Brief History:

HBL was the first commercial bank established in 1947. HBL 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 1,705 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. HBL is currently rated AA+ (Long term) and A1+ (Short term)*. It is the first Pakistani bank to raise Tier II Capital from external sources.

ORGANIZATIONAL STRUCTURE:
HBL is organized along functional lines with eight core divisions namely Corporate & International Banking, Retail Banking, International Banking, Audit & B.R.R., Credit Policy, A s s e t R e m e d i a l M a n a g e m e n t ( ARM), In f o r m a t i o n T e c h n o l o g y G r o u p and Human Resources Group.

VISION, MISSION AND VALUES:

Vision: Enabling people to advance with confidence and success. Mission: To make our customers prosper, our staff excel and create value for shareholders. Values: Our values are the fundamental principles that define our culture and are brought to life in our attitude and behaviors. It is these values that make us unique and unmistakable. Our values are defined below:

Excellence Integrity Customer Focus

Meritocracy Progressiveness

PRODUCTS AND SERVICES OFFERED BY HBL: Products:

o HBL Muhafiz Rupee Travelers Cheques o HBL Auto Finance o HBL Flexi Loans for salaried personnel o HBL Lifestyles Financing Scheme o HBL I-Card o HBL House Financing Loans o HBL Easy Access o HBL Fast Transfer o Haryali Agricultural Loans o HBL E-Bank

DEPARTMENTS & RESPONSIBILITIES:

1. 2. 3. 4. 5. 6.

Account opening department. Cash department. Credit department. Lockers department. Bill clearing department. Foreign exchange department.

7.

I.T department

Account opening Department:

In this department customer open the account in the bank. This gives facility to the customer for opening new account with the bank that they allow him and operate this account.

These require many document to open this account: Copy of CNIC Utility bill Student card Provisional receipt Address of customer Specimen Signature of the customer posting the account on the system Cheque book issue to the customer Secrecy of the customer

Types of the Account 1. Individual account 2. Joint account 3. Business account 4. Current account 5. Saving account

Individual account: Bank opens this account by individually. It involves single person only. Bank opens this account for one person. Joint account: Bank opens this account by one or two person. The two people use one account in the bank. Bank considers one account by two people. The two people of joint account show one account according to the law

Business account:

In this account, bank only business transaction. It is opened by companies, institution, organization and partnership business. It is purpose of deal with the businessmen. Current account: Bank opens current account to every person. Usually, some current account have to pay interest by the customer but its rate is low other accounts. Current account offers any facilities to the customer which is mentioned below: Debit card Cheque book to the customer Automatic bill payments from account Overdraft facility Clearing services etc. Reason for closing customer account: Bank ay close this account due to some reason: 1. Death of a customer 2. Notice by a customer 3. Customer insanity Death of a customer:

In the case death of the customer, bank may close the account and stop all transaction related to the person. Bank stop further transaction such as cheque issue, money transfer etc. Notice by the customer: Bank may close this account on the demand of the customer. application to the bank for closing this account. Customers insanity: Bank terminates this account due to mental of the customer. Bank stops this transaction with this customer. It is all too easy for the customers needs by the desires of others within a bank who interpret the customer needs through their own prism. His insanity of the customer, to the knowledge of the bank, has the effect of revoking this authority, and the bank would not be necessary in paying the acceptances. That the bank has not been officially notified of the customer's insanity does not indicate Customer gives

Cash department:
Cash department has vital role in the banking sector. All cash transaction represent in this account such as cash received from customer, import and export transaction, bill payment etc. It involves cash payment and receipt transaction in it. These are following perform various functions in this department: Acceptance of deposit Cheque payment Collection of funds Remittances Transfer of funds from one account to another Verification of signature Posting Heading of prize bond

There are some functions of cash department in the bank: Receipts and payments: Cash will be received by the Receipts from the customers in the bank. In the receipts, the name of the account holder, account number, name of the branch, dates etc are involved. Customer must also make certain that the receipts are signed by the person which deposit cash. In some cases, cash is received from receipt department. Deposit cash in customer account: When the customer wants to deposit amount in his account .T he a c co u nt in w h ic h t he c a s h w ill be deposited. Then customer will receive amount and credit the customers account that shows increase in customers bank accounts. Cheque encashment procedure: The cash is paid to the customer in the cash department such as: Cheque is drawn on some branches Cheque is not posted on date It should be bearer cheque

Credit department:
A simple but practical definition of credit is "the ability to buy with a promise to pay," in other words, to obtain present value for a promise to pay in the future. The word "credit" is derived from the Latin credo. The banker knows that he may be asked to expand credit. He first satisfies himself that the ability is such as to defend assurance. This information is obtained from personal knowledge of the borrower. Trade inquiries are directed to people selling goods to and competitors of the borrower. If all this information is satisfactory, the capital factor is studied in the borrower's financial statement which balance sheet should be taken off at normal intervals. This ratio is often called the 2 to 1 ratio, but differs in business. In short, the distinguish between a safe risk and an unsafe one that is the quality that marks the good banker.

Establishment of letter of credit:

In case party enjoying regular limit, the L.C is established without adopting the procedure mentioned above. However the amount of L.C should not exceed the regular limit. The major non-fund based facilities that are considered as a part of regular credit facilities are letter of Credit a n d B a n k G u a r a n t e e . Ba nk s c ha r g e co mmis s io n fo r t he s e r vic e s r e nd er ed by t he m a nd c o mmit me nt s on t he p a ct of t he ba nk t he s e a r e a llo w e d a ft e r ma k ing o ut a ve r y c a r e fu l and detailed assessment of borrowers requirement .

Types of credit:
These are many types of credit of habib bank which are given below: Demand finance: Packing credit Demand finance to student Loan to staff Loans are offered to the staff in various categories 1. loan for purchasing vehicles 2. Loan correspondent to months salary

3. Mortgage loan

Running finance: It include old name overdraft which are meet requirements to the customer. For example: secured Which are different forms given below?

1. Share certificate 2. Deposits 3. Mortgage of property etc unsecured

DEPOSIT DEPARTMENT Bank deals in money and they are merely mobilizing funds within the economy. They borrow from one person and lend to another, the difference between the rate of borrowing lending forms their spread or gross profit. Therefore we can rightly state that deposits are the blood of the bank which causes the body of an institution to get to work. These deposits are liability of the bank so from point of view of bank we can refer to them as liabilities. DEMAND DRAFT: Demand draft is a written order drawn by a branch of a bank upon the branch of same or any other bank to pay certain sum of money to or to the order of specified person. It can be issued to the customers as well as non customer against cash cheque and letter of instruction. Demand draft is negotiable instruments that can be negotiating at any time before its cancellation. Its Legal provisions are same as that of cheque. Following parties are involved in demand draft:

Applicant

issuing branch

Drawee branch

Beneficiary

A demand draft may be issued against the written request of the customer before issuing it must be seen that the demand draft is in order. The DD application must be scrutinized by the counter clerk in respect of following points. There should be branch where payment is to be made.

Full name of payer should be mentioned.

Amount in words and figures must be same

The applicant on two places should sign application.

TELEGRAPHIC TRANSFER:
Telegraphic transfer means the transfer of funds from one branch to another branch of the same bank or upon other bank under special arrangements just like a telegram. Telegraphic transfer is not negotiable and the funds are not payable to bearer. Minor cannot avail this facility. In telegraphic transfer the bankers use secret codes. One code is with issuing person and the second is with another person. When they combine the codes its become an amount that is called check. The payment is made after the confirmation of the check. Following parties are involved in TT

Applicant

Drawing branch

Drawee branch

Beneficiary

Following important things should be included in TT:

Full name of the beneficiary or account number should be mentioned in the application form. Instruction regarding mode of payment should be obtained.

A record in the remittance outward register should be maintained.

All the remittance must be controlled through number or codes.

PAY ORDER:

Pay order is an instrument through which payment can be made from one bank to another bank. Pay order is meant for bank own payment but in practice they are also issued to customers. Following parties are involved in pay order:

Applicant

issuing branch

Payee

MAIL TRANSFER: Mail transfer is not negotiable and the procedure of it is same with the procedure of DD. When a customer request the bank to transfer his money from this bank to any other bank of the branch of same bank in the city, outside the city of outside the country the first thing he has to do is to fill an application form. In which he states that I want to transfer the money from this bank to that specific bank by mail. If the customer is the account holder of this bank, the bank will debit his account and the concerned officer will fill forms to make the mail transfer complete.

If the customer is not the account holder of the bank, then firstly he has to deposit the money and then rest of the procedure will be adopted to transfer his money.

Demand Finance & Running Finance:

Demand finance:

This is common form of financing to commercial industrial concerns and is made available either on pledge or hypothecation of goods, produce or merchandise. In demand finance the party is finance up to certain limit either at once or as and when required. The party due to facility of a paying mark prefers the financing up only on the amount it actually utilizes.

Running Finance:

This form of financing was known as Overdraft when a bank customer requires temporary accommodation, his banker allows withdrawals from his account and running finance thus occurs. The accommodations generally allowed against collateral security. The customer is in advantageous position in a running finance because he has to pay mark up only on balance outstanding against him on daily products basis. Pledge:

It is entitled to the exclusive possession of the property until the debt is charged.

Hypothecation:

When the property in the goods is charged as security of loan from the bank but the ownership & possess

FAPC (finance against packing credit):

It is a type of banks own source finance provided to clients engaged in export trade. As the term packing indicates that the credit line is granted to an exporter for the purpose of packing merchandise for shipment to an importer abroad. An exporter should give documentary proof to the bank consist of L/C in favor of exporter indicating the description of the merchandise, the purchase price, date of delivery along with other terms.

FAFB(finance against foreign bills):

It is a post shipment finance facility which is provided by the banks to its clients after providing the evidence of shipment, he contacts his bank to request him to lodge the documents. He then provides the request letter with sale contract to grant him finance & this department grant him finance (90% value of commercial invoice).

IMPORTS

Imports regulation: Import is being regulated by the ministry of commerce and the government of Pakistan under the import and export act: Categories of imports: Imports are classified into the following categories: Commercial sector imports Industrial sector imports Public sector imports

Registration of importers:

A person who wants to approach the bank for importing goods from abroad, he should have to get himself registered with the export promotion bureau under registration of imports and exports act. He must fulfill the following conditions before getting himself

registered: NIC NUMBER NATIONAL TAX NUMBER MEMBER OF REGISTERED ASSOSITATION

Documentary letter of credit:

A documentary letter of credit is an instrument or document issued by the bank on the behalf of a customer, authorizing a beneficiary to draw a draft and drafts or sometimes the requirement of a draft, which will be honored, on presentation by the bank if drawn accordance with the te3rm and condition specified in the letter of credit. It is the written undertaking by the bank (issuing bank) pay to the seller (beneficiary) at the request or as per the instruction given by the opener (applicant) pay at sight or at the future date, a stated sum of money against the required documents. The documents include the commercial invoice, certificate of origin, insurance policy or certificate and the documents of transport relating to the mode sending goods. L/C is therefore is an arrangement of security for the parties. The conditional guarantee is related to the documents only and not on the underlying Goods or services.

Procedure for L.C:

The person applying for the letter of credit must be registered with the EPB. The opening bank verifies this registration or otherwise exemption. This is mentioned in the I form. The importer also shows the valid certificate of an organization membership. A category pass book is issued by the EPB for registered importer specifying his category. This book is centralized by the centralized banks in the city. It is not necessary for the bank to hold the original copy of the pass book of all the importers. But sometimes the importer gets L.C from more than one bank so the bank has to hold the photo copy of this pass book. The applicant can get the application from any branch of the Habib Bank Limited.

However only some branches are authorized to open L.C. That branches how are not authorized have to contact with the authorized branches to open an L.C. The authorized branches in such case require the certificate from the applicant branch that the required formalities are fulfilled and the approval was obtained with required margin. For establishment of letter of credit, the importer requests the opening bank with the following documents:

Credit application form:

Credit application form is an agreement between the bank and the customer on the basis of which the letter of credit is opened. This form contains the undertaking of the importer that get the documents from the bank at the mark up price. It contains the following information:

Name and address of importer. Name and address of exporter. Amount in foreign currency. Terms of credit. Description of goods.

Origin of goods. Port of loading and discharge. Last date of shipment. Foreign bank charges. Terms of shipment. (Partial shipment or transshipment) Insurance cover note, policy no, and name of insurance company. Forward booking. Mode of transmission. Import registration no. Any other documents required. Detailed documents.

Performa invoice/ purchase order:

A Performa invoice is quotation of seller containing the description and the specification of the goods, price, and terms of the sale. Sometimes the exporter has their agent in the country. The agent must be registered from the EPB.

Insurance cover note:

All the goods imported under the documentary credit must always be insured. In accordance with our country import policy, insured must be issued by a Pakistani insurance company or the foreign company operating in Pakistan and such company must be approved by the bank. Insurance covered based on the following:

It is issued in the name of issuing bank A/C importer. The rider should cover against war. The port of shipment and the port of destination. Amount of premium prepaid. Shipment period. The description of goods should be the same as per the form.

Appendix B:

This Performa replaces the import license and is submitted along with L.C application form duly filled in triplicate. It is conditional undertaking that the imports goods are not banned, not smuggled. It is also an undertaking that if the bank is unable to arrange the said currency the importer have to purchase it from other banks or from any other place. It includes the details and description of goods, codes, class, type, source of import, country of import, Performa invoice no etc. I FORM:

This form is used at the time of retirement of documents against L.C established earlier for reporting to the transaction to SBP through the bill of entry deptt. It has four copies that are used as follows: Original is for the use of SBP. Duplicate for the authorized dealer to be used for processing exchange control. Triplicate for the authorized dealer record. Quartiplacte is for the submission in SBP in the case of import where the documents are not retired.

Approval for establishment of letter of credit:

After scrutiny of the documents, IB-8 along with attached documents is put before the corporate head for approval. If the amount of application exceeds the power of the corporate head the branch concerned prepared the memorandum for the corporate e banking head for obtaining his approval. In case party enjoying regular limit, the L.C is established without adopting the procedure mentioned above. However the amount of L.C should not exceed the regular limit.

Types of letter of credit:

Revocable:
The letter of credit that can be canceling with the consent of importer, without giving any prior information to the exporter.

Irrevocable letter of credit: The letter of credit that can be cancelled by the mutual consent of the both parties. Only one party cannot cancel it. Irrevocable confirmed letter of credit:

When an issuing bank authorizes and or request to another bank to confirm his irrevocable credit and adds its confirmation. Such confirmation constitutes a definite undertaking of such bank in addition to that of the issuing bank. There are following other letter of credits:

1. Revolving Credit 2. Transferable Credit 3. Back to Back Credit 4. Green Clause Credit 5. Red Clause Credit 6. Clean Documentary Credit 7. Transit Credit 8. Stand by Credit 9. Sight Credit

Parties to a credit:

The applicant: The applicant of the letter of credit is called the importer or buyer. The buyer requests to the bank to open a documentary letter of credit in favor of the seller.

Opening bank (issuing bank or importer bank):

At the request of the importer an issuing bank issues a credit under the instructions in the favor of the seller. Advising bank: An advising bank is a bank in the sellers country. The issuing bank forwards the advice of the credit by mail or by any mode to the correspondent bank in the exporter country as instructions of the opener.

Beneficiary (exporter): The person or body receiving the letter of credit from the importer that is opened in favor of him.

Confirming bank: The bank that on the requests of the issuing bank adds confirmation to a credit. It is definite undertaking of the confirming bank, in addition to the issuing bank.

Negotiating bank: It May or may not be the advising bank. An authorized bank that gives the value to the draft for processing and payments.

Reimbursing bank: Reimbursing bank is the bank, which on the behalf of the opening bank, honors the Reimbursing claim lodged by the negotiating bank.

Modes of payment: Sight letter of credit: The seller submits all the documents with draft in the importer country complying with the all terms and conditions. The payments are made on the presence of the documents. Usance letter of credit: Under these circumstances it is agreed that the payment will be made after a specified period. So the payment is made after or on the expiry of that date.

CREDIT & ADMINISTRATION DEPARTMENT:

The responsibility of providing administrative support for the lending activities of the Bank, and day-to-day monitoring of credit-exposure, is vested in the Credit Administration Department (CAD).

FUNCTIONAL RESPONSIBILITIES:

The main responsibilities under this department are: Implementation of credit facility and their maintenance according to terms of credit approved. Ensure that standard loan documentation for each credit facility is maintained and the correctness & completeness of such documentation and also responsible for custody of all credit files. Maintain the safe custody of all collateral as per banks standard operating procedures; undertake periodic evaluation and inspection of hypothecated/ pledged inventories in accordance with the terms of credit. Ensure compliance with Institutional credit policies & procedures Local regulatory requirements. Prepare various portfolio composition reports and other documentation for submission to GRMs & RMs.

CREDIT FACILITY IMPLEMENTATION PROCEDURE:

Upon approval of credit proposal, the credit proposal and approval are handed over to CAD. Now CAD determines the nature of documentation required and on receipt of same ensures that all legal documents are obtained and are legally enforceable. After all these activities it can release the facility for utilization.

PROCEDURE FOR CREDIT APPROVAL:

It is the responsibility of the relationship manager to provide or fulfill the requirement of the customer by checking his financial and position. The procedure of credit approval starts with the credit proposal. First of all the customer request to the bank for credit and on the behalf of him the RM check the memorandum. The Memorandum includes:

The company information. Purpose of credit. Assessment of management. Risks.

Financial analysis. Third party or other bank information. Conclusion and recommendations.

Then the RM sends it to the authorities who accept or reject the proposal. If they accept the proposal they announced a credit range for the party. At the end RM sends the proposal to CAD deptt custody and check.

EXCESS FACILITY CREDIT BY RM:

Relationship manager is authorized to provide the excess facility to the customer than the credit line. It may be up to

10 percent of excess amount

OR

12.5 million Whichever is less?

It is not more than 15 days if the customer wants to increase this facility he has to contact with the head office.

TYPES OF CREDIT FACILITY:

1) Fund based: It is first type of credit facility. In this facility the bank actually provides fund to Customers. 2) Non fund base: Second type of credit facility that does not provides fun but only give the guarantee. If the customer is unable to make the payment at maturity date then bank will be responsible to make the payment.

Financial Analysis:

Balance Sheet As at December 31, 2007 Assets Cash & Balances with Treasury Banks Balances with other Banks Landings to Financial Institutions Investments Advances Other Assets Operating Fixed Assets Deferred Tax Asset

2010

2009

2008

(Rupees in '000) 81,516,883 35,990,301 30,339,344 245,016,986 434,998,560 15,876,545 8,835,326 34,478,466 887,052,411 79,527,191 29,560,309 5,352,873 209,421,147 432,283,588 16,475,939 8,172,590 40,333,882 821,127,519 10,041,203 48,121,649 653,452,460 4,212,080 26,204,580 5 6,533,134 39,364,297 6,193,787 129,833,446 456,355,507 34,588,444 14,751,252 12,186,848 749,806,715 9,828,082 46,961,165 597,090,545 3,954,925 2 5,663,411

Liabilities Bills Payable Borrowings From Financial Institutions Deposits and other Accounts Subordinated Loans Liabilities against assets subject to finance lease Other Liabilities Deferred Tax Liability

9,774,749 37,430,333 721,069,137 4,281,835 24,971,618

Net Assets Represented By: Shareholder's Equity Share Capital Reserves Un appropriate Profit Total equity attributable to the equity holders of the Bank Minority Interest Surplus on revaluation of assets - net of tax

797,527,672 8 9,524,739

742,031,972 79,095,547

683,498,128 6 6,308,587

10,018,800 27,671,813 4 4,121,103

9,108,000 25,801,889 36,325,458

7 ,590,000 23,656,044 3 1,933,178

8 1,811,716 7,713,023 8 9,524,739

71,235,347 7,860,200 79,095,547

6 3,179,222 8 90,099 6 6,308,587

Profit and Loss Account For the year ended December 31, 2007 Mark-up/return/interest earned Mark-up/return/interest expensed Net Mark-up/interest income Provision against Non-performing loans and advance-net Reversal/provision against off-balance sheet obligations Reversal of provision against diminution in value of investments Bad debts written off directly Net mark-up/interest income after provisions Non-market/interest income Fee,commision and brokerage income Income/gain on investments Income from dealing in foreign currencies other income Total non-mark-up/interest income Non-market/interest expense

2010 7 9,999,852 3 4,090,368 4 5,909,484 7 ,559,458 3 0,895 3 89,273 7 ,979,626 3 7,929,858

2009 2008 (Rupees in '000) 74,751,375 63,376,047 33,088,536 26,525,556 41,662,839 36,850,491 8,276,180 (51,396) 1 ,387,354 9,612,138 32,050,701 6,904,919 3 72,598 1,909,887 9,187,404 27,663,087

4 ,928,705 6 07,440 2 ,893,454 2 ,619,905 1 1,049,504 4 8,979,362

4,620,148 452,823 1,692,776 3,176,865 9,942,612 41,993,313

4,518,408 1 ,300,975 2 ,374,318 3 ,088,994 1 1,282,695 3 8,945,782

administrative expenses other provision offs-net other charges Total non-mark-up/interest expenses Profit Before Taxation

2 3,053,860 1 78,148 1 78,700 5 11,373 2 3,922,081 2 5,057,281

21,733,407 372,957 3 ,540 397,668 22,507,572 19,485,741

21,425,361 2 00,163 64,751 3 23,575 22,013,850 16,931,932 8 ,308,611 2 33,100 (2,473,891) 6,067,820 10,864,112

Taxation current prior years deferred Profit after taxation Attributable to: Equity holders of the Bank Minority Interest Basic and diluted earnings per share

9 ,331,828 7 ,827,137 6 94,898 (1,079,473) (582,499) 4 39,434 9 ,444,227 7 ,187,098 1 5,613,054 12,298,643

1 5.58

1 2.28

1 1.83

Cash Flow Statement For the year ended December 31, 2007 CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation Less: Dividend income and share of profit of associated and joint venture companies Gain on sale of investments - net

2010

2009 (Rupees in '000)

2008

25,057,281

19,485,741

16,931,932

(318,539) (288,836) (607,375) 24,449,906 1,666,058 389,273 7,559,458 (65) 69,755 (16,993) 209,043

(281,152) (171,403) (452,555) 19,033,186 1,670,958 1,387,354 8,276,180 (268) 257,155 (29,386) 321,561

( 1,111,810) (197,242) (1,309,052) 15,622,880 1 ,625,943 1 ,909,887 6 ,904,919 8 ,077 8 54,925 ( 41,840) 5 72,761

Adjustment for: Depreciation/amortization/adjustments Reversal against diminution in the value of investments Provision against Non-performing loans and advances-net of reversals Amortization of premium on investments Gain on sale of property and equipment-net Miscellaneous provisions

9,876,529 34,326,435 Increase/decrease in operating assets Government securities Landings to financial institutions Loans and advances Other assets-net Increase/decrease in operating liabilities Deposits and other accounts Borrowings from financial institutions Bills payable Other liabilities-net

11,883,554 30,916,740

11,834,672 27,457,552

(24,986,471) (10,274,430) 5,859,907 (29,400,994)

840,914 (4,851,108) (1,951,264) (5,961,458)

(4,565,657) ( 81,087,692 (6,355,923) ( 92,009,272 6 5,792,418 ( 12,033,4440 (5,590,148) 5 ,657,085 53,825,911 (10,725,809) (11,600,790) ( 22,326,599)

Income tax paid-net Net cash flows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Net investments in securities, associated and joint venture companies Dividend income received Fixed capital expenditure Proceeds from sale of fixed assets Effect of translation ofventures subsidiaries and joint net investment in foreign branches Net cash flows from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Sub-ordinate Loans Dividend Paid Net cash flows from (used in )financing activities Increase in cash and cash equivalents during the year Cash and cash equivalents at beginning of the year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of the year

67,616,677 81,053,273 (10,691,316) 4,098,973 (266,454) 260,126 (1,350,947) 4,083,696 55,307,960 89,496,068 60,233,401 114,451,350 (10,137,565) (12,265,104) 50,095,836 102,186,246

(35,957,034) (78,588,907) 319,465 624,628 (948,433) (1,835,161) 51,667 104,288 308,619 1,689,707

37,444,490 2 37,291 ( 2,662,833 1 08,033 3 ,037,018 38,163,999

(36,225,716) (78,005,445)

(5,450,436) (5,450,436) 8,419,684 108,541,351 546,149 109,087,500 117,507,184

(4,173,059) (58,868) ( 2,730,251 (4,173,059) (2,789,119) 20,007,742 1 3,048,281 84,639,657 7 5,518,830 4,440,101 89,079,758 109,087,500 7,330,320 82,849,150 9 5,897,431

Liquidity Ratios
Current Ratio: Current ratio = current asset/current liabilities 2010 Rs. In 000 843738619/770745837 1.0947041 2009 Rs. In 000 772621047/737819892 1.0471675 2008 Rs. In 000 666335481/679543203 0.9805638

1.1 1.08 1.06 1.04 1.02 1 0.98 0.96 0.94 0.92

habib bank limited

2010

2009

2008

Acid test ratio

1 0.8 0.6 0.4 HABIB BANK LIMITED

0.2 0 2010 2009 2008

Acid test ratio = Asset inventories prepaid expenses/current liabilities.

Current

2010 Rs. In 000 843738619-434998560 /770745837 0.5303176

2009 Rs. In 000 772621047-432283588 /737819892 0.4612744

2008 Rs. In 000 666335481-45635507 /679543203 0.9134077

1 0.8 0.6 0.4 HABIB BANK LIMITED

0.2

0 2010 2009 2008

Working capital: Working capital = current asset/current liabilities 2010 Rs. In 000 843738619/770745837 1.0947041 2009 Rs. In 000 772621047/737819892 1.0471675 2008 Rs. In 000 666335481/679543203 0.9805638

1.1 1.08 1.06 1.04 1.02 1 0.98 0.96 0.94 0.92

HABIB BANK LIMITED

2010

2009

2008

Leverage Ratios: Times Interest Earned= Earnings before Interest and Taxes (EBIT)
Interest Expenses

2010 Rs. In 000 2 3,922,081/34090368 0.7017255

2009 Rs. In 000 22,507,572/33088536 0.6802227

2008 Rs. In 000 22,013,850/26525556 0.829911

0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0

HABIB BANK LIMITED

2010

2009

2008

Debt Ratio: Debt Ratio= Total liabilities/ total assets. 2010 Rs. In 000 797,527,672/887,052,411 2009 Rs. In 000 742,031,972/821,127,519 2008 Rs. In 000 683,498,128/749,806,715

0.8990762

0.9036745

0.9115658

0.915 0.91 0.905 0.9 HABIB BANK LIMITED

0.895 0.89 2010 2009 2008

Debt-Equity Ratio: Debt-equity ratio = total liabilities / total share holder equity. 2010 Rs. In 000 797,527,672/81811716 9.7483308 2009 Rs. In 000 742,031,972/71235347 10.416626 2008 Rs. In 000 683,498,128/63179222 10.818401

0.915 0.91 0.905 0.9 HABIB BANK LIMITED

0.895 0.89 2010 2009 2008

Debt to Tangible Net worth Ratio: Tangible Net worth Ratio: Tangible net worth ratio =total assets- intangible asset-total liabilities.

Debt to tangible net worth ratio= Total Debt / Tangible Net worth Ratio. 2010 Rs. In 000 9.7483308 /80689413 1.2081 2009 Rs. In 000 10.416626/70922957 1.4687 2008 Rs. In 000 10.818401 /51557334 2.0983

2.5 2 1.5 1 HABIB BANK LIMITED

0.5 0 2010 2009 2008

Total Capitalization Ratio: Debt to total capital ratio =long term debt/ (long term debt-shareholder equity). 2010 Rs. In 000 750322590/(750322590-8 1,811,716) 750322590/668510874 1.122379
1.2 1 0.8 0.6 0.4 0.2 0 2010 2009 2008 Habib bank limited

2009 Rs. In 000 683869120/(68386912071,235,347) 683869120/612633773 1.1162772

2008 Rs. In 000 856678881/(856678881-6 3,179,222) 856678881/793499659 1.079621

Profitability ratios:
Net Profit Margin: Net profit margin = (Net income/ Net sale) * 100 2010 Rs. In 000 2009 Rs. In 000 2008 Rs. In 000

(15,613,054/79,999,852)*100 19.52%

(12,298,643/74,751,375)*100 16.45 %

(10,864,112/63,376,047)*100 17.14%

20 19 18 17 HABIB BANK LIMITED

16 15 14 2010 2009 2008

Return on Assets: Return on Asset = Profit before Tax / Total Assets *100 2010 2009 Rs. In 000 (23,922,081/887,052,411)*100 2.69681 Rs. In 000

2008 Rs. In 000

(22,507,572/821,127,519)*100 (22,013,850/749,806,715)*100 2.74106 2.93594

2.95 2.9 2.85 2.8 2.75 2.7 2.65 2.6 2.55

2010

2009

2008

DuPont Return on Assets: DuPont return on assets = (Net income/sale)*(sale/total asset) *100 2010 Rs. In 000 2009 Rs. In 000 2008 Rs. In 000

(15,613,054/79,999,852)*( (12,298,643/74,751,375)* (10,864,112/63,376,047)* 79,999,852/887,052,411)*100 (74,751,375/821,127,519)*100 (63,376,047/749,806,715)*100 1.7604 1.4975 1.4487

1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0

HABIB BANK LIMITED

2010

2009

2008

Operating Income Margin: Operating income margin = (EBIT/ Net sale) *100

1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0

HABIB BANK LIMITED

2010

2009

2008

Return on Operating Assets: Return on operating assets = (EBIT/operating asset)*100 2010 Rs. In 000 ( 2 3,922,081 /887,052,411)*100 2.69681 2009 Rs. In 000 2008 Rs. In 000

(22,507,572/821,127,519)*100 (22,013,850/749,806,715)*100 2.74106 2.93594

2.95 2.9 2.85 2.8 2.75 2.7 2.65 2.6 2.55 HABIB BANK LIMITED

2010

2009

2008

Return on Total Equity: Return on total equity = (Net income/ total equity)*100 2010 Rs. In 000 2009 Rs. In 000 2008 Rs. In 000 (10,864,112/63,179,222)*100 17.19%

(15,613,054/81,811,716)*100 (12,298,643/71,235,347)*100 19.08% 17.26%

19.5 19 18.5 18 17.5 17 16.5 16 2010 2009 2008 LIMITED

Gross Profit Margin: Gross profit margin = (Gross Profit/ Net sales)*100

2010 Rs. In 000

2009 Rs. In 000

2008 Rs. In 000

(45,909,484/79,999,852)*100 (41,662,839/74,751,375)*100 (36,850,491/63,376,047)*10 57.39% 55.73% 58.14%

58.5 58 57.5 57 56.5 56 55.5 55 54.5 HABIB BANK LIMITED

2010

2009

2008

Activity Ratios
Total Assets Turnover Total assets turnover = Net sales/ total asset 2010 Rs. In 000 7 9,999,852 /887,052,411 0.0902 2009 Rs. In 000 74,751,375/821,127,519 0.0910 2008 Rs. In 000 63,376,047/749,806,715 0.0845

58.5 58 57.5 57 56.5 56 55.5 55 54.5 HABIB BANK LIMITED

2010

2009

2008

Fixed Assets Turnover: Fixed assets2t010ver = Net s ales/ fixed asse009 uro 2t Rs. In 000 7 9,999,852 /739,205,903 0.1082 Rs. In 000 74,751,375/706,687,146 0.1057 2008 Rs. In 000 63,376,047/647,715,497 0.0978

0.11 0.108 0.106 0.104 0.102 0.1 0.098 0.096 0.094 0.092

2010

2009

2008

Project on HBL

Submittedto:

Mr. Mubashir Ali

Submitted by:

Shahid Ashraf , Fahad Akram Hassan Bilal, M. Nabeel

Course:

Credit Management

Quaid I azam school of management sciences Quaid I azam university islamabad