Unfavorable union activities and management conflicts Checking System is at intra-department level Weak marketing policies Nepotism &

mp; Favorism Infected portfolio still exists as bad debts Centralized management in particular areas

OPPORTUNITIES
Opportunities for growth and expansion in cash management. Faster market growth represents opportunity to grow and diversify Restoration of investors confidence and pick up in private sector investment flows. Large deposit base and funds flow can help to avail related market opportunities

THREATS
Adverse & unstable government policies Political instability Advance technology Competition from other banks

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Conclusion:

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Recommendations:
As we seen from the previous analysis of the financial statements I have realized that that Habib Bank is performing very well since its inception. It is quite difficult to give suggestion to improve the banking conditions Habib Bank Limited. As we know that nothing is perfect, there is always a room for improvement, so I will recommend following suggestions for HBL: 1) Employees Training programmes must be introduced on continuous basis so that Employees have understanding with the latest developments especially with the customers. 2) Bank should introduced incentive plans for employees on regular basis so that if employees may work whole heartedly for the welfare of their organization. While giving incentives qualification, work, experience, hard work and such other factors must be considered. 3) Mismanagement of resources must be avoided as much as possible as it decreases profit but also discourage hard worker and honest employees.

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4) Fresh graduates must be recruited. As the combination of Experienced and fresh can produce better results and it will improve the efficiency of management. 5) Habib Bank is going towards mobile banking but the problem is that a common client has no idea of its usage due to lack of marketing. I think that a proper marketing programme must be launched for clients awareness. 6) Banks different schemes must be conveyed to the targeted customers so that to have a reasonable share in market. 7) Bank should help the society by providing interest free loans to the Talented Students. 8) Online Banking should be introduced in all the branches. 9) To motivate the employees their remuneration / salaries should be made at par with top tier Banks. 10) Aggressive publicity campaign must be introduced through press and Electronic media for new products and scheme by initiating vigorous marketing policy. 11) Bank should adopt such an induction plan that when a customer opens his account with the bank he should be supplied with a booklet which enables him to know the procedure of filing the cheques, pay-in-slip etc. It will save a lot of time of the bank staff afterward during the conduct of the account of that customer. 12) The attitude of the bankers with all of their customers is not the same; they pay more attention and good service to some of the customers and neglect a major portion of them. Some of the customers approach to the bank officials and get their work done before others; it is not a good practice. All the customers should be treated equally.

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13) HBL should increase its communication with customers about the terms and conditions of its different products and services.

Discussing

problem

faced

by

the

credit

department

&

recommendations for it: Non-performing loans(NPL);

These are such loans which are no more profitable for the bank or in other words those loans which fall into the categories of bad debts are called NPL.

Classification of NPL:
We can classify NPLs into the following categories: 1. Substandard. 2. Doubtful. 3. Loss.

Substandard:
When markup amount remains outstanding from day 1 to 89th day the particular finance is marked substandard on the 90th day.

Doubtful:
When the markup amount remains outstanding from 91st day to 179th day then the particular finance is marked as doubtful on the 180th day.

Loss:
When the markup amount remains outstanding above the 180th day then the finance is marked as loss.

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All the finances in which markup is stuck and fall in particular categories are called classified amounts and are treated as NPL.

Remedies to avoid NPL:

Banks are taking special measures to avoid NPL by applying different warning systems given by State Bank of Pakistan. SBP has introduces early warning system which is applicable for all

commercial/scheduled banks. According to that system any account which will fall in any of the above classification will be regularly monitored and kept in continuous observation. More over these accounts will be in systems early warning category.

Limitations:

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Bibliography:
Material on these books, articles and websites has helped me a lot in preparation this report

Books
HBL Corporate Profile 2010 HBL Annual Reports 2007,2008,2009,2010 and 2011

Articles & Document

BANKING SECTOR REFORMS IN PAKISTAN: http://www.ishrathusain.iba.edu.pk/speaches/BANKING_SECTOR_REFORMS.pdf www.encyclopedia.com/doc/1G1-61864366.html

Websites
www.hbl.com www.habibbankltd.com

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Annexes:

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Glossary:

UOS: D.D: A/C: O.B: O.B.C P.L.S: Dr: Cr: C.A:

University of Sargodha Demand Draft account Other Bank Outward Bills Collection Profit and Loss Account debit Credit Current Account

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F.L: L.G: D.F: L.C: R.F: F.A.P.C: HBL ABL MCB NBP UBL NIFT (pvt) LTD. Flexi loan Letter of Guarantee Demand Finance Letter of Credit Running Finance Finance against Packing Credit Habib Bank Limited Allied Bank Limited Muslim Commercial Bank National Bank Limited United Bank Limited National Institutional Facilitation Technologies

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