Professional Documents
Culture Documents
EXECUTIVE SUMMARY
We have established a new record in the banking sector by achieving pre-Tax Profits of Rs.
15.14 billion for the year 2007.Net profits climbed to Rs. 2.04 billion from Rs. 10.1 billion.
Given the wide geographical operations of Habib Bank Group in 25 countries, this reflects the
benefits of embedding technology in all parts of the Bank.
In Consumer Banking we introduced Auto Financing and Life Style Financing Scheme for
consumer durables and further expanded the Flexi Loan Scheme. HBL was the first bank to offer
low cost US Dollar financing to help exporters and now has over Rs 12 billion in such loans, the
largest of any bank in Pakistan.HBL also launched Online Banking, Internet Banking and PC
Banking in 2008, offering a full service, round-the-clock access to banking.
With inflation below 11%, the State Bank cut the Discount Rate to 12.5% from 113.5%
in January 2008. The increase in foreign exchange reserves has led to strong growth in banking
sector deposits. For the overall banking sector, average lending rates have declined by 2.75% and
yield on government securities has declined by 3.5-8%, with steeper falls in the second half.
Customer deposits grew from Rs 273 billion to Rs 306 billion (12%) and Assets from Rs 334
billion to Rs 403 billion (21%). Net Revenues increased from Rs 14.1 billion to Rs 16 billion
(+13%). Habib Bank also had continued success in recovery of defaulted loans in 2008, with
cash recoveries of Rs 3 billion.
Overall, return on customer loans declined from 10.5% to 8.5% a reduction of 2%. Declining
yields on customer advances, T Bills and National Saving products have forced us to lower rates
on our deposits. This narrowing of spread reduced the Bank’s profitability by around Rs 3
billion.
Corporate and Investment Banking Group continues to face tough price competition, as the
market growth has been limited. Our International and Overseas Banking Group is an invaluable
asset of HBL. Economic growth is expected to pick up, with low interest rates leading to higher
investment.
University Of Sargodha
Internship report on Habib Bank Ltd
2
Mission Statement
“To make our customers prosper, our staff excel and create value for shareholders”
It was very difficult for Pakistan to build up its own Banking system immediately after
independence without sufficient resources. Following the announcement of the partition plan in
June 1947 there was a haste movement on the parts of banks to transfer their funds and accounts
across the borders. The banks having their registered offices in Pakistan were transferred to
India. In an effort to bring about the collapse of the new state by the persecuting an international
policy of withdrawal, the Indian bank offices closed quickly. Those banks, which stayed, were
considering the winding up of their business. By 30th June 1948 the number of schedule banks in
Pakistan declined from mere scratch.
Today there are more than 7000 branches of commercial banks along with an established
network of supplementary financial institutions. All this development in the banking sect is the
result of untiring efforts of four decades.
University Of Sargodha
Internship report on Habib Bank Ltd
3
With a domestic market share of over 40%, HBL was nationalized in 1974 and it continued to
dominate the commercial banking sector with a major market share in inward foreign
remittances (55%) and loans to small industries, traders and farmers. International operations
were expanded to include the USA, Singapore, Oman, Belgium, Seychelles and Maldives and
the Netherlands.
On June 13, 2002 Pakistan's Privatization Commission announced that the Government of
Pakistan had formally granted the Agha Khan Fund for Economic Development (AKFED) rights
to 51% of the shareholding in HBL, against an investment of PKR 22.409 billion (USD 389
million). On February 26, 2004, management control was handed over to AKFED. The Board of
Directors was reconstituted to have four AKFED nominees, including the Chairman and the
President/CEO and three Government of Pakistan nominees.
Commercial Banking:
HBL’s Commercial Banking Group targets medium sized companies with a turnover of at least
PKR 50 million. Our business units are located in Karachi, Lahore, Faisalabad, Sialkot,
Gujranwala and Peshawar. Each unit is dedicated to service business clusters located within
these cities.
We have the ability and the resources to meet the needs of your business with our pro-active,
responsive and experienced Relationship Managers who are committed to understanding your
business.
We offer financing for the following:
• Working Capital
• Procurement of Inventory
• Receivables
• Procurement of Machinery
• Expansion of production facilities
• Import of raw materials
• Exports
• Guarantees
University Of Sargodha
Internship report on Habib Bank Ltd
4
Management Committee
Names Designation
Zakir Mahmood President and Chief Executive Officer
University Of Sargodha
Internship report on Habib Bank Ltd
5
Management Hierarchy
University Of Sargodha
Internship report on Habib Bank Ltd
6
PRESIDENT
BOARD OF DIRECTOR
REGIONAL CHIEF
ZONAL CHIEF
BRANCH MANAGERS
Business Groups
University Of Sargodha
Internship report on Habib Bank Ltd
7
CIBG serves large institutional and corporate customers in Pakistan through 12 dedicated
corporate banking centers in all major cities. The CIBG portfolio consists of most of the largest
names in the market and represents all major industry groups, including textiles, large scale
manufacturing, telecommunications, petrochemicals, fertilizer, airlines, transportation and
services. It offers its clients a comprehensive range of banking services via a one window
interface through designated relationship managers.
The role of our Treasury is reviewing, streamlining and controlling the Bank’s domestic
and international money and foreign exchange markets related operations for the maximization
of returns on assets and equity, aiming to transform treasury related risks into safe revenues on a
continuing basis.
University Of Sargodha
Internship report on Habib Bank Ltd
8
basis for many of our other business lines, corporate and investment banking and treasury
activities.
1. Current Deposits
In the type of account the client is allowed to deposit or withdraw money as and when he
likes. He may, thus, deposit or with draw several times in the day if he likes. Usually the bank
allows this and service chargers are deducted by the bank and current deposit account.
2. Saving Bank Deposits
This type of account is for those persons who want to make small savings. This type of account
is opened with Rs. 100. In this case deposits can be made only up to a costing amount and with
drawls are allowed twice a week. If the depositors wants to withdraw more than Rs. 15000 a
seven days notices is required before the withdrawal.
University Of Sargodha
Internship report on Habib Bank Ltd
9
a) Pay-in-Slip
When money is to be deposited in the bank the pay in slip is to be filled. The object of this
book is to provide the customer with the bank’s acknowledgement for receipt of money to be
credited his account.
b) Cheque Book
University Of Sargodha
Internship report on Habib Bank Ltd
10
A cheques book contains a number of cheques, which is given to a customer upon written
request and after marking the payment for the cheques book. It enables a customer to make
withdrawal from his account or make payment to various parties by issue of cheques.
c) Pass Book
Passbook is a copy of the customer account as it appears in the books of the bank. ; The
clerk in this book records balance. But now a day due to computerization the concept of
passbook is not in practice.
The banker may close the account of the customer due to following reasons:
i. Notice by a Customer
ii. Death of a Customer
iii. Customer’s Insolvency
iv. Customer’s Insanity
v. By order of court
vi. Unsatisfactory operation
ADVANCES DEPARTMENT
1. Introduction
2. Securities.
3. Types of advances
University Of Sargodha
Internship report on Habib Bank Ltd
11
INTRODUCTION
The function of advances department is to lend money in the form of clean advances,
against pr9omissory notes, as well as secured advances against tangible and marketable
securities. The bankers prefer such securities that do not run the risk of general depreciation due
to market fluctuations.
Common Securities for the banker’s advances are as under:-
SECURITIES
1. Guarantees
When an application for advance cannot offer any tangible security, the banker may rely
on personal guarantees to protect himself against loss on advances or overdraft to the applicant.
2. Mortgage
A mortgage is the transfer of an interest in specific immovable property for the purpose
of security the payment of money advanced or to be advanced by way of loan, and existing or
future debt, or the performance of an engagement which may rise to a pecuniary liability. The
transfer is called a mortgagor, the transferee a mortgage.
Hypothecation
When property in the shape of goods is charged as security for a loan form the bank the
ownership and possession is left with the borrower, the goods are said to be Hypothecated The
essence of hypothecation is that neither the property in the goods not the possession of them are
possession is left with the borrower, the goods are said to be Hypothecated the essence of
hypothecation is that neither the property in the goods not the possession of them are possessed
by the lender, but the security is granted by means of letter of hypothecation, which usually
provides for a banker’s charge on the hypothecation goods.
4. Pledge
In a pledge the ownership remains with pledge, but the pledge has the exclusive
possession of property until the advance is repaid in full. While in case of the default the pledge
has the power of sale after giving due notice.
5. Promissory Note
University Of Sargodha
Internship report on Habib Bank Ltd
12
TYPES OF ADVANCES
The advances which are given by Habib Bank Limited are as under:-
1. DEMAND FINANCE (Ordinary Loan)
Demand Finances are those advances which are allowed in lump sum for a fixed period
and are repayable lump sum or gradually in installments.
TYPES OF ADVANCES
a. Demand Finance (Packing Credit)
Scheme introduced by State Bank of Pakistan for exporter of carpet, surgical instruments,
at zero percent rate of interest. While banks provides at concessional rate of interest.
b. Loan ordinary (Demand Finance to Students)
Qarz-e-Hasana Scheme Loans are allowed to the students, teachers without any interest
or mark up with the recommendations of the MPA or MNA.
c. Demand Finance (Staff)
Loans are offered to the staff of the following four categories.
i. House Building Loans against mortgage of property.
ii. Loan for purchasing vehicles.
iii. Loan equivalent to month’s salary.
University Of Sargodha
Internship report on Habib Bank Ltd
13
SMALL LOANS
Loan is allowed to contractors clearing and forwarding agents.
5. FINANCE AGAINST THE FOREIGN BILLS (FAFB)
The advance facility is allowed both to local foreign bills and is classified as under:-
University Of Sargodha
Internship report on Habib Bank Ltd
14
i. FAFB (Local) advance against Railway receipts and truck receipt, a company with bills
of exchange and invoices, are given under this head.
ii. FAFB (Foreign) advances against foreign bill, covering bills of exchange bills of lading
airway bills of exchange bills of lading airways bills etc.
6. AGRICULTURE LOANS
Loans to the farmers with holding up to 25 acres for meeting their short terms, medium
and long terms Agricultural production requirements, such as:
i. Agricultural inputs
ii. Tube wells
iii. Live Stock Framing
iv. Land improvement
7. INDUSTRIAL LOANS
Besides the short-term loans which play a part in working capital medium and long-term
loans are also given to industrial sector for purchase of machinery and other capital nature goods.
ACCOUNTS DEPARTMENT
Types of Supplementary
a. Debit Supplementary
b. Credit Supplementary
University Of Sargodha
Internship report on Habib Bank Ltd
15
Debit supplementary is used for debit voucher and credit supplementary is used for credit
voucher books and registered maintained by bank are as follows:
1. General ledger
2. Statement of daily affairs.
3. Cash book or Cash cum day book.
4. Transfer book
5. Income and expenditure ledger, etc.
INCOME INCLUDES
1. Brokerage (A bank sells and buys share, stocks, debentures, other securities and receives
payment for these services).
2. Discount
3. Service Charges
4. Rent (On building, Bank Lockers)
5. Commission
EXPENDITURES INCLUDES
1. Salaries, allowances and provident fund
2. Rent, taxes, insurance, lighting etc.
3. Profit paid on deposits and borrowings
4. Postage, telegram and stamps
5. Stationary, printing and advertisement charges etc.
6. Auditor’s fee and legal charges.
7. Others
REMITTANCE DEPARTMENT
University Of Sargodha
Internship report on Habib Bank Ltd
16
University Of Sargodha
Internship report on Habib Bank Ltd
17
1) Credit Cards
• Gold Card
• Green Card
Welcome to a world of convenience, flexibility and opportunity. The HBL Credit Card will add
simplicity and excitement to your life. Accepted at over 24 million merchants worldwide, HBL
Credit Card makes shopping fun and paying simple. Make the most out of your shopping
experience with your very own HBL Credit Card.
Benefits
• Convenience
• Security
• Affordability
• Cash Advance
• Balance Transfer Facility
• Internet shopping
2) HBL ATM
ATM can pay cash at odd hours within your withdrawal limit as long as there is balance in your
account. You can get cash from any Habib Bank ATM regardless of the fact that your account is
in a different branch or a different city. You can check your account balance and get a printed
mini statement. It is an extremely convenient way of banking, totally oblivious of time and
location. Money when you need it! The good thing about it is that it is a user-friendly machine.
The usage of ATM in Pakistan is gaining ground perceptibly. The shared ATM network,
which has obviously come to stay, is contributing to the usage factor due to unprecedented
convenience of timeless banking. Habib Bank has a large ATM network and enjoys the privilege
of being a founder-member of a fast expanding shared ATM network.
3) Debit Card:
University Of Sargodha
Internship report on Habib Bank Ltd
18
HBL Visa Debit Card allows you to pay for your purchases directly from your bank account.
You don’t 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.
Benefits
• No Interest
• Ease & Security
• No Liability
• International Recognition& Acceptability
• Spending Limits
• Free Account Statement
• 24 hour Customer Service
• Global Customer Assistance Service
University Of Sargodha
Internship report on Habib Bank Ltd
19
Eligibility
Salaried Individuals Self-Employed Business
persons/ Professionals
Documentation
Salaried Individual
• Copy of CNIC
• 2 recent passport size photographs
• Latest original salary slip and personal bank statement for last 3 months
University Of Sargodha
Internship report on Habib Bank Ltd
20
• • Proof of business
• Accessibility: Issuance from more than 700 branches across the country.
• Convenience: Encashment at more than 1400 branches.
• Choice: Available in denominations of Rs. 10,000, 25,000, 50,000 and 100,000.
• Guarantee: Prompt refund in case of loss or theft.
• Advantage: Convenience of transferability.
• Facility: Safety of special security printing.
• Freedom: Flexibility of no expiry date.
6) ACCOUNTS:
CURRENT ACCOUNT:
a) Eligibility:-
a) All Pakistani’s Resident/Non-Resident, Individuals (Single-Jointly) Companies/Firms etc.
can open and operate the Account.
b) Any Foreign National Individuals (Single-Jointly) having valid Resident Pakistan
VISA/Work Permit can open and operate the Account.
b) Features:-
University Of Sargodha
Internship report on Habib Bank Ltd
21
a) Eligibility:-
b) Conditions
Value Account:
a) Eligibility:-
Features:-
• 7% profit
• Minimum balance Rs. 10,000
• Free ATM/Debit Card
Supervalu Account:
a) Eligibility:-
Features:-
7.25% profit
University Of Sargodha
Internship report on Habib Bank Ltd
22
Tabeer is a plan that provides parents with a means to accumulate a fund over a period of time
which can then be used to pay for a child’s education or marriage. Plans are available for both
under and over 45 years of age.
Features:
Eligible age 18 – 60 years
Minimum payment Rs. 3,000 per month
Benefit on In addition to other benefits, Rs. 500,000 will be paid for the marriage of the
accidental death nominated female child, given that female child is at least 18 years of age
University Of Sargodha
Internship report on Habib Bank Ltd
23
An Aggressive growth strategy is in place with the retail bank being the generator of stable low
cost deposits. Recent developments include:
• Branch refurbishment
• Upgrade in technology
• Launching of new and re-branded deposit products
The Demand for private sector credit has been relatively flat; we expect it to improve later in the
years. There will be a focus on developing the synergy between the corporate and investment
bank and a focus on developing the SME segment with its higher margin. Revenues from
Bancassurance and other services are Likely to increase as the year progresses. Global Treasury
has been reorganized and repositioned, this will augment earnings and enable the group to
enhance its shares in finance area.
The Bank launched its credit card. While there is tough competition in the credit card market, we
believe that we will be able to position the bank to take on lead role in the next five years. The
credit card business will take 2-3 years to achieve profitability. The consumer bank is expected
to become major revenue generated. HBL has successfully implemented anti-money laundering
software and KYC procedures throughout its network.
The first phase of Branch refurbishment will see 170 Branches (Urban & Rural) renovated
throughout Pakistan over 2008. Over the next five years new building projects will be
undertaken in major cities. Human Resource challenges persist and the bank continues to invest
in recruiting, retaining, and training high achievers and experienced professionals. The bank is in
process of developing and implementing strategies for training staff at different levels within the
Bank.
As every body knows that "Knowledge without practice is sterile "In order to give vent to
this idea an Internship program of two months has been arranged in different esteemed
University Of Sargodha
Internship report on Habib Bank Ltd
24
organizations during BBA(Hons.). In this regard on 5th of July 2008, I was asked by my principal
to go to Habib Bank to have an internship of two months there. So as per standing order of my
Zonal Chief I was assigned to work under the supervision of AVP/Manager of HBL Branch
Chowk Satellite Town Sargodha. On my first day of Internship, Manager handed me over the
charge of Assistant to Accountant.
As three departments namely Accounts, Cash and Billing, and Clearing were being
managed by the Manager in this particular branch. I started my practical training by tockening
the cheques for withdrawals and entering them into token book. This was the routine work that I
had to daily and, at the time of closing exact position of cash in hand, Receipts and Payments
was evaluated. The Manager and the Accountants duly signed this evaluation.
Secondly I was advised by my Manager to be remained vigilant about the fake cheques
giving some instructions for the scrupulous examination of cheques like signature verification
from specimen. Right after two weeks, the date of balancing came. Here balancing means
balancing of ledgers of Current Deposit and Saving Deposits. The balancing of Current Deposit
Ledgers was done on weekly basis while Saving Deposits Ledgers were balanced on semi
monthly basis.
Then I collected bills of FESCO, PTCL and SNGPL during period of my internship. I
also used to write scrolls, which are written to keep record of bills collected by the branch and
one copy of them is sent to the concerned organization.
After one month I came under the supervision of the Cashier who got me to know, how
the books of cash are balanced at the closing of each day. I too learnt to prepare General Ledger
which is called as the mother of all books used in the branch. It was really a tough and daunting
task. I consumed lot of my time in scrolling the Utility bills of WAPDA, TELEPHONE, and
SUIGAS, the collection from these bills were to be performed by me and after the proper
vouchering of these bills, a copy of collections was sent to respective departments.
After Six Weeks My Manager tells me about the transfer book which keeps the record of
the transfer of funds between clients of bank.
University Of Sargodha
Internship report on Habib Bank Ltd
25
Habib Bank Ltd. enjoys a 40% market share as far as the domestic deposits are concerned,
which is an important factor to measure the success of a Bank. This percentage is second only to
National Bank of Pakistan. The Bank has got the largest number of branches in Pakistan and also
has the highest number of employees. The most recent figures although not known due to the
current restructuring.
With all the good things in it, every business has always got some internal strengths and
weaknesses pointing out which, it can create opportunities and avoid from threats.
SWOT ANALYSIS
Strength
Weakness:
University Of Sargodha
Internship report on Habib Bank Ltd
26
Opportunities
Threats
1) DE - MOTIVED EMPLOYEES
2) LARGE NUMBER OF COMPETITOR
3) REDUCED AREA NETWORK/BANKING
RECOMMENDATIONS
As we seen from the previous analysis of the financial statements we have realized that
that Habib Bank is performing very well since its inception. It is quite difficult to give suggestion
University Of Sargodha
Internship report on Habib Bank Ltd
27
to improve the banking conditions Habib Bank Limited. As we know that nothing is perfect,
there is always a room for improvement, so I have found during my internship can be made up
taking into account the following suggestions.
• The bank is also in process of computerizing its records which is good sign but it is
going on with small progress Computerization must be done on early basis. This will
help in increasing efficiency of work don, customer’s satisfaction decreases the
stationary cost and resultantly it will increase profits.
• In Past Habib Bank Limited has always being suffered from bad Government
policies. Government intervention should avoid completely.
• 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.
• Fresh graduates must be recruited. As the combination of Experienced and fresh can
produce better results and it will improve the efficiency of management.
• 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 plan
must be launched for client’s awareness.
University Of Sargodha
Internship report on Habib Bank Ltd
28
• Banks different schemes must be conveyed to the targeted customers so that to have a
reasonable share in market.
• Bank should help the society by providing interest free loans to the Talented Students.
University Of Sargodha