Internship Report on Hbl

INTERNSHIP REPORT

INTERNSHIP REPORT ONHABIB BANK LIMITED PAKISTAN Session 2011-2015 UNIVERSITY OF GUJRATDATE OF INTERNSHIP REPORT: 22-07-2013 to 06-09-2013DEDICATION

Allah Almighty (whose claim (to obedience) cannot be satisfied by those who attempt to do so)& His Beloved People.

ACKNOWLEDGEMENTThanks to ALLAH Almighty for giving me such a beautiful opportunity and enabling me to complete my project. Thanks to my loving parents and guardian who help me a lot at every phase of my life, encouraged me in the days of depression and sacrificed for my better future.

I am thankful to all of my teachers and my class fellows and friends whom

Cheerfulness and guidance is an asset for me .I am especially thankful to the bank staff and particularly.

Table of content

Executive Summary 7

Introduction

Brief history& Overview of the organization

11Vision & Mission 15Objectives 16

Organizational structure

19

No. of Employees 20

Work done by Me 21

Product lines

25

Competitors

42

Ratio analysis

43

SWOT Analysis 52

Conclusion & recommendations for improvement

56

Plan of our internship program

58

Training Programme 60

Nature of the organization

74 Annual Financial Statements 77

Bibliography 83

Executive Summary

HBL established operations in Pakistan in 1947 and moved its head office to

Karachi Our first international branch was established in Colombo, Sri Lanka in 1951 and Habib Bank Plaza was built in 1972 to commemorate the banks 25th Anniversary. HBL has the largest Corporate Banking portfolio in the country with an active Investment Banking arm. It encompasses product offerings and services in Retail Banking and, in recent years, Consumer Banking as well.

Satisfying customers are the only way to stay competitive in today's Market

Place. The balancing act between what customers want and what the HBL can provide must be optimized in order to maximize HBLs long-term profits.HBL is expanding its presence in principal international markets including the UK, UAE, South and Central Asia, Africa and the Far East.

With a domestic market share of over 40%, HBL was nationalized in 1974 and it continued to dominate the commercial banking sector with a major market share in inward foreign remittances (55%) and loans to small industries, traders and farmers. International operations were expanded to include the USA, Singapore, Oman, Belgium, Seychelles and Maldives and the Netherlands.

HBL is currently rated AA (Long Term) and A-1+ (Short term). HBL is the first Pakistani bank to raise Tier II Capital from external sources.

IntroductionHabib Bank Ltd is a Banking HBL which is engaged in Commercial & Retail Banking and related services domestically and overseas. HBL Enjoy 20% of the market Share in Pakistan. Today HBL 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 leadership In Pakistans corporate ground. HBL is currently uses rate AA and A1+.ESTABLISHMENT:

Habib Bank Limited was established by Mr. IsmailHabib (Late) on August 25, 1942 at Bombay. It was the first

Muslim Bank of the sub-continent. It was Established with a

Paid up capital of Rs. 2.5millon

BRANCHES:

Numbers of branch of HB L 1450.in Pakistan.Numbers of branch of HBL 55 .in worldwide.

Corporate center 1 Islamic banking.

Registered office:Habib Bank Limited 4th Floor, Habib Bank Tower

Jinnah Avenue Islamabad, Pakistan.Phone: 051-2872203 &051-2821183

Fax: 051-2872205Head office:

Habib Bank Plaza I.I. Chundrigar Road

Karachi 75650 Pakistan.

Phone: 2418000 [50 Lines]

Fax: 021-921751

Auditors:

Taseer Hadi Khalid & co.

(A member firm of KPMG International)

Sh. Sultan Trust Bidg. No. 2

Beaumont Road

Karachi-75530

Pakistan

A.F. Ferguson & Co.

(A member firm of price water house coopers)State Life Building 1-C

I. I. Chundrigar Road Karachi

Pakistan.

Audit Committee:

Mr. Moez Ahmad Jamal Chairman

Mr. Sajid Zahid Member

Mr. Ahmad Jawad Member

Mr. Salim Amlani Secretary

Board of Directors: Sultan Ali Allana

Chairman Moez Jamal

Director

Ahmad Jawad

Director

R.Zakir Mehmood

President & CEO Yasin Malik

Director

Sajid Zahid

Director

Mushtaq Malik

Director

Overview of the OrganizationHistory

The branches of Habib Bank in Pakistan

HBL Plaza in Karachi

Mohammed Ali Jinnah, Pakistan's founding father, realized the importance of financial intermediation while he was campaigning for the creation of a separate homeland for the Muslims of India. He persuaded the Habib family to establish a commercial bank that could serve the Indian Muslim community. His initiative resulted in the creation of Habib Bank in 1941, with HO in Bombay (now Mumbai), and fixed capital of 25,000 rupees. The bank played an important role in mobilizing funds from the Muslim community to finance the All-India Muslim League's campaign for the establishment of Pakistan. Habib Bank also played an important role in channeling relief funds to the people hurt in the communal riots and violence that preceded the departure of the British from India.

After Pakistan was born in 1947, Habib Bank, at the urging of Governor-General Jinnah, moved its headquarters to Karachi, Pakistan's first capital. This gave Karachi its first commercial bank of the newly formed Islamic Republic of Pakistan. The Habib family owned and managed the bank until the Pakistan government nationalized it on 01 January 1974.

1951 HBL opened the first of 3 branches in Sri Lanka.

1952 HBL established Habib Bank (Overseas).

1956 HBL opened first of 5 branches in Kenya.

1957 or 1958 HBL opened a branch in Aden.

1961 HBL opened the first of what would become 6 branches in the UK.

1964 HBL opened the first of 4 branches in Mauritius and a branch in Beirut.

1966 HBL opened the first of 8 branches in the UAE.

1969 HBL opened first of 3 branches and an OBU in Bahrain. However, HBs branch in Aden is nationalized.

1971 HBL opened an OBU in Singapore and a branch in New York.

1972 HBL opened the first of 11 branches in Oman. HBL constructed Habib Bank Plaza in Karachi to commemorate the banks 25th Anniversary.

1974 The government of Pakistan nationalized HBL and HBL merged with Habib Bank (Overseas).

1975 HBL opened a branch in Belgium. HBL also merged with Standard Bank, a Pakistani bank.

1976 HBL opened a branch in the Seychelles, the first of two branches in Bangladesh, and a branch in the Maldives.

1979 HBL opened a branch in the Netherlands.

1980 HBL opened a branch in Paris and another in Hong Kong.

1981 HBL established Nigeria Habib Bank with 40% ownership. HBL also opened a representative office in Teheran.

1982 HBL opened a branch in Khartoum.

1983 HBL opened branch in the Karachi EPZ and a branch in Istanbul.

1984 HBL established Habib American Bank in New York with a branch each in Manhattan and Queens, and a US International Banking Facility. HBL also opened a branch in California.

1987 HBL opened in Australia.

1991 The Habib Group established a separate private bank, the Bank AL Habib, after private banking was re-established in Pakistan. HBL opened a branch in the Fiji Islands, and took over the Paksistani branches of failed bank, BCCI.

1992 In Nepal HBL acquired 20% of Himalayan Bank.

1995 HBL established a representative office in Cairo.

1990s HBL established Habib Finance (Australia), and Habib Finance International Limited, Hong Kong.

2000 HBL established Habib Canadian Bank.

2002 On June 13, 2002 Pakistan's Privatization Commission announced that the Government of Pakistan had granted the Aga Khan Fund for Economic Development (AKFED), a subsidiary of the Aga Khan Development Network, rights to 51% of the shareholding in HBL, against an investment of PKR 22.409 billion (USD 389 million).

HBL's UK operation came close to being shut down due to regulatory issues with the Financial Services Authority. The issue was resolved by converting the operations to a subsidiary. Then Habib Bank Limited and Allied Bank of Pakistan merged their operations (Habib contributed its 6 branches and Allied its 4), into a new bank, called Habib-Allied International Bank, in which Habib Bank has a 90.5 percent shareholding, while Allied Bank has 9.5 percent. Simultaneously with the transfer of business to the new bank, both allied and Habib Bank close down all independent operations in the UK.

2003 HBL received permission to open a branch in Afghanistan.

2004 On February 26, the Government of Pakistan handed over management control of Habib Bank to AKFED. The Board of Directors was reconstituted to have four AKFED nominees, including the Chairman and the President/CEO and three Government of Pakistan nominees

2006 HBL sold the operations that it had established in Fiji in 1991 to Bank of South Pacific.

Vision

Simply the vision of Habib Bank is mass banking. At the time of formation it changed its motto from class banking to mass banking. Expedite the economic growth of the country through spreading the banking services to the doorsteps of mass people so that they get institutional financial help and participate in the economic activities of the country.

Mission To be the trendsetter for innovative banking with excellence and perfection.

To be the best performing bank in the country and the region.

To exceed customer expectations through innovative financial products & services and establish a strong presence to recognize shareholders' expectations and optimize there rewards through dedicated workforce.

Keeping ahead of other competitors in productivity and profitability. To attain budgetary targets fixed in each area of business.

Objectives

Like other business organization the core desire of Habib Bank is to maximize the profit through saving & loaning money to the life of the common people. The Objectives of the Habib Bank is given below:

I. Broad Goal:

As a nationalized commercial organization, Habib Bank belongs to the people. It implies that it stands for meeting the banking needs of the mass people of the society.

II. Operating Goal:

In compliance with the very nature of the organization, the objective in mind the bank aims at excelling quality and diversified services. To fulfill its mission Habib Bank has its main objectives as followings:

To provide banking services to people.

To earn profit.

Act as a media of exchange.

To contribute to gross domestic product (GDP).

Maintain a satisfactory deposit mix.

To promote and boost up business sector inside the country.

To help to grow entrepreneurship.

Increase loan portfolio diversification and geographical coverage.

To mitigate unemployment problem.

Provide finance specialized services to the export.

To help to boost economic development.

To help in development and industrialization of the country

Service Attitudes:

Habib Bank is a service organization. It will live and prosper on the quality of service it provides. Hence quality of service must be maintained at all levels.

Banks image with people should be identified on the quality and diversity of services that the people aspire to receive.

As a dynamic bank it will remain in search of new field of activity in line with people economic need. Suggestions by customers and other people shall receive proper attention so as to help identify new activity or improve upon present activities.

The bank shall maintain healthy competition with other banks aiming at excelling services in meeting economic needs of the people.

ManagementSultan Ali Allana

GroupExecutive,Risk Management

Nauman K. Dar

Group Executive, International Banking & CEO, Habib Allied International Bank Plc.,UK

Abid Sattar

GroupExecutive, Retail & Consumer Banking

Zafar Aziz Osmani

GroupExecutive,Human Resources&Organizational Development

Mudassir H. Khan

GroupExecutive, Chief Compliance Officer

Salim Amlani

GroupExecutive,Audit, BRR & Investigation

Aslam Gadit

GroupExecutive, Asset Remedial Management

Yousuf Nasir

GroupExecutive, Information Technology

Ms. Nausheen Ahmad

HBLSecretary & Head of Law Division

R. Zakir Mahmood

President & CEO

Sima Kamil

Group Executive,

Corporate Banking

Ayaz Ahmed

GroupExecutive, Chief Financial Officer

Jamil Iqbal

Group Executive, MISYS / BusinessProcessRe-engineering

Jamil A. Khan

Group Executive,

Global Operations

Faizan Mitha

Group Executive,

Global Treasurer

Mirza Saleem Baig

GroupExecutive, Commercial Banking

Kashif Shah

GroupExecutive, Investment Banking

Aly Mustansir

HeadofMarketing & Brand Management

Organizational Hierarchy chart

SHAPE \* MERGEFORMAT

Number of Employees

HBL Profile:Habib Bank Limited

Ticker:HBL

2011 Sales:73,498,000,000

Major Industry:Financial

Sub Industry:Commercial Banks

Country:PAKISTAN

Employees:14123

Detailed description of the department I worked

These are those departments where I worked

1. Deposits /Business development.2. General banking operational work.3. International banking(Trade).4. Credit (Financing).These are detail of their department.

1. 1. General banking operational work

As it is the function of the Bank to the money to any place where there is a Bank. It is the most easiest and safe way to send money to any place. Bank charges menial amount as a commission for the remittance. Here in the Habib Bank Limited Dolat Nagar there is also remittance Department. There are mostly four methods to remit the money. They Are

i. Demand Draft (DD)

ii. Mail Transfer (MT)

iii. Pay Order (PO)

i. Demand Draft

It is the most commonly method used for remittance of money. It is very simple, firstly a form is to be filled in which all details are specified that where and it which branch the draft is to be sent then the money is depositor which is called draft and money can by drawn after showing to the bank of the specified branch of the Bank. Only specified person can draw the money on that draft. Another method to secure the payment of the draft could be the crossing of the draft, which means that it will only be deposited in the payee's account.

To make it more secured and safe the Bank has coded the amount exceeding Rs. 15000. Only the banker or the person known the actual amount of the draft in return bank gets a commission which is its mode of earning.

ii. Mail Transfer (MT)

The money is transferred through mail. One Branch of the bank sends advice to the branch of the same bank to credit the account of payee. In this type of transfer the payee must has the Bank account. For example, now days PTV's licenses are made all over the Pakistan. Bank also gets commission on the mail transfers.

iii. Pay Order (PO)

Pay order is less expensive method of transfer money. Normally this method is used to transfer money inside the city. If it is used city wide, it takes a long time. The bank charge Rs. 10 which is flat fee the pay order and an excise duty of Rs, 1 per leaf with holding tax of 20% on the sum is also taken from the party.

Now if the pay order is to be cancelled or duplicate of the pay order is to be needed is case of misplacement Rs.20 is to be paid.

2. Finance/Advance Department

This department has been working under the supervision of knowledge experienced & well qualified banker. Mr. Usama who has been serving this bank for last 7 years.

This department has been playing one of the primary function of the bank because a bank is the organization that accept deposits & give advances.

Advances department is one of the most sensitive and important departments of the bank. The major portion of the profit is earned through this department. The job of this department is to make proposals about the loans.

The Credit Management Division of Head Office directly controls all the advances. As we known bank is a profit seeking institution. It attracts surplus balances from the customers at low rate of interest and makes advances at a higher rate of interest to the individuals and business firms. Credit extensions are the most important activity of all financial institutions, because it is the main source of earning. However, at the same time, it is a very risky task and the risk cannot be completely eliminated but could be minimized largely with certain techniques.

Any individual or company, who wants loan from HBL, first of all has to undergo the filling of a prescribed form, which provides the following information to the banker.

There are basically two types of loans.

Fund base

Non-fund base

In fund base the cash is involved while in non-fund base cash is not involved.

These are following types of advances those are given by the bank.

Cash Finance

Running Finance

Any individual or HBL, who wants loan from HBL, first of all has to undergo the filling of a prescribed form, which provides the following information to the banker.

Name and address of the borrower.

a) Existing financial position of a borrower at a particular branch.

b) Accounts details of other banks (if any).

c) Security against loan.

d) Exiting financial position of the HBL. (Balance Sheet & Income Statement).

e) Signing a promissory note is also a requirement of lending, through this note borrower promise that he will be responsible to pay the certain amount of money with interest. Product Lines

Services / Products Offered by the bank

Car to car

Car Loan

Credit Cards

Deposit Accounts

Bancassurance

Debit Card

Phone Banking

Mutual Funds

1. Credit Cards

Welcome to a world of convenience, flexibility and opportunity. The HBL Credit Card will add simplicity and excitement to your life. Accepted at over 24 million merchants worldwide, HBL Credit Card makes shopping fun and paying simple. Make the most out of your shopping experience with your very own HBL Credit Card.

Gold Card

Green Card

i. Convenience

ii. Security

iii. Affordability

iv. Cash Advance

v. Balance Transfer Facility

vi. Internet shopping

i. Convenience

Instead of paying with cash, simply present your HBL Credit Card to the shopkeeper and pay for anything you want. Bill Payments

We'll pay your bills on your behalf and charge the amount to your HBL Credit Card. You can give one-time standing instructions to pay your monthly bills. Check the amount in your monthly card statement and make the payment with your regular card payment.

SMS AlertsFor all transactions, an SMS alert will be sent to you on your mobile phone to confirm that the transactions have been conducted by you. A nominal fee will be charged for this service.

E-Statements

You can enroll for an e-statement with a simple call. An e-statement with details of all your transactions will be sent to your specified email address every month. You wont have to wait for your paper statement any more or have to worry about storing it.

Statement by Fax

HBL Credit Card also offers the facility of receiving your card statement by fax. Just give us a call and your last card statement will be faxed to you at the fax number specified by you

ii. Security.

Your HBL Credit Card ensures your money stays completely secure. You cannot lose cash if you dont carry it. In the unlikely event that your card is stolen, call us at HBL Phone Banking and your card will be blocked immediately.

iii. Affordability

Buy Now, Pay Later

HBL Credit Card gives you the flexibility to buy what you want, when you want and pay for it later. A credit card statement will be sent to you every month with details of all your purchases. You will have 21 credit free days to make the payment from the statement date. Please pay at least 3 days in advance if you make your payment by cheques to allow enough time for clearance.

Pay As Much As You WantYou have the freedom to pay the entire outstanding amount on your card statement or as little as 5% of the outstanding balance in your statement. The remaining amount will be transferred to next months statement. A nominal service charge will be applied to the unpaid amount each month.

Lower Rate Every YearJust make sure all your HBL Credit Card payments are made before the due date and you will benefit from a reduction in the rate of service charges at the end of each year.

iv. Cash Advance

If you require cash urgently, you can go to any specified HBL branch and withdraw cash at the counter. You can also go to any 1 Link ATM in Pakistan and

more than 780,000 ATMs and financial institutions worldwide displaying the Visa/Plus logo. You can withdraw cash up to the available cash advance limit on your HBL Credit Card. For Cash Advance, nominal service charges will be applied from the withdrawal date.

v. Balance Transfer Facility

With your HBL Credit Card Balance Transfer Facility, you have the opportunity to pay off balances you owe to other banks through your HBL Credit Card at lower service charges.

vi. Internet shopping

Enjoy a hassle free shopping experience and shop from a choice of online merchants, all from the comfort of your home. To activate /de-activate the service please call 111-111-425

2. HBL Car LoanHBL Car Loan helps you get your preferred car through a simple and hassle-free process, backed by superior service and support. Now you can drive a car you always wanted.

Car Showroom Car Navigator

Choice of either a new local/imported car or a reconditioned imported car.

Repayment options ranging unto 7 years.

Upton 85% of financing for the car of your choice.

Insurance at all times for complete peace of mind and security.

Round the clock support available through

3. HBL Phone Banking;

PHONE BANKING

Yourbankisjustaphonecallaway. You can now call HBL Phone Banking and save a trip to the branch. Your query will be resolved in a single telephone call from anywhere and at anytime.

You can place your requests and queries, track the status of your repayment/loan account and avail other value-added services through HBL Phone Banking.

Eligibility Criteria

Salaried Individuals

Self-Employed Businesspersons/Professionals

Citizenship

PakistaniPakistani

Age

22-60 years22-65 years

Minimum

monthly income

Rs. 20,000Rs. 25,000

Documentation

Salaried Individuals

Copy of CNIC

2 recent passport size photographs

Latest original salary slip and personal bank statement for last 3 months

Self-Employed Business persons/Professionals

Copy of CNIC

2 recent passport size photographs

Bank statement for last 6 months and bank letter confirming details of account

Proof of business

Home Loan

HBL yet not offered home loan in the future the management of the HBL will

offered Home loan also.

Types of accounts offered by the bank

Term Accounts

HBLs Term Accounts are offered in a variety

of tenure with deposits as low as Rs.10, 000.HBL Advantage Account

TermProfit

10 year 18%

5 year 15%

3 year 14%

1 Year 12%

Multiple options for tenure and profit payout

Loan facility up to 90% of deposit

Minimum required investment as low as Rs. 25,000

Special Notice Time Deposit

7 days or 30 days (and over) notice

Minimum deposit of Rs. 10,000

Balances less than Rs. 1 million

Balances equal to and greater than Rs. 1 million

Returns range from 0.75% to 4% depending on notice period and amount

Term Deposit Receipts

3 month term deposit

Minimum balance of Rs. 10 million

Returns range from 0.75% to 2.25%

IPDC

Minimum investment of Rs. 20 million except in the case of 1 month where minimum investment is Rs. 100 million

Available in 1 month, 3 month, 6 month, 12 month and 3 year terms

Profit paid on maturity

Rates on IPD are conveyed on a daily basis by the Treasury Division

Remittance Munafa plus Deposit (Certificates)

Available in 1 year, 3 year and 5 year certificates

Profit disbursement is monthly, quarterly, bi-annually, annually and on maturity

Profit paid on maturity

Returns range from 7.8% to 11%

Current Account

Non-profit bearing

No transaction limits

Minimum balance of Rs. 10,000. If the average balance falls below this

amount, then service charges will be deducted

No restriction on anyone opening a Current Account (as long as regulatory

guidelines are met)

Basic Banking Account (BBA)

No minimum balance

No service chargesSavings Account

Profit paid bi-annually

Minimum average balance of Rs. 10,000

5% profit per annumHBL Value Account

7% profit per annum*

Profit credited every 3 months

Deposit ranges from Rs. 10,000 to Rs. 100,000

Flexibility of withdrawals

HBL Supervalu Account

7.25% profit per annum* Profit credited every 3 months

Deposit ranges from Rs. 100,000 to Rs. 500, 00

Flexibility of withdrawals

Remittance Munafa Plus Saving Account

Remittance Based (no credit allowed except remittance)

Daily Basis Product

Tiered

Monthly profit

Minimum average balance of Rs. 10,000

Less than Rs. 20,000 earns 0.10% profit

Rs. 1 million and above earns 5% profit

Special Saving Bank Deposit Scheme

Daily Basis Product

Tiered

Monthly profit

Minimum balance of Rs. 20,000

Returns unto 8%

Daily Munafa plus Deposit Account

Daily Basis Product

Tiered

Monthly profit

Minimum balance of Rs. 50,000

Returns unto 8%

FC-SB Savings Account offered in 3 currencies, USD (US dollar), EUR (Euros) and GBP (UK pound)

Tiered product, with rates depending on choice of currency

To earn profit, minimum balance in USD, EUR and GBP is 1,000

Interest is payable on a quarterly basis

HYFFD (High Yield Foreign Currency Fixed Deposit)

Available in 1 month, 2 month, 3 month, 6 month and 12 Month in USD, EUR and GBP

Tiered product, with rates depending on choice of currency and term

Profit paid on maturity only. No interim interest is payable.

Tabeer Children Education:An insurance plan that enables parents to cover education and marriage costs.

DEBIT CARD

HBL Visa Debit Card allows you to pay for your purchases directly from your bank account. You dont have to carry cash and your monthly statement provides you with a complete record of all your transactions so you can manage your expenses with ease.

No Interest

Ease & Security

No Liability

International Recognition& Acceptability

Spending Limits

Free Account Statement

24 hour Customer Service

Global Customer Assistance Service

HBL has a long history of being a partner of growth for business and industry. We provide tailored banking solutions to business customers of all sizes in a wide range of industries.

We cater to the needs of a broad spectrum of clients. To do this, the business banking group is segregated by the size of the customer. For customers with an annual turnover between PKR 50 million to PKR 300 million, our Commercial Banking group provides a wide range of products that meet specific customer needs.

The Corporate Banking Group focuses on personalized services to large corporate borrowers who need tailored facilities. The Corporate Bank manages a diverse portfolio, being an active player in a multitude of sectors including textiles, sugar, leather, pharmaceuticals, fertilizer, petrochemicals, power, aviation, automotive, telecom, oil and gas and FMCGs.

The Investment Banking Group is a market leader. It provides innovative capital strategy solutions to major local and multinational entities.

HBL offers a wide range of products and services for its business customers. They are as follows:

Competitors

Local Private Banks in Pakistan Allied Bank of Pakistan Limited Arif Habib Rupali Bank Limited Askari Commercial Bank Limited Bank Al Habib Bank Al Falah Limited Faysal Bank Limited MCB Bank UnitedBankLimited RATIO ANALYSIS

Ratio Analysis is an important and age-old technique of financial analysis. Ratios are important and helpful in the reference that:

These simplify the comprehension of financial statement and tell the whole story of changes in the financial conditions of the business.

These provide data for inter-firm comparison. The ratios highlight the factors associated with successful and unsuccessful firms, also reveal strong and weak firms.

These help in planning and forecasting, these can assist management in its basic functions of forecasting, planning, coordination and control.

These help in investment decision in case of investor and lending decision in case of Bankers etc.

However, the ratios are only indicators, they cannot be taken as final regarding good and bad financial position of the business other things have also to be seen.

1. RETURN ON EQUITY

Dividing profit after taxation by shareholders equity. ROE compares net profit after taxes to the Shareholders Equity.

This ratio is calculated as:

ROE=Profit after taxes/Shareholders Equity2012

=29.42%

2011

=33.61%

2. RETURN ON ASSETS:

This ratio shows the efficiency of organization that how efficiently utilizes their assets. This ratio relates profits to assets.It is calculated as:

Profit after Tax/Total Assets

2012

=3.60%

2011

= 4.60%

3. EARNING PER SHARE: N.P.A.T No. Of outstanding shares

2012

=24.47%

2011

=24.30 %

4. RETURN ON DEPOSIT:

N.P.A.T * 100 Total Deposit

2012

=4.65 %

2011

=5.22 %

1. CASH/DEPOSIT RATIO:

This ration is obtained by dividing cash by current liabilities / liabilities.

This ratio shows that the cash is enough for payment of current liabilities or not.

It is calculated as cash Ratio=Cash/current liabilities

Or

=Cash/Total Deposit

2012 = 11.99 %

2011 = 13.58 %

6. INTEREST INCOME/TOTAL INCOME RATIO: Interest Income

Total Income

2012

=87.36 %

2011

=83.13 %

7. NET PROFIT MARGIN:

This ratio measure the firms profitability of sales/ interest earned after taking account of all expenses and income taxes.

This ratio can be calculated as:

Net profit margin ration= Net Profit after taxes / interest earned *100

2012

=33.54%

2011

=39.92 %

8. AVERAGE PROFIT PER BRANCH: Profit Net

No. Of Branches

2012

=Rs. 14,984,990.25

2011

=Rs. 14,878,715.4

9. OPERATING EXPENSE RATIO: Non markup expense

Gross income

2012

= 27.72 %

2011

=21.96 %

10. TOTAL ASSET TURNOVER:

Interest/markup earned*100

Total asset

2012

=9.02 %

2011

=7.74 %

11. RISK ASSETS TURNOVER:

Net interest income after provisionRisk assets

2012

=65.98 %

2011

=68.11%

12. ADVANCES TO TOTAL DEPOSITS:

This ratio show that how much efficiently the bank advances the deposits of their customer to borrower.

It is calculated as.

Advances deposit ratio = Advances/ deposit

2012

=79.48 %

2011

=74.96 %

13. DUE FROM BANK TO DUE FROM BANK:

Landing to financial institution* 100 Borrowing from financial institution

2012

=18.09 %

2011

=2.66 %

Organization analysis in comparison with its industry (or with its competitors)

Competitive advantage spells out the uniqueness' of the organization vis--vis its competitors. so the HBL also have uniqueness in its dealing with customers and also have uniqueness in his strategy with other their competitors. Business analysis is imperative for the organization to ascertain the mood and the conditions for starting or consolidating a business venture. Business strategy analysis involves analysis of the organizational strategy to create a sustainable competitive advantage

primary objective of competitor analysis is to understand and predict the rivalry, or interactive market behavior, between firms in their quest for a competitive position in an industry. Therefore the HBL also always analyze their competitors Banks Toward this end, researchers have examined factors that influence competitive and patterns of entry into and exit from rivals' markets However, researchers have made limited effort to investigate the prebattle competitive relationship between rivals and the extent to which it may predict rivalrous behavior in the market. This omission is due partly to the restricted conceptual treatment of competitor analysis, which has not fully incorporated the essential antecedents that affect a firm's competitive activity, let alone considered them in an integrated way.

Intensity of rivalry, one of Porter's (1980) well-known five forces driving competition, has remained mainly a theoretical construct confined to the industry level. In terms of analyzing firms competing in an industry, the strategic-group far the most popular and relevant. However, researchers who use this approach have largely ignored the market context in which competitors carry on their battles and the extent to which two firms actually compete directly against each other. Although the marketing literature recognizes the importance of the market context, its contribution has been primarily in analyzing competitors and competition at the brand or individual-market level rather than at the firm level. Other approaches usually represent a high degree of abstraction and rely primarily on managers' or researchers' subjective perceptions, which often are too remote to be linked to competitive behaviors in the market Thus far, some of the most fundamental questions in competitor analysis have remained unexplored 1985). For example, how can researchers studying competition differentiate among players in an industry to explain each player's market behaviors? How can a firm, before launching an attack, assess its prebattle relationship with a given rival and the resultant likelihood that this rival would retaliate? How can a firm gauge which opponent is most likely to attack its markets? How can strategists differentiate among a set of competitors to allow the firm to allocate appropriate resources and attention to each? Finally, although the importance of competitor analysis and interfirm rivalry is well recognized, there has been no systematic attempt to integrate the two topics.

This article seeks to provide a conceptual link by proposing two firm-specific, theory-based constructs: the market commonality and the resource similarity between a given pair of competitors. Taking the firm as the basis for analysis, I argue that each firm has a unique market profile and resource endowment and that a comparison with a given competitor along these two dimensions will help to illuminate the competitive relationship between them and to predict how they may attack (or respond to) each other in the market. This firm-specific conceptualization also leads to the idea of competitive asymmetry, the notion that a given pair of firms may not pose an equal threat to each other. I first offer a number of propositions that use market commonality and resource similarity to predict competitive attack and response. I also propose measures to assess market commonality and resource similarity along with a demonstration of how such measures could be implemented. The article ends with a number of implications for research and practice.Future prospects of the organization.

The structure of the Banking markets has changed radically over the last decade while in contrast the futures markets more or less maintained the status quo. But now the futures markets are in catch-up mode as evidenced by the emergence of some dark pools and, Banking firms are beefing up their technology to take advantage of what is coming down the pike. For the future aspects the HBL should be make itself active and also efficient and effective in the banking field and get the competitive advantage. That when occur truly when the HBL produce new products and services to their customers. The HBL should also introduce the new technologies in the Banking field before their competitors and provide the facilities to their customers and get the customer's loyalty . The HBL should also provide the better service than their competitors and also should give the full response in the any branch.

The HBL also should improve their computerized system in the bank and the bank in the future also want to trained their employees in any technology and also will provide the new technology that facilitate the customers of the HBL

SWOT analysis of organization in the business sectorHBL is considered to be a very sound bank in the financial circles. The bank where the customers can safely keep their money as long as they want. In SWOT analysis the best strategies accomplish in organizations mission by: 1.Exploiting opportunities and strengths.2.Neutralizing its threats and3.Avoiding its weaknesses. Following is a list of SWOT of HBL

Strengths

A skill or capability that enables HBL to conceive and implement its strategies.

The officers of HBL are considered as one of the most able professionals in the banking world.

I observed that HBL employees interact with their clients as if they are their personal friends and discuss about their problems as their own.

HBL has got a reliable and easy to use internal computer system. Every information regarding the transactions in customers deposits has been computerized.

HBL maintained its data properly.

HBL has very good security system.

HBL is the larger commercial bank in Pakistan with the network of over 1439 domestic and international branches.

Being the pioneer of banking in Pakistan, HBL is the oldest and is the richest in experience.

HBL focuses on consumer banking by lucrative schemes, products and services suiting best to the wants and demands of the customers.

HBL has opened all its branches at commercial areas so that the customers or clients face no problems in reaching to the bank.

The band is always on the look to improve its services both to the domestic as well as overseas customers.

Human resources development and introduction of new technology towards modern banking.

24 hours cash access and safe payment products for high value transaction.

Having potential to encounter the competitive environment in the market.

Veteran and experience private management group also involved in other interests like, textile and cement industry.

Customer enjoys the services at the residential localities.

Weaknesses

Highest number of branches effecting the proper maintenance and difficulty in providing same working environment at the each branch

Poorer system of recovery of the system is a threat to bankruptcy.

Lack of customer feed back.

Low job satisfaction.

Poor ATMs Service

Inconsistency in efficiency and working atmosphere due to the largest of branches.

Sense of insecurity in the employees serving at low profitable branches due to the down sizing.

Females feel uneasy in an environment among the male workers.

Victim of political, legal and socio-cultural pressures

.Lack of professionalism in the branch employees mostly.

Opportunities

Huge untapped market potential in consumer banking

In opportunity exist, in form of opening of ladies banking section within the branch which is entirely a new idea and it will attract customer.

Opportunity for developing value added services combined with corporate banking relationships, cash management services to large and medium sized corporate clients.

Growing policies of government on business and commerce sector provide HBL opportunities to take advantages of these policies to meet efficiently with the business people to solve their problems with the instant cash and financing facilities.

Govt. is taking very bold steps to promote IT in Pakistan. HBL has an opportunity to improve in technology.

Large international network which principally focuses on trade finance with Pakistan can be utilized to tap trade activities in other markets. In addition, services such as cross border / offshore financing for corporate customers can be enhanced.

Customer feedback on different products and accounts has really improved the bank performance and encourage the atmosphere for other future policies.

HBL also has an opportunity to expand its new technological advancement like; tele banking and internet banking facilities in order to serve the customer more efficiently, specially

E-banking facility is also a new opportunity which is a flourishing business in foreign countries and can also be here, if HBL takes the initiatives.

Further reduction in intermediation costs possible, with improving technology.

Due to efficient and veteran management group, HBL can also improve Ill and expand its foreign operation successfully.

Habib Bank Limited provides opportunity to utilize its skills and efficiencies in leasing business.

Threats

An area in the environment that increases the difficulties the organizations achieving high performance.

Consolidation in the banking sector resulting in increased competition.

Shortage of trained and specialized staff at lower executive and officer levels

The threat of inconsistency and government policy regarding to business and economics sectors, specially political and regional situation which makes the environment uncertain.

Growing global technological advancement.

Strict regulation by government over credit facilities to the customers as Ill as to meet the prudential.

Loss of confidence of overseas customers due to freezing of accounts.

Facing more competition by foreign banks in the market.

Foreign banks are flourishing in field of consumer financing.

Also the increasing operation of private banks.

Highly attractive and advance services by foreign banks to their customers.

Conclusion & recommendations for improvement Recommendation I Propose

1) I will give following suggestions for the better function of the Bank:

2) The management should provide better arrangement for the employees.

3) The daily newspapers and journals should be provided to the employees and customers visiting there.

4) A separate hajj applications acceptance counter should be provided to overcome inconveniences faced by the customers.

5) A separate ladies counter should be there

6) The Bank management should be very careful while granting the loans.

7) Personal interests should not be given importance and customers

8) Personal credit worthiness must be carefully scrutinized public relation desk should be established in each and every branch for guidance as well as redresses of grievance of customers at the spot.

9) Online Banking should be introduced in all the branches.

10) Aggressive publicity campaign must be introduced through press and Electronic media for new products and scheme by initiating vigorous marketing policy.

11) New talent / professionals should be hired to coupe with the competitive demand in the industry.

12) Information technology should be introduce in all the branches to enhance the efficiently.

13) The commission on government rashed enhanced / made rational to increase the Banks profitability.

14) The financial statement should be made more transparent and reliable.

15) Consumer financing should be initiated to capture the market share.

16) Employees induction, promotion and transfer should always be made on merit.

17) To motivate the employees their remuneration / salaries should be made at par with top tier Banks.

Plan of Our internship program

A brief introduction of the branch

Habib Bank Limited main Dolat Nagar branch is the center of the employee of different organizations, cotton, grain business and farmers. According to its location majority of its accounts holders are businessmen and employees of different organizations and as well as it has huge accounts of the farmers those are the brokers of wheat and cotton. This Branch work under the very experienced Manager Mr. Mazhar Iqbal. He is very talented and hardworking person he tries to make hard to improve the progress of the branch by leaps and bunds. He manage his employees very efficiently also motivated them according to his work and encourage them. The employees of this branch are also well experienced. Every employee of the branch guide the customers properly. As the working of the branch is organized so different are made in order to make the working easier and error free. Every person of the branch done his duty beautifully.

Starting and Ending dates of Internship

I start my internship at HBL from 22-07-2013 to 06-09-2013. I completed six weeks in the HBL and in these six weeks I get great experience from different departments of the HBL.

The departments in which I got training and the duration of training

These are departments where I get training

1. Deposits /Business development.2. General banking operational work.3. International banking(Trade).4. Credit (Financing).Training programIntroduction of all the departments

There are some Names of the departments

1. Account Department

2. Remittance Department

3. Utility bills

4. CD In charge Department

5. Finance department

6. Cash Department

7. Agri -Finance Department

Principles of Advances

There are five principles, which must be duly observed while advancing money to the borrowers.

Safety

Liquidity

Dispersal

Remuneration

Suitability

a. Safety

Bankers funds comprise mainly of money borrowed from numerous customers on various accounts such as Current Account, Savings Bank Account, Call Deposit Account, Special Notice Account and Fixed Deposit Account. It indicates that whatever money the banker holds is that of his customers who have entrusted the banker with it only because they have full confidence in the expert handling of money by their banker. Therefore, the banker must be very careful and ensure that his depositors money is advanced to safe hands where the risk of loss does not exist. The elements of character, capacity and capital can help a banker in arriving at a conclusion regarding the safety of advances allowed by him.

b. Character

It is the most important factor in determining the safety of advance, for there is no substitute for character. A borrowers character can indicate his intention to repay the advance since his honesty and integrity is of primary importance. If the past record of the borrower shows that his integrity has been questionable, the banker should avoid him, especially when the securities offered by him are inadequate in covering the full amount of advance.

It is obligation on the banker to ensure that his borrower is a person of character and has capacity enough to repay the money borrowed including the interest thereon.

c. Capacity

This is the management ability factor, which tells how successful a business has been in the past and what the future possibilities are. A businessman may not have vast financial resources, but with sound management abilities, including the insight into a specific business, he may make his business very profitable. On the other hand if a person has no insight into the particular business for which he wants to borrow funds from the banker, there are more chances of loss to the banker.

d. Capital

This is the monetary base because the money invested by the proprietors represents their faith in the business and its future. The role of commercial banks is to provide short-term capital for commerce and industry, yet some borrowers would insist that their bankers provide most of the capital required. This makes the banker a partner. As such the banker must consider whether the amount requested for is reasonable to the borrowers own resources or investment.

e. Liquidity

Liquidity means the possibilities of recovering the advances in emergency, because all the money borrowed by the customer is repayable in lump sum on demand. Generally the borrowers repay their loans steadily, and the funds thus released can be used to allow fresh loans to other borrowers. Nevertheless, the banker must ensure that the money he is lending is not blocked for an undue long time, and that the borrowers are in such a financial position as to pay back the entire amount outstanding against them on a short notice. In such a situation, it is very important for a banker to study his borrowers assets to liquidity, because he would prefer to lend only for a short period in order to meet the shortfalls in the wording capital. If the borrower asks for an advance for the purchase of fixed assets the banker should refuse because it shall not be possible for him to repay when the banker wants his customer to repay the amount. Hence, the baker must adhere to the consideration of the principles of liquidity very careful.

f. Dispersal

The dispersal of the amount of advance should be broadly based so that large number of borrowing customer may benefit from the bankers funds. The banker must ensure that his funds are not invested in specific sectors like textile industry, heavy engineering or agriculture. He must see that from his available funds he advances them to a wide range of sector like commerce, industry, farming, agriculture, small business, housing projects and various other financial concerns in order of priorities.

Dispersal of advances is very necessary from the point of security as well, because it reduces the risk of recovery when something goes wrong in one particular sector or in one field.

g. Remuneration

A major portion of the bankers earnings comes form the interest charged on the money borrowed by the customers. The banker needs sufficient earnings to meet the following:

a) Interest payable to the money deposited with him.

b) Salaries and fringe benefits payable to the staff members.

c) Overhead expense and depreciation and maintenance of the fixed assets of the bank.

d) An adequate sum to meet possible losses.

e) Provisions for a reserve fund to meet unforeseen contingencies.

f) Payment of dividends to the shareholders.

h. Suitability

The word suitability is not to be taken in its usual literary sense but in the broader sense of purport. It means that advance should be allowed not only to the carefully selected and suitable borrowers but also in keeping with the overall national development plans chalked out by the authorities concerned. Before accommodating a borrower the banker should ensure that the lending is for a purpose in conformity with the current national credit policy laid down by the central bank of the country.

Cash Finance

Cash finance is the biggest loan given to the businessmen, industrialists. After the proper investigation and documentation these finances are given and genuine property is pledged as a matter of security. These loans are taken for the purchase of stocks etc. the bank appoints its staff of two or three persons at the place where that stock is lying. This is a very common form of borrowing by commercial and industrial concerns and is made available either against pledge or hypothecation of goods, produce or merchandise. In cash finance a borrower is allowed to borrow money from the banker up to a certain limit, either at once or as and when required. The borrower prefers this form of lending due to the facility of paying markup/services charges only on the amount he actually utilizes. If the borrower does not utilize the full limit, the banker has to lose return on the un-utilized amount. In order to offset this loss, the banker may provide for a suitable clause in the cash finance agreement, according to which the borrower has to pay markup/service charges on at least on self or one quarter of the amount of cash finance limit allowed to him even when he does not utilize that amount.

Bank also keeps three records of the stock and current position. a notice is also written at the place that the stock are pledged with the bank To get these types of loan prior permission from the zonal office of the HBL is also required the bank gets back its principal amount and also markup for the loan. The rate of markup is Rs. 0.521/1000 per day.

Document Required For the Loan

1. Demand Promissory Note DP Note

This document is filled in by the party that promises to pay the amount whenever it is demanded.

2. Facility Letter

This is the requisition of the finance facilities to the bank by the party.

3. Balance Confirmation

After the approval of loan this letter is written by the party that such amount is in the account of the party.

4. Letter of Pledge (IB26)

For the getting of the cash finance a letter of pledge is to be given to the bank that such property is to be pledged with the bank as a security.

5. Letter of Guarantees (IB 29)

A letter for the personal guarantees is also required, in which the guarantee from a sound person to the party is attached with the application.

6. Agreement for Financing (IB 6)

This agreement for the short term medium term/long term on the markup basis. At most these are the documents required in attaining of the loan.

Running Finance

When a customer borrows from a banker a fixed amount repayable either in periodic installments or in lump sum at a fixed future time, it is called a loan. When bankers allow loans to their customers against collateral securities they are called secured loans and when no collateral security is taken they are called clean loans.

The amount of loan is placed at the borrowers disposal in lump sum for the period agreed upon, and the borrowing customer has to pay interest on the entire amount. Thus the borrower gets a fixed amount of money for his use, while the banker feels satisfied in lending money in fixed amounts for definite short periods against a satisfactory security.

This is the most common form of bank lending. When a borrower requires temporary accommodation his banker allows withdrawals on his account in excess of the balance which the borrowing customer has in credit, and an overdraft thus occurs. This accommodation is generally allowed against collateral securities. When it is against collateral securities it is called Secured Overdraft and when the borrowing customer cannot offer any collateral security except his personal security, the accommodation is called a Clean Overdraft. The borrowing customer is in an advantageous position in an overdraft, because he has to pay service charges only on the balance outstanding against him. The main difference between a cash finance and overdraft lies in the fact that cash finance is a bank finance used for long term by commercial and industrial concern on regular basis, while an overdraft is a temporary accommodation occasionally resorted to.

Demand Financing/Loans

When a customer borrows from a banker a fixed amount repayable either in periodic installments or in lump sum at a fixed future time, it is called a loan. When bankers allow loans to their customers against collateral securities they are called secured loans and when no collateral security is taken they are called clean loans.

The amount of loan is placed at the borrowers disposal in lump sum for the period agreed upon, and the borrowing customer has to pay interest on the entire amount. Thus the borrower gets a fixed amount of money for his use, while the banker feels satisfied in lending money in fixed amounts for definite short periods against a satisfactory security

3. ACCOUNT DEPOSIT DEPARTMENT: -

It controls the following activities:

a) A/C opening.

b) Issuance of cheque book.

a) Current a/c

b) Saving a/c

c) Cheque cancellation

d) Cash

Account Opening

The opening of an account is the establishment of banker customer relationship. Before a banker opens a new account, the banker should determine the prospective customers integrity, respectability, occupation and the nature of business by the introductory references given at the time of account opening. Preliminary investigation is necessary because of the following reasons.

i. Avoiding frauds

ii. Safe guard against unintended over draft.

iii. Negligence.

iv. Inquiries about clients.

There are certain formalities, which are to be observed for opening an account with a bank.

Formal Application

Introduction

Specimen Signature

Minimum Initial Deposit

Operating the Account

2. Pay-In-Slip Book

3. Pass Book

4. Issuing Cheque Book

a) Qualification of Customer

The relation of the banker and the customer is purely a contractual one, however, he must have the following basic qualifications.

He must be of the age of majority.

He must be of sound mind.

Law must not disqualify him.

The agreement should be made for lawful object, which create legal relationship

Not expressly declared void.

b) Types of Accounts

Following are the main types of accounts

1) Individual Account

2) Joint Account

3) Accounts of Special Types

Partnership account

Joint stock HBL account

Accounts of clubs, societies and associations

Agents account

Trust account Executors and administrators accounts

Pak rupee non-resident accounts

Foreign currency accounts1 Issuing of cheque book:

This department issue cheque books to account holders.

Requirements for issuing cheque book

a) The account holder must sign the requisition slip

b) Entry should be made in the cheque book issuing book

c) three rupees per cheque should be recovered from a/c holder if not then debit his/her account.Current account

These are payable to the customer whenever they are demanded. When a banker accepts a demand deposit, he incurs the obligation of paying all cheques etc. drawn against him to the extent of the balance in the account. Because of their nature, these deposits are treated as current liabilities by the banks. Bankers in Pakistan do not allow any profit on these deposits, and customers are required to maintain a minimum balance, failing which incidental charges are deducted from such accounts. This is because the depositors may withdraw Current Account at any time, and as such the bank is not entirely free to employ such deposits.

Until a few decades back, the proportion of Current Deposits in relation to Fixed Deposits was very small. In recent years, however, the position has changed remarkably. Now, the Current Deposits have become more important; but still the proportion of Current Deposits and Fixed Deposits varies from bank to bank, branch to branch, and from time to time.

Saving account

Savings Deposits account can be opened with very small amount of money, and the depositor is issued a cheque book for withdrawals. Profit is paid at a flexible rate calculated on six-month basis under the Interest-Free Banking System. There is no restriction on the withdrawals from the deposit accounts but the amount of money withdrawn is deleted from the amount to be taken for calculation of products for assessment of profit to be paid to the account holder. It discourages unnecessary withdrawals from the deposits.

In order to popularize this scheme the State Bank of Pakistan has allowed the Savings Scheme for school and college students and industrial labor also. The purpose of these accounts is to inculcate the habit of savings in the constituents. As such, the initial deposit required for opening these accounts is very nominal.

Cheque cancellation:

This department can cancel a cheque on the basis of;

a) Post dated cheque

b) Stale cheque

c) Warn out cheque

d) Wrong sign etc

Cash

This department also deals with cash. Payment of cheques, deposits of cheques etc.

5. Agri Finance Department

At HBL Agri Finance we understand the peaks and troughs of farming. Thats why we have designed our lease, loan and hire-purchase agreements to match your income situation. On an arable or dairy farm, for example, cash flow is tight early in the year when you are buying stock and feed. You may have a surplus at harvest time or when you receive the single farm payment.

We simply arrange to take high repayments when cash flow is good and lower ones at quieter periods. If necessary, you can even hold off payments during periods when your income is under pressure.

Flexible loan

Our lease, loan and hire-purchase agreements do not just apply to farms. We also help finance equipment used by local authorities, landscape gardeners and sports clubs in caring for grounds. Unlike buying equipment outright, this allows you to spread your payments over several yearly budgets. If club membership is an issue, it means you can spread costs fairly between present and future members. For more information, contact your local HBL Agri Finance

Area sales executive

Nature of the organization

Accepting Deposits

The primary function of HBL is to accept and receive surplus money from the people, which they willingly deposit with the Bank. Like all other Banks, HBL also take incitation to attract as much depositors as it can. They offer different deposit schemes to its customers, which includes the following types. These schemes as follow.

Current Deposits

This type of account is often maintained by the business

Current deposits are those deposits on which Bank offers no interest but it allows the account holders to withdraw their money at any time they want without giving any prior notice to the community, which requires large sums of money very often for their business transaction.

Profit and loss sharing account (Saving)

Saving deposits or PLS is those accounts on which Bank offers a lower rate of interest. After the Islamization of the Banking system in the country it has been given the name of PLS saving account. The Bank undertakes to repay deposits on demand up to a certain amount.

Fixed deposits

Fixed deposits are those which can be withdrawn only after the maturity period. In this type of deposits the Bank allows high rates of interest depending on the time period of deposits. The shorter the period of deposits, the less will be the interest and vice versa.

Making Loans and advances

The second most important function of HBL is to provide financing facility to its customers. These loans and advances are usually made against document of title to goods, marketable securities, and personal securities. HBL charges different interest rates on these loans and advances depending on the terms and conditions settled with the customers. Following types of loans and advances are made available to the customers.

Demand Finances

Demand finances are those finances which are given to the borrowers for specified period and can be called back without any prior notice. It is a single transaction finance. It can be long term, medium term and short term. Mark up is also charge. Here the amount can be withdrawn once at the time of disbursement.

Running Finance

HBL provides these finances against the security of current assets like shares, bond, cash crops like cotton and other cashable commodities. The borrowers account is opened with the Bank with the amount of the total loan provided or allowed to the borrower. The borrower is allowed to withdraw any amount from his account within the specified limit and interest is charged only on the amount actually withdrawn.

Over Draft

This type of facility is usually given to very loyal clients. This allows them to withdraw over and above the amount held by them in their account, and interest is charged only on the amount, which is withdrawn in excess of the amount actually held in their account.

Discounting bills of exchange

Discounting bills of exchange can also be considered as a form of loan because it allows the holder to get the bill encased before the maturity period. A bill of exchange is usually issued by the importer of goods to the exporters, which allows them to be paid in their own currency after three months time. If the exporter needs the money before the maturity of the bill of exchange, he can get his money from the Bank by discounting the bill of exchange. The Bank utilizes their surplus funds by discounting the bills of exchange at their market worth i.e. Bank pay to the holders of the bill on amount equal to their face value after deducting interest at the current rate for the maturity period of the bill. Our stated objective of being a premier emerging market bank.

Annual Financial Statements

Balance Sheet

As at December 31, 2012201020112012

Rupee's in 000

cash and balances with treasury banks324659763968388339631172

balances with other banks657701738075194043100

lendings to financial institutions2108180010513724100079

investment-net6348631611308926196256874

advances-net198239155218960598262510470

operating fixed assets90541561602412317263733

deferred tax assets-net17237300

other assets-net110314501786876119810476

342108243410485517443615904

Liabilities

Bills payable70896791047905810551468

Borrowings239434763940683122663840

deposits and other accounts257461838292098066330274155

sub-ordinate loan15974404792320

liabilities against assets subject to finance lease000

deferred tax liabilities-net01180162437137

other liabilities111714961172249321253250

301263929355365842385179850

Net assets408443145511967558436054

Represented by:

Share capital546327662827686282768

Reserves246624263400063836768765

Unappropraited profit553097351307509193332

356566754541415652244865

Surplus on revaluation pf assets-net of tax518763997055196191189

408443145511967558436054

Profit and Loss Account

For the year ended December31, 2012.201020112012

Mark-up/ return / interest earned257780613178659540043824

Mark-up/ return / interest expensed4525359786553311560740

Net mark-up/ interest income212527022392106228483084

Provision for diminution in the value of investments-net1211971052692683994

Provision against loans and advances-net101454029595831335127

Bad debts written off directly470001990

118273730650514019121

Net mark-up/ interest income after provision200699652085601124463963

Non mark-up/ interest income

Fee, commission and brokerage income231123526346102866729

Dividend income811801632300617554

Income from dealing in foreign currencies692010693408727564

Gain on sale of securities-net6058651500865740429

Unrealized loss on revaluation of investments

classified as held for trading-13105-103198

Other income-net5705051000149942362

Total non-mark-up/ interest income499141664482275791440

250613812730423830255403

Non-mark-up/ interest expense

Administrative expenses648259254261167546878

Other provisions/ (reversal)-net11411-374310120

Other charges66708573830830839

Total non-mark-up/ interest expense656071159962038387837

Extra ordinary/ unusual item000

Profit before Taxation185006702130803521867566

Taxation - Current year570144364423567341257

- Prior years593497-1294473-864824

- Deferred6333289459016533

635827260424736492966

Profit after Taxation121423981526556215374600

Unappropriated profit brought forward499026055309735130750

Transfer from surplus on revaluation of fixed assets-net of tax321661185521319

502242655428285152069

Profit available for appropriation171648242080839020526669

Basic and diluted earnings per share - after tax23.424.324.47

Balance Sheet

Vertical Analysis

Balance Sheet

As at December 31, 2012.2011201220112012

%%

cash and balances with treasury banks39683883396311729.678.93

balances with other banks380751940431000.930.91

landings to financial institutions105137241000790.260.92

investment-net1130892619625687427.5521.70

advances-net21896059826251047053.3459.18

operating fixed assets16024123172637333.903.89

deferred tax assets-net000.000.00

other assets-net17868761198104764.354.47

410485517443615904100.00100.00

Liabilities

Bills payable10479058105514682.952.74

Borrowings394068312266384011.095.88

deposits and other accounts29209806633027415582.2085.75

sub-ordinted loan47923200.130.00

liabilities against assets subject to finance lease000.000.00

deferred tax liabilities-net11801624371370.330.11

other liabilities11722493212532503.305.52

355365842385179850100.00100.00

Net assets5511967558436054

Represented by:

Share capital62827686282768

Reserves3400063836768765


4541415652244865


5511967558436054

Balance Sheet

Horizontal Analysis

Balance Sheet

As at December 31, 2012.201020112012201020112012

Rupee's in 000

%%%

cash and balances with treasury banks32465976396838833963117210022.2322.07

balances with other banks657701738075194043100100-42.11-38.53

lendings to financial institutions2108180010513724100079100-95.01-80.55

investment-net634863161130892619625687410078.1351.62

advances-net19823915521896059826251047010010.4532.42

operating fixed assets9054156160241231726373310076.9890.67

deferred tax assets-net17237300100-100.00-100.00

other assets-net11031450178687611981047610061.9879.58

34210824341048551744361590410019.9929.67

Liabilities

Bills payable7089679104790581055146810047.8148.83

Borrowings23943476394068312266384010064.58-5.34

deposits and other accounts25746183829209806633027415510013.4528.28

sub-ordinted loan15974404792320100-70.00-100.00

liabilities against assets subject to finance lease0001000.000.00

deferred tax liabilities-net011801624371371000.000.00

other liabilities1117149611722493212532501004.9390.25

30126392935536584238517985010017.9627.85

Net assets408443145511967558436054

Represented by:

Share capital546327662827686282768

Reserves246624263400063836768765


356566754541415652244865


408443145511967558436054

Vertical Analysis



Mark-up/ return / interest earned3178659540043824100100

Mark-up/ return / interest expensed78655331156074024.74528.87

Net mark-up/ interest income2392106228483084

Provision for diminution in the value of investments-net10526926839940.33126.7026

Provision against loans and advances-net295958313351279.31083.3342

Bad debts written off directly19900.00060

30650514019121

Net mark-up/ interest income after provision208560112446396365.61361.093


Fee, commission and brokerage income2634610286672940.85849.499

Dividend income6323006175549.805810.663

Income from dealing in foreign currencies69340872756410.75312.563

Gain on sale of securities-net150086574042923.27612.785


classified as held for trading-13105-103198-0.2032-1.7819

Other income-net100014994236215.5116.272

Total non-mark-up/ interest income64482275791440100100

2730423830255403


Administrative expenses5426116754687835.54549.087

Other provisions/ (reversal)-net-374310120-0.02450.0658

Other charges5738308308393.7595.404

Total non-mark-up/ interest expense5996203838783739.27954.556


Profit before Taxation2130803521867566139.58142.23

Taxation - Current year6442356734125742.20247.749

- Prior years-1294473-864824-8.4797-5.625

- Deferred894590165335.86020.1075

6042473649296639.58242.232

Profit after Taxation1526556215374600100100



55428285152069


Basic and diluted earnings per share - after tax24.324.47

Horizontal Analysis



Mark-up/ return / interest earned25778061317865954004382410023.3155.34

Mark-up/ return / interest expensed452535978655331156074010073.81155.47

Net mark-up/ interest income21252702239210622848308410012.5634.02

100

Provision for diminution in the value of investments-net1211971052692683994100-13.142114.57

Provision against loans and advances-net101454029595831335127100191.7231.60

Bad debts written off directly470001990100-99.58-100.00

118273730650514019121100159.15239.82

Net mark-up/ interest income after provision2006996520856011244639631003.9221.89


Fee, commission and brokerage income23112352634610286672910013.9924.03

Dividend income811801632300617554100-22.11-23.93

Income from dealing in foreign currencies6920106934087275641000.205.14

Gain on sale of securities-net6058651500865740429100147.7222.21


classified as held for trading-13105-103198

Other income-net570505100014994236210075.3165.18

Total non-mark-up/ interest income49914166448227579144010029.1916.03

2506138127304238302554031008.9520.73


Administrative expenses648259254261167546878100-16.3016.42

Other provisions/ (reversal)-net11411-374310120100-132.80-11.31

Other charges66708573830830839100760.211145.49

Total non-mark-up/ interest expense656071159962038387837100-8.6027.85


Profit before Taxation18500670213080352186756610015.1718.20

Taxation - Current year57014436442356734125710013.0028.76

- Prior years593497-1294473-864824100-318.11-245.72

- Deferred63332894590165331001312.54-73.89

635827260424736492966100-4.972.12

Profit after Taxation12142398152655621537460010025.7226.62



502242655428285152069


Basic and diluted earnings per share - after tax23.424.324.47

Reference & Sources used (Should be provided in Report)I collect this information from,

1. Habib Bank Limited of Pakistan, Annual Reports

2. State Bank of Pakistan Prudential Regulation for Corporate and Commercial Banking.

3. State Bank of Pakistan BPRD Circulars

4. Dawn Newspapers for updated information

5. Instruction Circulars of National Bank Limited

6. Economic Reviews for Banks and their activities

7. State Bank of Pakistan, Website, http://www.sbp.gov.pk8. Habib Bank's website, http://www.hbl.com I also visit & complete 6 weeks internship in Habib bank Limited Dolat Nagar branch for collecting data.

President

Chairman

SEVP International Operation

Board of Directors

SEVP Corporate Banking & Treasury

SEVP Finance, Audit & Administration

SEVP Asset Remedial Management

SEVP Retail Banking & Information Technology

SEVP Credit Policy

SEVP Corporate Banking, financial institute & Project finance

PAGE 5

Internship Report on Hbl

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