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Internship Report submitted to the Department of Administrative

In Partial Fulfillment of the Requirements for the Degree of
Master of Business Administration


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All praises and thanks for Almighty Allah who is entire source of
knowledge and wisdom to mankind. Who gave me the strength, patience,
courage and enthusiasm needed to write and complete this report, then to my
friends who assisted me in this effort and we worked daylong to accomplish
this assignment and to my parents who supported me financially and
encouraged me morally.
I worked in the different department of the Habib Bank Limited branch
G.T. Road Gujrat of Pakistan for the aim to get the practical knowledge. The
employees of the HBL are very cooperative who provide me all the necessary
information required to me for the completion of the report.
It was pleasure for me to be sent to the HBL branch G.T. Road Gujrat.
I am very thankful to the honorable internship incharge. It was a very healthy
activity for me.
The preparation of this report was a massive undertaking but the highly
competent and experienced bankers of HBL branch G.T. Road Gujrat.
Provided me with all assistance, information, advice and suggestions that I
needed which contributed essentially to this report.

Executive Summary:

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This report is for academic purpose. In this report I have mentioned the
history, role of organization in Pakistan, network, working of different
departments, particular information regarding the HBL branch Gujrat,
organizational structure, polices, strategies, SWOT analysis, PEST analysis,
Ratio analysis of HBL, and different problems of HBL and recommendations.
For this report I gather information from Branch Manager and also searched at
internet and collect information about organization.
Every student of Master in Business Administration at University of
Gujrat has a necessary requirement to do Six to Eight weeks internship in any
of the well reputed organization. The purpose of this program is to acquaint
the students with practical applications of theoretical concepts taught to them
during conduct of their MBA program. Really, it was a nice opportunity to
have a close comparison of theoretical concept in practical field, involving the
use of primary and secondary data. All the efforts on the way are summarized
in shape of this Internship Report.
This report has different chapters and each chapter contains
information regarding the particular area. Not only is the introduction of
internship report given but the introduction of HBL.
The word 'Bank' is said to have been derived from the words Bancus or
Banque or Bank. 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. HBLs
branch network is extended all over the Pakistan which has its competitive
edge over all other private sector banks in Pakistan. At the end of this report I
have given my suggestion for the improvement of the bank.

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Table of Contents

INTRODUCTION TO THE REPORT.........................................9


Background of this study:.............................................9


The purpose of this study:..........................................10


Scope of the study:.....................................................10


Objective of the study:................................................10


Methodology of the study:..........................................11





INTRODUCTION TO HBL....................................................13

Overall respective sectors in Pakistan:.......................13


Role of the organization in Pakistan:...........................14


Overall organization and functions of org in Pakistan 15

HBLs Vision, Mission and Values:.....................................15

ORGANIZATIONAL LEVEL..................................................17
2.4 STRUCTURE & FUNCTIONS OF HBL................................18
OBJECTIVES OF HABIB BANK LTD......................................19
SERVICES OFFERED BY HBL:.............................................20


Organization office in which you are working:............20



Introduction of HBL My Branch 1449:...............................22


HISTORY AND BACKGROUNG:.....................................23


Relationship of head office to the branch offices:....24


Number of departments..........................................25


Managerial Department for Development of Business.....25
Credit Department:...........................................................26
Information Technology Department................................26

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Operations Department:...................................................27
Finance Department.........................................................32
Administration Department..............................................32
Account opening department:..........................................33
Cash department:.............................................................35
Bill clearing department:..................................................35
Foreign department:.........................................................36
Fixed Deposits Department..............................................36

Offices or field offices...........................................37

Current staf................................................................38

3.2.1 Current staf of branch according to qualification

and experience.................................................................38

Critical analysis of the branch......................................39

3.3.1 Communication system..............................................39

3.6 Summary..........................................................................40

Introduction of Polices and Strategies of HBL:..................42

4.1 policies..........................................................................42
4.2 STRATEGIES:..................................................................43

Introduction of Specialization Area:..................................47

5.1. SWOT ANALYSIS OF HBL...............................................47


POLITICAL ENVIRONMENT.................................................53
ECONOMIC TRENDS..........................................................53
SOCIO-CULTURAL ENVIRONMENT.....................................54
TECHNOLOGICAL FACTORS...............................................55
LEGAL ENVIRONMENT.......................................................56

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5.3 Ratio Analysis of the HBL:................................................57

5.4 Summary:......................................................................61

CONCLUSION & RECOMMENDATIONS...............................63


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Chapter one is about the introduction to the report. Every student of
Master in Business Administration at University Of Gujrat has an essential
requirement to do Six weeks internship in any of the well reputed
This is an essential requirement of our university. Work done in
organization is written in as a comprehensive report. Internship report is
submitted to our designated teachers. Internship helps us to enhance our
abilities in order to understand the real world organizations and their
workings. I did my internship in Habib Bank Limited Gujrat.
In this chapter brief background of the report is given. The scope,
objectives and purpose of collectively in HBL has been given in chapter one.
The methodology used to data collect is described in this chapter. The
introduction of the specific organization I have chosen for internship is also
included in chapter one.

Background of this study:

Internship during Masters in Business Administration is the

requirement of University Of Gujrat. So I have selected Habib Bank Limited

for internship. Gujrat branch of Habib Bank was located G.T ROAD BR.
GUJRAT. There are many other banks in my town but I prefer to join HBL as I
got inspiration from their efficient services provided to their customers. Their
customers appreciate their service thats why I want to know the key elements
of their success and excited to join HBL.

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The purpose of this study:

The purpose of this study is to inform the students with practical

applications of theoretical concepts taught to them during conduct of their

MBA program. The internship in HABIB BANK is personally arranged by my
own resources and the department gave me a letter for getting this internship.
This study helps us to understand the real working environment in
organizations. This study improves our report writing skills and helps us to
sharp our learning skills and improve our observation.

Scope of the study:

Really, it was a nice opportunity to have a close comparison of

theoretical concept in practical field, involving the use of primary and

secondary data. All the efforts on the way are summarized in shape of this
Internship Report. This Report may describe deficiencies on my part but still it
is an output of a students efforts, for which I beg excuse. In this practice data
of statistical was also collected and data of analytical was gathered along with
its limitations.


Objective of the study:

The main objectives to study in HBL were:

To gain knowledge about the professional environment of the bank.

To enhance my observation.
To know how the banking system runs today.
To be able to move in professional organizations.
To implement the theoretical knowledge at real work place.
To learn more from the experiences of senior managers.
To know how to deal with the customers.
To know the importance of having professional attitude at work place.
To change my thinking about the easiness of job.

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To know that sharp memory and more responsiveness towards work


would increase the interest in work.

To learn more about banking sector as this sector is in boom now days.
To cope out the rapidly changing environment.
To know about the effective and efficient service to their customers.
To know about the technology utilized in the banks.
Methodology of the study:

For the completion of my report both primary and secondary data was
utilized. Methodologies used were both:



Primary Data:
Personal observations
Discussion with Bank Personnel
Secondary Data:
Annual reports

I have selected Habib Bank Limited for internship. Gujrat branch of

Habib Bank was the organizations where I have spend 6 weeks as an internee.
To complete my internship at Habib Bank Limited was my top priority as it
was an honor for me to join HBL. The value of HBL is very good and people
have a good image of HBL in their minds. Customers have satisfactory
services getting from bank and feel proud of being the customer of HBL.
Thats why I have also satisfactory period spend at HBL. They not only care
for their customers but workers and internees as well.



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This is the first chapter of the report containing the detail introduction
of the report. This chapter starts from the introduction. Then contains data
about the background of the report. In this chapter study purpose is also
depicted. Objectives and scope of internship at HBL are discussed in detail in
this chapter. Data collected from primary and secondary sources are
mentioned in methodology section of the report. Then the description of
organization I have chosen for internship is made. Now it is the end of chapter
one on the summary. Thus chapter one is all about the complete introduction
to internship report.

Chapter two is about the introduction to the organization. In this
chapter the overall banking system is depicted. This chapter contains

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information about what is the current banking situation in Pakistan. How many
banks are working in Pakistan and how the banks work in Pakistan. Then the
role of specific bank (Habib Bank Limited) is depicted in detail. The overall
introduction of organization is also included in this chapter.
What are the different functions of the organization are also included in
this chapter. Like all other banks, HBL also has its own objectives which are
also the part of this chapter.
Then the specific organization in which I did my internship is also
included. At the end of the report the summary of the whole chapter is written.

Overall respective sectors in Pakistan:

The Banking sector is an integral part of the countrys financial

services industry. The sector witnessed a phenomenal growth in 2001-03

where deposits rose by almost 100%. There are 39 scheduled banks (including
11 foreign banks) operating in Pakistan. Competition is relatively high,
especially after the challenging capital adequacy benchmarks set by the State
Bank of Pakistan to nourish a stable banking system. Attracting foreign
investment and winning profitable customers are the only options left to banks
for survival. Opportunities for foreign banks, especially in consumer and retail

banking, are greater than ever before. In the financial year of 2004-05, the
banking sector experienced growth rates of 21% and 36% in its deposit and
advances portfolio respectively, which in turn, has increased the banks
stability as compared to the preceding year .A significant shift of focus from
industrial lending to consumer products has allowed the banks to enjoy
enormous spreads. However, the manufacturing sector is still enjoying the
highest share in credit facilities extended by the banking industry.

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Banks are financial intermediaries. Financial Sector in Pakistan

possesses a wide spectrum of financial institutions. Commercial banks,







development finance institutions, investment banks, stock exchanges,

corporate brokerage houses, leasing companies, discount houses, microfinance institutions and Islamic banks. They offer a whole range of products
and services both on the assets and liabilities side. Financial deepening has
intensified during the last several years but the commercial banks are by far
the predominant players accounting for 90 percent of the total financial assets
of the system.

Role of the organization in Pakistan:

HBL was the first commercial bank to be established in Pakistan in

1947. Over the years, HBL over 1,455 branches across the country and a
customer base exceeding five million relationships. With a presence in 26
countries, subsidiaries in Hong Kong and the UK, affiliates in Nepal, Nigeria,
Kenya and Kyrgyzstan and representative offices in Iran and China, HBL is
also the largest domestic multinational. The Bank is expanding its has grown
its branch network and become the largest private sector 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. 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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Overall organization and functions of org in Pakistan

HBL has its own identity in the field of banking. HBL has gained name

at national and international level. HBL has following distinct Vision, Mission
and Values:
HBLs Vision, Mission and Values:

Our brand identity is the outward expression of what we stand for as an
organization. This is summarized in our vision, mission and is supported by
our values.
Enabling people to advance with confidence and success.

To make our customers prosper, our staff excel and create value for

Symbol depicts
Bismillah ============Islamic Culture and Values
Sword ============== Power
Lion================ As a symbol of strength


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Our values are the fundamental principles that define our culture and
are brought to life in our attitude and behaviors. It is these values that make us
unique and unmistakable. Our values are defined below:

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

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.

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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We believe in the advancement of society through the adoption of
enlightened working practices, innovative new products and processes and a
spirit of enterprise.
In HBL there is an open management system.
An open management system is one that is influenced by and is continually
interacting with its environment.
Senior Executive Vice President
Executive Vice President
Senior Vice President
Vice President
Assistant Vice President
To make day to day decisions to run the organization to make more
To implement policies approved by board of directors.
To recommend different products / changes in policies / procedure for

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To perform departmental activities.
To supervise activities & direct the organizational source toward,
achievement of organizational goals.
To supervise operational activities of branches.
Monitoring / marketing the products
To render services to customers.
To sell product to the customers.


The main Functions of HBL are:

Collecting cheques and bills exchange from its customers.

Collecting interest due, divided pensions and other sums to customers.
Transfer of money from place to place.
Acting as an executor, trustee or attorney for the customers.
Providing safe custody and facilities to keep jewelry, documents or

Issuing of travelers chafes to give credit facilities to travel.
Issuing of letter of credit to facilitate imports and exports.
Accepting bills of exchange on behalf of customers.
Purchasing shares for the customers.
Undertaking foreign exchange business.
Furnishing trade information and tending advice to customers.


The main objectives of HBL are:
Personalized banking system.
To earn profit for bank itself and maximize the shareholders wealth.
To provide solution for multiple requirements of clients of diverse
financial nature.
Domestic saving.
To cope out the rapidly changing environment.
To matching with the changing trends of modern day financial market.

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Fully modern and atomized services to their customers.

Acceleration in the commercial activities and capture the large market

The credit requirements of different sectors.
Offer credit to the agriculture sector at a lower rate.
Effective and efficient service among the competitor.
The international trade.
The banking services to urban and rural area
Uplift the bank in banking as superior and best banking. Serve

commerce and trade community.

To provide financial opportunity to people.
Honest and ethical conduct, including ethical handling of actual or
apparent conflicts of interest between personal and professional
To help in development and industrialization of the country.
Our brand identity is the outward expression of what we stand for as an
organization. This is summarized in our vision, mission and is supported by
our values.

Commercial Banking
Corporate Banking
Investment Banking
Global Treasury
Islamic Banking
Cash Management
Asset Management
Zarai Banking

Organization office in which you are working:

HBL has many branches in Pakistan and across the world as well. But I

have chosen the HBL Gujrat branch. Many branches of HBL in Gujrat. I
completed my internship in HBL branch.

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This branch is located on the G.T. Road BR. Gujrat. This is located on
such a place where people can go easily and not face any difficulty in reaching
there to get the banking services.
The place where HBL is working is good for transport facility. Every
type of transport has an easy access to this location thus increasing the value
of this branch.
Internee Work:
I have spend in HBL branch 6 weeks. 1 week for products
information, 2 week for account opening, 1 week for clearing dept., 1 week for
cash dept. and 1 week for remittance. My timetable in Ramadan 8 to 1:45 and
in normal day 9 to 5. Starting & ending date my internship is 5 th july to 19th
august 2013.

This chapter is about the introduction to Habib Bank Limited. First of

all there is a complete introduction of overall banking sector in Pakistan. The

current banking situation is described in this chapter. Banking is an important
sector of economy. Banks work as an intermediary and contribute much to the
prosperity in overall economy.
After describing the banking sector the role of Habib Bank Limited is
also mentioned. It is not easy to describe the role of such a large organization
in some pages. But I tried to summarize all of the roles in this report.
Organizations perform many functions, which are derived from the Vision,
Mission and core Values of the Organization. Thats why the Brand name,
Vision, Mission of HBL is also included.
The details of functions performed by HBL are also the part of the
chapter. The objectives of organization are also included. HBL offer many

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services to its customers. The services offered by organization are included in

this chapter.
Above all is the detail of overall banking system and over all structure
of HBL. At the end the HBL branch in which I have completed my internship
is introduced. HBL branch of Gujrat is my designated organization in which I
have completed my internship. Thus chapter two is all about the complete
introduction of the organization.

3 Introduction of HBL My Branch 1449:
Chapter three is about the introduction to the Habib Bank Limited. In
this chapter the overall working of HBL is described. This chapter contains
information about the brief history of the organization. When the bank was
established and who starts it.
HBL branch G.T. Road Gujrat is established 19 august 1975. No of
account is 2484 and base is 380,399.
Banks have a proper communication system through which the head
office communicate to the branch offices. The details of communication
system followed by head office are included in chapter three.
HBL branch of G.T. Road BR. Gujrat has many departments. In this
branch manager, operational manager, assistant manager, cash officer, cashier.
Staff of the branch, their qualifications and experiences is also the part of the
chapter. Branch also has training programs, and details about them are
included in it. Responsibilities of the employees are also written.

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Habib Bank Limited was established by Mr. Ismail Habib (Late) on

August 25, 1942 at Bombay, on the desire of Quaid-e-Azam Muhammad Ali

Jinnah, father of the nation. It was the first Muslim Bank of the sub-continent.
It was established with a paid up capital of Rs. 2.5 million. At an early stage,
the number of its branches was only 12. HBL established operations in
Pakistan in 1947 and moved its head office to Karachi.
At the time of independence, the areas which now constitute Pakistan
were producing only agricultural products raw material for indo-Pak
subcontinent. Partially no industries were there to process the raw material;
therefore the raw material was exported from Pakistan. There were 19 NonIndian foreign Banks which were engaged in the export of crops from Pakistan
with only two Pakistani Banks i.e. HBL and the Australia Bank. The
circumstances were completely un-certain. The confidence of the people had
been shaken by the un-friendly environment and till the time peace had not
been restored, people would naturally have been interested in other Things.
The nation was quite young with extreme scarcity of resources and these
definitely added to the difficulties of the govt., to run its own Banking system
Our first international branch was established in Colombo, Sri Lanka
in 1951 and Habib Bank Plaza was built in 1972 to commemorate the banks
25th Anniversary. With a domestic market share of over 40%, HBL was
nationalized in 1974 and it continued to dominate the commercial banking

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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.

Privatization of Habib bank:

On December 29, 2003 Pakistan's Privatization Commission
announced that the Government of Pakistan had formally granted the Aga
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.

3.1.2 Relationship of head office to the branch offices:

HBL has its head office in the Karachi. HBL has a very quick network
communication system through which the head office sends its messages to
the branches. If head office has an instruction or any kind of information first
head office sends the e-mail to all the Branches and later hard copy was also
send to the each Branch.
Habib Bank has the Anti money laddering department in his head
office. This department checks all the abnormal (which not occur on daily
basis) transactions and asks the subsequent Branch to give the information of
that transactions and check whether this transactions was actually occur or not.

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Furthermore this department makes the Balance sheet on daily basis and if any
mistake occurs in the accounts then it will be corrected in the beginning that
way banks saved from any serious damage.
Audit team comes from the head office on the annually and semi
annually basis to check the accounts. Audit team may also come at any time in
the Banks to check that whether the staff maintaining the customer record on
daily basis or not.
3.1.3 Number of departments
Various departments are working in all the branches of Habib bank to
facilitate the customers.
Followings are the main departments of HBL:

Managerial Department for Development of Business

Credit Department

I.T Department
Manager Operations Department
i. Deposit department
ii. Recovery Operation Department
Finance Department
iv. Internal Audit
v. Administration Department
vi. Account opening department.
vii. Cash department
Lockers department.
ix. Bill clearing department.
Foreign exchange department.
xi. Information Technology Department
xii. Fixed Deposits Department

Managerial Department for Development of Business

This is the important department of HBL. This department is
established to facilitate the customers of the bank. Branch Manager is
responsible for the smooth working of this department. He alone makes his

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customers loyal with the bank. He not only cares for the existing customers
but also try to generate new references to the bank. Branch Manager tries not
only to sustain the relationship of customers to the bank but also tries hard to
strong the relationship of customers to the bank. Branch Manager looking for
presents customers and also tries to take care of future or expected customers
of the bank. Thus, as this department is directly related to make the customer
bank relationship stronger so it is the most important department of the bank
and branch manger directly deals with customers to make them loyal with the
Credit Department:
The function of credit department is to lend money in the form of clean
advances, against promissory 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.
Loans are offered to the staff of the following four categories.
House Building Loans against mortgage of property.
Loan for purchasing vehicles.
The Credit Department is responsible for advancing loans to the
customers. The loans are mainly categorized in two types as given below:

Lending Products:


Banking Products:

To advance loans to labour intensive

Advances to general account holders.

Loans are provided to support the business community. Loan is given

not only to the business sector but other customers are also facilitating by
loans granted by this department.
Information Technology Department
All the information can be shared mutually by the virtue of software
called MYSIS. This information system connects all branches in Pakistan

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with each other through intranet. The banking and treasury transactions
are also made through this system and could be accessed anywhere in all
over the Pakistan.
Software used by HBL
HBL is enjoying the competitive advantage of vast operational area.
There are two types of branches come under HBL network. One type is the
online branches whereas other type is batch branches (offline branches). So
obviously HBL uses two types of different software. All batch branches use
SIMEX software whereas online branches use MYSIS.
MISYS (online) perform two type of system
Cashier system
This system use only cash transaction like cash withdraw, deposited,
Remittance, Accounts opening, LFT etc.
Equation system
Clearing inward or out ward, special or intercity clearing, supervision

Operations Department:
The other important department is the operations department.
Remittance officer is also in this department so increases the value of this
department. Thus there are many operations which fall under this department.
Due to increasing the number of operations under this department, the
department is getting most importance. The operational departments fall under
this head is as follows: Deposit department:

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Deposit department is also an important department. Banks basic

purpose is to get the deposit. The facilities provided to the customers to attract
more and more deposits are of different types. These are as follows: Current Accounts
Make unlimited transactions while maintaining a low minimum
balance every month. HBL is currently offering three types of accounts in
current account category. Their detail and name is as under.
i. HBL Business Value Account
ii. Current Account
iii. Basic Banking Account (BBA)

HBL Business Value Account

Unique transactional account for Businessmen

Up to 5.35%* profit per annum
Profit calculated daily, paid every quarter
No minimum balance requirement
HBL Debit Card and Inter Branch Transaction System (IBTS)

Up to 10 Bankers Cheques free (at minimum balance of Rs.
Funds transfer to any bank through HBL Phone Banking Current Account

Minimum balance of Rs. 5,000

Unlimited transactions
Non-profit bearing
HBL Debit Card and Inter Branch Transaction System (IBTS)

Funds transfer to any bank through HBL Phone Banking

Basic Banking Account (BBA)

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Can be opened with only Rs. 1,000

No minimum balance requirement
Up to 2 withdrawal and 2 deposit transactions free every month
Unlimited withdrawals through HBL Debit Card
Non-profit bearing Savings accounts

Avail the flexibility of making transactions while earning profit on
daily/monthly basis. HBL is currently offering five types of accounts in
savings account category. Their detail and name is as under.
i) HBL Value Account
ii) PLS-Savings Account
iii) Remittance Munafa Plus Savings Account
iv) Daily Munafa Account
v) Daily Progressive Account
HBL Value Account
7.19%* profit per annum
Profit calculated monthly, paid every quarter
Deposit ranges from Rs. 10,000 to Rs. 1,000,000
Two withdrawals free every month
PLS-Savings Account
5.06% profit per annum*
Profit paid bi-annually
HBL Debit Card and Inter Branch Transaction System (IBTS) facilities
Funds transfer to any bank through HBL Phone Banking
Minimum balance of Rs. 20,000
Unlimited transactions
Remittance Munafa Plus Savings Account
Special account for receiving foreign remittances

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5.12%* profit per annum

Profit paid every month
Minimum balance of Rs. 20,000 Daily Munafa Account
Profit calculated daily, paid every month
Up to 8.84% profit per annum*
HBL Debit Card and Inter Branch Transaction System (IBTS) facilities
Funds transfer to any bank through HBL Phone Banking
Minimum balance of Rs. 20,000

Daily Progressive Account

Unique transactional account for Institutions
Profit calculated daily, paid every month

Up to 11.57% profit per annum*

Inter Branch Transaction System (IBTS) facility
Funds transfer to any bank through HBL Phone Banking
Minimum balance of Rs. 20,000 Terms Accounts

Invest your savings in HBL term deposits for a fixed duration and earn
profit while keeping your savings secure. HBL is currently offering one type
of account in terms account category. Their detail and name is as under.

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Profit per annum*

1 Year


3 Year


5 Year


10 Year

10.24% 1. HBL Advantage Account

HBL Advantage Account
Multiple options for tenure and profit payout
Loan facility up to 90% of investment
Minimum investment of Rs. 25,000
Withdrawal at end of fixed term

Foreign Currency Accounts

HBL offers Foreign Currency Accounts in multiple currencies as

savings and term accounts. Their detail is as under.

Savings Account offered in 3 currencies, USD (US dollar), EUR
(Euros) and GBP (UK pound)
Tiered product, with rates depending on choice of currency
To earn profit, minimum balance in USD, EUR and GBP is 1,000
Interest is payable on a quarterly basis HYFFD (High Yield Foreign Currency Fixed Deposit)
Available in 1 month, 2 month, 3 month, 6 month and 12 Month in

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Tiered product, with rates depending on choice of currency and term

Profit paid on maturity only. No interim interest is payable.
All the rate and terms and condition are revised by HBL after every six
months periods.
Recovery Operations Department
The main function of this department is to recover the debts of the
bank. In the previous political government huge amount of loans were granted
on political grounds which are mostly bad debts. This department is trying to
recover those old and new debts.
Finance Department
The Finance Department is further divided into two departments:


It is Karachi based and deals in money market

It deals in accounting functions and preparations of

different statements.
Internal Audit
This Div. works under the Board of Directors. It has a President who is
CIA qualified. Its function is to observe the internal control. The audit is
conducted quarterly. The audit teams inspect every branch of the bank.
Surprise visits are also conducted by the auditors.
Administration Department
All the matters of administrative nature are being dealt in this
department. This includes: transfers, posting, promotion orders, leave orders,
approvals etc.
Account opening department:
Basic function of the accounts department is to open new account and
facilitate the customer for the account opening purpose. There are certain

Page 30

formalities which are to be observed for opening of an account with a Bank.

These formalities in brief are as under:
Documents require for opening an account:

Copy of CNIC
Service certificate or student card.
Utility bill
Provisional receipt
KYC (Know Your Customer)
Pictures of account holder

Allotment of Account Number

After going through the procedure above mentioned an account
number is given to the customer. One thing is very important for
understanding that even going through the above mentioned procedure
successfully, it does guarantee the opening of account. After allotment of
account number it remains block for two days as the verification process is in
process in these two days. This is why account is inactive for its first two days.
Specialty of Account Number
Fourteen digits account number is allotted to the HBL account holder.
The first four digits are code of HBL branch where account is going to be
opened, afterward eight digits are customer account serial number and last two
digits indicates type of account. For example
Branch Code

Account Serial #

Type of account

Posting the account on the system:

After that officer has to post the new account on computer system for
further processing. During the process customer id and account number is

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generated. New account remains active for one day after that it is blocked by
the head office until CNIC of the customer is verified from NADRA.
Cheque book issuing:
After the CNIC verification account opening officer has to issue a
cheque book to customer so that he can be able to make withdrawal from his
account. Now a day in Habib bank cheque book issuing process is centralized
that take 06 days to complete.

Types of accounts:
Individual accounts:
Individual accounts are the most common personal investment
accounts. Opened by single person.
Joint accounts:
A joint account occurs when two or more than two customers have one
account. The parties to a joint account are considered in law as they are one
Business accounts:
Business accounts can be opened by institutions, companies,
partnerships, trusts and non-profit organizations. Following documents are


The banker may close the account of the customer due to following

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Notice by a Customer
Death of a Customer
Customers Insanity
By order of court

Cash department:
Cash Department is very sensitive and risky part of the bank. Very
causations and competent personnel are needed for the Job. HBL has really
such a diligent staff with appreciable competencies and will to do work. Main
function of cash department is to deal with cash payment and cash receipts.
Bill clearing department:
Every bank acts in two way i.e.
Paying Bank
Collecting Bank
Here in theory no legal obligation on a banker to collect cheques, drawn up
to other banks for a customer. It is, however, an important function of crossed
cheques. A large part of this work is carried out through the N.I.F.T.
NIFT- National Institutional Facilitation Technologies (Pvt.) Limited:
NIFT is a joint venture between a consortium of six major banks and
private sector. It is responsible for the establishment and management of
automated clearinghouse facilities in Pakistan. NIFT is proactively involved in
the modernization of payment systems in Pakistan.


The following are the main functions of clearing department.
To accept transfer deliveries and clearing cheques from the customer of
the branch and to arrange for their collection.

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To arrange the payment of cheque drawn on the branch and given for
collection to any other branch of Habib Bank of Pakistan or any other
members, or sub-members of the local clearing area..
To collect amounts of cheques drawn on members, sub-members of the
local clearing house, sent for collection by those Habib Bank Limited,
branches which are not represented a the local clearing area.
Foreign department:
International trade is growing and with the development of
international trade it has become more imperative. For countries to devote
more and more attention to the complicated mechanism of Foreign Exchange.
It is more important in case of developing countries. It is need of time, that a
country should conserve its foreign exchange resources.

Issuing foreign exchange accounts cheques books:

Another function of foreign exchange department in Wah cantt branch
is to issue foreign exchange accounts cheques books to customers on request.
This process is not yet centralized. Cheque book is issued within 15 minute of
receiving request from customers after making necessary register entries and
posting stamps on it.
Fixed Deposits Department
Fixed deposits are those which can be withdrawn only after the
maturity period. In this type of deposits the Bank allows high rates of interest
depending on the time period of deposits. The shorter the period of deposits,
the less will be the interest and vice versa

Offices or field offices

Offices mean the Head office which is situated in Habib Bank Plaza,
Karachi, Pakistan. HBL is the largest bank in Pakistan. Field offices mean the
Branches. HBL has the largest domestic branch network in Pakistan. The bank
has a network of over 1450 branches in Pakistan and 55 branches worldwide

Page 34

in 26 countries. It has a domestic market share of over 40%. It continues to

dominate the commercial banking sector with a major market share in inward
foreign remittances (55%) and loans to small industries, traders and farmers.
HBL works in domestic as well as international arena.
Domestic branches


International branches


Subsidiary branches

Affiliate branches


Representative offices

Offices in 26 countries across 5 continents.

HBL 1450 branches are spread from one end of the country to its last
frontiers in the north, east, west and south thus contributing to the overall well
being of the communities they serve. Their presence in the country diverse
urban regions as well as in the rural areas, including far flung locations of the
country. Often classified as in accessible areas, creates opportunities for HBL
to provide financial services that compliment business of varying sizes and

Current staff
The current staff of HBL branch G.T. Road Gujrat has experience and

cooperatively. The branch manager is Asif Imran, operational manager is Sara

Bano, assistant manager is Mirza Tanveer Baig, cash officer Ayesha and
cashier is M. Asif. All staff are very good and cooperative.

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Current staff of branch according to qualification and experience

HBL branch G.T. Road Gujrat has the 8 staff members. Which are as




Mr. Asif Imran

Branch Manager


30 Years

Mrs. Sara Bano


MBA Finance

3 Years


32 years


Mirza Assistant

Tanveer Baig


Mrs. Ayesha

Cash Officer

Mr. M. Asif




Finance 3 Years

( continue)

30 Years

Critical analysis of the branch

I have worked in HBL branch G.T. Road Gujrat. The working

environment of this branch is very well and good. Manager has good
cooperative and good relations with his workers. All the employees or workers
are highly motivated. Salaries of employees or workers are very satisfactory
and they are willing to utilize their energies to the high performance of their

Page 36

branch. Workers gain respect from their manager, coworkers, customers and
public as well.
It is also necessary to hire experts to increase the morale of the
workers. There should be some sort of healthy activities through which
workers can feel easy and get relaxation.

3.3.1 Communication system

Communication is the process of sharing information with other
individuals. Information, as used here, is any thought or idea that managers
desire to share with other individuals. This technique is important for any
manager to be successful.
HBL used both the upward and downward communication.

Interpersonal Communication: The communication activities of Managers generally involve

interpersonal communication sharing information with other members. In
HBL, the information is usually share by writing and sending memos and

Types of Interpersonal communication: There are two types of interpersonal communication

Verbal communication
Non verbal communication

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Verbal Communication:
Verbal communication is the sharing of information through words either
written has spoken.
Nonverbal Communication:
Nonverbal communication is the sharing of information without using
words. Like gestures vocal tones and facial expressions. Interpersonal
communication in HBL Organizational communication is directly relates to
the goal functions, and structure of human organizations. Organizational
success is determined by the effectiveness of organizational communication.

3.6 Summary
This is the end of chapter three. In this chapter the complete
introduction of the HBL branch G.T. Road Gujrat has given. Chapter three is
all about how the branch is working. In this chapter it is described that how the
head office communicates to the branches. What are the communication
channels in branch itself. Details of different departments working in branch
are also given. Details of offices and field offices are also given. Other head
contains data regarding the current staff of HBL. Details of qualifications and
experience of employees is also given. Training of employees, their workload,
salary structure, promotion system, incentive and motivation of employees is
also discussed in detail. Responsibility of employees is also its part.
Communication is also the part of the system. Morale of employees is
necessary to increase. Physical facilities have their necessary to describe. Then
performance and output is measured not only in terms of customer satisfaction
but also in terms of account holders, their deposit and budget as well. Budget
is the important part of the branch so discussed here. At the end precise
summary of the chapter is given.

Page 38

Chapter no. 4

Introduction of Polices and Strategies of HBL:

This is the important chapter of this report. This chapter contains the

policies of HBL. Polices of any organization play an important role in the

Page 39

development of that organization. As polices show the direction of work down

in the organization so polices are the important part of the success or failure of
that organization. As I have worked in the HBL so here I discuss the different
polices of HBL. As polices are the ways through which the organization get
success so the organizations do not usually tell polices of the organization to
outsiders. Due to the most important part of organization polices should be
made stabled and should be persistent.
This chapter is about polices of HBL. As described earlier that polices
should be appropriate and should be understandable to all employees so these
play an important role in the organization. Not only polices but the strategies
are also important to the bank. As strategies are also important so these should
be also clearly defined to those who are working to implement the strategies to
in order to apply polices.
4.1 policies
As described in the introduction of this chapter that polices is the
important part of any organization. Polices kept to be secret and the
information regarding the polices are not fully disclosed to any outsider.
However in this head, I tried to show the procedure adopted to make
the policy, means how polices are made and what polices are made in HBL.
In HBL both the purposes of planning has been used:
PROTECTIVE purpose of planning is to minimize risk by reducing
the uncertainties surrounding business condition.
AFFIRMATIVE purpose is to increase the degree of organizational
According to demographically / political / economic and social sector. Plans
by seeing the external factors

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EXTERNAL FACTORS include political, social, demographic,

consumer, economic, state bank policies and rules effect the bank e.g;
increase in cash equidty badly effect bank.
Planning tools are techniques mangers can use to help develop plans.
when develop plans:
FORECASTING is a planning tool used to predict future environment
happenings that will influence the operation of the organization. It includes
political economical condition, consumer income forecasts than we plan.
TIME SERIES ANALYSIS METHOD is to predict future sales levels
by analyzing the historical relationship in an organization between sales and
Strategy refers to a plan of action designed to achieve a particular goal.
Strategies are the ways through which polices and goals of the organization is
met. So it should also be an important consideration to make the strategies
achievable. Followings are the different strategies which are important.
Another important point is this as there is not fully disclosed information
regarding HBL strategies so the described strategies may not be as much
realistic as that might be in reality.


Strategy implemented in HBL in the following manner.
STEP1: Review organizational objectives

Page 41

HBLs objective is to make other customer prosper and to create value

for their stakeholders.
STEP2: Set worker objectives
To earn profit for the organization
STEP3: Monitor progress
Less complaints
Timely service is provided
Monthly revenue and cost
STEP4: Evaluate performance
Performance efficiency achieving his goals / targets.
His performance is appraised with regard to the targets allocate to staff.
STEP5: Give rewards
Special salary increase
Cash price

HBL makes both narrow-scope and broad-scope research and
development decisions. They can take feedback, circulation of questionnaire
for important decision from top to lower level. Scope of decision depends on
the level of management. Higher the level, higher will be the scope.

Page 42


STEP1: Identify an existing problem

Complaints customer service cash counter

They delay the cash
Notes are not clean
Not behave well

STEP2: List possible alternatives for solving the problem

Change the cash counter staff or being replaced with new hire staff
who are better in education, manner, and dress
Warning to customer staff
Transfer the counter staff to other branch / from present assignment to
non-counter assignment.
STEP3: Select the most beneficial of these alternatives
Option 1 is best
STEP4: Implement the selected alternatives
The counter staff is being replaced with fresh hires.
STEP5: Gather feedback
Less complaints
As the polices made are properly implemented in HBL so the bank enjoys the
benefit of implementing and making the polices. All the employees put full
effort to achieve the polices at the right time. The overall efforts of the
employees are contributed to achieve the goals of HBL. So the proper efforts
of the employees are contributed very much. Thus goals of HBL are easily
This is the end of chapter four. In this chapter the overall polices of the
HBL has given. As throughout in this chapter the importance of polices has

Page 43

described so this chapter is containing important information about the

different polices of HBL.
Not only polices are important but the efforts to implement that polices
are also important. Polices should be successful if the ways to achieve that
polices should be effective. Polices should be successful only if the
appropriate methods are adopted to achieve that polices. As it is described
earlier that polices are the competitive edge of any organization in order to get
success so the bank also keep its polices very secret. Due to the limitations
imposed by the secrecy of the polices I am not better able to describe the
entire banks in detail.
This chapter is important regarding to data described in this chapter.
The success of the polices is also described in this chapter. How much the
polices are successfully implemented is also the part of this chapter. So this
chapter is all about containing the important information.

Chapter no. 5
5 Introduction of Specialization Area:
This is chapter five. In this chapter HBL is taken in the broader field.
In the previous chapters yet the entire workings are described. But in this
chapter I try to cover the broader areas. Not only internal conditions are

Page 44

important for the bank to survive but also the external environment also plays
important role to survive. Due to the very importance of external environment,
external factors are also discussed in this chapter.
First of all the SWOT ANALYSIS of HBL is made. The strengths of
HBL are also the part of this chapter as well as the weaknesses of HBL is also
described. All the opportunities and threats in external environment are also
discussed in detail. As there is not only a single business exists in the world
which has only the strength and opportunities so the weaknesses and threats of
HBL are also discussed.
Then the PESTL analysis of HBL is also made. Political, Economic,
Social and Technological factors affecting the HBL are also discussed. Ratios
are also important to show the financial position of the bank. That is why the
ratios are also discussed in this chapter. At the end the summary of the chapter
is given.
SWOT stands for Strength, Weakness, Opportunities and Threats.
Strength and weakness are the internal factors and opportunities and threats
are the external factors. HBL is considered to be a very sound bank in the
financial circles. This is the bank where customers can safely keep their
money as long as they want.

In SWOT analysis the best strategies accomplish in organizations mission by:

Exploiting opportunities and strengths.
Neutralizing its threats and
Avoiding its weaknesses.
Following is a list of SWOT of HBL

Page 45

The officers of HBL are considered as one of the most able
professionals in the banking world.
I observed that HBL employees (except annoyed ones) interact with
their clients as if they are their personal friends and discuss about their
problems as their own.
HBL has got a reliable and easy to use internal computer system. HBL
maintained its data properly.
HBL has very good security system.
HBL is the larger commercial bank in Pakistan with the network of
over 1450 domestic and international branches.
HABIB BANK is a well established bank enjoying long history of over
65 years of experience and profitable operation.
HBL is the largest private bank in Pakistan now and people trust is
very high.
HBLs car to car financing scheme is unique in auto loan segment.
Habib bank is an internationally recognized name in banking services
and products.
HBL has forged strategic alliances with international banks for
expanding its network further, both locally and internationally.
It has the largest branch network among private banks of Pakistan
Being the pioneer of banking in Pakistan, HBL is the oldest and is the
richest in experience.
A skill or capability that enables HBL to conceive and implement its
HBL 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.
24 hours cash access and safe payment products for high value

Page 46

Having potential to encounter the competitive environment in the

Customer enjoys the services at the residential localities.
HBL enjoys deep relations with all most all industries in Pakistan

There is week communication system in overall HBL as well as inside
Highest number of branches effecting the proper maintenance and

difficulty in providing same working environment at the each branch.

Poorer system of recovery of the system is a threat to bankruptcy.
Lack of customer feedback.
Low job satisfaction.
Poor ATMs Service.
In consistency in efficiency and working atmosphere due to the largest

of branches.
Sense of insecurity in the employees serving at low profitable branches

due to the downsizing.

Females feel uneasy in an environment among the male workers.
Victim of political, legal and socio-cultural pressures.
Lack of professionalism in the branch employees mostly.
Lack of communication between bank and customers about terms and
condition of products and services. Like centralization of cheque book

issuing process.
Employees at branch level are not properly motivated to work by heart.
They take the all routine activities as a boring job.
Now as it is a privatize bank that is why GOVERNAMENT support to
HBL decreased as it was in past
Mission of HBL is not well defined.

Huge untapped market potential in consumer banking as well as
Islamic Banking Opportunity for developing value added services

Page 47

combined with corporate banking relationships, cash management

services to large and medium sized corporate clients.
Growing policies of government on business and commerce sector
provide HBL opportunities to take advantages of these policies to meet
efficiently with the business people to solve their problems with the
instant cash and financing facilities.
Government is supporting very bold steps of bringing and promoting
IT in Pakistan. HBL has an opportunity to improve in technology.
Large international network which principally focuses on trade finance
with Pakistan can be utilized to tap trade activities in other markets. In
addition, services such as cross border / offshore financing for
corporate customers can be enhanced.
Customer feedback on different products and accounts has really
improved the bank performance and encourage the atmosphere for
other future policies.
HBL also has an opportunity to expand its new technological
advancement more effectively like; phone-banking and internet
banking facilities in order to serve the customer more efficiently,
specially E-banking facility is also a new opportunity which is a
flourishing business in foreign countries and can also be here, if HBL
takes the initiatives.
Further reduction in intermediation costs possible, with improving
Due to efficient and veteran management group, HBL can also
improve and expand its foreign operation successfully.
Habib Bank Limited provides opportunity to utilize its skills and
efficiencies in leasing business.

Prevailing circumstances increases the difficulties the organizations
achieving high performance.
Consolidation in the banking sector resulting in increased competition.

Page 48

Shortage of trained and specialized staff at lower executive 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. Growing global
technological advancement.
Strict regulation by government over credit facilities to the customers

as well as to meet the prudential.

Loss of confidence of overseas customers due to freezing of accounts.
Facing more competition by foreign banks in the market.
Foreign 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

For the last of 2 to 3 years, Pakistan is facing economic and political
instability which is a big threat.
Foreign banks are flourishing in field of consumer financing.
Afghan war and Iraq war has a deep effect on the economy of Pakistan,
which has affected HBL.
Increased regulations from State Bank of Pakistan may affect its


A broad view of market is important when management is interested in

introducing better services for customers. Rapid technological change, global

competition and the diversity of buyers preferences in many markets require
the constant attention of the market vouchers to identify promises business
opportunities, see the shifting requirements of the buyers, evaluate changes in
competitors positioning and guide the choice of which buyers to target and
classify them according to respective segments.
Environmental Analysis is the study of the organizational environment






Page 49



organizational operation. HBL has environmental analysis and acts

accordingly by pinpointing factors and to counter the same timely.

Identification of external and macro factors that influence buyers and thus
change the size and composition of market overtime involves initially building
customer profiles. These influences include:

Political environment
Economic trends
Social environment
Technological factors
Legal environment
Political component is that part of general environment which


related to Government affairs. Government policies may influence the

organization and it has vital impact thereon. In 1974, banks including HBL
and other important big industries/factories in the country were nationalized as
a Government policy. The charter of political parties on coming into powers
may influence


particular industry /organization. The form of

Government whether it is a military or democratic. Other countries economic,

political and military aids depend upon the form of the government which also
influence its industry, social sector institution and financial institutions as well
and rating of banks may be downgrade or otherwise. In international markets,
foreign banks may refuse acceptance of Pakistani Banks letters of credit
(LCs) opened for import of goods.
Banks are strongly affected by the political and legal considerations.
This environment is composed of regulatory agencies and government law that

Page 50

influence and limit various organizations and individuals. Mostly these laws
create new opportunities for business.

It indicates how resources are being distributed and used within the
environment. How the particular community is producing, distributing and
using various goods and services.
Keeping in view economic resources possessing by the population,
HBL targets the customers by introducing various products to attract them.
HBL introduced Auto Loan/Flexi, Loan/Life Style/Visa card/debit card/value
account to sell them same. The consumers are using the banks products.
While selling goods, the wages of the employees, inflation, the tax paid, and
the cost of material is kept in mind to determine and what price
product/service should be sold in the target market. It is very important for an





economic analysis of the

environment to design the products and services otherwise an organization

may not be able in achieving its results/goals.

A banking market requires better consumer market in volume along with

higher borrowing power. The available borrowing power depends on:

Consumer income
Saving rates
Consumption patrons
Rates of interest
Budget deficit
Exchange rates
Cost of living

Page 51

A society is shaped by beliefs, norms and values. People in a society
consciously and unconsciously interact with:


Nature Following are the main factors. Which arise because of change in
socio-cultural environment?
Consciousness about services
Concern for environment
Improved customer relation
The social component shows the characteristics of the society in
which organization exists. There are two important features of the society
are Demographics and Social Values.
Demographics are the statistical characteristics of a population. It
shows the changes in numbers of population and income distribution among
the various population segments. Such changes influence the reception of the
good and services with the organizations environment. The study of
demographics characteristics of population may help the organization in
formulating its strategy to compete in the market.
HBL as its strategy, targets the consumers (low /middle /high income)
by introducing the products. For example, it targets the middle income
consumer by introducing consumer products like Flexi loan/Visa Card and
Balance Transfer Facility (BTF) and house loan/car loan products were
introduced for high income consumers.
Social Values are the relative degrees of worth society places on the
manner in whi8ch it exists and functions. Social values of the society
influence the organization in tailoring its products and services to the

Page 52

consumers. Keeping in view social values in Pakistan society, HBL has

strategic planning in introducing the products /procedures.
New approaches/procedures/technology is used in producing goods
and services to compete with the other organizations in the market.
HBL has purchased software called as MISYS from a Singapore
firm. In 2005, it installed the system in one branch in Karachi and in its
Singapore Branch. After its successful launching, it has now installed MISYS
in about 300 branches in domestic and overseas branches. Real time banking
is now ensured in HBL. By completion of installation process, remaining
branches will also be on line banking leading to paperless banking. The
customer may transfer their funds from one account to another account within
or outside country within few seconds of time.
HBL has planned to shift all the 1443 (Nov.2007) branches on MISYS
by end of 2008. HBL is the first bank in Pakistan, which has acquired this
system to cater its needs. It will also help in reducing staff strength
significantly due to elimination of manual work. Due to introduction of
MISYS, HBL had to change its existing accounting and procedure system to
acquaint with the new system.
Forces of technological advancement have played the most dramatic
role in shaping the lives of people. The rate of change of technology has
greatly affected the rate of growth of economy. New technology is creating
deep rooted affects which could be observed in long run. The improvement
techniques involved in on line banking. In brief PEST analysis affects the
overall banking companies and provides us the information about the external
macro condition.

Page 53

The legal component is that part of general environment which
contains passed legislation. It influences the organization. Violation of laws
may lead to imposition of penalty to the organization. The banks in Pakistan
have to perform their functions in line with SBP directives (regulators),
Security & Exchange Commission of Pakistan (SECP), Banking Recovery
Ordinance ( 2001) for recovery of loans, BASEL -I & BASELII with regard
to Anti Money Laundering (AML) & Terrorist Financing to meet international
community obligation and to observe the United Nations directives on
freezing of assets of a country or person. Country laws with regard to
maintenance of secrecy of information about the customers. In 1974,
Nationalization Act was passed and banks and numbers of industries were
nationalized and now the same are being privatized. All the nationalized banks
except NBP have been privatized through Privatization Commission o f
Pakistan. Health and Safety Act aims at ensuring health and safe workplace for
the workers.
Business legislation has following main purposes
To protect banking companies from unfair competition.
To protect consumers from unfair business practices adopted by
banking companies
To protect the interest of the society from unbridled business behavior.
Banks are strongly affected by the political and legal considerations. This
environment is composed of regulatory agencies and government law that
influence and limit various organizations and individuals. Mostly these laws
create new opportunities for business.

Page 54

5.3 Ratio Analysis of the HBL:

An index that relates two accounting numbers and is obtained by
dividing one number by other
Ratio Analysis is an important and age-old technique of financial
analysis. It simplifies the comprehension of financial statements. Ratios tell
the whole story of changes in the financial condition of business. It provides
data for inter firm comparison. Ratios highlight the factors associated with
successful and unsuccessful firm. They also reveal strong firms and weak
firms, over- valued and undervalued firms. It helps in Planning and
forecasting. Ratios can assist management, in its basic functions of
forecasting, planning, co-ordination, control and communication.
Ratio analysis also makes possible comparison of the performance of
different divisions of the firm. The ratios are helpful in decision about their
efficiency of otherwise in the past and likely performance in future. Ratios
also help in Investment decisions in the investors and lending decisions in the
case of bankers etc.
Following are the main types of ratios that I am going to calculate in this
report to compare and highlight the financial performance of Habib bank in
2008 with 2007.

Return on Equity
Return on Assets ratio
Net Profit Ratio
Loan to Deposit

Return on Equity Ratio:

Return on Equity Ratio
Net Profit after tax X 100
Owner Equity
Net Profit after tax
Owner Equity
Return on equity





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HBL keeps on improving the financial position of the bank. HBL is in
leading position to introduce new services to the customers. The above ratios
shows that the bank is in good position in 2007 and not only maintain its
position but also improve the financial position in 2008 which is a very good
The past two years data shows an improvement in the return on equity
which is a positive sign. The Bank should have to continue its policies. By
observing the audited account I found that this improvement is due to increase
in the Net profit which is good sign.
Return on Assets Ratio:
Return on Assets
Net Profit after tax X 100







Total Assets
Net Profit after tax
Total Assets
Return on Assets

The above ratio is the return on asset ratio. Return on asset is an
important ratio. In 2007 this ratio is very good but HBL keeps on improving
this ratio in next year as well. There is a huge difference of ratios from the
year 2007 to 2008 which shows the commitment of employees towards their
work and the loyalty of customers to the bank.
Return on assets ratio shows an improving trend. This ratio shows that
the both the Net profit and Total Assets has improved in 2008 than 2007. But
net profit has increased more rapidly.

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Loan to Assets ratio:

Loan to Assets ratio



Loans Assets
Loan to Assets ratio



Deposits are also the important asset of the bank. Banks try hard to
increase the deposits of the customers. This fact is shown by the above ratios
as is increased by 2008 FROM 2007.
Loan to Asset Ratio is showing increasing trend in 2008. This is
because advances are increasing more rapidly than assets of the bank.

Net Profit Ratio:

Net Profit Ratio
Net profit /
Interest Income X 100
Net profit
Interest Income
Net profit ratio





Page 57

Above is the net profit ratio. This ratio shows that profit of the bank is
increasing or not. As the ratio is increasing from 2007 to 2008 so it showing a
good sign.
Net profit Ratio is giving upward trend. This trend is observed due to
increase in Net profit but on the other hand the expenses decreases which
shows an efficient management.

Loan to Deposit Ratio:

Loan to Deposit
Loan to deposit ratio





It is also an important ratio. This ratio shows how much the customers
are showing the trust on the bank and deposit their balance in HBL.
Loans to deposit ratio shows an increasing trend in 2008 as compare to
2007. This trend is observed as the advances and deposits both are increasing
but advances are increasing more rapidly than deposits.

5.4 Summary:
This is the end of chapter five. In this chapter the important internal
and external factors are discussed which can affect the working of HBL. The
other factors that can affect the working of bank are necessary to know.
SWOT analysis is also important as it shows the strength and weaknesses of
the bank and internal and external factors such as opportunities and threats.
SWOT analysis shows the important information as it shows how much and

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what areas are currently covered by the bank and what are the potential areas
where the bank can do more.
As this chapter contains all such important information so it should add
more to realize where the work is being done and where the work should be
Not only the SWOT analysis is considered the important analysis but
other analyses are also important as the PEST analysis. In this chapter I fully
try to cover all those points clearly which comes under this head. People are
also interested to invest their incomes in such institutions which have strong
financial positions and are necessarily important to consider when making
investment. So ratios are also discussed in this chapter and important
interpretation of ratios is also made. At the end summary of the chapter is

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Chapter no. 6

1. E _Statement
The account statement of customer must mail him after 15 days.
2. Transaction through mobile service
Customers must provide the facility to make transaction through
mobile. By doing this customers can save time and also transportation
3. Update customers after every transaction
After every transaction customers must inform that their transaction
has been taken place.
4. Marketing development
New technologies must adopt to facilitate the customers.
5. Cyber warfare
Cyber warfare must adopt to prevent electronic attacks to save
important documents and bank privacy.
6. High Risk in Internet Banking
As there is no proper cell is established throughout the country. It is
difficult to handle incase of cyber crime. The customers feel less protection in
this regard.

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Other recommendations are as follows:

There should be authority in every region which ensures efficient flow
of communication and its understanding.
HBL should immediately take brave steps towards the welfare of
experienced Habibians. In this regard NBP has set best example.
The management should try to decrease job insecurity among the
Training program should be started for internees and newly appointed
The bank charges high service charges as compared to the other banks,
so these should be lowered down.
Surveys must be conducted regarding customer satisfaction level and
all employees of this dept. should look forward to getting feedback
whenever possible.
Adding of value added features that offer competitive advantage is also
a means of avoiding customer dissatisfaction.
During my internship in HBL, I found many problems, which should
be resolved for the better function of HBL. The problems I have observed are
as follows:
These problems are:
There is lack of bringing change in HBL as the changes are taken place
in overall world of banking.
Criticism on HBL
1. Wastage of Time
Employees waste their time by using old version softwares and thus
not fully skilled.

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2. Low Speed
Working and service providing speed is very low.
3. Marketing speed
Service is not door to door, you have to met people personally.
4. Low awareness
People and customers do not have awareness about new banking
system because they do not provide proper information about bank and online

To sum up, internship is like The First Flight for a young business
graduate who is to enter his professional life very soon. It provides a gateway
to youngsters and an insight of corporate world. It helps them in the
orientation phase of their first job as well and if we talk about internship
decision in banking sector.
HBL is clearly the first choice of everyone who believes in qualitative
approach of banking an environment of highly responsible people. Bank is
enjoying a healthy market share and taste of good status in terms of its
operative features and customer support. HBL is clearly the best bank
operating in Pakistan. Corporate and commercial functions are distinguished
features of HBL experiencing a good reputation and reasonable mark up with
respect to prevailing market mark up with assurance of satisfaction and
support. HBL has more customers as compare to other banks, if they given
proper attention to every customer then in few years it will be the leading bank
of the country.

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Chapter no. 7
7 References
HBL Annual Report 2007
Direct Interaction and Learning from:

Branch Manager (Asif Imran)

Operation Manager (Sara Bano)
Assistant Manager (Mirza Tanveer Baig)
Cash Officer ( Ayesha)

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