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INTERNSHIP REPORT ON
HABIB BANK LIMITED PAKISTAN
SUBMITTED BY: MUHAMMAD IRFAN ALI
LOGID: mc070402338
Pho!" 03#3$%747208
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1 mc070402338/!)5
A))*!++: 6&*) " 2 Moh&(& h&h K*&'
MBA FINANE9
2007$0
SUPER;ISED BY: MAHER AMEER MUHAMMAD
DATE OF FINAL REPORT
#0$04$200
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DEDIATION
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AKNO6LEDGEMENT
Thanks 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.
! am very thankful to "r. "aher Ameer "uhammad my supervisor who has helped me
a lot in finding an appropriate project and for his reviews encouragement and support.
! am thankful to all of my teachers and my class fellows and friends whom
#heerfulness and guidance is an asset for me .! am especially thankful to the bank staff
and particularly.
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ntroductionHabib %ank Ltd is a %anking H%L which is engaged in #ommercial @
0etail %anking and related services domestically and overseas. H%L 5njoy
289 of the market,hare in &akistan. Today H%L is truly the bank of the people
&roviding its customers convenience and ,atisfaction all +ver the world. Habib
%ank &laa the tallest building in &akistan is the proud symbol of H%L leadership
!n &akistan/s corporate ground. H%L is currentlyuses rate AAand A1=.
ESTABLISHMENT:
Habib %ank Limited was established by "r.!smail
Habib :Late; on August 2- 1'(2 at %ombay. !t was the first
"uslim %ank of the sub3continent. !t was 5stablished with a
&aid up capital of 0s. 2.-millon
BRANHES:
H&@'@ B&5 L'm'
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H!&) o--'c!
H&@'@ B&5 P(&& II h)*'=&* Ro&)
K&*&ch' 7%0 P&5'+Sh S(
I I h)*'=&* Ro&) K&*&ch'
P&5'+
M* E@*&h'm S')&< M!m@!*
M* A+&* H++&' Sh&m+' M!m@!*
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Board of Directors:
,u l t an Al i A l l ana h&'*m&
"oe B ama l D'*!c
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M&&=!m!' H%L opened first of $ branches and an +%4 in %ahrain. However
H%/s branch in Aden is nationalied.
1')1 H%L opened an +%4 in ,ingapore and a branch in H%L opened a branch in the ,eychelles the first of two branches in
%angladesh and a branch in the "aldives.
1')' H%L opened a branch in the
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a branch in the 6iji !slands and took over the &aksistani branches of
failed bank %##!.
1''2 !n the Fovernment of &akistan handed over
management control of Habib %ank to A*65I. The %oard of Iirectors
was reconstituted to have four A*65I nominees including the #hairman
and the &residentG#5+ and three Fovernment of &akistan nominees
288> H%L sold the operations that it had established in 6iji in 1''1 to
%ank of ,outh &acific.
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Vision,imply the vision of Habib %ank is mass banking. At the time of formation it
changed its motto from class banking to mass banking. 5pedite 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 ecellence and
perfection.
To be the best performing bank in the country and the region.
To eceed customer epectations through innovative financial products @
services and establish a strong presence to recognie shareholders
epectations and optimie there rewards through dedicated workforce.
*eeping ahead of other competitors in productivity and profitability. To
attain budgetary targets fied in each area of business.
ObjectivesLike other business organiation the core desire of Habib %ank is to
maimie the profit through saving @ loaning money to the life of the
common people. The +bjectives of the Habib %ank is given below
I B*o&) Go&(:
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As a nationalied commercial organiation Habib %ank belongs to the
people. !t implies that it stands for meeting the banking needs of the mass
people of the society.
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Habib %ank is a service organiation. !t will live and prosper on the
Euality of service it provides. Hence Euality of service must be
maintained at all levels.
%anks image with people should be identified on the Euality 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. ,uggestions 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
ecelling services in meeting economic needs of the people.
Nature of the organization
Acc!
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#urrent deposits are those deposits on which %ank 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 reEuires large sums of money very often for
their business transaction.
P*o-'< &) (o++ +h&*'= &cco< S&'=9
,aving deposits or &L, is those accounts on which %ank offers a lower rate of
interest. After the !slamiation of the %anking system in the country it has been
given the name of &L, saving account. The %ank undertakes to repay deposits on
demand up to a certain amount.
F'?!) )!o+'
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Iemand finances are those finances which are given to the borrowers for specified
period and can be called back without any prior notice. !t is a single transaction finance.
!t can be long term medium term and short term. "ark up is also charge. Here the
amount can be withdrawn once at the time of disbursement.
R'= F'&c!
H%L provides these finances against the security of current assets like shares bond cash
crops like cotton and other cashable commodities. The borrower/s account is opened
with the %ank 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.
O!* D*&-;
#redit &olicy Froup);#orporate %ank 6inancial !nstitutions and &roject 6inance
Froup. !n addition to the overall controlling authority president also manages the
!nternational +perations Froup individually. 7hile the ,enior 5ecutive ice
&residents supervise rest of the functional groups. 5ach ,enior 5ecutive ice
&resident is individually responsible for the group which is assigned to him. At the
level of provinces there are 0egional Head uarters headed by 0egional #hief
5ecutives :0#5;. 5ach 0#5 is assisted by F" operations and F" ,upport
,ervices. %ranches are also controlled by the 0#5s. #ircle +ffices of the past times
have been removed to reduce "anagerial Layers which were working under the
control of Conal +ffices. This happened as a result of policy of beginning new
changes in the organiational structure.
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Organizational )ierarch* chart
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Bo&*) o- D'*!c
SE;P A++!< R!m!)'&(M&&=!m!(
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% A=*!!m!< -o* F'&c'= IB %9
This agreement for the short term medium termGlong term on the markup
basis. At most these are the documents reEuired in attaining of the loan.
R'= F'&c!
7hen a customer borrows from a banker a fied amount repayable either in
periodic installments or in lump sum at a fied future time it is called a
OloanP. 7hen bankers allow loans to their customers against collateral
securities they are called Osecured loansP and when no collateral security is
taken they are called Oclean loansP.
The amount of loan is placed at the borrower/s 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 fied amount of money for his use
while the banker feels satisfied in lending money in fied amounts for
definite short periods against a satisfactory security.
This is the most common form of bank lending. 7hen a borrower reEuires
temporary accommodation his banker allows withdrawals on his account inecess of the balance which the borrowing customer has in credit and an
overdraft thus occurs. This accommodation is generally allowed against
collateral securities. 7hen it is against collateral securities it is called
O,ecured +verdraftP and when the borrowing customer cannot offer any
collateral security ecept his personal security the accommodation is called a
O#lean +verdraftP. 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
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by commercial and industrial concern on regular basis while an overdraft is a
temporary accommodation occasionally resorted to.
D!m&) F'&c'=Lo&+
7hen a customer borrows from a banker a fied amount repayable either in
periodic installments or in lump sum at a fied future time it is called a
OloanP. 7hen bankers allow loans to their customers against collateral
securities they are called Osecured loansP and when no collateral security is
taken they are called Oclean loansP.
The amount of loan is placed at the borrower/s 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 fied amount of money for his use
while the banker feels satisfied in lending money in fied amounts for
definite short periods against a satisfactory security
3 AOUNT DEPOSIT DEPARTMENT: $
!t controls the following activities
a; AG# opening.
b; !ssuance of cheEue book.
a; #urrent aGc
b; ,aving aGc
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c; #heEue cancellation
d; #ash
Acco< o!'=
The opening of an account is the establishment of banker customer
relationship. %efore a banker opens a new account the banker should
determine the prospective customer/s integrity respectability occupation and
the nature of business by the introductory references given at the time of
account opening. &reliminary investigation is necessary because of the
following reasons.
i. Avoiding frauds
ii. ,afe guard against unintended over draft.
iii.
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"inimum !nitial Ieposit
+perating the Account
1. &ay3!n3,lip %ook
2. &ass %ook
$. !ssuing #heEue %ook
&9 &('-'c&?
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2; Boint Account
$; Accounts of ,pecial Types
&artnership account
Boint stock H%L account
Accounts of clubs societies and associations
Agents account
Trust account
5ecutors and administrators accounts
&ak rupee non3resident accounts
6oreign currency accounts1
I++'= o- ch!J! @oo5:
This department issue cheEue books to account holders.
0eEuirements for issuing cheEue book
a; The account holder must sign the reEuisition slip
b; 5ntry should be made in the cheEue book issuing book
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c; three rupees per cheEue should be recovered from aGc holder if not then
debit hisGher account.
**!< &cco(9 domestic
issuance and $>9 offshore issuance. 6or long3term funding the spit is 2-9
domestic issuance and )-9 offshore issuance. :These proportions vary
between banks.;
,hort3term funding costs have been volatile since August 288). +n several
occasions the '83day %ank %ill ,wap 0ate :%%,7;1spiked sharply
:August 288) ,eptember 288) Iecember 288) 6ebruary 288? "arch
288? Bune 288? ,eptember 288? and +ctober 288?;.
Long3term funding costs remain elevated with no evidence of easing.
,ince the onset of the financial crisis net flows into deposit accounts have
been strong particularly higher yielding personal investment accounts.
%alances in these accounts have increased 1'9 :annualied; compared to
19 for lower yielding personal transaction accounts.
M&*5!< '
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A number of factors influence interest rates including changes in the official cash
rate inflation epectations credit ratings and the broader global financial
environment. 4nder normal circumstances cash rate changes are epressly
linked to market interest rate changes. +ver the past year however global
events have had a greater influence on market rates.
I
+ver the past year financial markets have been in the midst of a serious global
financial event caused by the sub3prime crisis in the 4,A. The 0eserve %ank has
commented on the large increase in the delinEuency rate on 4, sub3prime
mortgages which had grown to about 1? per cent of housing loans in the 4,.
Also of the Q4,2 trillion of 4, residential mortgage backed securities :0"%,;
issued to investors in 288>M around a Euarter were backed by sub3prime
mortgages. As a result of the global credit crisis there was a sharp decline in
investor appetite for 0"%, even those of the highest credit Euality.
The 0eserve %ank said that the increase in risk aversion and the eistence of
considerable uncertainty about where the spreads on these securities will settle has
meant that traditional investors in 0"%, have preferred to wait until more settled
conditions return.
This increased risk aversion has significantly increased the cost of short3term and
long3term funds sourced by financial institutions internationally and in Australia.
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Additionally there has been considerable volatility in the cost of funds.
6inancial eperts are not predicting a Euick end to the current financial scenario
with some suggesting it will take up to two years to see financial market
conditions stabilie though there is still uncertainty over whether funding costs
will return to the lower levels they have been in the past.
2 O!*'!. o- @&5 -)'=
Fenerally speaking banks source their funds from deposits :-89; and through
wholesale funding that is short3term wholesale funding :2-9; and long3term
wholesale funding :2-9; in both the domestic and global markets :this split will
vary from bank to bank;. ,hort3term funding relates to borrowings for up to 12
months while long3term funding includes borrowings of greater than 12 months.
%anks borrow money from global financial markets to facilitate lending to
Australian businesses and households. %orrowing costs for banks short3term and
long3term funding reEuirements have increased significantly as a result of the
current global financial crisis.
The price or cost that banks pay for funds depends on many factors. These include
changes in the official cash rateM competitionM international eventsM the credit rating
of the bankM and the supply of wholesale funds.
%anks must pay for all funding either though paying deposit interest rates or
paying interest on domestic and global debt. Therefore to determine a bank/s cost
of funds it is important to conduct a detailed analysis of all funding components
and how these are changing. This is discussed further below.
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6or banks with a strong credit rating :i.e. AA or A; wanting short3term funding
there is generally good liEuidity in debt markets but prices remain elevated when
compared with levels prior to the financial crisis.
6or term funding markets have been very difficult to access and issuance by banks
has been very low particularly in the most recent months. ,preads are now at very
high levels.
%anks rated %%%= are finding it more difficult to access longer3term funding and
are concentrating more on short3term funds private placements and deposit
growth.
,ecuritiation markets continue to see very low issuance levels. "uch of the
Australian issuance was to the 4,. !nvestor interest in securitied assets has
virtually dried up.
0ecent initiatives designed to stimulate debt markets include
guarantee of banks/ term fundingM
deposit guaranteesM and
7idening the range of securities eligible for its repurchase operations :repos; by
the 0%A.
These initiatives align Australia/s response within the contet of the broader global
initiatives which are aimed at resolving the financial crisis.
4 F)'=
%anks source funds from deposits and through wholesale funding 3 short3term and
long3term funds in both the domestic and global financial markets.
7hen the term of any funding arrangement epires either in domestic and global
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markets banks have to re3finance. ,ince the onset of the global financial crisis
wholesale funding costs have increased significantly. 6urthermore interest rate
volatility has increased on these markets and it is widely reported considerable
uncertainty will remain over the net year at least.
Iue to the protracted nature of the sub3prime crisis pressures in financing from the
wholesale market continue.
A%, 6inancial Accounts shows retail deposits constitute ('9 :Q>>- billion; of
bank funding as at Bune 288?. 7holesale funding accounts for -19 or Q)8$
billion. +f the short3term funding ecluding bills of echange :which are not
classified by domesticGoffshore; short3term funding is >(9 domestic and $>9
offshore. 6or long3term funding 2-9 is domestic and )-9 offshore.
The '83day bank bill swap rate is commonly viewed as the short3term funding cost
benchmark in the market. The divergence :i.e. spread; of the '83day from a market
indicator of the cash rate can indicate changes to the banks/ short3term funding
costs. This cash rate Jmarket/ indicator is called the '83day +vernight !nde ,wap
rate :'83day +!,;.
The '83day +!, is a traded instrument by large treasuries. !ts value reflects the
epectation of where the cash rate will be in '8 days :it/s like a futures contract;.
Analying the spread between the '83day and the '83day +!, provides a broad
measure of changes to banks/ short3term funding costs. This spread reflects market
conditions as interest rates incorporate both credit premiums and liEuidity in
financial markets. #hanges in these measures also reflect banks/ product pricing
and risk management.
The chart below shows that the cost of short3term funds has been volatile since
August 288). +n numerous occasions the '83day has increased significantly
:August 288) ,eptember 288) Iecember 288) 6ebruary 288? "arch 288? Bune
288? ,eptember 288? and +ctober 288?;.
%anks/ short3term funding costs :i.e. over and above the '83day +!,; have
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significantly increased since the global financial crisis. The chart shows that prior
to August 288) the cost above the '83day +!, was about ?318 basis points. After
August 288) this spread reached a high of 1(( basis points in early +ctober 288?.
Longer term funding costs continue to stay high with little evidence of easing. The
chart below shows the spread to swap2for banks/ three3year term funding. 0ecent
pricing for bank issuance remains about 1)- bps above swap for three3 year terms.
The widening spreads for long term funding are detailed in The ,heet :1? August
288?;
JAs for the cost of longer term funding the credit spreads the banks have to pay on
their borrowings have been moving steadily wider since the credit crunch began. !n
the domestic market this is best eemplified in the two and four year parts of the
curve. %ond issuance in "ay attracted a spread of () bps and '- bps for two and
four years respectively.
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%alance ,heet
As at December 31, 2008 200% 2007 2008
0upeesin 888
cash and balances with treasury banks $2(>-')> $'>?$??$ $'>$11)2
balances with other banks >-))81) $?8)-1' (8($188
lending/s to financial institutions 218?1?88 18-1$)2 (1888)'
investment3net >$(?>$1> 11$8?'2>1 '>2->?)(
advances3net 1'?2$'1-- 21?'>8-'? 2>2-18()8
operating fied assets '8-(1-> 1>82(12$ 1)2>$)$$
deferred ta assets3net 1)2$)$ 8 8
other assets3net 118$1(-8 1)?>?)>1 1'?18()>
$(218?2($ (18(?--1) (($>1-'8(
L'&@'(')' 18()'8-? 18--1(>?
borrowings 2$'($()> $'(8>?$1 22>>$?(8
deposits and other accounts 2-)(>1?$? 2'28'?8>> $$82)(1--
sub3ordinate loan 1-')((8 ()'2$2 8
liabilities against assets subject to finance lease 8 8 8
deferred ta liabilities3net 8 11?81>2 ($)1$)
other liabilities 111)1('> 11)22('$ 212-$2-8
$812>$'2' $--$>-?(2 $?-1)'?-8
N!< &++!,hare capital -(>$2)> >2?2)>? >2?2)>?0eserves 2(>>2(2> $(888>$? $>)>?)>-
4nappropraited profit --$8')$ -1$8)-8 '1'$$$2
$->->>)- (-(1(1-> -22((?>-
,urplus on revaluation pf assets3net of ta -1?)>$' ')8--1' >1'11?'
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408443#4 ##%7 843%04
&rofit and Loss Account
For the year ended December31, 2008. 200% 2007 2008
"ark3upG return G interest earned 2-))?8>1 $1)?>-'- (88($?2(
"ark3upG return G interest epensed (-2-$-' )?>--$$ 11->8)(8
' 2>?$''(
&rovision against loans and advances3net 181(-(8 2'-'-?$ 1$$-12)
%ad debts written off directly ()888 1'' 8
11?2)$) $8>-8-1 (81'121
''>- 28?->811 2((>$'>$
No m&*5$ '
Iividend income ?11?81 >$2$88 >1)--(
!ncome from dealing in foreign currencies >'2818 >'$(8? )2)->(
Fain on sale of securities3net >8-?>- 1-88?>- )(8(2'
4nrealied loss on revaluation of investments
classified as held for trading 31$18- 318$1'?
+ther income3net -)8-8- 18881(' '(2$>2
Total non3mark3upG interest income (''1(1> >((?22) -)'1((8
2-8>1$?1 2)$8(2$? $82--(8$
No$m&*5$ '
Administrative epenses >(?2-'2 -(2>11> )-(>?)?
+ther provisionsG :reversal;3net 11(11 3$)($ 18128
+ther charges >>)8? -)$?$8 ?$8?$'
Total non3mark3upG interest epense >->8)11 -''>28$ ?$?)?$)
5tra ordinaryG unusual item 8 8 8
&rofit before Taation 1?-88>)8 21$8?8$- 21?>)->>
Taation 3 #urrent year -)81(($ >((2$-> )$(12-)
3 &rior years -'$(') 312'(()$ 3?>(?2(
3 Ieferred >$$$2 ?'(-'8 1>-$$
>$-?2)2 >8(2()$ >('2'>>
&rofit after Taation 121(2$'? 1-2>-->2 1-$)(>88
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4nappropriated profit brought forward (''82>8 --$8')$ -1$8)-8
Transfer from surplus on revaluation of fied assets3net of ta $21>> 11?-- 21$1'
-822(2> --(2?2? -1-28>'
&rofit available for appropriation #7#%4824 2080830 202%%%
%asic and diluted earnings per share 3 after ta 234 243 2447
%alance ,heetertical Analysis
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%alance ,heetHoriontal Analysis
;'*$11)2 '.>) ?.'$
balances with other banks $?8)-1' (8($188 8.'$ 8.'1
landings to financial institutions 18-1$)2 (1888)' 8.2> 8.'2
investment3net 11$8?'2>1 '>2->?)( 2).-- 21.)8
advances3net 21?'>8-'? 2>2-18()8 -$.$( -'.1?
operating fied assets 1>82(12$ 1)2>$)$$ $.'8 $.?'
deferred ta assets3net 8 8 8.88 8.88
other assets3net 1)?>?)>1 1'?18()> (.$- (.()
(18(?--1) (($>1-'8( 188.88 188.88
Liabilities
%ills payable 18()'8-? 18--1(>? 2.'- 2.)(
borrowings $'(8>?$1 22>>$?(8 11.8' -.??
deposits and other accounts 2'28'?8>> $$82)(1-- ?2.28 ?-.)-
sub3ordinted loan ()'2$2 8 8.1$ 8.88
liabilities against assets subject to finance lease 8 8 8.88 8.88
deferred ta liabilities3net 11?81>2 ($)1$) 8.$$ 8.11
other liabilities 11)22('$ 212-$2-8 $.$8 -.-2
$--$>-?(2 $?-1)'?-8 188.88 188.88
N!< &++!,hare capital >2?2)>? >2?2)>?
0eserves $(888>$? $>)>?)>-
4nappropraited profit -1$8)-8 '1'$$$2
(-(1(1-> -22((?>-
,urplus on revaluation pf assets3net of ta ')8--1' >1'11?'
##%7 843%04
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%alance ,heet
As at December 31, 2008 200% 2007 2008 200% 2007 2008
0upees in 888
9 9 9
cash and balances with treasury banks $2(>-')> $'>?$??$ $'>$11)2 188 22.2$ 22.8)
balances with other banks >-))81) $?8)-1' (8($188 188 3(2.11 3$?.-$
lending/s to financial institutions 218?1?88 18-1$)2 (1888)' 188 3'-.81 3?8.--
investment3net >$(?>$1> 11$8?'2>1 '>2->?)( 188 )?.1$ -1.>2
advances3net 1'?2$'1-- 21?'>8-'? 2>2-18()8 188 18.(- $2.(2
operating fied assets '8-(1-> 1>82(12$ 1)2>$)$$ 188 )>.'? '8.>)
deferred ta assets3net 1)2$)$ 8 8 188 3188.88 3188.88
other assets3net 118$1(-8 1)?>?)>1 1'?18()> 188 >1.'? )'.-?
$(218?2($ (18(?--1) (($>1-'8( 188 1'.'' 2'.>)
Liabilities
%ills payable )8?'>)' 18()'8-? 18--1(>? 188 ().?1 (?.?$
borrowings 2$'($()> $'(8>?$1 22>>$?(8 188 >(.-? 3-.$(
deposits and other accounts 2-)(>1?$? 2'28'?8>> $$82)(1-- 188 1$.(- 2?.2?
sub3ordinted loan 1-')((8 ()'2$2 8 188 3)8.88 3188.88
liabilities against assets subject to finance lease 8 8 8 188 8.88 8.88
deferred ta liabilities3net 8 11?81>2 ($)1$) 188 8.88 8.88
other liabilities 111)1('> 11)22('$ 212-$2-8 188 (.'$ '8.2-
$812>$'2' $--$>-?(2 $?-1)'?-8 188 1).'> 2).?-
N!< &++!,hare capital -(>$2)> >2?2)>? >2?2)>?
0eserves 2(>>2(2> $(888>$? $>)>?)>-
4nappropraited profit --$8')$ -1$8)-8 '1'$$$2
$->->>)- (-(1(1-> -22((?>-
,urplus on revaluation pf assets3net of ta -1?)>$' ')8--1' >1'11?'
408443#4 ##%7 843%04
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For the year ended December31, 2008. 200% 2007 2008
200
% 2007 2008
"ark3upG return G interest earned2-))?8>1
$1)?>-'-
(88($?2( 188 2$.$1 --.$(
"ark3upG return G interest epensed (-2-$-' )?>--$$
11->8)(
8 188 )$.?1 1--.()
' 2>?$''( 188 31$.1(211(.-)
&rovision against loans and advances3net 181(-(8 2'-'-?$ 1$$-12) 188 1'1.)2 $1.>8
%ad debts written off directly ()888 1'' 8 188 3''.-? 3188.88
11?2)$) $8>-8-1 (81'121 188 1-'.1- 2$'.?2
''>-
28?->811
2((>$'>$ 188 $.'2 21.?'
No m&*5$ '
Iividend income ?11?81 >$2$88 >1)--( 188 322.11 32$.'$!ncome from dealing in foreign currencies >'2818 >'$(8? )2)->( 188 8.28 -.1(
Fain on sale of securities3net >8-?>- 1-88?>- )(8(2' 188 1().)2 22.21
4nrealied loss on revaluation of investments
classified as held for trading 31$18- 318$1'?
+ther income3net -)8-8- 18881(' '(2$>2 188 )-.$1 >-.1?
Total non3mark3upG interest income (''1(1> >((?22) -)'1((8 188 2'.1' 1>.8$
2-8>1$?1
2)$8(2$?
$82--(8$ 188 ?.'- 28.)$
No$m&*5$ '
Administrative epenses >(?2-'2 -(2>11> )-(>?)? 188 31>.$8 1>.(2
+ther provisionsG :reversal;3net 11(11 3$)($ 18128 188 31$2.?8 311.$1
+ther charges >>)8? -)$?$8 ?$8?$' 188 )>8.21
11(-.(
'Total non3mark3upG interest epense >->8)11 -''>28$ ?$?)?$) 188 3?.>8 2).?-
5tra ordinaryG unusual item 8 8 8
&rofit before Taation1?-88>)8
21$8?8$-
21?>)->> 188 1-.1) 1?.28
Taation 3 #urrent year -)81(($ >((2$-> )$(12-) 188 1$.88 2?.)>
3 &rior years -'$(') 312'(()$ 3?>(?2( 188 3$1?.11 32(-.)2
3 Ieferred >$$$2 ?'(-'8 1>-$$ 1881$12.-( 3)$.?'
>$-?2)2 >8(2()$ >('2'>> 188 3(.') 2.12
&rofit after Taation121(2$'?
1-2>-->2
1-$)(>88 188 2-.)2 2>.>2
4nappropriated profit brought forward (''82>8 --$8')$ -1$8)-8
Transfer from surplus on revaluation of fied assets3net of ta $21>> 11?-- 21$1'
-822(2> --(2?2? -1-28>'
&rofit available for appropriation#7#%482
4
208083
0
202%%%
%asic and diluted earnings per share 3 after ta 234 243 2447
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RATIO ANALYSIS
0atio Analysis is an important and age3old techniEue of financial analysis. 0atios 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 inter3firm 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 %ankers 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.
# RETURN ON EUITY
Iividing profit after taation by share holder/s eEuity. 0+5 compares net profit
after taes to the ,hare holder/s 5Euity.
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This ratio is calculated as
0+5R&rofit after taesG,hare holder/s 5Euity
2008 Q 242
2007 Q 33%#
2 RETURN ON ASSETS:
This ratio shows the efficiency of organiation that how efficiently utilies their
assets. This ratio relates profits to assets.
!t is calculated as
P*o-'< &-
2008 Q 3%0
2007 Q 4%0
3 EARNING PER SHARE:
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8 A;ERAGE PROFIT PER BRANH:
&rofit
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2007 Q 774
## RISK ASSETS TURNO;ER:
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primary objective of competitor analysis is to understand and predict the rivalry or
interactive market behavior between firms in their Euest for a competitive position
in an industry. Therefore the H%L also always analye their competitors %anks
Toward this end researchers have eamined factors that influence competitive and
patterns of entry into and eit from rivals markets However researchers have
made limited effort to investigate the prebattle competitive relationship between
rivals and the etent 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 firms
competitive activity let alone considered them in an integrated way.
!ntensity of rivalry one of &orters :1'?8; well3known five forces driving
competition has remained mainly a theoretical construct confined to the industry
level. !n terms of analying firms competing in an industry the strategic3group far
the most popular and relevant. However researchers who use this approach have
largely ignored the market contet in which competitors carry on their battles and
the etent to which two firms actually compete directly against each other.
Although the marketing literature recognies the importance of the market contet
its contribution has been primarily in analying competitors and competition at the
brand or individual3market level rather than at the firm level. +ther 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
Euestions in competitor analysis have remained uneplored 1'?-;. 6or eample
how can researchers studying competition differentiate among players in an
industry to eplain each players market behaviorsV How can a firm before
launching an attack assess its prebattle relationship with a given rival and the
resultant likelihood that this rival would retaliateV How can a firm gauge which
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opponent is most likely to attack its marketsV How can strategists differentiate
among a set of competitors to allow the firm to allocate appropriate resources and
attention to eachV 6inally although the importance of competitor analysis and
interfirm rivalry is well recognied there has been no systematic attempt to
integrate the two topics.
This article seeks to provide a conceptual link by proposing two firm3specific
theory3based constructs the market commonality and the resource similarity
between a given pair of competitors. Taking the firm as the basis for analysis !
argue that each firm has a uniEue 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 firm3specific
conceptualiation also leads to the idea of competitive asymmetry the notion that a
given pair of firms may not pose an eEual threat to each other. ! first offer a
number of propositions that use market commonality and resource similarity to
predict competitive attack and response. ! 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.
F
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and effective in the banking field and get the competitive advantage. That when occur
truly when the H%L produce new products and services to their customers. The H%L
should also introduce the new technologies in the %anking field before their competitors
and provide the facilities to their customers and get the customers loyalty . The H%L
should also provide the better service than their competitors and also should give the full
response in the any branch.
The H%L also should improve their computeried 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 H%L
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! observed that H%L employees interact with their clients as if they are their
personal friends and discuss about their problems as their own.
H%L has got a reliable and easy to use internal computer system. 5very
information regarding the transactions in customers/ deposits has been
computeried.
H%L maintained its data properly.
H%L has very good security system.
H%L is the larger commercial bank in &akistan with the network of over 1($'
domestic and international branches.
%eing the pioneer of banking in &akistan H%L is the oldest and is the richest
in eperience.
H%L focuses on consumer banking by lucrative schemes products and
services suiting best to the wants and demands of the customers.
H%L 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.
2( hours cash access and safe payment products for high value transaction.
Having potential to encounter the competitive environment in the market.
eteran and eperience private management group also involved in other
interests like tetile and cement industry.
#ustomer enjoys the services at the residential localities.
6!&5!++!+
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Highest number of branches effecting the proper maintenance and difficulty
in providing same working environment at the each branch
&oorer system of recovery of the system is a threat to bankruptcy.
Lack of customer feed back.
Low job satisfaction.
&oor AT"/s ,ervice
!nconsistency in efficiency and working atmosphere due to the largest of
branches.
,ense of insecurity in the employees serving at low profitable branches due
to the down siing. 6emales feel uneasy in an environment among the male workers.
ictim of political legal and socio3cultural pressures
.Lack of professionalism in the branch employees mostly.
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business people to solve their problems with the instant cash and financing
facilities.
Fovt. is taking very bold steps to promote !T in &akistan. H%L has an
opportunity to improve in technology.
Large international network which principally focuses on trade finance with
&akistan can be utilied to tap trade activities in other markets. !n addition services
such as cross border G offshore financing for corporate customers can be enhanced.
#ustomer feedback on different products and accounts has really improved
the bank performance and encourage the atmosphere for other future policies.
H%L also has an opportunity to epand its new technological advancement
likeM tele banking and internet banking facilities in order to serve the customer
more efficiently specially
53banking facility is also a new opportunity which is a flourishing business in
foreign countries and can also be here if H%L takes the initiatives.
6urther reduction in intermediation costs possible with improving
technology.
Iue to efficient and veteran management group H%L can also improve !ll
and epand its foreign operation successfully.
Habib %ank Limited provides opportunity to utilie its skills and efficiencies
in leasing business.
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,hortage of trained and specialied staff at lower eecutive 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.
Frowing global technological advancement.
,trict regulation by government over credit facilities to the customers as !ll as
to meet the prudential.
Loss of confidence of overseas customers due to freeing of accounts.
6acing more competition by foreign banks in the market.
6oreign 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.
oc(+'o 1 *!comm!)&
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2; The management should provide better arrangement for the employees.
$; The daily newspapers and journals should be provided to the employees
and customers visiting there.
(; A separate hajj applications acceptance counter should be provided to
overcome inconveniences faced by the customers.
-; A separate ladies counter should be there
>; The %ank management should be very careful while granting the loans.
); &ersonal interests should not be given importance and customers
?; &ersonal credit worthiness must be carefully scrutinied public relation
desk should be established in each and every branch for guidance as well as
redresses of grievance of customers at the spot.
'; +nline %anking should be introduced in all the branches.
18; Aggressive publicity campaign must be introduced through press and
5lectronic media for new products and scheme by initiating vigorous marketing
policy.
11; ; 5mployee/s induction promotion and transfer should always be made
on merit.
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1); To motivate the employees their remuneration G salaries should be made
at par with top tier %anks.
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R!-!*!c! 1 So*c!+ +!) Sho() @! *o')!) ' APA
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A!?!+
List of Annees
A!? #
+verview of the organiation
%rief history
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!ntroduction of all the departments
Ietailed description of the department you worked in +0 Ietailed description of
the project assigned.
A!?
,tructure of the 6inance Iepartment
Iepartment hierarchy
A!? %
Accounting system of the organiation
6inance system of the organiation
4se of electronic data in decision making
"obiliation of funds
Feneration of funds
,ources of funds
A!? 7
#ritical analysis
0atio analysis
Horiontal @ vertical Analysis
+rganiation analysis in comparison with itscompetitors;
6uture prospects of the organiation.
A!? 8
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