h bl internship replor t for finance

8/12/2019 h Bl Internship Replor t for Finance

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INTERNSHIP REPORT ON

HABIB BANK LIMITED PAKISTAN

SUBMITTED BY: MUHAMMAD IRFAN ALI

LOGID: mc070402338

Pho!" 03#3$%747208

M&'( &))*!++: +,!)'*-&m./,&hoocom

1 mc070402338/!)5

A))*!++: 6&*) " 2 Moh&(& h&h K*&'

MBA FINANE9

2007$0

SUPER;ISED BY: MAHER AMEER MUHAMMAD

DATE OF FINAL REPORT

#0$04$200


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DEDIATION

A((&h A(m'=h


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AKNO6LEDGEMENT

Thanks to ALLAH Almighty for giving me such a beautiful opportunity and enabling

me to complete my project. Thanks to my loving parents and guardian who help me a lot

at every phase of my life encouraged me in the days of depression and sacrificed for my

better future.

! am very thankful to "r. "aher Ameer "uhammad my supervisor who has helped me

a lot in finding an appropriate project and for his reviews encouragement and support.

! am thankful to all of my teachers and my class fellows and friends whom

#heerfulness and guidance is an asset for me .! am especially thankful to the bank staff

and particularly.

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http://www.vustudents.ning.com/http://www.vustudents.ning.com/


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ITh! )!&*;'*


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So*c!+ o- -)+ 8#

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ntroductionHabib %ank Ltd is a %anking H%L which is engaged in #ommercial @

0etail %anking and related services domestically and overseas. H%L 5njoy

289 of the market,hare in &akistan. Today H%L is truly the bank of the people

&roviding its customers convenience and ,atisfaction all +ver the world. Habib

%ank &laa the tallest building in &akistan is the proud symbol of H%L leadership

!n &akistan/s corporate ground. H%L is currentlyuses rate AAand A1=.

ESTABLISHMENT:

Habib %ank Limited was established by "r.!smail

Habib :Late; on August 2- 1'(2 at %ombay. !t was the first

"uslim %ank of the sub3continent. !t was 5stablished with a

&aid up capital of 0s. 2.-millon

BRANHES:

H&@'@ B&5 L'm'

'


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H!&) o--'c!

H&@'@ B&5 P(&& II h)*'=&* Ro&)

K&*&ch' 7%0 P&5'+Sh S(

I I h)*'=&* Ro&) K&*&ch'

P&5'+

M* E@*&h'm S')&< M!m@!*

M* A+&* H++&' Sh&m+' M!m@!*

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Board of Directors:

,u l t an Al i A l l ana h&'*m&

"oe B ama l D'*!c


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M&&=!m!' H%L opened first of $ branches and an +%4 in %ahrain. However

H%/s branch in Aden is nationalied.

1')1 H%L opened an +%4 in ,ingapore and a branch in H%L opened a branch in the ,eychelles the first of two branches in

%angladesh and a branch in the "aldives.

1')' H%L opened a branch in the


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a branch in the 6iji !slands and took over the &aksistani branches of

failed bank %##!.

1''2 !n the Fovernment of &akistan handed over

management control of Habib %ank to A*65I. The %oard of Iirectors

was reconstituted to have four A*65I nominees including the #hairman

and the &residentG#5+ and three Fovernment of &akistan nominees

288> H%L sold the operations that it had established in 6iji in 1''1 to

%ank of ,outh &acific.

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Vision,imply the vision of Habib %ank is mass banking. At the time of formation it

changed its motto from class banking to mass banking. 5pedite the economic

growth of the country through spreading the banking services to the doorsteps of

mass people so that they get institutional financial help and participate in the

economic activities of the country.

Mission To be the trendsetter for innovative banking with ecellence and

perfection.

To be the best performing bank in the country and the region.

To eceed customer epectations through innovative financial products @

services and establish a strong presence to recognie shareholders

epectations and optimie there rewards through dedicated workforce.

*eeping ahead of other competitors in productivity and profitability. To

attain budgetary targets fied in each area of business.

ObjectivesLike other business organiation the core desire of Habib %ank is to

maimie the profit through saving @ loaning money to the life of the

common people. The +bjectives of the Habib %ank is given below

I B*o&) Go&(:

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As a nationalied commercial organiation Habib %ank belongs to the

people. !t implies that it stands for meeting the banking needs of the mass

people of the society.

II O!*&


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Habib %ank is a service organiation. !t will live and prosper on the

Euality of service it provides. Hence Euality of service must be

maintained at all levels.

%anks image with people should be identified on the Euality and diversity

of services that the people aspire to receive.

As a dynamic bank it will remain in search of new field of activity in line

with people economic need. ,uggestions by customers and other people

shall receive proper attention so as to help identify new activity or

improve upon present activities.

The bank shall maintain healthy competition with other banks aiming at

ecelling services in meeting economic needs of the people.

Nature of the organization

Acc!


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#urrent deposits are those deposits on which %ank offers no interest but it allows the

account holders to withdraw their money at any time they want without giving any

prior notice to the community which reEuires large sums of money very often for

their business transaction.

P*o-'< &) (o++ +h&*'= &cco< S&'=9

,aving deposits or &L, is those accounts on which %ank offers a lower rate of

interest. After the !slamiation of the %anking system in the country it has been

given the name of &L, saving account. The %ank undertakes to repay deposits on

demand up to a certain amount.

F'?!) )!o+'


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Iemand finances are those finances which are given to the borrowers for specified

period and can be called back without any prior notice. !t is a single transaction finance.

!t can be long term medium term and short term. "ark up is also charge. Here the

amount can be withdrawn once at the time of disbursement.

R'= F'&c!

H%L provides these finances against the security of current assets like shares bond cash

crops like cotton and other cashable commodities. The borrower/s account is opened

with the %ank with the amount of the total loan provided or allowed to the borrower. The

borrower is allowed to withdraw any amount from his account within the specified limit

and interest is charged only on the amount actually withdrawn.

O!* D*&-;

#redit &olicy Froup);#orporate %ank 6inancial !nstitutions and &roject 6inance

Froup. !n addition to the overall controlling authority president also manages the

!nternational +perations Froup individually. 7hile the ,enior 5ecutive ice

&residents supervise rest of the functional groups. 5ach ,enior 5ecutive ice

&resident is individually responsible for the group which is assigned to him. At the

level of provinces there are 0egional Head uarters headed by 0egional #hief

5ecutives :0#5;. 5ach 0#5 is assisted by F" operations and F" ,upport

,ervices. %ranches are also controlled by the 0#5s. #ircle +ffices of the past times

have been removed to reduce "anagerial Layers which were working under the

control of Conal +ffices. This happened as a result of policy of beginning new

changes in the organiational structure.

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Organizational )ierarch* chart

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Bo&*) o- D'*!c

SE;P A++!< R!m!)'&(M&&=!m!(


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% A=*!!m!< -o* F'&c'= IB %9

This agreement for the short term medium termGlong term on the markup

basis. At most these are the documents reEuired in attaining of the loan.

R'= F'&c!

7hen a customer borrows from a banker a fied amount repayable either in

periodic installments or in lump sum at a fied future time it is called a

OloanP. 7hen bankers allow loans to their customers against collateral

securities they are called Osecured loansP and when no collateral security is

taken they are called Oclean loansP.

The amount of loan is placed at the borrower/s disposal in lump sum for the

period agreed upon and the borrowing customer has to pay interest on the

entire amount. Thus the borrower gets a fied amount of money for his use

while the banker feels satisfied in lending money in fied amounts for

definite short periods against a satisfactory security.

This is the most common form of bank lending. 7hen a borrower reEuires

temporary accommodation his banker allows withdrawals on his account inecess of the balance which the borrowing customer has in credit and an

overdraft thus occurs. This accommodation is generally allowed against

collateral securities. 7hen it is against collateral securities it is called

O,ecured +verdraftP and when the borrowing customer cannot offer any

collateral security ecept his personal security the accommodation is called a

O#lean +verdraftP. The borrowing customer is in an advantageous position in

an overdraft because he has to pay service charges only on the balance

outstanding against him. The main difference between a cash finance and

overdraft lies in the fact that cash finance is a bank finance used for long term

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by commercial and industrial concern on regular basis while an overdraft is a

temporary accommodation occasionally resorted to.

D!m&) F'&c'=Lo&+

7hen a customer borrows from a banker a fied amount repayable either in

periodic installments or in lump sum at a fied future time it is called a

OloanP. 7hen bankers allow loans to their customers against collateral

securities they are called Osecured loansP and when no collateral security is

taken they are called Oclean loansP.

The amount of loan is placed at the borrower/s disposal in lump sum for the

period agreed upon and the borrowing customer has to pay interest on the

entire amount. Thus the borrower gets a fied amount of money for his use

while the banker feels satisfied in lending money in fied amounts for

definite short periods against a satisfactory security

3 AOUNT DEPOSIT DEPARTMENT: $

!t controls the following activities

a; AG# opening.

b; !ssuance of cheEue book.

a; #urrent aGc

b; ,aving aGc

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c; #heEue cancellation

d; #ash

Acco< o!'=

The opening of an account is the establishment of banker customer

relationship. %efore a banker opens a new account the banker should

determine the prospective customer/s integrity respectability occupation and

the nature of business by the introductory references given at the time of

account opening. &reliminary investigation is necessary because of the

following reasons.

i. Avoiding frauds

ii. ,afe guard against unintended over draft.

iii.


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"inimum !nitial Ieposit

+perating the Account

1. &ay3!n3,lip %ook

2. &ass %ook

$. !ssuing #heEue %ook

&9 &('-'c&?


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2; Boint Account

$; Accounts of ,pecial Types

&artnership account

Boint stock H%L account

Accounts of clubs societies and associations

Agents account

Trust account

5ecutors and administrators accounts

&ak rupee non3resident accounts

6oreign currency accounts1

I++'= o- ch!J! @oo5:

This department issue cheEue books to account holders.

0eEuirements for issuing cheEue book

a; The account holder must sign the reEuisition slip

b; 5ntry should be made in the cheEue book issuing book

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c; three rupees per cheEue should be recovered from aGc holder if not then

debit hisGher account.

**!< &cco(9 domestic

issuance and $>9 offshore issuance. 6or long3term funding the spit is 2-9

domestic issuance and )-9 offshore issuance. :These proportions vary

between banks.;

,hort3term funding costs have been volatile since August 288). +n several

occasions the '83day %ank %ill ,wap 0ate :%%,7;1spiked sharply

:August 288) ,eptember 288) Iecember 288) 6ebruary 288? "arch

288? Bune 288? ,eptember 288? and +ctober 288?;.

Long3term funding costs remain elevated with no evidence of easing.

,ince the onset of the financial crisis net flows into deposit accounts have

been strong particularly higher yielding personal investment accounts.

%alances in these accounts have increased 1'9 :annualied; compared to

19 for lower yielding personal transaction accounts.

M&*5!< '

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A number of factors influence interest rates including changes in the official cash

rate inflation epectations credit ratings and the broader global financial

environment. 4nder normal circumstances cash rate changes are epressly

linked to market interest rate changes. +ver the past year however global

events have had a greater influence on market rates.

I

+ver the past year financial markets have been in the midst of a serious global

financial event caused by the sub3prime crisis in the 4,A. The 0eserve %ank has

commented on the large increase in the delinEuency rate on 4, sub3prime

mortgages which had grown to about 1? per cent of housing loans in the 4,.

Also of the Q4,2 trillion of 4, residential mortgage backed securities :0"%,;

issued to investors in 288>M around a Euarter were backed by sub3prime

mortgages. As a result of the global credit crisis there was a sharp decline in

investor appetite for 0"%, even those of the highest credit Euality.

The 0eserve %ank said that the increase in risk aversion and the eistence of

considerable uncertainty about where the spreads on these securities will settle has

meant that traditional investors in 0"%, have preferred to wait until more settled

conditions return.

This increased risk aversion has significantly increased the cost of short3term and

long3term funds sourced by financial institutions internationally and in Australia.

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Additionally there has been considerable volatility in the cost of funds.

6inancial eperts are not predicting a Euick end to the current financial scenario

with some suggesting it will take up to two years to see financial market

conditions stabilie though there is still uncertainty over whether funding costs

will return to the lower levels they have been in the past.

2 O!*'!. o- @&5 -)'=

Fenerally speaking banks source their funds from deposits :-89; and through

wholesale funding that is short3term wholesale funding :2-9; and long3term

wholesale funding :2-9; in both the domestic and global markets :this split will

vary from bank to bank;. ,hort3term funding relates to borrowings for up to 12

months while long3term funding includes borrowings of greater than 12 months.

%anks borrow money from global financial markets to facilitate lending to

Australian businesses and households. %orrowing costs for banks short3term and

long3term funding reEuirements have increased significantly as a result of the

current global financial crisis.

The price or cost that banks pay for funds depends on many factors. These include

changes in the official cash rateM competitionM international eventsM the credit rating

of the bankM and the supply of wholesale funds.

%anks must pay for all funding either though paying deposit interest rates or

paying interest on domestic and global debt. Therefore to determine a bank/s cost

of funds it is important to conduct a detailed analysis of all funding components

and how these are changing. This is discussed further below.

3 S;'*


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6or banks with a strong credit rating :i.e. AA or A; wanting short3term funding

there is generally good liEuidity in debt markets but prices remain elevated when

compared with levels prior to the financial crisis.

6or term funding markets have been very difficult to access and issuance by banks

has been very low particularly in the most recent months. ,preads are now at very

high levels.

%anks rated %%%= are finding it more difficult to access longer3term funding and

are concentrating more on short3term funds private placements and deposit

growth.

,ecuritiation markets continue to see very low issuance levels. "uch of the

Australian issuance was to the 4,. !nvestor interest in securitied assets has

virtually dried up.

0ecent initiatives designed to stimulate debt markets include

guarantee of banks/ term fundingM

deposit guaranteesM and

7idening the range of securities eligible for its repurchase operations :repos; by

the 0%A.

These initiatives align Australia/s response within the contet of the broader global

initiatives which are aimed at resolving the financial crisis.

4 F)'=

%anks source funds from deposits and through wholesale funding 3 short3term and

long3term funds in both the domestic and global financial markets.

7hen the term of any funding arrangement epires either in domestic and global

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markets banks have to re3finance. ,ince the onset of the global financial crisis

wholesale funding costs have increased significantly. 6urthermore interest rate

volatility has increased on these markets and it is widely reported considerable

uncertainty will remain over the net year at least.

Iue to the protracted nature of the sub3prime crisis pressures in financing from the

wholesale market continue.

A%, 6inancial Accounts shows retail deposits constitute ('9 :Q>>- billion; of

bank funding as at Bune 288?. 7holesale funding accounts for -19 or Q)8$

billion. +f the short3term funding ecluding bills of echange :which are not

classified by domesticGoffshore; short3term funding is >(9 domestic and $>9

offshore. 6or long3term funding 2-9 is domestic and )-9 offshore.

The '83day bank bill swap rate is commonly viewed as the short3term funding cost

benchmark in the market. The divergence :i.e. spread; of the '83day from a market

indicator of the cash rate can indicate changes to the banks/ short3term funding

costs. This cash rate Jmarket/ indicator is called the '83day +vernight !nde ,wap

rate :'83day +!,;.

The '83day +!, is a traded instrument by large treasuries. !ts value reflects the

epectation of where the cash rate will be in '8 days :it/s like a futures contract;.

Analying the spread between the '83day and the '83day +!, provides a broad

measure of changes to banks/ short3term funding costs. This spread reflects market

conditions as interest rates incorporate both credit premiums and liEuidity in

financial markets. #hanges in these measures also reflect banks/ product pricing

and risk management.

The chart below shows that the cost of short3term funds has been volatile since

August 288). +n numerous occasions the '83day has increased significantly

:August 288) ,eptember 288) Iecember 288) 6ebruary 288? "arch 288? Bune

288? ,eptember 288? and +ctober 288?;.

%anks/ short3term funding costs :i.e. over and above the '83day +!,; have

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significantly increased since the global financial crisis. The chart shows that prior

to August 288) the cost above the '83day +!, was about ?318 basis points. After

August 288) this spread reached a high of 1(( basis points in early +ctober 288?.

Longer term funding costs continue to stay high with little evidence of easing. The

chart below shows the spread to swap2for banks/ three3year term funding. 0ecent

pricing for bank issuance remains about 1)- bps above swap for three3 year terms.

The widening spreads for long term funding are detailed in The ,heet :1? August

288?;

JAs for the cost of longer term funding the credit spreads the banks have to pay on

their borrowings have been moving steadily wider since the credit crunch began. !n

the domestic market this is best eemplified in the two and four year parts of the

curve. %ond issuance in "ay attracted a spread of () bps and '- bps for two and

four years respectively.

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%alance ,heet

As at December 31, 2008 200% 2007 2008

0upeesin 888

cash and balances with treasury banks $2(>-')> $'>?$??$ $'>$11)2

balances with other banks >-))81) $?8)-1' (8($188

lending/s to financial institutions 218?1?88 18-1$)2 (1888)'

investment3net >$(?>$1> 11$8?'2>1 '>2->?)(

advances3net 1'?2$'1-- 21?'>8-'? 2>2-18()8

operating fied assets '8-(1-> 1>82(12$ 1)2>$)$$

deferred ta assets3net 1)2$)$ 8 8

other assets3net 118$1(-8 1)?>?)>1 1'?18()>

$(218?2($ (18(?--1) (($>1-'8(

L'&@'(')' 18()'8-? 18--1(>?

borrowings 2$'($()> $'(8>?$1 22>>$?(8

deposits and other accounts 2-)(>1?$? 2'28'?8>> $$82)(1--

sub3ordinate loan 1-')((8 ()'2$2 8

liabilities against assets subject to finance lease 8 8 8

deferred ta liabilities3net 8 11?81>2 ($)1$)

other liabilities 111)1('> 11)22('$ 212-$2-8

$812>$'2' $--$>-?(2 $?-1)'?-8

N!< &++!,hare capital -(>$2)> >2?2)>? >2?2)>?0eserves 2(>>2(2> $(888>$? $>)>?)>-

4nappropraited profit --$8')$ -1$8)-8 '1'$$$2

$->->>)- (-(1(1-> -22((?>-

,urplus on revaluation pf assets3net of ta -1?)>$' ')8--1' >1'11?'

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408443#4 ##%7 843%04

&rofit and Loss Account

For the year ended December31, 2008. 200% 2007 2008

"ark3upG return G interest earned 2-))?8>1 $1)?>-'- (88($?2(

"ark3upG return G interest epensed (-2-$-' )?>--$$ 11->8)(8

' 2>?$''(

&rovision against loans and advances3net 181(-(8 2'-'-?$ 1$$-12)

%ad debts written off directly ()888 1'' 8

11?2)$) $8>-8-1 (81'121

''>- 28?->811 2((>$'>$

No m&*5$ '

Iividend income ?11?81 >$2$88 >1)--(

!ncome from dealing in foreign currencies >'2818 >'$(8? )2)->(

Fain on sale of securities3net >8-?>- 1-88?>- )(8(2'

4nrealied loss on revaluation of investments

classified as held for trading 31$18- 318$1'?

+ther income3net -)8-8- 18881(' '(2$>2

Total non3mark3upG interest income (''1(1> >((?22) -)'1((8

2-8>1$?1 2)$8(2$? $82--(8$

No$m&*5$ '

Administrative epenses >(?2-'2 -(2>11> )-(>?)?

+ther provisionsG :reversal;3net 11(11 3$)($ 18128

+ther charges >>)8? -)$?$8 ?$8?$'

Total non3mark3upG interest epense >->8)11 -''>28$ ?$?)?$)

5tra ordinaryG unusual item 8 8 8

&rofit before Taation 1?-88>)8 21$8?8$- 21?>)->>

Taation 3 #urrent year -)81(($ >((2$-> )$(12-)

3 &rior years -'$(') 312'(()$ 3?>(?2(

3 Ieferred >$$$2 ?'(-'8 1>-$$

>$-?2)2 >8(2()$ >('2'>>

&rofit after Taation 121(2$'? 1-2>-->2 1-$)(>88

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4nappropriated profit brought forward (''82>8 --$8')$ -1$8)-8

Transfer from surplus on revaluation of fied assets3net of ta $21>> 11?-- 21$1'

-822(2> --(2?2? -1-28>'

&rofit available for appropriation #7#%4824 2080830 202%%%

%asic and diluted earnings per share 3 after ta 234 243 2447

%alance ,heetertical Analysis

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%alance ,heetHoriontal Analysis

;'*$11)2 '.>) ?.'$

balances with other banks $?8)-1' (8($188 8.'$ 8.'1

landings to financial institutions 18-1$)2 (1888)' 8.2> 8.'2

investment3net 11$8?'2>1 '>2->?)( 2).-- 21.)8

advances3net 21?'>8-'? 2>2-18()8 -$.$( -'.1?

operating fied assets 1>82(12$ 1)2>$)$$ $.'8 $.?'

deferred ta assets3net 8 8 8.88 8.88

other assets3net 1)?>?)>1 1'?18()> (.$- (.()

(18(?--1) (($>1-'8( 188.88 188.88

Liabilities

%ills payable 18()'8-? 18--1(>? 2.'- 2.)(

borrowings $'(8>?$1 22>>$?(8 11.8' -.??

deposits and other accounts 2'28'?8>> $$82)(1-- ?2.28 ?-.)-

sub3ordinted loan ()'2$2 8 8.1$ 8.88

liabilities against assets subject to finance lease 8 8 8.88 8.88

deferred ta liabilities3net 11?81>2 ($)1$) 8.$$ 8.11

other liabilities 11)22('$ 212-$2-8 $.$8 -.-2

$--$>-?(2 $?-1)'?-8 188.88 188.88

N!< &++!,hare capital >2?2)>? >2?2)>?

0eserves $(888>$? $>)>?)>-

4nappropraited profit -1$8)-8 '1'$$$2

(-(1(1-> -22((?>-

,urplus on revaluation pf assets3net of ta ')8--1' >1'11?'

##%7 843%04

188


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%alance ,heet

As at December 31, 2008 200% 2007 2008 200% 2007 2008

0upees in 888

9 9 9

cash and balances with treasury banks $2(>-')> $'>?$??$ $'>$11)2 188 22.2$ 22.8)

balances with other banks >-))81) $?8)-1' (8($188 188 3(2.11 3$?.-$

lending/s to financial institutions 218?1?88 18-1$)2 (1888)' 188 3'-.81 3?8.--

investment3net >$(?>$1> 11$8?'2>1 '>2->?)( 188 )?.1$ -1.>2

advances3net 1'?2$'1-- 21?'>8-'? 2>2-18()8 188 18.(- $2.(2

operating fied assets '8-(1-> 1>82(12$ 1)2>$)$$ 188 )>.'? '8.>)

deferred ta assets3net 1)2$)$ 8 8 188 3188.88 3188.88

other assets3net 118$1(-8 1)?>?)>1 1'?18()> 188 >1.'? )'.-?

$(218?2($ (18(?--1) (($>1-'8( 188 1'.'' 2'.>)

Liabilities

%ills payable )8?'>)' 18()'8-? 18--1(>? 188 ().?1 (?.?$

borrowings 2$'($()> $'(8>?$1 22>>$?(8 188 >(.-? 3-.$(

deposits and other accounts 2-)(>1?$? 2'28'?8>> $$82)(1-- 188 1$.(- 2?.2?

sub3ordinted loan 1-')((8 ()'2$2 8 188 3)8.88 3188.88

liabilities against assets subject to finance lease 8 8 8 188 8.88 8.88

deferred ta liabilities3net 8 11?81>2 ($)1$) 188 8.88 8.88

other liabilities 111)1('> 11)22('$ 212-$2-8 188 (.'$ '8.2-

$812>$'2' $--$>-?(2 $?-1)'?-8 188 1).'> 2).?-

N!< &++!,hare capital -(>$2)> >2?2)>? >2?2)>?

0eserves 2(>>2(2> $(888>$? $>)>?)>-

4nappropraited profit --$8')$ -1$8)-8 '1'$$$2

$->->>)- (-(1(1-> -22((?>-

,urplus on revaluation pf assets3net of ta -1?)>$' ')8--1' >1'11?'

408443#4 ##%7 843%04

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For the year ended December31, 2008. 200% 2007 2008

200

% 2007 2008

"ark3upG return G interest earned2-))?8>1

$1)?>-'-

(88($?2( 188 2$.$1 --.$(

"ark3upG return G interest epensed (-2-$-' )?>--$$

11->8)(

8 188 )$.?1 1--.()

' 2>?$''( 188 31$.1(211(.-)

&rovision against loans and advances3net 181(-(8 2'-'-?$ 1$$-12) 188 1'1.)2 $1.>8

%ad debts written off directly ()888 1'' 8 188 3''.-? 3188.88

11?2)$) $8>-8-1 (81'121 188 1-'.1- 2$'.?2

''>-

28?->811

2((>$'>$ 188 $.'2 21.?'

No m&*5$ '

Iividend income ?11?81 >$2$88 >1)--( 188 322.11 32$.'$!ncome from dealing in foreign currencies >'2818 >'$(8? )2)->( 188 8.28 -.1(

Fain on sale of securities3net >8-?>- 1-88?>- )(8(2' 188 1().)2 22.21

4nrealied loss on revaluation of investments

classified as held for trading 31$18- 318$1'?

+ther income3net -)8-8- 18881(' '(2$>2 188 )-.$1 >-.1?

Total non3mark3upG interest income (''1(1> >((?22) -)'1((8 188 2'.1' 1>.8$

2-8>1$?1

2)$8(2$?

$82--(8$ 188 ?.'- 28.)$

No$m&*5$ '

Administrative epenses >(?2-'2 -(2>11> )-(>?)? 188 31>.$8 1>.(2

+ther provisionsG :reversal;3net 11(11 3$)($ 18128 188 31$2.?8 311.$1

+ther charges >>)8? -)$?$8 ?$8?$' 188 )>8.21

11(-.(

'Total non3mark3upG interest epense >->8)11 -''>28$ ?$?)?$) 188 3?.>8 2).?-

5tra ordinaryG unusual item 8 8 8

&rofit before Taation1?-88>)8

21$8?8$-

21?>)->> 188 1-.1) 1?.28

Taation 3 #urrent year -)81(($ >((2$-> )$(12-) 188 1$.88 2?.)>

3 &rior years -'$(') 312'(()$ 3?>(?2( 188 3$1?.11 32(-.)2

3 Ieferred >$$$2 ?'(-'8 1>-$$ 1881$12.-( 3)$.?'

>$-?2)2 >8(2()$ >('2'>> 188 3(.') 2.12

&rofit after Taation121(2$'?

1-2>-->2

1-$)(>88 188 2-.)2 2>.>2

4nappropriated profit brought forward (''82>8 --$8')$ -1$8)-8

Transfer from surplus on revaluation of fied assets3net of ta $21>> 11?-- 21$1'

-822(2> --(2?2? -1-28>'

&rofit available for appropriation#7#%482

4

208083

0

202%%%

%asic and diluted earnings per share 3 after ta 234 243 2447

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RATIO ANALYSIS

0atio Analysis is an important and age3old techniEue of financial analysis. 0atios are

important and helpful in the reference that

These simplify the comprehension of financial statement and tell the

whole story of changes in the financial conditions of the business.

These provide data for inter3firm comparison. The ratios highlight the

factors associated with successful and unsuccessful firms also reveal

strong and weak firms.

These help in planning and forecasting these can assist management in

its basic functions of forecasting planning coordination and control.

These help in investment decision in case of investor and lending decision

in case of %ankers etc.

However the ratios are only indicators they cannot be taken as final regarding

good and bad financial position of the business other things have also to be seen.

# RETURN ON EUITY

Iividing profit after taation by share holder/s eEuity. 0+5 compares net profit

after taes to the ,hare holder/s 5Euity.

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This ratio is calculated as

0+5R&rofit after taesG,hare holder/s 5Euity

2008 Q 242

2007 Q 33%#

2 RETURN ON ASSETS:

This ratio shows the efficiency of organiation that how efficiently utilies their

assets. This ratio relates profits to assets.

!t is calculated as

P*o-'< &-

2008 Q 3%0

2007 Q 4%0

3 EARNING PER SHARE:

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8 A;ERAGE PROFIT PER BRANH:

&rofit


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2007 Q 774

## RISK ASSETS TURNO;ER:


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primary objective of competitor analysis is to understand and predict the rivalry or

interactive market behavior between firms in their Euest for a competitive position

in an industry. Therefore the H%L also always analye their competitors %anks

Toward this end researchers have eamined factors that influence competitive and

patterns of entry into and eit from rivals markets However researchers have

made limited effort to investigate the prebattle competitive relationship between

rivals and the etent to which it may predict rivalrous behavior in the market. This

omission is due partly to the restricted conceptual treatment of competitor analysis

which has not fully incorporated the essential antecedents that affect a firms

competitive activity let alone considered them in an integrated way.

!ntensity of rivalry one of &orters :1'?8; well3known five forces driving

competition has remained mainly a theoretical construct confined to the industry

level. !n terms of analying firms competing in an industry the strategic3group far

the most popular and relevant. However researchers who use this approach have

largely ignored the market contet in which competitors carry on their battles and

the etent to which two firms actually compete directly against each other.

Although the marketing literature recognies the importance of the market contet

its contribution has been primarily in analying competitors and competition at the

brand or individual3market level rather than at the firm level. +ther approaches

usually represent a high degree of abstraction and rely primarily on managers or

researchers subjective perceptions which often are too remote to be linked to

competitive behaviors in the market Thus far some of the most fundamental

Euestions in competitor analysis have remained uneplored 1'?-;. 6or eample

how can researchers studying competition differentiate among players in an

industry to eplain each players market behaviorsV How can a firm before

launching an attack assess its prebattle relationship with a given rival and the

resultant likelihood that this rival would retaliateV How can a firm gauge which

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opponent is most likely to attack its marketsV How can strategists differentiate

among a set of competitors to allow the firm to allocate appropriate resources and

attention to eachV 6inally although the importance of competitor analysis and

interfirm rivalry is well recognied there has been no systematic attempt to

integrate the two topics.

This article seeks to provide a conceptual link by proposing two firm3specific

theory3based constructs the market commonality and the resource similarity

between a given pair of competitors. Taking the firm as the basis for analysis !

argue that each firm has a uniEue market profile and resource endowment and that

a comparison with a given competitor along these two dimensions will help to

illuminate the competitive relationship between them and to predict how they may

attack :or respond to; each other in the market. This firm3specific

conceptualiation also leads to the idea of competitive asymmetry the notion that a

given pair of firms may not pose an eEual threat to each other. ! first offer a

number of propositions that use market commonality and resource similarity to

predict competitive attack and response. ! also propose measures to assess market

commonality and resource similarity along with a demonstration of how such

measures could be implemented. The article ends with a number of implications

for research and practice.

F


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and effective in the banking field and get the competitive advantage. That when occur

truly when the H%L produce new products and services to their customers. The H%L

should also introduce the new technologies in the %anking field before their competitors

and provide the facilities to their customers and get the customers loyalty . The H%L

should also provide the better service than their competitors and also should give the full

response in the any branch.

The H%L also should improve their computeried system in the bank and the bank in the

future also want to trained their employees in any technology and also will provide the

new technology that facilitate the customers of the H%L

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! observed that H%L employees interact with their clients as if they are their

personal friends and discuss about their problems as their own.

H%L has got a reliable and easy to use internal computer system. 5very

information regarding the transactions in customers/ deposits has been

computeried.

H%L maintained its data properly.

H%L has very good security system.

H%L is the larger commercial bank in &akistan with the network of over 1($'

domestic and international branches.

%eing the pioneer of banking in &akistan H%L is the oldest and is the richest

in eperience.

H%L focuses on consumer banking by lucrative schemes products and

services suiting best to the wants and demands of the customers.

H%L 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.

2( hours cash access and safe payment products for high value transaction.

Having potential to encounter the competitive environment in the market.

eteran and eperience private management group also involved in other

interests like tetile and cement industry.

#ustomer enjoys the services at the residential localities.

6!&5!++!+

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Highest number of branches effecting the proper maintenance and difficulty

in providing same working environment at the each branch

&oorer system of recovery of the system is a threat to bankruptcy.

Lack of customer feed back.

Low job satisfaction.

&oor AT"/s ,ervice

!nconsistency in efficiency and working atmosphere due to the largest of

branches.

,ense of insecurity in the employees serving at low profitable branches due

to the down siing. 6emales feel uneasy in an environment among the male workers.

ictim of political legal and socio3cultural pressures

.Lack of professionalism in the branch employees mostly.

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business people to solve their problems with the instant cash and financing

facilities.

Fovt. is taking very bold steps to promote !T in &akistan. H%L has an

opportunity to improve in technology.

Large international network which principally focuses on trade finance with

&akistan can be utilied to tap trade activities in other markets. !n addition services

such as cross border G offshore financing for corporate customers can be enhanced.

#ustomer feedback on different products and accounts has really improved

the bank performance and encourage the atmosphere for other future policies.

H%L also has an opportunity to epand its new technological advancement

likeM tele banking and internet banking facilities in order to serve the customer

more efficiently specially

53banking facility is also a new opportunity which is a flourishing business in

foreign countries and can also be here if H%L takes the initiatives.

6urther reduction in intermediation costs possible with improving

technology.

Iue to efficient and veteran management group H%L can also improve !ll

and epand its foreign operation successfully.

Habib %ank Limited provides opportunity to utilie its skills and efficiencies

in leasing business.

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,hortage of trained and specialied staff at lower eecutive 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.

Frowing global technological advancement.

,trict regulation by government over credit facilities to the customers as !ll as

to meet the prudential.

Loss of confidence of overseas customers due to freeing of accounts.

6acing more competition by foreign banks in the market.

6oreign 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 customers.

oc(+'o 1 *!comm!)&


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2; The management should provide better arrangement for the employees.

$; The daily newspapers and journals should be provided to the employees

and customers visiting there.

(; A separate hajj applications acceptance counter should be provided to

overcome inconveniences faced by the customers.

-; A separate ladies counter should be there

>; The %ank management should be very careful while granting the loans.

); &ersonal interests should not be given importance and customers

?; &ersonal credit worthiness must be carefully scrutinied public relation

desk should be established in each and every branch for guidance as well as

redresses of grievance of customers at the spot.

'; +nline %anking should be introduced in all the branches.

18; Aggressive publicity campaign must be introduced through press and

5lectronic media for new products and scheme by initiating vigorous marketing

policy.

11; ; 5mployee/s induction promotion and transfer should always be made

on merit.

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1); To motivate the employees their remuneration G salaries should be made

at par with top tier %anks.

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R!-!*!c! 1 So*c!+ +!) Sho() @! *o')!) ' APA

-o*m&


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A!?!+

List of Annees

A!? #

+verview of the organiation

%rief history


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!ntroduction of all the departments

Ietailed description of the department you worked in +0 Ietailed description of

the project assigned.

A!?

,tructure of the 6inance Iepartment

Iepartment hierarchy

A!? %

Accounting system of the organiation

6inance system of the organiation

4se of electronic data in decision making

"obiliation of funds

Feneration of funds

,ources of funds

A!? 7

#ritical analysis

0atio analysis

Horiontal @ vertical Analysis

+rganiation analysis in comparison with itscompetitors;

6uture prospects of the organiation.

A!? 8

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h bl internship replor t for finance

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