HBL Summer Internship Report

1. i
AN INTERNSHIP REPORT ON
HABIB BANK LIMITED
BRANCH PANJERA A.K.
BByy
MIRZA MUHAMMAD NASEER
ROLL NO. 14
Session 2010-2014
Department of Commerce
University of Management Sciences & Information Technology
Kotli A.K.

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At first dedicating this work to Almighty ALLAH, without
his mercy and sympathy I was not able to accomplish this
work. Almighty ALLAH gave me power and confidence to
done my internship and also HOLY PROPHET HAZARAT
MUHAMMAD (Peace be upon him) who is a light for
humanity. I also dedicate this work to my lovely parents
whom I love from core of my heart.

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LETTER OF TRANSMITTAL
The Placement Officer,
Department of Commerce,
University of Management Sciences & IT.
22 October 2014
Dear Sir,
Subject: Submission of Internship Report
This report is in response to the instructions of your letter in which you asked me to
complete my internship in any organization. I have interned with Habib Bank (Branch
Panjera A.K.) for a period of 6 weeks. I have prepared this report containing my
findings, analysis, conclusions and recommendations.
It would be pleasure for me to hear your comments after you have gone through this
report. Though while reading if you like to discuss any point with me, I shall be happy
to do so at any time convenient to you.
Yours truly,
Mirza Muhammad Naseer
Roll No.14
B.Com (Hons)
Session 2010-14

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INTERNSHIP LETTER

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ACKNOWLEDGEMENT
All praises belong to almighty Allah who the supreme authority knows the ultimate relation
underlying all sorts of phenomenon going on in this universe & whose blessing & exaltation
flourished my thought & thrived my ambitions to have the cherished fruit of my modest
efforts my humblest thanks to the Holy Prophet Hazrat Muhammad (PBUH) who is forever a
torch of guidance & knowledge for humanity as a whole.
I am thankful to Dr. Iftikhar Ahmed. Chairman Department of Commerce who has given me
the chance to be acquainted with practical work in such a prestigious institution. And also to
Mr. Muhammad Mahfooz the manager of HBL Panjera branch who really help and support
me to understand things which are quite difficult for me.
I am also thankful to all of my teachers and my class fellows and friends whom Cheerfulness
and guidance is an asset for me.
Lastly to all those whom direct or indirect contribution results assistance for me.
MMiirrzzaa MMuuhhaammmmaadd NNaasseeeerr
RRoollll NNoo.. 1144
BB..CCoomm ((HHoonnss..))

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Executive Summary
This report is the result of 6 weeks internship. During the internship it
was required to study the organization, department of the organization
and critically relate the theoretical aspects of the organization to the
practical situation. I got an opportunity of getting practical knowledge about the
Banking system in Pakistan. So to quench the thirst of practical exposure and for
getting the basic knowledge about Bank I joined HBL Branch Panjera Azad Kashmir.
During six week in HBL I gather all necessary information about HBL.
Efforts have been made to compile this report in such a way that activates its salient
features not only for students but also for the layman. I have divided this report into
different Chapters.
First Chapter is about introduction of HBL. Second Chapter is about Nature of
organization. Third Chapter illustrates products and services of HBL. Fourth Chapter
is about the Structure and hierarchy of HBL. Fifth Chapter dealings with financial
analysis also include the future prospective of HBL. Sixth Chapter is about the
branch where I done my internship. Chapter seven containing the things I learned.
Chapter Eight evaluate the SWOT analysis. Chapter nine is about the problems and
recommendation chapter ten provided the references and sources.
At last I must say that this text is designed to stimulate the curiosity about
management practices of HABIB BANK Ltd of Pakistan. And to raise reader’s
consciousness about the banking system working in Pakistan and outside the
Pakistan.

7. Table of Contents
Serial No. Topics Page No.
1 Title page I
2 Dedication II
3 letter of transmittal III
4 Internship letter IV
5 Acknowledgement V
6 Executive summery VI
CHAPTER # 01 Introduction 01 – 06
1.1 Meanings of Bank 01
1.1.1 Commercial Bank 01
1.2 Historical development of Bank 02
1.3 Establishment of HBL 03
1.4 Values of HBL 04
1.5 Goals of HBL 05
1.5.1 Vision 05
1.5.2 Mission 05
1.5.3 Objectives 05
CHAPTER # 02 Nature of Organization 07 – 09
2.1 Accepting Deposits 07
2.1.1 Current Deposits 07
2.1.2 P&L sharing Deposits 07
2.1.3 Fixed Deposits 07
2.2 Making loans and Advances 07
2.2.1 Demand Finances 08
2.2.2 Running Finances 08
2.2.3 O/D 08
2.2.4 Discounting of Bill 08
2.3 Business Volume 09
10 – 18

8. CHAPTER # 03 Product Lines
3.1 Services Offering 10
3.1.1
3.1.2
3.1.3
3.1.4
3.1.5
3.1.5
Credit Cards
Car Loan
Phone Banking
Deposit Accounts
Debit Card
Mutual Funds
10
12
12
13
17
18
CHAPTER # 04 Organizational Structure 19 – 22
4.1 Structure of HBL 19
4.2 Organizational Hierarchy Chart 20
4.3 Comments on Organizational Structure 21
4.3.1 Centralized decision making 21
4.3.2 Downward communication 21
4.3.3 Chain of Command 22
4.3.4 Authority and Responsibility 22
4.3.5 Delegation 22
CHAPTER # 05 Financial Analysis 23 – 36
Balance Sheet of HBL 23
Income Statement of HBL 24
5.1 Balance Sheet Vertical Analysis 25
5.2 Balance Sheet Horizontal Analysis 26
5.3 P&L Vertical Analysis 27
5.4 P&L Horizontal Analysis 28
5.5 Financial Analysis 29
5.6 Ratio Analysis 29

9. 5.7 Comparison with Industry 34
5.8 Future prospect of Organization 36
CHAPTER # 06 Functions of Internship’s Branch 37 – 40
6.1 Set Up 37
6.1.1 Bank deposits 37
6.1.2 Individual Account Opening 37
6.1.3 Issuance of Cheque book 38
6.1.4 Recording to General Ledger 38
6.1.5 Types of Accounts 39
6.1.5.1 current account 39
6.1.5.2 P&L Sharing Account 40
6.1.5.3 Fixed Deposit account 40
CHAPTER # 07 Things I Learned 41 – 42
CHAPTER # 08 SWOT Analysis 43 – 46
8.1 Strength 43
8.2 Weakness 44
8.3 Opportunities 45
8.4 Threats 46
CHAPTER # 09 Conclusion &
Recommendations 47 – 48
9.1 Problems I Sought 47
9.2 Recommendation I Propose 47
CHAPTER # 10 Reference and Sources 49 – 52
1 Reference and Sources 49
2 Glossary 50
3 Appendices 50

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Chapter # 01 Introduction
1.1 MEANINGS OF BANK
The word “bank” has been derived from the French word “banque” or bancus which means bench,
office or institution for the keeping, lending and exchanging of money. Some authorities have the
opinion that “Bank” is derived from the “Germen” word back which to the meaning of “joint stock
fund”. The bank is a financial institution that borrows money from one party and lends to the other
party (Government, individual, business) and the difference between borrowing and lending rate of
profit/Interest for the bank. Bank borrows and lends money on interest basis. Banks are classified
according to their sphere of activity; the main types of banks are as under.
 Commercial bank
 Industrial banks.
 Agricultural banks.
 Saving banks.
 Exchange banks.
 Central banks.
 Cooperative banks
1.1.1 COMMERCIAL BANK:
Commercial is engaged in performing the routine duties of banking business. Such bank collects
the money from the people (as borrowing) and extends the same money as a loan for development
purposes. Commercial bank plays a vital role in the economic development of a country by
performing the variety of function as given below:
 Accepting of deposits (Current, saving and fixed account).
 Making loans and advances (overdraft, cash credit, discounting bill).

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 Agency services to customers (Collection of cheques, dividends, electricity, water and gas
bills, and sale of securities, and acts as a trustee.
 General utility services (Foreign business, Issue traveler cheques, providing trade information).
1.2 HISTORICAL DEVELOPMENT OF BANK
History of bank is very old; the history of bank is traced to as early as 2000 B.C. The priest in
Greece used to keep money and valuable of the people in temples. Its origin is also traced to early
goldsmiths. They used to keep strong safe, for storing the money and other valuable of the people.
People with surplus money deposited with them. The first stage in the development of banking was
the acceptance of deposits from people.
Later on goldsmiths began to issue receipts for the money deposited with them to settle
transactions. These receipts were used in payment of debt and acceptable to all. This was the
second stage towards the development of banking.
When goldsmiths realized that they had surplus money therefore they intended to lend some
portion of money to he nearly traders and merchants who constantly requested for loans This
business was quiet profitable and they instead of charging interest from depositors began to give
interest on the money deposited with them to attract more people this was the third stage towards
the development of banking.
They also planned to allow the customers to withdraw in excess of the amount deposited to meet
the customer’s needs. This facility is called overdraft and they used to keep some portion of money
for this purpose. After some time there was then started too much confusion in the banking system
and they were not able to meet the demands of customers. This failure on the part of money lender
to return money caused distress among the people.
To overcome this problem people felt that their must be a bank which control the banking
activities of different lending organization. As a result of conference held in 1548 at Nuremberg.

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The decision was taken in favor of establishing a bank that regulates the banking activities. The
first bank was found in Geneva in 1587. Later on many other banks were established will the same
objective. We can conclude that commercial banking system actually developed in nineteenth
century. Now a days the banking activities has greatly increased commercial banks are now multi
serviced organizations and play an important role in financial markets and in the economic
development of the country. Habib Bank Ltd is a Banking HBL which is engaged in Commercial
& Retail Banking and related services domestically and overseas. HBL Enjoy 20% of the market
Share in Pakistan. Today HBL is truly the bank of the people Providing its customers convenience
and Satisfaction all Over the world. Habib Bank Plaza, the tallest building in Pakistan, is the proud
symbol of HBL leadership in Pakistan’s corporate ground. HBL is currently uses rate AA and
A1+.
1.3 ESTABLISHMENT OF HBL
Habib Bank Limited was established by Mr. Ismail Habib (Late) on August 25, 1942 at Bombay. It
was the first Muslim Bank of the sub-continent. It was established with a Paid up capital of Rs.
2.5millon. Today, HBL plays a central role in Pakistan's financial and economic development. It
has come a long way from its modest beginnings in Bombay on August 25, 1941 when it
commenced operations with a fixed capital of 25,000 rupees. Impressed by its initial performance,
Quaid-e-Azam Mohammed Ali Jinnah asked the Bank to move its operations to Karachi after the
creation of Pakistan. HBL established itself in the Quid’s city on August 7, 1948 and became a
symbol of pride and progress for the people of Pakistan. Habib Bank has been a pioneer in
providing innovative banking services. These have included the installation of the first mainframe
computer in Pakistan followed by the first ATM and more recently, internet banking facilities in
almost 1425 domestic branches.

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The Bank's towering presence in Pakistan's financial and commercial life has remained unchanged
over the decades. The strength of its brand and image is symbolized by its prominent Head Office
building that has dominated Karachi's skyline for 35Years.
As per HBL Management result we continue to build on our track record and in our quest for
excellence we strive to meet the needs of both our customers and our employees. At Habib Bank
we aim to ensure customer satisfaction by providing high quality banking services. This is made
possible by the professionalism of our employees all of whom are provided with the requisite
training and opportunities to enable them to realize their full potential.
1.4 VALUES OF HBL
 Integrity
For us, integrity means a synergic approach towards abiding our core values. United with the force
of shared values and integrity, we form a network of a well-integrated team.
 Meritocracy
At every level, from selection to advancement, we have designed a consistent system of human
resource practices, based on objective criteria throughout all the layers of the organization. We are,
therefore, able to achieve a specific level of performance at every layer of the organization.
 Team Work
Our team strives to become a cohesive and unified force, to offer you, the customer, a level of
service beyond your expectations. This force is derived from participative and collective
endeavors, a common set of goals and a spirit to share the glory and the strength to face failures
together.

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 Culture of Innovation
We aim to be proactively responsive to new ideas, and to respect and reward the agents, leaders
and creators of change.
1.5 GOALS OF HBL
1.5.1 Vision
Simply the vision of Habib Bank is mass banking. At the time of formation it changed its motto
from class banking to mass banking. Expedite the economic growth of the country through
spreading the banking services to the doorsteps of mass people so that they get institutional
financial help and participate in the economic activities of the country.
1.5.2 Mission
 To be the trendsetter for innovative banking with excellence and perfection.
 To be the best performing bank in the country and the region.
 To exceed customer expectations through innovative financial products & services and
establish a strong presence to recognize shareholders' expectations and optimize there rewards
through dedicated workforce.
 Keeping ahead of other competitors in productivity and profitability. To attain budgetary
targets fixed in each area of business.
1.5.3 Objectives
Like other business organization the core desire of Habib Bank is to maximize the profit through

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saving & loaning money to the life of the common people. The Objectives of the Habib Bank is
given below:
 Broad Goal:
As a nationalized commercial organization, Habib Bank belongs to the people. It implies that it
stands for meeting the banking needs of the mass people of the society.
 Operating Goal:
In compliance with the very nature of the organization, the objective in mind the bank aims at
excelling quality and diversified services. To fulfill its mission Habib Bank has its main objectives
as followings:
 To provide banking services to people.
 To earn profit.
 Act as a media of exchange.
 To contribute to gross domestic product (GDP).
 Maintain a satisfactory deposit mix.
 To promote and boost up business sector inside the country.
 To help to grow entrepreneurship.
 Increase loan portfolio diversification and geographical coverage.
 To mitigate unemployment problem.
 Provide finance specialized services to the export.
 To help to boost economic development.
 To help in development and industrialization of the country

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Chapter # 02 NATURE OF ORGANIZATION
2.1 Accepting Deposits
The primary function of HBL is to accept and receive surplus money from the people, which they
willingly deposit with the Bank. Like all other Banks, HBL also take incitation to attract as much
depositor’s as it can. They offer different deposit schemes to its customers, which includes the
following types. These schemes as follow.
2.1.1 Current Deposits
This type of account is often maintained by the business. Current deposits are those deposits on
which Bank offers no interest but it allows the account holders to withdraw their money at any
time they want without giving any prior notice to the community, which requires large sums of
money very often for their business transaction.
2.1.2 Profit and loss sharing account (Saving)
Saving deposits or PLS is those accounts on which Bank offers a lower rate of interest. After the
Islamization of the Banking system in the country it has been given the name of PLS saving
account. The Bank undertakes to repay deposits on demand up to a certain amount.
2.1.3 Fixed deposits
Fixed deposits are those which can be withdrawn only after the maturity period. In this type of
deposits the Bank allows high rates of interest depending on the time period of deposits. The
shorter the period of deposits, the less will be the interest and vice versa.
2.2 Making Loans and advances
The second most important function of HBL is to provide financing facility to its customers. These
loans and advances are usually made against document of title to goods, marketable securities, and

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personal securities. HBL charges different interest rates on these loans and advances depending on
the terms and conditions settled with the customers. Following types of loans and advances are
made available to the customers.
2.2.1 Demand Finances
Demand finances are those finances which are given to the borrowers for specified period and can
be called back without any prior notice. It is a single transaction finance. It can be long term,
medium term and short term. Mark up is also charge. Here the amount can be withdrawn once at
the time of disbursement.
2.2.2 Running Finance
HBL provides these finances against the security of current assets like shares, bond, cash crops like
cotton and other cashable commodities. The borrower’s account is opened with the Bank with the
amount of the total loan provided or allowed to the borrower. The borrower is allowed to withdraw
any amount from his account within the specified limit and interest is charged only on the amount
actually withdrawn.
2.2.3 Over Draft
This type of facility is usually given to very loyal clients. This allows them to withdraw over and
above the amount held by them in their account, and interest is charged only on the amount, which
is withdrawn in excess of the amount actually held in their account.
2.2.4 Discounting bills of exchange
Discounting bills of exchange can also be considered as a form of loan because it allows the holder
to get the bill encased before the maturity period. A bill of exchange is usually issued by the
importer of goods to the exporters, which allows them to be paid in their own currency after three
months time. If the exporter needs the money before the maturity of the bill of exchange, he can

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get his money from the Bank by discounting the bill of exchange. The Bank utilizes their surplus
funds by discounting the bills of exchange at their market worth.
2.3 Business volume
Habib Bank Limited (HBL), Pakistan’s biggest IPO of Rs 12 billion in terms of value, will be
formally listed today at the Karachi Stock Exchange (KSE). This listing would further add Rs. 162
billion to the banking sector market capitalization of nearly Rs 3,700 billion if we simply take the
offer price of Rs 235/share as a proxy. Pakistan’s banking sector has already got the biggest share
of 29% in the market capitalization of KSE and with this listing it will increase up to 33%.
We have signaled our positive outlook for the bank in our detailed ‘Pakistan’s banking jewel’ IPO
report on HBL mainly due to 1) our forecasted CY07 ROE of 27% which is also in line with high
performing peer banks viz. MCB Bank & United Bank (UBL) 2) satiating 10% yield on earning
assets 3) presence of more than 80% low cost deposits and mere 4.2% weighted average cost on
remunerative deposits 4) greater market share of fee-based income of 16% vis-à-vis peer banks 5)
management thrust on retail banking 6) strong brand equity. On the flipside, recent draft circular
by State Bank of Pakistan (SBP) regarding withdrawal of forced sale value (FSV) facility on
illiquid securities in taking provision coverage against non-performing loans (NPLs) is a blow to
HBL. HBL has relatively low provision coverage against historical NPLs and we expect the bank
to make more provisioning to the tune of Rs 5.2 billion that could impair our CY07 EPS forecast
of Rs 26.85/share.

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Chapter # 03 PRODUCT LINES
3.1 Services / Products Offered by the bank
 Credit Cards
 Car Loan
 Phone Banking
 Deposit Accounts
 Bancassurance
 Debit Card
 Mutual Funds
3.1.1 Credit Cards
Welcome to a world of convenience, flexibility and opportunity. The HBL Credit Card will add
simplicity and excitement to your life. Accepted at over 24 million merchants worldwide, HBL
Credit Card makes shopping fun and paying simple. Make the most out of your shopping
experience with your very own HBL Credit Card.
 Convenience
 Security
 Affordability
 Cash Advance
 Balance Transfer Facility
 Internet shopping
Convenience
Instead of paying with cash, simply present your HBL Credit Card to the shopkeeper and pay for

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anything you want.card statement will be faxed to you at the fax number specified by you
Security
Your HBL Credit Card ensures your money stays completely secure. You cannot lose cash if you
don’t carry it. In the unlikely event that your card is stolen, call us at HBL Phone Banking and
your card will be blocked immediately.
Affordability
Buy Now, Pay Later HBL Credit Card gives you the flexibility to buy what you want, when you
want and pay for it later. A credit card statement will be sent to you every month with details of all
your purchases. You will have 21 credit free days to make the payment from the statement date.
Please pay at least 3 days in advance if you make your payment by cheques to allow enough time
for clearance.
Pay As Much As You Want You have the freedom to pay the entire outstanding amount on your
card statement or as little as 5% of the outstanding balance in your statement. The remaining
amount will be transferred to next month’s statement. A nominal service charge will be applied to
the unpaid amount each month.
Lower Rate Every Year Just make sure all your HBL Credit Card payments are made before the
due date and you will benefit from a reduction in the rate of service charges at the end of each
year.
Cash Advance
If you require cash urgently, you can go to any specified HBL branch and withdraw cash at the
counter. You can also go to any 1 Link ATM in Pakistan and more than 780,000 ATMs and
financial institutions worldwide displaying the Visa/Plus logo. You can withdraw cash up to the
available cash advance limit on your HBL Credit Card. For Cash Advance, nominal service
charges will be applied from the withdrawal date.

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Balance Transfer Facility
With your HBL Credit Card Balance Transfer Facility, you have the opportunity to pay off
balances you owe to other banks through your HBL Credit Card at lower service charges.
Internet shopping
Enjoy a hassle free shopping experience and shop from a choice of online merchants, all from the
comfort of your home. To activate /de-activate the service please call 111-111-425
3.1.2 HBL Car Loan
HBL Car Loan helps you get your preferred car through a simple and hassle-free process, backed
by superior service and support. Now you can drive a car you always wanted.
 Choice of either a new local/imported car or a reconditioned imported car.
 Repayment options ranging unto 7 years.
 Upton 85% of financing for the car of your choice.
 Insurance at all times for complete peace of mind and security.
 Round the clock support available through
3.1.3 HBL Phone Banking
Your bank is just a phone call away. You can now call HBL Phone Banking and save a trip to the
branch. Your query will be resolved in a single telephone call from anywhere and at anytime You
can place your requests and queries, track the status of your repayment/loan account and avail
other value-added services through HBL Phone Banking.
Eligibility Criteria/ Documentation/Salaried Individuals
Copy of CNIC
2 recent passport size photographs
Latest original salary slip and personal bank statement for last 3 months

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Self-Employed Business persons/Professionals
Copy of CNIC
2 recent passport size photographs
Bank statement for last 6 months and bank letter confirming details of account
Proof of business
Home Loan
HBL yet not offered home loan in the future the management of the HBL will offered Home loan
also.
3.1.4 Deposit Accounts
Term Accounts
HBL’s Term Accounts are offered in a variety of tenure with deposits as low as Rs.10, 000.
HBL Advantage Account
 Multiple options for tenure and profit payout
 Loan facility up to 90% of deposit
 Minimum required investment as low as Rs. 25,000
Special Notice Time Deposit
Term Profit
10 year 18%
5 year 15%
3 year 14%
1 Year 12%

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 7 days or 30 days (and over) notice
 Minimum deposit of Rs. 10,000
 Balances less than Rs. 1 million
 Balances equal to and greater than Rs. 1 million
 Returns range from 0.75% to 4% depending on notice period and amount
Term Deposit Receipts
 3 month term deposit
 Minimum balance of Rs. 10 million
 Returns range from 0.75% to 2.25%
IPDC
 Minimum investment of Rs. 20 million except in the case of 1 month where minimum
investment is Rs. 100 million
 Available in 1 month, 3 month, 6 month, 12 month and 3 year terms
 Profit paid on maturity
 Rates on IPD are conveyed on a daily basis by the Treasury Division
Remittance Munafa plus Deposit (Certificates)
 Available in 1 year, 3 year and 5 year certificates
 Profit disbursement is monthly, quarterly, bi-annually, annually and on maturity
 Profit paid on maturity
 Returns range from 7.8% to 11%
Current Account
 Non-profit bearing

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 No transaction limits
 Minimum balance of Rs. 10,000. If the average balance falls below this
amount, then service charges will be deducted
No restriction on anyone opening a Current Account (as long as regulatory
guidelines are met)
Basic Banking Account (BBA)
 No minimum balance
 No service charges
Savings Account
 Profit paid bi-annually
 Minimum average balance of Rs. 10,000
 5% profit per annum
HBL Value Account
 7% profit per annum*
 Profit credited every 3 months
 Deposit ranges from Rs. 10,000 to Rs. 100,000
 Flexibility of withdrawals
HBL Super value Account
 7.25% profit per annum*
 Profit credited every 3 months
 Deposit ranges from Rs. 100,000 to Rs. 500, 00
 Flexibility of withdrawals

25. 16
Remittance Munafa Plus Saving Account
 Remittance Based (no credit allowed except remittance)
 Daily Basis Product
 Tiered
 Monthly profit
 Minimum average balance of Rs. 10,000
 Less than Rs. 20,000 earns 0.10% profit
 Rs. 1 million and above earns 5% profit
Special Saving Bank Deposit Scheme
 Daily Basis Product
 Tiered
 Monthly profit
 Minimum balance of Rs. 20,000
 Returns unto 8%
Daily Munafa plus Deposit Account
 Daily Basis Product
 Tiered
 Monthly profit
 Minimum balance of Rs. 50,000
 Returns unto 8%
FC-SB
 Savings Account offered in 3 currencies, USD (US dollar), EUR (Euros) and GBP (UK
pound)
 Tiered product, with rates depending on choice of currency

26. 17
 To earn profit, minimum balance in USD, EUR and GBP is 1,000
 Interest is payable on a quarterly basis
HYFFD (High Yield Foreign Currency Fixed Deposit)
 Available in 1 month, 2 month, 3 month, 6 month and 12 Month in USD, EUR and
GBP
 Tiered product, with rates depending on choice of currency and term
 Profit paid on maturity only. No interim interest is payable.
Tabeer – Children Education:
 An insurance plan that enables parents to cover education and marriage costs.
3.1.5 Debit Card
HBL Visa Debit Card allows you to pay for your purchases directly from your bank account. You
don’t have to carry cash and your monthly statement provides you with a complete record of all
your transactions so you can manage your expenses with ease.
 No Interest
 Ease & Security
 No Liability
 International Recognition& Acceptability
 Spending Limits
 Free Account Statement
 24 hour Customer Service
 Global Customer Assistance Services
HBL has a long history of being a partner of growth for business and industry. We provide tailored
banking solutions to business customers of all sizes in a wide range of industries.

27. 18
We cater to the needs of a broad spectrum of clients. To do this, the business banking group is
segregated by the size of the customer. For customers with an annual turnover between PKR 50
million to PKR 300 million, our Commercial Banking group provides a wide range of products
that meet specific customer needs.
The Corporate Banking Group focuses on personalized services to large corporate borrowers who
need tailored facilities. The Corporate Bank manages a diverse portfolio, being an active player in
a multitude of sectors including textiles, sugar, leather, pharmaceuticals, fertilizer, petrochemicals,
power, aviation, automotive, telecom, oil and gas and FMCGs.
The Investment Banking Group is a market leader. It provides innovative capital strategy solutions
to major local and multinational entities.
HBL offers a wide range of products and services for its business customers. They are as follows:

28. 19
Chapter # 0 4 ORGANIZATIONAL STRUCTURE
A well-developed and properly coordinate structure is an important requirement for the success of
any organization. It provides the basic framework within which functions and procedures are
performed. Any organization needs a structure, which provides a framework for successful
operations. The operation of an organization involves a number of activities, which are related to
decision making, and communication of these decisions. These activities must be well coordinated
so that the goals of the organization are achieved successfully.
4.1 STRUCTURE OF HBL
At present the Bank operates through one central and 23 Regional Offices and 1439 branches, all
over Pakistan. The president and Executives Committee look after the affairs of the Bank. Each
Regional Head Quarter is headed by a Chief Executive and assisted by General Manager
Operations and General Manager Support Services. The Regional Head Quarter controls the
branches in their area. Overseas operations consist of 65 main branches, two affiliates, two
representative offices and two subsidiaries. President, from Head Office at Karachi controls the
officers of the Bank with the help of the senior management. Functional responsibilities of the
Banks are broken into seven groups known as 1) International Operations Group2) Corporate
Banking and Treasury Investment Group3) Retail Banking and Operation Group
Finance, Audit and Administration Group5) Assets Remedial Management Group6) Credit Policy
Group7) Corporate Bank, Financial Institutions and Project Finance Group.

29. 20
4.2 Organizational Hierarchy chart
President
Chairman
SEVP International
Operation
Board of Directors
SEVP Corporate Banking
& Treasury
SEVP Finance, Audit &
Administration
SEVP Asset Remedial
Management
SEVP Retail Banking &
Information Technology
SEVP Credit Policy
SEVP Corporate Banking, financial
institute & Project finance

30. 21
4.3 Comments on the organizational structure
The purpose of an organizational structure is to help in creating an environment for human
performance. It is then, a management tool and not an end in its own. Although the structure must
define the task to be done, the rules so established must also be designed in the light of abilities
and motivation of the human recourse available. By analyzing the organizational structure of HBL
presence of the following elements can be found in its structure.
4.3.1 Centralized Decision Making
By looking at the organizational structure of HBL would be found that the structure at HBL is a
critical one. All the decisions are made at the top management level and the subordinates have to
obey these decisions. This trend in the decision making shows a pattern of rigidity in structure of
HBL.
4.3.2 Downward Communication
Communication is the process by which information is exchanged and understood by two or more
people, usually with the interest to motivate or influence the behavior of others in the organization.
Downward communication is the message and information sent from top management to
subordinates in a downward direction. Managers can communicate downward to the employees
through speeches, massages in HBL publications, information leaflets, tucked into pay envelops
material on bulletin boards, policy and procedure mandates. The same pattern is followed at HBL.
No doubt it’s a very traditional approach but it can create problems because it ignores the receiver
of the communication because the issuer
Of policies and procedures does not ensure communication. In reality may the messages
communicated downward are not understood perfectly.

31. 22
1.3.3. Chain of Command
The chain of command is an unbroken line of authority that links all persons in an organization and
shows who reports to whom. By analyzing the organizational structure it can be found that there is
a scalar principle followed with in the Bank because each and every person knows to whom can
one report. The authority and responsibility for different tasks and duties are different, as well as
every one knows the successive levels of management all the way to the top.
4.3.4 Authority and Responsibility
The chain of command illustrates the authority structure of HBL. Authority is the formal and
legitimate right of the manger to make decisions, issues orders and allocates resources to achieve
organizational desired outcomes. By analyzing the chain of command of HBL, one can come to the
conclusion that, as there is scalar pattern followed at the organizational setup of HBL therefore it is
implied that everyone in his position knows that what is one’s authority and what is the
responsibility and the authority it allocated.
4.3.5 Delegation
Delegation is the process, which managers use to transfer the authority and responsibility to
position below in the hierarchy. Most organizations today encourage managers to delegate
authority to the lowest possible level to provide maximum flexibility to meet customer needs and
adapts to the environment. But at HBL no such system prevails the managers try to keep as much
of the authority as they can and if some authority is delegated it is sure that it will be misused

32. 23
Chapter # 05 FINANCIAL ANALYSIS
HABIB BANK LIMITED
Balance Sheet
As at December 31, 2013
Rupee’s In 000
2011 2012 2013
Assets
Cash and balances with treasury banks 32465976 39683883 39631172
balances with other banks 6577017 3807519 4043100
lending’s to financial institutions 21081800 1051372 4100079
investment-net 63486316 113089261 96256874
advances-net 198239155 218960598 262510470
operating fixed assets 9054156 16024123 17263733
deferred tax assets-net 172373 0 0
other assets-net 11031450 17868761 19810476
342108243 410485517 443615904
Liabilities
Bills payable 7089679 10479058 10551468
Borrowings 23943476 39406831 22663840
deposits and other accounts 257461838 292098066 330274155
sub-ordinate loan 1597440 479232 0
liabilities against assets subject to finance lease 0 0 0
deferred tax liabilities-net 0 1180162 437137
other liabilities 11171496 11722493 21253250
301263929 355365842 385179850
Net assets 40844314 55119675 58436054
Represented by:
Share capital 5463276 6282768 6282768
Reserves 24662426 34000638 36768765
Inappropriate profit 5530973 5130750 9193332
35656675 45414156 52244865
Surplus on revaluation of assets-net of tax 5187639 9705519 6191189
40844314 55119675 58436054

33. 24
Profit and Loss Account
For the year ended December 31, 2013.
2011 2012 2013
Mark-up/ return / interest earned 25778061 31786595 40043824
Mark-up/ return / interest expensed 4525359 7865533 11560740
Net mark-up/ interest income 21252702 23921062 28483084
Provision for diminution in the value of investments-net 121197 105269 2683994
Provision against loans and advances-net 1014540 2959583 1335127
Bad debts written off directly 47000 199 0
1182737 3065051 4019121
Net mark-up/ interest income after provision 20119965 20856011 24463963
Non mark-up/ interest income
Fee, commission and brokerage income 2311235 2634610 2866729
Dividend income 811801 632300 617554
Income from dealing in foreign currencies 692010 693408 727564
Gain on sale of securities-net 605865 1500865 740429
Unrealized loss on revaluation of investments
classified as held for trading -13105 -103198
Other income-net 570505 1000149 942362
Total non-mark-up/ interest income 4991416 6448227 5791440
25061381 27304238 30255403
Non-mark-up/ interest expense
Administrative expenses 6482592 5426116 7546878
Other provisions/ (reversal)-net 11411 -3743 10120
Other charges 66708 573830 830839
Total non-mark-up/ interest expense 6560711 5996203 8387837
Extra ordinary/ unusual item 0 0 0
Profit before Taxation 18500670 21308035 21867566
Taxation - Current year 5701443 6442356 7341257
- Prior years 593497 -1294473 -864824
- Deferred 63332 894590 16533
6358272 6042473 6492966
Profit after Taxation 12142398 15265562 15374600
Inappropriate profit brought forward 4990260 5530973 5130750
Transfer from surplus on revaluation of fixed assets-net of
tax
32166 11855 21319
5022426 5542828 5152069
Profit available for appropriation 17164824 20808390 20526669
Basic and diluted earnings per share - after tax 23.4 24.3 24.47

34. 25
5.1 Balance Sheet (Vertical Analysis)
HABIB BANK LIMITED
Balance Sheet
As at December 31, 2013
2012 2013 2012 2013
Rs. Rs. % %
Assets
Cash and balances with treasury banks 39683883 39631172 9.67 8.93
balances with other banks 3807519 4043100 0.93 0.91
landings to financial institutions 1051372 4100079 0.26 0.92
investment-net 113089261 96256874 27.55 21.70
advances-net 218960598 262510470 53.34 59.18
operating fixed assets 16024123 17263733 3.90 3.89
deferred tax assets-net 0 0 0.00 0.00
other assets-net 17868761 19810476 4.35 4.47
410485517 443615904 100.00 100.00
Liabilities
Bills payable 10479058 10551468 2.95 2.74
Borrowings 39406831 22663840 11.09 5.88
deposits and other accounts 292098066 330274155 82.20 85.75
sub-ordinate loan 479232 0 0.13 0.00
liabilities against assets subject to finance lease 0 0 0.00 0.00
deferred tax liabilities-net 1180162 437137 0.33 0.11
other liabilities 11722493 21253250 3.30 5.52
355365842 385179850 100.00 100.00
Net assets 55119675 58436054
Represented by:
Share capital 6282768 6282768
Reserves 34000638 36768765
Inappropriate profit 5130750 9193332
45414156 52244865
Surplus on revaluation pf assets-net of tax 9705519 6191189
55119675 58436054

35. 26
5.2 Balance Sheet (Horizontal Analysis)
HABIB BANK LIMITED
Balance Sheet
As at December 31, 2013
2011 2012 2013 2011 2012 2013
Rupee's in 000 %
% % %
cash and balances with treasury banks 32465976 39683883 39631172 100 22.23 22.07
balances with other banks 6577017 3807519 4043100 100 -42.11 -38.53
lending’s to financial institutions 21081800 1051372 4100079 100 -95.01 -80.55
investment-net 63486316 113089261 96256874 100 78.13 51.62
advances-net 198239155 218960598 262510470 100 10.45 32.42
operating fixed assets 9054156 16024123 17263733 100 76.98 90.67
deferred tax assets-net 172373 0 0 100 -100. -100.
other assets-net 11031450 17868761 19810476 100 61.98 79.58
342108243 410485517 443615904 100 19.99 29.67
Liabilities
Bills payable 7089679 10479058 10551468 100 47.81 48.83
Borrowings 23943476 39406831 22663840 100 64.58 -5.34
deposits and other accounts 257461838 292098066 330274155 100 13.45 28.28
sub-ordinate loan 1597440 479232 0 100 -70.00 -
100.00
liabilities against assets subject to
finance lease
0 0 0 100 0.00 0.00
deferred tax liabilities-net 0 1180162 437137 100 0.00 0.00
other liabilities 11171496 11722493 21253250 100 4.93 90.25
301263929 355365842 385179850 100 17.96 27.85
Net assets 40844314 55119675 58436054
Represented by:
Share capital 5463276 6282768 6282768
Reserves 24662426 34000638 36768765
Inappropriate profit 5530973 5130750 9193332
35656675 45414156 52244865
Surplus on revaluation pf assets-net of
tax
5187639 9705519 6191189
40844314 55119675 58436054

36. 27
5.3 Vertical Analysis
Profit and Loss Account
For the year ended December 31, 2013.
2012 2013 2012 2013
Mark-up/ return / interest earned 31786595 40043824 100 100
Mark-up/ return / interest expensed 7865533 11560740 24.745 28.87
Net mark-up/ interest income 23921062 28483084
Provision for diminution in the value of investments-net 105269 2683994 0.3312 6.7026
Provision against loans and advances-net 2959583 1335127 9.3108 3.3342
Bad debts written off directly 199 0 0.0006 0
3065051 4019121
Net mark-up/ interest income after provision 20856011 24463963 65.613 61.093
Non mark-up/ interest income
Fee, commission and brokerage income 2634610 2866729 40.858 49.499
Dividend income 632300 617554 9.8058 10.663
Income from dealing in foreign currencies 693408 727564 10.753 12.563
Gain on sale of securities-net 1500865 740429 23.276 12.785
Unrealized loss on revaluation of investments
classified as held for trading -13105 -103198 -
0.2032
-
1.7819
Other income-net 1000149 942362 15.51 16.272
Total non-mark-up/ interest income 6448227 5791440 100 100
27304238 30255403
Non-mark-up/ interest expense
Administrative expenses 5426116 7546878 35.545 49.087
Other provisions/ (reversal)-net -3743 10120 -
0.0245
0.0658
Other charges 573830 830839 3.759 5.404
Total non-mark-up/ interest expense 5996203 8387837 39.279 54.556
Extra ordinary/ unusual item 0 0 0 0
Profit before Taxation 21308035 21867566 139.58 142.23
Taxation - Current year 6442356 7341257 42.202 47.749
- Prior years -1294473 -864824 -
8.4797
-5.625
- Deferred 894590 16533 5.8602 0.1075
6042473 6492966 39.582 42.232
Profit after Taxation 15265562 15374600 100 100
Inappropriate profit brought forward 5530973 5130750

37. 28
Transfer from surplus on revaluation of fixed assets-net
of tax
11855 21319
5542828 5152069
Profit available for appropriation 20808390 20526669
Basic and diluted earnings per share - after tax 24.3 24.47
5.4 Horizontal Analysis
Profit and Loss Account
For the year ended December 31, 2013.
2011 2012 2013 2011 2012 2013
Mark-up/ return / interest earned 25778061 31786595 40043824 100 23.31 55.34
Mark-up/ return / interest expensed 4525359 7865533 11560740 100 73.81 155.47
Net mark-up/ interest income 21252702 23921062 28483084 100 12.56 34.02
Provision for diminution in the value of
investments-net
121197 105269 2683994 100 -13.14 2114.57
Provision against loans and advances-net 1014540 2959583 1335127 100 191.72 31.60
Bad debts written off directly 47000 199 0 100 -99.58 -100.00
1182737 3065051 4019121 100 159.15 239.82
Net mark-up/ interest income after
provision
20119965 20856011 24463963 100 3.92 21.89
Non mark-up/ interest income
Fee, commission and brokerage income 2311235 2634610 2866729 100 13.99 24.03
Dividend income 811801 632300 617554 100 -22.11 -23.93
Income from dealing in foreign currencies 692010 693408 727564 100 0.20 5.14
Gain on sale of securities-net 605865 1500865 740429 100 147.72 22.21
Unrealized loss on revaluation of
investments
classified as held for trading -13105 -103198
Other income-net 570505 1000149 942362 100 75.31 65.18
Total non-mark-up/ interest income 4991416 6448227 5791440 100 29.19 16.03
25061381 27304238 30255403 100 8.95 20.73
Non-mark-up/ interest expense
Administrative expenses 6482592 5426116 7546878 100 -16.30 16.42
Other provisions/ (reversal)-net 11411 -3743 10120 100 -132.80 -11.31
Other charges 66708 573830 830839 100 760.21 1145.49
Total non-mark-up/ interest expense 6560711 5996203 8387837 100 -8.60 27.85
Extra ordinary/ unusual item 0 0 0
Profit before Taxation 18500670 21308035 21867566 100 15.17 18.20
Taxation - Current year 5701443 6442356 7341257 100 13.00 28.76
- Prior years 593497 -1294473 -864824 100 -318.11 -245.72
- Deferred 63332 894590 16533 100 1312.54 -73.89

38. 29
6358272 6042473 6492966 100 -4.97 2.12
Profit after Taxation 12142398 15265562 15374600 100 25.72 26.62
Inappropriate profit brought forward 4990260 5530973 5130750
Transfer from surplus on revaluation of
fixed assets-net of tax
32166 11855 21319
5022426 5542828 5152069
Profit available for appropriation 17164824 20808390 20526669
Basic and diluted earnings per share -
after tax
23.4 24.3 24.47
5.5 Financial Analysis
Financial analysis is the process of identifying the financial strengths and weakness of the firm by
properly establishing relation ship between the items of balance sheet and profit and loss account,
in order to make rational decision in keeping with the objective of the organization, for that
purpose the management use analytical tools. To evaluate the financial condition and performance
of the business entity, the financial analyst needs to perform "checkups" on various aspects of the
business financial health.
A tools frequently used during these checkups is a financial ratio analysis, which relates two piece
of financial data by dividing one quantity by the other we calculate ratios because in this way we
get a comparison that may prove more useful than the raw number by themselves. The business
itself and outside providers of capital (creditors and investors) all undertake financial statement
analysis. The type of analysis varies according to the specific interest party involved. The nature of
analysis is depending at the purpose of analyst.
5.6 Ratio Analysis
Ratio Analysis is an important and age-old technique of financial analysis. Ratios are important
and helpful in the reference that:

39. 30
 These simplify the comprehension of financial statement and tell the whole story of changes in
the financial conditions of the business.
 These provide data for inter-firm comparison. The ratios highlight the factors associated with
successful and unsuccessful firms, also reveal strong and weak firms.
 These help in planning and forecasting, these can assist management in its basic functions of
forecasting, planning, coordination and control.
 These help in investment decision in case of investor and lending decision in case of Bankers
etc.
However, the ratios are only indicators, they cannot be taken as final regarding good and bad
financial position of the business other things have also to be seen.
RETURN ON EQUITY
Dividing profit after taxation by share holder’s equity. ROE compares net profit after taxes to the
Share holder’s Equity. This ratio is calculated as:
ROE = Profit after taxes/Share holder’s Equity
2013 = 29.42%
2012 = 33.61%
RETURN ON ASSETS
This ratio shows the efficiency of organization that how efficiently utilizes their assets. This ratio
relates profits to assets. It is calculated as:
Profit after Tax/Total Assets
2013 = 3.60%
2012 = 4.60%

40. 31
EARNING PER SHARE
N.P.A.T ÷ No. Of outstanding shares
2013 = 24.47%
2012 = 24.30 %
RETURN ON DEPOSIT
N.P.A.T * 100 ÷ Total Deposit
2013 = 4.65 %
2012 = 5.22 %
CASH/DEPOSIT RATIO
“This ration is obtained by dividing cash by current liabilities / liabilities”. This ratio shows that
the cash is enough for payment of current liabilities or not.
It is calculated as cash Ratio = Cash/current liabilities Or =Cash/Total Deposit
2013 = 11.99 %
2012 = 13.58 %

41. 32
INTEREST INCOME/TOTAL INCOME RATIO:
Interest Income ÷ Total Income
2013 = 87.36 %
2012 = 83.13 %
NET PROFIT MARGIN:
This ratio measure the firm’s profitability of sales/ interest earned after taking account of all
expenses and income taxes. This ratio can be calculated as:
Net profit margin ration= Net Profit after taxes / interest earned *100
2013 = 33.54%
2012 = 39.92 %
AVERAGE PROFIT PER BRANCH:
Profit Net ÷ No. Of Branches
2013 = Rs. 14,984,990.25
2012 = Rs. 14,878,715.4
OPERATING EXPENSE RATIO:
Non markup expense ÷ Gross income

42. 33
2013 = 27.72 %
2012 = 21.96 %
TOTAL ASSET TURNOVER:
Interest/markup earned*100 ÷ Total asset
2013 = 9.02 %
2012 = 7.74 %
RISK ASSETS TURNOVER:
Net interest income after provision ÷ Risk assets
2013 = 65.98 %
2012 = 68.11%
ADVANCES TO TOTAL DEPOSITS:
This ratio show that how much efficiently the bank advances the deposits of their customer to
borrower. It is calculated as.
Advances deposit ratio = Advances/ deposit
2013 = 79.48 %
2012 = 74.96

43. 34
DUE FROM BANK TO DUE FROM BANK:
Landing to financial institution* 100 ÷ Borrowing from financial institution
2013 = 18.09 %
2012 = 2.66 %
5.7 Organization analysis in comparison with its industry (or with its
competitors)
Competitive advantage spells out the ‘uniqueness' of the organization vis-à-vis its competitors. so
the HBL also have uniqueness in its dealing with customers and also have uniqueness in his
strategy with other their competitors. Business analysis is imperative for the organization to
ascertain the mood and the conditions for starting or consolidating a business venture. Business
strategy analysis involves analysis of the organizational strategy to create a sustainable competitive
advantage. Primary objective of competitor analysis is to understand and predict the rivalry, or
interactive market behavior, between firms in their quest for a competitive position in an industry.
Therefore the HBL also always analyze their competitors Banks Toward this end, researchers have
examined factors that influence competitive and patterns of entry into and exit from rivals' markets
However, researchers have made limited effort to investigate the prebattle competitive relationship
between rivals and the extent to which it may predict rivalries behavior in the market. This
omission is due partly to the restricted conceptual treatment of competitor analysis, which has not
fully incorporated the essential antecedents that affect a firm's competitive activity, let alone
considered them in an integrated way.
Intensity of rivalry, one of Porter's (1980) well-known five forces driving competition, has

44. 35
remained mainly a theoretical construct confined to the industry level. In terms of analyzing firms
competing in an industry, the strategic-group far the most popular and relevant. However,
researchers who use this approach have largely ignored the market context in which competitors
carry on their battles and the extent to which two firms actually compete directly against each
other. Although the marketing literature recognizes the importance of the market context, its
contribution has been primarily in analyzing competitors and competition at the brand or
individual-market level rather than at the firm level. Other approaches usually represent a high
degree of abstraction and rely primarily on managers' or researchers' subjective perceptions, which
often are too remote to be linked to competitive behaviors in the market Thus far, some of the most
fundamental questions in competitor analysis have remained unexplored 1985). For example, how
can researchers studying competition differentiate among players in an industry to explain each
player's market behaviors? How can a firm, before launching an attack, assess its prebattle
relationship with a given rival and the resultant likelihood that this rival would retaliate? How can
a firm gauge which opponent is most likely to attack its markets? How can strategists differentiate
among a set of competitors to allow the firm to allocate appropriate resources and attention to
each? Finally, although the importance of competitor analysis and interfirm rivalry is well
recognized, there has been no systematic attempt to integrate the two topics.
This article seeks to provide a conceptual link by proposing two firm-specific, theory-based
constructs: the market commonality and the resource similarity between a given pair of
competitors. Taking the firm as the basis for analysis, I argue that each firm has a unique market
profile and resource endowment and that a comparison with a given competitor along these two
dimensions will help to illuminate the competitive relationship between them and to predict how
they may attack (or respond to) each other in the market. This firm-specific conceptualization also
leads to the idea of competitive asymmetry, the notion that a given pair of firms may not pose an

45. 36
equal threat to each other. I first offer a number of propositions that use market commonality and
resource similarity to predict competitive attack and response. I also propose measures to assess
market commonality and resource similarity along with a demonstration of how such measures
could be implemented. The article ends with a number of implications for research and practice.
5.8 Future prospects of the organization.
The structure of the Banking markets has changed radically over the last decade while in contrast
the futures markets more or less maintained the status quo. But now the futures markets are in
catch-up mode as evidenced by the emergence of some dark pools and, Banking firms are beefing
up their technology to take advantage of what is coming down the pike. For the future aspects the
HBL should be make itself active and also efficient and effective in the banking field and get the
competitive advantage. That when occur truly when the HBL produce new products and services
to their customers. The HBL should also introduce the new technologies in the Banking field
before their competitors and provide the facilities to their customers and get the customer's loyalty
The HBL should also provide the better service than their competitors and also should give the full
response in the any branch. The HBL also should improve their computerized system in the bank
and the bank in the future also want to trained their employees in any technology and also will
provide the new technology that facilitate the customers of the HBL

46. 37
Chapter # 0 6 FUNCTIONING OF HBL where I did my internship
6.1 HBL bank is functioning under following set up:
6.1.1 BANK DEPOSITS
Deposits are to the bank as a backbone is to the body of a man. They are the lifeblood of the bank.
HABIB BANK LIMITED and all other commercial banks perform the function of deposit
accepting from the general public by offering suitable rates of interest on them, or on simply a
promise to repay on demand.
6.1.2 OPENING OF ACCOUNT BY AN INDIVIDUAL:
After entering into bank premises the person goes through the following steps for opening an
account in the bank and for becoming a bank customer.
6.1.2.1 AN INTRODUCTION
The first important step to take place in bank is to get satisfactory introduction of the person, who
wants to become bank’s customer by putting various questions.
In HBL (PANJERA BRANCH) the branch manager takes great care of this step and gets
introduced with the person himself. His main intention is to determine the prospective customer’s
integrity, respectability, occupation, and nature of business he is doing at the time of opening an
account.
6.1.2.2 ACCOUNT OPENING FORM & SPECIMEN SIGNATURE CARD
Now the person is provided with an application form known as Account Opening Form.
This form contains:
 Title of account
 Address
 I.D. Card number

47. 38
 Telephone No. (Office and Residence)
 Introductory reference (all above mentioned particulars of introducer )
 Signatures of the applicant
 Amount deposited
In addition to this the customer is required to attach a copy of National Identity Card with the
form.
Specimen signature card
Specimen of signatures will be obtained from depositor at the time of opening his account. A
specially designed card is used for this purpose; the card must be countersigned by an official of
the bank not below the rank of an officer.
6.1.2.3 ACCOUNT OPENING REGISTER
Now the name of the customer will be recorded in account opening register, and from here the
account no. of the customer will be written on (top most corners) account opening form and on
specimen signature card.
6.1.3 ISSUANCE OF CHEQUE BOOK
The cheque book will ordinarily be issued to all customers desiring to have drawing facility.
Cheque book consists of 10, 25, 50, or 100 pages depending upon customer requirement. Customer
can withdraw money by signing a cheque and writing the amount he wants to withdraw from his
account. A special cheque book register is kept to enter the name of the person having cheque
book.
6.1.4 RECORDING IN TO GENERAL LEDGER
The concerned officer records the name and amount deposited with the bank in to general ledger.
Separate ledgers are maintained four different types of accounts e.g.
 Current Account Ledger

48. 39
 Saving Account Ledger
 Fixed Deposit Account Ledger
 Call Deposit Account Ledger
As and when customer deposits the money, amount is credited the general ledger and the
withdrawal is followed by a debit entry in the ledger.
Note: This Method is past. Now-a-Days all posting of voucher is due through computer.
6.1.5 TYPES OF ACCOUNTS MAINTAINED BY HABIB BANK LIMITED
(AZAD KASHMIR) PANJERA BRANCH:
The following types of accounts are maintained in HBL:
 Current accounts.
 Profit and loss sharing account.
 Fixed deposit account.
 Freedom account.
6.1.5.1 CURRENT ACCOUNTS
A bank account which may be used to lodge payments or to withdraw money on demand. Its main
purpose is to serve the businessman. Form number F-53 is provided to the person to open the
account for business man. It is a statutory requirement to maintain current account. Its main
features are:
 Minimum amount for opening this account is Rs.5000
 Any person can open the account with the bank
 According to inter banks agreement interest is not paid on current account.
 Bank act as custodian of money
 Customer can withdraw money through cheque supplied by bank.

49. 40
6.1.5.2 SAVING/P&L SHARING ACCOUNTS
To provide interest free banking facilities in Pakistan, this type of account was introduced in
January 1982.The main features of this account are:
 Instead of having fixed return in the form of interest the deposited money will be shared in
profit and loss of the bank.
 One can open the account by depositing minimum Rs.1000
 To withdraw a large amount a notice of 7 days to the bank is necessary but practice not seen.
 There is not any kind of interest is provided on money deposited.
 Rate of profit is declared at the close of each half-year.
6.1.5.3 TIME/FIXED DEPOSIT ACCOUNT
This account is the major source of funds for the banks. This account is best for people who have
surplus money and don’t need such funds in nearer future. The money is deposited for a fixed
period of time. Main features of this account are:
 Fixed amount deposited for fixed period.
 Amount of profit can be obtained after each moth or quarter, six months.
 Higher will be the time period, higher will be the rate of profit.
 A receipt is used for the amount deposited called fixed deposit receipt.
 Period of deposit can vary from 3 months to 10 years.
 The amount can be withdrawn before maturity after surrendering interest.

50. 41
Chapter # 07 THINGS I LEARNED
Truthfully speaking everything was new to me in Habib Bank limited though I have a good
Bookish knowledge but truthfully speaking it was totally different from the practical knowledge of
the banking. But with the grace of ALLAH I able to learn every section of the Bank.
7.1 WHAT I LEARAND DURING INTERNSHIP
The most important thing that i learn is that the difference between the behaviors of officials. And
also learn more clerical work of HBL as under.
7.1.1 ACCOUNT OPENING SECTION
I spent the 1st three days in account opening section. As the area where I did my internship, the
people are not well educated that is why whenever a person will come for opening an account than
the manager referred that man towards me. Then I guide that man and the form of opening an
account will be filled by me and the entire legal requirement are completed by me. In past the
Habib Bank use and the old type of firm but now it is using a new firm of opening an account.
There were five sign are required on old type of firm but now the new firm require only one side.
7.1.2 CLEARING SECTION
Past Method:
I also work in clearing section during my work I learned how to collect the different cheques of
different Banks. Then I learned how these cheques of different Banks mutually transfer. For
mutual transfer everyday a meeting is held in NBP main branch Bannu. The representative of
UBL, ABL, BANK AL FALAH, BANK OF KHYBER, and HBL was participating and thus
mutual transfer of cheques was held.
Mr.Mubasir sahib was the in charge of this section .He gave me a lot of attention.

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New Method:
Now-a-Days this activity done through NIFT.
7.1.3 REMITANCES SECTION
I also worked in remittances section .in remittances section I learned how to transform the money
from one place to another place. In this section I learned,
 DEMAND DRAFT.
 ON LINE TRANSFOR.
On each transaction there is commission charged to the sender.
The commission of (D.D) from 1 to 1lack is Rs; 160.
The charges are on the (D.D) up to 1lack is calculated in percentage.
The commission of (O.T) is Rs 350.

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Chapter # 08 SWOT ANALYSIS
HBL is considered to be a very sound bank in the financial circles. The bank where the customers
can safely keep their money as long as they want. In SWOT analysis the best strategies accomplish
in organization’s mission by:
 Exploiting opportunities and strengths.
 Neutralizing its threats and.
 Avoiding its weaknesses.
Following is a list of SWOT of HBL
8.1 Strengths
 A skill or capability that enables HBL to conceive and implement its strategies.
 The officers of HBL are considered as one of the most able professionals in the
banking world.
 I observed that HBL employees interact with their clients as if they are their
personal friends and discuss about their problems as their own.
 HBL has got a reliable and easy to use internal computer system. Every
information regarding the transactions in customers’ deposits has been
computerized.
 HBL maintained its data properly.
 HBL has very good security system.
 HBL is the larger commercial bank in Pakistan with the network of over 1439
domestic and international branches.
 Being the pioneer of banking in Pakistan, HBL is the oldest and is the richest in
experience.

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 HBL focuses on consumer banking by lucrative schemes, products and services
 HBL has opened all its branches at commercial areas so that the customers or
clients face no problems in reaching to the bank.
 The band is always on the look to improve its services both to the domestic as
well as overseas customers.
 Human resources development and introduction of new technology towards
modern banking.
 24 hours cash access and safe payment products for high value transaction.
 Having potential to encounter the competitive environment in the market.
 Veteran and experience private management group also involved in other interests
like, textile and cement industry.
 Customer enjoys the services at the residential localities.
8.2 Weaknesses
 Highest number of branches effecting the proper maintenance and difficulty in
providing same working environment at the each branch
 Poorer system of recovery of the system is a threat to bankruptcy.
 Lack of customer feed back.
 Low job satisfaction.
 Poor ATM’s Service
 Inconsistency in efficiency and working atmosphere due to the largest of branches.
 Sense of insecurity in the employees serving at low profitable branches due to the down
sizing.

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 Females feel uneasy in an environment among the male workers.
 Victim of political, legal and socio-cultural pressures
 .Lack of professionalism in the branch employees mostly.
8.3 Opportunities
 Huge untapped market potential in consumer banking
 In opportunity exist, in form of opening of ladies banking section within the branch
which is entirely a new idea and it will attract customer.
 Opportunity for developing value added services combined with corporate banking
relationships, cash management services to large and medium sized corporate clients.
 Growing policies of government on business and commerce sector provide HBL
opportunities to take advantages of these policies to meet efficiently with the business people
to solve their problems with the instant cash and financing facilities.
 Govt. is taking very bold steps to promote IT in Pakistan. HBL has an opportunity to
improve in technology.
 Large international network which principally focuses on trade finance with Pakistan
can be utilized to tap trade activities in other markets. In addition, services such as cross
border / offshore financing for corporate customers can be enhanced.
 Customer feedback on different products and accounts has really improved the bank
performance and encourage the atmosphere for other future policies.
 HBL also has an opportunity to expand its new technological advancement like; tele
banking and internet banking facilities in order to serve the customer more efficiently,
specially
 E-banking facility is also a new opportunity which is a flourishing business in foreign
countries and can also be here, if HBL takes the initiatives.

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 Further reduction in intermediation costs possible, with improving technology.
 Due to efficient and veteran management group, HBL can also improve Ill and expand
its foreign operation successfully.
 Habib Bank Limited provides opportunity to utilize its skills and efficiencies in leasing
business.
8.4 Threats
 An area in the environment that increases the difficulties the organization’s achieving
high performance.
 Consolidation in the banking sector resulting in increased competition.
 Shortage of trained and specialized staff at lower executive and officer levels
 The threat of inconsistency and government policy regarding to business and
economics sectors, specially political and regional situation which makes the environment
uncertain.
 Growing global technological advancement.
 Strict regulation by government over credit facilities to the customers as Ill as to meet
the prudential.
 Loss of confidence of overseas customers due to freezing of accounts.
 Facing more competition by foreign banks in the market.

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Chapter # 09 Conclusion & recommendations for improvement
9.1 PROBLEMS I SOUGHT
During my Six weeks stay in (HBL Azad Kashmir Panjera Branch) I found various problems,
which I think, so should be resolved for the better functioning of the Bank. Some of these
problems are of such nature that their solution will help the Bank and its workers in cooping in this
complex world of globalization.
PROBLEMS:
These problems are: -
 There is a lack of on-line information in the Bank about the changes taking place in the world
of Banking.
 A customer cannot find any kind of journal or newspaper there.
 In early days of month there is a great rush of customers, which cause inconvenience for the
officer concerned and cashier as well.
 Separate cabins are not available for the staff.
 A separate counter for ladies is not maintained there.
9.2 Recommendation I Propose
I will give following suggestions for the better function of the Bank:
 The management should provide better arrangement for the employees.
 The daily newspapers and journals should be provided to the employees and customers
visiting there.
 A separate hajj applications acceptance counter should be provided to overcome

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inconveniences faced by the customers.
 A separate ladies counter should be there
 The Bank management should be very careful while granting the loans.
 Personal interests should not be given importance and customers
 Personal credit worthiness must be carefully scrutinized public relation desk
should be established in each and every branch for guidance as well as redresses of
grievance of customers at the spot.
 Online Banking should be introduced in all the branches.
 Aggressive publicity campaign must be introduced through press and
Electronic media for new products and scheme by initiating vigorous
marketing policy.
 New talent / professionals should be hired to coupe with the competitive
demand in the industry.
 Information technology should be introduce in all the branches to enhance
the efficiently.
 The commission on government rushed enhanced / made rational to increase
the Banks profitability.
 The financial statement should be made more transparent and reliable.
 Consumer financing should be initiated to capture the market share.
 Employee’s induction, promotion and transfer should always be made on
Merit.

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Chapter # 10 REFERENCE & SOURCES
I collect this information from,
1. Habib Bank Limited of Pakistan, Annual Reports
2. State Bank of Pakistan Prudential Regulation for Corporate and Commercial Banking.
3. State Bank of Pakistan BPRD Circulars
4. Dawn Newspapers for updated information
5. Instruction Circulars of National Bank Limited
6. Economic Reviews for Banks and their activities
7. State Bank of Pakistan, Website, http://www.sbp.gov.pk
8. Habib Bank's website, http://www.hbl.com
9. Annual Report 2013 issued by HBL
I also visit & complete 6 weeks internship in Habib bank of Pakistan Panjera Branch for collecting
data.

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GLOSSARY
D.D ------------------------------------- Demand Draft
TT -------------------------------------- Telegraphic Transfer
A/C ------------------------------------- Account
OB --------------------------------------Other Bank
OBD -------------------------------------Other Bank Draft
PLS -------------------------------------Profit and Loss Sharing
DR -------------------------------------Debit
CR -------------------------------------Credit
CA -------------------------------------Current Account
FL -------------------------------------Flexi Loan
LG -------------------------------------Letter of Grantee
DF -------------------------------------Demand Finance
LC -------------------------------------Letter of credit
RF -------------------------------------Running Finance
FAPC -------------------------------------Finance against Packing Credit

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APPENDICES
Appendix 1
 Meanings of Bank
 Historical Background of Banking
 Establishment of HBL
 Values of HBL
 Goals of HBL
Appendix 2
 Nature of Organization
 Accepting Deposits
 Making Loans
 Business Volume
Appendix 3
 Product Lines
 Product and Services by HBL
 Types of Deposits of HBL
Appendix 4
 Organizational Structure
 Structure of HBL
 Organizational Hierarchy Structure
 Comments on organizational Structure
Appendix 5
 Financial Analysis

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 Financial Statements
 Vertical Analysis
 Horizontal Analysis
 Ratio Analysis
 Comparison with industry and competitors
 Future prospects of the organization
Appendix 6
 Functions of Branch where internship conducted
 Account opening procedure
 Types of accounts offering
Appendix 7
 Things I learned
 Account opening section
 Clearing section
 Remittance section
Appendix 8
 SWOT Analysis
Appendix 9
 Problems I sought
 Conclusion & recommendations for improvement
Appendix 10
 Reference & Sources
 Glossary