INTERNSHIP REPORT
HABIB BANK
CREATED BY (Amir Mursleen)
ROLL NO: 35
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INTERNSHIP REPORT
HABIB BANK
2
Being aware of the importance of practical training, the Department of
Commerce (IUB) requires every B.Com (Hons) MS-IT student to go through
training for practical purpose as trainee.
The internship program is to broaden the vision of practical experiences with
theoretical knowledge as it increases one’s capabilities to handle problems at
various stages and the ability of decision.
I tried my best to collect the valuable information and its relevant facts.
This report is the result of my internship with Habib Bank (HBL).
M.Safdar
B.Com (Hons) MS-IT
Session: 2005-09
CREATED BY (Amir Mursleen)
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INTERNSHIP REPORT
HABIB BANK
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Who always prayed for my success and their love and affection have always been a source
of inspiration for me to difficulties, this taught me a lot about life.
Who always provide us knowledge and guidance that becomes a successful way in our life,
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HABIB BANK
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Up and above everything, I am thankful to ALMIGHTY ALLAH, the most
Beneficent and merciful, and his Holy Prophet (Peace be upon him) who is
forever a true torch of guidance for whole humanity. I am greatly obliged to
“ALLAH” by whom grace I have been able to complete this report
successfully.
I also offer my thanks to honorable Chairman Prof. Javaid Iqbal for
providing me a chance to work in such a prestigious organization.
I also offer my thanks to respected teacher Mr. Farrukh Naveed for his
valuable guidance and contribution in making my report meaningful and
useful.
I also thank to the Branch Manager Mr. Zubair Khan, officers and employees
for their kind behavior and full cooperation during the internship Period.
M.Safdar
B.Com (Hons) MS-IT
Session: 2005-09
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
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I have completed my 8 weeks internship in HABIB BANK LIMITED. I tried
my best to gain something practically from this opportunity. This report starts
from the introduction of word ‘Banking’ and then History of HABIB BANK
LIMITED. History of HBL shows that how it helps its Nation and Country in
both war & peace. The first Pakistani bank .Bank Mission statement & Vision
shows its focus on overall performance of the bank and quality of services
and products.
After restructuring of the bank the objectives of the bank are changed. Now it
has objectives to overcome past mistakes, realize the real importance of
customer so now it has main objective to achieve customization.
A commercial bank has basic functions that are must be performed by them as
a bank i.e.
1. Accept money as deposits.
2. Investing deposits to earn profit.
3. Miscellaneous functions.
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Each branch of the bank is divided on the basis of these functions into
different sections.
Deposit section opens different accounts of clients and maintains record
of deposited money from the customer & credited it into his account. It also
maintains record of payment to the customer when he presents cheque.
Advances section deals the customers who demand loans against required
security.
Remittance & collection section deals customers who want to transfer or
collect their money from/to other city.
Foreign Exchange section deals customers who have foreign account in the
bank & deals exchange of foreign currencies.
Bank also provides facility of L.C to support export and import in the region.
Flexi is the new product of Habib bank for the employees.
All branches are now interconnected with head office through internet.
Total numbers on branches are 1489 and number of employees are 14552.
Bank shows improvement after the privatization.
Simex system is very good but misused by staff due not proper training.
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SWOT analysis of Habib Bank shows that it has small number of strengths
and lot of weaknesses and threats. The bank should give attention to this draw
back. But bank has lot of opportunities to improve its quality of services, and
do efficient banking. Bank should give proper attention to overcome its
threats.
Banks profit has been increased as compared to previous years.
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TABEL OF CONTENTS
Serial No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Content
Company Introduction
Company Information
Financial Highlights
Mission Statement and Objectives
Operation Of The Bank
Work Done By Me During Internship
Field of Activities/Department Of Bank
Deposit Department
Accounts Department
Advances Department
Agriculture Loan
Flexi Loan
Foreign Exchange Department
Miscellaneous Function Of all Departments
Lockers
ATM
Credit Card
Simex
Balance Sheet
Income Statement
Ratio Analysis
SWOT Analysis
Suggestions
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17
20
22
25
27
31
32
35
39
41
44
50
53
56
58
62
64
65
66
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86
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Company Description:
Habib Bank Limited is a Banking Company, which is engaged in Commercial &
Retail banking and related services domestically and overseas.
WHAT IS BANKING COMPANY?
Section 5 of banking ordinance 1962 says that Banker means a person
transacting business of transacting the business of accepting, for the purpose
of lending or investment of deposits and withdrawals by Cheques, drafts,
orders of other wise and include any post office saving bank.
COMMERCIAL BANKING:
Commercial banks are profit seeking organization. They have been the most
effectively mobilize the savings and have been providing short-term
requirements of businesses. They help in internal and external trade of the
country.
FUNCTIONS OF COMMERCIAL BANKS:
Today there are more than 7000 branches of commercial banks along with an
established network of supplementary financial institutions.
The function of a modern commercial bank can be divided under the four
headings as:
1. Accepting of deposits.
2. Advancing of loans.
3. Agency service.
4. General utility service.
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ACCEPTING DEPOSITS:
The primary function of a bank is to receive surplus balances from individuals,
firms, public institutions and government etc and honor Cheques drawn upon it.
Three types of deposits are



Current or demand deposits
Saving deposits
Fixed or term deposits
ADVANCING OF LOANS:
The most important function is to provide loans to individuals, firms,
business concerns and government bodies against securities to meet their
financial needs at a fixed percentage of interest. These are some kinds of loans:






Loan to business
Loan to real estate mortgage
Consumer loan
Loan for purchasing security
Loan to agriculture
Bank investment for security
AGENCY SERVICES:
The commercial bank provides following agency services to its customer







Collection and payment of Cheques
Collection of dividend
Purchase of securities
Execution of standing orders
Acting as trustee or executer
Make transfer of funds
Act as an agent
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HABIB BANK
GENERAL UTILITY SERVICES:
Commercial bank performs general utility services as follows





Foreign exchange business
Act as referee
Accepting of bills for collection
Issuer of traveler’s Cheques
Supplier of trade information
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INTERNSHIP REPORT
HABIB BANK
CREATED BY (Amir Mursleen)
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INTERNSHIP REPORT
HABIB BANK
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HBL established operations in Pakistan in 1947 and moved its head office to Karachi. Our
first international branch was established in Colombo, Sri Lanka in 1951 and Habib Bank
Plaza was built in 1972 to commemorate the bank’s 25th Anniversary.
With a domestic market share of over 40%, HBL was nationalized in 1974 and it continued
to dominate the commercial banking sector with a major market share in inward foreign
remittances (55%) and loans to small industries, traders and farmers. International
operations were expanded to include the USA, Singapore, Oman, Belgium, Seychelles and
Maldives and the Netherlands.
On June 13, 2002 Pakistan's Privatization Commission announced that the Government of
Pakistan had formally granted the Aga 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, 2004, 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.
TODAY’S HABIB BANK:
Today, Habib Bank 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’s leadership in Pakistan’s corporate arena.
Today, HBL 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.
Operational Structure:
Habib Bank Limited is one of the largest commercial bank of Pakistan. It accounts
for a substantial share (20%) of the total commercial banking market in Pakistan
with a network of 1469 domestic branches; 55 overseas branches in 26 countries
spread over Europe, the Middle East, Far East, Asia, Africa and the United States; 3
CREATED BY (Amir Mursleen)
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HBL wholly owned Subsidiaries namely 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
representative offices in Iran and Egypt.
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INTERNSHIP REPORT
HABIB BANK
AUDITORS:
TASEER HADI KHALID & Co.
Chartered Accountants
Sh. Sultan Trust Building No. 2
Beaumont Road
Karachi – 75530
Pakistan
A.F. Ferguson & Co.
Chartered Accountants
State Life building 1-C
1-1
Chundrigar Road
Karachi
Pakistan
REGISTERED OFFICE:
Habib Bank Limited
Habib Bank Plaza
1-1
Chundrigar Road
Karachi - 75650
Pakistan
HEAD OFFICE
Habib Bank Plaza
1-1
Chundrigar Road
Karachi - 75650
Pakistan
Phones: 2418000(50 lines)
Fax:
2411647
Telex: 20086-20751 HBANK-PK
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INTERNSHIP REPORT
HABIB BANK
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BOARD OF DIRECTORS
ZAKIR MEHMOOD
SULTAN ALI ALLANA
PRESIDENT &
CHIEF EXECUTIVE
CHAIRMAIN
LAIN DONALD CHEYNE
DIRECTOR
SAJID ZAHID
DIRECTOR
AHMAD WAQAR
DIRECTOR
MUSHTAQ MALIK
DIRECTOR
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DESIGNATION
Zakir Mehmood
President & Chief Executive
Sohail Malik
SEVP & Group executive
Credit policy
Jamail Iqbal
SEVP & Group executive
Global operation
Shahid M.Loan
SEVP & Group Executive
Audit, BRR & Investigation
Sima kamal
SEVP & Group Executive
Corporate and investment
Banking
Ayaz Ahmad
SEVP & Group Executive
Information Technology,
financial control
Hanif Akhai
SEVP & Group Executive
Global treasury
Jamil A. Khan
SEVP & Group Executive
Human Resource s Retail
banking
Aziz Rajkotwala
CREATED BY (Amir Mursleen)
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SEVP & Group Executive
International
INTERNSHIP REPORT
HABIB BANK
Description
1
Total Deposits
2
Total Assets
3
Advances
4
Liquid Assets*
5
Shareholders' Equity & Revaluation
Surplus
Liquid Assets % of Deposits from
Customers & Bills Payable
6
18
2007
2006
2005
2004
2003
531298
459140
283445
266052
333751
328605
691992
594062
328183
2
403013
38173
349433
167523
167225
174894
170901
126207
147288
85228
96499
62272
52530
19498
12611
12534
32.06%
27.72%
47.36%
30.61%
26.82%
Profit & Loss
8
Total Net Income
41350
38971
18,564
16788
14613
9
Total Expenditure
18382
17204
11,748
11810
12176
11
Pre Tax Profit
15145
18840
4,088
2224
476
12
Profit after Taxation
10084
12700
2,034
1112
493
13
Earnings Per Share (Rs. / Share)
14.49
18.30
1.68
0.92
0.40
CREATED BY (Amir Mursleen)
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INTERNSHIP REPORT
HABIB BANK
CREATED BY (Amir Mursleen)
ROLL NO: 35
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INTERNSHIP REPORT
HABIB BANK
CREATED BY (Amir Mursleen)
ROLL NO: 35
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INTERNSHIP REPORT
HABIB BANK
21
The main logo of the bank shows a picture of a lion with a sword on the top on the up most
Portion BISMILLAH is written to show the supremely of God and the symbol of lion
shows the
Quality of leadership that lies with the bank. The reason for the statement the power to
Lead.
As the bank has entered the new millennium, it wishes to appear as a bank that is
“LEADING LOCALLY AND GROWING GLOBALLY”
MISSION STATMANT OF HABIB BANK IS TO MAKE
Habib bank the dominate financial institution in Pakistan and a leading bank of the Middle
East and South Asia regions.
The bank main aims to provide better and efficient services to its Domestic and overseas
customer.regarding the need for improving the financial
Performance of the company, following objective have been chalked out.
 To take necessary steps to plug the leakages of revenue and expenses.
 To insure internationally accepted accounting standard are followed by the bank
 To correct the structural flaws in the balance sheet
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 To put greater focus on neglected sectors to correct sectored imbalances in the loan
portfolio.
 To achieve those objectives necessary steps have been taken by the management
loss making branches have been closed or merged.
 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
markets.
 To increased the number of “ON
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LINE” branches
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 To provide 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.
CREATED BY (Amir Mursleen)
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INTERNSHIP REPORT
HABIB BANK
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INTERNSHIP REPORT
HABIB BANK
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For facilitation of domestic operations the retail banking group and the corporate
institution banking group is divided in to several distinct regions, centers and sub centers
comprising of
1469 branches
For the facilitation of the overseas operations the bank has
55Branches
02 affiliates
01 Representative office
02 subsidiaries
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I have worked as an internee in the Habib Bank limited Farid gate Branch Bahawalpur for
eight weeks. During my internship I learned a lot about the banking work.On first day I
reported to the branch manager and he guided me and gave me information about the
branch. In first week he had given me information about the overall banking in this branch.
He told me about the departments of the bank and some other basic information about the
bank, cheques, records, etc.
In the next week he told me that now I have to start work in the different departments. I
started my internship from account department.
The most of the working was conducted in this department. There was a lot of burden of
work in this department. In this department the following major activities were
a) Account opening.
b) IBDA’s records and preparation.
In this department daily many people came for open the accounts according to their own
choice of account. In PLS Saving account and current account procedure of opening of
account is the same except the initial
deposite.
The type of account which any person want to be open, he has to select that.

Nature of account whether individual or proprietorship or other.

Currency (in which want to operate).

Particular of deposits. (Period for operation).

Complete address.

Telephone number.
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
Nature of business etc.

Detail of other accounts.

Zakat deduction.

Personal information.

Name.

Date of birth.

Nationality etc.

Then signatures of the account holders and the bankers and manager.

Signature of the introducer, his account number and address.
When this form is filled then signature of the person who want to open the account are to
be taken on the specimen signature card. Then it is recorded in the PC. Then after a week
letter of thanks when received by the person then a cheques book is issued to him. Now he
can withdraw the amount by fulfilling cheques up to the extent of his balance, in the
account.
In that account opening I also write the letter to the customer.
There are two letter are written while opening the account
1. New customer
2. Introducer of new customer
These are printed letter on which just write the name of person and his addresser written in
the form.
I issued cheques books in the account opening department. The cheques book is issued
after opening of the account. The Account No. is stamped by the rubber stamp on each
cheque. Then it is given to the person.
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When all cheques books are issued to the customers then these are recorded in the
CD Book or PLS saving book. All cheque books are recorded with their a/c number and
name of the person.
I prepared in this department IBDA Inter Branch Debit Advice. If for one branch it is
IBDA transition then it is for branch is IBCA. (Inter branch credit advice).
For example transaction between satellite town Branch and Model Town Branch is
as follow.
If the customer of satellite town branch withdraw money from Model Town branch.
(Use) this branch will debit the account of satellite town branch with IBDA. Davis road
branch will receive the slips that the person has used the ATM machine there. When
money is withdrawn then Habib Bank satellite town branch will credit the Model Town
branch. After transfer of cash from branch the account will be settled.
I spent one week in the cash department here I issued token to the customers and then
recorded it into the token book. The procedure of issuing the token is that when cheque is
presented at the counter. Then following things are checked.

The signatures on front and at the back.

Similarities in the signatures of the issuer of the cheque.

Date.
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Amounts whether tally with the amount written in words.
Then token is issued to him and cheques are stamped at the back at which date and token
No. is filled. Then all cheques are forwarded to the next counter where signatures are
compared with the signatures in the book and the balance of the account is checked.
If the cheque has not any fault on it then it is given to cash payment counter and cash is
paid to the customer up to the amount mentioned on the cheques. I spent one week in this
department.
I also completed their pending token books also.
I also spend some time in the Advance t department .the loans available in our branch are
1-FLAXI LOAN
2-AGRI LOAN
3-CONSUMER FINANCE
4-BUSNIERES LOAN
These are the main types of loan which is future categriosed in different ways.
 I check there the procedure of different loans
 Documents required
 Capacity of the party
 Purpose of loan
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I also observed the 5c’s of loan while gave the to the party
The main departments of a bank are as follow
1. Deposit department
2. Accounts department
3. Advances department
4. Clearing department
5. Bills and remittances department
6. Foreign exchange department
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1) Deposit Department
The function of deposit department is to collect cash from the customers and to deposit it
into the accounts, maintained by them. Their classification is based on duration and
purpose for which the account is maintained. The following types of accounts are
maintained for this purpose.
a) Current account
b) Saving account
c) Fixed account
a. Current account
A current account is a running account is a running account which is
continuously in operation, by the customers on all working days of the bank. The
customers can withdraw the amount from the bank without prior notice. The banks
usually do not pay any interest on these deposits as they can withdraw without
notice.
These accounts are operated normally by the traders, business companies,
institutions, public service bodies, industrialists etc.
Summing up, the current account does not earn but serves the cause of industry,
trade and commerce.
b. Saving deposits account
This type of account is for those persons who want to make small savings. The
depositors are allowed to withdraw a limited amount of money for twice a week.
The banks will keep a minimum account and the balance be safely utilized for
investment by the bank.
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The bank pays interest on saving bank accounts according to the prescribed
rates by the central bank of the country.
c. PLS saving account
In Pakistan (PLS) saving account was introduced in January, 1982.
The bank has full right to investment of credit balances /deposits in the PLS
saving accounts.
Statements of accounts will be supplied on periodical intervals.
The following information are required to be furnished
1.
2.
3.
4.
5.
Name
occupation and full address
Specimen signature
Introductory references
Declaration that he will follow them
D.Fixed or time deposit
Fixed or time deposit are the major source of funds of a commercial bank. The rate
of interest on fixed deposits is higher them that of saving deposits and it varies with
time to time. The longer the period for which the amount is kept higher is rate of
interest. The fixed deposit receipt (FDR) is marked as not negotiated. The holder of
time deposit account cannot issue cheque for the withdrawal of the amount.
E.Joint account
A joint account is a special bank account which is opened in the name of two
Or more persons. For drawing amount all persons whose name the account stands
should sign the cheque.
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In case of firms or companies a/c following are the
requirement
To open the account of firms or companies the following are the essentials.
-List of the office bearers.
-List of authorized signatures.
-Copy of memorandum or by laws.
-Copy of registration.
-In case of joint stock companies
-Certificate of incorporation.
-Certificate of commencement of business.
-Beside NIC copies
Cash department
The cash department is the most important department of the bank. It receives cash
from customers and then deposit it into the accounts of the customers and
maintained their balances
In cash department following books are maintained..
I. Scroll book
II. Paying cash book
III. Token book
IV. Cash balance book
I.Scroll book:
When cash is received at the counter it is recorded in the scroll book.
II.Paying cash book:
The cashier makes entry in the paying cash book when cash is paid.
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III.Token book:
When any cheque or any negotiable instrument is presented it is recorded in the token
book then token is issued.
IV.Cash balance book:
The consolidated figure of receipt and payment of cash is entered in cash balance book.
There are two ways of maintaining an accounts
 Journal system
 Voucher system
Journal system
Under this system entries are journalized in journal book and then posted in ledger
account. Their entries are maintained in journals.
Voucher system
In voucher system for each transaction voucher is prepared, either in cash or in transfer or
in clearing all vouchers are summarized to the one consolidated figure and are recorded in
cash –cum- daybook sheet upon which vouchers are summarized according to the
transition wise suit is called supplementary.
These are of 2 types.
Debit supplementary
Credit supplementary
Debit suplementary is for debit vouchers and it is of red colour
Credit supplementary is for credit vouchers and it is of green colour
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The following books are maintained in accounts department.
1) Cash cum day book.
2) General ledger.
3) Subsidiary ledger.
4) Voucher register.
5) Transfer book.
6) CD/SB summery book.
7) Balance books.(Weekly and monthly)
8) Old record register.
9) Bank ledger.
10) Fraud and forgeries register.
11) Comparative statistics cards of deposits.
12) Advances and profit and loss.
The individual figure of subsidiaries will be posted straight to subsidiary ledger from
individual vouchers.
It is not safe for private individual to keep their surplus money at home. They can keep
their money in safe custody by opening accounts in a bank. They can open deposit
accounts for fixed period. The deposit account also earns interest for the depositors. Again
the businessman conducts transaction is for thousands of rupees daily. It is unsafe to keep
so much cash in hand for carrying on business transactions. They may put their money
with some banks by opening deposit accounts. Now they can draw cheques for settlement
of transactions without involving cash.
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:
There are certain formalities which are to be observed for opening of a current account or
saving a/c. With a bank, these formalities are as
1) Request of opening of an account.
2) Obtaining introduction
3) Specimen signatures
4) Minimum initial deposit
5) Operating the account / cheque book
1).Request of opening of an account.
The customer has to fill an account opening form. It is a formal request by a
customer to the bank to allow him to have and operate the current or saving account
.
2). Obtaining introduction.
The bank before opening an account obtains introduction of the customers from an
old customer, responsible person etc.
3) Specimen signatures.
When the banker satisfied about the information’s provided in the form hen the
banker obtains the specimen signatures of the customer on the signature book or on
card. The duty of a banker is to verify customer’s signature on the cheques with his
specimen signature in order to ascertain whether there has been any forgery or
fraud.
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4). Minimum initial deposit.
In Pakistan to open up an account in the PLS account is up to Rs.1000/- it is the
minimum requirement. However the account of zakat dependent can be opened by
Rs. 200
5). Operating the account. / cheque book.
When the account is operated the banker gives a pay-in-slip book, cheque
Book, pass book with the view to operate it.
Books relating to customers.
 Pay-in-slip
 Cheque book
 Pass book
Pay-in-slip
When money is to be deposited in the bank the pay-in-slip is to be filled, the object
of this book is to provide the customers with the bank’s acknowledgment for
receipt of money to be credited his account.
Cheques book.
A cheque book contains a number of cheques which is given to a customer upon
written request and after making payment for the cheque book. It enables to a
customer to make withdrawals from his account.
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ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
38
Pass book.
Is a copy of customers account as it appears in the books of the bank. Pass book is a
book in which the banker maintain the record of its customers account for later use.
The because it passes hand periodically between the banker and the customers. On
delivery of pass book the customer examine the debit and credit eateries with its
cheque book and bank receipt challans. But now days this concept of pass book is
ended and computerized account statement send to the customer semi annually or
on the demand of customer bank is bounded to give him the account statement.
The function of advances department is to lend money in the form of clean
advances. Against promissory notes, as will as secured advances against tangible and
marketable securities. The bankers prefer the securities which are free of risk of
depreciation.
Deposits lead to advances and advances create deposits. Advances to a variety of
customers is the sure method of enhancing income and promoting expansion of a bank.
Types of advances:
The main types of advances are as follow.
1). Overdraft.
2). Cash credit.
3). Loans.
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HABIB BANK
39
1). Overdraft.
“An overdraft is the right given by a bank to his customer to draw in excess
of his current account up to a fixed limit.”
The facility to overdraw by cheques is allowed only in current account. The overdraft
facility enables a customer to draw over and above his own balances up to the extent of
limit as agreed. The bank does not provide the facility of overdraw on checking accounts to
all of its customers.
A. Clean overdraft.
Advances for which the bank no security except the personal security.
B. Secured overdraft.
Advances for which bank has security other then his personal security.
1. Against lien on third party account.
2. Against immovable property, equitable mortgage
collateral.
C. Cash finance.
Cash finance may be allowed within discretionary powers of the branch managers
to first class parties keeping in view their credit worthiness, overall business and
average balance maintained in their account.
2).Cash credit.
A cash credit is an arrangement by which a banker allows a customer to borrow money up
to certain extent cash credits are usually made against securities of commodities
hypothecated or pledged with the bank.
CREATED BY (Amir Mursleen)
ROLL NO: 35
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HABIB BANK
40
 Pledge
Pledge is a contract whereby a good is deposited with the lender as security for
repayment of the loan. The delivery of documents of title relating to goods also
creates a valid pledge. The person delivering the goods as security is called
pledger. The person to whom the goods are delivered is called the pledge.
 Hypothecation:
It is a legal transaction where by goods may be made available as security for a
debt without transferring property or the possession to the lender.
Advances granted under hypothecation are not secure from safety point of view.
The bank should make sure that the party has a good reputation, which property
regularly.
3). Loans
Banks may make advances to its customers which may be payable in lump sum or in
installments. Loans may be.
A). clean loans
This is granted to borrowers without obtaining any security. Example
flexi loan
B).Secured loans.
Loans for which bank has security other then its personal security.
These are issued against the pledge, hypothecation, property and cash
etc.
C).Small loans.
These are the loans which are sanctioned for small size projects.
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
41
The loans may be call loans or loans repayable at short notice. These are the loans
repayable which bear no maturity date. They can be paid at anytime. These are normally
secured by other assets.
The other kind of loan is loans repayable at short notice; these are short term loans and are
repayable at short notice. These are widely used in the financing of seasonal increase in the
working capital and the temporary financing of capital expenditure these loans are obtained
by manufacturing concerns to meet the financing of working capital expenditure.
1. Haryali agricultural finance scheme
2. Tractor finance scheme
3. Live stock finance scheme
1-Haryali agricultural finance scheme:
Habib is providing creditability to the farmers according to instructions of state bank
of Pakistan under the agricultural Haryali finance scheme. The Haryali credit scheme is a
best section of every agricultural need.
According to this scheme the credit is provided on easy installment for productive
and installment for productive and improvement purpose.
The basic purpose of Haryali finance scheme is to provide credit in time to overcome
agricultural needs, so that they earn profit from forms by using modern technology.
Basic conditions to get Habib Bank Haryali scheme:
 Tenant has a NIC covered.
 A computerized NIC cord is to provide to Bank from getting loan.
CREATED BY (Amir Mursleen)
ROLL NO: 35
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HABIB BANK
42
 An attested copy of receipt can also given with old NIC in case of computerized
is not available.
The rate of mark up on this scheme is 16% lowest mark up rate as
compared to the other scheme like flexi or life style loan
2-Tractor finance scheme.
Under this scheme finance is allowed to cultivator/land owners cultivating minimum 5
acres of agricultural land,
Finance is allowed from a period of 5-7 years repayable in half yearly installments, a
minimum debt/equity ratio of 90:10 is maintained, mark up of 16% p.a. is charges
however in case of timely adjustment of all installments at time of last installment mark
up is recalculated at 13%p.a and 2% amount is adjusted towards last installment.
In case of cash collateral no equity is needed and mark up is charged at a rate of 2% over
the Bank profit.
In case of NSCs, DSCs etc., a mark up of 8% p.a. charged.
Special effort have been made to promote tractor finance and during the
year 2003-2004 HBL has disbursed 3850 tractor up to MAY ,2004 against
1598 tractor distributed last year
3-LIVE STOCK FINANCE SCHAME
The scheme has been introduced to promote the following sub-sector.
1- Live stock /diary farming.
2- sheep /goat farming
3- Fattening of animals for beef purposes.
4- Poultry
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ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
43
Finance is allowed at a mark up rate of 17%p.a. for fixed investment purposes as well as to
meet the needs of working capital requirement to all categories of farmers all over Pakistan
including Azad Kashmir area. Finance is repayable in a maximum period of 5 year time
period in easy installment.
In case of timely adjustment of all installments, at the time of final adjustment the bank
offers the 2% incentives on all installments. In order to facilitate the bonafide formers
these finances are available against security of agricultural land under agricultural pass
book system, rural /urban property and cash collaterals in the shape of NSCs, TDCs and
bank deposited etc. there agricultural finances products offered by HABIB BANK provide
consumer opportunity for our hard working farming community promote agriculture sector
an modern line by fulfilling their credit requirements
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
44
A special scheme of Habib bank limited for the employee of govt. and semi govt .institute.
This is a clean loan no any security has been taken from the employees of the organization.
Just salary of the employee is transferred in the account of the client.
Basic requirements for the flexi loan
 He must be employee of listed organization
 He must be account holder of the bank
 His salary is transferred in his account
 His job at least one year
 His retirement period is grater then the period of loan
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
Document required for flexi loan
 Letter from employer
 His last month salary slip
 His account statement
 60 post dated cheques
 Promissory notes
The rate of mark up on flexi loan is different for various
departments
For the armed forces
 The rate of mark up is 19% for thee years
 The DSR factor is 35%
For the civil person
 The rate of mark up is 21% for thee years
 The rate of mark up is 25% for Five years
 The DSR factor is 35%
CREATED BY (Amir Mursleen)
ROLL NO: 35
45
INTERNSHIP REPORT
HABIB BANK
46
“Clearing house is the place where representative, of all banks get together
for the purpose of off setting the inter bank indebtedness arising from the
transfer of deposit by a customer of a particular bank to another bank”
Clearing settlement is made by debiting or crediting the bankers accounts, the daily
difference in the clearing between banks may considerable and much differences are
adjusted by mean of debit and credit entries in the respective accounts with is SBP, by
book entries.
Functions of clearing department.
The following are the main function of clearing department
1). To accept transfer delivery and clearing cheques from customer of the bank and
to arrange for their collection.
2). To arrange the payment of cheque drawn on branch and given for collection to
any other branch of HBL or any other member or sub member of the local clearing
house.
3). To collect amount of cheque drawn on members, sub members of the local
clearing house, sent for collection by thouse HBL branches which are not
represented at the local clearing house.
Procedure of clearing at clearing house:
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
47
The mechanism of off setting inters bank indebtedness operators as follows; Clerk
representing various banks met at a common plane, the clearing everyday. Every clerk then
delivers to the others the cheques and other claims which his bank holds against them. So
he also receive from the others the claims which their respective banks hold against his
bank. Cheques and other documents dishonored will be returned to the representative of
the respective bank. The various amounts of receipts and deliveries are now added up an
balance is struck therein and the final settlement is effected by the supervisor of the
clearing house by transferring balances kept at the central bank the these various clearing
banks
The main function of bills and remittances department is to deal mainly in following.
A. Outward bills for collection (OBC)
B. Inward bill for collection(IBC)
A. Outward bill for collection
1. Clean bills
These are negotiable instruments drawn on out station branches of the bank, sent for
collection on behalf of the customer’s i.e. cheques drafts etc.
2.Documentary bills
These are bills accompanied by documents such as R.R, T.R bill of lading etc having title,
collected on behalf of their customers. if payment is made other than cheques then this
CREATED BY (Amir Mursleen)
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INTERNSHIP REPORT
HABIB BANK
48
mode is used. it is an arrangement between 2 parties. Banks plays role as an agent.
Documentation is properly drawn between 2 parties. But in 99 cases clean bills are used.
B. Inward bill for collection
These are bills received locally. They are received from out station branches of the bank
and parties drawn on recipient banker or other banks or parties.
The main documents invited in bills and remittances department are as follow.
1. Demand draft
2. Pay slip
3. Mail transfer MT
4. Telegraphic transfer
5. Pay order
1. Demand draft
Demand draft is an instrument which is drawn by one branch to another branch of
the same bank. If any person wants to make payment from one city to another city then he
can make payment through demand draft. Bank charges a commission for performing this
kind of service according to bank rate schedule which is revised after 6 months. Demand
draft may be issued or paid.
2. Pay slip
For payment of internal expenses of the bank the pay slip is used. For e.g tax payment, by
bank, repair and maintenance expenses, repair and maintenance expenses etc.
3. Mail transfer (MT)
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
49
Bank to bank remittances are transferred through mail. Its charges are same as of DD plus
additional 60 rupees. Mail transfer advise is use against cash receipt , cheque, and letter of
instrument.MT advise is prepared and test number is written on this MT advise. The advise
is given to dispatch department for onward transmission.
4. Telegraphic transfer.
It is a bank to bank transaction the issuing bank makes payment on payment order. The
beneficiary (3rd party) not directly involved in it. Two other mode of this transactions are
1. telephonic transfer
2. Fax
It is a coded massage by one bank to another bank. Each bank has its own code number
first they write the massage in the code form and after this they apply its test number on it.
Two types of instructions can be issued by the bank for T.T.
a) Advice in pay
b) Advice in credit.
a). Advice in pay
In this case the party on which the T.T is drawn, if not having its account in this
bank it means they are not the account holder of this bank, bank informs the party
that its T.T has came and to come and to open the account and to receive the
amount. Bank charges according to the bank schedule. Bank make payment to the
party after opening the account in the branch.
b). Advise in credit.
In this case the party having its own account in the same bank where the T.T has
came in their names the bank simply credit the account of its customer.
5. Pay order
Pay order is just like cash. If someone wants to make payment to some other person he can
make payment through pay order slip. The main advantage of pay order is that it can
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
50
not be dishonor by the bank when payment is required to made within the city then we can
take this bank service and when we want to make payment outside the city then we use
demand draft in case of cheque there is a possibility that it can be dishonour by the bank
but it case of pay order we have security that it can never be dishonour.
The main function of foreign exchange department is to facilitate the import and exports by
opening up of letter of credit the banks provide. This facility to its customers. There are 2
types of facilities.
1. fund based
2. Non fund based.
Fund based facilities are those facilities which involve cash but non fund
based facilities are those which do not involve cash. Letter of credit is a fund based
facility. Foreign exchange department also deals in the foreign currency.
Letter of credit.
“A letter of credit is a commitment on the part of buyer’s bank to pay or accept
draft drawn upon it provided drafts do not exceed a specified amount.”
Why banks deal in letter of credit.
The bank charge nominal commission on financing the import and export shipment
The main benefits for opening it are
-Increased balances.
-Commission.
-New business opportunities.
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
Procedure of opening a letter of credit.
The letter of credit is opened by filling an application with the bank and following
information’s should be provided to the bank.
1. name of beneficiary (seller)
2. Complete address of beneficiary
3. Type of letter of credit whether
Revocable or irrevocable
4. mode and time of payment
5. Description of goods
6. Payment of freight
7. Detail of documents
8. Place &date of shipment
9. The date of expiry of credit
10. How the credit is to be advised by mail, cable, telex etc.
Foreign exchange department also provide facility to financing the exports by
-advising export credit
-collection of negotiation of foreign bills
-receiving payment from aboard by means of remittances.
-allowing packing credit facility to exports
Other services
-Sale and purchase of foreign exchange
-providing credit information to foreign correspondent
-implementation of foreign exchange regulations
-Maintenance of non- resident accounts of foreign nationals.
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ROLL NO: 35
51
INTERNSHIP REPORT
HABIB BANK
52
MISCELANIESUS
FUNCTIONS
OF
ALL
DEPARTMENTES
CREATED BY (Amir Mursleen)
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HABIB BANK
53
Many branches and checking accounts Habib Bank Limited are linked through
satellite. It provides the facility of transaction with each branch while sitting on
any branch of Habib Bank.
On Line Transaction are of three types:
 Cash Transaction
 Clearing Transaction
 Transfer Transaction
The clients can shift their amounts from one branch to another branch. Their
cheques can be cashed. On line banking is miscellaneous activity that is performed
in almost all the department of Habib Bank.
 There are no charges recovered with in the same city.
 No charges from the customer maintaining Rs. 200,000 in their current
accounts other wise charges will be recovered according to the schedule.
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK





Up to Rs. 25,000/Rs. 50/Up to Rs. 200,000/Rs. 100/Rs. 200,001 to 500,000
Rs. 250/Rs. 500,001 to 200,000
Rs. 500/Collection account(companies only)
Opened with the approval of head offices. Rs 750/-
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ROLL NO: 35
54
INTERNSHIP REPORT
HABIB BANK
55
One of much appreciated facility offered by a bankers to his customer is
that of keeping in safe custody, valuables if various kinds, including
securities, and documents of title of property. Frequently such items
deposits in a locker box or sealed envelope, in which case the banker
takes no cognizance of the contents. A part from providing the facility for
accepting the valuable for safe custody, safe deposit lockers are also
made available to customers on nominal rent.
Documents required for a locker facility:
 Locker opening form.
 Specimen signature card.
 Copy of NIC of the client.
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HABIB BANK
56
Fee for safe deposit lockers to be recovered in advance or at the
commencement of the period yearly/half yearly/ quarterly as the case may be.
Small size
Rs. 1000 per annum or nil on refundable key deposit of Rs. 15,000/-
Medium size
Rs. 1,500 per annum or nil on refundable key deposit of Rs.20, 000/-
Large size
Rs. 2,500per annum or nil refundable keys deposited of Rs. 35000/-
Extra large
Rs. 3,000per annum or nil refundable keys deposited of Rs. 45000/-
Extra Extra large Rs. 5,000per annum or nil refundable keys deposited of Rs.75000/Key deposited
Rs. 1,000 per locker
Breaking charges Rs. 2,000 per locker plus actual charges of supplier
Late payment charges Rs.50 per month of part thereof, maximum one year annual
rent.
CREATED BY (Amir Mursleen)
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HABIB BANK
57
Habib bank Limited has offered on line banking which is an innovative and truly global
product to its customer. Thus enables them to check their balance, view their account
statement, can transfer their fund.
Habib bank has introduced ATM (automated teller machine) in Pakistan for its customer.
Electronic cash dispensing facilities are available in various cities. in due course of time, it
plans to install more ATMS and extended this on line facility to other operating centers of
the bank. All these ATMS are linked through a state –of- the- art satellite based
communication system offering real time 24- hour service. ATM card is a debit card and
cash withdrawal transition are performed with its used as well as customer can check
balance and have its account statmant.By using this card a client can with drawl the
amount from 500 to 20,000 rupee in 24- hours.
 Customer should be an account holder
 Application from is filled
 Spaceman signature card is filled
Application is forward to head office .Within to 10-15 days bank receive the ATM card
and pin codes and hand it over ton the respective customer after taking his signature. Bank
charges are Rs. 200 per annum
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HABIB BANK
58
When client enters his card in machine, it asks for the pin code. If he enters a wrong pin
code constantly three times, then machine captured the card. This secured the transition
.this increased the safety of the customer card. After the client has given a correct pin code,
he can safely perform his transition. After getting the amount from ATM machine
customer get a small statement of his account which contains the following,
 Pervious balance
 Transaction amount
 Current balance
 Date
 Time of transaction
 Account number
 Name of customer
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
Habib bank Limited has arrangement with other bank to use their ATMS where Habib
bank ATM is not available. When a client uses an ATM of these other banks, Rs. 15 per
transition are deducted from his account as ATM charges.
KARACHI
 HABIB BANKM LIMITED
 SONERI BANK
 ASKARI COMMERICAL BANK
LAHORE
 SONERI BANK
 ASKARI COMMERICAL BANK
 ABN –AMRO BANK
ISLAMABAD/RAWALPINDI
 SONERI BANK
 ASKARI COMMERICAL BANK
 ABN –AMRO BANK
CREATED BY (Amir Mursleen)
ROLL NO: 35
59
INTERNSHIP REPORT
HABIB BANK
MULTAN
 HABIB BANKM LIMITED
 ASKARI COMMERICAL BANK
SIALKOT
 HABIB BANKM LIMITED
 ASKARI COMMERICAL BANK
FAISALBAD
 HABIB BANKM LIMITED
PESHAWAR
 HABIB BANKM LIMITED
GUJRANWALA
 HABIB BANK LIMITED
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ROLL NO: 35
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INTERNSHIP REPORT
HABIB BANK
61
HAYDERABAD
 HABIB BANKM LIMITED
 ASKARI COMMERICAL BANK
AZAD KASHMIR
 HABIB BANKM LIMITED
BAHAWALPUR
 HABIB BANKM LIMITED
CREDIT CARD
Habib Bank offers a range of credit cards, accepted at thousands of locations in Pakistan.
These cards facilitate the small financial, needs of customers like shopping of goods or any
short term financing. Limit of credit card depends on the average balance in the account
and monthly income. One of the requirements to issues credit card is that the applicant
should be the account holder of the bank.
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
 Application form of credit card
 Photocopy of national identey card
 Passport size photograph
 Salary certificate
 Last six month income certificate
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INTERNSHIP REPORT
HABIB BANK
63
SIMEX/
KHAERADER
Function of simex
For the close interaction and monitoring Habib bank devolved a intra net networking
system known as simex.
For the time being internal net working the data is stored in computer and then send to
head office on the daily basis.
All the function of branch is entered in the computer then these are as follows,
 Cheques presented at counter of bank
 Deposit slip
 Account of new customer
 Cheque book issued to customer
 Cashier payment book
 Cash received book etc.
This type of data is send to the head office and when data received a conformation letter is
received to the branch and this letter is attached with daily vouchers.
Also formats of different kind are sending to the branch.
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
64
CONSOLIDATED BALANCE SHEET
AS AT DECEMBER 31, 2007
ASSETS
Cash and balance with treasury banks
Balance with other banks
Lending to financial institutions
Investments
Advances
Others Assets
Operating fixed assets
Deferred Tax assets
Total
2007
2006
(Rupees in ‘000)
55487664
46310478
27020704
35965048
1628130
6550128
177942251
119587476
382172734
349432685
27346111
21535471
13780555
11954876
6613372
2725486
691991521
594061648
Liabilities
Bill Payable
Borrowing from Financial institutions
Deposits and other Account
Sub-ordinated loan
Liabilities against assets subject to finance lease
Other liabilities
Deferred tax liability
Total
NET ASSETS
CREATED BY (Amir Mursleen)
ROLL NO: 35
15418230
58994609
531298127
3100000
19943126
628754092
63237429
9507637
56392270
459140198
15578177
540618282
53443366
INTERNSHIP REPORT
HABIB BANK
65
REPRESENTED BY:
Shareholder Equity
Share capital
Reserves
Unappropriated Profit
6900000
19821455
28341670
6900000
17802584
20475080
Total equity attributable to the equity
holder of the bank
55063125
45177664
Minority interest
965642
913317
Surplus on revolution of assets-net tax
7208662
7352385
Total
63237429
53443366
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED DECEMBER 31, 2007
2007
2006
Mark-up / return / interest earned
Mark-up / return / interest expensed
(Rupees in ‘000)
50481021
43685740
19153957
13204037
Net mark-up / interest income
31327064
30481703
Provision against non-performing
Loans and advances-net
(Reversal)/provision against off-balance sheet
Obligations
Reversal of provision against diminution
in value of investments
Bad debts written of directly
8238227
2863207
(54626)
(45438)
(84310)
8099291
(13697)
2804072
Net Mark-up / interest income after provisions
23227773
27677631
3420051
2472663
1487374
2643076
10023164
3931710
1219623
1102358
2235805
8489496
Non mark-up / interest income
Fee, commission and brokerage income
Income / gain on investments
Income from dealing in foreign currencies
Other income
Total non mark-up / interest income
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HABIB BANK
66
33250937
36167127
Non mark-up / interest expenses
Administrative expenses
Other provision /write offs-net
Other charges
18297279
(267111)
85152
17149232
122510
54898
Total non mark-up / interest expenses
Profit before taxation
18106320
15144617
17326640
18840487
Taxation
Current
Prior years
Deferred
Total
7220717
1668562
(3828699)
5060580
7144846
(39067)
(965607)
6140172
Profit after taxation
Attributable to:
10084037
12700315
Equity holder of the bank
Minority interest
10000231
83806
12630259
70056
Basic and diluted earnings per share
14.49
18.30
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
67
HABIB BANK LIMITED
HORIZONTAL ANALYSIS
BALANCE SHEET
YEAR 2003-2007
CAPITAL AND LIBILITIES
PARTICULARS
2003
(Rs.000)
Deposits
2006
(Rs.000)
2007
(Rs.000)
328182054 404629059 432545165
459140198
531298127
Borrowing
38045541
29346284
34904352
56392270
58994609
B/P
5834673
5776325
7601766
Other liabilities
11243342
15180213
14162888
15578177
19943126
Capital
6900000
6900000
6900000
6900000
6900000
Reserve fund
1901371
2051371
2645730
17802584
19821455
Surplus on revaluation of
assets
7224050
7609852
8085127
7352385
7208662
Particulars
Deposits
Borrowing
B/P
Other
liabilities
Capital
Reserve
fund
Surplus on
revaluation
of assets
Increase/
Decrease
2003-04
(Rs.000)
76447005
(8699257)
(58348)
3936871
Change
in %
2004
(Rs.000)
2005
(Rs.000)
Change
in %
23%
(23)%
(1)%
35%
Increase/
Decrease
2004-05
(Rs.000)
27916107
5558068
(1825441)
1017325
15000
7%
385802
5%
9507637
Change
in %
8%
14%
32%
10%
Increase/
Decrease
2005-06
(Rs.000)
26595033
21487918
1905871
1415289
(594359)
(32)%
(475275)
6%
CREATED BY (Amir Mursleen)
ROLL NO: 35
15418230
Change
in %
2%
40%
32%
4%
Increase/
Decrease
2006-07
(Rs.000)
72157929
2602339
5910593
4364949
15156854
745%
2018871
95%
(732742)
(10)%
(143723)
(2)%
22%
6%
102%
32%
INTERNSHIP REPORT
HABIB BANK
68
HABIB BANK LIMITED
HORIZONTAL ANALYSIS
BALANCE SHEET
YEAR 2003-2007
PROPERTY AND ASSETS
Particulars
2003
2004
2005
2006
2007
(Rs.000)
(Rs.000)
(Rs.000)
(Rs.000)
(Rs.000)
Cash
27449292
31970302
33051049
46310478
55487664
Balances with other banks
26870767
33419120
31813513
Lending to financial
institutions
Investment
10001123
3755039
122723248
6550128
142877930
134522944
107384470
119587476
177942251
Advances
167523299
259089466
316881635
349432685
382172734
Other assets
18137931
11919594
14481818
21535471
27346111
Operating fixed assets
7184623
11110724
11166195
Deferred tax assets
1967570
1978144
1842977
Particulars
Cash
Balances
with other
banks
Lending to
financial
institutions
Investment
Advances
Other assets
35965048
11954876
2725486
27020704
1628130
13780555
6613372
Increase/
Decrease
2003-04
(Rs.000)
Change
in %
Increase/
Decrease
2004-05
(Rs.000)
Change
in %
Increase/
Decrease
2005-06
(Rs.000)
Change
in %
Increase/
Decrease
2006-07
(Rs.000)
Change
in %
4521010
6548353
16%
24%
1080747
(1605607)
4%
6%
13259429
4151535
48%
31%
9177186
(8944344)
33%
(15)%
(6248353 (37)%
)
8517209
85%
(11617312
0)
(57)%
(4921998)
(48)%
(8354986 (6)%
)
9156616 54%
7
(6218337 (34)%
)
27138474
20%
12203006
6%
58354776
39%
57792169
35%
32551050
11%
32740049
16%
2562224
14%
7053653
37%
5810640
24%
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
Operating
fixed assets
Deferred tax
assets
69
3926101
54%
55471
0.5%
788681
9%
1825679
25%
10574
0.53%
(135167)
(7)%
882509
47%
3887886
170%
HABIB BANK LIMITED
HORIZONTAL ANALYSIS
PROFIT AND LOSS ACCOUNT
YEAR 2003-2007
EXPENDITURES
PARTICULARS 2003
2004
2005
2006
2007
(Rs.000)
(Rs.000)
(Rs.000)
(Rs.000)
(Rs.000)
Markup/return/interest
expense
Provision against
non performing
loan
Provision against
diminution in
value of
investment
Administrative
expenses
Other provision
11580431
4472138
7327603
43685740
50481021
2656361
1887552
2974665
13204037
19153957
(144154)
(151218)
(82558)
(13697)
11807129
13781291
14095063
17149232
18297279
62542
24459
249033
122510
267111
Other charges
4061
7523
68483
54898
85152
Increase/
Decrease
2003-04
Change
in %
Increase/
Decrease
2004-05
Mark up /Return /
Interest expense
7108293
61%
Provision against non
performing loan
Provision against
diminution in value
of investment
Administrative
expenses
Other provision
7668809
Increase/
Decrease
2005-06
Change
in %
Increase/
Decrease
2006-07
Change
in %
2855465 25%
363581
37
303%
6795281
54%
29%
1087113 40%
386%
5949920
224%
(7064)
(5)%
(68660)
(45)%
102293
72
(8861)
(38%)
(70613)
(36)%
1974162
17%
313772
2%
26%
1148047
9%
182408
61%
4083
1%
305416
9
(126523
(157)
144601
232%
CREATED BY (Amir Mursleen)
ROLL NO: 35
Change
in %
(84310)
INTERNSHIP REPORT
HABIB BANK
Other charges
3262
70
85%
60960
)
(13585)
810%
%
(335)
%
30254
745%
INCOME:
PARTICULARS 2003
Mark up/ return
/ interest earned
Fee,Commission
and brokerage
income
Gain on
investment
Income from
F/C
Other income
2004
2005
2006
2007
(Rs.000)
(Rs.000)
(Rs.000)
(Rs.000)
(Rs.000)
23956114
18198725
32343206
43685740
50481021
209687
2510933
2938000
3931710
3420051
1795385
4235574
1726336
1219623
2472663
1144350
1095789
1402521
1102358
1487374
1151751
2020506
1787443
2235805
2643076
PARTICULARS
Increase/
Decrease
2003-04
(Rs.000)
Change
in %
Increase/
Decrease
2004-05
(Rs.000)
Change
in %
Increase/
Decrease
2005-06
(Rs.000)
Mark up/ return /
interest earned
Fee,Commission
and brokerage
income
Gain on
investment
Income from F/C
Other income
1119305
25%
62%
63771
1097%
1414448
1
427067
(526033
0)
183449
(404682
)
(135)%
(250923
8)
306732
(233063
)
4%
(75)%
CREATED BY (Amir Mursleen)
ROLL NO: 35
Change
in %
Increase/
Decrease
2006-07
(Rs.000)
Change
in %
679528
1
(359165
9)
28%
204%
(27975746 (169)
6)
%
993710
834%
139%
(506713)
(28)%
69%
26%
(20)%
(300163)
448362
(26)%
39%
125304
0
385016
407271
244%
33%
35%
INTERNSHIP REPORT
HABIB BANK
71
2003- HABIB BANK LIMITED
VERTICAL ANALYSIS
BALANCE SHEET
YEAR 2007
CAPITAL AND LIABILITIES
PARTICULARS 2003
2004
2005
2006
2007
Deposits
(Rs.000)
328182054
(Rs.000)
404629059
(Rs.000)
432545165
(Rs.000)
459140198
(Rs.000)
531298127
Borrowing
B/P
38045541
5834673
29346284
5776325
34904352
7601766
56392270
9507637
58994609
15418230
Other liabilities
11243342
15180213
14162888
15578177
19943126
Capital
Reserve fund
6900000
1901371
6900000
2051371
6900000
2645730
6900000
17802584
6900000
19821455
Surplus on
revaluation of
assets
7224050
7609852
8085127
7352385
7208662
Total
399331031
471493104
506845028
572673251 659584209
2003 %
2004 %
2005 %
2006 %
2007 %
Deposits
Borrowing
B/P
Other
liabilities
Capital
Reserve fund
Surplus on
revaluation
of assets
82
9
1
3
86
6
1.43
3
85.3
7
1.5
2.7
80.1
9.84
1.7
2.7
80.5
8.9
2.3
31
2
1
2
1.5
0.43
1.6
1.36
0.52
1.6
1.2
3.1
1.3
1.04
3
1.09
Total
100
100
100
100
100
Particulars
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
72
HABIB BANK LIMITED
VERTICAL ANALYSIS
BALANCE SHEET
YEAR 2003-2007
ASSETS
2003
2004
2005
2006
2007
(Rs.000)
(Rs.000)
(Rs.000)
(Rs.000)
(Rs.000)
Cash
27449292
31970302
33051049
46310478
55487664
Balances with other banks
26870767
33419120
31813513
Lending to financial
institutions
Investment
10001123
3755039
122723248
6550128
142877930
134522944
107384470
119587476
177942251
Advances
167523299
259089466
316881635
349432685
382172734
Other assets
18137931
11919594
14481818
21535471
27346111
Operating fixed assets
7184623
11110724
11166195
Deferred tax assets
1967570
1978144
1842977
Total
403012535
475845739
528893905
594061648
691991521
2003 %
2004 %
2005 %
2006 %
2007 %
Cash
6.8
6.7
6.2
7.8
8.01
Balances with other banks
6.6
7
6
6.1
3.9
Lending to financial
institutions
Investment
Advances
2.4
0.7
2.3
1.1
0.23
35.4
41.5
28
54
20
60
20.1
58.5
25.7
55.2
Other assets
4.50
2.5
2.7
3.6
3.95
Operating fixed assets
1.7
2.3
2.3
2.01
1.99
Particulars
35965048
11954876
2725486
27020704
1628130
13780555
6613372
Particulars
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
73
Deferred tax assets
0.7
0.4
0.5
0.45
0.95
Total
100
100
100
100
100
HABIB BANK LIMITED
VERTICAL ANALYSIS
PROFIT AND LOSS ACCOUNT
YEAR 2003-2007
EXPENDITURE:
PARTICULARS 2003
2004
2005
2006
2007
(Rs.000)
(Rs.000)
(Rs.000)
(Rs.000)
(Rs.000)
Markup/return/interest
expense
Provision
against non
performing loan
Provision
against
diminution in
value of
investment
Administrative
expenses
Other provision
11580431
4472138
7327603
43685740
50481021
2656361
1887552
2974665
13204037
19153957
(144154)
(151218)
(82558)
(13697)
11807129
13781291
14095063
17149232
18297279
62542
24459
249033
122510
(267111)
Other charges
4061
7523
68483
54898
85152
TOTAL
25841286
20242236
24632289
74202720
87665988
2004 %
2005 %
2006 %
2007 %
22
30
58.8
57.6
9.32
12
17.79
21.8
(0.74)
(0.33)
(0.01)
(0.1)
2003 %
PARTICULARS
Mark44.81
up/return/interest
expense
Provision
10.27
against non
performing loan
Provision
0.55
against
diminution in
value of
investment
CREATED BY (Amir Mursleen)
ROLL NO: 35
(84310)
INTERNSHIP REPORT
HABIB BANK
Administrative
expenses
Other provision
Other charges
TOTAL
74
45.69
68
57
23.11
20.9
0.42
0.015
100
1.2
0.03
100
1
0.23
100
0.165
0.07
100
(0.3)
0.1
100
PARTICULARS 2003
2004
2005
2006
2007
(Rs.000)
(Rs.000)
(Rs.000)
(Rs.000)
(Rs.000)
23956114
18198725
32343206
43685740
50481021
209687
2510933
2938000
3931710
3420051
1795385
4235574
1726336
1219623
2472663
1144350
1095789
1402521
1102358
1487374
1151751
30144471
2020506
28061527
1787443
40197506
2235805
52175236
2643076
60504185
2003 %
2004 %
2005 %
2006 %
2007 %
79.47
64.8
80
83.7
83.4
6.91
8.94
7.3
7.5
5.7
5.95
15.09
4.29
2.3
4.1
3.79
3.90
3.48
2.1
2.5
3.82
100
7.20
100
4.4
100
4.2
100
4.4
100
INCOME:
Mark up/ return
/ interest earned
Fee,Commission
and brokerage
income
Gain on
investment
Income from
F/C
Other income
TOTAL
PARTICULARS
Mark up/ return
/ interest earned
Fee,Commission
and brokerage
income
Gain on
investment
Income from
F/C
Other income
TOTAL
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
75
RATIO ANALYSIS:
Ratio analysis involves the method of calculating and interpreting financial ratio to access
the firm’s performance and status. The basic input to ratio analysis is the firm’s income
statement and balance sheet for the period to be examined.
Ratio analysis of firm’s financial statement is of interest to shareholders. Creditors and the
firm’s own management, both present and perspective shareholders are interested in the
firm’s current and future level of risk and return. These two dimensions directly affect
share price. The firm’s creditors are the primarily interested in the short-term liquidity of
company and its ability to make interest and principal payment. A secondary interest of the
creditor firm’s profitability. In addition, management uses ratio to monitor the firm
performance from period to period.
From bank point of view we can calculate following ratios:
 Short-term Ratios
 Overall profitability Ratios
 Balance sheet Ratios
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
76
CURRENT RATIO:
FORMULA: CURRENT ASSETS / CURRENT LIABILITIES
YEARS
RATIO
2004
1.77:1
2005
1.59:1
2006
0.96:1
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2007
1.1:1
3-D Column 1
3-D Column 2
3-D Column 3
2004
2005
COMMENTS:
CREATED BY (Amir Mursleen)
ROLL NO: 35
2006
2007
INTERNSHIP REPORT
HABIB BANK
77
Current ratio is used to judge a firms ability to meet its short term obligations. A current
ratio of 2:1 is usually cited as acceptable, but values acceptability depends on the purpose
and person who is calculating this ratio.
The current ratio of HBL is good and shows that it is able to remain solvent in the event of
adversities. But as compared to previous year the ratio decreased this shows that banks
liabilities are increased at greater quantum than assets. And banks liabilities basically
include a deposit which doesn’t mean that it is a good sign but as bank has to pay interest
over it so it is just satisfactory for bank.
FORMULA: ADVANCES / TOTAL DEPOSITES
YEARS
RATIO
2004
3.7:1
2005
8.5:1
2006
4.1:1
9
8
7
6
5
4
3
2
1
0
2007
3.1:1
3-D Column 1
3-D Column 2
3-D Column 3
2004
2005
2006
COMMENTS:
CREATED BY (Amir Mursleen)
ROLL NO: 35
2007
INTERNSHIP REPORT
HABIB BANK
78
Current ratio is used to judge a firm’s ability to meet its short term obligation. The current
ratio of HBL is good and show that it is able to remained solvent in the event of adversities
but as the compare to the year 2005 the ratio decreased this shows that banks liabilities are
increased at greater quantum than assets.
FORMULA: CURRENT ASSETS - CURRENT LIABILITES.
YEARS
RATIO
2004
58389842
2005
68290962
2006
78725183
2007
74493123
80000000
60000000
40000000
3-D Column 1
20000000
0
2004
2005
2006
2007
COMMENTS:
Net working capital although not actually a ratio, it is commonly used to measure to
firm/banks over all liquidity.
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
79
Here working capital is increased in the year 2006 as compare to the previous year, but in
the year 2007 is decreases this shows that its ability to repay short term obligation out of its
current assets has remained almost same.
FORMULA: LIQUID ASSET / CURRNT LIABILITES
YEARS
RATIO
2004
1.5
2005
3.6
2006
1.8
2007
1.5
4
3.5
3
2.5
3-D Column 1
2
3-D Column 2
1.5
3-D Column 3
1
0.5
0
2004
2005
2006
CREATED BY (Amir Mursleen)
ROLL NO: 35
2007
INTERNSHIP REPORT
HABIB BANK
80
COMMENTS:
This ratio also shows the liquidity of a company. This means it tells us that for the payment
of its liabilities the bank has how many liquid resources at the time of calculating this ratio.
With regards to this bank its liquidity position in the year2005 was better than the current
year.
RETURN ON ASSETS:
FORMULA: NET PROFIT AFTER TEXT/ TOTAL ASSETS*100
YEARS
RATIO
2004
1.8
2005
1.18
2006
2.13
2.5
2
1.5
3-D Column 1
3-D Column 2
1
3-D Column 3
0.5
0
2004
2005
2006
CREATED BY (Amir Mursleen)
ROLL NO: 35
2007
2007
1.45
INTERNSHIP REPORT
HABIB BANK
81
COMMENTS:
Return on assets which is usually called return on investment (ROI).It measures the overall
effectiveness of management in generating profit with its available assets. The higher
return on total assets is considered best.
Return on assets shows the profit earns by the bank on its present assets.
The HBL return on assets is decreased in 2007 that is not a better sign.
FORMULA: TOTAL INCOME / TOTAL ASSETS
YEARS
RATIO
2004
0.01 times
2005
0.02 times
2006
0.02 times
0.02
0.015
3-D Column 1
0.01
3-D Column 2
3-D Column 3
0.005
0
2004
2005
2006
COMMENTS:
CREATED BY (Amir Mursleen)
ROLL NO: 35
2007
2007
0.001 times
INTERNSHIP REPORT
HABIB BANK
82
This ratio indicates the efficiency with which the firm uses its assets to generate sale.
Generally, the higher a firm total assets, the more its efficiency to use assets. This measure
is of greater interest for management then its share holders. As it tells the relative
efficiency of the bank with which it utilizes the resources to generate output. The current
year efficiency of the firm increase but in the year 2007 it decreased.
DEBT RATIO:
FORMULA: TOTAL LIABILITIES OTHER THAN EQUITY / TOTAL
ASSETS
YEARS
RATIO
2004
93.4 %
2005
92 %
2006
91 %
94
93
92
3-D Column 1
91
3-D Column 2
90
3-D Column 3
89
88
2004
2005
2006
CREATED BY (Amir Mursleen)
ROLL NO: 35
2007
2007
90 %
INTERNSHIP REPORT
HABIB BANK
83
COMMENTS:
Debt ratio measure the proportion of total assets financed by creditors. The higher the ratio
the greater the amount of others money used in an attempt to generate profit. This ratio
indicates that bank has financed 90% of its assets with debt in the year 2007. It increased
and then decreased this shows that its borrowing decreased which is a good sign.
FORMULA: ADVANCES / TOTAL DEPOSITS
YEARS
RATIO
2004
64 %
2005
73 %
2006
72 %
74
72
70
68
3-D Column 1
66
3-D Column 2
64
3-D Column 3
62
60
58
2004
2005
2006
COMMENTS:
CREATED BY (Amir Mursleen)
ROLL NO: 35
2007
2007
71 %
INTERNSHIP REPORT
HABIB BANK
84
It shows advances of the bank as compare to the deposits. This ratio is decreased by 1% in
2006 and 1% increased in 2007.This shows that advances are increasing than deposits
which is good for bank.
FORMULA: NET PROFIT BEFORE TAX / DEPOSITS * 100
YEARS
RATIO
2004
1.42%
2005
2.2%
2006
4.1%
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2007
2.85%
3-D Column 1
3-D Column 2
3-D Column 3
2004
2005
COMMENTS:
CREATED BY (Amir Mursleen)
ROLL NO: 35
2006
2007
INTERNSHIP REPORT
HABIB BANK
85
Return on deposit is basically calculated for the purpose of checking the increase in profit
that is 4.1% in 2006 but decrease in 2007 by 2.85% that is not a good sign for
management.
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK




The staff of the bank is trained and competent.
The branches of are more in Pakistan and becoming online.
Increasing account holders due to blood relationship.
The reserves of bank are higher.
 The administrative cost is high due to over staffing.
 The owners not taking invest in management in bank. As
ownership by (Agha khan).
 The Markup is high.
 Paying low interest rate to account holder.
 The branches are using manual system.
CREATED BY (Amir Mursleen)
ROLL NO: 35
86
INTERNSHIP REPORT
HABIB BANK
87
 The new branches can open as a staff is trained an competent.
 Investment can be made in new project as account holder
increasing.
 They can establish their branches online.
 The profit becoming low due to higher cost.
 The staff is old and no energetic leading to not attractiveness
to the customers.
 The customers leaving the bank due to low interest rate.
 The branches are no sufficient due to manual system
 Staff should be provided professional training in marketing, selling, finance and
computer.
.
 It will be helpful in sharpening their abilities and developing their skills.
 Bank should emphasize on hiring of business graduates and computer experts
for the simex system.
 ATMs should be installed in small cities as well.
 The political influence should be minimized on all type of the operations of the
bank.
 Advance for non-productive investment should be stopped.
 The influence of employees union should be minimized.
CREATED BY (Amir Mursleen)
ROLL NO: 35
INTERNSHIP REPORT
HABIB BANK
 Implantation on the rules, regulations and policies should be done at all cost.
 The customer satisfaction should be guaranteed through rapid delivery of
financial products and services
 Habib bank should focus in the services of their educational institutes
 The training should be proper time period
 Right person on right job should be placed
 Proper staff should be in the branches.
ANNEXURES
CREATED BY (Amir Mursleen)
ROLL NO: 35
88
INTERNSHIP REPORT
HABIB BANK
WWW.HBL.COM
WWW.SBP.ORG.PK
CREATED BY (Amir Mursleen)
ROLL NO: 35
89