURING

INTERNSHIP29

7 FEILD OF ACTIVITIES /DEPARTMENTS OF A BANK

33

8 Deposit department 34

9 Accounts department 38

10 Advances department 43

11 Agriculture loan 46

12 Flexi loan 51

13 Clearing department 54

14 Bills and Remittances department 56

15 Foreign exchange department 59

16 MISCELANIESUS FUNCTIONS 61

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OF ALL DEPARTMENTES

17 Lockers 64

18 A.T.M. 6619 CREDIT CARD 72

20 SIMEX 7321 INCOME STATMANT 7522 BALANCE SHEET 8623 Ratio Analysis 9624 SWOT ANALYSIS 109

25 SUGGESTION 114

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Executive Summary

I have completed my 8 weeks internship in HABIB BANK LIMITED. I

tried my best to gain something practically from this opportunity. This report

starts from the introduction of word ‘Banking’, and then History of HABIB

BANK LIMITED. History of HBL shows that how it helps its Nation and

Country in both war & peace. the first Pakistani bank .Bank Mission statement

& Vision shows its focus on overall performance of the bank and quality of

services and products.

After restructuring of the bank the objectives of the bank are changed. Now it

has objectives to overcome past mistakes, realize the real importance of

customer so now it has main objective to achieve customization.

A commercial bank has basic functions that are must be performed by them as

a bank i.e.

1. Accept money as deposits.

2. Investing deposits to earn profit.

3. Miscellaneous functions.

Each branch of the bank is divided on the basis of these functions into different

sections.

Deposit section opens different accounts of clients and maintains record of

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deposited money from the customer & credited it into his account. It also

maintains record of payment to the customer when he presents cheque.

Advances section deals the customers who demand loans against required

security.

Remittance & collection section deals customers who want to transfer or

collect their money from/to other city.

Foreign Exchange section deals customers who have foreign account in the

bank & deals exchange of foreign currencies.

Bank also provides facility of L.C to support export and import in the region.

Flexi is the new product of Habib bank for the employees.

All branches are now interconnected with head office through internet.

Total numbers on branches are 1469 and number of employees

are 18625.

Bank shows improvement after the privatization.

Simex system is very good but misused by staff due not proper training.

SWOT analysis of Habib Bank shows that it has small number of strengths and

lot of weaknesses and threats. The bank should give attention to this drawback.

But bank has lot of opportunities to improve its quality of services, and do

efficient banking. Bank should give proper attention to overcome its threats.

Banks profit has been increased as compared to previous years.

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COMPANY INTRODUCTION

Company Description:

Habib Bank Limited is a Banking Company, which is engaged in Commercial & Retail banking and related services domestically and overseas.

WHAT IS BANKING COMPANY?

Section 5 of banking ordinance 1962 says that Banker means a person transacting business of transacting the business of accepting, for the purpose of lending or investment of deposits and withdrawals by Cheques, drafts, orders of other wise and include any post office saving bank.

COMMERCIAL BANKING:

Commercial banks are profit seeking organization. They have been the most effectively mobilize the savings and have been providing short-term requirements of businesses. They help in internal and external trade of the country.

FUNCTIONS OF COMMERCIAL BANKS:

Today there are more than 7000 branches of commercial banks along with an established network of supplementary financial institutions.

The function of a modern commercial bank can be divided under the four headings as:

1. Accepting of deposits.2. Advancing of loans.3. Agency service.4. General utility service.

ACCEPTING DEPOSITS:

The primary function of a bank is to receive surplus balances from individuals, firms, public institutions and government etc and honor Cheques drawn upon it. Three types of deposits are

Current or demand deposits Saving deposits Fixed or term deposits

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ADVANCING OF LOANS:

The most important function is to provide loans to individuals, firms, business concerns and government bodies against securities to meet their financial needs at a fixed percentage of interest. these are some kinds of loans:

Loan to business Loan to real estate mortgage Consumer loan Loan for purchasing security Loan to agriculture Bank investment for security

AGENCY SERVICES:

The commercial bank provides following agency services to its customer

Collection and payment of Cheques Collection of dividend Purchase of securities Execution of standing orders Acting as trustee or executer Make transfer of funds Act as an agent

GENERAL UTILITY SERVICES

Commercial bank performs general utility services as follows

Foreign exchange business Act as referee Accepting of bills for collection Issuer of traveler’s Cheques Supplier of trade information

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HISTORICAL PERSPECTIVE

History of the Company:

Habib Bank Limited was incorporated on 25th August 1941 by ISMAIL HABIB (LATE). Habib Bank inaugurated its operations with the bank’s first branch in Bombay. It was the first Muslim bank of the sub continent. It was established with a paid up capital of Rs.2500, 000. At an early stage the number of branches was only 12.

In 1947 Karachi saw its first commercial bank of the newly formed Islamic Republic of Pakistan, when the bank shifted its head office there. And build the largest private sector bank that controlled an estimated 27% of total bank deposits in the country and hand over 500 branches including many overseas. Although primary functions were banking and finance, but it moved to industry by the late 1950’s and developed interest in sugar, jute and textile.

HABIB BANK operated in the private sector until its nationalization in 1974 under the Bank Nationalization Act 1974. Thus the holding of Habib group was lost. Throughout the decades, HBL has held the mantle of a dynamic leader, by adding value to the lives of its customers. HBL has been approved for privatization and the privatization commission has selected a Financial Advisor to prepare a comprehensive plan and assist in the sale process. The government has appointed a professional management team to restructure the bank and to recover and clean its doubtful and classified portfolio. .

It was HBL that introduced products such as Credit Cards, ATMs, Travelers Cheques, etc., to the Pakistani market. We at Habib Bank cater to the needs of millions with our quality products & services.

TODAY’S HABIB BANK:

Today, Habib Bank is truly the bank of the people, providing its customers convenience and satisfaction all over the world. Habib Bank Plaza, the tallest building in Pakistan, is the proud symbol of HBL’s leadership in Pakistan’s corporate arena.

Today, HBL has more than 1469 branches all over Pakistan and presence in 26 countries across five continents. With a revamped customer oriented philosophy, we are pursuing new

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avenues of leadership through innovation, as it gear up to face the challenges of the new millennium.

Operational Structure:

Habib Bank Limited is one of the largest commercial bank of Pakistan. It accounts for a substantial share (20%) of the total commercial banking market in Pakistan with a network of 1469 domestic branches; 55 overseas branches in 26 countries spread over Europe, the Middle East, Far East, Asia, Africa and the United States; 3 HBL wholly owned Subsidiaries namely Habib Bank Financial Services (PVT) LTD. Karachi, Habib Finance International LTD

(Hong Kong) and Habib Finance Australia Ltd. – Sydney; 2 Joint Ventures namely Habib Nigeria Bank Ltd. (40%) and Himalayan Bank Ltd. (20%) and 2 representative offices in Iran and Egypt.

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COMPANY INFORMATION

AUDITORS:

TASEER HADI KHALID & Co.Chartered AccountantsSh. Sultan Trust Building No. 2Beaumont RoadKarachi – 75530Pakistan

A.F. Ferguson & Co.Chartered AccountantsState Life building 1-C1-1 Chundrigar RoadKarachiPakistan

REGISTERED OFFICE:

Habib Bank LimitedHabib Bank Plaza1-1 Chundrigar RoadKarachi - 75650Pakistan

HEAD OFFICE

Habib Bank Plaza1-1 Chundrigar RoadKarachi - 75650PakistanPhones: 2418000(50 lines)Fax: 2411647Telex: 20086-20751 HBANK-PK

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BOARD OF DIRECTORS

ZAKIR MEHMOOD PRESIDENT &CHIEF EXECUTIVE

SULTANALI ALLANA CHAIRMAIN

LAIN DONALD CHEYNE DIRECTOR

SAJID ZAHID DIRECTOR

AHMAD WAQAR DIRECTOR

SHAUKAT HAYAT DURRANI DIRECTOR

MUHAMMAD ISMAIL QURASHI DIRECTOR

ARIF MANSUR DIRECTOR

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SENIOR MANAGEMENT

DESIGNATION

Zakir Mehmood President & Chief Executive

Sohail Malik SEVP & Group executive Credit policy

Jamail Iqbal SEVP & Group executive Global operation

Shahid M.Loan SEVP & Group ExecutiveAudit, BRR & Investigation

Sima kamal SEVP & Group ExecutiveCorporate and investment

Banking

Ayaz Ahmad SEVP & Group ExecutiveInformation Technology, financial control

Hanif Akhai SEVP & Group ExecutiveGlobal treasury

Jamil A. Khan SEVP & Group ExecutiveHuman Resource s Retail banking

Aziz Rajkotwala SEVP & Group Executive International

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FINANCIAL HIGH LIGHTS

Description

2004 2003

2002

2004growth %age

1 Total Deposits 404629 360648

328,182

12%

2 Total Assets 486982 434932

403,013

12%

3 Advances 258306 18354

167,523

41%

5 Liquid Assets* 143735 164533

147,822

-13%

6 Shareholders' Equity & Revaluation Surplus 31188 23485

19,498

33%

7 Liquid Assets % of Deposits from Customers & Bills Payable

35.41% 46.26%

47.36%

-232%

Profit & Loss

8 Total Net Income 23512 21364

18,564

10%

9 Total Expenditure 13783 9803

11,748

41%

10 Provision for non performing loan 2565 5804

5004

-56%

11 Pre Tax Profit 7146 5469

4,088

31%

12 Profit after Taxation 5680 4018

2,034

41%

13 Earnings Per Share (Rs. / Share) 8.21 5.82

1.68

41%

Others

14 Home Remittances

47423 46326 38,229 2%

15 Exports/Imports

296492 258157 214,590 15%

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16 Number of Branches

1469 1,470 1,473 -

17 Number of Staff

18625 18800 19,005 -1%

ORGANIZATIONAL STRUCTURE

Ownership StructureShareholder Percentage (%)State Bank of Pakistan 73.047Islamic Republic of Pakistan .783Agha khan foundation for economic development 26.00State Life Insurance Corp. of Pakistan 0.138Other Public Bodies 0.05Outstanding Shares (1,217,849,500) 100

ORGOGRAME PRESIDENT

SENIOR EXECUTIVE VICE - PRESIDENT VICE- PRESIDENT

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VICE- PRESIDENT

ASSISSTANT VOICE PRESIDENT

OFFICER GRADE I

OFFICER GRADE II

OFFICER GRADE III


MISSION STATMANT

AND

OBJACTIVES

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CASHIER

CLERCK


MISSION STATMANT The main logo of the bank shows a picture of a lion with a sword on the top on the up most

Portion BISMILLAH is written to show the supremely of God and the symbol of lion shows the

Quality of leadership that lies with the bank. The reason for the statement the power to Lead.

As the bank has entered the new millennium, it wishes to appear as a bank that is

“LEADING LOCALLY AND GROWING GLOBALLY”

MISSION STATMANTOF HABIB BANK IS TO MAKE

Habib bank the dominate financial institution in Pakistan and a leading bank of the Middle East and South Asia regions.

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OBJECTIVES The bank main aims to provide better and efficient services to its

Domestic and overseas customer .regarding the need for improving the financial

Performance of the company, following objective have been chalked out.

To take necessary steps to plug the leakages of revenue and expenses.

To insure internationally accepted accounting standard are followed by the bank

To correct the structural flaws in the balance sheet

To put greater focus on neglected sectors to correct sectored imbalances in the loan portfolio.

To achieve those objectives necessary steps have been taken by the management loss making branches have been closed or merged.

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MARKETING OBJECTIVE

To devolved country specific business revitalization strategies for important franchise to improve overseas operations.

To develop more branded proudest in saving deposits and consumer assets.

To increased the ATM network to further improve the banks market shears.

To establish sound relationship with top industrial groups and various multinationals.

To make the bank customer focused.

To launch innovative product as which cater to the needs of different segments of the markets.

To increased the number of “ON LINE” branches

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HRM 0BJECTIVES

To provide extensive training to employees in process ,products, marketing and selling skills introduced.

Upgrading skills levels of staff.

To implement a performance appraisal process to provide motivation and a merit oriented culture in the bank.

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OPERATIONSOF THE BANK

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DOMESTIC OPERATIONS

For facilitation of domestic operations the retail banking group and the corporate institution banking group is divided in to several distinct regions, centers and sub centers comprising of

23 Regional head quarter

20 corporate centers

1469 branches

OVERSEAS OPERATIONS

For the facilitation of the overseas operations the bank has

55Branches

02 affiliates

01 Representative office

02 subsidiaries

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WORK DONE BY ME DURING INTERNSHIP

I have worked as an internee in the Habib Bank limited Branch Dahranwala for eight weeks.

During my internship I learned a lot about the banking work. The branch was quite small

comparatively with others but it had all departments. I tried my best level to gain from this

internship experience.

On first day I reported to the branch manager and he guided me and gave me information

about the branch. In first week he had given me information about the overall banking in

this branch. He told me about the departments of the bank and some other basic information

about the bank, cheques, records, etc.

In the next week he told me that now I have to start work in the different departments. I

started my internship from account department.

The most of the working was conducted in this department. There was a lot of burden of

work in this department. In this department the following major activities were

a) Account opening.

b) . IBDA’s records and preparation.

Account opening.

In this department daily many people came for open the accounts according to their own

choice of account. In PLS Saving account and current account procedure of opening of

account is the same except the initial deposit.

The account opening form contains the following information’s.

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The type of account which any person want to be open, he has to select

that.

Nature of account whether individual or proprietorship or other.

Currency (in which want to operate).

Particular of deposits. (Period for operation).

Complete address.

Telephone number.

Nature of business etc.

Detail of other accounts.

Zakat deduction.

Personal information.

Name.

Date of birth.

Nationality etc.

Then signatures of the account holders and the bankers and manager.

Signature of the introducer, his account number and address.

When this form is filled then signature of the person who want to open the account are to be

taken on the specimen signature card. Then it is recorded in the PC. Then after a week letter

of thanks when received by the person then a cheques book is issued to him. Now he can

withdraw the amount by fulfilling cheques up to the extent of his balance, in the account.

In that account opening I also write the letter to the customer.

There are two letter are written while opening the account

1. New customer

2. Introducer of new customer

These are printed letter on which just write the name of person and his addresser written in

the form.

Preparation of cheque book;

I issued cheques books in the account opening department. The cheques book is issued after

opening of the account. The Account No. is stamped by the rubber stamp on each cheque.

Then it is given to the person.

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When all cheques books are issued to the customers then these are recorded in the

CD Book or PLS saving book. All cheque books are recorded with their a/c number and

name of the person.

Prepration of IBDA

I prepared in this department IBDA Inter Branch Debit Advice. If for one branch it is IBDA

transition then it is for branch is IBCO. (Inter branch credit advice).

IBDA Transition:

For example transaction between satellite town Branch and Model Town Branch is

as follow.

If the customer of satellite town branch withdraw money from Model Town branch.

(use) this branch will debit the account of satellite town branch with IBDA. Davis road

branch will receive the slips that the person has used the ATM machine there. When money

is withdrawn then Habib Bank satellite town branch will credit the Model Town branch.

After transfer of cash from branch the account will be settled.

Cash department

I spent one week in the cash department here I issued token to the customers and then

recorded it into the token book. The procedure of issuing the token is that when cheque is

presented at the counter. Then following things are checked.

The signatures on front and at the back.

Similarities in the signatures of the issuer of the cheque.

Date.

Amounts whether tally with the amount written in words.

Then token is issued to him and cheques are stamped at the back at which date and token

No. Is filled. Then all cheques are forwarded to the next counter where signatures are

compared with the signatures in the book and the balance of the account is checked.

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If the cheque has not any fault on it then it is given to cash payment counter and cash is paid

to the customer up to the amount mentioned on the cheques. I spent one week in this

department.

I also completed their pending token books also.

Advance department I also spend some time in the Advance t department .the loans available in our branch are

1-FLAXI LOAN2-AGRI LOAN3-CONSUMER FINANCE 4-BUSNIERES LOAN

These are the main types of loan which is future categriosed in different ways.

I check there the procedure of different loans

Documents required

Capacity of the party

Purpose of loan

I also observed the 5c’s of loan while gave the to the party

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FEILDOF ACTIVITIES/DEPARTMENTS OF A BANK

The main departments of a bank are as follow

1. Deposit department

2. Accounts department

3. Advances department

4. Clearing department

5. Bills and remittances department

6. Foreign exchange department

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1).Deposit department

The function of deposit department is to collect cash from the customers and to deposit it

into the accounts, maintained by them. Their classification is based onduration and purpose

for which the account is maintained. The following typs of accounts are maintained for this

purpose.

a) Current account

b) Saving account

c) Fixed account

a. Current account A current account is a running account is a running account which is

countiniously in operation, by the customers on all working days of the bank. The

customers can withdraw the amount from the bank without prior notice. The bank

usually donot pay any interest on these deposits as they can withdraw without notice.

These accounts are operated normally by the traders, business companies,

institutions, public service bodies, industrialists etc.

Summing up, the current account does not earn but serves the cause of industry,

trade and commerce.

b. Saving deposits account

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This type of account is for those persons who want to make small savings. The

depositors are allowed to withdraw a limited amount of money for twice a week.

The banks will keep a minimum account and the balance be safely utilized

forinvestment by the bank.

The bank pays interst on saving bank accounts according to the prescribed rates by

the centeral bank of the country.

c. PLS saving account

In pakistan (PLS) saving account was introduced in January ,1982.

-The bank has full right to investment of credit balances /deposits in the PLS

saving accounts.

- statments of accounts willbe supplied on periodical intervals.

The following informations are required to be furnished

1. Name2. occupation and full address3. Specimen signature4. Introductory refrences5. Declaration that he will follow them

D.Fixed or time deposit

Fixed or time deposit are the major source of funds of a commercial bank. The rate

of interest on fixed deposits is higher them that of saving deposits and it varies with

time to time. The longer the period for which the amount is kept higher is rate of

interest. The fixed deposit receipt (FDR) is marked as not negotiated. The holder of

time deposit account cannot issue cheque for the withdrawl of the amount.

E.Joint accountA joint account is a special bank account which is opened in the name of two

or more persons. For drawing amount all persons whose name the account stands

should sign the cheque.

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In case of firms or companies a/c following are the requirement

To open the account of firms or companies the following are the essentials.

-List of the office bearers.

-List of authorized signatures.

-Copy of memorandum or by laws.

-Copy of registration.

-In case of joint stock companies

-Certificate of incorporation.

-Certificate of commencement of business.

-Beside NIC copies.

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Cash department

The cash department is the most important department of the bank. It receives cash

from customers and then deposit it into the accounts of the customers and

maintained their balances

In cash department following books are maintained..

I. Scroll book

II. Paying cash book

III. Token book

IV. Cash balance book

1. Scroll book:

When cash is received at the counter it is recorded in the scroll book.

1. Paying cash book:

The cashier makes entery in the paying cash book when cash is paid.

2. Token book:

When any cheque or any negotiable instrument is presented it is recorded in the token

book then token is issued.

3. Cash balance book:

The consolidated figure of receipt and payment of cash is entered in cash balance book.

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Accounts department

There are two ways of maintaining an accounts Journal system Voucher system

Journal system

Under this system entries are journalized in journal book and then posted in

ledger account. Their entries are maintained in journals.

Voucher system

In voucher system for each transaction voucher is prepared, either in cash or in transfer or

in clearing all vouchers are summarized to the one consolidated figure and are recorded in

cash –cum- daybook sheet upon which vouchers are summarized according to the transition

wise suit is called supplementary.

These are of 2 types.

Debit supplementaryCredit supplementary

Debit suplementary is for debit vouchers and it is of red colour

Credit supplementary is for credit vouchers and it is of green colour

The following books are maintained in accounts department.

1) Cash cum day book.

2) General ledger.

3) Subsidiary ledger.

4) Voucher register.

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5) Transfer book.

6) CD/SB summery book.

7) Balance books.(Weekly and monthly)

8) Old record register.

9) Bank ledger.

10) Fraud and forgeries register.

11) Comparative statistics cards of deposits.

12) Advances and profit and loss.

The individual figure of subsidiaries will be posted straight to subsidiary ledger from

individual vouchers.

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Why account is open.

It is not safe for private individual to keep their surplus money at home. They can keep their

money in safe custody by opening accounts in a bank. They can open deposit accounts for

fixed period. The deposit account also earns interest for the depositors. Again the

businessman conducts transaction is for thousands of rupees daily. It is unsafe to keep so

much cash in hand for carrying on business transactions. They may put their money with

some banks by opening deposit accounts. Now they can draw cheques for settlement of

transactions without involving cash.

Procedure of opening of an account :

There are certain formalities which are to be observed for opening of a current account or

saving a/c. With a bank , these formalities are as

1) Request of opening of an account.

2) Obtaining introduction

3) Specimen signatures

4) Minimum initial deposit

5) Operating the account / cheque book

1).Request of opening of an account.

The customer has to fill an account opening form . it is a formal request by a

customer to the bank to allow him to have and operate the current or saving account

.

2). Obtaining introduction.

The bank before opening an account obtains introduction of the customers from an

old customer, responsible person etc.

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3). Specimen signatures.

When the banker satisfied about the information’s provided in the form hen the

banker obtains the specimen signatures of the customer on the signature book or on

card. The duty of a banker is to verify customer’s signature on the cheques with his

specimen signature in order to ascertain whether there has been any forgery or fraud.

4). Minimum initial deposit.

In Pakistan to open up an account in the PLS account is up to Rs.1000/- it is the

minimum requirement. However the account of zakat dependent can be opened by

Rs. 200

5). Operating the account./ cheque book.

When the account is operated the banker gives a pay-in-slip book, cheque

Book, pass book with the view to operate it.

Books relating to customers.

Pay-in-slip

Cheque book

Pass book

Pay-in-slip

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When money is to be deposited in the bank the pay-in-slip is to be filled, the object

of this book is to provide the customers with the bank’s acknowledgment for receipt

of money to be credited his account.

Cheques book.

A cheque book contains a number of cheques which is given to a customer upon

written request and after making payment for the cheque book. It enables to a

customer to make withdrawals from his account.

Pass book.

Is a copy of customers account as it appears in the books of the bank. Pass book is a

book in which the banker maintain the record of its customers account for later use.

The because it passes hand periodically between the banker and the customers. On

delivery of pass book the customer examine the debit and credit eateries with its

cheque book and bank receipt challans. But now a days this concept of pass book is

ended and computerized account statement send to the customer semi annually or on

the demand of customer bank is bounded to give him the account statement.

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3). Advances department

The function of advances department is to lend money in the form of clean advances.

Against promissory notes, as will as secured advances against tangible and marketable

securities. The bankers prefer the securities which are free of risk of depreciation.

Deposits lead to advances and advances create deposits. Advances to a variety of

customers is the sure method of enhancing income and promoting expansion of a bank.

Types of advances:

The main types of advances are as follow.

1). Overdraft.

2). Cash credit.

3). Loans.

1). Overdraft.

“An overdraft is the right given by a bank to his customer to draw in excess

of his current account up to a fixed limit.”

The facility to overdraw by cheques is allowed only in current account. The overdraft

facility enables a customer to draw over and above his own balances up to the extent of limit

as agreed. The bank does not provide the facility of overdraw on checking accounts to all of

its customers.

a. Clean overdraft.

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Advances for which the bank no security except the personal security.

B. secured overdraft.Advances for which bank has security other then his personal security.

1. Against lien on third party account.

2. Against immovable property, equitable mortgage collateral.

c. cash finance.

Cash finance may be allowed within discretionary powers of the branch managers to

first class parties keeping in view their credit worthiness, overall business and

average balance maintained in their account.

2).Cash credita cash credit is an arrangement by which a banker allows a customer to borrow money up to

certain extent cash credits are usually made against securities of commodities hypothecated

or pledged with the bank.

Pledge

Pledge is a contract whereby a good is deposited with the lender as security for

repayment of the loan. The delivery of documents of title relating to goods also

create a valid pledge. The person delivering the goods as security is called

pledger. The person to whome the goods is delivered is called the pledgee.

Hypothecation:

It is a legal transaction where by goods may be made available as security for a

debt without transfering property or the possession to the lender.

Advances granted under hypothecation are not secure from safety point of view.

The bank should make sure that the party has a good reputation, which property

regularly.

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3). Loans

Banks may make advances to its customers which may be payable in lump sum or in

installments. Loans may be.

A). clean loans

This is granted to borrowers without obtaining any security. Example

flexi loan

b).Secured loans.

Loans for which bank has security other then its personal security.

These are issued against the pledge, hypothecation, property and cash etc.

c).Small loans.

These are the loans which are sanctioned for small size projects.

The loans may be call loans or loans repayable at short notice. These are the loans repayable

which bear no maturity date. They can be paid at anytime. These are normally secured by

other assets.

The other kind of loan is loans repayable at short notice; these are short term loans and are

repayable at short notice. These are widely used in the financing of seasonal increase in the

working capital and the temporary financing of capital expenditure these loans are obtained

by manufacturing concerns to meet the financing of working capital expenditure.

43


Agriculture loan

44


1. Haryali agricultural finance scheme

2. Tractor finance scheme

3-LIVE STOCK FINANCE SCHAME

45


1-Haryali agricultural finance scheme: Habib is providing creditability to the farmers according to instructions of state bank of Pakistan under the agricultural Haryali finance scheme. The Haryali credit scheme is a best section of every agricultural need. According to this scheme the credit is provided on easy installment for productive and installment for productive and improvement purpose.The basic purpose of Haryali finance scheme is to provide credit in time to overcome agricultural needs, so that they earn profit from forms by using modern technology.

Basic conditions to get Habib Bank Haryali scheme: Tenant has a NIC covered. A computerized NIC cord is to provide to Bank from getting loan. An attested copy of receipt can also given with old NIC in case of computerized is

not available.

The rate of mark up on this scheme is 11% lowest mark up rate

as compared to the other scheme like flexi or life style loan

46


2-Tractor finance scheme.

Under this scheme finance is allowed to cultivator/land owners cultivating minimum 5 acres of agricultural land, Finance is allowed from a period of 5-7 years repayable in half yearly installments, a minimum debt/equity ratio of 90:10 is maintained, mark up of 11% p.a. is charges however in case of timely adjustment of all installments at time of last installment mark up is recalculated at 9%p.a and 2% amount is adjusted towards last installment.

In case of cash collateral no equity is needed and mark up is charged at a rate of 2% over the Bank profit.

In case of NSCs, DSCs etc., a mark up of 8% p.a. charged.

Special effort have been made to promote tractor finance and during the year 2003-2004 HBL has disbursed 3850 tractor up to MAY ,2004 against 1598 tractor distributed last year

47


3-LIVE STOCK FINANCE SCHAME

The scheme has been introduced to promote the following sub-sector.

1- Live stock /diary farming.

2- sheep /goat farming

3- Fattening of animals for beef purposes.

4- Poultry

Finance is allowed at a mark up rate of 11%p.a. for fixed investment purposes as well as to meet the needs of working capital requirement to all categories of farmers all over Pakistan including Azad Kashmir area. Finance is repayable in a maximum period of 5 year time period in easy installment.

In case of timely adjustment of all installments, at the time of final adjustment the bank offers the 2% incentives on all installments. In order to facilitate the bonafide formers these finances are available against security of agricultural land under agricultural pass book system, rural /urban property and cash collaterals in the shape of NSCs, TDCs and bank deposited etc. there agricultural finances products offered by HABIB BANK provide consumer opportunity for our hard working farming community promote agriculture sector an modern line by fulfilling their credit requirements

48


Flexi loan

49


Flexi loan

A special scheme of Habib bank limited for the employee of govt. and semi govt .institute. This is a clean loan no any security has been taken from the employees of the organization. Just salary of the employee is transferred in the account of the client.

Basic requirements for the flexi loan

He must be employee of listed organization

He must be account holder of the bank

His salary is transferred in his account

His job at least one year

His retirement period is grater then the period of loan

Document required for flexi loan

Letter from employer

His last month salary slip

His account statement

50


60 post dated cheques

Promissory notes

Rate of mark up on flexi loan

The rate of mark up on flexi loan is different for various departments

For the armed forces

The rate of mark up is 13.5%

The DSR factor is 35%

For the civil person

The rate of mark up is 14.5%

The DSR factor is 35%

51


4). Clearing department

“Clearing house is the place where representative, of all banks get together

for the purpose of off setting the interbank indebtedness arising from the

transfer of deposit by a customer of a particular bank to another bank”

Clearing settlement is made by debiting or crediting the bankers accounts, the daily

difference in the clearing between banks may considerable and much differences are

adjusted by mean of debit and credit entries in the respective accounts with is SBP, by book

entries.

Functions of clearing department.

The following are the main function of clearing department

1). To accept transfer delivery and clearing cheques from customer of the bank and

to arrange for their collection.

2). To arrange the payment of cheque drawn on branch and given for collection to

any other branch of HBL or any other member or sub member of the local clearing

house.

3). To collect amount of cheque drawn on members, sub members of the local

clearing house, sent for collection by thouse HBL branches which are not

represented at the local clearing house.

52


Procedure of clearing at clearing house

The mechanism of off setting inters bank indebtedness operators as follows; Clerk representing various banks met at a common plane, the clearing everyday. Every clerk then delivers to the others the cheques and other claims which his bank holds against them. So he also receive from the others the claims which their respective banks hold against his bank. Cheques and other documents dishonored will be returned to the representative of the respective bank. The various amounts of receipts and deliveries are now added up an balance is struck therein and the final settlement is effected by the supervisor of the clearing house by transferring balances kept at the central bank the these various clearing banks

5) Bills and Remittances department

The main function of bills and remittances department is to deal mainly in following.

A. Outward bills for collection (OBC)

B. Inward bill for collection(IBC)

A. Outward bill for collection

1. Clean bills

These are negotiable instruments drawn on out station branches of the bank, sent for

collection on behalf of the customer’s i.e. cheques drafts etc.

2. Documentary bills

These are bills accompanied by documents such as R.R, T.R bill of lading etc having title,

collected on behalf of their customers. if payment is made other than cheques then this

mode is used. it is an arrangement between 2 parties. Banks plays role as an agent.

Documentation is properly drawn between 2 parties. But in 99 cases clean bills are used.

B. Inward bill for collection

53


These are bills received locally. They are received from out station branches of the bank and

parties drawn on recipient banker or other banks or parties.

The main documents invited in bills and remittances department are as follow.

1. demand draft

2. Pay slip

3. Mail transfer MT

4. Telegraphic transfer

5. Pay order

1. Demand draft

Demand draft is an instrument which is drawn by one branch to another branch of the

same bank. If any person wants to make payment from one city to another city then he can

make payment through demand draft. Bank charges a commission for performing this kind

of service according to bank rate schedule which is revised after 6 months. Demand draft

may be issued or paid.

2. Pay slip

For payment of internal expenses of the bank the pay slip is used. For e.g tax payment, by

bank, repair and maintenance expenses, repair and maintenance expenses etc.

3. Mail transfer (MT)

Bank to bank remittances are transferred through mail. Its charges are same as of DD plus

additional 60 rupees. Mail transfer advise is use against cash receipt , cheque, and letter of

instrument.MT advise is prepared and test number is written on this MT advise. The advise

is given to dispatch department for onward transmission.

4. Telegraphic transfer.

It is a bank to bank transaction the issuing bank makes payment on payment order. The

beneficiary (3rd party) not directly involved in it. Two other mode of this transactions are

1. telephonic transfer

54


2. Fax

It is a coded massage by one bank to another bank. Each bank has its own code number first

they write the massage in the code form and after this they apply its test number on it. Two

types of instructions can be issued by the bank for T.T.

a) Advice in pay

b) Advice in credit.

a). Advice in pay

In this case the party on which the T.T is drawn, if not having its account in this

bank it means they are not the account holder of this bank, bank informs the party

that its T.T has came and to come and to open the account and to receive the amount.

Bank charges according to the bank schedule. Bank make payment to the party after

opening the account in the branch.

b). Advise in credit.

In this case the party having its own account in the same bank where the T.T has

came in their names the bank simply credit the account of its customer.

5. Pay order

pay order is just like a cash. If someone want to make payment to some other person he can

make payment through pay order slip. The main advantage of pay order is that it can not be

dishonour by the bank when payment is required to made within the city then we can take

this bank service and when we want to make payment outside the city then we use demand

draft in case of cheque there is a possibility that it can be dishonour by the bank but it case

of pay order we have surity that it can never be dishonour.

55


6).Foreign exchange department

The main function of foreign exchange department is to facilitate the import and exports by

opening up of letter of credit the banks provide. This facility to its customers. There are 2

types of facilities.

1. fund based

2. Non fund based.

Fund based facilities are those facilities which involve cash but non fund based facilities

are those which do not involve cash. Letter of credit is a fund based facility. Foreign

exchange department also deals in the foreign currency.

Letter of credit.

“A letter of credit is a commitment on the part of buyer’s bank to pay or accept

draft drawn upon it provided drafts do not exceed a specified amount.”

Why banks deal in letter of credit.

The bank charge nominal commission on financing the import and export shipment

The main benefits for opening it are

-Increased balances.

-Commission.

-New business opportunities.

Procedure of opening a letter of credit.

56


The letter of credit is opened by filling an application with the bank and following

informations should be provided to the bank.

1. name of beneficiary (seller)

2. Complete address of beneficiary

3. Type of letter of credit whether

Revocable or irrevocable

4. mode and time of payment

5. description of goods

6. Payment of freight

7. Detail of documents

8. Place &date of shipment

9. The date of expiry of credit

10. How the credit is to be advised by mail, cable, telex etc.

Foreign exchange department also provide facility to financing the exports by

-advising export credit

-collection of negotiation of foreign bills

-receiving payment from aboard by means of remittances.

-allowing packing credit facility to exports.

Other services

-Sale and purchase of foreign exchange

-providing credit information to foreign correspondent

-implementation of foreign exchange regulations

-Maintenance of non- resident accounts of foreign nationals.

57


MISCELANIESUS FUNCTIONS OF

ALL DEPARTMENTES

58


ON LINE BANKING

Many branches and checking accounts Habib Bank Limited are linked through satellite. It provides the facility of transaction with each branch while sitting on any branch of Habib Bank.

On Line Transaction are of three types:

Cash Transaction

Clearing Transaction Transfer Transaction

The clients can shift their amounts from one branch to another branch. their cheques can be cashed. On line banking is miscellaneous activity that is performed in almost all the department of Habib Bank.

Charges for inter branch in line transitions

59


There are no charges recovered with in the same city. No charges from the customer maintaining Rs. 200,000 in their current

accounts other wise charges will be recovered according to the schedule.

Schedule charges:

Up to Rs. 25,000/- Rs. 50/- Up to Rs. 200,000/- Rs. 100/- Rs. 200,001 to 500,000 Rs. 250/- Rs. 500,001 to 200,000 Rs. 500/- Collection account(companies only)

Opened with the approval of head offices. Rs 750/-

60


Lockers

One of much appreciated facility offered by a bankers to his customer is that of keeping in safe custody, valuables if various kinds, including securities, and documents of title of property. Frequently such items deposits in a locker box or sealed envelope, in which case the banker takes no cognizance of the contents. A part from providing the facility for accepting the valuable for safe custody, safe deposit lockers are also made available to customers on nominal rent.

61


Documents required for a locker facility:

Locker opening form. Specimen signature card. Copy of NIC of the client.

SAFE DEPOSIT LOCKERS CHAGES:

Fee for safe deposit lockers to be recovered in advance or at the commencement of the period yearly/half yearly/ quarterly as the case may be.

Small size Rs. 1000 per annum or nil on refundable key deposit of Rs. 15,000/-

Medium size Rs. 1,500 per annum or nil on refundable key deposit of Rs.20,000/-

Large size Rs. 2,500per annum or nil refundable keys deposited of Rs. 35000/-

62


Extra large Rs. 3,000per annum or nil refundable keys deposited of Rs. 45000/-

Extra Extra large Rs. 5,000per annum or nil refundable keys deposited of Rs. 75000/-

Key deposited Rs. 1,000 per locker

Breaking charges Rs. 2,000 per locker plus actual charges of supplier

Late payment charges Rs.50 per month of part thereof, maximum one year annual rent.

Internet Banking

Habib bank Limited has offered on line banking which is an innovative and truly global product to its customer. Thus enables them to check their balance, view their account ststmant, can transfer their fund.

63


Automatic teller machine

Habib bank has introduced ATM (automated teller machine) in Pakistan for its customer. Electronic cash dispensing facilities are available in various cities. in due course of time,it plans to install more ATMS and extended this on line facility to other operating centers of the bank. All these ATMS are linked through a state –of- the- art satellite based communication system offering real time 42- hour service. ATM card is a debit card and cash withdrawal transition are performed with its used as well as customer can check balance and have its account statmant.By using this card a client can with drawl the amount from 500 to 20,000 rupee in 42 hours.

In order to get an ATM card

Customer should be an account holder

Application from is filled

Speacmain signature card is filled

Application is forward to head office .Within to 10-15 days bank receive the ATM card and pin codes and hand it over ton the respective customer after taking his signature. Bank charges are Rs. 200 per annum

Working of ATM card:

When client enters his card in machine, it asks for the pin code. If he enters a wrong pin code constantly three times, then machine captured the card. This secured the transition .this increased the safety of the customer card. After the client has given a correct pin code, he

64


can safely perform his transition. After getting the amount from ATM machine customer get a small statement of his account which contains the following,

Pervious balance

Transaction amount

Current balance

Date

Time of transaction

Account number

Name of customer

ATMS AVAILABEL FOR HABIB BANK CUSTOMER:

Habib bank Limited has arrangement with other bank to use their ATMS where Habib bank ATM is not available. When a client uses an ATM of these other banks, Rs. 15 per transition are deducted from his account as ATM charges.

65


KARACHI

HABIB BANKM LIMITED

SONERI BANK

ASKARI COMMERICAL BANK

LAHORE

SONERI BANK


ABN –AMRO BANK

ISLAMABAD/RAWALPINDI

SONERI BANK


ABN –AMRO BANK

MULTAN

HABIB BANKM LIMITED


SIALKOT

66


HABIB BANKM LIMITED


FAISALBAD

HABIB BANKM LIMITED

PESHAWAR

HABIB BANKM LIMITED

GUJRANWALA

HABIB BANK LIMITED

GUJRANWALA

67


HABIB BANKM LIMITED

HAYDERABAD

HABIB BANKM LIMITED


AZAD KASHMIR

HABIB BANKM LIMITED

BAHAWALPUR

HABIB BANKM LIMITED

68


CREDIT CARD

Habib Bank offers a range of credit cards, accepted at thousands of locations in Pakistan.These cards facilitate the small financial, needs of customers like shopping of goods or any short term financing. Limit of credit card depends on the average balance in the account and monthly income. One of the requirements to issues credit card is that the applicant should be the account holder of the bank.

Documents required for credit card

Application form of credit card

Photocopy of national identey card

Passport size photograph

Salary certificate

Last six month income certificate

69


SIMEX/ KHAERADER

Function of simex

For the close interaction and monitoring Habib bank devolved a intra net networking system known as simex.

For the time being internal net working the data is stored in computer and then send to head office on the daily basis.

All the function of branch is entered in the computer then these are as follows,

70


Cheques presented at counter of bank

Deposit slip

Account of new customer

Cheque book issued to customer

Cashier payment book

Cash received book etc.

This type of data is send to the head office and when data received a conformation letter is received to the branch and this letter is attached with daily vouchers.

Also formats of different kind are sending to the branch.

71


ANALYSIS OF INCOME STATMANT

CNSOLIDATED PROFIT AND LOSS STATMANT(Rs.000)

As at December.31

2000 2001 2002 2003 2004Mark up /interest /earned

24271792 26738446 23956114 19049914 18,146,938

Less cost /return on deposit

173857616 15434544 11580431 4467402 4,467,402

72


886031 11303902 12375683 13,603,574 13,679,536

Fees commission and brokerage

185324 1827685 2096871 2,044,657

2,510,443

Profit/loss from investment securities

385912 ------------ ---------- ---------- ----------

Income from dealing in foreign currencies

1135343 1453522 1144350 1,069,192 1,095,789

Dividend income 1509213 ------------ ------------ ------------ ------------Income on gain on investment

------------ 1099947 1795385 3,513,808

4,205,921

14509309 4381154 5036606 6627657 7812143

13623278 6922748 7339077 20231231 21491679

Less operating expanse Administrative expanses

120714531 1127443 11807129 9,782,136 13,775,787

Provision against non performing loans

1222172 2632960 2652361 4879574

1900,090

Provision for diminution in value of investment

(142550) 3747 144154 452,223 571,352

Other provision (6031) 72896 62542 472248 93732(1067043) 3837046 14666186 15586181 16340961

(12556235) 3085702 (7327109) 4645050 5150718

Add other income

76406 1102845 1151751 1,132,385

2,020,347

(12632641) 4188547 (6175358) 5777435 7171065

Less other charges

(68924) 12381 4061 308267

7,523

Profit/loss before taxation

1074525 4176166 (6179419) 5469168 7163542

Current taxation

465000 1111826 (84631) 488750 398152

For prior ------------- -------------

------------- (629) 15341

Deferred ------------- (62) 1211435 963390 1070543

1451511 1484036

73


Profit/loss after taxation

609525 3064278 (7475485) 4017657 5679506

COMPERITIVE PROFIT AND LOSS STATMANT(Rs.000)

As at December.31 2000 2001 + /- in Rs. +/-in %Mark up /interest /earned

24271792 267384462466654 9.225121


173857616 15434544-158423072 -102.642

74


886031 11303902 10417871 92.16172Fees commission and brokerage

185324 18276851642361 89.86018


385912 ------------

-385912 -100


1135343 1453522

318179 21.89021

Dividend income 1509213 ------------ 1509213 -100

Income on gain on investment

------------ 10999471099947 100

14509309 4381154-10128155 -231.176

13623278 6922748-6700530 -96.79


120714531 1127443-119587088 -10606.9


1222172 2632960

1410788 53.58182


(142550) 3747

146297 3904.377

Other provision (6031) 72896 78927 108.2734

(1067043) 38370464904089 127.809

(12556235) 308570215641937 506.9166

Add other income 76406 1102845 1026439 93.07192

(12632641) 418854716821188 401.5996

Less other charges (68924) 12381 81305 656.6917


1074525 41761663101641 74.27006

Current taxation 465000 1111826 646826 58.17691

For prior ------------- ------------- ------------- -------------Deferred ------------- (62) 62 100%


609525 30642782454753 80.10869

75


COMPERITIVE PROFIT AND LOSS STATMANT

(2000- 2001)

A considerable increase in revenue and decrease in expenses. The bank mark up increased by 2466654.The cost has been decreases by 158423072. Profit before taxation has been increases by 3101641. The profit after taxation has been by 2454753. This increased due to bank mark up and decreased in the mark up cost and increased in other income.


As at December.31

2001 2002 +/-in Rs. +/-in%Mark up /interest /earned

26738446 23956114-2782332 -11.61428769

Less cost /return on

15434544 11580431 -3854113 -33.28125698

76


deposit11303902 12375683 1071781 8.660378583


1827685 2096871269186 12.83750884


------------ ----------

---------- ----------Income from dealing in foreign currencies

1453522 1144350

-309172 -27.01725871

Dividend income

------------ ---------------------- ----------


1099947 1795385695438 38.73475606

4381154 5036606655452 13.01376363

6922748 7339077416329 5.672770568


1127443 1180712910679686 90.45116726


2632960 2652361

19401 0.731461517


3747 144154

140407 97.40069648

Other provision 72896 62542 -10354 -16.55527486

3837046 1466618610829140 73.83746531

3085702 (7327109)-10412811 142.1134993

Add other income

1102845 115175148906 4.246230305

4188547 (6175358)-10363905 167.8267883

Less other charges

12381 4061-2782332 -11.61428769


4176166 (6179419)-10355585 167.5818552

Current taxation

1111826 (84631)1196457 7.0734677

For prior ------------- -------------Deferred (62) 1211435 1211373 99.99

77



3064278 (7475485)-10539763 140.99


(2001- 2002)

Considerable decreases in revenue and also decrease in expenses. The bank mark up decreases by 2782332.The cost has been decreases by 3854113. Profit before taxation has been decreases by 10355585. The profit after taxation has been by 10539763. This decreases due to bank mark up rate and increases in the provision against non performing loans and increased in administrative cost.


As at December.31

2002 2003 +/-in Rs +/-in %Mark up /interest /earned

23956114 19049914-4906200 -25.75444698


11580431 4467402

-7113029 -159.22

78


12375683 13,603,5741227891 9.026238252


2096871 2,044,657 -52214 -2.553680153


---------- ---------- ---------- ----------


1144350 1,069,192

-75158! 7.02

Dividend income

------------ ------------ ---------- ----------


1795385 3,513,808 1718423 48.90486333

5036606 66276571591051 24.00623629

7339077 2023123112892154 63.72402154


11807129 9,782,136-2024993 -20.70092871


2652361 4879574

2227213 45.64359512


144154 452,223

308069 68.12324893

Other provision 62542 472248 409706 86.7565347

14666186 15586181919995 5.902632595

(7327109) 464505011972614 257.74

Add other income

1151751 1,132,385 -19366 -1.710

(6175358) 577743511952793 206.88

Less other charges

4061 308267 304206. 98.68


(6179419) 546916811648587 212.987

Current taxation

(84631) 488750573381 117.31

For prior ------------- (629) 629 100

Deferred 1211435 963390 -248045 -25.7471

79


1451511Profit/loss after taxation

(7475485) 401765711493142 286.06


(2002- 2003)

Considerable decreases in revenue and also decrease in expenses. The bank mark up decreases by 4906200.The cost has been decreases by 4467402. Profit before taxation has been decreases by 10355585. The profit after taxation has been increases by 11493142. This decreases due to bank mark up rate and increases in the provision against non performing loans and increased in administrative cost.


As at December.31

2003 2004 +/-in Rs +/-in%Mark up /interest /earned

19049914 18,146,938 -902976 -4.975913843


172595754 4,467,402

-168128352 -3763.448017

13,603,574 13,679,53675962 0.555296612

80



2,044,657 2,510,443465786 18.5539365


---------- ----------

---------- ----------Income from dealing in foreign currencies

1,069,192 1,095,789

26597 2.427200857

Dividend income

------------ ---------------------- ----------


3,513,808 4,205,921692113 16.45568236

6627657 78121431184486 15.16211365

20231231 214916791260448 5.864818658


9,782,136 13,775,7873993651 28.99036549


4879574 1900,090

-2979484 -156.8075196


452,223 571,352

119129 20.85036895

Other provision 472248 93732 -378516 -403.827935

15586181 16340961754780 4.618944994

4645050 5150718505668 9.817427396

Add other income

1,132,385 2,020,347887962 43.95096

5777435 7171065 139363019.4340729

Less other charges

308267

7,523-300744 3997.660508


5469168 71635421694374 23.6527405

Current taxation

488750 398152-90598 22.75

For prior (629) 15341 15970 104.100

Deferred 963390 1070543 107153 10.0092196

1451511 1484036 32525 2.1916584

Profit/loss 4017657 5679506 1661849 29.2604497

81


after taxation


(2003- 2004)

Considerable decreases in revenue and also decrease in interest expenses. The bank mark up decreases by -

902976.The cost has been decreases by 168128352. Profit before taxation has been increases by 1694374. The profit after taxation has been increases by 1661849. This increases due to bank mark up rate and decreases in the provision against non performing loans and increased in non mark up income

HABIB BANK LIMITED

BALANCE SHEETYEAR 2000-2005

(000)

Particulars 2000 2001 2002 2003 2004Cash 37343702 27669276 27494292 27639313 31970290

Balances with other banks

766674 22843841 28870767 20312646 33386118

Lending to financial 22843841 10001123 22595488 3755039

82


institutionsInvestments 72525352 57792325 142877930 158870811 134540558

Advances 173822905 167225401 167523299 183654042 258306053

Other assets 30246684 21256518 18837931 11523641 11935142

Operating fixed assets 5923411 5874422 7184623 7111940 11110314

Deferred tax assets 2967570 3224049 1978144

TOTAL ASSETS 320628728 325505624 403012535 434931930 486981658

LIBLITESBill payable 5376924 5419260 5834673 6258226 7601766

Deposits 265751324 283444680 328182054 360648228 404629059

Borrowing from financial institutions

23923589 23443322 38045541 31610200 29196284

Deferred tax liabilities ----------- ----------- ----------- ----------- -----------

Other liabilities 13340485 8629175 11243342 12697392 14090772

Total liabilities 523692332 320936437 383305610 411214046 455517881

Presented by Share Capital 12178495 12178495 12178495 12178495 69000000

Capital Reserve fund 985942 1027348 1635407 2644052

Accumulated (loss)/profit

17876069 (11662155) (8931643) (5045153) 13546636

Surplus on assets 3762197 3108366 7224050 6716125 8097387

Total 203063564 4569187 19706925 23717884 31463777

HABIB BANK LIMITEDBALANCE SHEET COMPARIOTVE

ANASLYSISYEAR 2000-2001

Particulars 2000 2001 +/-in Rs +/-in%Cash 37343702 27669276 -9674426 -34.9645072


766674 22843841

22077167 96.64384812

Lending to financial institutions

-------------------- 22843841

22843841

83


Investments 72525352 57792325 -1.5E+07 -25.4930512

Advances 173822905 167225401 -6597504 -3.945276232

Other assets 30246684 21256518 -8990166 -42.29369081

Operating fixed assets

5923411 5874422

-48989 -0.833937364

Deferred tax assetsTOTAL ASSETS 320628728 325505624 4876896 1.498252454

LIBLITES 0 #DIV/0!

Bill payable 5376924 5419260 42336 0.781213671

Deposits 265751324 283444680 17693356 6.242260747


23923589 23443322

-480267 -2.048630309

Deferred tax liabilities

----------- -----------

Other liabilities 13340485 8629175 -4711310 -54.59745572

Total liabilities 523692332 320936437 -2E+08 -63.17634012

Presented by 0 #DIV/0!

Share Capital 12178495 12178495 0 0

Capital Reserve fund

985942

985942 100


17876069 (11662155)

-3E+07 253.2827252

Surplus on assets 3762197 3108366 -653831 -21.03455642

Total 203063564 4569187 -2E+08 -4344.194646



On asset there is a significant decrease in the advances by -4.38% on the other deposit had bean increased while other asset and operating asset also decreased. Other liabilities decreased by a large amount-

84


54.59745572%balance with other banks has bean also increased by 96.64384812%



Particulars 2001 2002 +/-in Rs +/-in%Cash 27669276 27494292 145021 0.524691044


22843841 28870767

-8558121 -42.13198517


22843841 10001123

12594365 55.73840671

Investments 57792325 142877930 15992881 10.06659493

85


Advances 167225401 167523299 16130743 8.783222424

Other assets 21256518 18837931 -7314290 -63.47203978


5874422 7184623

-72683 -1.021985562

Deferred tax assets 2967570 256479 7.955183063

TOTAL ASSETS 325505624 403012535 31919395 7.338940372

LIBLITES 0 #DIV/0!

Bill payable 5419260 5834673 423553 6.767940308

Deposits 283444680 328182054 32466174 9.002172056


23443322 38045541

-6435341 -20.35843177


----------- -----------

#VALUE! #VALUE!

Other liabilities 8629175 11243342 1454050 11.45156423

Total liabilities 320936437 383305610 27908436 6.786839183


Share Capital 12178495 12178495 0 0


985942 1027348

608059 37.18089748


(11662155) (8931643)

3886490 -77.03413554

Surplus on assets 3108366 7224050 -507925 -7.56276871

Total 4569187 19706925 4010959 16.91111652



On asset there is a significant increased in the advances the deposit and other accounts has bean increased while other asset decreased. Other liabilities increased by a large amount .balance with other banks has bean also increased by 8558121000. Operating asset has been increased by a large amount 72683000

86




Particulars 2002 2003 +/-in Rs +/-in%Cash 27494292 27639313 145021 .5246


28870767 20312646

-8558121 -42.1319


10001123 22595488

12594365 55.73840

Investments 142877930 158870811 15992881 10.066593

Advances 167523299 183654042 16130743 8.78323

Other assets 18837931 11523641 -7314290 63.472039

87



7184623 7111940

-72683 -1.0219855

Deferred tax assets 2967570 3224049 256479 7.9551830

TOTAL ASSETS 403012535 434931930 31919395 7.3389403

LIBLITESBill payable 5834673 6258226 423553 6.767940

Deposits 328182054 360648228 32466174 9.002172


38045541 31610200

-6435341 -20.3584317


----------- -----------


Total liabilities 383305610 411214046 27908436 6.7Z8868391

Presented by Share Capital 12178495 12178495 0 0


1027348 1635407

608059 37.1808974


(8931643) (5045153)

3886490 77.0341335

Surplus on assets 7224050 6716125 507925 7.562787

Total 19706925 23717884

4010959

16.9111165



On asset there is a significant increased in the advances by 74652011000 the deposit and other accounts has bean also increased by large amount while other asset decreased by-2418587000.Other liabilities increased by a large amount. Balance with other banks has bean decreased by a large amount. Operating asset has been decreased by a small amount.

88


HABIB BANK LIMITED

BALANCE SHEET COMPARIOTVE ANASLYSISYEAR 2003-2004

Particulars 2003 2004 +/-in Rs +/-in%Cash 27639313 31970290 4330977 13.54688056


20312646 33386118

13073472 39.1584071


22595488 3755039

-18840449 -501.7377716

Investments 158870811 134540558 -24330253 -18.08395428

Advances 183654042 258306053 74652011 28.90060459

Other assets 11523641 11935142 411501 3.447809838

Operating fixed 7111940 11110314 3998374 35.98794778

89


assetsDeferred tax assets 3224049 1978144 -1245905 -62.98353406

TOTAL ASSETS 434931930 486981658 52049728 10.68823171

LIBLITES 0 #DIV/0!

Bill payable 6258226 7601766 1343540 17.674051

Deposits 360648228 404629059 43980831 10.86941979


31610200 29196284

-2413916 -8.26788779


----------- -----------


Total liabilities 411214046 455517881 44303835 9.726036419


Share Capital 12178495 69000000 56821505 82.35000725


1635407 2644052

1008645 38.14769906


(5045153) 13546636

18591789 137.2428476

Surplus on assets 6716125 8097387 1381262 17.05812011

Total 23717884 31463777 7745893 24.61844616

HABIB BANK LIMITEDBALANCE SHEET COMPARIOTVE ANASLYSIS

YEAR 2003-2004

On asset there is a significant increased in the advances by 411501000 the deposit and other accounts has bean also increased by large amount while other asset increased by43980831.Other liabilities increased by a large amount balance with other banks has bean increased by 13073472. Operating asset has been increased by a large amount.

90


RATIO ANALYSIS

91


CASH TO DEPOSIT RATIO

YEARS

ACCOUNTES 2004 2003 2002 2001 2000

CASH 31970290 276393313 27449292 27669276 12869044 DEOSIET 404629059 360648228 328182054 283444680 265751324

CASH TO DEPOSIT RATIO 7.90 7.66 8.36 9.76 4.84

92


93


EQUITY TO ASSEST RATIO

YEARS

ACCOUNTES 2004 2003 2002 2001 2000

EQUITY 23090688 16768749 12274200 9502282 8770811

ASSEST 486981658 434931930 403012535 333750605 320926758

CASH TO DEPOSIT RATIO 4.74 3.85 3.045 29.81 2.7

94


EQUITY TO ASSEST RATIO

95


EQUITY TO DEPOSIT RATIO

YEARS

ACCOUNTES 2004 2003 2002 2001 2000

EQUITY 23090688 16768749 12274200 9502282 8770811

DEPOSIT 404629059 360648228 328182054 283444680 265751324

EQUITY TO DEPOSIT RATIO 5.70 4.6 3.7 3.3 3.3

96


EQUITY TO DEPOSIT RATIO

97


98


ADVANCES TO DEPOSIT RATIO

YEARS

ACCOUNTES 2004 2003 2002 2001 2000

ADVANCES 29196284 31610200 38045541 23443322 23923589

DEPOSIT 404629059 360648228 328182054 283444680 265751324

ADVANCES TO DEPOSIT RATIO 7 8.76 11.59 8.27 9

ADVANCES TO DEPOSIT RATIO

99


EARNING PER SHARE

YEARS 2000 2001 2002 2003 2004

AMOUNT 0.4 .92 1.67 5.82 8.21

100


EARNING PER SHARE

101


RETURN ON ASSAEST

YEARS 2000 2001 2002 2003 2004

ACCUOUNT PROFIT AFTER TAX 609525 3064278 (7475485) 4017657 5679506

ASSEST 486981658 434931930 403012535 333750605. 320926758

102


RATIO 0.125 0.7045 (1.85) 1.20 0.1769

RETURN ON ASSAEST

103


104


SWOT ANALYSIS

STRENGTHS

105


HBL is a leading financial institution in terms of market share. It has a big market share in the domestic market.

In terms of product design capabilities in relation to competitors, bank has been leading so far, right from 1947. HBL has introducing innovative products in the country i.e. Rupee traveler cheques, Flexi loans

HBL is the oldest bank in the history of banking in Pakistan it was founders of Habib Bank who presented a bank cheques to Quaid-e-Azam HBL also provided funds for the establishment of SBP.

It is the only Pakistan bank with the largest overseas net work which consists of 71 branches in 21 countries.

HBL has largest net-work mode and customer base in Pakistan with 1469 branches in Pakistan.

HBL is in dominating position in Pakistan terms of deposits, advances and assets.

The organization uses a differentiated marketing strategy with a different marketing mix for each segment.

Keeping in view the need of time the bank has automated its operations like providing ATM services

Bank has launched his credit card.

Bank charges are lees then other banks

WEAKNESSES

106


A few branches are on line and have a universal access account.

Few ATM are available for the customer of the bank.

Rate offered on PLS are very lees as compared to the other banks

No specialist person is for the simex in the branches.

Employees are less in the branches while regional offices are over staff .

The pays of the employees are comparatively less and there are no clear criteria for

the promotion

Rate of mark up charged from customer are high as compared to other banks.

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OPPERTUNITIES

With the largest work of branches, with highly qualified staff bank provides

the quality of service and support to the customers and retain its leading

position.

Bank should target segments like soft-ware energy pharmaceutical and

communications which have potential for grew

As bank has minimum charges by installing the ATMS he can grabbed more

market share.

Due to privatization management is free for decision making.

Bank can increase his revenue by focused on flexi loan.

THERAT

108


Almost of the foreign banks that operations in the bigger cities only and are concentrating on individuals of higher income and blue chips companies they are taking away the mark from bank.

As most of the loans are stuck up there are fewer tendencies to more loans thus giving a low loan

Products and services introduced by HBL in the past have been copied and followed by other commercial banks.

The bank has to deal with increasingly thought competitions in domestic market from Nationalized foreign and private sector banks.

The schemes of National savings are a threat for Habib Bank Limited. They offer higher rate of interest.

. Habib bank is the bank of most educational institute but due to bad policies most of institute shift their account to U.B.L

SUGGESTION

109


Staff should be provided professional training in marketing, selling, finance and computer.

. It will be helpful in sharpening their abilities and developing their skills.

Bank should emphasize on hiring of business graduates and computer experts for the simex system.

ATMs should be installed in small cities as well.

The political influence should be minimized on all type of the operations of the bank.

Advance for non-productive investment should be stopped.

The influence of employees union should be minimized.

Implantation on the rules, regulations and policies should be done at all cost.

The customer satisfaction should be guaranteed through rapid delivery of financial products and services

Habib bank should focus in the services of their educational institutes

The training should be proper time period.

Right person on right job should be placed

Proper staff should be in the branches.

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Final Report of Internship

Documents

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