Habib Bank Limited uses various techniques to minimize credit risk, including assessing individuals, businesses, collateral, and industry prospects. The presentation discusses credit risk and how organizations try to reduce it. It then focuses on Habib Bank Limited and the specific techniques they use, such as credit information bureaus, assessing collateral through mortgages, and setting credit limits. A SWOT analysis finds strengths in collateral valuation and mortgages, but also notes current economic weaknesses and risks from competitors.

2. FINANCIAL ACCOUNTING
Topic:
Techniques to Minimize
the Credit Risk
Presented To: Asif Muzaffar Sheikh
Presented By: M.Hashaam
Roll No. : AM552381
Class : MBA ( B&F ) 1st Semester
Allama Iqbal Open University
ASC: Punjab Computer College, Garhishao,
Lahore.
Date: 30-04-2012

3. Acknowledgement
First of all thanks of Allah who is
most beneficent and the most
merciful whose blessings are
abundant and favors are unlimited.
It is my pleasure to acknowledge the
guidance and support of my
respected Teacher: Asif Muzaffar
for her endless guidance.
I would also like to acknowledge
“Habib Bank Limited”.

4. An Abstract
Credit Risk is an investor's risk of loss
arising from a borrower who does not
make payment’s as promised. To reduce
this kind of risk different techniques
are used in different organization’s.
In Habib Bank Limited, they use different
techniques to minimize the Credit Risk
which include Assessment of Person,
Business, Collateral and future prospect
of line of Business in industry.

5. Introduction of Techniques to
minimize the Credit Risk
Credit Risk
“Credit Risk is an investor’s risk of loss
arising from a borrower who does not
make payments as promised.”
To minimize this kind of risk different
organization’s use different techniques.
These techniques mostly also affect the
sale or services of any organization.

6. Introduction of Techniques to
minimize the Credit Risk cont...
Most famous techniques used for
minimize the Credit Risk
 Higher Interest Rate
 Covenants
 Credit Insurance
 Diversification
 Proper Assessment
 Collaterals
 Credit Information Bureau

7. Case Study
Techniques used for minimize the
Credit Risk
Habib Bank Limited

8. Introduction to HBL
History
HBL head quarter situated in Habib Bank plaza,
Karachi. The Bank has a network of over 1,450
Branches in Pakistan and 55 Branches worldwide.
The GoP initiated the privatization of HBL in 2000.
51% shares of HBL were acquired by the Aga Khan
Fund for Economic Development (AKFED) for a
price of PKR 63.68 per share and the management
of the Bank was transferred on February 28, 2004.

9. Vision & Mission
Vision of HBL
“Enabling people to progress with a
confidence and success.”
Mission of HBL
“To be recognized as the leading financial
institution of Pakistan and a
vibrant international bank in the promisin
g markets, providing our customers with
a best set of original products and
services, and granting
superior values to our stakeholders -
shareholders, customers and employees.”

10. Techniques for minimize the
Credit Risk by HBL
HBL use following techniques to
minimize the Credit Risk
 CIB
 Assessment of Person and
Business
 Assessment of Collaterals
 Mortgage
 Credit Limits

11. SWOT Analysis
Strengths Weaknesses
• Valuation of • Current Economic
Collaterals scenario's
• Mortgage • Customer’s not
• Coordination Satisfied

12. SWOT Analysis cont...
Opportunities Threat’s
• Secured Lending • Competitor’s
relax credit
policies
• Decrease in
Customer’s

13. Conclusion
It is conclude that Habib Bank
Limited adopted that policies and
techniques which minimize the
Credit Risk.
HBL credit department analysis of
credit subjectively and objectively
at approval level reduce the Credit
Risk.

14. Recommendation’s
After study and analyze, I will recommend
that Lack of Coordination among each
other in Banking Industry should be
removed.
The minimization of credit risk process
should be short period and credit should
be sanctioned with in reasonable time.

16. Questions
?