1.

OVERVIEW OF THE HBL

HBL established operations in Pakistan in 1947 and moved its head office to Karachi. HBL first
international branch was established in Colombo, Sri Lanka in 1951 and Habib Bank Plaza was
built in 1972 to commemorate the banks 25th Anniversary.
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.

7.1

Debt/Asset Ratio

Debt/Asset Ratio

Total Liabilities
Total Assets

For the year ended 2003

509,804,203

560,150,004

For the year ended 2004

433,666,466

465,128,994 =

0.93 or 93%

For the year ended 2005

466,336,895

506,067,762 =

0.92 or 92%

For the year ended 2006

536,848,102

590,291,468 =

0.90 or 90%

For the year ended 2007

534,771,236

587,540,354 =

0.91 or 91%

7.2

0.91 or 91%

Return on Assets (ROA)

1

Return on Assets

Net income after taxes

Total Assets

For the year ended 2003

9,646,549

560,150,004

0.017

For the year ended 2004

5,870,176

405,128,994

0.015

For the year ended 2005

8,916,171

506,067,762

0.018

590,291,468

0.024

587,540,354

0.016

For the year ended 2006

14,276,125

For the year ended 2007

7.3

3,293,468

Return on Equity (ROE)

Return on equity

Net income after taxes

Total equity capital

For the year ended 2003

9,646,549

50,345,801

0.192 or 19.2%

For the year ended 2004

5,870,176

31,462,528

0.187 or 18.7%

For the year ended 2005

8,916,171

39,730,867

0.224 or 22.4%

0.256 or 25.6%

0.162 or 16.2%

For the year ended 2006

14,276,125

For the year ended 2007

7.4

3,293,468

55,769,118
53,443,366

Net Interest Margin

Net Interest Margin

Interest income from loans and security investments - Interest

Expense on deposits and on other debt issued
Total Assets

For the year ended 2003

32,343,206

560,150,004

0.06 or 6 %

For the year ended 2004

17,292,455

465,128,994

0.04 or 4 %

For the year ended 2005

31,041,863

506,067,762

0.06 or 6 %

For the year ended 2006

42,152,520

590,291,468

0.07 or 7 %

For the year ended 2007

11,903,763

587,540,354

0.02 or 2 %

7.5

Net Non-interest Margin).

Net noninterest margin

For the year ended 2003

Non-interest Revenues Non-interest Expenses

Total Assets

-6554179
For the year ended 2004

2,161,130 3,950,578
-1789448

465,128,994
=

-0.006 or -0.06 %

-0.001 or -0.01 %

590,291,468

-4619753 501,291,468
For the year ended 2007

-0.001 or -0.01 %

506,067,762

506,067,762

10,146,469 14,766,222

560,150,004
=

490,128,994

7,173,942 13,686,669
-6512727

For the year ended 2006

560,150,004

10,149,954 13,288,058
-3138104

For the year ended 2005

7,858,300 14,412,479

-0.007 or -0.07 %

587,540,354

587,540,354

-0.03 or -0.03 %

7.7

Earning Per Share of Stock (EPS)

Earning per share of stock (EPS)

For the year ended 2003

9,646,549

696,000

Rs. 13.86

For the year ended 2004

5,870,176

696,000

Rs. 8.43

For the year ended 2005

8,916,171

696,000

Rs. 12.81

For the year ended 2006

Net income after taxes

Common equity shares outstanding

14,276,125

For the year ended 2007

3,293,468

696,000 =
696,000

Rs. 20.51
=

Rs. 14.73

A Balance Sheet
I

Index / Horizontal Analysis:

HABIB BANK LIMITED
INDEX / HORIZONTAL ANALYSIS
BALANCE SHEET AS AT DECEMBER 31
Common Size (%)
2003
2004
2005
2006

2007

ASSETS
Cash and balances with treasury banks

100%

103%

140%

97%

98%

Balance with other banks

100%

97%

154%

88%

135%

Lending to financial institutions

100%

327%

53%

36%

36%

Investments

100%

79%

116%

109%

113%

Advances

100%

123%

114%

98%

102%

Other assets

100%

122%

125%

107%

109%

Operating fixed assets

100%

101%

108%

103%

104%

Deferred tax assets

100%

86%

173%

102%

101%

100%

109%

117%

100%

105%

100%

77%

101%

61%

63%

LIABILITIES
Bills payables

Borrowing from financial institutions

100%

113%

187%

78%

88%

Deposits and other accounts

100%

108%

110%

102%

106%

Sub-ordinated loans

Liabilities against assets subject to finance lease

100%

104%

112%

104%

111%

100%

108%

115%

100%

105%

100%

126%

135%

104%

111%

Share capital

100%

100%

100%

100%

100%

Reserves

100%

882%

120%

96%

106%

Unappropriated Profit
Total equity attributable to the equity holders of the
bank

100%

67%

224%

93%

106%

100%

137%

148%

95%

105%

3%

3%

Other liabilities
Deferred tax liabilities
NET ASSETS
SHAREHOLDERS EQUITY

Minority interest
Surplus on revaluation of assets Net of tax

II

100%

94%

98%

99%

100%

100%

126%

140%

96%

106%

Common Size / Vertical Analysis:

HABIB BANK LIMITED
COMMON SIZE / VERTICAL ANALYSIS
BALANCE SHEET AS AT DECEMBER 31
Common Size (%)
2003
2004
2005
2006

2007

ASSETS
Cash and balances with treasury banks

92%

101%

83%

87%

81%

Balance with other banks

47%

76%

59%

67%

57%

Lending to financial institutions

13%

12%

31%

12%

4%

Investments

230%

414%

259%

224%

234%

Advances

667%

797%

774%

654%

616%

Other assets

90%

80%

145%

81%

93%

Operating fixed assets

27%

47%

34%

25%

27%

5%

6%

4%

5%

5%

1113%

1478%

1274%

1105%

1054%

Deferred tax assets

LIABILITIES
Bills payables

11%

23%

14%

11%

6%

Borrowing from financial institutions

99%

85%

76%

106%

79%

873%

1228%

1049%

859%

840%

Sub-ordinated loans

0%

0%

0%

0%

0%

Liabilities against assets subject to finance lease

0%

0%

0%

0%

0%

29%

42%

35%

29%

29%

0%

0%

0%

0%

0%

1013%

1378%

1174%

1005%

959%

100%

100%

100%

100%

100%

94%

85%

91%

93%

94%

Reserves

229%

22%

202%

248%

242%

Unappropriated Profit
Total equity attributable to the equity holders of the
bank
Minority interest

262%

182%

202%

248%

278%

585%

289%

422%

637%

614%

3%

3%

Surplus on revaluation of assets Net of tax

100%

100%

100%

Deposits and other accounts

Other liabilities
Deferred tax liabilities
NET ASSETS
SHAREHOLDERS EQUITY
Share capital

13.2

100%

100%

Balance Sheet
Habib Bank Limited
Balance Sheet
As at December 31
2003
2004

ASSETS
Cash and balances with treasury banks
Balance with other banks
Lending to financial institutions
Investments
Advances
Other assets
Operating fixed assets
Deferred tax assets
LIABILITIES
Bills payables
Borrowing from financial institutions
Deposits and other accounts
Sub-ordinated loans
Liabilities against assets subject to finance
lease
Other liabilities
Deferred tax liabilities

(Rupees in 000)

2005

2006

2007

46,244,803
23,532,165
6,550,128
115,822,511
335,985,458
17,447,808
11,802,870
2,764,261
560,150,004

31,934,375
24,005,342
3,755,039
130,327,611
250,612,460
11,719,874
10,949,060
1,825,233
465,128,994

33,014,694
23,304,315
12,272,248
102,984,482
307,602,748
14,265,234
11,046,166
1,577,875
506,067,762

46,310,478
35,965,048
6,550,128
119,587,476
349,432,685
17,765,291
11,954,876
2,725,486
590,291,468

45,121,689
31,683,390
2,373,533
130,698,791
343,642,560
18,977,689
12,260,172
2,782,530
587,540,354

5,577,429
49,980,794
439,724,335
-

7,359,133
26,624,558
386,332,570
-

5,694,018
30,160,501
416,603,030
-

5,737,457
56,392,270
459,140,198
-

3,514,734
43,844,160
468,286,988
-

14,521,645
509,804,203

13,350,205
433,666,466

13,879,346
466,336,895

15,578,177
536,848,102

16,125,354
534,771,236

NET ASSETS

50,345,801

31,462,528

39,730,867

53,443,366

55,769,118

SHAREHOLDERS EQUITY
Share capital
Reserves
Unappropriated Profit
Total equity attributable to the equity holders

6,900,000
16,817,472
19,281,940

6,900,000
1,746,285
14,718,856

6,900,000
15,400,087
9,822,330

6,900,000
18,459,154
22,030,775

6,900,000
17,802,584
20,475,080

42,999,412

23,365,141

32,122,417

47,389,929

45,177,664

7,346,389
50,345,801

8,097,387
31,462,528

7,608,450
39,730,867

940,607
7,438,582
55,769,118

913,317
7,352,385
53,443,366

of the bank
Minority interest
Surplus on revaluation of assets Net of tax