Habib Bank: History

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 famil to establish a commercial bank that could
ser!e the Indian Muslim communit. His initiati!e resulted in the creation of Habib "ank in
#$%#, with H& in "omba 'now Mumbai(, and fi)ed capital of *+,,,, rupees. -he bank plaed
an important role in mobilizing funds from the Muslim communit to finance the All.India
Muslim /eague's campaign for the establishment of Pakistan. Habib "ank also plaed an
important role in channeling relief funds to Muslims hurt in the communal riots and !iolence that
preceded the departure of the "ritish from India. After Pakistan was born in #$%0, Habib "ank,
at the urging of 1o!ernor.1eneral Jinnah, mo!ed its head2uarters to 3arachi, Pakistan's first
capital. -his ga!e 3arachi its first commercial bank of the newl formed Pakistan. -he Habib
famil owned and managed the bank until the Pakistan go!ernment nationalized it on # Januar
#$0%.
The Introduction
H"/ established operations in Pakistan in #$%0 and mo!ed its head office to 3arachi. Its first
international branch was established in 4olombo, 5ri /anka in #$+# and Habib "ank Plaza was
built in #$0* to commemorate the bank6s *+th Anni!ersar. 7ith a domestic market share of
o!er %,8, H"/ was nationalized in #$0% and it continued to dominate the commercial banking
sector with a ma9or market share in inward foreign remittances '++8( and loans to small
industries, traders and farmers. International operations were e)panded to include the :5A,
5ingapore, &man, "elgium, 5echelles and Maldi!es and the ;etherlands.
Habib "ank is working for the last +, ears and has become the largest commercial bank in the
countr. It has the Authorized capital of <5 +,,, Million with a paid up capital and reser!es of
<5 =+= Million and its deposits are more than <5 *#> billion in appro)imatel #,.0 Million
accounts. It has the ad!ances of #># Million. Habib "ank has inno!ated a number of financial
schemes like term deposits, 5pecial notice term deposits, A.-.M. etc. As go!ernments are hoping
to be liberal and their policies are inno!ati!e and liberal the scope of banking is increasing and
Habib "ank is one step ahead if the growth and participating !er much in the economic growth
of Pakistan.
Habib "ank has been a pioneer in pro!iding inno!ati!e banking ser!ices. -hese ha!e included
the installation of the first mainframe computer in Pakistan followed b the first A-M and more
recentl, internet banking facilities in all its #%*+ domestic branches. -he "ank's towering
presence in Pakistan's financial and commercial life has remained unchanged o!er the decades.
-he strength of its brand and image is smbolized b its prominent Head &ffice building that has
dominated 3arachi's skline for>+?ears.
Habib Bank Ltd. #
&n June #>, *,,* Pakistan's Pri!atization 4ommission announced that the 1o!ernment of
Pakistan had formall granted the Aga 3han @und for Aconomic Be!elopment 'A3@AB( rights
to +#8 of the shareholding in H"/, against an in!estment of P3< **.%,$ billion ':5B >=$
million(. &n @ebruar *C, *,,%, management control was handed o!er to A3@AB. -he "oard of
Birectors was reconstituted to ha!e fi!e A3@AB nominees, including the 4hairman and the
PresidentD4A& and three 1o!ernment of Pakistan nominees.
H"/ has been rated as the top banking brand in Pakistan b -he "anker. -he "anker is the
world's premier banking and finance magazine. <ead in #+, countries around the world, -he
"anker is the ke source of data and analsis for the industr. -he "anker teamed up with "rand
@inance, the leading :3.based independent brand !aluation firm, to release its top +,, banking
brands for the ear *,,$.
Habib Bank Ltd. *
Departments in Habib Bank Limited
-his department consists of the following sectionsE
#. Account opening section.
*. Beposit section.
>. 4learing section.
%. <emittance section.
+. Accounts section.
FUNCTIONS OF HBIB BN! LI"IT#D
-o fulfill the basic ob9ecti!e that is of socio.economic nature H"/ perform following important
functionsE
#. Commercia$ Bankin%
&' Corporate Bankin%
(' In)estment Bankin%
*' +etai$ Bankin%
,' Is$amic Bankin%
#. 4&MMA<4IA/ "A;3I;1
Anterprises operating in the middle market contribute significantl to the econom of a countr.
-raditionall, this sector was the stronghold of H"/6s business. Buring the earl $,s, with the
liberalization of the financial sector in Pakistan, competition in the industr stiffened due to the
emergence of new banks in the pri!ate sector. -he senior management at most of these banks
comprised personnel from H"/.
-he not onl knew the market but were also familiar with the shortcomings of H"/. :nder the
new set.up, the were able to address these shortcomings and began to target H"/6s customer
base. 7ith the inception of an alternati!e, H"/ customers started migrating to the newl
established banks this causing the erosion of H"/6s market share.
Buring @?.*,,, H"/6s management decided to address this issue. Hence forth, 4ommercial
"anking was created to focus on the business needs of the middle market customers. &n
;o!ember #, *,,, 4ommercial "anking came into being. At present, #= 4ommercial 4enters
and 5ub.4enters functioning, located at 3arachi, /ahore, @aisalabad, 5ialkot and 1u9ranwala.
Habib Bank Ltd. >
-oa$s
-he 1oals of setting.up 4ommercial "anking was two.foldE
@irst to stop the erosion of market share in the middle marketF
5econd, to regain the lost market share
-he strateg adopted to achie!e the abo!e ob9ecti!e was to position 4ommercial "anking
segment as the G-rade @inance "ankH for its customers. -he rationale behind this strategic
decision was to capitalize on the e)isting marketing knowledge I strong contacts with the
middle market customers, who were loal to the H"/ brand.
-he product line of 4ommercial banking includesE
FUND BS#D FCILITI#S
<unning @inance for 7orking 4apital re2uirements '<@(
@inance Against Packing 4redit for Pre.shipment '@AP4(
@inance Against @oreign "ills for Post.shipment '@A@"(
@inance Against Imported Merchandise '@IM(
@inance Against -rust <eceipt '@A-<(
Bemand @inanceE Medium -erm /oans 'B@(
NON.FUND BS#D FCILITI#S
/etter of 4redit '/4(
o BA ':nseen(
o BP '5ight(
/etter of 1uarantee '/1(
5uccessful achie!ement of the strateg entailed addressing the following ke issuesE
Be!eloping a sales culture so that business was aggressi!el sought
Impro!ement of 4ounter 5er!ice
<educing the turnaround time on credit decisions
-raining of staff to enhance credit and sales skills
Habib Bank Ltd. %
@ollowing initiati!es were taken to address the abo!e issues fictionalization of branches into two
ke areasE
MarketingF and
&perations
Implementation of a standard organization at 4enters I sub.centers where b there were two ke
areas within operationsE
-rade
4ounter 5er!ice i.e. 4ash I <emittances
Be.laering of the 4redit processing to ensure 2uick turnaround on credit decisions
5etting up of <elationship Management teams at all 4ommercial "anking 4enters to
focus on procurement of business
5etting.up of 4redit Administration Bepartments at all 4enters for impro!ed <isk
Management
-raining of staff in following ke areasE
4redit
-rade 5er!ices
4omputer literac
Impact o/ the steps
-he decision to setup 4ommercial "anking has been fruitful. -his is e!ident from the following
resultsE
Anhanced customer interaction b the branch management has now become possible
after segregation of marketing and operations at the branch le!el.
Becentralization of 4redit Authorit and streamlining of the processes ha!e resulted
in reduced turnaround time. 4urrentl decision making in this area is perhaps most
efficient in the market place.
&ur strateg has allowed us to achie!e our first ob9ecti!eF the trend of erosion in our
market share has been re!ersed. 7e now would be looking at regaining our market
share.
Habib Bank Ltd. +
4ommercial "anking is making headwa with impro!ement not onl in terms of the business
figures but also in its ambiance. <eno!ation of is being carried out in order to gi!e a professional
look to all the 4ommercial "anking 4enters.
*. Corporate Bankin%
4orporate "anking 1roup ser!es large institutional and corporate customers in Pakistan through
#, dedicated corporate banking centers in all ma9or cities. -he 4I"1 portfolio consists of most
of the largest names in the market and represents all ma9or industr groups, including te)tiles,
large scale manufacturing, telecommunications, petrochemicals, fertilizer, airlines, transportation
and ser!ices. It offers its clients a comprehensi!e range of banking ser!ices !ia a one.window
interface through designated relationship manager.
4orporate "anking is recognized as a market leader due to its uni2ue abilit to meet the entire
spectrum of a customer6s banking re2uirements. H"/6s large e2uit base allows meeting the
financing needs of the largest corporate and it6s large network and specialized teams are able to
deli!er and pro!ide customized solutions.
-he 1roup has increasingl focused on pro!iding !alue addition ser!ices to the customers, e.g.
paroll and cash management ser!ices. -he "ank has become a leader in cash management
ser!ices b le!eraging its large domestic branch network and now pro!ides such ser!ices to a
range of large and medium sized corporations, including the Pakistani units of some @ortune
+,,.companies.
-he 1roup also stri!es to sta ahead of the market b anticipating customer re2uirements. 7e
strongl belie!e in relationship banking, which is essential for us to remain responsi!e to our
customers. 7e also remain focused on impro!ing producti!it and ensuring the 2ualit of our
risk management.
In *,,>, 4orporate "anking 1roup continued to e)pand the scale of its acti!ities, with a
substantial increase in new customers, re!enue and profitabilit.
>. In)estment Bankin%
An In!estment "anking :nit has been established which focuses on loan sndications,
de!elopment of local currenc corporate bonds '-@4s( and ad!isor ser!ices.
%. +etai$ Bankin%
-he <etail "anking network, with #%*+ branches, is the core strength of Habib "ank. Its
e)tensi!e reach in all geographic locations J urban and rural J throughout the countr pro!ides
access to o!er + Million customers across all sectors of the econom. -he network pro!ides H"/
Habib Bank Ltd. C
with the largest di!ersified low cost deposit base of an bank in Pakistan, and forms the basis for
man of its other business linesE corporate and in!estment banking and treasur acti!ities.
<etail "anking 1roup '<"1( has two principal areas of acti!itE
-he retail network for deposit mobilization
-he consumer.banking group.
Beposits mobilization, the traditional strength, continued to perform strongl in *,,* with
deposits growing b #*8. H"/ is the onl ma9or bank to ha!e a !er dedicated group to ser!e
the 5mall I Medium Anterprises '5MA( sector. H"A belie!es that the 5MA sector can be an
engine of growth for the econom and represents an area of opportunit for the "ank.
4"1 was therefore established in late *,,, to pro!ide banking ser!ices and credit on a
structured and sstemized basis. It now co!ers *+ branches in the si) ma9or industrial cities of
Pakistan. -he 1roup now works closel with its customers, which co!er all segments of the
econom including the te)tile sector, !endors and suppliers to structure the finances and impro!e
their capabilities. 7e ha!e been !er encouraged b the outcome that reaffirms its belief in the
potential of this sector.
-here is a growing propensit for consumer spending to uplift li!ing standards. <ecognizing that
consumer demand can be a ma9or dri!er of in!estment and economic growth, the 1o!ernment
has also mo!ed towards an enabling regulator framework and has also taken initiati!es to create
an appropriate legal regulator framework to enable the de!elopment of a housing finance
market.
7ith its e)tensi!e branch network and large customer base, H"/ has an important role to pla in
the de!elopment of this sector of the econom in which it e)pects substantial growth in the ne)t
fi!e ears. H"/ has mo!ed aggressi!el and has alread introduced three ma9or productsE
Personal /oans,
4ar @inancing
4onsumer Burable @inancing
In association with ma9or suppliers of consumer products. -hese ha!e been well recei!ed and
!olumes ha!e been building up steadil. It is the intention of H"/ to be a leader in consumer
financing. Plans are also underwa to de!elop mortgage financing for the housing sector.
Agriculture is the most important contributor to Pakistan6s econom. H"/, which has been a
leader in agriculture financing, plans to increase further its credit to this sector with a particular
focus on pro!iding a wider range of products to small and medium size farmers. In this regard, to
Habib Bank Ltd. 0
pro!ide fle)ibilit, the Harali scheme for farmers was introduced which is a >.ear re!ol!ing
facilit rather than the traditional short term seasonal financing. H"/6s specialized agricultural
finance department helps farmers in modernizing their farming techni2ues.
-he 1o!ernment has also pro!ided a regulator framework to encourage corporate farming and
as this de!elops the participation in this sector will grow e!en further.
7hile H"/ continue to de!elop its products, we recognize that 2ualit of customer ser!ice will
become an e!en greater differentiating factor in the market. H"/ ha!e taken a number of
initiati!es in this areaF in!esting in technolog, training and upgrading of its branches. A)tended
banking hours and better facilities for utilit bill paments ha!e been made a!ailable.
In *,,*, H"/ launched real time inter.cit banking, internet banking for +,,,,,, customers and
P4 banking for its corporate and commercial banking customers. H"/ A-M network has
e)panded and its usage is also growing rapidl.
A Bebit 4ard program has also been introduced which will be a!ailable in o!er #,,,, point of
sale terminals within the countr.
Inward remittances from o!erseas Pakistanis pro!ide an immeasurable support to the econom.
&wing to our uni2ue combination of the largest domestic and international networks, we process
the highest !olume of o!erseas remittances into Pakistan. 7e recognize that speed and efficient
processing is the re2uirement of remitters and to meet these needs, we ha!e put in place our
@A5- -ransfer ser!ice and our full automated processing center in 3arachi ensures that all
remittances are deli!ered within *% hours in urban areas and %= hours in rural areas.
In our <etail network, we ha!e an unmatched distribution network, which pro!ides us man
opportunities for growth, and we plan to use this to soon pro!ide additional ser!ices, including
wealth management ser!ices.
+. ISL"IC BN!IN-
-he "ank has taken the first step towards Islamic banking and for this purpose an Islamic
banking di!ision has been established to complete the necessar regulator and operational
formalities thereb pa!ing the wa for commencement of Islamic "anking in its specialized
branches.
Habib Bank Ltd. =
#0istin% 1ision
GAnabling people to ad!ance with confidence and successH
Ne2 1ision
GHabib "ank6s !ision is to be stakeholders6 first choice in the pro!ision of banking products and
ser!ices that are distincti!eH.
Habib Bank Ltd. $
#0istin% "ission Statement
G-o make our customers prosper, our staff e)cel and create !alue for shareholdersH
"issin% components
Products or 5er!ices
Markets
-echnolog
4oncern for sur!i!al, growth and profitabilit
Philosoph
5elf 4oncept
4oncern for Public image
Ne2 "ission Statement
&ur mission is to foster the needs of customers 'Customers( b pro!iding uni2ue banking
products 'products and services( and being present in the local and global markets 'Markets(. 7e
ha!e deploed the latest technolog and banking software '-echnolog( and it has also become
our distincti!e feature 'Self Concept(. 7e belie!e to in!ol!e our customers in our business that
makes them feel comfortable and choose H"/ as their first choice 'Philosophy(. 7e stri!e to be
the countr6s sound financial institution b ha!ing the highest ratio of profitabilit and growth
'Concern for survival, groth and profitability(. 7e !alue our emploees the most who are our
most sound asset '!mployees( and together we tr to be the part of communit b showing a
le!el of commitment 'Concern for public image(.
Habib Bank Ltd. #,
#0terna$ udit o/ Habib Bank Limited
#conomic 1ariab$es
-he Pakistan econom is more controlled econom, then one where market forces reign
supreme. 5e!eral ke institutions are stated owned. -hus a discussion of the economic forces that
influence the pri!ate organization such as Habib "ank cannot ignore the substantial role plaed
b the go!ernment in determining the state of the econom.. "adla rates are a true indication of
market rates at which financial intuitions are willing to lend but the go!ernment, under the
dictates of the IM@ wants to artificiall lower the interest rates so as to pro!ide in!estment
li2uidit within the econom.
Socia$3 Cu$tura$3 Demo%raphic and #n)ironmenta$ 1ariab$es
A low sa!ing culture has offset the huge population ad!antage this is en9oed b Pakistan. Also
culture is dedicated b the religion, and in Pakistan a significant segment of the population is
loath to accept interest for their deposits due to the negati!e religious implications of such an act.
About 0,8 of Pakistan6s population is based on rural areas, thus making it harder for banks to
mobilize their deposits within these regions.
Techno$o%ica$ 1ariab$es:
"anks in the de!eloped world ha!e been turning to hea! I- in!estments, which differentiate
their products, pro!ide response times, enhance accessibilit and impro!e customer satisfaction.
-hough in!esting in state.of.the.art host banking solutions A-M and P&5 ' point of sale(
networks, Kisa, Master4ard, and telebanking and now internet banking are common I-
in!estment in the de!eloped world, it is now that these products and ser!ices are gaining faster
acceptance in Pakistan.
The #0terna$ /actors #)a$uation "atri0
#0terna$ Factor #)a$uation 4#F#5 matri0 method is a strategic.management tool often used
for assessment of current business conditions. -he A@A matri) is a good tool to !isualize and
prioritize the opportunities and threats that a business is facing.
-he !"! matri# is !er similar to the IF# matri0. -he ma9or difference between the A@A matri)
and the I@A matri) is the tpe of factors that are included in the model. 7hile the I@A matri)
deals with internal factors, the A@A matri) is concerned solel with e#ternal factors.
A)ternal factors assessed in the A@A matri) are the ones that are sub9ected to the will of social,
economic, political, legal, and other e)ternal forces.
Habib Bank Ltd. ##
S' No' !ey #0terna$ Factors 6ei%ht +atin% 6ei%hted
Score
Opportunities
# :se global e)pansion to get first mo!er ad!antage ,.#, % ,.%,
* Agriculture as a potential niche ,.,+ > ,.#+
> "roader product portfolio ,.#, > ,.>,
% /arge !olume of corporate customers ,.,+ * ,.#,
+ 5trong "rand <ecognition ,.#+ % ,.C,
Threats
# Intense competition among !arious banks ,.#+ % ,.C,
* 7a!ering conditions of econom ,.#+ * ,.>,
> -echnolog is consistentl changing ,.#, > ,.>,
% 1o!ernment policies ,.#, * ,.*,
+ A)tension o!erseas in!ol!es greater risk ,.,+ > ,.#+
Tota$ 7'88 ('7
-his A@A matri) will be discussed in detail in follows starting from the opportunities.
Opportunities
7' Use %$oba$ e0pansion to %et /irst mo)er ad)anta%e
Habib bank is present in *+ countries and it has also been focusing on opening new
subsidiaries and !entures with other banks. 5o this ma9or presence in all these countries when
there are !er other Pakistani banks will help Habib bank to reap the benefits of first mo!er
ad!antage.
&' %ricu$ture as a potentia$ niche
/atel Habib bank has been focusing on the agriculture sector as well. @or this purpose it
has formulated a new agriculture task force and its primar moti!e is to offer new products and
ser!ices for this potential sector. " catering the needs of this large and potential sector it will be
easier for Habib bank to compete with other banks in the industr and to ser!e this niche in a
better wa.
(' Broader product port/o$io

Habib Bank Ltd. #*
7ith the presence of man products like debit cards, credit cards which ha!e further
categor like platinum cards, gold cards etc. it is eas for Habib bank to ser!e the needs of the
customers in a better and responsi!e wa.
*' Lar%e )o$ume o/ corporate customers
Habib bank has di!ided its customers in * ma9or forms including indi!idual and corporate
customers. "oth ha!e their own importance and magnitude. -o cater the needs of the corporate
customers Habib bank has opened corporate portals in its main centers. In this wa it will be
easier for Habib bank to cater the needs of specific corporate customers and customers can get
the ser!ices sitting at their homes.
,' Stron% Brand +eco%nition
7ith the help of ad!anced ser!ices and products and its dominate presence in the countr
it has been easier for Habib bank to register its image in the minds of the customers. 4ustomers
relate to it and ha!e complete confidence in rendering the ser!ices of Habib bank. "ecause of
this it is eas for Habib bank to retain its e)isting customers and to attract new ones.
Threats
7' Intense competition amon% )arious banks
-he banking industr in Pakistan has been prospering in a !er fast paced manner and
with the increasing no of banks present it will be !er difficult to retain and maintain the positi!e
image of the bank and to remain in the good books of the customers. -o respond to this e!er
increasing competition it is feasible for Habib bank to keep introducing new and compatible
product offerings which are the demand of the customers and it should focus on its core
competencies which are its banking software Miss, its strong brand image and its !alue added
ser!ices which are ser!ing the customers for C> ears now.
&' 6a)erin% conditions o/ economy
-he fluctuating economic patterns of the countr ha!e been 2uite subtle in order for
businesses to e)cel and to prosper. ;o matter how much good competencies and ser!ices the
banks are e2uipped with, the economic crunch does affect the buing and in!esting patterns of
the customers. 5o it must be the top priorit of the bank to cater this disruption and to offer such
banking solutions and ser!ices which are trul beneficial for the customers in this era of financial
crunch.
(' Techno$o%y is consistent$y chan%in%
Habib Bank Ltd. #>
It is an age of technolog, -echnolog which is not static, which is sub9ected to introduce
new was of doing things and to replace the old patterns in the flick of an ee. 5o Habib bank
has to be responsi!e to all the latest trends on the technological background. @or this purpose
Habib bank has installed latest and comprehensi!e software called Miss. It has upgraded
ma9orit of its branches to online facilities and so on.
*' -o)ernment po$icies
1o!ernment policies are the most !icious e)ternal factor that affects an industr either
positi!el or negati!el wa n a dominant wa. @or instance 2uite recentl 1o!ernment has
established a banking court which can influence the bank to be responsi!e to the conformance of
the go!ernment. ;o doubt it facilitates the customers but it limits the working of the banks and
the are supposed to be continuousl on alert. 5o Habib must be open, alert and responsi!e to
an such go!ernmental polic or implication which might pose a threat to the banks working and
profits.
,' #0tension o)erseas in)o$)es %reater risk
As discussed earlier, Habib bank is present in more than *+ banks. It is 2uite ob!ious that
opening a new branch in a foreign countr or to form a 9oint !enture re2uires surrendering to
their respecti!e rules and regulation which might sometimes be against our core philosoph and
!alues. 5o in order to open a new branch or accessing an future endea!or, the bank must
complete it home work as to how to respond to such aspects.
Interna$ udit o/ Habib Bank Limited
"ana%ement at HBL
Habib Bank Ltd. #%
TOP MANAGEMENT
President
5enior A)ecuti!e Kice President
MIDDLE MANAGEMENT
A)ecuti!e Kice President
5enior Kice President
Kice President
LOWER LEVEL MANAGEMENT
Assistant Kice President
&fficers
Planning
At H"/, it is firml belie!ed that planning is an essential part of managing organization on local
le!el or international le!el. -he consider planning as first step to mo!e towards their
organizational goals, for which management de!elops effecti!e plans. H"/ is using a
@orecasting, -ime series analsis as tools when de!elop plans.
Organizing
H"/ organizes all its managerial acti!ities that results in a structure of task and authorit
relationship. &rganizing includes organizational design, 9ob specification, 9ob description, span
of control, unit of command, coordination, 9ob design and 9ob analsis
Motivating
Herzberg -wo @actor -heor ma be applied on H"/ which pro!ides 9ob satisfaction
'moti!ation( and 9ob dissatisfaction 'hgiene factor(.-his is the theor easil applicable on an
organization.

MOTIVATORS
Personal growth
7ork content
Achie!ement
<ecognition
<esponsibilit
Ad!ancement

HYGIENE FACTORS
4ompan policies
Supervision
Interpersonal relations
Working conditions
Job security
Habib Bank Ltd. #+
Pay
Stafng
5taffing is another of the H"/6s core management functions. H"/ staffs the most competent
indi!iduals basing on e2ual opportunit emploment. -he ha!e their set criteria for the
selection of emploees belonging to each department.
Controlling
H"/ has Internal 4ontrol Bepartment ';ow 4ompliance 1roup( which ensured proper controls
in the organization. All the instructional and informational circulars are issued b consulting
them.
T!"# o$ Control#
-here are three '>( tpes of management controls which are as underE
#. Precontol
*. 4oncurrent control
>. @eedback control
%& Pr"'ontol(
In H"/, 4ompliance 1roup is tasked to ha!e Precontol before performance of a transaction.
All the policies and procedures created are e!aluated b them before implementation.
)& Con'*rr"nt 'ontrol(
In H"/, concurrent controls e)ist while performing the 9ob manuall or through sstem. If
the 9ob is being performed through sstem i.e. MI5?5 'software for performance of dail
banking transactions installed at head office and line with branches(, the well.defined securit
controls are in place. Hence e!er transaction whether it is performed manuall or through
sstem, the well.defined procedure is in place for obser!ance of the emploees while completing
the work.
+& F"",-a'. 'ontrol(
In H"/, on introduction of an new product whether it is consumer or commercial, the
feedback is taken and correcti!e actions are taken to correct the situation where numbers of
customer complaints are being recei!ed or the product has some built in problem and not based
on customers6 satisfaction. In the present en!ironment, it has been !ital for the banks or an other
industr to ha!e proper feedback of the transactions to take remedial measures.
Habib Bank Ltd. #C
-he control process consists of
Astablish performance standards
Measure actual performance
Compare Measured Performance Against Established Standards
ake Corrective Action
"arketin%
Marketing can be described as the process of defining, anticipating, creating, and fulfilling
customer6s needs and wants for products and ser!ices.
-he Marketing head includesE
C*#to/"r Anal#i#
H"/ has a wide arra of customers both from commercial and consumer perspecti!es. 7hile
introducing certain products for both these tpes of customers a comprehensi!e customer
analsis is concei!ed, which makes it !iable for the bank to foster its banking products specific
and responsi!e to its customers. A contemporar approach to conduct this customer6s analsis is
through Miss software which entails the details of its customers.
S"lling !ro,*'t# an, #"rvi'"#
7hile selling its products and ser!ices to its potential customers the basic business model that is
used b H"/ is "*4. 7hile its customers are widel dispersed across the globe and throughout
the countr a !igorous media campaign is sought for b H"/ and mass media and promotional
acti!ities are undertaken
Pro,*'t an, #"rvi'" !lanning
H"/ plans to sell its products which might be of different genres to its customers both local and
International. -his product planning is done to cater the di!ersifing needs of the customers, for
instance areas where credit cards are most suitable, debit cards would not be an ideal option to be
pursued.
Pri'ing
-he primar wa to get its earnings, the bank has to charge its customers for the banking ser!ices
that are offered to them. 5ome of the most important banking products are credit cards, debit
cards, loans ad!anced, and account opening fee and others alike. 7hile charging the customers,
care is taken that these charges must be nominal and must not hinder the opportunities to keep
ser!ing the customers and to e)ploit them.
Mar."ting R"#"ar'0
"eing an important constituent of the econom and business sector of Pakistan, H"/ has to take
into consideration !arious underling factors which might restrict the business acti!ities in one
wa or another. -hese factors might comprise of a !ibrant econom, constantl changing
political background, !igorous competition and man others which force the bank to change its
proposed strategies and to act according to the dri!ing forces.
Habib Bank Ltd. #0
O!!ort*nit Anal#i#
&pportunit analsis means to consider all costs and benefits that are directl or indirectl
associated with carring out the business. @rom the banking perspecti!e it ma mean opening a
new branch in an un attended area, institutionalizing online banking throughout the network to
ease out customers6 2uests, facilitating the customers through the application of different gadgets
such as Miss software which makes the routine banking easier than before. Ha!ing conducted
this analsis successfull might result in infusing a banking ser!ice that is more dnamic in its
prospects, more competiti!e than its competitors, more comprehensi!e in its banking solutions
and so on.
+esearch 9 De)e$opment
<esearch and Be!elopment has alwas been an integral part of Habib "ank /imited. H"/ is one
of those banks which has no choice but to continuall de!elop new and impro!ed products
because of the rapid changes and competiti!eness of the banking sector. H"/ accepts the
importance of <IB in toda6s competiti!e global market and it also recognizes the needs of its
customer who demand continuous ad!ancements and differentiated products as it pro!ides
financial ser!ices to all segments of the national econom within and outside Pakistan. 7ith a
re!amp customer oriented philosoph, the Habib "ank is pursuing the new a!enues of leadership
through inno!ation and automation in customer ser!ices. -he direction gi!en to the staff b the
leadership in the management and especiall to <IB is to gear up the efforts to face the
challenges to bring new heights of professionalism in the banking sstem to pro!ide cost
efficient solutions for businesses in this field.
"ana%ement In/ormation Systems
Information sstems are absolutel essential for almost all organizations toda, especiall for an
organization like H"/. It is using the usual kinds of -ransaction Processing 5stems, &ffice
Automation 5stems, 3nowledge 7ork 5stems, Becision 5upport 5stems, and A)ecuti!e
5upport 5stems. Aach functional unit of the "ank had its own dedicated sstems. In order to
keep pace with changes swiftl taking place around the world, the H"/ has embarked upon an
ambitious plan for automation to ha!e competiti!e edge o!er competing banks. An uphill task, it
started in full swing and tempo which is unprecedented in the histor of H"/. -he team of I.-
professionals has almost hit the goals set b the management and showing positi!e and
encouraging results. -he computer di!ision is pro!iding technical support both for hardware and
software to branches and other offices at the region or Head &ffice le!el throughout the countr
to ensure trouble.free operations of the "ank.
The Interna$ Factor #)a$uation "atri0
S' No' !ey Interna$ Factors 6ei%ht +atin% 6ei%hted
Score
Stren%ths
# :sage of comprehensi!e software pro!iding
o!erall banking solutions
,.#+ > ,.%+
* 5trong brand recognition ,.#+ % ,.C,
Habib Bank Ltd. #=
> Acceptance of being a ma9or bank in Pakistan
globall
,.#, > ,.>,
% Affecti!e management ,.#, > ,.>,
+ Abilit of effecti!e ser!ice pro!ision through
nationwide network of o!er #%,, branches
,.#, % ,.%,
6eakness
# /ess di!ersified products pro!ide little room to be
distinguished
,.#, # ,.#,
* Interception in online link causes customer ser!ice ,.#+ * ,.>,
> <eduction in o!erall cost leading to emploee
dissatisfaction
,.,+ * ,.#,
% Incomplete local online network ,.#, * ,.*,
Tota$ 7'88 &':,
Stren%ths
7' Usa%e o/ comprehensi)e so/t2are pro)idin% o)era$$ bankin% so$utions
It has been mentioned abo!e that after the installment of the latest banking software
Miss, H"/6s functioning has become 2uite eas and profound and customer ser!ices ha!e
become better. -his software caters all basic banking functions ranging from account opening to
handling, online information and transfer of funds and so on. 5o we can sa that Miss has
become one of the basic core competencies of H"/.
&' Stron% brand reco%nition
7ith the help of ad!anced ser!ices and products and it6s dominate presence in the
countr it has been easier for Habib bank to register its image in the minds of the customers.
4ustomers relate to it and ha!e complete confidence in rendering the ser!ices of Habib bank.
"ecause of this it is eas for Habib bank to retain its e)isting customers and to attract new ones.
(' cceptance o/ bein% a ma;or bank in <akistan %$oba$$y
It has been mentioned earlier that not onl H"/ is the ma9or bank is Pakistan but it also
happens to be the largest bank o!erseas. -his acceptance has earned H"/ a respectful name and
status in the banking sector of Pakistan.
*' #//ecti)e "ana%ement
After it got pri!atized back in *,,%, the management of H"/ was di!ided in * main
parts. Its board of directors comprises of % directors from Aagha 3han Be!elopment fund
Habib Bank Ltd. #$
'A3@B( which ac2uired +#8 shares of H"/ and * directors come from the go!ernment.
-ogether the ha!e helped H"/ to be prominent in the banking industr of Pakistan. All the
recent ad!ances in the management stles and practices being followed globall are also the part
of H"/ management making it distinguished amongst other banks present in Pakistan.
,' bi$ity o/ e//ecti)e ser)ice pro)ision throu%h nation2ide net2ork o/ o)er 7*88
branches
It has been mentioned earlier in this pro9ect that Habib bank is the largest bank in our
countr with a staggering #%,, branches all o!er the countr, out of which more than #,,, are
commercial and the remaining are retail branches. 5o greater the number of branches greater will
be the chance to respond to customer re2uirements and to reach them.
6eaknesses
7' Less di)ersi/ied products pro)ide $itt$e room to be distin%uished
"anks all o!er the world usuall come up with uni2ue banking product portfolios
designed to cater the di!ersified needs of the customers but it is the underling dilemma that
these competencies cannot remain specific to one single bank and more or less the are same
across different banks. @or instance the interest rate will be close to similar in all banks with a
!er minute change in the structure. 5o H"/ while ser!ing with same nature of products has to
distinguish itself b making the products all the more attracti!e b making them more intriguing.
&' Interception in on$ine $ink causes customer ser)ice
It so happens sometimes that the online link gets lost thus limiting the options of the bank
in online banking. -his ob!iousl costs the bank its customers6 satisfaction and other elements as
well. 5o this matter should be sol!ed on preference.
(' +eduction in o)era$$ cost $eadin% to emp$oyee dissatis/action
As mentioned earlier that top management of H"/ has been adopting latest management
practices. -his includes rolling back the bonuses and additional benefits being gi!en to the
emploees in their respecti!e pas. 5o what happens is the bank is able to cut down its costs but
o!er all the emploees consider it a serious breach in their legal rights resulting in their
dissatisfaction.
*' Incomp$ete $oca$ on$ine net2ork
Habib Bank Ltd. *,
7e ha!e mentioned time and again that H"/ has the largest presence in the countr but it
is 2uite difficult to upgrade all the branches to the online link. 5o the absence of the online link
does not enable the bank to reap the full benefits of being a bank of this magnitude. Attention
should be gi!en to this aspect as well.
B$ue Ocean Strate%y
Blue oceans denote all the industries not in e)istence toda the unknown market space, untainted
b competition. In blue oceans, demand is created rather than fought o!er. -here is ample
opportunit for growth that is both profitable and rapid. In blue oceans, competition is irrele!ant
because the rules of the game are waiting to be set. "lue &cean is an analog to describe the
wider, deeper potential of market space that is not et e)plored.
-he corner.stone of "lue &cean 5trateg is 'Kalue Inno!ation'. A blue ocean is created when a
compan achie!es !alue inno!ation that creates !alue simultaneousl for both the buer and the
compan. -he innovation 'in product, ser!ice, or deli!er( must raise and create !alue for the
market, while simultaneousl reducing or eliminating features or ser!ices that are less !alued b
the current or future market. -he authors criticize Michael Porter's idea that successful
businesses are either low.cost pro!iders or niche.plaers. Instead, the propose finding !alue that
Habib Bank Ltd. *#
crosses con!entional market segmentation and offering !alue and lower cost. Aducator 4harles
7. /. Hill proposed this idea in #$== and claimed that Porter's model was flawed because
differentiation can be a means for firms to achie!e low cost. He proposed that a combination of
differentiation and low cost might be necessar for firms to achie!e a sustainable competiti!e
ad!antage.
AS-IS Strategy Canvas
Gro*!( Ha-i- 1an. Li/it",
Competitor 7: United Bank Limited
Competitor &: "us$im Commercia$ Bank
Sr' No Competin% Factors =ou Competitor 7 Competitor &
7 Customer Ser)ice HI1H /&7 M&BA<A-A
& Techno$o%y HI1H M&BA<A-A M&BA<A-A
( <roduct <ort/o$io M&BA<A-A M&BA<A-A M&BA<A-A
* Branches HI1H /&7 M&BA<A-A
Habib Bank Ltd. **
, C+" M&BA<A-A /&7 M&BA<A-A
> Corporate <OS HI1H /&7 /&7
: Deposits? Interest
+ates? Leasin%
HI1H /&7 M&BA<A-A
Habib Bank Ltd. *>
Four Action Frame Work
ERRC GRID for HB
#$iminate +aise
"inimum ba$ance re@uirements
<re/erentia$ treatment o/ customers
based on amount o/ deposit
=ie$ds and sa)in% rates
Customer Satis/action
Customer responsi)eness and trust
+educe Create
<rocessin% time Sua)e products easi$y accessib$e by
customers
Internet bankin% booths to make customers
a2are o/ the Internet bankin%
Ho2 to make our strate%ic mo)es B$ueA
Habib Bank Ltd. *%
&perating in the ser!ice industr re2uires the firm to be more responsi!e to the sub9ecti!e
matters. 5o H"/ being a ma9or plaer in the dnamic banking industr of Pakistan needs to
instill the abo!e mentioned A<<4 grid elements to enable it to perform at a par from the rest of
the ke plaers. @ollowing is a brief e)planation of the abo!e mentioned postulates.
#$iminate
Minimum balance re2uirement as the name suggests re2uires the customers to keep a specific
amount of mone in the account below which if the amount falls, the account becomes non.
operating. 7e want to eliminate this re2uirement so the customers ha!ing shorter amounts of
mone might still be able to utilize the banking ser!ices without an glitch. Also preferential
treatment for customers must be ceased which entails that if a customer wants to operate an
account with lower le!el of deposits he should not be allowed to open an account and utilize the
ser!ices. It sends a negati!e images and the bank ma suffer the loss of potential customers and
comprehensi!e !aluable amounts deposits. -his practice needs to be eliminated.
+educe
-he processing time for e!er tpe of banking ser!ice being offered must be reduced so that the
customers will feel it considerable !isit the bank which offers them 2ualit ser!ices in relati!el
shorter span of time. 7e want to reduce this touch stone well below the industr standards.
+aise
5a!ings of the bank and the ield rates being charged for the products being offered must be
e)ercised on an optimal le!el so that the bank while charging their customers also reaps benefits
out of them. Also the bank can deplo its ser!ices to help instill a stronger sense of trust and
customers satisfaction e!entuall leading to the infusion of a stronger mutual bond between the
two concerned parties.
Create
-he products being offered b the bank must be delicatel and efficientl designed so that the
offer ma)imum !alue to the customers and help to create ultimate proposition for them. @or
instance a credit card being offered must offer softer ser!ice charges and ma)imum utilit
e!entuall pro!ing to be customers6 ultimate choice. Also H"/ might do well b creating
Internet banking booths to offer introductor lessons about the internet banking to those
customers who in one wa or another not aware of using this genre of banking and its other
aspects. -his will help to attract man customers who otherwise would not ha!e utilized this
distinguishing facilit.
Habib Bank Ltd. *+