Final Report of Internship

Internship Report on HBL
AN INTERNSHIP REPORT ON
SUBMITTED TO
Sir .Zahid Ali

(INCHARGE INTERNSHIP& PLACMANT)
SUBMITTED BY Muhammad Shahzad Niaz

Roll # 06 B.com (Hons) MS-IT SESSION 2003-2006
DEPARTMENT OF COMMERCE ISLAMIA UNIVERSITY BAHAWALPUR
IN THE NAME OF ALLAH, THE MOST BENEFICENT AND THE MOST MERCIFUL
DEDICATIONS This report is dedicated to my parents, friends and my teachers who all support me in times of intricacy and continuously appraise me. Therefore these people are the source of my inspiration and I would be forever thankful to them for keeping my morale high and encouraging me against all odds.
Preface
Internship is an integral part of B.com (Hons) program. It is a mean of providing practical exposure to the student, of what they study Our teacher also managed an internship program for us. I had my internship in HABIB BANK LIMITED BRANCH DAHRANWALA (1408), for Eight weeks. During this period of Eight weeks I work in all the departments of Branch, and learned a lot. As the period of internship involved working with the permanent staff of bank and assimilating into their routine it provided an experience and in depth review of how the employees of the bank coordinate one another and with their manager. . The daily difficulties that aroused out of the formal routines of the bank became evident and the draw back of the extremely formalized system of the bank became apparent during the internship period. The bank facing the difficulties of less staff and difficulties of operating the new simex system. Following is the generalized view of the bank as perceived by me during the period of my internship is presented for the readers before going into depth review of the report. As the generalization are based on the writers perceptions so they cannot be considered as the final word in this context as perception are different with different people. In this report, I have tried to present a complete picture of Habib Bank Limited. Including its market position, competitive production, working of bank, its various departments, and finally the SWOT analysis and financial analysis of Habib Bank Limited.
Acknowledgements
I must offer my thanks to Allah Almighty by whose blessings I have been able to complete my internship report on HABIB BANK LIMITED. I offer my thanks to Sir Zahid Ali for his valuable guidance and contribution in making my report meaningful and useful. I also thank to the Branch Manager Mr. Abdul Qadeer, officers and employees for their kind behavior and full cooperation during the internship period. I also thank to the Branch operation Manager Mr. ULLAH KHAN Officers and employees for their kind behavior and full cooperation during the internship period and tell about the importance of customer in the banking field I also thank to the Branch officer MR. Asghar Ali cooperation during the internship period and tell about FLAXI LOAN. In the last I like to thank all of the staff of branch for their valuable comments, cooperative behavior and friendly environment during the internship.
Muhammad Shahzad Niaz
TABEL OF CONTENTS
serial No. 1 Content
COMPANY INTRODUCTION
Page # 11
2 3 4 5 6 7
COMPANY INFORMATION FINANCIAL HIGH LIGHTS MISSION STATMANTAND OBJACTIVES
15 18 22
OPERATIONS OF THE BANK 27 WORK DONE BY ME DURING 29 INTERNSHIP FEILD OF ACTIVITIES 33 /DEPARTMENTS OF A BANK Deposit department Accounts department Advances department Agriculture loan
8 9 10 11 12 13 14 15
34 38 43 46 51 54 56 59
Flexi loan Clearing department Bills and Remittances department Foreign exchange department
16 17 18 19
20 21 22 23 24 25
MISCELANIESUS FUNCTIONS OF ALL DEPARTMENTES Lockers A.T.M. CREDIT CARD SIMEX INCOME STATMANT BALANCE SHEET Ratio Analysis SWOT ANALYSIS SUGGESTION
61 64 66 72
73 75 86 96 109 114
Executive Summary
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. Each branch of the bank is divided on the basis of these functions into different sections.
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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 1469 and number of employees are 18625. Bank shows improvement after the privatization. Simex system is very good but misused by staff due not proper training. 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 drawback. 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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COMPANY INTRODUCTION
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. 2. 3. 4. Accepting of deposits. Advancing of loans. Agency service. General utility service.
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
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Internship Report on HBL 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
GENERAL UTILITY SERVICES Commercial bank performs general utility services as follows Foreign exchange business Act as referee Accepting of bills for collection Issuer of travelers Cheques Supplier of trade information
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HISTORICAL PERSPECTIVE
History of the Company:
Habib Bank Limited was incorporated on 25th August 1941 by ISMAIL HABIB (LATE). Habib Bank inaugurated its operations with the banks first branch in Bombay. It was the first Muslim bank of the sub continent. It was established with a paid up capital of Rs.2500, 000. At an early stage the number of branches was only 12. In 1947 Karachi saw its first commercial bank of the newly formed Islamic Republic of Pakistan, when the bank shifted its head office there. And build the largest private sector bank that controlled an estimated 27% of total bank deposits in the country and hand over 500 branches including many overseas. Although primary functions were banking and finance, but it moved to industry by the late 1950s and developed interest in sugar, jute and textile. HABIB BANK operated in the private sector until its nationalization in 1974 under the Bank Nationalization Act 1974. Thus the holding of Habib group was lost. Throughout the decades, HBL has held the mantle of a dynamic leader, by adding value to the lives of its customers. HBL has been approved for privatization and the privatization commission has selected a Financial Advisor to prepare a comprehensive plan and assist in the sale process. The government has appointed a professional management team to restructure the bank and to recover and clean its doubtful and classified portfolio. . It was HBL that introduced products such as Credit Cards, ATMs, Travelers Cheques, etc., to the Pakistani market. We at Habib Bank cater to the needs of millions with our quality products & services.
TODAYS HABIB BANK:
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Internship Report on HBL 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 HBLs leadership in Pakistans corporate arena. Today, HBL has more than 1469 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 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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COMPANY INFORMATION
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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BOARD OF DIRECTORS
ZAKIR MEHMOOD
PRESIDENT & CHIEF EXECUTIVE CHAIRMAIN DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR
SULTANALI ALLANA LAIN DONALD CHEYNE SAJID ZAHID AHMAD WAQAR SHAUKAT HAYAT DURRANI MUHAMMAD ISMAIL QURASHI ARIF MANSUR
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SENIOR MANAGEMENT
DESIGNATION Zakir Mehmood Sohail Malik Jamail Iqbal Shahid M.Loan Sima kamal Banking Ayaz Ahmad SEVP & Group Executive Information Technology, financial control SEVP & Group Executive Global treasury SEVP & Group Executive Human Resource s Retail banking SEVP & Group Executive International President & Chief Executive SEVP & Group executive Credit policy SEVP & Group executive Global operation SEVP & Group Executive Audit, BRR & Investigation SEVP & Group Executive Corporate and investment
Hanif Akhai Jamil A. Khan
Aziz Rajkotwala
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FINANCIAL HIGH LIGHTS

Description 2004 2003 2002 2004growth %age
1 2 3 5 6 7
Total Deposits Total Assets Advances Liquid Assets* Shareholders' Equity & Revaluation Surplus Liquid Assets % of Deposits from Customers & Bills Payable
404629 486982 258306 143735 31188 35.41%
360648 434932 18354 164533 23485 46.26%
328,182 403,013 167,523 147,822 19,498 47.36%
12% 12% 41% -13% 33% -232%
Profit & Loss 8 9 10 11 12 13 Others 14 15 16 17 Home Remittances Exports/Imports Number of Branches Number of Staff 47423 46326 296492 258157 38,229 214,590 1,473 19,005 2% 15% -1% Total Net Income Total Expenditure Provision for non performing loan Pre Tax Profit Profit after Taxation Earnings Per Share (Rs. / Share) 23512 13783 2565 7146 5680 8.21 21364 9803 5804 5469 4018 5.82 18,564 11,748 5004 4,088 2,034 1.68 10% 41% -56% 31% 41% 41%
1469 1,470 18625 18800
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ORGANIZATIONAL STRUCTURE
Ownership Structure
Shareholder
State Bank of Pakistan Islamic Republic of Pakistan Agha khan foundation for economic development State Life Insurance Corp. of Pakistan Other Public Bodies Outstanding Shares (1,217,849,500)
Percentage (%)
73.047 .783 26.00 0.138 0.05 100
ORGOGRAME
PRESIDENT SENIOR EXECUTIVE VICE - PRESIDENT VICE- PRESIDENT VICE- PRESIDENT ASSISSTANT VOICE PRESIDENT OFFICER GRADE I
OFFICER GRADE II
OFFICER GRADE III
CASHIER
CLERCK
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MISSION STATMANT AND OBJACTIVES
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MISSION STATMANT
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 STATMANTOF 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.
OBJECTIVES
The bank main aims to provide better and efficient services to its 21
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
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.
MARKETING OBJECTIVE
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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
LINE branches
HRM 0BJECTIVES
23
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.
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OPERATIONS OF THE BANK
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DOMESTIC OPERATIONS
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
23 Regional head quarter 20 corporate centers 1469 branches
OVERSEAS OPERATIONS
For the facilitation of the overseas operations the bank has
55Branches 02 affiliates 01 Representative office 02 subsidiaries
WORK DONE BY ME DURING INTERNSHIP

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I have worked as an internee in the Habib Bank limited Branch Dahranwala for eight weeks. During my internship I learned a lot about the banking work. The branch was quite small comparatively with others but it had all departments. I tried my best level to gain from this internship experience. 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) . IBDAs records and preparation.
Account opening.
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 deposit. The account opening form contains the following informations. 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. Nature of business etc. Detail of other accounts. Zakat deduction. 27
Internship Report on HBL 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.
Preparation of cheque book;

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. 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. Prepration of IBDA I prepared in this department IBDA Inter Branch Debit Advice. If for one branch it is IBDA transition then it is for branch is IBCO. (Inter branch credit advice). IBDA Transition:
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Internship Report on HBL 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. Cash department 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. 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.
Advance department
I also spend some time in the Advance t department .the loans available in our branch are
1-FLAXI LOAN 2-AGRI LOAN

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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 I also observed the 5cs of loan while gave the to the party
FEILDOF ACTIVITIES/DEPARTMENTS OF A BANK
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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
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 onduration and purpose 31
Internship Report on HBL for which the account is maintained. The following typs 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 countiniously 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 bank usually donot 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 forinvestment by the bank. The bank pays interst on saving bank accounts according to the prescribed rates by the centeral bank of the country.
c. PLS saving account In pakistan (PLS) saving account was introduced in January ,1982.
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Internship Report on HBL -The bank has full right to investment of credit balances /deposits in the PLS saving accounts. - statments of accounts willbe supplied on periodical intervals. The following informations are required to be furnished 1. 2. 3. 4. 5. Name occupation and full address Specimen signature Introductory refrences 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 withdrawl 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.
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. 33
Internship Report on HBL -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.. 34
I. Scroll book II. Paying cash book III. Token book IV. Cash balance book 1. Scroll book: When cash is received at the counter it is recorded in the scroll book. 1. Paying cash book: The cashier makes entery in the paying cash book when cash is paid. 2. Token book: When any cheque or any negotiable instrument is presented it is recorded in the token book then token is issued.
3. Cash balance book: The consolidated figure of receipt and payment of cash is entered in cash balance book.
Accounts department
There are two ways of maintaining an accounts Journal system Voucher system Journal system
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Internship Report on HBL 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 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.
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Why account is open. 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
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Internship Report on HBL some banks by opening deposit accounts. Now they can draw cheques for settlement of transactions without involving cash. Procedure of opening of an account : 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 informations 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 customers signature on the cheques with his specimen signature in order to ascertain whether there has been any forgery or fraud.
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Internship Report on HBL 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 banks 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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Internship Report on HBL 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 a 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.
3). Advances department

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.
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Internship Report on HBL 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.
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. 41
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. 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 create a valid pledge. The person delivering the goods as security is called pledger. The person to whome the goods is delivered is called the pledgee. Hypothecation: It is a legal transaction where by goods may be made available as security for a debt without transfering 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.
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Internship Report on HBL 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.
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Agriculture loan
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1. Haryali agricultural finance scheme 2. Tractor finance scheme 3-LIVE STOCK FINANCE SCHAME
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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. 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 11% lowest mark up rate as compared to the other scheme like flexi or life style loan
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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 11% p.a. is charges however in case of timely adjustment of all installments at time of last installment mark up is recalculated at 9%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. 47
1- Live stock /diary farming. 2- sheep /goat farming 3- Fattening of animals for beef purposes. 4- Poultry Finance is allowed at a mark up rate of 11%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
48
Flexi loan
Flexi loan
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.
49
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
Document required for flexi loan
Letter from employer His last month salary slip His account statement 60 post dated cheques Promissory notes
Rate of mark up on flexi loan
50
The rate of mark up on flexi loan is different for various departments
For the armed forces

The rate of mark up is 13.5% The DSR factor is 35%
For the civil person

The rate of mark up is 14.5%
The DSR factor is 35%
4). Clearing department
51
Internship Report on HBL Clearing house is the place where representative, of all banks get together for the purpose of off setting the interbank 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
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
5) Bills and Remittances department

The main function of bills and remittances department is to deal mainly in following.
52
Internship Report on HBL 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 customers 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 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 53
Internship Report on HBL 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) 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.
54
Internship Report on HBL 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 a cash. If someone want 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 not be dishonour 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 surity that it can never be dishonour.
6).Foreign exchange department
55
Internship Report on HBL 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 buyers 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. Procedure of opening a letter of credit. The letter of credit is opened by filling an application with the bank and following informations 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
56
Internship Report on HBL 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.
57
MISCELANIESUS FUNCTIONS OF ALL DEPARTMENTES
58
ON LINE BANKING
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.
Charges for inter branch in line transitions

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.
59
Schedule charges:
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/-
60
Lockers
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.
61
SAFE DEPOSIT LOCKERS CHAGES:

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. 15,000/Medium size 20,000/Large size Extra large Rs. 1000 per annum or nil on refundable key deposit of Rs. 1,500 per annum or nil on refundable key deposit of Rs. Rs. 2,500per annum or nil refundable keys deposited of Rs. 35000/Rs. 3,000per annum or nil refundable keys deposited of Rs. 45000/Rs. 5,000per annum or nil refundable keys deposited of Rs.
Extra Extra large 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.
62
Internet Banking
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 ststmant, can transfer their fund.
Automatic teller machine

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 42- 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 42 hours.
In order to get an ATM card

Customer should be an account holder Application from is filled Speacmain 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
63
Working of ATM card:

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
64
ATMS AVAILABEL FOR HABIB BANK CUSTOMER:

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
65
MULTAN
HABIB BANKM LIMITED ASKARI COMMERICAL BANK
SIALKOT
FAISALBAD
HABIB BANKM LIMITED
PESHAWAR
HABIB BANKM LIMITED
66
GUJRANWALA
HABIB BANK LIMITED
GUJRANWALA
HABIB BANKM LIMITED
HAYDERABAD
AZAD KASHMIR
HABIB BANKM LIMITED
67
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.
Documents required for credit card

Application form of credit card Photocopy of national identey card Passport size photograph Salary certificate Last six month income certificate
68
SIMEX/ KHAERADER
69
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.
70
ANALYSIS OF INCOME STATMANT
71
CNSOLIDATED PROFIT AND LOSS STATMANT (Rs.000) As at 2000 2001 2002 2003 2004 December.31
Mark up /interest /earned Less cost /return on deposit
Fees commission and brokerage
24271792 173857616 886031 185324 385912 1135343
26738446 15434544 11303902 1827685 -----------1453522
23956114 11580431 12375683 2096871 ---------1144350
19049914 4467402
18,146,938 4,467,402 13,679,536 2,510,443
13,603,574
2,044,657
Profit/loss from investment securities Income from dealing in foreign currencies Dividend income Income on gain on investment
---------1,069,192
---------1,095,789
1509213 -----------14509309 13623278
-----------1099947 4381154 6922748
-----------1795385 5036606 7339077
-----------3,513,808
-----------4,205,921
6627657 20231231
7812143 21491679
Less operating expanse Administrative expanses Provision against non performing loans Provision for diminution in value of investment Other provision
120714531 1222172 (142550)
1127443 2632960 3747
11807129 2652361 144154
9,782,136
13,775,787 1900,090
4879574 452,223 571,352
(6031) (1067043) (12556235)
72896 3837046 3085702
62542 14666186 (7327109)
472248 15586181 4645050
93732 16340961 5150718
72
Internship Report on HBL Add other income Less other charges Profit/loss before taxation Current taxation For prior Deferred Profit/loss after taxation 76406 (12632641) (68924) 1074525 465000 ------------------------609525 1102845 4188547 12381 4176166 1111826 -----------(62) 3064278 1151751 (6175358) 4061 (6179419) (84631) ------------1211435 (7475485)
1,132,385 2,020,347
5777435
308267
7171065
7,523
5469168 488750 (629) 963390 1451511 4017657
7163542 398152 15341

1070543 1484036 5679506
73
COMPERITIVE PROFIT AND LOSS STATMANT (Rs.000)

As at December.31 Mark up /interest /earned Less cost /return on deposit
2000
24271792 173857616 886031 185324 385912 1135343 1509213 -----------14509309 13623278
2001
26738446 15434544 11303902 1827685 ------------
+ /- in Rs. +/-in %
2466654 -158423072 10417871 1642361 9.225121 -102.642 92.16172 89.86018
-385912 1453522
318179
-100
-----------1099947 4381154 6922748
1509213 1099947
-10128155 -6700530
21.89021 -100 100 -231.176 -96.79
120714531 1222172 (142550) (6031) (1067043) (12556235) 76406 (12632641) (68924)
1127443
-119587088 -10606.9
2632960
1410788 53.58182
3747 72896 3837046 3085702 1102845 4188547 12381

146297 78927 4904089 15641937 1026439 16821188 81305 3904.377 108.2734 127.809 506.9166 93.07192 401.5996 656.6917
Add other income Less other charges
74
Internship Report on HBL Profit/loss before taxation Current taxation For prior Deferred Profit/loss after taxation 1074525 465000 ------------------------609525 4176166 1111826 ------------(62) 3064278
2454753 80.10869 3101641 646826 74.27006 58.17691
------------62
------------100%
COMPERITIVE PROFIT AND LOSS STATMANT (2000- 2001)

A considerable increase in revenue and decrease in expenses. The bank mark up increased by 2466654.The cost has been decreases by 158423072. Profit before taxation has been increases by 3101641. The profit after taxation has been by 2454753. This increased due to bank mark up and decreased in the mark up cost and increased in other income.
75

2001
26738446 15434544 11303902 1827685 -----------1453522
2002
23956114 11580431 12375683 2096871 ----------
+/-in Rs.
-2782332
+/-in%
-11.61428769
-3854113 1071781 269186
-33.28125698 8.660378583 12.83750884
---------1144350
----------
-309172
-27.01725871
-----------1099947 4381154 6922748
--------------------1795385
695438 38.73475606 13.01376363 5.672770568
----------
5036606 7339077
655452 416329
1127443 2632960
11807129
10679686 90.45116726
2652361
19401
0.731461517
3747
144154
72896 3837046
62542 14666186
140407 -10354 10829140
97.40069648 -16.55527486 73.83746531
76
Internship Report on HBL 3085702 Add other income Less other charges Profit/loss before taxation Current taxation For prior Deferred Profit/loss after taxation 1102845 4188547 12381 4176166 1111826 ------------(62) 3064278 (7327109) 1151751
48906 4.246230305 167.8267883 -11.61428769 167.5818552 7.0734677 99.99
-10412811
142.1134993
(6175358) 4061
-10363905 -2782332
(6179419)
-10355585
(84631)
1196457
------------1211435 (7475485)
1211373
-10539763
140.99
COMPERITIVE PROFIT AND LOSS STATMANT (2001- 2002)

Considerable decreases in revenue and also decrease in expenses. The bank mark up decreases by 2782332.The cost has been decreases by 3854113. Profit before taxation has been decreases by 10355585. The profit after taxation has been by 10539763. This decreases due to bank mark up rate and increases in the provision against non performing loans and increased in administrative cost.
77

2002
23956114 11580431 12375683 2096871 ---------1144350
2003
19049914 4467402
+/-in Rs
-4906200
+/-in %
-25.75444698
-7113029
-159.22 9.026238252 -2.553680153
13,603,574
1227891
2,044,657
-52214
---------1,069,192
----------
----------
-75158!
7.02
-----------1795385 5036606 7339077
-----------3,513,808
----------
----------
1718423
48.90486333 24.00623629 63.72402154
6627657 20231231
1591051 12892154
11807129 2652361
9,782,136
-2024993 -20.70092871
4879574
2227213
45.64359512
144154
452,223
62542 14666186
472248 15586181
308069 409706 919995
68.12324893 86.7565347 5.902632595
78
Internship Report on HBL (7327109) Add other income Less other charges Profit/loss before taxation Current taxation For prior Deferred Profit/loss after taxation 1151751 (6175358) 4061 (6179419) (84631) ------------1211435 (7475485) 4645050
1,132,385
-19366 -1.710 206.88 98.68 212.987 117.31 100 -25.7471
11972614
257.74
5777435
308267
11952793 304206. 11648587
5469168 488750 (629) 963390 1451511 4017657

573381 629 -248045
11493142
286.06
COMPERITIVE PROFIT AND LOSS STATMANT (2002- 2003) Considerable decreases in revenue and also decrease in expenses. The bank mark up decreases by 4906200.The cost has been decreases by 4467402. Profit before taxation has been decreases by 10355585. The profit after taxation has been increases by 11493142. This decreases due to bank mark up rate and increases in the provision against non performing loans and increased in administrative cost.
79

2003
19049914 172595754
2004
18,146,938 4,467,402
+/-in Rs
-902976
+/-in%
-4.975913843
-168128352
-3763.448017 0.555296612 18.5539365
13,603,574
2,044,657
13,679,536
75962
2,510,443
465786
---------1,069,192
------------------1,095,789
----------
26597
2.427200857
-----------3,513,808
--------------------4,205,921
692113 16.45568236 15.16211365 5.864818658
----------
6627657 20231231 Less operating expanse Administrative expanses Provision against non performing loans Provision for diminution in value of investment Other provision
7812143 21491679
1184486 1260448
9,782,136 4879574
13,775,787
3993651 28.99036549
1900,090
-2979484
-156.8075196
452,223
571,352
472248 15586181 4645050
93732 16340961 5150718
119129 -378516 754780 505668
20.85036895 -403.827935 4.618944994 9.817427396
80
Internship Report on HBL Add other income Less other charges Profit/loss before taxation Current taxation For prior Deferred Profit/loss after taxation
1,132,385 2,020,347
5777435
308267
7171065
7,523
887962 1393630
43.95096 19.4340729
-300744
3997.660508 23.6527405 22.75 104.100 10.0092196 2.1916584 29.2604497
5469168 488750 (629) 963390 1451511 4017657
7163542
1694374
398152 15341
1070543 1484036 5679506 32525 1661849 -90598 15970 107153
COMPERITIVE PROFIT AND LOSS STATMANT (2003- 2004) Considerable decreases in revenue and also decrease in interest expenses. The bank mark up decreases by -902976.The cost has been decreases by 168128352. Profit before taxation has been increases by 1694374. The profit after taxation has been increases by 1661849. This increases due to bank mark up rate and decreases in the provision against non performing loans and increased in non mark up income
81
HABIB BANK LIMITED BALANCE SHEET YEAR 2000-2005 (000)

Particulars Cash Balances with other banks Lending to financial institutions Investments Advances Other assets Operating fixed assets Deferred tax assets TOTAL ASSETS LIBLITES Bill payable Deposits Borrowing from financial institutions Deferred tax liabilities Other liabilities Total liabilities Presented by Share Capital Capital Reserve fund Accumulated (loss)/profit Surplus on assets Total
2000
37343702 766674
2001
27669276 22843841 22843841
2002
27494292 28870767 10001123 142877930 167523299 18837931 7184623 2967570 403012535 5834673 328182054 38045541 ----------11243342 383305610
2003
27639313 20312646 22595488 158870811 183654042 11523641 7111940 3224049 434931930 6258226 360648228 31610200 ----------12697392 411214046
2004
31970290 33386118 3755039 134540558 258306053 11935142 11110314 1978144 486981658 7601766 404629059 29196284 ----------14090772 455517881
72525352 173822905 30246684 5923411 320628728 5376924 265751324 23923589 ----------13340485 523692332
57792325 167225401 21256518 5874422 325505624 5419260 283444680 23443322 ----------8629175 320936437
12178495 12178495 12178495 12178495 69000000

17876069 3762197 203063564 985942 1027348 (11662155) (8931643) 3108366 4569187 7224050 19706925 1635407 (5045153) 6716125 23717884 2644052 13546636 8097387 31463777
82
HABIB BANK LIMITED BALANCE SHEET COMPARIOTVE ANASLYSIS YEAR 2000-2001

2000
37343702 766674 -------------------72525352 173822905 30246684 5923411
2001
27669276 22843841 22843841
+/-in Rs
-9674426 22077167
+/-in%
-34.9645072 96.64384812
22843841 57792325 167225401 21256518 5874422

-1.5E+07 -6597504 -8990166 -48989 -25.4930512 -3.945276232 -42.29369081 -0.833937364 1.498252454 #DIV/0! 0.781213671 6.242260747 -2.048630309
320628728 5376924 265751324 23923589 ----------13340485 523692332
325505624 5419260 283444680 23443322 ----------8629175 320936437
4876896 0 42336 17693356 -480267
-4711310 -2E+08 0 0 985942
-54.59745572 -63.17634012 #DIV/0! 0 100 253.2827252 -21.03455642 -4344.194646
12178495
17876069 3762197 203063564
12178495
985942 (11662155)
-3E+07
3108366 4569187
-653831 -2E+08
83
On asset there is a significant decrease in the advances by -4.38% on the other deposit had bean increased while other asset and operating asset also decreased. Other liabilities decreased by a large amount54.59745572%balance with other banks has bean also increased by 96.64384812%
84

Particulars
2001
2002
27494292 28870767 10001123
+/-in Rs
145021 -8558121 12594365
+/-in%
0.524691044 -42.13198517 55.73840671 10.06659493 8.783222424 -63.47203978 -1.021985562 7.955183063 7.338940372 #DIV/0! 6.767940308 9.002172056 -20.35843177 #VALUE! 11.45156423 6.786839183 #DIV/0! 0 37.18089748 -77.03413554 -7.56276871 16.91111652
27669276 Cash 22843841 Balances with other banks 22843841 Lending to financial institutions 57792325 Investments 167225401 Advances 21256518 Other assets 5874422 Operating fixed assets Deferred tax assets 325505624 TOTAL ASSETS LIBLITES 5419260 Bill payable 283444680 Deposits 23443322 Borrowing from financial institutions ----------Deferred tax liabilities 8629175 Other liabilities 320936437 Total liabilities Presented by Share Capital 12178495 985942 Capital Reserve fund (11662155) Accumulated (loss)/profit 3108366 Surplus on assets 4569187 Total
142877930 167523299 18837931 7184623 2967570 403012535 5834673 328182054 38045541 -----------
15992881 16130743 -7314290 -72683 256479 31919395 0 423553 32466174 -6435341 #VALUE!
11243342 383305610
1454050 27908436 0 0 608059
12178495
1027348 (8931643)
3886490
7224050 19706925
-507925 4010959
85

On asset there is a significant increased in the advances the deposit and other accounts has bean increased while other asset decreased. Other liabilities increased by a large amount .balance with other banks has bean also increased by 8558121000. Operating asset has been increased by a large amount 72683000
86

2002
27494292 28870767 10001123 142877930 167523299 18837931 7184623 2967570 403012535 5834673 328182054 38045541 ----------11243342 383305610
2003
27639313 20312646 22595488
+/-in Rs
145021 -8558121 12594365
+/-in%
.5246 -42.1319 55.73840 10.066593 8.78323 63.472039 -1.0219855 7.9551830 7.3389403 6.767940 9.002172 -20.3584317
158870811 183654042 11523641 7111940 3224049 434931930 6258226 360648228 31610200 ----------12697392 411214046
15992881 16130743 -7314290 -72683 256479 31919395 423553 32466174 -6435341
1454050 27908436 0 608059
11.451564 6.7Z8868391 0 37.1808974 77.0341335
12178495
1027348 (8931643) 7224050 19706925
12178495
1635407 (5045153)
3886490
6716125 23717884
507925
7.562787 16.9111165
4010959
87

On asset there is a significant increased in the advances by 74652011000 the deposit and other accounts has bean also increased by large amount while other asset decreased by-2418587000.Other liabilities increased by a large amount. Balance with other banks has bean decreased by a large amount. Operating asset has been decreased by a small amount.
88

2003
27639313 20312646 22595488 158870811 183654042 11523641 7111940 3224049 434931930 6258226 360648228 31610200 ----------12697392 411214046
2004
31970290 33386118 3755039
+/-in Rs
4330977 13073472 -18840449
+/-in%
13.54688056 39.1584071 -501.7377716 -18.08395428 28.90060459 3.447809838 35.98794778 -62.98353406 10.68823171 #DIV/0! 17.674051 10.86941979 -8.26788779
134540558 258306053 11935142 11110314 1978144 486981658 7601766 404629059 29196284 ----------14090772 455517881 69000000 2644052 13546636
-24330253 74652011 411501 3998374 -1245905 52049728 0 1343540 43980831 -2413916
1393380 44303835 0 56821505 1008645
9.888599432 9.726036419 #DIV/0! 82.35000725 38.14769906 137.2428476 17.05812011 24.61844616
12178495
1635407 (5045153) 6716125 23717884
18591789
8097387 31463777
1381262 7745893
89

On asset there is a significant increased in the advances by 411501000 the deposit and other accounts has bean also increased by large amount while other asset increased by43980831.Other liabilities increased by a large amount balance with other banks has bean increased by 13073472. Operating asset has been increased by a large amount.
90
RATIO ANALYSIS
91
CASH TO DEPOSIT RATIO

YEARS ACCOUNTES CASH DEOSIET 2004
31970290 404629059
2003
276393313
2002
2001
2000
27449292 27669276 12869044 283444680 265751324
360648228
328182054
CASH TO DEPOSIT RATIO 7.90
7.66
8.36
9.76
4.84
92
93
EQUITY TO ASSEST RATIO

YEARS ACCOUNTES
EQUITY ASSEST
2004
23090688
486981658
2003
16768749
434931930
2002
12274200
2001
9502282
2000
8770811
403012535 333750605 320926758
CASH TO DEPOSIT RATIO 4.74
3.85
3.045
29.81
2.7
94
EQUITY TO ASSEST RATIO
95
EQUITY TO DEPOSIT RATIO

YEARS ACCOUNTES
EQUITY DEPOSIT
2004
23090688 404629059
2003
16768749
2002
12274200 328182054
2001
9502282
2000
8770811
360648228
283444680 265751324
EQUITY TO DEPOSIT RATIO 5.70
4.6
3.7
3.3
3.3
96
EQUITY TO DEPOSIT RATIO
97
ADVANCES TO DEPOSIT RATIO

YEARS ACCOUNTES
ADVANCES DEPOSIT
2004
29196284 404629059
2003
31610200 360648228
2002
38045541 328182054
2001
23443322
2000
23923589
283444680 265751324
ADVANCES TO DEPOSIT RATIO 7
8.76
11.59
8.27
98
ADVANCES TO DEPOSIT RATIO
99
EARNING PER SHARE

YEARS AMOUNT 2000 0.4 2001 .92 2002 1.67 2003 5.82 2004 8.21
100
EARNING PER SHARE
101
RETURN ON ASSAEST
YEARS 2000 2001 2002 2003 2004
ACCUOUNT
PROFIT AFTER TAX 609525 ASSEST 320926758 RATIO 0.125 3064278 (7475485) 4017657 5679506 486981658 434931930 403012535 333750605.
0.7045 (1.85) 1.20 0.1769
102
RETURN ON ASSAEST
103
SWOT ANALYSIS
104
STRENGTHS
HBL is a leading financial institution in terms of market share. It has a big market share in the domestic market. In terms of product design capabilities in relation to competitors, bank has been leading so far, right from 1947. HBL has introducing innovative products in the country i.e. Rupee traveler cheques, Flexi loans HBL is the oldest bank in the history of banking in Pakistan it was founders of Habib Bank who presented a bank cheques to Quaid-e-Azam HBL also provided funds for the establishment of SBP. It is the only Pakistan bank with the largest overseas net work which consists of 71 branches in 21 countries. HBL has largest net-work mode and customer base in Pakistan with 1469 branches in Pakistan. HBL is in dominating position in Pakistan terms of deposits, advances and assets. The organization uses a differentiated marketing strategy with a different marketing mix for each segment. Keeping in view the need of time the bank has automated its operations like providing ATM services Bank has launched his credit card. Bank charges are lees then other banks
105
WEAKNESSES
A few branches are on line and have a universal access account. Few ATM are available for the customer of the bank. Rate offered on PLS are very lees as compared to the other banks No specialist person is for the simex in the branches. Employees are less in the branches while regional offices are over staff . The pays of the employees are comparatively less and there are no clear criteria for the promotion Rate of mark up charged from customer are high as compared to other banks.
106
OPPERTUNITIES
With the largest work of branches, with highly qualified staff bank provides the quality of service and support to the customers and retain its leading position. Bank should target segments like soft-ware energy pharmaceutical and communications which have potential for grew As bank has minimum charges by installing the ATMS he can grabbed more market share. Due to privatization management is free for decision making. Bank can increase his revenue by focused on flexi loan.
107
THERAT
Almost of the foreign banks that operations in the bigger cities only and are concentrating on individuals of higher income and blue chips companies they are taking away the mark from bank. As most of the loans are stuck up there are fewer tendencies to more loans thus giving a low loan Products and services introduced by HBL in the past have been copied and followed by other commercial banks. The bank has to deal with increasingly thought competitions in domestic market from Nationalized foreign and private sector banks. The schemes of National savings are a threat for Habib Bank Limited. They offer higher rate of interest. . Habib bank is the bank of most educational institute but due to bad policies most of institute shift their account to U.B.L
108
SUGGESTION
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. 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. 109
110

Final Report of Internship

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Final Report of Internship

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Internship Report on HBL

Sir .Zahid Ali

SUBMITTED BY Muhammad Shahzad Niaz

DEPARTMENT OF COMMERCE ISLAMIA UNIVERSITY BAHAWALPUR

Internship Report on HBL

Internship Report on HBL

Internship Report on HBL

Internship Report on HBL

Muhammad Shahzad Niaz

Internship Report on HBL

COMPANY INFORMATION FINANCIAL HIGH LIGHTS MISSION STATMANTAND OBJACTIVES

Internship Report on HBL

Internship Report on HBL

Internship Report on HBL

Internship Report on HBL

Banks profit has been increased as compared to previous years.

Internship Report on HBL

FUNCTIONS OF COMMERCIAL BANKS:

Internship Report on HBL Fixed or term deposits

Internship Report on HBL

TODAYS HABIB BANK:

Internship Report on HBL

Internship Report on HBL

Internship Report on HBL

Hanif Akhai Jamil A. Khan

Internship Report on HBL

FINANCIAL HIGH LIGHTS

404629 486982 258306 143735 31188 35.41%

360648 434932 18354 164533 23485 46.26%

328,182 403,013 167,523 147,822 19,498 47.36%

12% 12% 41% -13% 33% -232%

1469 1,470 18625 18800

Internship Report on HBL

OFFICER GRADE III

Internship Report on HBL

MISSION STATMANT AND OBJACTIVES

Internship Report on HBL

LEADING LOCALLY AND GROWING GLOBALLY

MISSION STATMANTOF HABIB BANK IS TO MAKE

Internship Report on HBL

To correct the structural flaws in the balance sheet

Internship Report on HBL

To increased the number of ON

Internship Report on HBL

Internship Report on HBL

OPERATIONS OF THE BANK

Internship Report on HBL

23 Regional head quarter 20 corporate centers 1469 branches

55Branches 02 affiliates 01 Representative office 02 subsidiaries

WORK DONE BY ME DURING INTERNSHIP

Internship Report on HBL

Preparation of cheque book;

1-FLAXI LOAN 2-AGRI LOAN

Internship Report on HBL

3-CONSUMER FINANCE 4-BUSNIERES LOAN

FEILDOF ACTIVITIES/DEPARTMENTS OF A BANK

Internship Report on HBL

Bills and remittances department

6. Foreign exchange department

Internship Report on HBL

Internship Report on HBL

Operating the account./ cheque book.

Books relating to customers. Pay-in-slip Cheque book Pass book