habib metro bank report

If you want that report contact on this number 0333-6519686

INTERNSHIP REPORT OF

HABIB METROPOLITAN BANK LIMITED

By

Your Name

Roll No

Submitted in Partial Fulfillment of Requirements for the Degree of

Master of Commerce

To

Department of Management Sciences

National University of Modern Languages

Faisalabad, Campus.

August, 2014

National University of Modern Languages

Faculty of Information Technology and Management Sciences

It is hereby certified that the report has been thoroughly and carefully read and

recommended to the faculty of management sciences. For acceptance of final

internship report by Name, roll#, Session (Sep 2012 to June 2014) morning, in

partial fulfillment of the requirements for the degree of (name of Degree of) National

University of Modern Languages Faisalabad.

Dated

Supervisor

Supervisor signature

Panel member name

Panel member signature

Head of department

TABLE OF CONTENT

Chapter Page

TABLE OF CONTENTS ………………………………………………… i

EXECUTIVE SUMMERY …………………….………………………… v

ACKNOWLEDGEMENT…...…………………………………………… vi

DEDICATION…...………………………………………………………. vii

I Commercial Banking in Pakistan And Origin of Islamic Banking.................1

1.1 Background Of Pakistani Banking..................................................................1

1.1.1 Scheduled Banks and NBFIs....................................................................1

1.1.2 Studies Conducted....................................................................................2

1.2 Regulations Of Commercial Banking In Pakistan...........................................2

1.3 Technology Used By Commercial Banks In Pakistan.....................................3

1.4 Structure Of Commercial Banks In Pakistan...................................................3

1.5 Challenges Faced By Commercial Banks In Pakistan.....................................4

1.6 Commercial Banks Operating In Pakistan.......................................................5

1.7 Introduction Of Islamic Banking.....................................................................7

1.7.1 Re-launching of Islamic banking.............................................................8

1.7.2 Departments and divisions.......................................................................8

1.8 Vision Statement Of Islamic Banking.............................................................9

1.9 Mission Statement Of Islamic Banking...........................................................9

1.10 Objectives Of Islamic Banking......................................................................10

1.11 Islamic Modes Of Financing.........................................................................11

1.11.1 Musharakah............................................................................................11

1.11.2 Mudarabah..............................................................................................11

1.11.3 Murabaha................................................................................................11

1.11.4 Salam......................................................................................................12

1.11.5 Istisna.....................................................................................................12

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1.11.6 Ijaraha.....................................................................................................12

II Introduction of Habib Metropolitan Bank Limited........................................13

2.1 Introduction...................................................................................................13

2.1.1 HBZ Group.............................................................................................13

2.2 Company Profile............................................................................................14

2.2.1 Vision Statement....................................................................................14

2.2.2 Company Registration Number..............................................................14

2.2.3 Company National Tax Number............................................................14

2.2.4 Registered Office....................................................................................14

2.2.5 Website...................................................................................................14

2.3 Habibmetro Organization Chart....................................................................15

2.3.1 Habibmetro Code of Conduct for Directors of the Bank.......................15

2.4 Habibmetro Memberships.............................................................................17

2.5 Product...........................................................................................................17

2.5.1 Current Account.....................................................................................17

2.5.2 Saving.....................................................................................................18

2.5.3 Term Deposit..........................................................................................23

2.6 Services..........................................................................................................25

2.6.1 Habibmetro Home Remittance...............................................................25

2.6.2 Habibmetro Money Gram International.................................................25

2.6.3 Habibmetro Cash Management Services...............................................26

2.6.4 Habibmetro E-Salary..............................................................................26

2.6.5 Habibmetro Rent Free Lockers..............................................................26

2.6.6 Habibmetro Short Term and Long Term Finance..................................26

2.6.7 Habibmetro Shares Subscription Desk (Services).................................26

2.6.8 Habibmetro 24 Hours Call Center..........................................................27

2.6.9 Habibmetro Web Banking......................................................................27

2.6.10 Habibmetro SMS Banking.....................................................................28

2.6.11 Habibmetro POS (Point of Sale) Services.............................................28

2.6.12 Habibmetro E-Statement........................................................................29

2.6.13 Habibmetro Visa (ATM / Debit Card)...................................................29

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2.7 Habibmetro Islamic Banking.........................................................................30

2.7.1 Mission...................................................................................................30

2.7.2 Introduction............................................................................................30

2.8 Islamic Product..............................................................................................31

2.8.1 Habibmetro Islamic Current Account....................................................31

2.8.2 Habibmetro Islamic Saving Account.....................................................31

2.8.3 Habibmetro Islamic Investment Certificates (HIIC)..............................32

2.8.4 Habibmetro Murabaha............................................................................33

2.8.5 Habibmetro Ijarah..................................................................................33

2.8.6 Habibmetro Diminishing Musharakah...................................................33

2.8.7 Habibmetro Trade Services....................................................................34

III Structure and Departments of Habibmerto.....................................................36

3.1 Hierarchy Chart.............................................................................................36

3.2 Brief Introduction Of All The Departments..................................................37

3.2.1 Business development department.........................................................37

3.2.2 Cash management department...............................................................37

3.2.3 Account opening department.................................................................37

3.2.4 Credit department...................................................................................37

3.2.5 Dispatch department...............................................................................38

3.2.6 Clearing department...............................................................................38

3.2.7 Account department...............................................................................38

3.2.8 Finance department................................................................................38

3.3 Comment On The Organizational Structure..................................................39

3.4 Future Prospects Of The Organization..........................................................39

IV Learning in Six Week Internship......................................................................41

4.1 A Brief Introduction Of The Branch.............................................................41

4.1.1 Starting and the ending dates of my internship......................................41

4.1.2 Names of the departments in which I got training.................................41

4.2 Training Program...........................................................................................42

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4.2.1 Account opening department.................................................................42

4.2.2 Cash department.....................................................................................43

4.2.3 Credit department...................................................................................44

4.2.4 Cleaning department..............................................................................45

4.2.5 Inward clearing.......................................................................................46

4.2.6 Outward Clearing...................................................................................46

4.2.7 Remittances Department........................................................................47

4.2.8 Western Union.......................................................................................48

4.2.9 Telegraphic transfer (TT).......................................................................49

4.2.10 Demand draft (DD)................................................................................49

4.3 Ratio Analysis...............................................................................................50

4.3.1 Gross spread ratio...................................................................................50

4.3.2 Noninterest income to total income ratio...............................................51

4.3.3 Spread ratio............................................................................................52

4.3.4 Return on Asset ROA Formula..............................................................53

4.3.5 Return on Total Equity(ROE)................................................................54

4.3.6 Debt Ratio..............................................................................................55

4.3.7 Debt / Equity Ratio.................................................................................56

4.3.8 Times Interest Earned.............................................................................57

4.3.9 Advance /deposit ratio............................................................................58

4.3.10 Operating cash flow ratio.......................................................................59

4.3.11 Dividend Per share.................................................................................60

4.3.12 Earning per share....................................................................................61

V Analytical Analysis.............................................................................................62

5.1 Swot Analysis................................................................................................62

5.1.1 Strengths.................................................................................................62

5.1.2 Weaknesses............................................................................................63

5.1.3 Opportunities..........................................................................................63

5.1.4 Threats....................................................................................................64

VI Conclusion and Recommendation.....................................................................65

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6.1 Conclusions...................................................................................................65

6.2 Recommendations For Improvement............................................................66

6.2.1 Security cameras....................................................................................66

6.2.2 Proper reception.....................................................................................67

6.2.3 Token system.........................................................................................67

6.2.4 Behavioral and professional training......................................................67

References...................................................................................................................68

EXECUTIVE SUMMARY

This report is about HabibMetro. In October 1992, HabibMetro was established under

HabibMetro Ordinance 1949. National bank is owned by the government and act as

an agent of the State bank of Pakistan. It’s headquarter is situated in Karachi. It has its

national and international level branches i.e. 51 national. HabibMetro maintains its

positions as a pakistan’s premier bank for higher achievements. Its subsidiaries

include HMB Capital, HMB Modaraba Management Company, HMB Exchange

Company, Taurus Securities, HMB Almaty and others. It offers its unique products

that are affordable for all classes.

During my internship, I learn a lot about working in different departments that are

account opening, clearing and remittance. The main department of any bank is finance

department and the main function of any bank is to deal with finance. Any bank

secures the resources of general public and offers them a good profit. HMB also

provides services for government employees. One portion of bank is reserve for

government employees’ dealings only.

After complete analysis of HabibMetro, I come to this conclusion that the

HabibMetro plays an important part in financial sector and it can gain highest success.

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DEDICATION

To My Loving Teachers, Friends, and family members who have been steadfast

supporters throughout myM.com with their invaluable love and understanding

T H A N K S T O A L L

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ACKNOWLEDGEMENT

First of all I am thankful to ALLAH who always helped me in all of the ways in my

life and always gave me courage and patience to do all of my internship in a good

manner and secondly I am thankful to my teacher and all of the staff of the bank that

also helped me to do my internship.

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YOUR NAME

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9CHAPTER NO 1

INTRODUCTION OF HABIB METROPOLITAN BANK LIMITED

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1. INTRODUCTION

Habib Metro was incorporated in Pakistan as a Public Listed Company in 1992 under

the name, Metropolitan Bank Limited. The Bank commenced, duly licensed, full

scheduled commercial-banking operations in October 1992.

Metropolitan Bank, from October 1992 to September 2006, remained a highly rated

bank and, vide it’s nationwide 51-branch on-line network, established as a

distinguished provider of trade finance services.On October 26, 2006 Habib Bank A

G Zurich`s Pakistan Operations merged into Metropolitan Bank Limited and the

merged entity was named Habib Metropolitan Bank Limited. Demonstrating a strong

commitment to Pakistan economy, HBZ is the principal shareholder of Habibmetro.

Habibmetro operates in all major cities of the country. The Bank ranks within Top 10

in Pakistan with a strong vision to be the most respected Financial Institution.

HABIBMETRO has its primary focus on retail banking and trade finance and also

offers highly innovative E-Banking solutions and Consumer Banking to its customers.

The Bank’s Islamic Banking Division is fully capable of catering to customers

seeking Shariah compliant products.

COMPANY PROFILE

Vision Statement

Based on a foundation of trust, to be the most respected financial institution,

delighting customers with excellence, enjoying the loyalty of a dedicated team,

meeting the expectations of regulators and participating in social causes while

providing superior returns to shareholders

Company Registration Number

K-03892

(CUIN 0028018)

Company National Tax Number

0711167-3

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Registered Office

Ground Floor, Spencer’s Building, I.I.Chundrigar Road,

Karachi–74200,Pakistan

Phone (92-21)111-14-14-14

Fax (92-21) 3263 0404 – 05

Website

Parent Company Habib Bank AG Zurich (www.habibbank.com)

Subsidiary Company HabibMetro Financial Services (www.hmfs.com.pk)

BACKGROUND

Banking in Pakistan first formally started in Pakistan during the period of British

colonialism in the South Asia. After independence from British Raj in 1947, and the

emergence of Pakistan as a country in the globe, the scope of banking in Pakistan has

been increasing and expanding continuously. Pakistan's oldest bank is the State Bank

of Pakistan, which is also the central bank of the nation. Before independence on

August 14, 1947, the Reserve Bank of India was the central bank of what is now

Pakistan. After independence, Muhammad Ali Jinnah took actions to establish a

central bank in Pakistan, which resulted in the new founding of the State bank of

Pakistan, with its headquarters to be based in Karachi. Only 7% of the population uses

the banks, has tremendous potential but this needs to be pushed a little further.

Pakistan’s financial sector consists of Scheduled Commercial Banks which include

nationalized, foreign, and private banks; and Non-banking Financial Institutions

(NBFIs) which include Development Finance Institutions (DFIs), Investment Banks,

leasing companies, modarabas, and housing finance companies tan under structure,

conduct and performance paradigm of industrial organization.

Scheduled Banks and NBFIs

Scheduled Banks and NBFIs (excluding Moradabad and leasing companies) are both

regulated by the State Bank of Pakistan’s Prudential Regulations, albeit through

different wings, and are subject to different SBP regulatory requirements such as

CapitaLand liquidity reserve requirements. Modaraba and leasing companies are

being regulated by the Securities and Exchange Commission of Pakistan (formerly

Corporate Law Authority), which is a body corporate. Compared to commercial banks

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http://www.hmfs.com.pk/

http://www.habibbank.com/

which cater mostly to short-term working capital requirements, NBFIs cater to

medium and long term financing needs and, thus, are barred from engaging in any

commercial banking activities including trade business and issuing cheques.

However, the SBP allowed commercial banks to undertake long term project lending.

Among the scheduled banks, only Pakistani commercial banks are listed.

Studies Conducted

Although there are number of studies on market structure, conduct and performance

in the banking sector conducted since 1960s for a number of countries (for a survey

see Swank 1996, Berger 1995, & Gilbert 1984), there is hardly such a study in the

context of Pakistan. However, there exist some studies with limited scope like

Qureshi, et al (1998) on cost structure of five commercial banks and one specialized

bank1, Malik, et al (1989 & 1991), Qureshi et al (1984) and Qureshi & Shah (1992)

on the rural finance and Siddique & Siddiqui (1998) on overall profitability of the

banking sector in Pakistan. Recently SBP (2002) evaluated commercial banks’

performance under traditional framework of financial analysis, but it also excluded an

analysis of the market structure and conduct of the banking sector. Thus, one is still

unable to find a study on the NBP, HBL, UBL, and ABL, MCB & ADBP commercial

banks of Pakistan.

REGULATIONS OF COMMERCIAL BANKING IN PAKISTAN

Regulations of Pakistan’s commercial Banks

Limit on Exposure to a Single Person/Group

Limit on Exposure against Contingent Liabilities

Minimum Conditions for Taking Exposure

Limit on Exposure against Unsecured Financing Facilities

Linkage between Financial Indicators of the Borrower and Total Exposure From

Financial Institutions

Exposure against Shares/TFCS and Acquisition of Shares

Guarantees

Classification and Provisioning For Assets

Assuming Obligations On Behalf Of NBFCS

Facilities to Private Limited Company

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Payment of Dividend

Monitoring

Margin Requirements

TECHNOLOGY USED BY COMMERCIAL BANKS IN PAKISTAN

Technological advances are quickly changing the face of the Pakistani banking

industry. Alternative channels are growing quickly and represent a sizable portion of

banks’ revenue streams as all banks as well as mobile network operators are jumping

on the ‘branchless banking’ bandwagon.

As I discussed in the previous piece about shrinking spreads, published on November

4, the business model utilized by commercial banks of collecting deposits and

investing in treasury bills is not sustainable. No single additional revenue stream can

completely compensate for the declining interest income, so banks will have to

aggressively pursue revenue expansion from several diversified streams.

Competition is also expected to intensify in smaller cities as there are many

underserved affluent customers in Hyderabad, Multan, Sukkur, etc. Aggressively

growing mid-sized banks such as Bank Alfalah and Meezan Bank are looking to

expand their branch network to these cities.

Given the intense competition and increasingly price-sensitive customers, price

increase for standard banking services, such as cheque book issuance, is unlikely. To

generate additional income, banks will have to develop new and innovative products

and cross-sell to increase products per customer.

STRUCTURE OF COMMERCIAL BANKS IN PAKISTAN

We will discuss structure of banks in Pakistan, first in terms of number of banks and

size of banks (as measured by assets, deposits, etc), then in terms of concentration

ratios(Lorenz curve, Gini co-efficient, Herfindahl index and Concentration Ratio).In

1990, seven domestic banks and seventeen foreign banks were doing business in

Pakistan. All the domestic banks were owned by the government. Entry of domestic

private sector in the banking business had been banned since the promulgation of

Banks.

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Nationalization Act 1974 However, as a part of financial liberalization strategy of

1990s, Private sector was allowed to open commercial banks in 1991. At that time

fifteen banks were opened. During the next ten years the process of entering of new

banks and exiting of inefficient banks continued. Moreover, in order to go some step

further to make the banking sector competitive, the government also denationalized a

couple of commercial banks. In 1999, there were 19 domestic banks and seventeen

foreign banks in Pakistan (see Annex for list). Of the domestic banks, four were

owned by the federal government, two were privatized, two were owned by the

provincial governments and the rest were in the private sector. The government has

also minimized its interventions in the business of its own banks in order to ensure

that a competitive environment prevails in the industry. Along with the growth of

banks in numbers, their business also shows a reasonable growth during 1990s. Total

assets of commercial banks grew at a compound annual growth rate of 15 percent,

from Rs 419 billion at the beginning of decade to Rs 1,469 billion by the end of 1999.

Amongst different groups, assets of private banks showed fastest growth during 1990s,

followed by foreign banks. A similar trend is witnessed in the advances and deposits

of the banks.

CHALLENGES FACED BY COMMERCIAL BANKS IN PAKISTAN

The banking sector in Pakistan has been going through a comprehensive but complex

and painful process of restructuring since 1997. It is aimed at making these

institutions financially sound and forging their links firmly with the real sector for

promotion of savings, investment, and growth. Although a complete turnaround in

banking sector performance is not expected until the completion of reforms, signs of

improvement are visible. The almost simultaneous nature of various factors makes it

difficult to disentangle signs of improvement and deterioration.

Commercial banks have been exposed and withstood several types of pressure since

1997. Some of these are

Multipronged reforms introduced by the central bank,

Freezing of foreign currency accounts,

Continued stagnation in economic activities and low growth and

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Drive for accountability and loan recovery. All these have brought a behavioral

change both among the borrowers as well as among the lenders. The risk aversion

has been more pronounced than warranted.

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12 CHAPTER NO. 2

HABIBMETRO ORGANIZATION CHART

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HIERARCHY CHART

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Cash Deposit Department

Clearing Department

Bills Remittances Department

Foreign Exchange Department

Credit Department

General Banking

Account Opening Department

Internal AuditorBranch Credit

Customer Service Department

Branch Manager

Regional Manager

General Manager

HABIBMETRO ORGANIZATION CHART

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Habibmetro Code of Conduct for Directors of the Bank

The members of Board of Director of HabibMetro Ltd, hereinafter called

HabibMetro, are expected to uphold the core values of the Bank relating to lawful and

ethical conduct of business, Key aspects of the Bank’s Code of Conduct include the

following

Integrity and honesty

The directors shall discharge their responsibilities with the highest standards of ethics

and professional honesty and integrity in all dealings with the public, clients, investors

and employees. The directors are also required to comply with the regulations of the

Bank in letter and spirit in order to protect the interest of the Bank and to inform the

Board if he became aware of any irregularity that might affect the interest of the

Bank.

Professionalism

The directors shall serve the Bank honestly, faithfully, ethically and with utmost

competence, and shall use their best endeavor to promote and uphold the interest and

goodwill of the Bank.

Fidelity and secrecy

The directors shall not disclose to any person any information as to the practice,

dealings and affairs of the Bank, or to divulge any information relating to the affairs

of its customers, except in circumstances in which it is in accordance with law,

practice and usage customary among banks, necessary or appropriate to divulge such

information as director of the Bank.

Conflict of interest

The directors shall ensure that their personal interests do not conflict with the

responsibilities they owe to the bank. In particular, they shall not become personally

involved in any transaction, negotiation or contract on behalf the bank, with an entity

in which they or any of their relative/friend has an interest, without full written

disclosure and prior written consent of the Board of Directors.

Insider dealing

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The directors shall abide by the terms and conditions contained in all applicable laws

and regulations on subscribing and/or acquiring the shares/securities of the Bank.

HABIBMETRO MEMBERSHIPS

International Chamber Of Commerce.

Karachi Bankers Club.

Management Association of Pakistan.

Overseas Investors Chamber of Commerce & Industry.

Pakistan Banks’ Association.

Swiss Business Council.

The Institute of Bankers Pakistan.

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CHAPTER NO.3

PRODUCT/ SERVICES

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PRODUCT

Current Account

Habib Metro Basic Banking Account

Your basic banking requirements do not require multiple monthly cheque

transactions, then Basic Banking account may fulfill your day to day banking needs

with no minimum balance requirement or restrictions on ATM withdrawals.

Features & Benefits

No minimum amount requirement for opening the account.

No requirement for maintaining minimum balance.

Non-remunerative account.

No limit on number of ATM / Deposit transactions.

Two cheque transactions will be allowed free per calendar month. Charge of Rs.

25/- per cheque will be applied from the third cheque onwards.

Free Services

Free Payment Orders.

Free HABIBMETRO ATM/Debit Card.

Free Funds Transfer within HABIBMETRO.

Free Web banking services.

Yearly Statements.

Rent Free lockers.

Habibmetro Current Account

Enjoy your everyday banking needs with absolute ease through our non-interest

bearing Current Account.

Features & Benefits

The minimum amount required to open the account is Rs 5,000/-

This is a checking account with no limit on the number of transactions.

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Free Services

Cheque Book(s)

Free Payment Orders

Free HABIB METRO ATM/Debit Card

Free Funds Transfer within HABIBMETRO

Free Web banking services

Free Half-yearly Statements

Rent Free lockers

Saving

Habibmetro PLS Saving Account

Offers you the simplest way to save and manage your savings with high rate of return.

Eligibility

Individuals / Companies

Amount Requirements

No minimum amount requirement.

Profit Payment

Profit Calculated on Average Balance & paid on Half Yearly Basis.

Exclusive Free Life Insurance Cover

Min Qualifying Balance Rs 15,000/-

Maximum claim Rs 1,000,000/-

Basis Average credit balance of previous 6-months

Zakat, Withholding Tax & Other Levies

Zakat / Taxes will be applicable as per law/rules from time to time.

Free Services

Cheque Book(s)

Free Payment Orders


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Rent Free lockers

Habibmetro Saving Plus Account

Earn monthly profits and access your growing savings at all times

Eligibility

Individuals Only

Amount Requirements

Minimum Average Deposit Rs. 100, 000/-

Maximum Average Deposit Rs. 25, 000, 000/-

*If the amount falls behind the minimum requirement or exceeds the maximum

required deposit; profit will be paid on prescribed SBP rate.

Profit Payment

Monthly Profit Payment on Average Balance







Free Services

Cheque Book(s)

Free Payment Orders



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Rent Free lockers

Habibmetro Privilege 55+ Savings Deposit

Considering the Need of HABIBMETRO’s privilege Customer HABIBMETRO Now

Offer’s “Privilege 55+”, a saving account with unique features. As HABIBMETRO’s

Privilege customers you now enjoy,

Eligibility

Individuals

Age Requirement 55 years & above

Amount requirement*

Minimum Average Deposit Rs. 25, 000/-

Maximum Average Deposit Rs. 25, 000, 000/-

*If the amount falls behind the minimum requirement or exceeds the maximum

required deposit; profit will be paid on prescribed SBP rate.

Profit Payment

Monthly Profit Payment on Average Balance

Anniversary Bonus

Upon maintaining a minimum balance of Rs. 1,000,000/- or more for the year, the

account holder will be eligible to receive an anniversary Bonus


In case of joint account, primary account holder will be covered up to 65 years of

age.

Maximum Age 65 years. In case of joint account, 1st person will be covered if

under 65 years.





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Free Services

Cheque Book(s)

Free Payment Orders





Rent Free lockers

Habibmetro Multiplier Account

Enjoy the facility of making transactions while earning profit on daily basis

Eligibility

Individuals / Companies

Profit payment

Profit calculated on daily basis and paid on monthly basis



Free Features

Cheque Book(s)*

Free Payment Orders

Free HABIBMETRO ATM/Debit Card




Rent Free lockers

Habibmetro Foreign Currency Saving Plus ($, £, €)

Considering the Need of HABIBMETRO’s Customer, HABIBMETRO Now Offer’s

“Foreign Currency Saving Account with unique features

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Eligibility

Individuals

Currency Type

US Dollar

Pound Sterling

Euro

Profit Payment

Monthly Profit Payment on Minimum Balance.

Anniversary Bonus

Upon maintaining a minimum balance of 100,000/- or more in respective currency

for the year, the account holder will be eligible to receive an anniversary Bonus

Withholding Tax & Other Levies

Taxes & other levies will be applicable as per law/rules from time to time.

Free Services

Issuance of FTTs*

Outward Remittances (2 per month)*

Cheque Books

Collection of Outward Foreign Cheques

SMS Alerts & Internet Banking

Term Deposit

Habibmetro Mahana Scheme

Habib Metro Mahana Scheme offers high rate of returns on your fixed deposits with

the benefit of monthly profits

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Eligibility

This Scheme is open for Individuals

Amount Requirements

Minimum Investment Rs 25,000/-

Tenure & Investment Details

Funds may be deposited for 1, 3 & 5 years

Profit Payment

Profit will be paid on monthly basis.

Maturity

Upon maturity principal will be automatically rolled over at the rate applicable on

the date of maturity.



Premature Encashment

A premature encashment fee will be levied for premature withdrawal of funds

from the scheme.

The rate of the fee will be 2% of the deposit amount or the amount of profit

already paid until the date of premature withdrawal, whichever is lower.

Habibmetro Premium Deposit Scheme

You can now enjoy the facility of quarterly or half yearly profit payments at your

convenience

Eligibility The scheme is open for any

Individuals

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Amount Requirement

Minimum deposit requirement is Rs. 25,000/-,

Tenure

Funds may be deposited for 1, 3 & 5 years

Profit Payment

Profit will be paid on Quarterly or Half Yearly basis as per customer’s preference

at the time of booking the deposit.

Maturity

Upon maturity principal will be automatically rolled over at the rate applicable on

on the date of maturity.


All payments will be subject to Zakat (as per rules), withholding tax and other

government levies as applicable from time to time.

Premature Encashment

A premature encashment fee will be levied for premature withdrawal of funds

from the scheme.

The rate of the fee will be 2% of the deposit amount or the amount of profit

already paid until the date of premature withdrawal, whichever is lower.

Habibmetro Izafa Certificates

Earn higher returns by investing it in Certificate of Deposit for 07 Years.

Eligibility

Individuals

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Amount Requirement

Minimum Rs. 10,000/-

Tenure

Certificates are offered for 7 years with Profit Paid on Maturity.

Early Encashment

Encashable anytime, no penalties



SERVICES

Habibmetro Home Remittance

Habibmetro Home Remittance Division is facilitating overseas Pakistanis under the

guidance and patronage of Pakistan Remittance Initiative (PRI), a joint initiative of

State Bank of Pakistan, Ministry of Overseas Pakistanis and Ministry of Finance.

Through this service loved ones, families, friends & remitters can send money back to

Pakistan.

Habibmetro Money Gram International

Money Gram has a global reach through its network of over 334,000 local agents in

more than 200 countries and territories, providing customers with convenience and

flexibility. Money Gram is a fast, trusted and secure service to receive money all over

the world from your loved ones in a few minutes.

Habibmetro Cash Management Services

Cash Management department provides high quality solutions and services to its

Corporate Clients. The client can be benefited in the form of efficient liquidity

management to increase their profitability

Habibmetro E-Salary

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Comprehensive system through which salary disbursement to the employees of our

valued corporate customers with ease & efficiency.

Habibmetro Rent Free Lockers

Secure

Rent Free Lockers

Refundable security deposit

Available in,

SIZE Security Deposits

SMALL Rs. 20,000

MEDIUM Rs. 35,000

LARGE Rs. 60,000

EXTRA LARGE Rs. 100,000

Habibmetro Short Term and Long Term Finance

The bank also offers short term working capital financing including under sharia

compliant modes, exports/import financing and long-term finances to

Corporate/Commercial customers as well as SMEs trade & industry. It also extends

Agricultural credit, specialized financing tailored to customer’s needs and is also a

regular member of Syndicated financing club.

Habibmetro Shares Subscription Desk (Services)

We provide following services to our valued customers.

Initial Public Offering –IPO

Right Shares – RS

Term Finance Certificate – TFC

Dividend Warrant – DW

Habibmetro 24 Hours Call Center

Now you can access your account without going to the bank, 24 hours a day, 7 days a

week absolutely free. Thismeans all you need is a touch-tone telephone at home, at

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work or on the go to access all the information you needwithout making a trip to the

branch Dial 0800-42242 (Habib) and reach our Customer Services Representative

Get your account Balance

Short Statement

Cheques in Clearing

Lodge a complaint in case of any inconvenience

Cash dispense issue complaints

ATM/VISA Prepaid Card Blockage

Inquire about the daily accounts related profit rates and currency exchange rates

VISA Card internet activation

VISA Card Transaction details

Lead(s) Generation

Inquire about our product offerings

Habib Metro Network Information

Habibmetro Web Banking

Web Banking

Access your account from your home or office or anywhere in the world.

Login through web banking username and password.

Following services can be accessed 24/7

Up-to-date Account Balance.

Cheques in Clearing

Account statement

Beneficiary Management (Local Fund Transfer, Outside Fund Transfer)

Debit / Credit Advice

Fund Transfer

Internal Fund Transfer ( HabibMetro To HabibMetro)

Inter Bank Fund Transfer (HabibMetro To Other Bank)

Utility Bill Payment Services

Electricity

Sui Gas

24

https://ib.habibmetro.com/

PTCL

Internet Service Providers (ISP)

PTCL Evo Prepaid

PTCL Evo Postpaid

Wateen

WiTribe

Mobile Top Up/Airtime Purchase (Easy Load)

TELENOR

UFONE

WARID

ZONG

QUBEE DISTRIBUTOR

MOBILINK

Habibmetro SMS Banking

HabibMetro SMS Banking utilizes SMS channel to conduct various financial as well

as non financial transactions. The simple to use service facilitates HabibMetro

customers to conduct transactions from the location of their convenience. A simple

structured SMS will land the required information on your fingertips.

Habibmetro POS (Point of Sale) Services

Now you can withdraw cash from all HMB branches cash counters easily and

without any delay.

Each HabibMetro branch is now equipped with a POS machine available on their

Cash Counters.

No need to issue cash cheques and no need to wait .

Cash can be withdrawn up to Rs. 400,000/- via HMB VISA (ATM / Debit card).

Cash can be withdrawn up to Rs. 250,000/- via HMB ACCESS (ATM / Debit

card).

(Subject to availability of funds in the account )

Habibmetro E-Statement

25

You can get your account statement electronically and avoid use of paper based

statements.

E-statement will be delivered at your designated email address and the same will

arrive in no time as compared to courier. In addition E-Statement is a more secure

mode of transmission.

Just fill up the attached subscription form and visit your branch to avail this free

service and make Pakistan a Green State.

Habibmetro Visa (ATM / Debit Card)

HABIBMETRO VISA Debit Cards are available to our valued clients at all

HABIBMETRO branches.

Make transactions up to the credit balance available in your account

Withdraw cash through convenient POS terminals at all HABIBMETRO

branches.

Daily ATM Withdrawal Limit Rs 100,000/-

Daily Branch cash counter POS Limit Rs 400,000/-

Local Purchase and Online Shopping Limit Rs 200,000/-

HABIBMETRO Access (ATM / Debit Card)

HABIBMETRO Debit Cards are FREE, and available to our valued clients at all

HABIBMETRO branches.

Make transactions up to the credit balance available in your account

Withdraw cash through convenient POS terminals at all HABIBMETRO branches

Daily ATM Withdrawal Limit Rs 30,000/-

Daily Branch cash counter POS Limit Rs 250,000/-

BRIEF INTRODUCTION OF ALL THE DEPARTMENTS

There is brief introduction of all the departments of the HABIB METRO bank

Business development department

The business department promotes or selling the product to the customers, products

like ATM account opening forms etc .this department work as set the target strategies

26

according the current circumstances this department work with the three strategic

objectives.

customer satisfaction

employee satisfaction

Business results.

Cash management department

In this department the teller are the casher person receive the deposited and the give

the cash to the account holder on their demand and also maintained the online etc. in

cash department there is three type of sector .

Token issuance

Cash receipt

Cash payments

Bill receives or fees received etc.

Account opening department

The account opening department is the department which deals with the account

opening open of new account or the verifying the account this department is necessary

as par the order of the state bank of Pakistan in this department I come to know how

to open the account by filling the account opening form and also attached the NIC

card copy and it is verify by the NADRA

Credit department

In this department the bank granted the loan to the customer and there are the

different type of the credit which is provided to its customer during my internship I

learned that if some individual request for the loan then bank granted him a loan

according to limit and some requirement for different kind of loan for example if the

organization request for the loan then bank granted the loan according to some

requirement and limits which apply on the organization.

Dispatch department

Dispatch department is the very important sector in the bank because all inward and

outward mails in which ordinary and sensitive as well, routed or transfer to this

department as the mail in the branches consists of documents covering title to goods,

27

cheques, inter branch Dr. Cr. Advices, letter of credit in international banking apart

from other routine letters. So it is important to handle dispatch carefully and make

sure there is not wrong devilry

Clearing department

There are two type of clearing in the bank and during my internship me doing both

type of the clearing.

Inward clearing

Outward clearing

Account department

This is important department in which the account are maintained and also the

voucher and the books and the all the expenses or expenditure of the bank are

maintained so it is the most important department of the bank maintain all the account

of the bank is the duty of this department and this department is working well.

Finance department

Financing department is the important department because bank finance in various

ways like advancing the loan and make the profit as a excess amount in the way of

interest the HABIB METRO finance in such a way giving the loan to the customer

and also buy the share of the private organization also finance in the agriculture sector

and the private sector as well.

COMMENT ON THE ORGANIZATIONAL STRUCTURE

The success of the organization is based on organizational structure the HABIB

METRO organizational structure is very smooth and efficient .for the convenience of

work the work is divided to department according to the type of the work and no bank

or organization can be run if their employee not doing their assign work or duties the

during my internship in the bank I observed that at the department doing their assign

duties and there is no discrepancy between the bottom line employees and the top

level management .all the communication between the employees and the department

is efficient whither it is horizontal or vertical communication .there is a harmony

among the horizontal and vertical line of management .every employee know his duty

28

and authority for doing the retain job I like the structure of the bank due to it clear and

who reports whom transparency method.

In my opinion that HABIB METRO bank of Pakistan doing the clear ,transparent and

the exceptional work which make the HABIB METRO bank (Ltd) a leading bank in

the banking sector of the Pakistan.

FUTURE PROSPECTS OF THE ORGANIZATION

The future prospectus of HABIB METRO bank(Ltd) for the convenience of the

customer the bank install the ATMs machines all the big cities and make all the

branches online these steps takes more technology in the banking sectors and make

the business more profitable.

HABIB METRO team loyal to takes the Banking to the top level of success. Key

features for the future prospectus are given below.

In future the HABIB METRO bank work on the customer satisfaction and make the

new rules and launching new products to the valuable customer to attain the major

share in the market locally as well as globally like remittances , payroll and the trade

policy and making the cash management more effective. The HABIB METRO bank

makes the all branches online for the customer, the customer can make the transaction

with more ease at home and on his computer and make the payments of the all type of

utility bill by using online banking service and the other online facilities too. The

HABIB METRO management invests in his branches and franchise to make them

more business oriented and effective. HABIB METRO bank introduces the new

financial product and service to take the leading position as compare to its

competitors and positively traveling to achieve it goal.

HABIB METRO bank taken the steps to reduce the expenditure and invest in those

things and business to make sure to maximize its profitability. HABIB METRO bank

focuses on the expansion of its customer oriented franchises and especially in Islamic

and SME segments. The HABIB METRO bank is taking the steps and investment on

the employees and focus on their training because if there is no talented and

professional employees in the organization the organization not make effective

progress.

And the final thing is that control and command by the central management so the top

management develops the strong culture and invest on their franchises and also in

29

other business activities and HABIB METRO doing a great gob for the purpose of the

attainment of the goal.

30

13

14

15

16

17

18

19

20

21

22

23

24 CHAPTER NO 4

LEARNING IN SIX WEEK INTERNSHIP

31

A BRIEF INTRODUCTION OF THE BRANCH

Thank fully I did my internship from HABIB METRO bank (Ltd) Allied hospital

branch. This Branch is online branch so I leaned that the working of the management

is very smooth and the efficient.

In this branch I observed that this branch doing a great business and the management

and the staff of the branch is efficient and the professional and the manage handle all

the working of the branch and this branch have the very good contact and the relation

with the shops business entities and the other sound parties as well to increase the

deposit of the branch and maintain the efficiency of the work and enhance the

organization.

The manager guided to the different functions operating within the organization and

the sub manager makes sure and takes the responsibility that staff doing work

efficiently in the entire department.

And also the branch is well maintained and decorated and the entire department have

separate place within the organization to doing there assign duties and the

environment of the organization attract the customer as well which is good for the

organization.

Starting and the ending dates of my internship

Starting and the ending dates of my internship program in the HABIB METRO bank

(Ltd) Allied hospital branch

Starting Date 1st July 2014

Ending Date 20th August 2014

Names of the departments in which I got training

During my internship I work almost in the all department and my internship duration

is 6 week I learnt the working of the following department


Cash department

Credit department

32

Clearing department

Remittances department

TRAINING PROGRAM

Detailed description of the tasks assigned to me during the internship program

Duration of my internship six week in a HABIB METRO bank (Ltd) Allied hospital

branch I learned the detail work of the different department I work in the various

department but I explain those department in which I got full command during my

learning process . The detail of the function which I perform is mention as under


In my first two weeks I’ll work in the account opening departments. It is important

department of the bank because all the working of the bank base on account and the

bank account shows the deposit of the bank if any person working with the bank or

the organization then first step is the account opening and my work is in the

department is to open the new account for a valuable customer and I learned that there

is few many document which is use in the opening of new account. There are many

type of accounts the HABIB METRO bank (Ltd) is offered to its customer in which

include Current account, Saving account, (PLS) Profit and loss account, these have

different specification of the customer which will gave benefit of him. For account

opening the minimum amount required is 1000 Rs.

The document which is used in the opening a new account is as under

Account opening form

The name of person who request for opening the new account

The type of the account

Computerized Copy of national identification card

Check the expiry date

Filled the opening form

Signature of the person

SS Card (Specimen Signature Card)

Mother name

Father name

Present address

33

Permanent address

KYC Foam (Know your Customer)

CNIC Required for KIN

The most important in account opening is SS Card signature because we grudge it

may which customer withdraw the money is original customer or not, and other step

is KYC Form in this form we collect all secret information like client Father and

mother name, income of the business, his email address, postal address, and content

number. The last one is CNIC required of KIN for those person who have a blood

relation of client like father, mother, brother, sister, in this there is no required for

friend or other person NIC only for those who have a blood relation of the client.

Cash department

During my internship I spent my 3rd week in the cash department and cash department

is totally deals with the cash whether the cash comes in the bank or out from the bank

during the learning in the cash department I learn the all the activities which is

perform in the cash department .in the cash department there is various sub

department according to the categories which are performing by the different persons

in the department in the cash department there are four to five counters in which

include

The issuance the token

Receipt counter or the cash deposit counter

Payment of cash and checks

Verification and clearance the check and account counter

Bill and fee receive counter

During my learning process I learned that first of all issue the token to the customer

and then in the receipt counter receive the cash and maintained the account and then if

a customer have a check then the cheque is verifies by the verification person and

then the casher makes the payment against the cheque and also transfer the money

online and maintained the all activities which is casher duties i.e. give the cash to the

valuable customer and the bill and the fees receive counter receive the bill payment

and the fees and maintain all the activities related to bill and fees collection.

The activities of the cash department of HABIB METRO bank (Ltd) is as under

34

Source of cash

Management of cash

Deposits

Demand draft and the online maintains

Treatment of surplus cash

Treatment of the cash deficit

Cash transit

Issuance of cash

Security arrangements

Verification of cheque

Receive the bill and the fees collection

This is the most important department of the bank I leaned while working in this

department that there is all about maintains of the cash in this department in the staff

work very carefully make sure there is no mistake and in the closing at evening both

the sides of the cash account is balanced or equal then the banks makes the profit.

Credit department

My 4th week during my internship in the credit department the credit department is the

one of the most important department of the bank. The credit department is works

with maintain the loan and credit and also issue the credit after necessary verification

and the security and the guarantee to the desire limit and there is the rule and the

regulation to issue the credit and loan to the customers.

Credit department of HABIB METRO bank (Ltd) deals with different type of running

finance and the type of loan is as under

Cash finance

Demand finance

Term finance

Short term and loan term loan Etc.

I learned in this department that the basic information that I entered for the issuance

of credit or loan is as under

Name of the customer

Copy of CINC

35

Expiry date of the CNIC

Date of birth

Complete address

Income of the customer

If the individual wants to take the loan from the bank then there is the limits of the

loan which provided by the bank to any person or the organization. I leaned that for

the purpose of loan giving by the bank there is few many document and the guarantee

required by the bank according to the loan type the requirements is as under

Account number of the borrower and the account type

Nature of the business and the main products

Name of the borrower

Purpose of the loan whether it is for partnership or proprietor business

Type of the business

Details in case of firm and companies associated with the loan

And the current financial position of the business

And the accurate financial statement of the business last two years or more

And the detail of the borrowers bank account with other banks

The purpose of the credit is for the starting the new business or the expansion of the

existing business or the purchase of the stock

Cleaning department

My 5th week is all about the clearing department. I learned the work and the function

which is performed in the clearing department. This department the important

department of the bank I learn that clearing is the process in which bankers settle their

mutual accounts by the claming the arising account of various instruments presented

by one bank drawn on the other banks in a same city or the outside the city through

NIFT (National Institutional Facilitation Technologies). NIFT is the department of

collection of clearing cheques of each branch, these plays middlemen of the bank and

client. There are two types of clearing going in the bank Inward clearing and the

Outward clearing .we can say that the clearing is clear those cheque which cannot be

cash at the cash counter of the bank . the representative of the respective bank collect

36

all the cheque and the instrument which drawn on there and settle the account and

doing the clearing function this assembly of the representative of the bank is called

Clearing house NIFT perform the clearing on the behalf of the commercial banks in

all the cities throughout the country.

The type of the clearing is as under

Inward clearing/ Local clearing

Outward clearing/ Intercity clearing

Inward clearing

The instrument and the settlement or the claim by the other banks or the other

branches of HABIB METRO on our branch of HABIB METRO bank in which

include the cheque draft and etc, are drawn by the other bank customer or by the

HABIB METRO bank branches in clearing in the inward clearing process there is few

thing include which is mentioned as under

Cross stamp on the face

Clearing stamp on the front and the back

The clearing stamp bearing the date of the next working day

Payees account is credited and the stamp on the cheque and signature of the

operational manager

And before entering the cheque into the computer the stamp and the signature is to

be verified and the cheque is posted and drafted.

Outward Clearing

I leant about outward clearing in HABIB METRO bank clearing department. out ward

clearing is that the settle of claims of our branch of HABIB METRO bank or the other

branches of HABIB METRO bank drawn of other banks or other branches of HABIB

METRO bank deposited by our customer in our branches of the bank , presented by

our branch of HABIB METRO bank in out ward clearing .

When the cheques of outward clearing is received then it is entered into the clearing

registered

Following detail are entered is in the both registered is as follow

Serial No.

Account no. of the depositor

37

Depositor name

Drawer

Drawee

Cheque No.

Amount of the cheque

Cross stamp on the face of the cheque

And the clearing stamp

And the stamp on the back of the check payee account will be credited

The local clearing, a bundle cover is arranged manner the branch code stamp, total

amount and number of instruments. This amount should match the one that is kept in

the Clearing Register. The cheques or the instrument with bundle cover and outline

are packed in NIFT bag. Before putting these items in the bag, a plastic seal number is

required and should be written on the bundle cover and the same seal should be used

to close the NIFT bag. This is to ensure additional safety as when the seal is opened, it

is non-replaceable. If the seal number on the bag and on the bundle cover does not

match, it is a suggestion that the bag has been tamper with. Strict action can be taken

by NIFT and the Bank consequently.

In clearing process there s also include intercity clearness

Remittances Department

My last week is about working in the remittances department. It is very important

department in the current scenario in this department the bank deals with transfer

money and different type of fund and also receive fund from abroad form the

Pakistani community and others as well which is called remittances

The HABIB METRO bank transfer different type of fund through the different

services in which the some is mentioned below

I learnt that the money transfer and remittances have following features

Quick and hassle free transfer

There is little charges of transfer

And same day devilry to HABIB METRO account holder

SMS alert facility

And for non account holders the funds transfers online or via bank draft.

38

And also when the nonresident person sends the fund to their family the bank is takes

the following steps;

Alert with a phone call or SMS to customer

No charges or no deduction to the recipient.

Received the 8 digit PIN from receiver and then check it whether the remittance is

received and fill the form

Then check the copy original national ID card

And then received the CNIC copy from the person

Then the verification Seal or stamp placed on the form

And the last step is that the person received the cash from the casher

Western Union

During my work in this department I deals with the customer which transfer their

money through the western union. Through the use of the western union one can get

money from all cities in the Pakistan from western union branches or any bank or post

office or the money changer. When person sent the money, the concerned company or

bank give the PIN number to the person against the name of the person and the cell

number who received the money through western union. When the receiver go to

bank for receiving of money the bank takes the PIN number and the original CNIC

copy from the receive and give him money

Telegraphic transfer (TT)

Telegraphic transfer is that after filling the application form the concerned officer fills

the telegraphic transfer form after that it is sent to the required bank and then the

concerned bank makes the payment immediately to the customer and after that the

voucher sent to the bank by the mail.

Demand draft (DD)

Demand draft is like an instrument as issue on the will of the customer because avoid

the extra burden of the currency and it is payable on the demand when the customer

want it its issue by the one branch of the bank a payable by another branch of the

same bank.

39

25 CHAPTER NO. 5

SWOT ANALYSIS

SWOT ANALYSIS

Strengths

Habibmetro Limited has certain strengths which are different from the other Banks.

Habibmetro is one of the first Muslim Bank of the world, which is owned and

managed by its own employs. This is the biggest strength of the Bank. A feeling

of ownership is present in every employ, which not only helps in increasing the

productivity of employs but also creates sincerity with the Bank in them.

Strength is the high motivation of employees to their work because they know that

what so ever they do, it will be in their own benefit. They know that the profit,

which they will earn, will be distributed among all the employees. So they work

with high motivation and concentration.

Salaries are very reasonable, so the employees are not financially disturbed and

they devote their selves fully to their work.

They have wide area network in all over the Pakistan, so that they cover a lot of

portion of cash transactions and make customer satisfied.

The Bank has very strict rules and regulations about the customer’s complaints.

The customers are treated as very special persons in the Bank.

Conservative and sustainable business policy

Flat hierarchies, high degree of flexibility and lean decision-making

Highly qualified and experienced staff

Customized products packages and services, high level of client service and close

contacts to manufacturers and leasing companies

Extensive market and asset expertise

Credit portfolio diversified by multiple criteria and categories

Advanced risk management and pricing systems

Maturity matched funding

Strong capital base due to own funds

41

Unique business model with a clear focus, cycle-neutral business approach and

global presence in all key transport markets

Weaknesses

Relatively high sector exposure

Global presence requires high staff resources

High staff costs due to high levels of employee qualification in terms of academic

expertise and experience

No material client deposits

Dependence on the money and capital markets

Exposure to the Euro/US dollar exchange rate, with an impact on growth and

results

No entertainment facilities are available in the Bank when customer goes to the

Bank and wait for a longer time. These facilities can be the newspaper,

magazines, etc.

Advertisement of Habibmetro is not such goods as of other banks.

Out look of the Habibmetro branches is not attractive to the people.

As compare to other private commercial banks the limited branches of

Habibmetro are computerized.

Opportunities

Realization of margins in line with risks taken

Expansion of anti-cyclical Investment Management activities

Building new client relationships

Expanding the advisory and other services offered to clients, investors, and banks

Boosting our reputation as a reliable partner to the international transport industry

The policies of the new government to uplift the economy and pursue financial

sector reforms are expected to yield positive results in the banking industry of the

country. The Habibmetro is very well praised to avail promising opportunities.

As a result of the different steps taken by the Government regarding the

betterment of the economy, small borrowers are attracted to get the financing and

start small businesses. So, the Habibmetro has an opportunity to attract the

customers by giving them attractive schemes.

42

They have wide area network in all over the Pakistan, if Habibmetro can make it

possible the fast delivery of fund from abroad through online banking, it can cover

the major market of Pakistan which still is capturing by ‘Hundi’.

Threats

Distortions on the money and capital markets, in the broadest sense.

Decline in transport asset values in the various transport market segments.

Impact of the global financial markets crisis and the sovereign debt crisis in

Europe.

Increasing debt levels in some industrial countries and emerging markets.

Unanticipated rise of the US dollar against the Euro.

Further government support for Habibmetro's bank competitors growing

regulatory requirements.

Spikes in crude oil prices.

First threat is that of political influence. Three boards of directors are of

government. So that they can influence on the decisions of the Habibmetro.

The biggest threat in the banking sector is the continuous downfall of the country

economy since the last few years. If this downfall remains for more few years

then it may be the great hindrance in achieving the Bank’s objectives.

New Privates Bank coped with emerging new Technology of IT.

43

CHAPTER NO.6

RATIO ANALYSIS

25.1.1 Gross spread ratio

Formula

Net interest margin / mark-up earned

Year 2011 Year 2012 Year 2013

7,727,231/ 27,263,385

=0.27 times

8,912,537/ 28,566,583

=0.31 times

9,071,907/ 24,641,671

=0.37 times

Working

2011 Net income margin = mark-up earned – mark-up expanses

= 27263385-19536154=7727231

(Page#117 2012 profit and loss account –consolidated)

2012L Net income margin = mark-up earned – mark-up expanses

= 28566583-19654046=8912537


2013 Net income margin = mark-up earned – mark-up expanses

= 24641671-15569764=9071907


Graphical presentation of Gross Spread Ratio

442011 2012 20130

0.050.1

0.150.2

0.250.3

0.350.4

Gross Spread Ratio

Gross Spread Ratio

Interpretation

Gross spread ratio is increased in every year in its value.

25.1.2 Noninterest income to total income ratio

Formula

Noninterest income / total income


10,172,092 / 37,435,477

=0.27times

11097039 / 39,663,622

=0.28 times

11,782,402 / 36,424,073

=0.32 times

Working

2011 Total income=interest earned + non mark-up income

=27,263,385+10,172,092=37,435,477

(Page # 117 of 2012 profit and loss account consolidated)


=28566583+ 11097039= 39,663,622



=24,641,671 + 11,782,402 = 36,424,073


Graphical presentation of Non Interest Income to Total Income Ratio

45

2011 2012 20130.24

0.25

0.26

0.27

0.28

0.29

0.3

0.31

0.32

0.33

Noninterest income to total income ratio

Interpretation

Non interest income to total Income ratio is increased gradually.

25.1.3 Spread ratio

Formula

Interest earned / interest expenses


27263385 / 19536154

=1.39 times

28566583 / 19654046

=1.45 times

24641671 / 15569764

=1.59times

Working

2011

Page # 117 of 2012 profit and loss account consolidated

2012,2013

Page # 122 of 2013 profit and loss account consolidated

Graphical presentation of Spread Ratio

462011 2012 2013

1.25

1.3

1.35

1.4

1.45

1.5

1.55

1.6

Spread Ratio

Spread Ratio

Interpretation

Spread ratio increased every year.

25.1.4 Return on Asset ROA Formula

(Earning before income tax / total assets) * 100


24,180,960

/288,200,657 *100

=8.39 %

24,695,367

/304,310,087*100

=8.12 %

20,687,058

/311,395,637 *100

=6.64 %

Working

2011 EBIT = profit before tax + interest expenses

=4,644,806 + 19,536,154=24,180,960

(page#117 2012 profit and loss account consolidated)

Total assets =288,200,657 (page#116 2012 balance sheet -consolidated)


=5,041,324 + 19,654,043=24,695,367

(page#122 2012 profit and loss account consolidated)

Total assets =304,310,087(page#121 2012 balance sheet consolidated)


=51,17,294 + 15,569,764=20,687,058

(page#122 2013 profit and loss accounts -consolidated)

Total assets =311,395,637 (page#121 2013 balance sheet -consolidated)

Graphical Presentation of Return on Assets

472011 2012 20130123456789

Return on Assets

Return on Assets

Interpretation

Return on asset is decrease over the year and it is not a good sign for the organization.

25.1.5 Return on Total Equity(ROE)

Formula

(Net income / total equity) * 100


7,362,729 /24,581,369 *100

= 29.95 %

8,310,500/28,188,611*100

=29.49%

9,562,533/ 27,985,283*100

=34.16%

Working

2011

Net income 7,362,729 (page#117 2012 profit and loss account -unconsolidated)

Total equity 24,581,369 (page #116 2012 balance sheet unconsolidated)

2012

Net income 8,310,500(page#122 2013 profit and loss account -unconsolidated)

Total equity 28,188,611(page #121 2013 balance sheet unconsolidated)

2013

Net income 9,562,533(page#122 2013 profit and loss account -unconsolidated)

Total equity 27,985,283(page#121 2013 balance sheet -unconsolidated)

Graphical Presentation of Total Equity

48

2011 2012 201327

28

29

30

31

32

33

34

35

Return on Total Equity

Return on Total Equity

Interpretation

Return on total equity is decrease over the year this in not worthy for the organization

and it is increase by profit by saving more and more taxes.

25.1.6 Debt Ratio

Formula

Total Liabilities / Total Assets


263,619,288 / 288,206,517

= 0.914 Times

263,619,288 / 304,310,087

= 0.907Times

283,410,354/ 311,395,637

= 0.91 Times

Working

2011

Total liabilities 263,619,288 (page#116 2012 balance sheet -consolidated)

Total assets 288,206,517 (page#116 2012 balance sheet –consolidated)

2012



2013



Graphical Presented of Debt Ratio

49

2011 2012 20130.902

0.904

0.906

0.908

0.91

0.912

0.914

Debt Ratio

Debt Ratio

Interpretation

Debit ratio has been decrease in 2012 and relatively stable 2013

25.1.7 Debt / Equity Ratio

Formula

Total liabilities / total share holder Equity


263,619,288/ 24,581,369

=10.72 Times

263,619,288/ 28,188,611

=9..79 times

283,410,354/ 27,985,283

=10.12 times

Working

2011

Total liabilities 263,619,288

Total shareholders’ equity 24,581,369 (page#116 2012 balance sheet –consolidated)

2012


Total shareholders’ equity 28,188,611 (page#121 2013 balance sheet –consolidated)

2013


Total shareholders’ equity 27,985,283 (page #121 2013 balance sheet –consolidated)

Graphical Presentation of Debt / Equity Ratio

Interpretation

50

2011 2012 20139.29.49.69.810

10.210.410.610.8

Debt to Equity Ratio

Debt to Equity Ratio

Debt/ equity ratio has been decrease over the years.

25.1.8 Times Interest Earned

Formula

Earning before Income Tax (EBIT) / Interest Expenses


24,180,960/ 19,536,154

=1.24times

24,695,367/ 19,650,443

=1.26times

20,687,058/ 15,569,764

=1.32 times

Working


=4,644,806 + 19,536,154=24,180,960

Interest expenses =19,536,154

(Page#117 2012 profit and loss account consolidated)


=5,041,324+ 19,650,443=24,695,367

Interest expenses =19,650,443

(Page#122 2013 profit and loss account -consolidated)

2013 2013- EBIT = profit before tax + interest expenses

=5,117,294+ 15,569,764=20,687,058

Interest expense = 15,569,764


Graphical Presentation of Time Interest Earned Ratio

Interpretation Time interest has increased gragually.

51

2011 2012 20131.2

1.22

1.24

1.26

1.28

1.3

1.32

Times Interest Earned

Times Interest Earned

25.1.9 Advance /deposit ratio

Formula

Advance / deposit


109656714/185281624

=0.59 times

110444198/217670932

=0.567 times

129833937/247507718

=0.52 times

Working

2011,

Page #116 of 2012 balance sheet –unconsolidated

2012, 2013

Page # 121 of 2013 balance sheet -unconsolidated

Graphical presentation of Advance to Deposit Ratio

Interpretation

Advance to deposit ratio is decrease over the period.

52

2011 2012 20130.48

0.5

0.52

0.54

0.56

0.58

0.6

Advance to Deposit Ratio

Advance to Deposit Ratio

25.1.10 Operating cash flow ratio

Formula

Operating cash flow / current liabilities


3,457,088/263,619,288

=0.013times

4,409,215/263,619,288

=0.0159 times

5,072,700/28,3410,354

=0.0178 times

Working

2011

Current liabilities = bill payable + borrowing + deposit +other liabilities

=263,619,288 (Page#116 2012 balance sheet consolidated)

2012



2013



Graphical presentation of Operating Cash Flow Ratio

Interpretation

Operating cash flow increase every year

53

2011 2012 20130

0.002

0.004

0.006

0.008

0.01

0.012

0.014

0.016

0.018

Operating cash flow ratio

25.1.11 Dividend Per share

Formula

Total dividend / no. of outstanding shares


1,062/2,344,818.1

=0.004 5Rs.

1,569,822/ 2,564,969.1

=0.61 Rs.

2,893,214/2,837,546.8

=1.019 Rs.

Working

2011

Dividend paid = 1,062(page120 2012 cash flow –consolidated)

No. of outstanding shares = 2,344,818.1

2012

Dividend paid = 1,569,822(page124 2012 cash flow –consolidated)


2013

Dividend paid = 2,893,214 (page124 2013 cash flow –consolidated)


Graphical Presentation of Dividend per Share

Interpretation

Dividend per share of the company is fluctuation over the years. It depend upon the

company’s policy how much dividend it likes to share with its share holder.

54

2011 2012 20130

0.2

0.4

0.6

0.8

1

1.2

Dividend per Share

Dividend per Share

25.1.12 Earning per share

Formula

Net income / number of outstanding


7,362,729/ 2,344,818.1

=3.14 Rs.

8,310,500/2,564,969.1

=3.24 Rs.

9,562,533/ 2,837,546.8

=3.37 Rs.

Working

2011

Net income = 7,362,729

Number of shares outstanding = 2,344,818.1

2012

Net income =8,310,500


2013

Net income = 9,562,533


Graphical Presentation of Earning Per Share

Interpretation

Earning per share has decreased over the years; it is need to be increasing it by

increasing the net income.

55

2011 2012 20133

3.05

3.1

3.15

3.2

3.25

3.3

3.35

3.4

Earning per Share

Earning per Share

26

27

28

29

30

31

32

33

34

35

36

37

38CHAPTER NO 7

CONCLUSION

57

CONCLUSIONS

During my internship in HABIB METRO bank (Ltd) it has a good experience of 6

weeks and I learn so much about the banking and the working and I also observe

many thing in which some thing are good for the banking business and I observe

some weakness in the HABIB METRO branches. the good thing is that most of the

branches are online and connected with the main Bank and the online system which I

like and observe is secure and time saving and there is less chances of the mistake as

compare to non-online bank branches there is also facility of ATM machine almost all

the branches of HABIB METRO bank which is good for bank and the customer too

and the working and the functioning of the HABIB METRO bank is smooth and

customer oriented and the management is good but there is also the drawback is that

some employees has not professional degree which makes the difference as compare

to the work of the professional degree holder some employee not paid full attention to

the customer and not use the proper business language with the customer but the

professional have the very good manner and they give proper attention to their

customer.

I experienced that the management is hesitate to give internee chance of working in

the cash department because they are not take any risk. Also some branches have not

full decorated and in some branches there is no installation of rotation camera which

is not good for the security.

I conclude through the study and perpetration of the ratio analysis I conclude that the

Net profit margin of the company decrease and it is need to be improved and Gross

spread ratio also decrease need to be improved, non interest income to total income is

relatively increase which is good sign for organization . Debt ratio of the company

decreased over the years. Return on asset (ROA) increasing on the year base it’s good

because the organization uses its asset effectively and efficiently and there is also

need to improve the return on equity. Price earn ratio is stabilizing over the period of

time and the return of equity has been decreased.

Finally I conclude that by keep the entire thing in mind that organization doing good

business overall but the need to make the policies of the organization is more effective

and stabilized which makes the organization more sound reliable and strong.

58

CHAPTER NO.8

SUGGESTION AND RECOMMENDATION

59

RECOMMENDATIONS FOR IMPROVEMENT

The HABIB METRO bank (Ltd) doing good gob over the years that way the deposit

of the organization increase and the profitability also increase. The recommendation

for the improvement is as follow

Recommendation as the basis of the ratio analysis

Gross spread ratio of the organization is steady decreasing and need to be

improved.

Noninterest income to total income ratio is improving and need to be continued.

Spread ratio is good but organization must decrease the interest expenses which

help in improving in the interest income which is very good for the organization.

Debt ratio is decrease over the period of the time and its thing need to be

continued.

Return on assets is improving over the year and make sure this is continued.

Organization takes the necessary step to stabilize the net profit margin.

Return on asset is increasing and this trend need to be continue

Gross profit margin and return on equity is not satisfactory need to be improved

And also the earning per share of organization needed to be improved.

And the other recommendation on the bank management for improvement is as follow

Security cameras

In some branches there is not the proper installation of the security cameras so I

suggest that in every branch there is the installation of the rotation security cameras

which is necessary for the security of the organization

Proper reception

There is no proper reception in the bank branches so the people have no proper

information no guide line so the organization takes a measure for the reception so that

it is good for the customer because every customer is valuable for the bank.

Token system

60

I observed that the token system has many problem because if there is lot of customer

and after the break or the closing of the bank and some time people have no time so

that they bring token with them it creates a problem for the bank and the customer too

so there is chance to loss the customer in my suggestion the organization doing the

measure no to loss the value able customer and increase the staff such as if there is

one casher counter increase it to two so that customer is treated hurry and there is time

saving both for the bank and the customer .

Behavioral and professional training

Last suggestion is that there is proper education and training of the staff of the

organization and also the work on the behavior of the staff. If there is proper training

and behavior it is good of the organization and this step hold the customer for long

period of time.

61

habib metro bank report

Documents

habibmetro memberships172

habibmetro murabaha332

habibmetro ijarah332

habibmetro islamic banking302

habibmetro short term

habibmetro estatement292

habibmetro esalary262

habibmetro sms banking282