1

CHAPTER NO. 1

EXECUTIVE SUMMAY

Every student of master has to practically work for six to eight weeks for more learning of
theoretical concept which he/she read during the session. It is very helpful during practical life
and awareness about the economy of the country. This purpose is to explain the student with
practical work that how to apply what they have learnt in practical work. It is nice opportunity
for the student to have shut relationship in theoretical concept and practical work.
I got the chance to get my internship from one of the renowned bank of Pakistan The Habib
Metro Bank Limited, Pakistan, it was a nice opportunity for me to apply my theoretical work
and learn from seniors having years of experience. All the efforts on the way are summarized in
shape of this Internship Report. Internship Report contains the Short History of Banking,
Banking in Pakistan, Introduction of Habib Metropolitan Bank Limited, Organization
Breakdown structure, Organization Hierarchy Chart, Introduction of different department,
product and services offered by the organization. Most importantly ratio, vertical and horizontal
analysis of financial statements of bank shows that bank is performing really well and is
constantly improving his profits. Resources are being utilized in best manner which gives high
yield. Various ratio analysis is been done in this report, these ratios are enough to describe the
performance of bank.
During the course of internship I learned about different functions performed by Remittances,
advances and Customer Service Office department and bank as a whole. I also learned banks
correspondence with their customers and within branches. I learned about documentation
requirements and record keeping for different activities and processes, especially the
documentation requirement for different kinds of financing facilities





2

1.1 Objectives of studying HABIBMETRO Bank:
In order to understand the correct position of the bank financial analysis is also my
objective. Financial analysis can be done by using various tools like Ratio analysis,
Horizontal and vertical analysis of the financial statements.
There is importance of Finance Management in the banking sector because bank is a
financial Institution how to manage the finance to know is my objective.
What kinds of software are being used in the bank for accounting and operational
activities? Being a student of banking & Finance (MBA) need to know how a bank
works and how theoretical knowledge relates the practical in the banking sector. As
theoretical knowledge is not enough to run a bank or business therefore practical has its
important not for only experience it also disclose the answers of the questions remain in
the theoretical study.
Understanding of Financial Operation is another objective to study the organization.
How working take place in the bank to handle financial matters. Without understanding
the real picture of financial matter could not find the solution of the problems related to
finance.

To understand the organizational structure in term of reporting line: who is report to
whom and know how develop what are responsibilities & authorities of different
designations.
To identify how banks working divide in to various departments to monitor all
activities in the bank.
What are products lines of the bank offers to the customers








3

1.2 THE PAKISTAN BANKING SECTOR OVERVIEW

The financial structure in Pakistan can broadly be categorized into Scheduled Banks and Non
Banking Financial Institution (NBFIs). At present, there are 14 private commercial banks, 2
privatized commercial banks, 4 nationalized commercial banks, and l9 foreign banks (State Bank
of Pakistan Annual Report 2000-2001). The NBFIs are composed of investment banks, leasing
companies, mutual funds, Modarabas. Development Financial Institutions (DFIs) and housing
finance companies. The State Bank of Pakistan regulates the banking sector consisting of the
commercial banks, along with all NBFIs, except for Modarabas and leasing companies.

The banking sector has endured many ups and downs. In late 1996, the banking system was on
the verge of a crisis. Non-performing loans had reached alarming proportions. Liquidity
problems surfaced as dis-intermediation spread and banking losses accumulated. Majority of
loan defaults remained caught in an ineffective court system. These were caused by deep-rooted
problems, embedded in failure of governance and lack of financial discipline. The NBFIs and
DFIs experienced continuous political interference, resulting in bad loans, which accounted for
90 percent of the non-performing loans in the entire system. Such a situation was not sustainable.

In the face of a difficult external situation, and recognizing the institutional and governance
problems being faced, the authorities, in particular, the State Bank of Pakistan and the Ministry
of Finance in early 1997 embarked on a home-grown" banking reform program.

In the same year, the World Bank financed a loan of $250 million (co-financed with another
$250 million by Japan) under the Banking Sector Adjustment Loan, which supported the initial
stages of Pakistans national banking reform program. By 1999, the reform program had
advanced significantly. Around one third of the value of defaulted loans had been recovered.
Nationalized commercial banks, which still account for the majority of loans in the country, had
stemmed operating losses. A new banking court system had processed nearly half of pending
loan default cases at an unprecedented rate. Higher quality new loans combined with improved
loan recovery and resolution of problem loans had helped the banking system achieve

4

improvements in capital adequacy, asset quality, efficiency and profitability. Disclosure
standards, fundamental to the reform program, had become much more stringent.

Subsequently, the crisis eased and financial institutions began to heal, the reform process
substantially slowed down and in several respects, stalled. In mid - 1999, interference in the
banking system through new centrally mandated credit programs increased. Loan recovery
slowed down, except for the dramatic gains as a result of the accountability campaign that was
started in October 1999 by the military government. Loan collateral foreclosure and bankruptcy
procedures were not further strengthened as planned. Market reforms to reduce segmentation
were not pursued completely. Most importantly, bank privatization did not materialize as
planned, due on the one hand; the country's deteriorating foreign investment climate and lack of
sustained weak market conditions efforts, and on the other, the distressed conditions of the banks
with high cost structures and depleted balance sheets.

To assist and ensure the sustainability of the banking sector reform process, the World Bank
approved the Banking Sector Restructuring and Privatization Project Loan for $300 million in
2001. The project's objective is to assist Pakistan in the implementation of its banking reform
program started in 1997. The Project focuses on further restructuring of the NBFIs to improve
their prospects for sale to qualified strategic investors, and completing the privatization of the
partially privatized banks. The project also includes liberalizing bank branching and at the same
time reducing the loss making institutions by alma gating the largest DFI with one of the NBFIs.
The project is also deepening the banking market by reducing the taxation on financial
intermediation and the cost of loan recovery by facilitating foreclosure on loan collaterals.

1.3 BANKING INDUSTRY OF PAKISTAN
Governor state bank of Pakistan Syed Salim Raza has said that Pakistans banking industry had
tremendous potential for further investment in the financial sector of country. Pakistan has a well
developed banking system, which consist of wide verity of institutions ranging from central bank
to commercial banks and to specialized agencies to cater for specific requirements of special
sectors. Major sector like global financial disorder, economic slowdown and strict monetary
policy were on the top but Pakistani bank cater all these problems.

5

CHAPTER NO.2

2.1 INTRODUCTION OF HMB BANK LIMILED
Over the years HMB has developed strong relationships with its customers by understanding
their needs and treating them with respect, dignity and importance. The driving force behind its
commitment and services is its focus on customers, ensuring that its not only meets, but also
exceeds their expectations.
They strive to achieve excellence by ensuring that every moment of their time is spent in adding
value, making sure that they do things right, first time every time. With the quest of quality HMB
always taken initiatives bringing banking into a new arena; from cash to the convenience of
plastic ;from branch banking to internet banking and from face to face customers interaction to
online accessibility.
It encourages diversity and treats each of its employees with fairness .it gives constructive
feedback for their continuous development and seeks suggestions from all employees for further
improvement. It ensures that quality performance is acknowledged and rewarded and exercise
utmost responsibility in decision making with regards to its employees. Integrity of its employees
is the strength of its performance.
HMB believe in achieving their mission and vision by working together as a combine group. Its
treats its colleague as its internal customers and ensures that the requirement of internal
customers focus are always met. Equipped with in-depth product knowledge and recognizing the
strength in each individual, it strive for optimum results from its co-workers and bringing out
peak performance by working towards common goals and objectives in to day demonic banking
environment.










6

2.2 HISTORY OF HABIBMETRO BANK
Habib Metropolitan Bank was incorporated in Pakistan as a Public Listed Company in 1992
under the name, Metropolitan Bank Limited. The Bank commenced, duly licensed, full
scheduled commercial-banking operations in October 1992.
Metropolitan Bank, from October 1992 to September 2006, remained a highly rated bank and,
vide its nationwide 51-branch on-line network, established as a distinguished provider of trade
finance services.
On October 26, 2006 Habib Bank A G Zurich`s Pakistan Operations merged into Metropolitan
Bank Limited and the merged entity was named Habib Metropolitan Bank Limited.
Demonstrating a strong commitment to Pakistan economy, HBZ is the principal shareholder of
HABIBMETRO.
HABIBMETRO operates in all major cities of the country. The Bank ranks within Top 10 in
Pakistan with a strong vision to be the most respected Financial Institution. HABIBMETRO has
its primary focus on retail banking and trade finance and also offers highly innovative E-Banking
solutions and Consumer Banking to its customers. The Banks Islamic Banking Division is fully
capable of catering to customers seeking Shariah compliant products.
The HBZ Group is heir to a rich tradition of banking and commerce dating back to more than
160 years. The groups flagship and HABIBMETROs principal, HBZ (incorporated 1967)
enjoys International ranking of 687 in terms of capital. With Headquarters in Switzerland, the
HBZ Group also operates in Hong Kong, Singapore, United Arab Emirates, Kenya, South
Africa, United Kingdom and North America.
The Pakistan Credit Rating Agency (PACRA) has allotted both long-term and short-term ratings
of Habib Metropolitan Bank Limited at AA+ (Double A plus) and A1+ (A one plus),
respectively. These ratings, being the highest amongst the local sector Private Banks, denote a
very low expectation of credit risk emanating from a very strong capacity for timely payment of
financial commitments.


7

2.3 VISION STATEMENT
Our vision based on a foundation of trust, to be the most respected financial institution,
delighting customers with excellence ,enjoying the loyalty of a dedicated team, meeting the
expectations of regulators and participating in social causes while providing superior returns to
shareholders.


2.4 MISSION STATEMENT
The Mission of the Habib metropolitan Bank is to foster a sound economic and financial
environment which promotes the development of its stakeholders and encourages a culture of
excellence and leadership.

Spaces of paragraph should be same





2.5 PACRA MAINTAIN RATING OF HABIB METROPOLITIAN BANK LTD

The Pakistan Credit Rating Agency (PACRA) has maintained the long-term and short term
entity ratings of HabibMetropolitian Bank Ltd at AA+(Double A plus) and A1+ (A one
plus) respectively.these ratings donate a very low expactions of credit risk emanating from a very
strong capacity for timely payments of financial commitments. The ratings reflect the strong
position of bankin its respective niche- self-liquidating trade finance to corpprate and
SMEs.while consolidating its strength, the management continues to focus on product
innovation, enhanced reach through network expansion, and technology up gradation for
ensuring quality services to its customer thereby retaining its relative positioning in the face of
intensifying competition within the sector.The bank continues to maintain outstanding asset

8

quality- an outcome of conservative risk appetite as eell as effective risk management.The also
take into account the banks association with ageographically diversified international
sponsoring group- Habib Bank AG Zurich (HBZ)
About the bank:HMB,commencing operations in 1992,is listed on all bourses of
Pakistan.susequent to the recent merger,the bank is a 51% owned subsidiary of HBZ,
incorporated in Switzerland .HBZ ,with consolidated assets of above US$6 bln,has operations in
eight countries directly and through subsidiaries.This provides inherent strength to bank given
high credibility and standing of HBZ.The Chief Excetive of the bank is a former Governor of
the State Bank and also a former president of Habib Bank Limited ,one of the largest banks in
the country .A highly professional team of senior executives including the executive director,
who has emerged as a key of professional in evolving banks strategy as well as its
implementation ,assists the chief executive.The primary function of PACRAis to evaluate the
capacity and willingness of the entity to honor its obligations.Our reflect the independent ,
professional and partial assessment of the risk associated with a particular instrument or an
entity.PACRAs comprehensive offerings include instrument and entity credit
ratings,insurerfinancial strength ratings ,fund ratings ,asset manager ratings and real estate
grading.PACRA;s opinion is not a recommendation to purchase ,sell or held a security , in as
much as it does not comment on the securitys market price or suitability for a particular
investor.

Check spelling and words spaces
2.6 ACHIEVEMENTS
These above credit ratings denote
HMB is one of the top ten banks in Pakistan
A very high credit quality
A very low expectation of credit risk
A very strong capacity for timely payment of financial commitments

2.7 OUR VALUES

9


a) INTEGRITY
We are the trustees of public funds and serve our community with integrity. We believe in being
the best at always doing the right thing. We deliver on our responsibilities and commitments to
our customers as well as our colleagues.
b) RESPECT
We respect our customers values, beliefs, culture and history. We value the equality of gender
and diversity of experience and education that our employees bring with them. We create an
environment where each individual is enabled to succeed.
c) EXCELLENCE
We take personal responsibility for our role as leaders in the pursuit of excellence. We are a
performance driven, result oriented organization where merit is the only criterion for reward.
d) CUSTOMER CENTRICITY
Our customers are at the heart of everything we do. We thrive on the challenge of understanding
their needs and aspirations, both realized and unrealized. We make every effort to exceed
customer expectations through superior services and solutions
e) INNOVATION
We encourage and reward people who challenge the status quo and think beyond the boundaries
of the conventional. Our teams work together for the smooth and efficient implementation of
ideas and initiatives.

Chapters should be started in new pages
CHAPTER NO.3


3.1 BOARD OF DIRECTORS

10






Mr. Kassim Parekh Chairman


Mr. Ali S. Habib Director

Mr. Bashir Ali Mohammad Director

Mr. Mohamedali R. Habib Executive Director

Mr. Muhammad HyderHabib Director

Mr. Tariq Ikram Director

Mr. SohailHasan Director

Mr. Syed Zubair Ahmad Shah Director

Mr. Sirajuddin Aziz President & CEO



3.2 AUDIT COMMITTEE
Ali S.Habib
Kassim Parekh
Tariq Ikram

3.3 CREDIT COMMITTEE
Kassim Parekh
Mohamedali R .Habib
Muhammad H .Habib


11







Division Heads Head Office
Regional Head. Regional Office
Zonal Head. Zonal Office
Branch Manager.. Branch (VP, AVP, GRADE 1, 2, 3)


12

CHAPTER NO.4
4.1 INTRODUCTION OF PRODUCTS
4.1.1 1HABIBMETRO Privilege 55+ Savings Deposit

Considering the Need of HABIBMETROs privilege Customer HABIBMETROs Now Offer
Privilege 55+, a saving account with unique features. As HABIBMETROs Privilege
customers you now enjoy,
Best rates
Extended Life Insurance
Bonus Profit.
How it works

A savings account for 55 year old & above.
Initial Investment Requirement-Rs.25,000/-
Profit will be calculated on average balance maintained in the account during the month.
Unique Bonus Profit Feature on maintaining certain minimum Balance*
Free Life Insurance up to 65 years, a unique feature available only to HABIBMETRO
privilege 55+ customers.

Free Features

Online funds transfer within HABIBMETRO ( same / intercity)
Personalized Cheques Book(s)
Statement of Account Half yearly
HABIBMETRO ATM / Debit Card (first card only)
Web info & Tele info services
Utility Bills payment via call center
Mobile top ups via call center


13


4.1.2 HABIBMETRO Premium Deposit Scheme

HABIBMETRO now offers yet another highly attractive investment opportunity for our
Valued account holders. HABIBMETRO Premium Deposit Scheme offers profit rates upto
10.00% per annum. You may deposit your funds for 1, 3 & 5 years, with quarterly and half
yearly profit payment options to suit your need.
Who can avail this Opportunity
There are no restrictions as to the eligibility of depositors and the scheme is open for any
investors / account holder.
Indicative Profit Rates
On a deposit of
Rs. 100,000/- the profit will be paid as under.

Tenor Quarterly Profit Half Yearly profit

Rate p.a

Rate p.a

1 Year 8.30%

8.40%

3 Year 8.60%

8.70%

5 Year 8.90%

9.00%


Amount of Deposit
Minimum investment amount is Rs. 25,000/- (Rupees Twenty Five Thousand Only). The funds
can be placed in multiples of Rs. 5,000/- as per customers needs.
Profit Payment
Profit will be paid on Quarterly or Half yearly basis as per customer decision at the time of
booking the deposit. Profit will be credited directly to your PLS Savings / Current account and
can be withdrawn by HABIBMETRO Access ATM/Debit Card or Cheque book.


14

Maturity
Upon maturity, principal plus profit payable will be credited to your link account unless
rollover instructions are given at least 3 (Three) working days before maturity.
Zakat, Withholding Tax & Other Levies
All payments will be subject to Zakat (as per rules), withholding tax and other government
levies as applicable from time to time.
Easy Loan Facility
The loaning facility offered is essentially of temporary nature and the account holder(s) can
obtain the loan up to 80% of the amount placed in the scheme.

Premature Encashment
A premature encashment fee will be levied for premature withdrawal of funds from the
scheme. The rate of the fee will be 2% of the deposit amount or the amount of profit already
paid until the date of premature withdrawal, whichever is lower. The net amount after
deduction will be credited in the customers account.

4.1.3 BASIC BANKING ACCOUNT


Account Opening with Rs. 1,000/-


No minimum balance Required.

Non-remunerative account.


First cheque book of 25 leaves issued free of
charge. Additional cheque book(s) at Rs. 100/- per
book.


No limit on number of ATM / Deposit transactions.


Two cheque transactions will be allowed free per
calendar month. Charge ofRs. 25/- per cheque will
be applied from the third cheque onwards.


15



Free Services


ATM / Debit Card


Web Info &Teleinfo


Yearly statement of account


Online Funds Transfer.




4.1.4 HABIBMETRO Access ( ATM / Debit Card )




SHABIBMETRO Debit Cards are FREE, and available to our valued clients at all
HABIBMETRO branches.


Make transactions up to the credit balance available in your account


Withdraw cash through convenient POS terminals at all HABIBMETRO branches


Daily ATM Withdrawl Limit Rs 30,000/-


4.1.5 HABIBMETRO Auto Finance



HABIBMETRO Auto Finance is available up to Rs. 3 Million


Minimum Down Payment is 15% of the total amount.


Processing Fee is Rs. 4,000/-.

Vehicle to be registered in the name of customer and marked HPA with the Bank.

16

4.1.6 HABIBMETRO Auto Leasing


HABIBMETRO Auto Leasing is offered to all our Commercial & Corporate Clients.


Minimum down Payment is as low as 10% of the total amount.


Auto lease limit depends on the strength of the Companys financials and credit checks.


A Processing fee is charged at 0.5% of the Lease amount.


The Vehicle is to be registered in the name of the Bank


The Insurance cost to be borne by the customer.


4.1.7 HMB Current Account


The minimum amount required to open the account is Rs 5,000/-


Minimum balance to maintain in the account is Rs 1,000/-


This is a checking account with no limit on the number of transacitons


No profit is paid in this account


There are no deduction of Zakat or any levies on this account


Free Services

Cheque Book(s)

Statement of Account

HMB ATM / Debit Card

Webinfo&Teleinfo Services

Pay Order





4.1.8 HMB Education Loans


Financing for Education Loans are available for


Graduation


Post Graduation

17



PHD


Diploma courses


Financing for Tuition fee, Books and materials.


A Markup is charged at concessional rate.


There is No processing fee.


Convenient repayment options are offered.


The Tenor is from 6 to 60 months .


4.1.9 HABIBMETRO Izafa Certificates



Izafa Certificates are issued in multiple(s) of Rs. 10,000/-, 25,000/-,
250,000/- and 2,500,000/-.


HABIBMETRO Izafa certificates are offered as 7 years Deposits
Certificate.


Offering attractive Profit rates upto 14.29 % p.a


Investment doubles in Seven years.


Easy Loan Facility.


Encashable any time.


No Penalties.


Your profits grows daily.


Can be linked to any of the regular accounts.



4.1.10. HABIBMETRO Multiplier Account


18



The minimum amount required to open and maintain the account is Rs. 1 Million.


Profit is accrued on a DAILY product basis and credited to your account monthly.


Accrual of Profit is is on balance of Rs. 1 Million and above.


Profit Rates


In case balance of Rs. 1 Million not maintained for any day profit will be paid @ 6.00%
p.a. for the month.



Free Services:

Cheque Book(s)

Statement of Account

HABIBMETRO ATM / Debit
Card

Stop payment of Cheques

Pay Order

Webinfo&Teleinfo Services

.

4.1.11. HABIBMETRO Mahana Scheme

HABIBMETRO offers highly attractive investment opportunity for our Valued account holders.
HABIBMETRO Mahana Scheme offers profit rates upto 9.30% per annum. You may deposit
your funds for 1, 3 & 5 years, with monthly profit payment to suit your need.
Who can avail this Opportunity
There are no restrictions as to the eligibility of depositors and the scheme is open for any
investors / account holder.
Indicative Profit Rates
Period Indicative Profit rates Investments in multiples of
1 Year
8.10 % p.a.
(Rs. 168.75/- p.m. on Rs.
Rs 25,000/- or Rs. 250,000/-

19

25,000/-)
3 Year
8.40 % p.a.
(Rs. 350/- p.m. on Rs.
50,000/-)
Rs 50,000/- or Rs. 500,000/-
5 Year
8.70 % p.a.
(Rs. 725/- p.m. on Rs.
100,000/-)
Rs 100,000/- or Rs.
1,000,000/-

Amount of Deposit
Minimum investment amount is Rs. 25,000/- (Rupees Twenty Five Thousand Only).
Profit Payment
Profit will be paid on monthly basis and will be credited directly to your PLS Savings / Current
account. Profit can be withdrawn by HABIBMETRO Access ATM/Debit Card or Cheque
book.
Maturity
Upon maturity, principal plus profit payable will be credited to your link account unless
rollover instructions are given at least 3 (Three) working days before maturity.
Zakat, Withholding Tax & Other Levies
All payments will be subject to Zakat (as per rules), withholding tax and other government
levies as applicable from time to time.
Easy Loan Facility
The account holder(s) can avail the loan up to 80% of the amount placed in the scheme.
Premature Encashment
A premature encashment fee will be levied for premature withdrawal of funds from the scheme.
The rate of the fee will be 2% of the deposit amount or the amount of profit already paid until
the date of premature withdrawal, whichever is lower. The net amount after deduction will be
credited in the customers account.

4.1.12. HMB Personal Loans

20



Clean loans are offered up to Rs. 500,000/- .


A Processing Fee of 1% of the loan amount or Rs. 2,000/- is
charged, which ever is higher.


4.1.13. HABIBMETRO Saving Plus Account


Eligibility : Individuals Only


Initial Deposit : Rs. 25,000/-

Indicative profit rates


Profit payment basis : Average balance maintained
during the month


Profit payment frequency : Quarterly Basis


+ Free


Cheque Book


Payment Orders


Statments of Account


ATM / Debit Card


Web Info &Teleinfo


Online Funds Transfer


SMS Alert: Balance & Account Debit


Electronic Funds Transfer within HABIBMETRO


Rent Free Lockers





4.1.14. PLS Saving Account (Free Life Insurance)


The minimum amount to open and maintain this account is Rs. 1,000/-.


Profit will be calculated on average balance maintained in the account during the month.

21



Free life Insurance cover.



Free insurance is equal to the average six monthly balance in case of death.


The minimum qualifying average balance for Life Insurance is Rs. 15,000/-.


The maximum sum assured is Rs. 1,000,000/- .


Free Services


Cheque Book(s)

Statement of Account

HABIBMETRO ATM / Debit
Card

Webinfo&Teleinfo Services

Pay Order



4.1.15. HABIBMETRO Super Current Account


The minimum amount required for opening and
maintaining this account is Rs. 100,000/-


This is a current account, which can be operated from any
HABIBMETRO branch nationwide.


Cheques are acceptable at all HABIBMETRO branches
across Pakistan.


A non remunerative account.


No deduction of Zakat or any levies on this account.


+ Free


Cheque Book


Payment Orders


Statments of Account


ATM / Debit Card


Web Info &Teleinfo


22




Online Funds Transfer

Rent Free Locker





CHAPTER NO.5
5. INTRODUCTION OF SERVICES

5.1.BRANCH BANKING
5.1.1 HABIBMETRO Home Remittance
HABIBMETRO Home Remittance Division is facilitating overseas Pakistanis under the
guidance and patronage of Pakistan Remittance Initiative (PRI), a joint initiative of State Bank of
Pakistan, Ministry of Overseas Pakistanis and Ministry of Finance. Through this service loved
ones, families, friends & remitters can send money back to Pakistan.
Our Services
What Home Remittance Division at HABIBMETRO can do for you?
Home Remittance Division facilitates instant transfer of money sent by overseas Pakistanis
through our dedicated agents in various parts of the world.
HABIBMETRO also facilitates MoneyGram International who is one of the leading money
transfer companies in the world whereby beneficiaries can receive cash at our bank counters.
HABIBMETRO account holders will have their remittance directly transferred to their accounts
while non-customers can obtain cash instantly from all of our branches or through our
correspondent arrangement with Allied Bank of Pakistan.

Our Home Remittance Partners (Tie-Ups)
HABIBMETRO Bank has partnered with the best known exchange companies and banks in the
following countries:
Canada
Hong Kong
Isle of Man

23

Kenya
Qatar
Singapore
South Africa
Spain
Switzerland
United Arab Emirates
United Kingdom
United States of America


24


5.1.2 HMB Rent Free Lockers


Secure



Rent Free Lockers


Refundable security deposit


Available in,


SIZE Security Deposits

SMALL Rs. 20,000

MEDIUM Rs. 35,000

LARGE Rs. 60,000


EXTRA
LARGE
Rs. 100,000

5.2 CONSUMER BANKING

5.2.1 HABIBMETRO Auto Finance



HABIBMETRO Auto Finance is available up to Rs. 3
Million


Minimum Down Payment is 15% of the total amount.


Processing Fee is Rs. 4,000/-.


Vehicle to be registered in the name of customer and
marked HPA with the Bank.



5.2.2 HABIBMETRO Auto Leasing


HABIBMETRO Auto Leasing is offered to all our Commercial & Corporate Clients.


Minimum down Payment is as low as 10% of the total amount.


Auto lease limit depends on the strength of the Companys financials and credit checks.


A Processing fee is charged at 0.5% of the Lease amount.


The Vehicle is to be registered in the name of the Bank

25



The Insurance cost to be borne by the customer.


5.2.3 HMB Personal Loans


Clean loans are offered up to Rs. 500,000/- .


A Processing Fee of 1% of the loan amount or Rs. 2,000/- is
charged, which ever is higher.




5.2.4 HMB Education Loans


Financing for Education Loans are available for


Graduation


Post Graduation


PHD


Diploma courses


Financing for Tuition fee, Books and materials.


A Markup is charged at concessional rate.


There is No processing fee.

Convenient repayment options are offered.


The Tenor is from 6 to 60 months .



5.2.5 POS (Point of Sale) Machine



Now you can withdraw cash from all HMB branches cash counters easily and without any
delay.


Each HMB branch is now equipped with a POS machine available on their Cash Counters.


No need to issue cash cheques and no need to wait .


Cash can be withdrawn up to Rs. 250,000/- via HMB ACCESS (ATM / Debit card).




26

5.3 ELECTRONIC BANKING
5.3.1 HMB Tele Info Service


Dial 0800 HABIB / 0800 42242


Instant access to the information you need at any time, from anywhere.


Teleinfo is a 24 hour telephone banking service to give you information you need easily,
instantly.


Following services can be accessed 24/7


Account Balance.


Cheques in Clearing.


Indicative Foreign Exchange Rates.


Faxed back account statements.



5.3.2 HABIBMETRO GSM Mobile Banking
We are pleased to introduce HABIBMETRO mobile banking facility, which would be available
on request to all our existing and new account holders.
Account holders who subscribe to this facility would receive SMS messages on their designated
mobile phones for all types of transactions that they had requested.


5.3.3 HABIBMETRO Access ( ATM / Debit Card )



HABIBMETRO Debit Cards are FREE, and available to our valued clients at all
HABIBMETRO branches.


Make transactions up to the credit balance available in your account


Withdraw cash through convenient POS terminals at all HABIBMETRO branches


Daily ATM withdrawal Limit Rs 30,000/-




27

5.4. CORPORATE BANKING


5.4.1.CASH MANAGEMENT SERVICES



This Service is best suited for Corporate clients with Rs.500 Million and above in local
Sales and collections.


Service involves Bulk collection of cash and cheques from all over Pakistan where
HABIBMETRO branches are available.


Funds are collected and credited to customers accounts (cash/transfer) the same day
through
Online Banking supported by the state of the art hPLUS technology.


Customers benefit with outright savings of time & money.


Product is very competitively priced.


Up to date tracking of funds with online reports available through web info and teleinfo
services.





5.4.2.SHORT TERM AND LONG TERM FINANCE

The bank also offers short term working capital financing including under sharia compliant
modes, exports/import financing and long-term finances to Corporate/Commercial customers
as well as SMEs trade & industry. It also extends Agricultural credit, specialized financing
tailored to customers needs and is also a regular member of Syndicated financing club.




5.4.3.INTERNATIONAL TRADE

Habib Metropolitan Bank offers full range of Trade Finance products and services to its

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customers. Due to its wide network of correspondent banking arrangements with most reputed
international banks, it offers seamless trade services to importers and exporters. Refinance and
other trade related products are also made available to eligible customers

5.4.4.E SALARY

Through this service Salary disbursement to the employees of our valued corporate
customers is done electronically.


The Opening and maintenance of all salary accounts are managed form a central location.


There are no charges on minimum balance in salary accounts.


The individual Salary accounts are also eligibile to apply for HMB Personal & Auto Loans.


All banking services that include Electronic fund transfer (EFT) , Demand Draft (DD) ,
Telegrapic Transfer (TT) are available to e-Salary account holders.


The Minimum monthly salary disbursement per corporate customer is Rs. 1 Million.

Charges per salary Rs. 50/- or minimum of Rs. 5,000/-.


Free ATM / Debit Cards will be issued to all e-salary customers at the time of opening
accounts.
















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5.5.HABIB METROPOLITAN BANK -ISLAMIC BANKING DIVISION
MISSION
Our mission is to provide full range of Shariaah compliant products and services to our
customers with no compromise on Shariaah rulings
INTRODUCTION TO ISLAMIC BANKING DIVISION
Habib Metropolitan Bank has developed sufficient expertise, necessary infrastructure,
information technology, and manpower to run Islamic banking operation.
Banking customers who wish to avail Islamic banking products and services are welcome to
contact us to accomplish their banking requirements.
Our Islamic Banking Division is headed by an experienced banker who is responsible for the
over all operational activities of the Islamic Banking Division. The Division has the advisory
services of reputable Shariah advisors who also help in developing Islamic Banking Products.

5.5.1.ISLAMIC BANKING PRODUCTS
5.5.1.1.DEPOSITS PRODUCTS


Islamic Current Deposits Account


Islamic PLS Account


Islamic Investment Certificates


Historical Profit Rates
Local Currency
Foreign Currency


Current Weightages
Local Currency
Foreign Currency





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5.5.1.2.ISLAMIC FINANCING PRODUCTS
a) MUDARABA
Mudaraba is a partnership in profit whereby one party provides capital (rab al-maal) and the
other party provides labor (mudarib)
b) SHARIKA AL-AQD:
Sharika al-aqd (contractual partnership) means an agreement between two or more parties to
combine their assets, labor or liabilities for the purpose of making profits.
c) MURABAHA
Murabaha is selling a commodity as per the purchasing price with a defined and agreed profit
mark-up. This mark-up may be a percentage of the selling price or a lump sum. This transaction
may be concluded either without a prior promise to buy , in which case it is called an ordinary
Murabaha, or with a prior promise to buy submitted by a person interested in acquiring goods
through the institution, in which case it is called a Banking Murabaha i.e. Murabaha to
purchase ordered. This transaction is one of the trust based contracts that depends on
transparency as to the actual purchasing price or cost price in addition to the common expenses.
d) IJARAH
This terms ijarah as used in this standard means leasing of property pursuant to a contract under
which a specified permissible benefit in the form of a usufruct is obtained for a specified period
in return for a specified permissible consideration.

5.5.1.3.SHARIAH ADVISOR
Mufti Abdul Sattar Laghari holds a ShahadatulA'almiah (Dars e Nizami) and a Master scholar
from JamiaDarul-Uloom, Korangi, Karachi. He holds Specialization (Takhassus) in
Islamic Fiqh and Fatwa from Darul Iftawal IrshadNazimabad 4 Karachi with Master in
Islamic Studies from University of Karachi.
Mufti Laghari also holds a certificate of 1 year correspondence course in Islamic Law from
Shariah Academy International Islamic University Islamabad Pakistan along with certificates of

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various courses on Islamic Banking and Finance conducted by Prominent learning Centers in
Pakistan & Malaysia. He was a class topper in Islamic Banking Certificate Course # 20
conducted at NIBAF Karachi.
All paragraph should be justified
He has been providing Shariah Advisory services since 2005. He has previously worked as
Shariah Advisor of one of the largest Bank of Pakistan and is part of NBFI &Mudarabah
Association of Pakistan. Mufti Laghari has remained a member of sub committees for review of
some AAOIFI shariah standards at State Bank of Pakistan. He is a master trainer in Islamic
banking and Finance and has conducted extensive courses throughout Pakistan. During his
career he has also issued numerous fatawas on general as well as financial & Islamic Banking
issues.
He is also Imam &Khateeb in Jamiah Masjid Tauheed Karachi since 2002.


FIELD OF ACTIVITIES AT HMB
Commercial banks are the most effective mobilizer of saving and have been providing short term
requirements of working capital to trade, commerce and industry. The commercial banks are
authorized to engage in forms of business.+
The banks play a very important role in economy of a country .Businesses depend upon banks
for carrying out various activities relating to finances, obtaining agency services etc. Banks
provide facilities to individual too. The manifold services of the bank can be divided into a major
head.
They purpose of the banks is to provide some services to the general public .and for this purpose
different banks provide different services to the people in different forms .The HABIBMETRO
commercial is a commercial bank in modern time play a very important role and their functions

32

are manifold. The main functions and services which HMB provides to different people are as
follows:
e) Open different accounts for different people
f) Accepting various types of deposits
g) Granting loans and advances
h) Undertaking of agency services and also utility functions
i) Collecting cheques and bill of exchange for the customers.
j) Collecting interest due, dividend pensions and other sum due to customers
k) Transfer of money from place to place
l) Acting as a executor, trustee or attorney for the customers providing save custody and
facilities to keep jewelry, documents and securities.
INTRODUCTION OF ALL DEPARTMENTS
1) Reception
2) Account Opening Department
3) Finance Department
4) Clearing department
5) Remittance Department
6) Foreign Trade DepartmentS
7) Cash Department
8) Accounts department
9) Lockers department

These divisions can be explained as follows:
1) RECEPTION
In this department the CSO provides all the information to the customer which they want to get
from bank. That information may be related to the new account opening or any other financial
related problem or related to loan etc
2) ACCOUNT OPENING DEPARTMENT

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In this department all the new customer who want to open an account in the bank, their accounts
are opened. They filled the form and fill all the necessary requirement of the bank and then bank
after proper verification make entry in the account opening ledger and as well as in online
software called Symbol in the form of electronic form.
The Account types in this department are:
1) INDIVIDUAL ACCOUNT
SINGLE
JOINT
2) BUSINESS ACCOUNT
These accounts are opened for business and by businessman
There are many options under business account.
Sole proprietorship
Joint stock company (public/private)
Partnership (registered/unregistered)
Societies
Association/club etc
So, according to the requirement customer selects the type of account then select the nature e.g.
BBA plus saving, currency e.g. pkr , euro etc and initial deposit also. Then obtain the detailed
information of customer who is going to open account. Then comes the information related to
business account, ATM, next of kin etc Then comes the client profile in which there is detail of
customer regarding its type, education etc. and signature on account opening form as well as
signature specimen card.
DOCUMENTS REQUIRED FOR DIFFERENT ACCOUNTS
INDIVIDUALS
Attested photocopy of CNIC
Attested copy of service card in case of salaried person
Illiterate persons two latest photographs together with its thumb impression on signature
card
JOINT STOCK COMPANY
Resolution of board of directors
Memorandum Of Association

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Article of Association
Certificate of incorporation
Attested photocopies of CNIC of all directors
SOLE PROPRIETORSHIP
Application of opening account on the official letter
NTN or sales tax no
PARTNERSHIP
All partners attested photocopies of CNIC
Partnership deed attested photocopy etc

3) FINANCE DEPARTMENT
In finance system of the organization as we know that every schedule bank have to follow the
State Bank of Pakistans instructions. Such types of advances are tackled in HMB Bank Limited.
The bank take deposit form the customers and then issue loan to the desired customer who need
the finance on behalf of the securities that they pledge for getting loan.
As we know that every schedule bank has to follow State Bank of Pakistan Instructions. Such
types of advances are tackled in National Bank of Pakistan.
Advances categories are two types.
FUNDED FACILITIES
NON FUNDED FACILITIES
1. FUNDED FACILITIES
Funded facilities are those in which cash involved.

2. NON-FUNDED FACILITIES
Non- funded facilities are those in which cash is not involved.

TYPES OF FUNDED FACILITIES:
In funded facilities HMB offered three types of finance.

Running Finance
Cash Finance

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Demand Finance


1) RUNNING FINANCE

Running finance base on hypothecation, In this borrow is owner. In this type of finance the
borrower should adjust the finance provided by bank within stipulated expiry normally one year.
In case of Running Finance / Revolving Finance, it shall be ensured that at least 15% of the
maximum utilization of the loan during the year is cleaned up by the borrower for a minimum
period of one week. In case the cleaned up is not made by the borrower, the loan will be
appropriately classified.


2) CASH FINANCE

Cash finance is a facility in which amount is disbursed against the pledge of local goods and
merchandise. Delivery of pledge stock is allowed on payment.

3) DEMAND FINANCE

Demand finance is fixed finance and in which amount is disbursed against the mortgage of
property.

Advantages are given to the customers on the following basis:
Capacity and credit worthiness of the borrow
Financial condition of this business
Details about the customer dealing with other associated companies
Account turnover position

USE OF ELECTRONIC DATA IN DECISION MAKING

36

In HMB Bank Limited both the manual as well as electronic system called symbol are uses for
record keeping. At the time of decision making the Manager follow the both the records. First he
sees the electronic system because it is easy to use and help easily in decision making as
compare to the manual data.

SOURCE OF FUNDS
There are different types of sources of funds for the bank. Customer deposits are very important
source of fund for the bank. Sources of funds are SBP which provides cash for maintaining its
routine work. Bank also raises funds by issuing stock to the public.

ALLOCATION OF FUNDS

These funds are utilized to fulfill the routine customer withdrawal and also these funds are also
utilized on advancing loan to the desired people. Advances are the most important source of
earning for the banks. When a customer borrows a fixed amount from a bank , which is
repayable either in periodic installments or in lump sum at a fixed future times. Customer has to
pay mark-up on the entire amount.
HMB is also giving full attention towards this aspect and it is also obvious from the growing
portfolio of advances and from very low delinquency rate. The credit portfolio of this institution
is in a very much better shape than other financial institutions of Pakistan and the credit goes to
the management and the staff who are concerned about the quantity and quality as well.
Loans
Cash Credits
Overdraft

1) LOANS
Loans are monetary assistance by a financial institution to a business, individual etc. The loans
are granted by the bank in lump sum, so these types called fixed or demand loans. Interest is
charged on the whole amount of a fixed loan. The two types of loans which are provided to the
customers are a) Loan against Gold 2) Loan against pledge of stock.


37


2) CASH CREDIT
The cash credit is usually given against the securities of goods or merchandize as follows:
Advances AGAINST PLEDGE stock in trade or products:
Hypothecation of stock on Finished Products:
Mortgages of property

MODES OF CREDIT FACILITIES
There are two types of facilities
FUNDED FACILITY
Running finance
Cash finance
Demand finance
Payment against documents
Finance against imported merchandise
Finance against trust receipt
Export finance
Foreign bill purchased
Others
NON FUNDED FACILITY
Letter of credit
Letter of guarantees

4) CLEARING DEPARTMENT:
In Clearing departmentcheques received from other banks for collection and cheques drawn on
our bank are cleared through NIFT (National Institutional Facilitation Technology). For this
purpose, representative of the NIFT visits the bank twice in a day. In this process, there is no
involvement of cash. Only debit or credit is given.
Every banker acts both as a paying as well as a collecting banker, It is however an important
function of crossed cheques . A large part of this work is carried out through the
bankers clearing house.

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NIFT (National Institution of Financial Transaction
Now a day an institution named as NIFTis supervising the whole clearing function. It collects all
the cheques sent in clearing from the bank and collects it in their on clearing house. The next
morning the cheques are presented to the paying bank. The bank after verifying all manners debit
the account of the customer and prepares an advice which is sent to the NIFT. The same day the
amount is collected by the receiving bank.
A clearing house is a place where representative of all banks of the city get together and settle
the receipts and payment of cheques drawn on each other. As the collecting banker runs certain
risks in receipt of their ownership the law has provided certain protections to the banks.
The Negotiable Instrument Act, 1881, lays down hat drawer or holder of a cheque or draft may
cross the instrument generally or specially. It further lies down that a crossed.

FUNCTIONS OF CLEARING DEPARTMENT

The following are the main functions of clearing department.
1) To accept transfer, transfer deliveries and clearing cheques from the customer of the branch
and to arrange for their collection.
2) To collect amounts of cheques drawn on members, sub-members of the local clearing house,
sent for collection by HMB branches which are not represented the local clearing house.
3) To arrange the payment of cheque drawn on the branch and given for collection to any other
branch of HMB or any other members, or sub-members of the local clearing house.

1) REMITTANCE DEPARTMENT
It is a most important and interesting department. Transfer of money or equivalent to money
from one branch to another of the same bank is called remittance. Now it has become easier and
safer method for the client and banker to transfer their money from one branch to another within
the city and outside of the city.


HMB offers the following forms of remittances


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Demand Draft
Telegraphic Transfer
Pay Order
Mail Transfer

5) FOREIGN TRADE DEPARTMENT
This department deals with the foreign exchange transaction dealer of SBP can deal in foreign
exchange. HMB is also the authorized dealer and has a license of THE STATE BANK OF
PAKISTAN. This department is further divided into following main heads.
Foreign Currency Account
Foreign Remittance
Import
Export
1) FOREIGN CURRENCY ACCOUNTS
Authorized Dealers are permitted to open and maintain accounts in all fully convertible
currencies with their branches and correspondents abroad, subject to the condition that opening
of every new account should be reported to the Director, Exchange Policy Department by a letter
giving the name and address of the foreign branch or correspondent with whom the account has
been opened and the currency of the account.
2) REMITTANCES UNDER FOREIGN TRADE
There are two types of remittances called inward and outward remittances.
INWARD REMITTANCE
In this department a lot of amount comes from the foreign country. The amount, which comes
from, the foreign country called INWARD REMITTENCE.




OUTWARD REMITTANCE

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The foreign exchange department also provides the facility to customer to remit. These funds are
oversea education purpose, and for some business purpose.
Although, the State Bank of Pakistan fixes many kinds of restrictions to outward remittance, so it
is the duty of in charge of forex department to keep these remittances in order to compliance
with SBP regulations. Only foreign currency account holders are allowed to make outward
remittance freely without any hesitation.

6) CASH DEPARTMENT
In this department cash officer take deposit of all the customer who want to deposit their money
in the bank and also provide money who want to withdraw the amount form their accounts.
The following books are maintained in the Cash Department:
1. Receiving Cash Book
2. Paying Cash Book
3. Cash Balance Book

Cash Required In Emergency:
A certain amount of cash is kept in bank lockers for meeting daily requirement but if any further
cash is required in emergency due to some heavy payment, such cash is called from other
branches.

7) ACCOUNTS DEPARTMENT
Sorting of vouchers is a very tough job. All the accounts are a sequence and vouchers, which
come in to the accounts department, are at randomly. So we arrange the vouchers in a sequence
in accordance with accounts and this is called Sorting maintained in. Vouchers may comes
documents wise.

8) LOCKER DEPARTMENT
Another facility provided by HMB Bank Limited is that of Lockers. A customer needs to fill a
request form for availing this facility in the bank and then bank will be liable to serve the
customer.


41



At HMB Bank Limited, there are three types of lockers provided to the customers:
There are mainly three types of lockers:
1. Small lockers
2. Medium lockers
3. Large lockers




PLAN OF MY INTERNSHIP PROGRAM

a) A BRIEF INTRODUCTION OF THE BRANCH WHERE I DID MY INTERNSHIP
HMB BANK KOTWALI ROAD Branch located in main area of Faisalabad. Many good areas
and markets have surrounded the branch. Many people have accounts of surrounding area in
HMB peoples colony branch.
There are almost 10more banks at the same location. Competition is fierce and every bank is
trying to compete with best of its services, and HMB is doing full efforts to have an edge on
other banks to remain customer focused. For that purpose HMB Bank has developed a strong
chain of branches. This branch has a total of 23 employees from manager to the security guard.


I joined HMB Bank Limited (kotwali road main branch Faisalabad) as an internee on 02-01-
2014. I was welcomed by the Branch Manager MUSHARAF UD DIN .At my first day, he
described me about his branch rules, learning behavior of people and shared his life experiences.
I felt myself more comfortable by the supervision of that person. In end my internship on 02-03-
2014




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Branch structure




43















TRAINING PROGRAM

A. DETAILED DESCRIPTION OF THE OPERATIONS/ACTIVITIES
PERFORMED BY THE DEPARTMENTS I WORKED IN

1. CUSTOMER SERVICES
This department is primarily concerned with public dealing I worked in this department under
supervision of CSO (customer service officer).the customer are given information about different
accounts; their features profit calculation on different accounts etc.
By working in this department I learned: -
How to fill a deposit slip
How to fill a cheque
How to open a new account
FILLING A DEPOSIT SLIP
When a customer comes for depositing money in his account he is given a deposit slip for
current and saving accounts different color slips are used for depositing current account blue

44

colored slip is given to depositors and in case of saving account green color slip is used. Slip
contain following details;
Date of deposit
Amount to be deposited
Whether the amount is cash or check is given
Account number
Signature of depositors
Name of account holder
The slip along with cash or cheque is sent to cash counter for the purpose of depositing.

FILLING A CHEQUE
Filling of cheque is quite an easy method. The amount is written both in words and figures
signatures are verified by the passing officer. Two signatures of the person are taken on the back
of cheque.

2. ACCOUNT OPENING
Account opening is an agreement between customer and the bank in which customer offers his
funds and bank accepts these funds. Therefore the nature of relation between a banker and
customer is of a contractual nature. Procedure for opening of account is as follows:

STEP 1: FILL ACCOUNT OPENING FORM
A person who wants to open an account in HMB Bank Limited fill the account opening form and
there should be no cutting and overwriting. Account can be opened at the name of Customer or
Corporate name. It can be opened in any type of accounts like: Current, Saving, KBA, PLS etc.
When account opening form is filled then signatures/thumb impressions should be taken from
customers at minimum three places. Two signatures are done at the specimen signature card and
at least one is signed on the account opening form. A sample of Account Opening Form and
Specimen Signature Card is given on the next coming pages.

STEP 2: INTRODUCER

45

Person should also come with an introducer who is already the account holder of the bank. The
introducer verifies the integrity, reliability and honesty of customer. If the introducer does not
sign on form, customer will not be able to open his account in HMB.
STEP 3: ASSIGN ACCOUNT NUMBER
At this stage, account number is assigned to the customer. Firstly account number is recorded on
register then account is posted on computed.
STEP 4: ISSUANCE OF CHEQUE BOOK
While issuing cheque book to customer it is firstly recorded on Cheque Book Register.
STEP 5: ISSUANCE OF LETTER OF THANKS
This letter is sent for the purpose of sending thanks for opening of account to both persons
account opener and introducer.
APPLY FOR ATM CARD
If a customer wants to get an ATM Card, he/she should mention in Account Opening Form.
Under this form customer should select the type of ATM Card. On the next page ATM Card
Portion is given. Customer will fill this portion and then his/her ATM Card application is given
to the Head Office. After one week his/her ATM Card and Pin Card will be sent by the Head
Office.
FACILITY OF LOCKERS
Locker facility offered to account holders. The account holders may avail this facility with low
service charges. Three types of lockers are available in this branch.
Small locker
Medium locker
Large locker
The security for the above three lockers in same which is Rs. 1000/- rent for the three locker is
different
For small locker it is Rs. 1200/- per annum
For medium locker it is Rs. 1800/- per annum
For large locker it is Rs. 3000/- per annum
As per government rule, 10% FED is also applicable on the rent of these lockers.
CLOSING OF AN ACCOUNT

46

When an Account holder wants to close his account, then first of all he fills out the application
for closing of the account, which consists of the reason of closing of account.
LOST OF CHEQUE BOOK:
If cheque book is lost then a requisition slip is filled first. Signature of account holder is verified.
Lost cheque book is stopped. Rs 100 will be charged and a new cheque book will be issued.

There are number of reasons of closing an account some can be as follows.
At the desire of customer
In case of death of account holder
Bankruptcy of the account holder
If an account contain nil balance or not up to the requirement of rules.

3. CLEARING DEPARTMENT

In clearing every bank acts in two way i.e.
PAYING BANK
COLLECTION BANK

Representations of Cheques belong to one bank by other bank deposited with it by the clients (in
a clearing house) for clearance. There are two types of clearing called i) Inward Clearing ii)
Outward Clearing
INWARD CLEARING
The cheques are drawn on the particular bank branch & then clearing department debit those
amounts mentioning on the cheques from the account of account holder return. bonuscheques
with specific reasons & give the credit advice NIFT (National Institution of Financial
Transaction).

OUTWARD CLEARING
Outward clearing comes under clearing department; the clearing department collects the cheques
from the customer & places the required stamps on the cheques& makes the entries on the
register & sheet then finalize the sheet after balancing. In the last make bundle cover and

47

summary & place them in the bag, which should locked with the serial No and then gives this
bag to NIFT.

FUNCTIONS OF CLEARING DEPARTMENT
The following are the main functions of clearing department.
1) To accept transfer, transfer deliveries and clearing cheques from the customer of the branch
and to arrange for their collection.
2) To collect amounts of cheques drawn on members, sub-members of the local clearing house,
sent for collection by HMB branches which are not represented the local clearing house.
3) To arrange the payment of cheque drawn on the branch and given for collection to any other
branch of HMB or any other members, or sub-members of the local clearing house.

NIFT (NATIONAL INSTITUTION OF FINANCIAL TRANSACTION)

Now a day an institution named as NIFTis supervising the whole clearing function. It collects all
the cheques sent in clearing from the bank and collects it in their in clearing house. The next
morning the cheques are presented to the paying bank. The bank after verifying all manners debit
the account of the customer and prepares an advice which is sent to the NIFT. The same day the
amount is collected by the receiving bank.



CLEARING HOUSE

A Clearing house is a place where representative of all banks of the city get together and settle
the receipt and payments of cheques drawn on each other. As the collecting banker run certain
risks in respect of collection of cheques. Especially in respect of their ownership the law has
provided certain protection to the bank.

4) REMITTANCE DEPARTMENT

48

Remittance means a sum of money sent in payment for something. This department deals with
either the transfer of money from one bank to other bank or from one branch to another branch
for their customers. HMB offers the following forms of remittances.
Demand Draft
Telegraphic Transfer
Pay Order
Mail Transfer

5) FINANCE DEPARTMENT
In the finance department both the electronic as well as manual system are used. Symbol as
online software is used for all types of transaction whether cash or transfer. In it ledger head are
given specific code whenever they have to debit or credit a ledger they only instruct system by
code it becomes ready for transaction in such code. Where as the manual system is used for the
preparation of the record in the form of the hard copies.
In finance system of the organization as we know that every schedule bank have to follow the
State Bank of Pakistans instructions. Such types of advances are tackled in MCB Bank Limited.
The bank take deposit form the customers and then issue loan to the desired customer who need
the finance on behalf of the securities that they pledge for getting loan.
As we know that every schedule bank has to follow State Bank of Pakistan Instructions. Such
types of advances are tackled in National Bank of Pakistan. Advances are the most important
source of earning for the banks. MCB is also giving full attention towards this aspect. The credit
portfolio of this institution is in a very much better shape then other institution of Pakistan. The
credit goes to management and the staff of this department.



Advances categories are two types.

FUNDED FACILITIES
NONFUNDED FACILIYIES


49

6) CASH DEPARTMENT OPERATIONS/ACTIVITIES

Cash department performs the following functions:
RECEIPT
The money, which either comes or goes out from the bank, its record should be kept. Cash
department performs this function. The deposits of all customers of the bank are controlled by
means of ledger accounts. Every customer has its own ledger account and has separate ledger
cards.

PAYMENTS
It is a bankers primary contract to repay money received for this customers account usually by
honoring his cheques.
The following books are maintained in the Cash Department:
1. Receiving Cash Book
2. Paying Cash Book
3. Cash Balance Book

CASH RECEIVED REGISTER
In this book the cashier records all the amount of money which he receives from the customers
during the day. At the end of the day it must also be tallied by the computers received payment.
This sum is added in the opening balance of the cash and hence closing balance is calculated.
CASH PAID REGISTER
This is a book in which all the payments during the day are recorded. After receiving the cheques
from the customer the officer verifies the signature and posts it in the computer then the cashier
makes the payment and enters the amount in the register. At the end of the day the total payment
must be tallied with the computers amount.

WORK DONE BY ME
Attended phone calls

50

Scanning of signature specimen cards and its attachment
Handling of return cheques
Daily clearing
Update KYC
Filling of deposit slips
Attended customer inquiries
Received ATM forms
Issued ATM cards
Worked on the seat of ACCT opening/check collection/ Opened accounts
Issued check books
Received check book requisition

RESPOSIBILITIES OF CSO
To work for an organization to promote customer care
To work for an organization to help customers to resolve their queries
To develop rapport with the customer base, greet by name, have knowledge of account
ownership, be responsive and timely with correspondence and problem resolution, and
display a caring attitude.
Follow the Code of Business Conduct and Ethics and other related policies, maintaining
ethical behavior at all times.
To work for an organization to promote business.
To answer to the queries of the customers in an ethical and informative way.
To give appropriate and relevant information to the customers.
To maintain a position of trust and responsibility by keeping all customer business
confidential.
To update any requests made by the customers into the system to complete the task.
Self motivation to increase knowledge and skills by in-house trainings and seminars.

51

Have complete knowledge of services rendered, and complete line of products, taking
responsibility to stay update and ask for assistance to acquire latest developments.
Answer confidently or find appropriate solutions to customers' problems.
To initiate conversation to uncover customers' needs.
Identify customer needs and refer customers to appropriate banking services
accept money or cheques deposited by customers, verify records and receipts, and credit
customers' accounts
pay money to customers according to advice slips, cheques or negotiable documents, and
debit customers' accounts
assess the viability and credit risk of business and consumer loan proposals
conduct foreign currency transactions for overseas travelers
provide change and cash cheques
record transactions
balance cash and advise supervisors of cash position or discrepancies
answer customer inquiries
Open and close accounts for customer.













SWOT ANALYSIS

52


STRENGTH
Large capital base.
Rank in top 10 bank of Pakistan.
Continuous growth in ROE.
Credit rating in Long-term is AA+ and in short-term is A1+.
Effectively handled the current economic recession.
The banks management realizes the necessity of existence of effective
internal controls to ensure smooth operations in the current technical and
swift business environment.
Loyal management.
The bank has a efficient and experienced management making significant.
Asset utilization is very good.
Strong customer relationship
Loans are given only to known, reputable clients to avoid chances of
frauds. Very low non performing loans.

WEAKNESS
Only valued client is important
Bad portfolio diversification(54%in textile industry)
No advertisement on electronic media
Declining standard of banking after merger. Inter organizational
conflict after merger.
Old management .(no creativity)
Low consumer finance.
Majority of shares are owned by the one family



OPPORTUNITIES

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Opportunity in Islamic Banking
To go global fully
Low exposure to consumer banking providing opportunity to explore
the segment
Greater profitability can be achieved through strong internal control.
Emphasize much on e- banking. Profit margin will be increase
Attracts foreign investor
Opportunity to open branch in ruler to increase its branch network
and gain more profit.
THREATS
Adverse impact of Credit Crisis can badly effect on HMB
Inconsistency in Government policy
Strict policy of State Bank of Pakistan
Geopolitical condition of country
Global liquidity crisis has constrained banks to stop lending
Increasing competition in the banking sector. Entry of many
foreign banks














54



PEST ANALYSIS
POLITICAL:
Political instability can lead to changes in laws and policies which can be in favor or
against the banking sector

Monopolies Legislation
Taxation policy
Foreign Trade Regulation

ECONOMIC :
Economy of Pakistan is facing issues about

Unemployment
Inflation
Illiteracy
Corruption
Business Cycle
Interest Rates
All the above issues hinder business growth.







SOCIAL CULTURAL

55

Cultural issues can be there but still as there are a number of multiple companies there,
therefore, cultural issues are not prominent.
Population Demographics
Income Distribution
Social Mobility
Lifestyle Changes
Levels of Educations

TECHNOLOGICAL

Speed of technology transfer
New discoveries / development
Investment in research
Rate of obsolescence
























1. PROFITABILITY RATIO

56


a) SPREAD RATIO

Spread ratio = Net mark up/interest income *100

Mark up interest earned


Items 2010 2011 2012
Net mark up /interest
income


6946823 7699257 8306652
Mark up interest earned 23380314 27247789 27139449
Percentage 29.71% 28.25% 30.60%









ANALYSIS;
Spread is the gap between interest rate a bank charges on loans and rate pays on deposits. The
amount of total interest earned divided by the total interest paid to depositors as mentioned in the
income statement. This ratio is useful for Banks and DFIs.


b) RETURN ON EQUITY
27.00%
27.50%
28.00%
28.50%
29.00%
29.50%
30.00%
30.50%
31.00%
2010
2011
2012
2011 2012 2010
Spread ratio

57




ROE=
Profit and loss after tax
* 100
Total Equity




Items

2010 2011 2012
profit and loss after tax 2818038 3402793 3402793
Total equity 20954427 26066846 24235800
Percentage 13.44841355 13.05410329 14.04035765










ANALYSIS:
This ratio is more meaningful to the equity shareholders who are interested to know
profits earned by the company and those profits which can be made available to pay
dividends to them. Analysis of the ratio is similar to the interpretation of return on
shareholder's investments and higher the ratio better is.
Return on equity
12.40%
12.60%
12.80%
13.00%
13.20%
13.40%
13.60%
13.80%
14.00%
14.20%
2010
2011
2012

2010 2011 2012

58



c) RETURN ON ASSETS


=
Profit and loss after tax
* 100
Total Assets



Items 2010 2011 2012
Profit and loss after
tax
2818038 3402793 3402793
Total assets 252210652 288219358 300845782
percentage 1.11% 1.18% 1.13%









ANALYSIS
An indicator of how profitable a company is relative to its total assets. ROA gives an idea
as to how efficient management is at using its assets to generate earnings. ROA tells you
what earnings were generated from invested capital (assets). ROA for public companies
can vary substantially and will be highly dependent on the industry.
27.00%
27.50%
28.00%
28.50%
29.00%
29.50%
30.00%
30.50%
31.00%
2010
2011
2012
2011 2012 2010
Return on assets

59

Results describe that HMB is performing good enough to earn some profit because of his
Assets. The trend is increasing from year to year.


d) NON MARK UP/INTEREST INCOME TO TOTAL ASSETS

=
Non mark up/ interest income
* 100
Total Assets








ANALYSIS



Item 2010 2011 2012
Non mark up
interest income
4429070 5187223 5458422
Total assets 252210652 288219358 300845782
percentage 1.75% 1.79% 1.81%
Non mark up income to total assets

60

Ratio on incomes earned other than mark-up e.g. capital gains, commission, fee to total assets
etc. Thisratio expresses how much income is earned other than mark-up through other functions
of the bank byemploying total assets. It is useful for Banks and DFIs.






































e) NET INTEREST MARGIN RATIO

= Net interest * 100

61

Total Assets


Items 2010 2011 2012
Net interest 6,946,826 7,699,257 8,306,652
Total assets 252,210,652 288,219,358 300,845,782
Percentage 2.75% 2.67% 2.76%






ANALYSIS
This ratio indicates the earning capacity through core banking business by utilizing all assets.
banks normally borrow from savers and lend to investors. It is the ratio between the difference of
interest income and interest expense to total assets.



f) EARNING PER SHARE


= Profit and loss after tax * 100
Net interest margin ratio


62

No. of ordinary shares





Items 2010 2011 2012
Profit and loss after tax 2818038 3402793 3402793
No. of ordinary shares 873193 1047831 1047831
Percentage
322.72% 324.74% 324.74%









ANALYSIS

EPS is the ratio between net profit after tax to number of shares outstanding at the end of the
year as shown in balance sheet and its relevant notes to accounts. It is useful for whole financial
sector except for Modaraba Companies where certificates are issued for raising capital.

2. LEVERAGE RATIO

a ) CAPITAL RATIO
321.50%
322.00%
322.50%
323.00%
323.50%
324.00%
324.50%
325.00%
2010 2011 2012
Earning per share

63

=
Total Equity
* 100
Total Assets


Items 2010 2011 2012
Total equity 20954427 26066846 24235800
Total assets 252210652 288219358 300845782
percentage 8.30% 9.04% 8.05%











ANALYSIS

The ratio between shareholders equity and total assets expresses the percentage of equity in total
assets.






b) Break up value per share


7.40%
7.60%
7.80%
8.00%
8.20%
8.40%
8.60%
8.80%
9.00%
9.20%
2010 2011 2012
Capital ratio

64

=
Total Equity
* 100
No. of ordinary shares





Items 2010 2011 2012
Total equity 20954427 26066846 24235800
No. of ordinary shares 873193 1047831 1047831
percentage 2399.74% 2487.69% 2312.94%












ANALYSIS
Break-up Value is net worth per share and is an important criterion to measure financial
soundness ofa company. The break-up value is calculated for whole financial sector except in
case of foreign banksand Modaraba Companies.

c) TOTAL DEPOSIT TO TOTAL EQUITY

2200.00%
2250.00%
2300.00%
2350.00%
2400.00%
2450.00%
2500.00%
2010 2011 2012
Break up value per share

65


=
Total Deposit
* 100
Total Equity



Items 2010 2011 2012
Total deposit 160457975 185399802 217797754
Total equity 20954427 26066846 24235800
percentage 765.74% 711.25% 898.66%











ANALYSIS
The ratio shows the relationship between total deposits in a bank to the total shareholders equity.




3. LIQUIDITY RATIOS
0.00%
100.00%
200.00%
300.00%
400.00%
500.00%
600.00%
700.00%
800.00%
900.00%
2010 2011 2012
Total deposit to total equity

66


a) CASH AND BALANCES WITH BANKS TO TOTAL ASSETS


=
Cash and balance with other banks
* 100

Total Assets



Column1 2010 2011 2012
Cash and balance
with banks
17,046,487 22,069,896 17,785,281
Total assets 252,210,652 288,219,358 300,845,782
percentage 6.75% 7.65% 5.91%








ANALYSIS
This ratio expresses the percentage of total assets available in the form of highly liquid assets.







0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
2010 2011 2012
Cash and balance with bank to total assets

67

b) TOTAL DEPOSIT AND OTHER ACCOUNTS TO TOTAL ASSETS


=
Total Deposit and other account
* 100
Total Assets



Items 2010 2011 2012
Deposit and
other accounts
160,457,975 185,399,802 217,797,754
Total assets 252,210,652 288,219,358 300,845,782
percentage 63.62% 64.32% 72.39%














ANALYSIS
The ratio shows what percentage of total assets comprises total deposits and other accounts.



58.00%
60.00%
62.00%
64.00%
66.00%
68.00%
70.00%
72.00%
74.00%
2010 2011 2012
Total deposit and other accounts to total assets

68

c) INVESTMENT AND TOTAL ASSETS


=
Investment
* 100
Total Assets




Items 2010 2011 2012
Investment 100,993,820 147,524,622 160,849,741
Total assets 252,210,652 288,219,358 300,845,782
percentage 40.04% 51.18% 53.46%










Analysis
The ratio between Investment and total assets shows investment activity with reference to its
total assets. It indicates the portion of total assets used for investment in various venues. This
ratio is usefulfor banks, DFIs and insurance companies



0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
2010 2011 2012
Investment and total assets

69


Advances and total asset


=
Advances
* 100
Total Assets



Items 2010 2011 2012
Advances 119,827,636 109,656,714 106,910,727
Total assets 252,210,652 288,219,358 300,845,782
percentage 47. 5% 38.04% 35.53%














Analysis
This ratio shows that how much portion of the total assets is used as advances. Because advances
are the most efficient way of earning profits for a bank. This ratio is showing downward trends.



0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
2010 2011 2012
Advances and total assets

70



Total liabilities and total assets


=
Total liabilities
* 100
Total Assets


Column1 2010 2011 2012
Total liabilities 231,902,519 263,645,850 272,592,731
Total assets 252,210,652 288,219,358 300,845,782
percentage 91.94% 91.47% 90.60%











Analysis

The ratio shows the proportion of banks assets, which are financed through debt. This ratio is
usefulfor banks and DFIs.




90.00%
90.50%
91.00%
91.50%
92.00%
2010 2011 2012
Total liabilities to total assets

71



Current ratio

=
Current Assets
* 100
Current Liabilities



Items 2010 2011 2012
Current assets 20,236,886 20,147,035 22,069,896
Current liabilities 114,914,545 127,247,706 107,017,574
percentage 17.60% 15.80% 20.60%











Analysis
The ratio calculated to show company's ability to pay back its short-term
liabilities (payables) with its short-term assets (receivables).
The higher the current ratio, the more capable the company is of paying its
obligations

0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2010 2011 2012
Current ratio

72

HORIZONTAL ANALYSIS OF BALANCE SHEET


ASSETS 2010 2011 2012 Horizontal analysis in % age
2010 2011 2012
Cash and
balances with
treasury banks



13,923,393



14,233,690



16,918,780



24.3% 2.22% 18. 86%
Balances with
other banks

3,123,094

3,551,591

5,151,116

-35.4% 13.72% 45.03%
Lending to
financial
institution


3,190,399


2,361,754

-



2026% -25.9% -
Investments 100,993,820 147,524,622 160,849,741 -9.56% 46.07% 9.03%
Advances 119,827,636 109,656,714 106,910,727 17.14% -8.48% -2.5%
Operating fixed
assets

3,3527,702

3,195,886

2,999,673

37. 9% -4.67% -6.13%
Deferred tax
assets

1,868,328

2,019,809

2,274,940

126% 8.10% 12.63%
Other assets 5,931,280 5,675,292 5,740,805 48. 1% -4.3% 1.15%
252,210,652 288,219,358 300,845,782 6. 23% 14. 27% 4.3% 4.3%
LIABILITIES
Bill payable 2,572,954 3,733,794 4,092,268 -17.3% 45.1% 9.60%
Borrowing 62,529,729 66,641,226 41,569,169 -8. 29% 6.5% -37.6%
Deposit and
other accounts


160,547,975


185,399,802


217,797,754


12. 6% 15.54% 17.47%
Sub-ordinate
loan

-

-

-

- - -
Liabilities
against lease
-


-

-

- - -

Deferred tax
liabilities

-

-

-

- - -
Other
liabilities

6,341,861

7,871,028

9,133,540

28. 99% 24.1% 16.03%
231,902,519 263,645,850 272,592,731 6. 05% 13. 6% 3.39%
Net Assets 20,308,133 24,573,508 28,253,051 8.36% 21% 14.97%

Share capital 8,731,929 10,478,315 10,478,315 16% 20% 20%
Reserve 8,151,443 8,807,718 9,488,277 7. 42% 8.05% 7.72%
Unappropriate
profit

4,071,055

4,949,767

6,100,254

7. 87% 21.58% 23.24%
20,954,427


(649,294)
24,235,800


337,708
26,066,846


2,186,205
10.9% 15.65% 7.55%
Deficit/surplus
on revaluation
of assets


20,308,133 24,573,508 28,253,051 8.36% 21% 14.97%



73

HORIZONTAL ANALYSIS OF PROFIT AND LOSS STATEMENT



Particulars

2010

2011

2012
Horizontal analysis in % age
2010 2011 2012
Mark
up/interest
earned

23,380,314



(16,433,491)

27,247,789



(19,548,532)

27,139,449



(18,832,797)

9.37% 16.54% -0.397%
Mark
up/interest
expense

12.05% 18.95% -3.66%
Mark up/interest
income
6,946,823 7,699,257 8,306,652 3.51% 10.83% 7.88%
Provision against
non-performing
loans and advances
2,937,763 2,659,962 2,661,248 17.36% -9.45% 0.048%
Provision for
diminution in the
value of investment
103,785 94,640 32,499 56.1% -8.8% -65.6%
Bad debt written
off directly
- - - - - -
(3,041,548) (2,754,602) (2,693,747) 18.36% -9.43% -2.20%
Net mark up /
interest income after
provision

3,905,275

4,944,655

5,612,905

-5.69% 26.61% 13.51%
Non-mark up
interest income

Fee commission and
brokerage income

1,589,451

1,758,515

2,119,673

25.63% 10.63% 18.37%
Dividend income 568,553 1,187,718 653,109 29.73% 108% -45.01%
Income from dealing
in foreign currencies

1,775,133

1,647,536

1,363,252

15.83% -7.18% -17.25%
Gain on
sale/redemption of
securities

245,436

350,543

1,072,625

18.92% 42.47% 205%
Unrealized gain/
(loss)on revaluation
of investments

-

-

-

- - -
Other income 250,497 242,911 249,763 -3.6% -3.02% 18.52%
Total non mark up
interest income

4,429,0702

5,187,223

5,458,422

19.6% 17.11% 5.22%

8,334,345 10,131,878 11,071,327 6.25% 21.56% 9.27%
Non mark up /
interest expense

Administrative
expense
4,172,840 4,923,839 5,747,121 18.42% 17.99% 16.72%
Other charges 96,248 302,588 223,487 -9.30% 214% -26.14%
Other
provision/write off

38,922

275,000

59,8058

- 606% -78.25%

74


Total non mark up
/interest expenses
(4,308,010) (5,501,427) (6,030,413) 18.68% 27.7% 9.61%
4,026,335 5,630,451 5,040,914 4.44% 15% 8.86%
Unusual items - - - - - -
Profit before tax
4,026,335 5,630,451 5,040,914 4.44% 15% 8.86 %
Tax-current (1,904,158) (2,192,266) (2,527,478) 12.6% 15.15% 15.26%
Prior year - 134,985 (72,235) - - -46.4%
Deferred 695,861 708,603 961,592 2.21% 1.83% 35.70%
(1,208,297) (1,349,078) (1,638,121)
Profit after tax
2,818,038 3,281,373 3,402,793 2.86% 16.44% 3.70%
Inappropriate profit
brought forward
3,773,782 4,071,055 4,949,767 22.22% 7.87% 21.58%
Profit available
for appropriation
6,591,820 7,352,428 8,352,560 13.12% 11.53% 13.60%
EPS
3.23 3.13 3.25


Where its interpretation

































75

VERTICAL ANALYSIS OF BALANCE SHEET


ASSETS 2010 2011 2012 Vertical analysis in % age
2010 2011 2012
Cash and balances
with treasury
banks



13,923,393



14,233,690



16,918,780



5.52% 4.93% 5.6%
Balances with
other banks

3,123,094

3,551,591

5,151,116

1.23% 1.2% 1.7%
Lending to
financial
institution


3,190,399


2,361,754

-



1.26% 0.8% -
Investments 100,993,820 147,524,622 160,849,741 40% 51.18% 53.46%
Advances 119,827,636 109,656,714 106,910,727 47.5% 38% 35.53%
Operating fixed
assets

3,3527,702

3,195,886

2,999,673

1.33% 1.11% 0.99%
Deferred tax
assets

1,868,328

2,019,809

2,274,940

0.74% 0.7% 0.756%
Other assets 5,931,280 5,675,292 5,740,805 2.37% 1.96% 1.90%
252,210,652 288,219,358 300,845,782
LIABILITIES
Bill payable 2,572,954 3,733,794 4,092,268 1.02% 1.29% 1.36%
Borrowing 62,529,729 66,641,226 41,569,169 24.79% 23.12% 13.81%
Deposit and
other accounts


160,547,975


185,399,802


217,797,754


63.6% 64.32% 72.39%
Sub-ordinate
loan

-

-

-

- - -
Liabilities
against lease
-


-

-

- - -
Deferred tax
liabilities

-

-

-

- - -
Other liabilities
6,341,861

7,871,028

9,133,540

2.51% 2.73% 3.03%
231,902,519 263,645,850 272,592,731
Net Assets 20,308,133 24,573,508 28,253,051

Share capital 8,731,929 10,478,315 10,478,315
Reserve 8,151,443 8,807,718 9,488,277
unappropriate
profit

4,071,055

4,949,767

6,100,254


20,954,427


(649,294)
24,235,800


337,708
26,066,846


2,186,205

Deficit/surplus
on revaluation of
assets


20,308,133


24,573,508


28,253,051


76



VERTICAL ANALYSIS OF PROFIT AND LOSS STATEMENT


Particulars

2010

2011

2012
Vertical analysis in % age
2010 2011 2012
Mark
up/interest
earned

23,380,314



(16,433,491)

27,247,789



(19,548,532)

27,139,449



(18,832,797)

- - -
Mark
up/interest
expense

70.28% 71.7% 69.39%
Mark up/interest
income
6,946,823 7,699,257 8,306,652 - - -
Provision against
non-performing
loans and
advances
2,937,763 2,659,962 2,661,248 12.56% 9.76% 9.80%
Provision for
diminution in the
value of
investment
103,785 94,640 32,499 0.44% 0.34% 0.11%
Bad debt written
off directly
- - - - - -
(3,041,548) (2,754,602) (2,693,747) - - -
Net mark up /
interest income
after provision

3,905,275

4,944,655

5,612,905

- - -
Non-mark up
interest
income








Fee commission
and brokerage
income


1,589,451


1,758,515


2,119,673

6.79% 6.45% 7.8%
Dividend income 568,553 1,187,718 653,109 2.43% 4.35% 2.4%
Income from
dealing in foreign
currencies

1,775,133

1,647,536

1,363,252

7.59% 6.04% 5.02%
Gain on
sale/redemption
of securities

245,436

350,543

1,072,625

1.04% 1.28% 3.95%
Unrealized gain/
(loss)on
revaluation of
investments

-

-

-

- - -

Other income 250,497 242,911 249,763 1.07% 0.89% 0.92%
Total non mark
up interest

4,429,0702

5,187,223

5,458,422

-

77

income

8,334,345 10,131,878 11,071,327 - - -
Non mark up
/ interest
expense


Administrative
expense
4,172,840 4,923,839 5,747,121 17.84% 18% 21.11%
Other charges 96,248 302,588 223,487 0.411% 1.11% 0.82%
Other
provision/write
off

38,922

275,000

59,8058

0.16% 1.0% 0.22%
Total non mark
up /interest
expenses
(4,308,010) (5,501,427) (6,030,413) - - -
4,026,335 5,630,451 5,040,914 - - -
Unusual items - - - - - -
Profit before
tax
4,026,335 5,630,451 5,040,914 - - -
Tax-current (1,904,158) (2,192,266) (2,527,478) - - -
Prior year - 134,985 (72,235) - - -
Deferred 695,861 708,603 961,592 - - -
(1,208,297) (1,349,078) (1,638,121) - - -
Profit after
tax
2,818,038 3,281,373 3,402,793 - - -

Inappropriate
profit brought
forward

3,773,782

4,071,055

4,949,767

- - -
Profit
available for
appropriation

6,591,820

7,352,428

8,352,560

28.19% 26.98% 30%
EPS
3.23 3.13 3.25






















78

SUGGESTIONS AND RECOMMENDATION:
Diversify the portfolio
Introduction of new product and services in the market
Hire new management
Give importance to all customer
Increase branches all over the country
Improve standard of banking
Start advertisement as soon as possible

CONCLUSION:
Major factors like global financing disorder, economic, slowdown and strict monitory
policy were on the top but Pakistan bank caters all theseproblems.HMB is one of the
top ten banks it is expected to play a major role in pioneering these newer markets.

Currently, the banking sector is facing two major problems. The first one is the decline
in credit demand due to slowdown in the economic activities due to the poor law and
order situation, power crisis, inflationary pressure, and high interest rate. The other
problem is the mounting amount of NPLs (non-performing loans).With the exception
of a few banks all the banks are exhibiting considerable rise in NPLs.These two issues
are collectively dampening the banking sectors performance.


HMB offers branch banking, e-banking, international banking and also offers Islamic
banking to facilitate their customer.

The credit rating s denotes a very high credit quality, a very low expectation of credit
risk and a very strong capacity for timely payment of financial commitment.




79






ASSETS 2010
Cash and balances with treasury banks 13,923,393
Balances with other banks 3,123,094
Lending to financial institution 3,190,399
Investments 100,993,820
Advances 119,827,636
Operating fixed assets 3,3527,702
Deferred tax assets 1,868,328
Other assets 5,931,280
252,210,652
LIABILITIES
Bill payable 2,572,954
Borrowing 62,529,729
Deposit and other accounts

160,547,975
Sub-ordinate loan
-
Liabilities against lease -

Deferred tax liabilities
-
Other liabilities
6,341,861
231,902,519
Net Assets 20,308,133
PRESENTED BY
Share capital 8,731,929
Reserve 8,151,443
Unappropriate profit
4,071,055



Deficit/surplus on revaluation of assets
20,954,427


(649,294)
20,308,133












80









ASSETS 2011
Cash and balances with treasury banks 14,233,690
Balances with other banks 3,551,591
Lending to financial institution 2,361,754
Investments 147,524,622
Advances 109,656,714
Operating fixed assets 3,195,886
Deferred tax assets 2,019,809
Other assets 5,675,292
288,219,358
LIABILITIES
Bill payable 3,733,794
Borrowing 66,641,226
Deposit and other accounts 185,399,802
Sub-ordinate loan
-
Liabilities against lease
-
Deferred tax liabilities
-
Other liabilities 7,871,028
263,645,850
Net Assets 24,573,508
PRESENTED BY
Share capital 10,478,315
Reserve 8,807,718
Unappropriate profit
4,949,767



Deficit/surplus on revaluation of assets
24,235,800


337,708
24,573,508












81




ASSETS 2012
Cash and balances with treasury banks 16,918,780
Balances with other banks 5,151,116
Lending to financial institution -

Investments 160,849,741
Advances 106,910,727
Operating fixed assets 2,999,673
Deferred tax assets 2,274,940
Other assets 5,740,805
300,845,782
LIABILITIES
Bill payable 4,092,268
Borrowing 41,569,169
Deposit and other accounts 217,797,754
Sub-ordinate loan -
Liabilities against lease -
Deferred tax liabilities -
Other liabilities
9,133,540
272,592,731
Net Assets 28,253,051
PRESENTED BY
Share capital 10,478,315
Reserve 9,488,277
Unappropriate profit
6,100,254



Deficit/surplus on revaluation of assets
26,066,846


2,186,205
28,253,051


















82

PROFIT AND LOSS STATEMENT



Particulars

2010
Mark up/interest earned

Mark up/interest expense
23,380,314

(16,433,491)
Mark up/interest income 6,946,823
Provision against non-performing loans and advances 2,937,763
Provision for diminution in the value of investment 103,785
Bad debt written off directly -
(3,041,548)
Net mark up / interest income after provision 3,905,275
Non-mark up interest income


Fee commission and brokerage income 1,589,451
Dividend income 568,553
Income from dealing in foreign currencies 1,775,133
Gain on sale/redemption of securities
245,436
Unrealized gain/ (loss)on revaluation of investments
-
Other income 250,497
Total non mark up interest income 4,429,0702

8,334,345
Non mark up / interest expense

Administrative expense 4,172,840
Other charges 96,248
Other provision/write off
38,922
Total non mark up /interest expenses (4,308,010)
4,026,335
Unusual items -
Profit before tax
4,026,335
Tax-current (1,904,158)
Prior year -
Deferred 695,861
(1,208,297)
Profit after tax
2,818,038

Un appropriated profit brought forward

3,773,782
Profit available for appropriation 6,591,820
Eps 3.23





83


















Particulars

Mark up/interest earned

Mark up/interest expense

Mark up/interest income
Provision against non-performing loans and
advances

Provision for diminution in the value of investment
Bad debt written off directly

Net mark up / interest income after provision
Non-mark up interest income


Fee commission and brokerage income
Dividend income
Income from dealing in foreign currencies
Gain on sale/redemption of securities
Unrealized gain/ (loss)on revaluation of investments
Other income
Total non mark up interest income


Non mark up / interest expense

Administrative expense
Other charges
Other provision/write off
Total non mark up /interest expenses

Unusual items
Profit before tax

Tax-current
Prior year
Deferred

Profit after tax




84



















Particulars

Mark up/interest earned

Mark up/interest expense

Mark up/interest income
Provision against non-performing loans and advances
Provision for diminution in the value of investment
Bad debt written off directly

Net mark up / interest income after provision
Non-mark up interest income


Fee commission and brokerage income
Dividend income
Income from dealing in foreign currencies
Gain on sale/redemption of securities
Unrealized gain/ (loss)on revaluation of investments
Other income
Total non mark up interest income


Non mark up / interest expense

Administrative expense
Other charges
Other provision/write off
Total non mark up /interest expenses

Unusual items
Profit before tax

Tax-current
Prior year
Deferred

Profit after tax



85