HABIB BANK LIMITED PAKISTAN

HBL CREDIT CARD:

The HBL CreditCard will add simplicity and excitement to your life. Accepted at over 24 million
merchants worldwide, HBL CreditCard makes shopping fun and paying simple. Make the most out
of your shopping experience with your very own HBL CreditCard.
Convenience
Instead of paying with cash, simply present your HBL CreditCard to the shopkeeper and pay for
anything you want.

• Bill Payments
We'll pay your bills on your behalf and charge the amount to your HBL CreditCard. You can
give one-time standing instructions to pay your monthly bills. Check the amount in your monthly
card statement and make the payment with your regular card payment.

• SMS Alerts
For all transactions, an SMS alert will be sent to you on your mobile phone to confirm that the
transactions have been conducted by you. A nominal fee will be charged for this service.

• E-Statements
You can enrol for an e-statement with a simple call. An e-statement with details of all your
transactions will be sent to your specified email address every month. You won’t have to wait for
your paper statement any more or have to worry about storing it.

• Statement by Fax
` HBL CreditCard also offers the facility of receiving your card statement by fax. Just give us a
call and your last card statement will be faxed to you at the fax number specified by you.
Security
Your HBL CreditCard ensures your money stays completely secure. You cannot lose cash if you
don’t carry it. In the unlikely event that your card is stolen, call us at HBL PhoneBanking and your
card will be blocked immediately

Affordibility
Buy Now, Pay Later

HBL CreditCard gives you the flexibility to buy what you want, when you want and pay for it later.
A credit card statement will be sent to you every month with details of all your purchases. You will
have 21 credit free days to make the payment from the statement date. Please pay at least 3 days in
advance if you make your payment by cheques to allow enough time for clearance.
You have the freedom to pay the entire outstanding amount on your card statement or as little as 5%
of the outstanding balance in your statement. The remaining amount will be transferred to next
month’s statement. A nominal service charge will be applied to the unpaid amount each month.

Lower Rate Every Year

Just make sure all your HBL CreditCard payments are made before the due date and you will
benefit from a reduction in the rate of service charges at the end of each year.

Cash Advance

If you require cash urgently, you can go to any specified HBL branch and withdraw cash at the
counter. You can also go to any 1 Link ATM in Pakistan and more than 780,000 ATMs and
financial institutions worldwide displaying the Visa/Plus logo. You can withdraw cash up to the
available cash advance limit on your HBL Credit Card. For Cash Advance, nominal service charges
will be applied from the withdrawal date.

Balance Transfer Facility

With your HBL Credit Card Balance Transfer Facility, you have the opportunity to pay off balances
you owe to other banks through your HBL Credit Card at lower service charges.

Proposed idea
 As HBL is going to lunch its credit cards in 2008. This marks HBL’s latest
addition to a series of new initiatives aimed at adding value for the nation’s consumers. but they can
include the feature of signature credit card which will make its new launch more value added and
more attractive also it is a scarce opportunity because very few banks are providing this facility so
in this way HBL can have a greater concern of people as in this business people are the main asset

Introduction

Habib Bank Limited (commonly referred to as "HBL") (Arabic: ‫حبيب بينك‬

َ ) is the largest bank in
Pakistan and a thoroughly established banking chain throughout the world. An extensive network of
1425 branches in Pakistan and 55 international branches makes it one of the largest banks in
Pakistan today. Habib Bank Plaza located in Karachi, Sindh is the formal headquarters of the bank.
The bank has a network outside Pakistan including USA, UK, Middle East, Asia Pacific and Africa.
The Privatization Commission's IPO for HBL was a success; share trading will start on 24 Sep
2007.

Pakistan

With the largest number of branches in Pakistan, the main branches are mostly located in the largest
commercial cities of Pakistan including; Karachi, Hyderabad, Lahore, Islamabad,

Faisalabad,Mirpur Khas, Multan, Rawalpindi, Quetta, Sialkot, Peshawar, Kharian,Jhang,Mirpur

Mathelo,Chishtian, and many others.

Major executives
R. Zakir Mahmood is President & Chief Executive officer

Slogan: The Power to Lead

Vision
“Enabling people to advance with confidence and success”

Mission

To be recognized as the leading financial institution of Pakistan and a dynamic international bank in
the emerging markets, providing our customers with a premium set of innovative products and
services, and granting superior value to our stakeholders – shareholders, customers and employees.
Current Strategy:

Mantas, Inc., a leading global provider of advanced solutions for compliance and risk management
including anti-money laundering (AML), broker and trading compliance, fraud detection, and
operational risk analysis, today announced its partnership with Habib Bank Ltd., the largest bank in
Pakistan. With an extensive network of 1425 domestic branches and 55 international branches,
Habib Bank plays an important role in Pakistan's financial and economic development

Previously Habib Bank used separate business unit solutions and manual processes to identify
suspicious activity. However, the bank decided it needed a more sophisticated, robust and
comprehensive platform to address regulatory compliance, protect its customers and brand, and
prevent operational losses stemming from financial crime. Having evaluated different solutions,
Habib Bank chose Mantas ONE to address their compliance and risk management needs in a
rapidly deployable and cost-effective manner.

“To continue to build on our position as a globally recognized financial institution, we sought an
enterprise approach to anti-money laundering. We chose Mantas because it is a proven product, and
is able to cover a large number of subsidiaries and jurisdictions. Mantas also has worldwide brand
recognition, an excellent implementation track record and is price-competitive. With this choice, we
are confident we have selected the very best solution to augment our efforts in combating financial
crime,”

Management Structure

The operations of the Banks are divided into 14 division/ groups. Each Group is headed by
professional and experienced bankers. The Group Heads (excluding the Head of Audit), the
Company Secretary and the Chief Financial Officer, report directly to the President & CEO of the
Bank. The Bank also has a strong team of experienced and qualified individuals at the middle and
lower management levels.

History

HBL established operations in Pakistan in 1947 and moved its head office to Karachi. Our first
international branch was established in Colombo, Sri Lanka in 1951 and Habib Bank Plaza was
built in 1972 to commemorate the bank’s 25th Anniversary.
With a domestic market share of over 40%, HBL was nationalized in 1974 and it continued to
dominate the commercial banking sector with a major market share in inward foreign remittances
(55%) and loans to small industries, traders and farmers. International operations were expanded to
include the USA, Singapore, Oman, Belgium, Seychelles and Maldives and the Netherlands.

On June 13, 2002 Pakistan's Privatization Commission announced that the Government of Pakistan
had formally granted the Aga Khan Fund for Economic Development (AKFED) rights to 51% of
the shareholding in HBL, against an investment of PKR 22.409 billion (USD 389 million). On
February 26, 2004, management control was handed over to AKFED. The Board of Directors was
reconstituted to have four AKFED nominees, including the Chairman and the President/CEO and
three Government of Pakistan nominees.

Company Profile

Financial Analysis,
Financial information of the company is as follows,
Authorized Capital: 30000000000
Paid up capital: 12178495000
Authorized capital Shares: 3000000000
Paid up Capital shares: 1217849500
Financial Statements for Habib Bank Ltd.
Year over year, Habib Bank Ltd. has been able to grow revenues from 7.8B to 8.5B. Most
impressively, the company has been able to reduce the percentage of sales devoted to selling,
general and administrative costs from 176.29% to 175.90%. This was a driver that led to a bottom
line growth from 9.6B to 12.6B.

Currency in Millions of PKR As of Dec 31 Dec 31

Dec 31 2005 2006
2004
Revenues 10,013.5 7,808.0 8,548.6

Other Revenues -1,887.6 -2,974.7 8,548.6

Total Revenues 21,852.6 29,849.0 -2,863.2

Cost of Goods Sold ---- 330.7 36,167.1

 Gross Profit 21,852.6 29,518.3 388.1

Selling General & Admin Expenses,

Total 13,781.3 13,764.4 15,037.4

Other Operating Expenses 823.8 317.5 177.4

Other Operating Expenses, Total 14,605.1 14,081.9 15,214.8

Operating Income 7,247.4 15,436.4 20,564.3

EBT, Excluding unusual items 7,247.4 15,436.4 20,564.3

Merger & Restructuring charger --- -1,602.4 -1,723.8

EBT, Including unusual items 7,247.4 13,834.0 18,840.5

Income Tax Expenses 1,484.0 4,187.4 6,140.2

Minority interest in earnings -89.4 -83.2 -70.1

Earning from continuing operations 5,674.0 9,563.3 12,630.3

Net Income 5,674.0 9,563.3 12,630.3

Net Income to common including extra 5,674.0 9,563.3 12,630.3

Net Income to common excluding extra 5,674.0 9,563.3 12,630.3

Core Competencies of Habib Bank

Major competitors of HBL are united bank limited, national bank limited, Muslim commercial bank
etc. Other private banks compete HBL in certain aspects.

Management Capabilities
Habib bank focuses on following
Cash Management
HBL offers a comprehensive platform for customers to avail Cash Management Services
throughout Pakistan. Our Cash Management Services reduce the cash turn around of your company,
thereby making it cost efficient.
Performance Management
HBL’s performance management and reward systems ensure that goals are met in an effective and
efficient manner. We define a clear path for you to contribute to the organization’s overall goals,
peppered with regular reviews and feedback to help you gauge your progress.

Corporate Culture
HBL have created a challenging environment that encourages creativity and commitment. In pursuit
of excellence, it focused on attracting, developing and retaining the best talent in the marketplace.
Dynamic culture of HBL offers diverse growth opportunities across Pakistan and in 25 countries
around the world.
HBL fosters a work environment where employees can realize their potential whether locally or in
the international arena. Thus, they enable their employees to achieve their professional goals while
keeping in synch with the bank’s overall objectives.

Sponsor

Habib Bank Ltd. (Sponsor of HBL Asset Management) is a leader in Pakistan’s service industry.
An extensive network of 1437 domestic branches - the largest in Pakistan – and presence in 25
countries around the globe has enabled HBL to provide comprehensive services that meet customer
needs. This has ensured thriving client relationships that form the background of the Bank’s
operations. Today Habib Bank Ltd. plays a central role in Pakistan’s financial and economic
development.

Environmental analysis

Economic Condition

Under the GoP reforms, efforts were initiated in 1996 to prepare the Bank for privatization.
Accordingly, senior experienced bankers were hired from reputable foreign banks to reinvigorate
and restructure the Bank. In addition to implementing a financial re-structuring program, where the
Bank was recapitalized through the issuance of right share amounting to PKR 8 billion, the
management also implemented a staff and branch rationalization plan. Consequently, some of the
branches were closed or merged and the staff strength was reduced from 31,099 to 14,572.
As part of the privatization strategy, the GoP initiated the privatization of HBL in 2000. Through
the defined process, 51% shares of HBL were acquired by the Aga Khan Fund for Economic
Development (AKFED) for a price of PKR 63.68 per share and the management of the Bank was
transferred on February 28, 2004. Key initiatives introduced since privatization include

(a) Upgrading the IT and communication system

(b) Strengthening management and enhancing its capacity
(c) Rebranding and repositioning the Bank in the domestic as well as in the international markets.

As a result of these initiatives, the Bank’s core banking system has been fully upgraded and as of
December 31, 2006 271 branches are online, while over 1,000 branches are expected to become
online by the end of 2007. Strategic measures have been taken to position the Bank for expansion in
high growth markets such as in Africa, Central Asia and the Middle East. An ambitious progress for
upgrading the branches is underway. Service levels have been improved and overall delivery
channels have been strengthened. Staffing levels have been further rationalized and general skills at
all levels have been improved. The professional management of AKFED introduced a number of
initiatives to revamp the Bank and to establish policies, procedures and systems in line with modern
banking requirements. In addition, the management also outlined a long-term strategy for the Bank
to ensure that the Bank continues on the path to recovery.
Under the management of AKFED, the Bank has shown exceptional progress as evident from its
increasing deposit base, soaring advances and improving income
As a part of this strategy, the Bank invested in technology and human infrastructure in order to
make banking faster and easier for its customers. The Bank has invested in alternate distribution
channels which facilitate customer access to the Bank through many modes of services. Recent
alternate delivery channels include ATM, POS, Internet Banking, Contact Centers, and Debit Cards.
Investment in technology has resulted in tremendous reduction of transaction costs and speedy
execution of services.

Functions

Services

Habib Bank offers the following services to its customers;

• Commercial Banking
• Corporate Banking
• Investment Banking

• International Group Banking

• Retail Banking
 • Treasury
• Islamic Banking (referred to Modaraba)

Internet Banking

Habib Bank refers to its Internet banking to "hblEbank". The service was first set up as the internet
was becoming a very popular place to check bank accounts and do payments and transfers.
HblEbank offer the following services;

• Statement of Account(s)
• Single Account Balances
• Group Accounts Balances
• Account to Account Transfers
• Payment to Third Party by requesting the following:

COMPETITION RISK

The profitability of HBL may be affected due to risk of increasing competition from strong public
and private commercial banks and foreign banks. HBL is well positioned to successfully compete in
the banking sector due to its wide market presence and brand recognition, large asset and deposit
base and strong sponsor support. HBL managed to achieve high profitability levels in 2006 despite
the increase in competition. The Bank has also invested in technology thereby improving the
service quality offered to clients. The Bank is also offering new products to its clients and has plans
to increase services offered which will result in a more loyal and productive client base. In today’s
time most of its competitors are:
• Askari Bank Limited
• Muslim Commercial Bank
• National Bank of Pakistan
• Allied Bank Limited
• United Bank Limited
• Abn Amro
• Citi Bank
• Alfallah Bank etc

Problems faced by Habib Bank Limited

There is a great economic change in the country and world over and it is not as much easier to
launch a new product in a competitive environment because you have to face many challenges and
problems. Main
Problem for habib bank limited is to launch a new credit card services for their customers because
no one knows that how the customers are going to react to their new production and there is also a
problem that how to attract the customers which are already have the same benefit from other
banks. In addition what new they are offering.

Another problem is in Leasing sector, which has experienced an extraordinary growth in past is
now facing challenges due to competition and reducing spreads. Due to intense competition
amongst the market players particularly with the commercial and investment banks, the margins of
leasing profit has shown declining trend. Shortage of good quality customer, slower recovery and
growing defaults remains major problem of overall financial sector particularly in leasing business

Alternative Solutions

The financial sector will have to be prepared to address efficiently the needs of future challenges
and sharpen the focus on new developments
The main solution towards the problem that either the people will welcome the new product and
their response will be positive or not for this purpose HBL should have the following alternative
solution to attract the customers

Intensive advertising:

Advertising is one of the major resource to get famous in today’s competitive world and let the
customers know about the company its major features, product and services , recent changes
according to the external environment and what are their benefits for their customers.

The company should have intensive advertising schemes for the new product i.e. credit card.
Advertisement can be through the electronic media, internet, print media, bill boards, sales persons
etc

Advantages

• Customers came to know about the launching of a new product

• Increase the loyalty of customers
• Another other market segmented area can be covered
• Accepted at over 24 million merchants worldwide
• Help to increase the market share
• Success of the new product will open the ways to make co branding with famous and well
known organization in order to make diversification in its products
 • Covers a large number of geographic areas.

Disadvantages
• Expensive
• If new product could not able to recover the cost then it will be a great loss for the company
• Great effect on the image of the company
Providing incentives to the customers
To attract the towards a new product it is important to that customers should given the services
different from the other bank providing credit card service because this is the nature of a person that
he or she always want something new and different from the previous one and it is important for a
company to give new and different incentive to the people who become the customers of their firm.
Different incentives are as given below

• The first 100 customers of credit card will be given the opportunity to have free shopping
worth rupees 3000 each
• The credit card holders will avail the opportunity to have loans on discount for the first five
months

Advantages
• More customers will be attracted
• It will provide a great speciality and uniqueness over the other companies
• Help to lead over the competitors

Disadvantage
• Increase in competition
• Financial burden
• Having No profit in short term

Best solution:
It is recommended that advertisement is the best solution for any company to launch its new
product in a better manner to attract the customers as people are the main asset for HBL so the first
objective of how to get the attention of the customers can be fulfilled through advertising covering
every area.
It will also be according to budget of the company may be some sort of short term constraints can
be faced but in long run it will provide benefits. The advertisement is through out different
geographic areas so market segmentation can be increased.
Summary

Habib Bank Limited (commonly referred to as "HBL") (Arabic: ‫حبيب بينك‬

َ ) is the largest bank in
Pakistan and a thoroughly established banking chain throughout the world. An extensive network of
1425 branches in Pakistan and 55 international branches makes it one of the largest banks in
Pakistan today. R. Zakir Mahmood is President & Chief Executive officer Mantas, Inc., a leading
global provider of advanced solutions for compliance and risk management including anti-money
laundering (AML), broker and trading compliance, fraud detection, and operational risk analysis,
today announced its partnership with Habib Bank Ltd., the largest bank in Pakistan. With an
extensive network of 1425 domestic branches and 55 international branches, Habib Bank plays an
important role in Pakistan's financial and economic development Under the GoP reforms, efforts
were initiated in 1996 to prepare the Bank for privatization As part of the privatization strategy, the
GoP initiated the privatization of HBL in 2000. Through the defined process, 51% shares of HBL
were acquired by the Aga Khan Fund for Economic Development (AKFED) for a price of PKR
63.68 per share and the management of the Bank was transferred on February 28, 2004.also
introduced a new product to increase their customers The HBL CreditCard will add simplicity and
excitement to your life. Accepted at over 24 million merchants worldwide, HBL Credit Card makes
shopping fun and paying simple. Make the most out of your shopping experience with your very
own HBL Credit Card. Habib bank provides cooperative and friendly culture to its customers. They
understand fully the needs of their customers and adapt their products and services to meet these.
HBL always strive to put the satisfaction of their customers first. They believe in the advancement
of society through the adoption of enlightened working practices, innovative new products and
processes, and a spirit of enterprise

Financial Analysis of Habib Bank

Currency in Millions of PKR As of Dec 31 Dec 31

Dec 31 2005 2006
2004
Revenues 10,013.5 7,808.0 8,548.6

Other Revenues -1,887.6 -2,974.7 8,548.6

Total Revenues 21,852.6 29,849.0 -2,863.2

Cost of Goods Sold ---- 330.7 36,167.1

Gross Profit 21,852.6 29,518.3 388.1

Selling General & Admin Expenses,
Total 13,781.3 13,764.4 15,037.4

Other Operating Expenses 823.8 317.5 177.4

Other Operating Expenses, Total 14,605.1 14,081.9 15,214.8

Operating Income 7,247.4 15,436.4 20,564.3

EBT, Excluding unusual items 7,247.4 15,436.4 20,564.3

Merger & Restructuring charger --- -1,602.4 -1,723.8

EBT, Including unusual items 7,247.4 13,834.0 18,840.5

Income Tax Expenses 1,484.0 4,187.4 6,140.2

Minority interest in earnings -89.4 -83.2 -70.1

Earning from continuing operations 5,674.0 9,563.3 12,630.3

Net Income 5,674.0 9,563.3 12,630.3

Net Income to common including extra 5,674.0 9,563.3 12,630.3

Net Income to common excluding extra 5,674.0 9,563.3 12,630.3

References
1. ^ Summary of Project Information, Habib Bank Ltd - International Finance Corporation.
Retrieved on 2006-12-01.
2. ^ U.S. Designates Al Akhtar Trust. Retrieved on 2007-07-22.
3. ^ "HBL froze banned charities’ accounts before Daniel Pearl’s abduction". Retrieved on
2007-07-22.
4. ^ "Pakistani bank agrees to U.S. money-launder order". Retrieved on 2007-07-22.
GROUP MEMBERS
Nabila Gulan
Maria Salaahuddin
Sehrish Rana
Shamaila Naz