hbl bank internship final report

7/30/2019 HBL Bank Internship Final Report

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Habib Bank Ltd.

Internship Report, 2011

PREFACE

Internship is an integral part of B.B.A. program. It is a mean of providing practical

exposure to the student, of what they study

Our teacher also managed an internship program for us. I had my internship in HABIB

BANK LIMITED SATELLITE TOWN BRANCH BAHAWALPUR, for six weeks.

During this period of six weeks I work in all the departments of branch, and learned a lot.

As the period of internship involved working with the permanent staff of bank and

assimilating into their routine it provided an experience and in depth review of how the

employees of the bank coordinate one another and with their manager.

. In this report, I have tried to present a complete picture of Habib Bank Limited.

Including its market position, its objectives, working of bank, its various departments, and

finally the SWOT analysis and financial analysis of Habib Bank Limited.

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ACKNOWLEDGMENT

All the praise for Almighty Allah, who enabled me, to carry a successful effort, to prepare a

report on MCB Bank Ltd in the best possible way.

Its also a great honour for me to present this effort to honorable Mr. Nazik Hussain

department of Management sciences Islamia University of (Bwp).

Rafia Kanwal

MBA (3.5 years)

Roll No. 125

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DEDICATIONS

This report is dedicated to my parents, friends and my teachers who all support me in times of

intricacy and continuously appraise me.

Therefore these people are the source of my inspiration and I would be forever

thankful to them for keeping my morale high and encouraging me against all odds.

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Table of Contents

Sr. No NAME Page No

1 Preface

2 Dedication

3 Acknowledgement

4 Executive Summary

5 Mission Vision

6 Introduction of organization7 Objectives of the organization

8 Corporate level strategies

9 Business level strategies

10 Departmental level strategies

11 Organizational structure

12 Working of various departments

13 SWOT analysis

14 Financial analysis

15 Suggestions and Recommendations

16 Conclusion

17 Annexure

Executive Summary

Department of Management Sciences demands every student of BBA/MBA program to go a

procedure of 4 to 6 weeks internship course and to present the report based on the

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observations and work done during the training practice. It is actually the appraisal of any

organization currently running its business, having its competitors. It is also meant for

discovering the weaknesses and shortcomings and then giving the suggestions for perfection.

I have fulfilled my eight weeks internship at Habib Bank Limited, The Islamia University

Branch Bahawalpur and tried my level best to achieve something sensibly from this

opportunity.

In my internship I opened many accounts of the customers; most of them were the employees

of The Islamia University. I also did a lot of work on the pension and salary days. As there is

a bunch of crowd on these days so I helped the staff of the bank by filling out the pension

forms and then recording the entries in the register of the Pension Records. In this way we

winded up the work quickly and in less time.

Department of Management Sciences demands every student of BBA/MBA program to go a

procedure of 4 to 6 weeks internship course and to present the report based on the

observations and work done during the training practice. It is actually the appraisal of any

organization currently running its business, having its competitors. It is also meant for

discovering the weaknesses and shortcomings and then giving the suggestions for perfection.

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I have fulfilled my eight weeks internship at Habib Bank Limited, The Islamia University

Branch Bahawalpur and tried my level best to achieve something sensibly from this

opportunity.

This internship report starts from the introduction on word BANKING and then history of

Habib Bank Limited of Pakistan i.e. how it helped the nation and country in any way.

Bank mission and vision statement shows that it focuses on overall performance of bank and

quality of service and products.

The main objective of the bank is to realize the real importance of its customers and is profit-

oriented.

A bank performs basic functions that are:

Accept money as deposit

Investing deposits to earn profit

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Miscellaneous functions

Each branch of the bank is divided into different sections on the basis of these basic

functions.

Deposit Section opens different accounts of clients and maintains record of money

deposits from the customer and credited it into his account. It also maintains record of

payment to the customer when he presents cheque.

Remittance and Collection Section deals with customers who want to transfer or

collect their money from other city.

Clearance Departmentdeals with the clearance of cheques of other banks and also the

cheques can be cleared at any branch of bank.

I have also given the SWOT Analysis of HBL which shows that the bank as many Strengths

and Weaknesses and also with many Opportunities there are numerous Threats as well.

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After this I have suggested and recommended how bank can improve its working and

flourish.

I also faced some challenges and problems before, during and after my internship in the bank

which I have added in the report

In the end I have given conclusion of the entire report.

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VISION, MISSION & VALUES

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Vision of HBLVision of HBL

Enabling people to progress with a confidence and success.Enabling people to progress with a confidence and success.

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Mission of HBLMission of HBL

To be recognized as the leading financial institution of Pakistan and a vibrant

international bank in the promising markets, providing our customers with a

best set of original products and services, and granting superior values to our

stakeholders shareholders, customers and employees.

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IINTRODUCTIONNTRODUCTION OFOF

OORGANIZATIONRGANIZATION

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What is Bank?

Bank is an institution which revives money from one party and lends to

another party.

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There are different views about origin of the word Bank. According to some people the

word Bank is derived from the world Bancus which means a Bench. They argue their

point by this transacted their business of money exchange on the benches. If the business of

any businessman failed, his bench was destroyed by the people. Due to this practice the word

Bankrupt was also used.

On the other hand some people say that the world Bank is derived from German time the

word Bank was replaced by the word Bank which is called Banco in Italian

language.

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The bank can be defined as a financial institution thatborrows money from one party

and lends to the other party (Government, individual, business) and the

difference between borrowing and lending make profit for the bank.

In Simple words we can also say that bank is a pipeline through which money moves into and

out of circulation. Bank accepts deposits and repays cash to its customers on demand.

The bank borrows money at a lesser rate of interest and lends it to the borrower at a

higher rate.

The history of banking evolution is very interesting. In the early ages human like and wealth

was not secure. Due to fear of loot-mar and theft people buried their wealth under land

but this method was not satisfied. People started to search the custodians of wealth.

The evolution of banking started and it has crossed the many stages.

Why Bank is important?

Bank plays a significant part in the economic existence of nation. The growth of economy is

strongly related to the reliability of its banking system. Although banks create no new

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money but they borrow, exchange and use wealth. In this way they become very

valuable partners in the process of economic development.

The fundamental role of bank is to persuade the habit of savings among the people and to

activate these savings for investment purposes. Banks serve in capital formation.

If there are no banks then there would be concentration of capital in few hands and the great

fraction of capital of the country would remain inactive.

Loan facility provided by the bank works as an encouragement to the produce to increase

production. Banks offer transfer of payment facility, which is cheaper, quicker and

safe. These facilities are very much accommodating for the development of commerce

and trade.

Types of Banks

Banks are classified according to their field of activity; the main types of banks are as under.

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So we can say that commercial banks are companies which transact business of banking in

Pakistan. Commercial banks have constituted the most important source of institutional

credit in the economy of Pakistan. E x a mp l e o f c o m m e r c i a l b a n k s i n P a k i s t a n

i s H B L , U B L e t c .

F u n c t i o n s o f C o m m e r c i a l B a n k s :

T o da y t h er e a r e m o r e t h an 7 0 00 b r an c he s o f c o mm e rc i a l b a nk s

a l o n g w i th a n e s ta b l i s he d n e tw o rk o f s u pp l em en t a r y f i n a nc i a l

i n s t i t u t i o n s .

T h e f u n c t io n o f a m o d er n c o m me r c i a l b a n k c a n b e d i v i d e d u n d e r

f o u r h e a d i n g s a s :

A c c e p t a n c e o f d e p o s i t s

A d v a n c e m e n t o f l o a n s

A g e n c y s e r v i c e

G e n e r a l u t i l i t y S e r v i c e

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History of banking in Pakistan

At the time of independence, there were 487 offices of scheduled banks in the territories now

constituting Pakistan. Following the announcement of independence plan in June 1947, the

Hindus residing in the territories now comprising Pakistan started transferring their registered

offices in Pakistan, transferred them to India in order to bring a collapse of the new state. By

30th June 1948, the number of offices of scheduled banks in Pakistan declined from 487 to

only 195.

BANKING IN PAKISTAN

Pakistan has indeed unique banking history

commencing as were from scratch at the

time of Pakistan of this subcontinent.

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However it soon comes over its extra ordinary banking problems and by grace of Allah we

have a stable banking sector.

H I S T O R Y O F HA B I B BA N K L I M I T E D

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Habib Bank Limited

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Habib Bank Limited commonly referred to as "HBL" and head-quartered in Habib Bank

Plaza, Karachi, Pakistan, is the largest bank in Pakistan. The bank has a network of over 1450

branches in Pakistan and 55 branches worldwide. It has a domestic market share of over 40%.

It continues to dominate the commercial banking sector with a major market share in inward

foreign remittances (55%) and loans to small industries, traders and farmers.

Mohammed Ali Jinnah, Pakistan's founding father, realized

the importance of financial intermediation while he was

campaigning for the creation of a separate homeland for the

Muslims of India. He persuaded the Habib family to establish a commercial bank that could

serve the Indian Muslim community. His initiative resulted in the creation of Habib Bank in

1941, with HO in Bombay (now Mumbai), and fixed capital of 25,000 rupees. The bank

played an important role in mobilizing funds from the Muslim community to finance the All-

India Muslim League's campaign for the establishment of Pakistan. Habib Bank also played

an important role in channeling relief funds to Muslims hurt in the communal riots and

violence that preceded the departure of the British from India.

After Pakistan was born in 1947, Habib Bank, at the urging of Governor-General Jinnah,

moved its headquarters to Karachi, Pakistan's first capital. This gave Karachi its first

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commercial bank of the newly formed Pakistan. The Habib family owned and managed the

bank until the Pakistan government nationalized it on 1 January 1974.

HBLs first international branch was established in Colombo, Sri Lanka in 1951 and Habib

Bank Plaza was built in 1972 to commemorate the banks 25th Anniversary.

On June 13, 2002 Pakistans Privatization Commission announced that the Government of

Pakistan had formally granted the Agha Khan Fund for Economic Development (AKFED)

rights to 51% of the shareholding in HBL, against an investment of PKR 22.409 billion (USD

389 million). On February 26, 204, management control was handed over to AKFED. The

Board of Directors was reconstituted to have four AKFED nominees, including the Chairman

and the President/CEO and three Government of Pakistan nominees.

It was HBL that introduced products such as Credit Cards, ATMs, Travelers Cheques, etc., to

the Pakistani market. Today, Habib Bank is truly the bank of the people, providing its

customers convenience and satisfaction all over the world. HBL plays a central role in

Pakistan's financial and economic development.

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Habib Bank Plaza, the tallest building in Pakistan, is the proud symbol of HBLs leadership

in Pakistans corporate arena.

Habib Bank offers the basic range of banking services to its customers, to include

Commercial, Corporate, Investment, and Retail Banking, Treasury, and Islamic Banking. It

has more than 1489 branches all over Pakistan and presence in 26 countries across five

continents. With a revamped customer oriented philosophy, we are pursuing new avenues of

leadership through innovation, as it gear up to face the challenges of the new millennium.

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Objectives of organization

The banks main aim is to provide better and efficient services to its domestic and efficient

customers and overseas customer regarding the need for improving the financial performance

of the company.

Next are some of the main objectives of HBL.

To get profit for the Bank itself and maximize its shareholders value.

To offer solutions for multiple requirements of clients of assorted financial nature.

To cope with the changing trends of the modern day financial market.

To be a diversified bank by offering all basic consumer services along with specialized

services

Honest and ethical conduct, including ethical handling of actual or apparent conflicts of

interest between personal and professional relationship.

To provide employment opportunities to people.

To help in development and industrialization of the country

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Corporate level strategies

1-Growth:

Maintain a mix of short and long term deposits to maximize the cost of funds.

2-Asset quality:

stringent risk management

unified IT system

intensive training and professional recruitment

3-Focus:

Re-organization of the consumer and retail banking business

IT system enhancement

product offering enhancement

Advancement of operations in urban areas

4-Culture:

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Maintain a decentralized culture in which every employees have the authority to take part in

the decision making process of the organization.

Business-Level Strategies

To devolved country specific business revitalization strategies for important franchise to

improve overseas operations.

To develop more branded proudest in saving deposits and consumer assets.

To increased the ATM network to further improve the banks market shears.

To establish sound relationship with top industrial groups and various multinationals.

To make the bank customer focused.

To launch innovative product as which cater to the needs of different segments of the

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To increased the number ofON LINE branches.

Departmental level strategiesDepartmental level strategies

Toprovide extensive training to employees in process ,products, marketing and

selling skills introduced.

Upgrading skills levels of staff.

To implement a performance appraisal process to provide motivation and a merit

oriented culture in the bank.

Division to tighten operational and regulatory controls.

In all department the research and development effort are increased.

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ORGANIZATION STRUCTURE

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Domestic Structure

With a domestic system of 1408 trade branches and 17 business branches which are well

located in all cities and towns of the country, the bank provides the entire banking services

counting consumer and corporate finances, leasing, investment and money market

transactions etc.

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International Structure

Through its 15 overseas offices including branches, locally included subsidiaries and joint

ventures, the bank has international presence in 26 countries encompassing the United

Kingdom, Continental Europe, the Middle East, Southeast and Far East Asia, Africa,

Australia, and the United States. Besides providing banking services to the emigrants

Pakistanis, these offices also help out in developing linkages between Pakistan and the

international financial set-up.

Operational Structure

HBL is among the principal commercial bank of Pakistan. It accounts for a considerable share

(40%) of the entire commercial banking market in Pakistan with a set-up of 1,705 domestic

branches; 55 overseas branches in 26 countries extend over Europe, the Middle East, Far

East, Asia, Africa and the United States; 3 HBL wholly owned subsidiaries explicitly Habib

Bank Financial Services (pvt) Ltd. (Karachi), Habib Finance International Ltd. (Hong Kong)

and Habib Finance Australia Ltd. (Sydney); 2 joint ventures namely Habib Nigeria Bank Ltd.

(40%) and Himalayan Bank Ltd. (20%); and 2 delegate offices in Iran and Egypt.

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Retail Banking

Retail banking of HBL consists of trade lending, deposits, and banking services to private

individual and small businesses.

Corporate & Commercial Banking

Consists of business customers and savings banking, includes advices and placements to

commercial mergers and acquisitions, underwriting, privatizations, and securitizations.

Ownership Structure

HBL operated under Government possession from 1974-2004. After privatization in 2004,

51% of the banks shares were purchased by the Agha Khan Fund for Economic

Development, an organization of the Agha Khan Development Network. The administration

of Pakistan is expected to slowly strip its remaining 49% shares in the bank.

Business Segments

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A segment is a noticeable constituent of the bank that is occupied in providing product or

service (business segment), or in providing products or services within a particular economic

environment (geographical segment), which is subject to risk and rewards that are different

from those of other segments. The banks primary layout of reporting is based on business

segments.

Geographical Segments

The bank operates in five geographic regions, being:

Pakistan

Asia Pacific (including South Asia)

Europe

North America

Middle East

Others

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Board of Directors

What does Board of Directors do?

To construct the policies in order to support the business of bank.

To announce the profits on deposits.

To declare the rate of interest on advances and loans.

To make the policies for the benefit of bank recruits.

List of Board of Directors

Sultan Ali Allan CHAIRMAN

R. Zakir Mahmood PRESIDENT & CEO

Mushtaq Malik DIRECTOR

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Ahmad Jawad DIRECTOR

Yasin Malik DIRECTOR

Moez Jamal DIRECTOR

Management

List of Management

R. Zakir Mahmood PRESIDENT & CEO

Sohail Malik RISK MANAGEMENT

Saima Kamil CORPORATE BANKING

Nauman K Dar INTL BANKING & CEO HABIB ALLIED

INT BANK

Ayaz Ahmad CHIEF FINANCIAL OFFICER

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Abid Sattar RETAIL & CONSUMER BANKING

Zafar Aziz Usmani HR & ORG DEVELOPMENT

Mudasir K Khan GLOBAL OPERATION

Jamil Iqbal CHIEF COMPLIANCE OFFICER

Faizan Mitha GLOBAL TREASURY

Saleem Amlani AUDIT & INVESTIGATION

Aslam Gatit ASSET REMEDIAL MANAGEMENT

Tulu Islam IT & SYSTEMS

Mirza Saleem Baig COMMERCIAL BANKING

Kashif Shah INVESTMENT BANKING

Aly Mustansir BRAND MANAGER

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Management Hierarchy

President

Board of Directors

Member Executive Board

Zonal Chief

Branch Managers

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WORKINGOF VARIOUS DEPARTMENTS

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FUNCTIONSOF HBL

Basic Functions

Receiving of money and deposits

Lending and investing the deposit money

Miscellaneous functions

Miscellaneous Functions

Collecting negotiable instruments on behalf of customer.

Issuing Letter of Credit for the customer.

Receiving values for safe custody.

Issuing guarantees and LCs.

Utility services.

Transfer money from one place to another.

Giving there customer life insurances for better future.

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A) Types of accounts:

Depositors can open following types of accounts.

Current account

Profit and Loss account

Basic Baking Account

Current Account/Demand Deposit:

In this category of account the customer is permitted to withdraw or deposit money as and

when he likes. Unlike term deposit there is no restriction of withdrawals. The depositor can

draw or demand amount money at any time by presenting the cheque in the bank. No revenue

or interest is specified on these accounts. These types of accounts are generally maintained by

the businessmen who may draw money at any time. Zakat is also not deducted on these

accounts and no any notice is necessary for the withdrawal of money. In urbanized and

developing countries a very noteworthy amount of money is kept under current account.

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The confidentiality of depositors account is the responsibility of every official engaged in the

Bank service.

H) Money Deposited or Drawn by Post:

When currency is sent by post for deposit, the pass book and a letter starting the amount of

the deposit and the number of the account escort it.

When a depositor desires to withdraw money by post he must forwards his pass book with a

letter stating the number of his account, the amount to be drawn and either the money is to be

remitted by money- order or in currency notes registered.

2) Remittance Department:

Remittances are arithmetic of money sent in payment for or against something. The

remittance department is chiefly concerned with these payments. As it is the responsibility of

the bank to pass on the money to any place where there is a bank.

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I. Demand Draft:

Demand draft is the on paper order given by one branch of the bank on the behalf of client to

another branch outside the city of the same bank for a certain amount to the certain person.

It is the most commonly used method for the remittance of money. It is very simple, firstly a

form is to be filled, in which all details are specified that where and in which branch the draft

is to be sent then the money is deposited which is called draft and money can by drawn after

showing to the bank of the specified branch of the bank. Only specified person can draw the

money on that draft. Another method to secure the payment of the draft could be the crossing

of the draft which means that it will only be deposited in the payees account.

It is unconditional order. The payee is not bound to have an account in the bank. It is issued to

rest of the customer and the bank receives the charges and exchange.

II. Pay Order:

A pay order is on paper order issued by the bank on its own branch, drawn upon and payable

by itself to pay a particular sum of the money to the person. The purpose of the pay order is to49


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transfer the funds from one place to another. It is usually not issued in favor of the parties of

other cities. Usually the pay order is issued for the local transfer of money between the

parties.

Pay order is less costly method of relocate money. Normally this method is used to transfer

money inside the city. If it is used city wide, it takes a long time.

Procedure of DD and Pay order:

First remittance application form is filled that is etched in annexure of the report.

Here the customer is requested to fill update, branch, amount, cheque #, beneficiary

details; his complete name, address, CNIC no., account no. and the details of the

applicant.

Customer is asked to submit money on the counter by first filling the pay in slip and

required amount is received by customer from the customer.

Cash is received by the cashier on counter and he place stamps on the pay in slip and

give the receipt to the customer.

Then the remittance department will make the DD or pay order and then handed overt

to customer.

3) Clearing Department:

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It has offices in all the major cities of Pakistan.

NIFT facilitates the clearing of cheques between institutions locally (within the city).

It is also referred to as the Automated Clearing House.

NIFTcollects cheques, demand drafts, Pay orders, Travelers Cheques, etc. from all the

branches of different banks within city through its carriers and send them to the branches

on which these are drawn for clearing. After the branches approve the instruments drawn

on them, NIFT prepares a sheet for each branch showing the number for instruments and

amount in its favor and drawn on it and sends it to each branch.

SWOT ANALYSIS

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Habib Bank Ltd. spotlights on consumer banking by rewarding schemes, products and

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

HBL has opened all its branches at marketable regions so that the customers face no

problems in reaching to the bank.

The bank is all the time on the look to get better its services mutually to the domestic

as well as overseas customers.

Human resources development and introduction of new technology towards

contemporary banking.

24 hours cash access and secure payment products for high value transaction.

Having prospective to meet the competitive environment in the market.

Customer takes benefit from the services at the housing localities.

Weaknesses:

Maximum number of branches carrying out the proper maintenance and complexity in

providing identical working atmosphere at the every branch

Inferior organization of revival of the system is a danger to bankruptcy.

Be deficient in customer feedback.

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Little job contentment.

Pitiable ATMs Service

Irregularity in efficiency and working environment due to the largest of branches.

Sense of uncertainty in the employees allocated at little money-making branches due

to the down sizing.

Females feel nervous in an environment in the middle of the male workers.

Prey of political, legal and socio-cultural stress

Short of professionalism in the branch employees frequently.

Opportunities:

Huge available market prospective in consumer banking.

An opportunity exists, in shape of opening of ladies banking segment inside the branch which

is completely a new idea and it will pull customers towards bank.

Chance for mounting value added services combined with corporate banking

relationships, cash management services to large and medium sized corporate clients.

Emergent strategy of government on business and commerce sector provide HBL

opportunities to take return of these policies to meet professionally with the business

people to solve their problems with the instant cash and investment facilities.

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Government is taking very courageous steps to endorse Information Technology in

Pakistan. HBL has an opportunity to recover its technology.

Huge international net which mainly emphasizes on trade finance with Pakistan can

be operated to valve trade activities in other markets. In addition, services such as

cross border / offshore financing for corporate customers can be improved.

Customer advice on diverse products and accounts has really improved the bank

performance and encouraged the ambiance for other potential policies.

Habib Bank Ltd. also has an opportunity to enlarge its new technological expansion

like; tele-banking and internet banking facilities in a way to serve the customer more

competently.

E-banking facility too is an innovative opportunity which is a prosperous business in

foreign countries and can also be here, if HBL takes the step ahead.

Due to well-organized and expert management group, HBL can also develop and

enlarge its foreign business productively.

Habib Bank Limited provides opportunity to make use of its abilities and efficiencies

in leasing business

Threats:

Consolidation in the banking segment ensuing in increased rivalry.

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Scarcity of qualified and focused personnel at minor managerial and officer stage.

The danger of irregularity and government policy concerning about business and

economics sectors, specially political and regional situation which makes the

environment doubtful.

Increasing global technological progression.

Firm regulation by government over credit conveniences to the customers as poorly as

to meet the prudential.

Loss of assurance of out of the country customers due to freezing of accounts.

Facing more opposition by overseas banks in the marketplace.

Overseas banks are flourishing in field of consumer financing.

Also the rising operation of private banks.

Highly striking and advance services by overseas banks to their customers.

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Loans to deposit show a decreasing trend in alternative year from 2007 to 2011. This shows

that the advances of the bank decreased but on the other side bank deposits increased. While

in year 2008 and 2010 the advances of bank increased and deposits of bank decreased.

4. Equity to Assets:

FORMULA: Equity / Total assets

Year 2007 2008 2009 2010 2011

Equity to

assets

7.50% 8.84% 9.00% 8.72% 9.64%

Interpretation:

The equity to assets ratio shows the profitability and finance of the bank. In 2007 ratio is

lowest this means that much of the bank is financed by loans. From 2008 to onwards this ratio

increased to 9.64% in 2011 showing better financial and profitability position of the bank as

approximately all of the long term capital is equity.

5. Deposits to total Liability:

FORMULA: Total deposits / Liabilities

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Interpretation:

This ratio shows the relation between total equity to the total deposit.

In 2007 ratio is lowest this means that much of the bank was financed by deposits made to

bank rather than equity. From 2008 to onwards this ratio is increasing to 12.19% in 2011

showing better financial and profitable position of the bank as approximately all of the long

term capital is equity with less or no deposits involved in the financing of bank.

7. Investment to total assets:

FORMULA: Investment / Total Assets

Year 2007 2008 2009 2010 2011

Inv. to total

assets

20% 20.13% 25.71% 17.32% 25.06%

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Interpretation:

The above ratio shows the relation between the investment and total assets.

As the calculation show that for the couple of years the ratio was low but the value has

increased in year 2009 and 2011. This means that the investment has increased a lot as

compared to the assets.

8. Advances to Assets:

FORMULA: Loans / Total Assets

Year 2007 2008 2009 2010 2011

Advances to

assets

59.91% 58.8% 55.23% 60.86% 52.64%

Interpretation:

This ratio measures the percentage of funds provided by the creditors. Loan to asset is

continuously decreasing except in year 2010. This continuous decrease shows a decrease to

the advances of the bank but on the other side the bank assets increase rapidly.

9. Cash to deposit ratio:

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FORMULA: Cash / Total Deposit

Year 2007 2008 2009 2010 2011

Cash to

deposit ratio

14.99% 17.92% 15.53% 16.06% 17.61%

Interpretation:

Cash to deposit ratio is lowest in 2007 indicating a decrease in cash while in 2008 it is highest

showing an increase in cash and decrease in deposits. From 2009 onwards cash is increasing

continuously but on other hand deposits of bank is decreasing.

10.Earning per share:

FORMULA: Profit available to Common Shareholders / No. of Equity Holders

Year 2007 2008 2009 2010 2011

EPS 13.86% 18.30% 14.49% 11.83% 14.70%

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Interpretation:

EPS shows the companys profitability. In 2008 company has a maximum EPS it

indicates that company is enjoying profits more as compare to year 2009 onwards till

2011 which shows a tremendous decrease in EPS showing adverse effect to the

companys profitability.

11.Net Interest Margin:

FORMULA: Interest Income / Earning Assets

Year 2007 2008 2009 2010 2011

Net Interest

Ratio

4.91% 1.74% 1.74% 1.86% 1.84%

Interpretation:

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Net Interest Margin measures difference between interest income generated by banks or other

financial institutions by their lending and interest paid on borrowing.

NIM is highest in the year 2007 and then it decreased rapidly in 2008 and onwards. This

happened because interest expenses were greater than the amount of returns generated by

investments.

12.Net Profit Margin:

FORMULA: Profit after tax / Total income

Year 2007 2008 2009 2010 2011

Net profit

margin

32.31% 35.11% 30.33% 27.90% 29.95%

Interpretation:

Net profit margin shows how much a firm is earning per dollar of sales.

In 2008 company is producing highest net profit of sales i.e. 35.11% than in any other given

year. After 2008 the net profit margin is decreasing that is not a good sign for the companys

profitability.

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RECOMMENDATIONS & SUGGESTIONS

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So, I will give following suggestions for the better function of the bank:

It is strongly recommended that HBL must introduce employees training programs on

regular basis. So that employees have awareness about the new developments with the

clients.

Habib Bank Ltd. should update all the branches throughout the country as the banking

competition is very tight and they have to make their banking systems quicker and

reliable.

Habib Bank Limited even though providing the customer service in better way but

there is a lot of work to be done in a custom banking due to which employees work

for stretched duration. Management should reduce the burden of the employees by

hiring new qualified staff and trim down the working hours.

If any bad debt comes up, then the bank should recover those debts as soon as possible

so that its financial position should improve.

Branch managers attitude and behavior should be supportive & friendly in order to

entertain the difficulties faced by the workers.

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All the additional banks are taking hold of the customers on very high interest rate

presented to the depositors, HBL should also implement some approach to grab the

customer and enhance total deposits.

The amount of women employed by Habib Bank Limited is not as much as compared

to male staff, so it should provide work to more women.

Working conditions must be improved for the employees.

Immediate feedback to customers inquiries is essential to sustain a healthy

relationship with the customer.

Top executive should take all the decisions for the promotion of employees on the

basis of their work done in the bank

Supplementary conveniences of loans should be provided to individuals for enhancing

the business, studies etc on simple state of affairs.

For financing actions the procedure should be simple to the customer.

The recruitment procedure must be reasonable and clear.

Studies must be carried out regarding degree of customer satisfaction and all

employees of this department should look forward to get criticism whenever

possible.

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CONCLUSION

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Habib Bank Ltd.:

Habib Bank Ltd. is obviously the first and foremost selection of each and everyone who

believes in qualitative approach of banking, an atmosphere of extremely accountable

employees. Habib Bank is taking pleasure in a strong market share and enjoying the taste of

high-quality standing in terms of its operational features and customer support. Habib Bank

Ltd. is undoubtedly the unsurpassed bank operating in Pakistan.

Personal loan is a distinguished feature of HBL experiencing a good reputation and

reasonable mark up with respect to prevailing market mark up with assurance of satisfaction

and support. HBL has additional customers as contrast to other banks, if they give appropriate

concentration to every customer then in coming few years it will be the principal bank of the

country.

I noticed that Habib Bank Ltd. is an economically sound bank. Its proceeds are increasing

gradually more years by year. Its personnel are exceptionally good and genuine with the

bank. But due to the current economic crash, business of the bank has been reduced.

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HBL is lacking in conflict management. There are many problems aroused regarding any

issue that leads to a conflict; HBL must be having a conflict resolving system in which higher

officials must be involved to have a keen and close look on the critical issues. The decision

making will become easier and beneficial as the issues are observed by the higher officials.

This will result in the decreasing of conflict within the organization resulting in the

motivation of workers as they are now working in ethical environment, ultimately this will

lead to increased productivity of the bank.

HBL took a great step of introducing mobile banking. But a huge problem HBL is facing is

the lack of knowledge of client. Client is unaware of this sort of banking.

HBL can launch an organized marketing program to make its customers aware of their

product.

HBL has upgraded its system by installing MISYS to ensure real time banking at its about

300 local and overseas locations.

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Habib Bank, The Islamia University Old Campus Branch:

I want to sum up the pleasant experience I had during my internship program in Habib Bank

Limited, The Islamia University Old Campus Branch. I worked in various departments of the

bank and got the chance to know about the banking operations.

Pension Forms:

On the first day of internship there was

Salary and Pension week was in process.

So the bank was crowded with people to

get their salaries and pensions.

We were told to help the bank staff by filling the pension forms. It was fun but I had to do it

with responsibility. So I and other internees did this work with full enthusiasm. After filling

out the forms we were asked to record the entries in the register of Pension Records.

We were told that there are two types of pension:

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1. Personal Pension:

The pension which is taken by the worker or employee by himself/herself after he/she is

retired from the work it is called PERSONAL PENSION.

2. Family Pension:

The pension which is collected by the family i.e. wife, children etc of the employee/worker

after his/her death is called FAMILY PENSION.

Every individual is assigned a P.P. no. through which he is given the pension and then the

entry is made in the register of the bank to which the pension is paid.

I worked in the various departments of the bank. My workings in those areas are as follows:

Account Opening Department:

This department deals with opening account and saving account for its customer and all

matters regarding there off. I opened the current and saving accounts of individual customers

only.

We were told that there are five basic steps to open an account of any customer.

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This account number will be used to carry out different transactions by the customer as the

same number will be imprinted on his cheque book.

Account can be OPENED with Minimum Balance Rs.1000/- with no maximum limit.

Deposits Department:

This is the fundamental department of the bank. The entire banking system is based upon

borrowing. Like all banks, deposit department has acknowledged its worth as the most

important. Almost all the operations generated from the deposit department and with due

course of time reflect back to the deposit department. In order to attract funds bank has

introduced various types of deposit schemes that may

suit the need and tastes of a large number of depositors

There are three basic types of deposits:

1. Demand Deposits

2. Time Deposits

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3. Saving Deposits

Clearing Department:

Clearing is a system by which banks exchange cheques and other negotiable instruments

drawn on each other within a specified area and thereby secure payment for their client

through the clearing house at specified time in an efficient way.

There are two types of clearing:

Inward Clearing:

A type of clearing in which a bank does payment on the behalf of customer is called Inward

Clearing.

Outward Clearing:

A type of clearing in which a bank collects on the behalf of customer is called Outward

Clearing.

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customers. In this regard, HBL won THE BANK OF THE YEAR 2009award which is a

big achievement for HBLs management and its hard working employees.

Annexure

hbl bank internship final report

Documents