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Acknowledgment
This report on capital budgeting is a collaborative effort by all group members.

Firstly, we would really owe a debt of gratitude to our course instructor Mr.
Chaudhary Mazhar Hussain whose expertise, motivation and professional
knowledge proved to be guiding light for us and we shall greatly benefit from this
experience in our future endeavors.

We would also take the opportunity to thank

Mr. (), and ()

of Habib Bank (Pvt) Ltd for providing us valuable information and required
assistance.
We have ensured that this report covers all the essentials of Financial
Management Project guidelines.

About HBL
HBL was the first commercial bank to be established in Pakistan in 1947. Over the years, HBL
has grown its branch network and become the largest private sector bank with over
1,450 branches across the country and a customer base exceeding five million
relationships.
With a presence in 25 countries, subsidiaries in Hong Kong and the UK, affiliates in
Nepal, Nigeria, Kenya and Kyrgyztan and representative offices in Iran and China, HBL
is also the largest domestic multinational. The Bank is expanding its presence in
principal international markets including the UK, UAE, South and Central Asia, Africa
and the Far East. Key areas of operations encompass product offerings and services in
Retail Banking. HBL has the largest Corporate Banking portfolio in Pakistan with an
active Investment Banking arm. SME and Agriculture lending programmes and banking
services are offered in urban and rural centres. In the UK and GCC, HBL focuses on
trade finance and remittances for the South Asian Diaspora in addition to basic banking
facilities.
HBL has always been a bank and a brand for the masses, with a history that is
inextricably linked with the history of Pakistan itself. As it continues to grow, both locally
and abroad, it strives to embody its brand personality: honest, approachable, and
inclusive.
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HBL is currently rated AA+ (Long term) and A1+ (Short term)*. It is the first Pakistani
bank to raise Tier II Capital from external sources.

HBL's Vision, Mission and Values

Vision
Enabling people to advance with confidence and success.

Mission
To make our customers prosper, our staff excels and creates value for shareholders.

Values
Our values are the fundamental principles that define our culture and are brought to life
in our attitude and behavior. It is these values that make us unique and Unmistakable.
Our values are defined

Objectives
Following are some of the main objectives of HBL.
To earn profit for the Bank itself and maximize its shareholders value.
To provide solutions for multiple requirements of clients of diverse financial
nature.
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 To manage with the changing trends of the modern day financial market.
To be a diversified bank by offering all basic consumer services along with
Specialized services
Honest and ethical conduct, including ethical handling of actual or apparent
conflicts of interest between personal and professional relationship.
To provide employment opportunities to people.
To help in development and industrialization of the country.

Excellence
This is at the core of everything we do. The markets in which we operate are
becoming increasingly competitive, giving our customers an abundance of choice.
Only through being the very best - in terms of the service we offer, our products
and premises - can we hope to be successful and grow.

Integrity
We are the leading bank in Pakistan and our success depends upon trust. Our
customers - and society in general - expect us to possess and steadfastly adhere
to high moral principles and professional standards.

Customer Focus
We understand fully the needs of our customers and adapt our products and
services to meet these. We always strive to put the satisfaction of our customers
first.

Meritocracy
We believe in giving opportunities and advantages to our employees on the basis
of their ability. We believe in rewarding achievement and in providing first-class
career opportunities for all.
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Progressiveness
We believe in the advancement of society through the adoption of enlightened
working practices, innovative new products and processes and a spirit of
enterprise

HBLs Code of Corporate Governance :The Code of Corporate Governance issued by the Securities & Exchange
Commission of Pakistan for establishing a framework of good corporate
governance to manage a company in compliance with best practices has been
made applicable by the State Bank of Pakistan to banks in June 2002.
HBL Board of Directors has adopted the Code of Corporate Governance and
necessary actions have been initiated for compliance with all applicable and
relevant clauses. The bank applies the principles contained in the Code in the
following manner:
Except for the Chief Executive Officer, all the other directors are nonexecutive directors.
None of the directors of the bank are serving as a director in ten or more
listed companies.
The directors are registered as tax payers and to the best of our knowledge
none of them have defaulted in payment of any loan, to a banking company,
a development financial institution or non banking financial institution, or
stock exchange.

 The bank is in the process of preparing a Statement of Ethics and Business

Practices which shall be signed by the directors and employees of the
bank.
The Board has already adopted its vision / mission statement, overall
corporate strategy and significant policies.
All the major decisions relating to investment and disinvestment of funds,
remuneration and terms and conditions of the Chief Executive Officer are
taken or ratified by the Board.
As and when present, the Chief Executive Officer presides over meetings of
the Board as no Chairman has been appointed by the Government.
The Board meets at least once in every quarter. The Chief Financial Officer
and the Company Secretary also attend the meetings of the Board.
Directors are aware of the relevant laws applicable to the bank, its policies
and procedures and provisions of the Memorandum and Articles of
Association to manage the affairs of the bank on behalf of the shareholders.
The Board has approved the appointment of Chief Financial Officer and
Company Secretary including their remuneration and terms and conditions.
An effective internal audit department has already been established.
The Directors Report for this year has been prepared keeping in view the
requirements of the Code and fully describes the salient matters required to
be disclosed.
The financial statements of the bank have been duly endorsed by the Chief
Executive Officer and the Chief Financial Officer.
The directors do not hold any interest in the shares of the bank.
The bank has complied with all the applicable corporate and financial
reporting Requirements.
The statutory auditors of the bank have confirmed that they have been given
a satisfactory rating under the quality control review programme of the
Institute of Chartered Accountants of Pakistan and that the firm and all its
partners are in compliance with International Federation of Accountants
(IFAC) guidelines on code of ethics as adopted by the Institute of Chartered
Accountants of Pakistan.
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 An Audit Committee has been formed and it met twice during the second
half of 2002. The terms of reference have been framed and advised to the
Committee. On recommendation of the Audit Committee the Board has
approved the financial statements of the bank.
This Statement of Compliance with best practices of corporate governance
is being published and circulated along with the annual report of the bank.

PRODUCTS OFFERED BY HBL

With a customer base of 5 million and a network of more than 1,450 branches in
Pakistan, HBL is the largest private bank in the country. Their network means that
they are geographically closer to their customers than any other bank. This gives
the insights needed to provide a variety of products that directly reflect customer
needs.
HBL caters to all market segments, offering products that are as diverse as the
people they service. They remain resolute in their commitment to provide products
that are competitive and services that are exemplary. Products offerings are
meant for individual as well as business customers.

Products for Individual Customers:

HBL Car To Car
HBL CarToCar is a revolutionary car-financing offer. It makes the car of your choice
affordable and practical with a buy back guarantee. HBL CarToCar offers
matchless features and unique options at the end of the lease. Now you can drive
a new car at the end of every two years.

HBL Car loan: HBL 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.

HBL Deposit Accounts

HBL offers a wide range of accounts suited to meet individual customer needs.

Term accounts

Saving accounts

Current accounts

Foreign Currency accounts

HBL credit card

Welcome to a world of convenience and flexibility. Accepted at over 29 million
merchants worldwide, HBL Credit Card makes shopping fun and paying
simple. So make the most of your shopping experience. HBL credit card gives
numerous benefits such as

Affordability
Flexibility
Security
Convenience
Supplementary Cards

HBL HomeLoan
HBL HomeLoan offers financing options to purchase a new house or renovate an
existing house.

Outright Purchase: The outright purchase loan option provides financing

for buying a new house.
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Home-improvement loan: option provides financing for renovating your

house

HBL Bancassurance
HBL and New Jubilee Life Insurance Company Limited (NJLI) introduce Amaan
(Retirement Plan) and Tabeer (Child Education & Marriage). These products have
been designed keeping HBLs customer base as the focus and will provide life
insurance along with an investment option.

HBL Visa 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.

HBL PhoneBanking services

HBL PhoneBanking can save a trip to the branch. Customer query is resolved in a
single telephone call from anywhere and at anytime.

HBL Fast Transfer

lets you receive your remittance instantly and absolutely free. HBL - Pakistans
largest banking network - provides unmatched convenience and a confirmation
SMS to inform you that your money is ready for collection.

HBL Mutual Funds

Provides stable stream of income with a moderate level of risk by investing in fixed
income securities/instruments.
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Products for Business Customers:

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

Commercial Banking Products

: For customers with an annual

turnover between PKR 50 million to PKR 300 million, the Commercial Banking
group provides a wide range of products that meet specific customer needs. They
provide financing for the following:

Working Capital

Procurement of Inventory

Receivables

Procurement of Machinery

Expansion of production facilities

Import of raw materials

Exports

Guarantees

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. HBL provides following services to
meet your funding requirements of corporate clients:

Working Capital Finance, including Overdraft, FE Loans, etc.

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Pre and Post Shipment Export Financing (PKR and USD based)

Import Financing (PKR and USD based)

LMM Funding

Receivable Discounting

Islamic Banking facilities

Cash Management Services

Trade Services including Letter of Credit, Letter of Guarantee and

Standby Letter of Credit, etc.

The

Investment Banking Group is a market leader. It provides innovative

capital strategy solutions to major local and multinational entities. HBL offers fullservice Investment Banking capabilities to its clientele. This year alone, HBL has
closed over thirty transactions with a cumulative worth of over USD 2 billion. This is
a testament to the out-of-box thinking and the innovative products they bring to
their customers. The Investment Banking Group functions in three specialist
business areas: Project Finance, Debt Capital Markets & Syndications and Equity
Capital Markets & Advisory.

Islamic Banking

is a growing market segment that offers attractive

opportunities to potential and existing customers. At HBL, Islamic Banking offers

Shariah compliant products and services to meet the short and long term
requirements of business, trade and industry.
Corporate and Commercial customers can choose from Shariah compliant banking
solutions to meet their business needs.

Ijarah (Leasing): Medium to long term facility for vehicles, plant and
machinery leased out to the client on rental basis

Diminishing Musharaka: Medium to long term facility for vehicles, plant

and machinery on joint ownership basis

Murabaha Local and Import facilities for purchase of raw materials, semi
finished and finished goods, stores or spares

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Trade Services Letter of Credit Facility, Collection of Foreign Bills,

Collection of Local Bills, Letter of Guarantees

HBL Zarai Banking facilities are spread across the country and provide
financing through more than 800 of our branches. HBLs presence in all agriculture
belts of the country ensures easy access to farmers in rural areas.

HBL

ZaraiBanking provides loans to small-scale land owning farmers as well as large

institutionalized and alliance based finance, enhancing agricultural harvest and, in
turn, economic output of the country.

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