Internship Report of HBL Bank

(Pakistan Chowk Branch Gujrat)

Internship Report Submitted to

The Superior College, Lahore
In Partial fulfillment of the
Requirement for the Degree of
Associate Degree in Accounting and Finance
By
Sadaf Iqbal
Roll No. ADPAF-F17-006
Session: 2017-19
Registration No.
SC07-ADPAF-F17-006
 Internship Report of HBL Bank
By
Sadaf Iqbal
Roll No. ADPAF-F17-006
Session: 2017-19
Registration No:
SC07-ADPAF-F17-006

Internship Report Submitted to

The Superior College, Lahore
In partial fulfillment of the
Requirements for the degree of
Associate Degree in Accounting and Finance

Approved by: ____________ ________________

Sir Zohaib Mehmood Project Manager Evening Program
Prof. Research Supervisor

2
 Internship Report Submitted to

The Superior College Evening Campus, Lahore, Pakistan DECLARATION TO

BE FILLED BY THE STUDENT AT THE TIME OF

SUBMISSION OF THESIS TO THE SUPERVISOR AND/OR FOR

EXTERNAL EVALUATION

Section 1: Particulars of the Student

1.1 Full Name Sadaf Iqbal
1.2 Father’s Name Muhammad Iqbal
1.3 Roll Number ADPAF-F17-006
1.4 Program ADP A&F

2.1 Title Internship Report

2.2 Supervisor’s Name Sir. Zohaib Mehmood
2.3 Date of Completion August 31, 2019

3
 THE SUPERIOR COLLEGE

EVENING CAMPUS, LAHORE, PAKISTAN

SUPERVISOR’S CERTIFICATE ON

INTERNSHIP REPORT SUBMITTED BY A STUDENT

Section 1. Particulars of the Supervisor

1.1 Name Sir. Zohaib Mehmood

1.2 Full Address Behind Eid Ghah Gujrat

Section 2. Particulars of the Student

2.1 Full Name Sadaf Iqbal

2.2 Father’s Name Muhammad Iqbal
2.3 Registration Number SC07-ADPAF-F17-006
2.4 Program ADP A&F

Section 3. Particulars of the Internship Report

3.1 Title Internship Report

3.2 Date of Completion August 31, 2019
a) I certify that: student has completed the cited thesis under my guidance and supervision.
b) I am satisfied with quality of the student’s research work, and
c) I consider it worthy of submission for external evaluation.

4.1 Supervisor’s Signature

4.2 Date August 31, 2019

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Declaration of Originality
I Sadaf Iqbal hereby solemnly declare that this project:
a) It is my original work, except where otherwise acknowledged in the text.
b) Has not been published earlier and
c) Shall not be submitted by me in future for obtaining any degree from this or
other university or institution
d) Has been incorporated HEC Plagiarism Policy
e) In case of violation of HEC Plagiarism Policy, I shall be liable to punishable
action under the plagiarism rules of HEC.
3.1 Student’s Full Signature
3.2 Date August 31, 2019

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 DEDICATION

This Humble Effort, the Fruits of my thoughts and Study,

To my Supervisor, Project Manager, My Friends and My Classmates

who encourage me to face any challenge.

To my Parents who inspired me to higher ideas of life,

For their Prayers,

For their Sacrifices,

They are “Heaven on Earth” for me

And all those who are dear to me.

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 Acknowledgement
Firstly, my humble thanks to Allah, the Sole, Supreme creator and sustainer of the universe, for
guiding us towards the straight path and granted me health, courage and concentration to complete
this work with His blessings.

Preparing the manuscript for this report has been an unusually enjoyable and exciting experience for
me. Perhaps the most memorable aspects of the project have been the opportunity to know better a
number of people who have provided information from various portion of the work in the course of
the research.

My thanks first go to my parents who supported me throughout my internship program. And I would
like to thanks Sir. Zohaib Mehmood for their unconditional support and help in making me learn in a
a good environment. I am very grateful to you for clarifying my concepts and making me learn from
your experience. Whatever I learnt from you will defiantly help me in my upcoming study and the
professional life ahead. Thank you so much for being so co-operative and so helpful every time.

I started collecting data from the first day of my internship program. All the staff at HBL was
supporting me in this task of collecting information about banking and its operations and provided
me with the relevant information about their particular departments. I present my deep regards for all
of these respected individuals.

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 Executive Summary
This report contains the details of the experience during my internship program at Habib Bank
Limited Pakistan Chowk, Gujrat Branch. This is one of biggest branches of the bank and deals in
general banking, credits and foreign trade.

Efforts have been made to compile this report in such a way that activates its salient features not only
for students but also for the layman. I have divided this report into different Chapters.

During my six weeks stay, I was given a brief orientation of different departments of general banking
which include account opening, clearing, remittances and online transactions

HBL is the prime bank in country established in 1941 having a registered head office in Karachi. It
was nationalized in 1974, but on February 2004, it has been privatized by Government of Pakistan
and is taken over by Aga Khan Fund for Economic Development (AKFED). They acquired 51
percent of shares of HBL.

It is one of the largest banks of Pakistan with 1439 branches and having total assets of Rs.
434,931,930,000. HBL is the largest bank having 56 branches in Gujrat District.

At last I must say that this text is designed to stimulate the curiosity about management practices of
Habib bank Ltd. of Pakistan. And to raise reader’s consciousness about the banking system working
in Pakistan.

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 Table of Content
Acknowledgement …………………………………………………………………7
Executive Summary …………………………………………….…………………8
1. Introduction of Report ……………………………….…………………….11
1.1 Introduction …………………………………………………………………...……………….11
1.2 Background of the study…………………………………………………………………….…11
1.3 Purpose……………………………………………………………............................................11
1.4 Scope…………………………………………………………………………………………...12
1.5 Limitation of Study…………………………………………………………………………….12
1.6 Objective……………………………………………………………………………………….12
1.7 Methodology of the Study……………………………………………………………………...12

2. Introduction of HBL …………………………………….….……………....13

2.1 About HBL.…………………………………………………………….………………………13
2.2 Brief History………………………………………………………………………….………...13
2.3 Business Structure……………………………………………………………………………....14
2.4 Departments…………………………………………………………………………………….19
2.5 Departments of HBL Bank………………………………………………………………...……19
2.6 Organizational Structure of HBL Bank……………………………………………………...….26
2.7 Market Standing…………………………………………………………………………………29
2.8 Swot Analysis…………………………………………………………………………………...29
2.8.1 Strength……………………………………………………………………………………......29
2.8.2 Weakness……………………………………………………………………..……………….30
2.8.3 Opportunities…………………………………………………………………………..……...30
2.8.4 Threats…………………………………………………………………………...…………….30

3. My Work ……...…………………………………………...…………………32
3.1 Activities in HBL …………………………………………………………………………….…32
3.2 Learning work in HBL ……….……………………………………………………………...….34
3.3 Identification of Main Problems and findings ………………………………………………….36

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 4. Financial Analysis of HBL ………………………………………………..…37
4.1 Importance ………………………………………………………………………………………37
4.2 Balance Sheet Analysis ………………………………………………………………………....38
4.2.1 Horizontal Analysis of Balance Sheet HBL Bank …………………………………………....38
4.2.2 Horizontal Analysis of Balance Sheet Askari Bank…………………………………………..40

5. Recommendation and Suggestions…….……………….….......................…42

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Chapter No. 1:

Introduction of Report

1.1: Introduction

Student of ADP study courses leading to Bachelor degree in Accounting & Finance are required to
undergo an internship program me of six-week duration. This is an essential academic requirement.
This internship is followed by comprehensive report writing, required to submit to the Superior
University. This report is properly evaluated based on its description and analytical capabilities by
internal and external examiners. I did my internship in Habib Bank Limited Pakistan Chowk Branch.

1.2: Background of Study

Internship training program during bachelors in accounting and finance is necessary for the partial
fulfillment of the completion in the degree of bachelors in accounting and finance. it is necessary for
me to complete an internship section of about six weeks in some manufacturing or services industry
relevant to my area of interest and specialization .so, I choose the banking field because I have
interest in this sector because my study background is related with this sector.

1.3: Purpose of Study

The purpose of the study is to work in real life situation and learn banking practice by doing account
opening, clearing, remittances, online transactions, and other work at branch.

1.4: Scope

This study is confined to banking operations. An attempt along with all its limitations, to collect
financial data and general statistics of the bank has been made. Keeping in view the purpose of the
study, which is to make an acquaintance with practical doings in the bank, this seems a
comprehensive effort.

1.5: Limitation of Study

It is to admit that the study attempts only those aspects, which are closely relevant to the purpose of
the study. Facts, which otherwise might be equally important, but not having a direct bearing on the
conclusions arrived at this study, have been ignored. The most important limitation from which the

11
study suffers is the non-availability of information in a manner required for analysis at the secrecy of
the bank. Another important limitation of the study is time and space constraint.

1.6: Objective of Study

Objectives are as follows:

a. To analyze banking operations i.e. operational analysis, financial analysis.

b. To develop concrete and feasible recommendations

c. To improve report writing skills.

1.7: Methodology of Study

 Broachers/ Manuals of Bank

 Annual Report

 Journals, Newspaper and Books

 Internet

 State Bank Foreign Exchange Manual

 Bank Internship Reports

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Chapter No. 2:

Introduction to Bank

2.1: About HBL

Originally established in 1941, HBL moved its operations to Pakistan in 1947 at the request of
Muhammad Ali Jinnah, hence becoming the first commercial bank to lay its foundation in the
country. Embarking on a progressive journey, HBL continued to grow and expand in the successive
years. The Bank's first international branch opened in Colombo, Sri Lanka in 1951, while the
construction of the iconic Habib Bank Plaza was completed in 1972, the year that also marked the
commemoration of HBL's 25th anniversary.

With a sizeable domestic share, HBL was nationalized in 1974. The Bank became a trendsetter in the
banking industry, acquiring the lion's share in inward foreign remittances and a major market share
in loans to small industries, traders and farmers. International operations expanded and HBL now
operates in over 20 countries across four continents.

In February 2004, the bank was privatized and the management control of the bank was handed over
to AKFED. By April 2015, the Government of Pakistan divested its entire shareholding of 41.5%
through the Privatization Commission of Pakistan, thereby officially making HBL Pakistan's largest
private bank.

HBL has not just been a pioneer in the banking industry, but has also been a platform that has
enabled dreams for millions of people. It has repeatedly, proven to be a catalyst for change by
initiatives that have elevated Pakistan’s image and reputation. From bringing back international
cricket to Pakistan through the HBLPSL, to helping strengthen the economy of the country through
initiatives like CPEC, HBL continues to enrich lives of Pakistanis around the world.

2.2: Brief History

HBL, Pakistan’s largest bank, was the first commercial bank to be established in Pakistan in 1947.
Over the years, HBL has grown its branch network to over 1,700 branches and +2,100 ATMs
globally, serving 14 million customers and clients.

13
The Government of Pakistan (GOP) privatized HBL in 2004 through which Aga Khan Fund for
Economic Development (AKFED) acquired 51% of the Bank's shareholding and the management
control. The remaining 41.5% shareholding by the GOP was divested in April 2015. AKFED
continues to retain 51% shareholding in HBL while individuals hold the remaining shareholding,
local and foreign institutions and funds including CDC Group Plc, which holds 5%, and International
Finance Corporation, which holds 3%.

The Bank is a leading full-service commercial bank. The key areas of operation are Branch Banking,
Corporate & Investment Banking, Treasury, SME & Rural Banking, Financial Institutions & Global
Trade Services, Transaction Banking and Islamic Banking.

The Branch Banking business is the mainstay of the Bank, positioning HBL as the largest retail bank
in Pakistan catering to all market segments. HBL Corporate & Investment Banking Group is a
leading provider of financial services to multinational and local corporate clients across the country.
The Bank also has the largest Treasury operations in Pakistan and plays a key role in Pakistan's
domestic markets.

With a global presence in over 20 countries spanning across four continents, HBL is also the largest
domestic multinational. The Bank’s international footprint is important as it provides opportunities to
effectively serve its core customers across its network. HBL is the largest executor of CPEC related
financing in Pakistan and coupled with being the first Pakistani bank to start Renminbi (RMB)
operations makes the Bank a key player in this economic initiative.

HBL is shaping the future through a paradigm shift as a ‘Technology company with a banking
license’. The Bank’s multiple digital channels are helping it get closer to its customers through
innovative and frictionless ways. The bank will continue to use technology to deliver service to its
customers in a faster, cheaper and more efficient way.

As the leading financial intuition of Pakistan, HBL is at the forefront of all development initiatives,
which includes growth of priority sectors and targeting the unbanked population in the country. The
Bank remains committed to its objective of financial inclusion for all sectors of society, across
Pakistan. The Bank is already playing a leading role in enhancing gender diversity through ensuring
the access of women to the financial sector.

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 2.3: Business Structure

HBL offers a range of products & services to facilitate the demands of partners. These include:

1. Trade Finance

Opening, advising, confirmation and negotiation of letters of credit.

Discounting of LCs including providing bankers acceptances.

Trade loan syndications.

Risk participations.

Pre/post, export financing.

Issuance of financial guarantees/SBLCs.

Documentary collections.

2. Cash Management

Specialized Deposit Slips – conventional collection model.

Internet Banking – electronic collection (non-individual/business customers).

Cash in Transit – CIT

Direct Debit Collection – SIDA (Standing Instructions for Debit Authority).

Utility Bills Payments – UBP

HBL at Work (HAW) – payroll solution.

Vostro account services.

Commercial Payments – SSI

4. Remittances

With a substantial market share in distribution of incoming home remittances into Pakistan, HBL has
built-up capacity to serve overseas FIs wishing to remit funds for beneficiaries in Pakistan as well as
in other specific locations.

15
5. Treasury

Money market placements.

FX/Swaps.

Bonds /TFCs.

Private placements & other debt instruments.

6. Bilateral Loans

Customized bilateral products are available to fulfill financing requirements of NBFIs, which
includes term loans and SBLC facilities.

7. Bank deposits

Deposits are to the bank as a backbone is to the body of a man. They are the lifeblood of the bank.
Habib Bank Limited and all other commercial banks perform the function of deposit accepting from
the public by offering suitable rates of interest on them, or on simply a promise to repay on demand.

8. Opening of account by an individual:

After entering into bank premises, the person goes through the following steps for opening an account
in the bank and for becoming a bank customer.
An introduction:
The first important step to take place in bank is to get satisfactory introduction of the person, who
wants to become bank’s customer by putting various questions.
In HBL (Katchery Chowk Branch), the branch manager takes great care of this step and is introduced
with the person himself. His main intention is to determine the prospective customer’s integrity,
respectability, occupation, and nature of business he is doing at the time of opening an account.
Account opening form & specimen signature card:
Now the person is provided with an application form known as Account Opening Form.
This form contains:
i. Title of account
ii. Address
iii. I.D. Card number
iv. Telephone No. (Office and Residence)

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 v. Introductory reference (all above-mentioned particulars of introducer)
vi. Signatures of the applicant
vii. Amount deposited
In addition to this, the customer is required to attach a copy of National Identity Card with the form.
Account opening register:
Now the name of the customer will be recorded in account opening register, and from here the account
no. of the customer will be written on (top most corners) account opening form and on specimen
signature card.
Issuance of chequebook:
The chequebook will ordinarily be issued to all customers desiring to have drawing facility.
Chequebook consists of 10, 25, 50, or 100 pages depending upon customer requirement. Customer can
withdraw money by signing a cheque and writing the amount he wants to withdraw from his account.
A special chequebook register is kept to enter the name of the person having chequebook.
Recording in to general ledger:
The concerned officer records the name and amount deposited with the bank in to general ledger.
Separate ledgers are maintained for different types of accounts e.g.
i. Current Account Ledger
ii. Saving Account Ledger
iii. Fixed Deposit Account Ledger
iv. Call Deposit Account Ledger
v. As and when customer deposits the money, amount is credited the general ledger and
the withdrawal is followed by a debit entry in the ledger.
9. Types of accounts maintained by Habib Bank Limited:
The following types of accounts are maintained in HBL:
1. Current accounts.
2. Profit and loss sharing account.
3. Fixed deposit account.
4. Freedom account.

Current accounts:
A bank account, which may be used to lodge payments or to withdraw money on demand. It’s main
Purpose is to serve the businessperson. Form number F-53 is provided to the person to open the
17
account for businessperson. It is a statutory requirement to maintain current account. Its main features
are:
1. Minimum amount for opening this account is Rs.5000
2. Any person can open the account with the bank
3. According to inter banks agreement interest is not paid on current account.
4. Bank act as custodian of money
5. Customer can withdraw money through cheque supplied by bank.
Saving/P&L sharing accounts:
To provide interest free banking facilities in Pakistan, this type of account was introduced in January
1982.The main features of this account are:

1. Instead of having fixed return in the form of interest the deposited money will be shared in
Profit and loss of the bank.
2. One can open the account by depositing minimum Rs.1000
3. To withdraw a large amount a notice of 7 days to the bank is necessary but practice not seen.
4. There is not any kind of interest is provided on money deposited.
5. Rate of profit is declared at the close of each half-year.
Time/Fixed Deposit Account:
This account is the major source of funds for the banks. This account is best for people who have
surplus money and do not need such funds in nearer future. The money is deposited for a fixed period.
Main features of this account are:
1. Fixed amount deposited for fixed period.
2. Amount of profit can be obtained after each moth or quarter, six months.
3. Higher will be the time, higher will be the rate of profit.
4. A receipt is used for the amount deposited called fixed deposit receipt.
5. Period of deposit can vary from 3 months to 10 years.
The amount can be withdrawn before maturity after surrendering interest.
2.4: Departments
The head office is operationally in charge of central affairs including the delegation of powers and
authority to the regional headquarters throughout the country. All the senior management team works
in the Head office of HBL bank is situated in Karachi. In addition, it is all branches, regional offices,

18
corporate branches and overseas branches, online branches, and representative offices work
according to rules and regulation set by the head office.
Following are the departments that are working at head office:
 Administration
 Credit Management
 Investment Banking
 Human Resource
 Corporate Planning & Budgeting
 Finance & Treasury
 Inspection & Audit
 Marketing & Development

2.5: Departments of HBL Bank

1. Account Opening Department
2. Deposit Department
3. Clearing Department
4. Remittance Department
5. Accounts Department
1. Account Opening Department:
How to open an account:

There are certain formalities, which are to be observed for opening of a current or saving account
with a Bank. These formalities in brief are as under.

Formal application:

The customer is to fill "Account Opening Form. It is a formal request by a customer to the bank to
allow him to have and operate the current or saving account.

Specimen signature:

When the Banker is satisfied about the integrity of the customer, he agrees to open the account. The
Banker obtains the specimen signatures of the customer on the signature book or on card.

Minimum initial deposit:

19
In Pakistan the current account can be opened with a minimum of Rs. 5000/- and PLS Saving
Account with a minimum of Rs 1000/- These amounts are also the minimum balances to be
maintained by the account holders with the Bank.

Operating the account:

When an account is opened in a Bank, the Banker gives to the customer.

i. Pay in slip book.

ii. Cheque Book and pass book with a view to operate it.

Precautions in preparing the pass book:

The Banker should be careful in preparing the passbook However, the customer himself should.

i. Send the passbook for making entries and periodically checkup them.

ii. He should also see that the accountant initials the entries.

iii. The customer should verify the entries with own books of account.

iv. In order to safeguard the secrecy of the account; the customer should receive the passbook
in closed cover.

With-drawl:

Withdrawal is made on cheques supplied by the Bank. A new chequebook is issued only on receipts
of the requisition slip attached to the chequebook issued previously.

Transfer of an account:

Account can be transferred to any other branches of HBL. Free of charge. If a depositor wants to
transfer his account, he presents his passbook personally or sends it to Bank and writes an
application for the transfer of an account.

Closing of an account:

It is done simply on letter or request for closing the account, unused cheque leaves on hand are also
surrendered at the same time.

2. Deposits Departments:
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There are two types of deposits i.e. current and saving. There are different forms present in the
section of or deposits.

i. Current account form.

ii Saving account form.

iii Private or individual form

iv Private firm account form

In the above-mentioned forms, the bank makes an agreement with his customers.

3. Clearing Department:

Every Bank performs the paying and receiving functions. Cheques are collected which are drawn up
to Banks for customers. Similarly, the cheques drawn on different Banks and deposited by Banks
own customers for collection within the city is known as clearing the functions of receiving and
paying is mostly done through the clearing house. A clearinghouse can be defined as "AA place
where that representatives of all Bank get together to settle the receipts and payment of cheques
drawn on each other" Clearing House provides the facility which can hardly be dispensed with
especially, in case of crossed cheques.

There are two main types of clearing.

i Outward clearing

ii Inward clearing.

Outward Clearing:

It includes those cheques and other instruments, which are sent by the Bank to the Banks for
payment on behalf of its own clients. Cheques are sent to clearing house thorough local main branch.

A delivery message from the local main branch comes to every branch at a fixed time to pick its
outward clearing or outward returns as the case maybe.

Outward Clearing at Branch

a. Account number of payee/endorsees is written on the backside of the cheques.

b. The instrument and the paying in slips are separated.

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 c. The instruments are sorted I Bank-wise and branch wise.

d. Schedules are prepared.

e. Jotting of all the schedules are taken in the clearing House statement. Amount of the
cheques in written in the "Delivered" and to pay column.

f. After balancing the outward clearing, the pay in slips are released to C.D department.

g. After balancing, a transfer debit voucher is prepared.

h. The instrument, schedules are delivered to the messenger from the main branch.

Inward Clearing:

The cheques drawn are called inward clearing drawn on Habib Bank through its representatives. On
the Bank presented by other Banks for payment, it includes those cheques and other instruments of
Pakistan branches, which another Banks present at the clearinghouse.

Inward Clearing at the Drawn Branch

a. Numbers of instruments noted in the schedules are verified immediately on receipt.

b. The amounts of all the instruments are jotted down and totaled. If should be equal to the
amount mentioned in schedule from the local main branch.

c. The amounts are debarred to the relevant accounts if otherwise in order.

Types of Cheques Collected by Clearing Section

Transfer Cheques: These are the cheques which are collected and paid by same branch of HBL for
example Mr. Ali is a customer of HBL of CITY branch and draws a cheque in favor of Mr. Hussain
who is also the customer of the same branch.

Transfer Delivery Cheques:

The cheques, which are collected and paid by two different branches of a Bank, situated in the same
city. For example, a person draws a cheque on HBL main branch, D.I. Khan in favor of another
person who maintains an account with HBL Rakh Mandra branch, D.I. Khan.

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Clearing Cheques:

When the payee/endorse and the drawer of cheque maintains account with different Banks, the
collection Bank in any one of the following methods: -

a. It can collect cash by sending its representative with the cheques to each of the paying
Banks. It is not so much appropriate.

b. The Bank maintains an account with the paying Bank.

c. he cheques can be exchanged by representative of the various Banks who meet at a fixed
time and at a fixed place. This is the most efficient method of collection and paying cheques.

Functions of Clearing Section in a Branch:

a. To accept transfer, transfer delivery and clearing cheques from the customer of the branch
and to arrange for their collection.

b. To arrange payment of cheques drawn on the branch and gives for collection to any other
branch of H.B.L. or any other member or such member of local clearinghouse.

c. To collect amounts of cheques drawn on members of the local clearinghouse sent for
collection by HBL branches not represented at the local clearinghouse.

Procedure for Clearance of Cheque:

The customers are provided with the copes of pay In-slip, whenever the customer wants to deposit
any cheque, he fills in the pay in slip himself and hands it over the counter along with the instrument.

4. Remittance Department:

Remittance means transfer of money from one place to another place. It is of two kinds.

I: Inland remittance.

II: Home remittance.

Inland Remittance:

An inland remittance means a transfer of money payable at a certain place within the country. Inland
remittances can be classified as under: -

23
 I: Within locality.

II: Outside locality.

Within Locality:

When a branch situated in D.I. Khan is required to send drafts to any other branch situated in the
same city the process is known as within locality. For example, HBL. Main Branch, D.I. Khan sends
any draft to HBL. Rakh Mandra branch, D.I. Khan.

Outside Locality:

Outside locality is an important type of inland remittances, which means the transfer of money
payable outside the city. For example, HBL. Main Branch D.I. Khan sends any draft to a Branch
situated at LAHORE.

5. Accounts Department:

Every Business organization deals in money matters. Bank also deals in money and more over since
the money belong to the depositors therefore, it is of utmost importance to keep systematic and
correct record. Furthermore, the Banks are commercial institutions and its main objective is to earn
profit, therefore, then record of all incomes and expenditures are kept correct and systematically.

In HBL, the responsibility for maintaining necessary accounting data and to keep up to date records
in a systematic manner has been assigned to the Accounts Department. The Branches of Bank
perform their daily routine work and deal in money that belongs to depositors. Here account
department hold great importance in banking, because it keeps all the accounting records properly.

Accounts Terms:

The account department maintains all the accounting records properly there are certain accounting
terms, which are defined into the following.

Account: A summary of all debit and credit transaction pertaining to a similar nature or to an
individual or body of persons is called an account.

Vouchers: Written evidence recorded on a piece of paper in respect of money transaction is called
voucher.

24
General ledger: Main ledger is a book, where various accounts of different type are kept. Generally,
this book is in bended form containing several sheets for several accounts.

Subsidiary ledger: Where a main head has different sub-head of it: subsidiary leader are maintained.
These subsidiary ledgers are maintained from the main ledger.

Books and stationery: The account department uses the following books and stationery

 Cash book cum-general ledger

 Register of vouchers
 Transfer book
 Receiving cashier book
 Paying cashier book
 Supplementary sheets
 Different vouchers
Functions of the Account Section:

 During the course of daily business of the branch, a number of cheques are presented by
customer for cash payment, though transfer, delivery and clearing cheques at the counter. In
addition, a number of new accounts are opened and the customers deposit cash. The branch
passes a number of new vouchers by debiting, one account and crediting another account.
 So, in order to ensure that during the day, all the transactions have properly been recorded
and they are complete in all respects and are recorded in proper books by the branch this
recording is done on daily basis and maintained by account section.

Preparation of Statements:

To Judge the performance of branches, the Head Office requires periodic statements from them.
Through these statements, the top management watches the progress of the branches and they
provide them necessary guidance.

25
2.6: Organizational Structure of HBL Bank

President and CEO

Member of Board of Directors

Head of HR Head of Finance

Senior Vice Presidents

Vice Presidents

Chief Manager

Branch Manager

Manager Teller

Cashier/Cash officer

26
 Board of Directors:

Mr. Sultan Ali Allana

Chairman

Mr. Moez Ahmad Jamal

Director

Miss Sadia Khan

Director

27
Mr. Agha Sher Shah
Director

Mr. Salim Raza

Director

Mr. Muhammad Aurangzeb

President & CEO

28
 2.7: Market Standing

Competitors of HBL are as follows:

Faysal Bank:

Faysal Bank is seen as one of Hbl's top competitors. Faysal Bank was founded in 1994, and is
headquartered in Karachi, Sindh. Like Hbl, Faysal Bank also competes in the Banks industry. Faysal
Bank generates $1.5B.

Soneri Bank:

Soneri Bank is a top competitor of Hbl. Soneri Bank was founded in 1991, and its headquarters is in
Karachi, Sindh. Like Hbl, Soneri Bank also competes in the Banks field. Soneri Bank has 14,480
fewer.

Bank Al Falah:

BAFL is Hbl #3 rival. BAFL was founded in Karachi, Sindh in 1997. Like Hbl, BAFL also works
within the Banks industry. Compared to Hbl, BAFL generates $1.1B less revenue.

2.8: SWOT Analysis

2.8.1: Strength:

Strength can be defined as an area where a company is best at doing something or a feature that puts
the company at an advantage in comparison to its competitors. HBL enjoys the following strengths:

1. HABIB BANK is a well-established bank enjoying long history of over 65 years of

experience and profitable operation.
2. HBL was the first privatized bank that gives it an edge over other nationalized banks as it can
develop any strategy consistent with the demand of market and free from any political or
bureaucratic influence.
3. HBL is the largest private bank in Pakistan now and people trust is very high.
4. It has the largest branch network among private banks of Pakistan.
5. HBL is the market leader in introduction of e banking and it has the largest.
6. HBL was rated the best domestic bank for two consecutive years of 2000 and 2001 by Euro
money, a leading international publication.
29
 7. HBL has forged strategic alliances with international banks for expanding its network further,
both locally and internationally.
8. HBL has the ability to bring innovative products and services like personalized service,
electronic funds Transfer, sophisticated financial products such as electronic banking,
auto-teller machines and evening banking.
9. HBL has been very effective in controlling costs as it successfully restructured itself after its
privatization. During this process, more than 1,600 employees were relieved under a golden
handshake scheme and 110 branches were closed.
10. Excellent branches appearance gives an edge to HBL over other banks. The branches are well
furnished even in less developed areas where other banks’ branches give a poor view.
2.8.2: Weakness:

A weakness is defined as an area in an organization where the organization is not as good at doing
something as its competitors or a thing, which an organization lacks thus, putting the organization at
disadvantage in comparison to its competitors. Based on the above definition, HBL has the following
weaknesses.

1. Mission of HBL is not well defined.

2. Though HBL is second largest bank in Pakistan, yet the fact remains that it is not market
leader as NBP. Its total assets are always less than NBP total assets.
3. Now as it is a privatize bank that is why GOVERNAMENT support to HBL decreased as it
was in past.
4. Employees at branch level are not properly motivated to work by heart. They take the
all-routine activities as a boring job.
5. Most of the employees lack managerial training, as they are not properly educated. Due to
seniority, they have moved up on the hierarchy line to Grade- I, II or III positions having
hardly bachelor degrees. This type of senior staff cannot apply the modern and innovative
techniques of management in decision making almost computer knowledge.

2.8.3: Opportunities:

An opportunity can be defined, as a change in external environment which if properly exploited with
the organizational strengths will result in enhanced sales, market share, or income. Using its
strengths, HBL can avail the following opportunities:
30
 1. It can introduce debit card system or may convert the existing ATM cards into a complete
debit card.
2. New products like personal loans, mortgage and auto leasing and cash management which
diversify credit risk and add to revenue generating products, are currently provided in big
cities like Lahore, Islamabad, Karachi, and Rawalpindi, these products may be tested for
success in other small areas of PAKISTAN in different provinces.
3. As all around the world remittances of money are strictly monitored so as the money remitted
may not fall in hands of so-called terrorists. For that all conventional money laundering
through Hundies have been stopped, there is an opportunity for HBL to extend its branch
network to various countries emphasizing mainly on introducing electronic fund transfer
facilities.
2.8.4: Threats:
Threat can be defined as a change in external environment, which if not met with proper strategies
will result in loss of revenues, market share, or income. In the context of HBL’s external
environment, the following potential threats exist:

1. The frequent reduction on 6-month and 12-month Treasury Bills discount rates by SBP may
create pressure on the banks profitability.
2. The low discount rates are also negatively influencing the advances rates, which may affect
the banks’ profits from the other side.
3. Foreign banks operating in Pakistan are playing a significant role by incorporating new
technologies and providing better quality services thus creating a threat to the local banks
especially to HBL, which tries to develop core competence in electronic based products.
Policies of privatization, foreign exchange reforms, and structural adjustments have increased
the inflow of foreign resources through direct and portfolio investment. In trade financing,
the role of foreign banks is even more significant, as approximately 30 percent of the total
trade of the country is transacted through them. Major portion of the trade financing is for
importers to establish letters of credit.

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 Chapter No. 3:

My Work

3.1: Activities in Branch

HBL bank is functioning under following set up:

Bank Deposits:

Deposits are to the bank as a backbone is to the body of a man. They are the lifeblood of the bank.
HBL and all other commercial banks perform the function of deposit accepting from the public by
offering suitable rates of interest on them, or on simply a promise to repay on demand.

Opening of Account by an Individual:

After entering into bank premises, the person goes through the following steps for opening an
account in the bank and for becoming a bank customer.

An Introduction: The first important step to take place in bank is to get satisfactory introduction of
the person, who wants to become bank’s customer by putting various questions.

In HBL (Pakistan Chowk Branch Gujrat), the branch manager takes great care of this step and gets
introduced with the person himself. His main intention is to determine the prospective customer’s
integrity, respectability, occupation, and nature of business he is doing at the time of opening an
account.

Account Opening Form & Specimen Signature Card: Now the person is provided with an
application form known as Account Opening Form.
This form contains:

i. Title of account

ii. Address

iii. I.D. Card number

iv. Telephone No. (Office and Residence)

Introductory reference (all above mentioned particulars of introducer)

32
 vi. Signatures of the applicant

vii. Amount deposited

In addition to this the customer is required to attach a copy of National Identity Card with the form.

Account Opening Register: Now the name of the customer will be recorded in account opening
register, and from here the account no. of the customer will be written on (top most corners) account
opening form and on specimen signature card.

Issuance of Cheque Book: The cheque book will ordinarily be issued to all customers desiring to
have drawing facility. Cheque book consists of 10, 25, 50, or 100 pages depending upon customer
requirement. Customer can withdraw money by signing a cheque and writing the amount he wants to
withdraw from his account. A special cheque book register is kept to enter the name of the person
having cheque book.

Recording in to General Ledger: The concerned officer records the name and amount deposited
with the bank in to general ledger. Separate ledgers are maintained for different types of accounts
e.g.

i. Current Account Ledger

ii. Saving Account Ledge
iii. Fixed Deposit Account Ledger
iv. Call Deposit Account Ledger

As and when customer deposits the money, amount is credited the general ledger and the withdrawal
is followed by a debit entry in the ledger.

Types of Accounts Maintained by HBL Pakistan Chowk Branch Gujrat

The following types of accounts are maintained in HBL:

1. Current accounts.

2. Profit and loss sharing account.

3. Fixed deposit account.

4. Freedom account.

33
 3.2: Learning Work in Branch

Truthfully speaking everything was new to me in Habib Bank limited though I have a good Bookish
knowledge but truthfully speaking it was totally different from the practical knowledge of the
banking. But with the grace of ALLAH and able to learn every section of the Bank.

What I Learned During Internship: THE most important thing that i learn is that the difference
between the behaviors of officials. And also learn more clerical work of HBL as under.

Account Opening Section:

I spent the 1st three days in account opening section. As the area where I did my internship, the
people are not well educated that is why whenever a person will come for opening an account than
the manager referred that man towards me. Then I guide that man and the form of opening an
account will be filled by me and the entire legal requirement are completed by me. In past the Habib
Bank use and the old type of firm but now it is using a new firm of opening an account. There were
five signs are required on old type of firm but now the new firm require only one side.

Clearing Section:

Past Method:

I also work in clearing section during my work I learned how to collect the different cheques of
different Banks. Then I learned how these cheques of different Banks mutually transfer. For mutual
transfer everyday a meeting is held in NBP main branch Bannu. The representative of UBL, ABL,
BANK AL FALAH, BANK OF KHYBER, and HBL was participating and thus mutual transfer of
cheques was held. Mr. IRFAN sahib was the in charge of this section. He gave me a lot of attention.

New Method:

Now-a-Days this activity done through NIFT.

Remittances Section:

I also worked in remittances section .in remittances section I learned how to transform the money
from one place to another place. In this section I learned,

1: Demand Draft.

34
 2: On Line Transfer.

On each transaction there is commission charged to the sender.

The commission of (D.D) from 1 to 1lack is Rs; 160.
The charges are on the (D.D) up to 1lack is calculated in percentage.

The commission of (O.T) is Rs 350.

I have done my internship at HBL and I have learned a lot from it. It was really a great opportunity
for me to work as a professional. I gained a lot of things and skills. First of all, I learned to be
punctual. I waked up early to get ready for internship. My dressing and appearance were counted and
had greatly affected on my feedback. Mostly I do not like to stay at a single place for a long time, but
by doing internship at HBL, I learned a skill of being patience. My mind started working fast in
taking financial decision by dealing with a large number of people. My communication skills were
improved. I recognized how to deal with different type of people. Beside this, I recognize the
banking concepts which makes a conflict in my mind.

I was the internee of HBL, but for clients and other people, I was the employee of HBL and it was
my responsibility to deal with them as employee of HBL. Whatever I did, was the act under HBL
and it was my responsibility to increase its good will. My responsibility was to create deposits slips
of clients. Guides them what to do and where to go.

It was my responsibility to verify checks of holders. It was under my responsibility to make a good
relationship with people. I also got a great benefit by doing internship that I recognize what type of
institute is best for me for job. Or what kind of business I should do. It was a great opportunity for
me to identify what type of demand is existing in the market, and what is the overall taste and trend
of people. It gives me a vision and helps me in identifying my goals.

One more and important thing I want to share is that, it was not much related with my class room
bookish knowledge. It was something different from what I learned in my institutes. What I learned
from books is that why it was created, when it was created and numerical, I did were in artificial
environment. But in HBL, it was different. I realize that practical life is a bit different from bookish
life and what you have to do is according to your skills.

35
 3.3: Identification of Main Problems and Findings

Problems:

These problems are: -

1. There is a lack of on-line information in the Bank about the changes taking place in the world
of Banking.
2. A customer cannot find any kind of journal or newspaper there.
3. In early days of month there is a great rush of customers, which cause inconvenience for the
officer concerned and cashier as well.
4. Separate cabins are not available for the staff.
5. A separate counter for ladies is not maintained there.
Recommendation:

I will give following suggestions for the better function of the Bank:

1. The management should provide better arrangement for the employees.

2. The daily newspapers and journals should be provided to the employees and customers
visiting there.
3. A separate ladies counter should be there.
4. The Bank management should be very careful while granting the loans.
5. Personal interests should not be given importance and customers Personal credit worthiness
must be carefully scrutinized public relation desk should be established in each and every
branch for guidance as well as redresses of grievance of customers at the spot.
6. Online Banking should be introduced in all the branches.
7. Aggressive publicity campaign must be introduced through press and Electronic media for
new products and scheme by initiating vigorous marketing policy.
8. New talent / professionals should be hired to cope with the competitive demand in the
industry.
9. The financial statement should be made more transparent and reliable.
10. Consumer financing should be initiated to capture the market share.
11. Employee’s induction promotion and transfer should always be made on merit.
12. To motivate the employees their remuneration / salaries should be made at par with top tier
Banks.
36
Chapter No. 4:
Financial Analysis of HBL Bank
4.1: Introduction
Analysis is vital to fathom, weigh and evaluate the operating performance of the firm. Another reason
that depicts the importance of ratio is that investors make their investment decision in certain firm
based on these ratios. But few points to remember before starting the computation process:
Bank is service sector hence it doesn’t deal in with any kind of physical good, therefore certain ratio
such as inventory turnover will not be discussed at all.
The key points to note with the bank are:
 There are substantial non-cash charges in the profit and loss statement – mainly provision for
loans losses.
 It is generally difficult to get a definitive fix on actual cash loan losses due to lack of disclosure.
 Banks are in the business of borrowing money and on lending it at higher interest rates. Debt is
therefore not only a form of financing bit more importantly a key input into its “production
process”.
Now keeping in view these differences, it is crucial to make following adjustment to get a better look
of data:
Accounting loss provisions are added back in the calculation of cash profits but an estimate of the
economic or cash loan losses is deducted (proxies by estimated write-offs). In the case of HBL, actual
write-offs have historically been disclosed since. Interest is deducted in the calculation of cash profits.

37
 4.2: Balance Sheet Analysis

4.2.1: Horizontal Analysis of Balance Sheet HBL Bank:

2016 16 vs. 17 2017 17 vs. 18 2018

Rs. % Rs. % Rs.
ASSETS
Cash and due 284397 100.86% 286847 112.29% 322102
from banks
Other earning
assets 1356161 106.74% 1447591 103.46% 1497765

Net Loans 748466 107.06% 801380 126.81% 1016299

Goodwill 4309 50.93% 2195 115.62% 2538

Intangibles 1013 410.06% 4154 128.21% 5326

Long term 22559 121.26% 27357 107.89% 29518

investments

Other long term - - - - 570

assets

other assets 59510 118.04% 70248 124.76% 87647

2476415 106.59% 2639772 112.19% 2961765

Total Assets
LIABILITIES

Accounts 11936 90.24% 10772 - -

payable

Accrued 18188 66.42% 12081 59.78% 7223

expenses

Total deposits 2137293 93.52% 1998935 94.34% 1885959

38
 Total short-term 429290 76.11% 326769 92.29% 301585
borrowings

Capital leases 129949 80.81% 105022 - -

Other current 1054 67.55% 712 285.67% 2034

liabilities

Total long-term 16530 59.01% 9756 742.42% 72431

debt

Total Debts 575769 76.67% 441458 84.72% 374016

Other liabilities 82353 51.08% 42068 84.59% 35588

Total Liabilities 3402367 86.63% 2947573 90.88% 2678836

Total Equity 192833 90.07% 185264 105.38% 195241

Shareholder’s 2507182 107.53% 2696218 112.22% 3025853

equity

Total Common 1466 100% 1466 100% 1466

Shares
outstanding

Interpretation:
 Cash was 100.86% of total assets in year 2016 which was increased to 112.29% in year 2018.
 Earning assets was 106.74% in years 2016 which was decreased to 103.46% in year 2018.
 Net loans were 107.06% in year 2016 which was increased to 126.81% in year 2018.
 Intangible assets were 410.06% in year 2016 which was increased to 128.21% in year 2018.
 Long term assets were 121.26% in year 2016 which was decreased to 107.89% in year 2018.
 Other assets were 118.34% in year 2016 which was increased to124.89 % in year 2018.
 Total assets of the bank were 112.19% in year 2018.
 Total liabilities of the bank were increased to 90.88% in 2018 as compared to 2016.
 Equity was 105.38% in year 2018.


39
4.2.2: Horizontal Analysis of Balance Sheet Askari Bank:
2016 16 vs. 17 2017 17 vs. 18 2018
Rs. % Rs. % Rs.
ASSETS

Cash & dues from

bank 43082 25.17% 10846 120.07% 12156
Earning assets 334008 116.32% 388549 89.66% 348377
Net loans 209169 107.06% 223937 132.21 296088
Plant 10097 97.90% 9885 129.39% 12791
Intangibles 922 94.03% 867 88.23% 765
Other long-term
assets 796 53.76% 428 931.77% 3988
Other assets 21596 28423 114.33% 32497
131.61%
LIABILITIES
Accounts
payable 2711 115.60% 3134 130.21% 4081
Accrued
expenses 2243 97.72% 2192 68.88% 1510
Total deposits 472803 111.21% 525805 109.08% 573596
Other bearing
liabilities - - 5976 146.16% 8735
Total short-term
borrowings 85313 75.105% 64075 65.34% 41870
Capital Leases - - 27290 145.19% 39623
Other current
liabilities 19221 72.45% 13926 91.23% 12705
Total long-term
debt 20967 66.97% 14043 8.45% 1188
Total debt 106280 86.09% 91506 90.35% 82682
Other liabilities 206192 79.49% 163907 142.23% 233139
40
 Total Liabilities 915730 99.57% 911854 109.57% 999129

Interpretation:
 Cash was 25.17% of total assets in year 2016 which was increased to 112.07% in year 2018.
 Earning assets was 116.32% in years 2016 which was decreased to89.66 % in year
 Net loans were 107.06% in year 2016 which was increased to 129.87% in year 2018.
 Intangible assets were 94.04% in year 2016 which was decreased to 88.29% in year 2018.
 Long term assets were 53.81% in year 2016 which was increased to 930.38% in year 2018.
 Other assets were 131.61% in year 2016 which was decreased to 114.33% in year 2018.
 Total assets of the bank were 128.21% in year 2016.
 Total liabilities of the bank were increased to 109.95% in 2018 as compared to 2016.

41
Chapter No. 5:
Recommendations
 HBL is already the best bank of Pakistan. For me to make recommendation, my knowledge is
very limited. But improvement is always a need of every organization. As I observed SWOT
analysis and some other facts are also needs improvement.
 HBL needs to provide lunch for employees.
 There must be bonus and incentives provided to the employees.
 Decision taking structure must be decentralized.
 Mostly I observed that one employee is dealing with more than one customer, this will reduce
the level of satisfaction. To meet this drawback, bank must increase their employees.
 There is no proper place of sitting for people. HBL must focus on this and provide a proper
sitting place.
 Work of Teller Manager and Operational Manager is not much different. So, both remains
confused who will do a task. They must be guided what type of tasks they should do.
 There is a proper downward communication way. But there is no such proper way of upward
communication
 If foreign bank starts its setup in Pakistan with its own technology. HBL will be pushed back.
So HBL needs to improve its technology.

According to me, there are the recommendations for HBL. It must focus on these drawbacks.

42