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Brief History:

HBL was the first commercial bank established in 1947. HBL is one of the largest

commercial bank of Pakistan. It accounts for a substantial share (20%) of the total

commercial banking market in Pakistan with a network of 1,705 domestic branches; 55

overseas branches in 26 countries spread over Europe, the Middle East, Far East, Asia,Africa and the United States; 3 HBL wholly owned Subsidiaries namely Habib Bank

Financial Services (PVT) LTD. Karachi, Habib Finance International LTD (Hong Kong)

and Habib Finance Australia Ltd. Sydney; 2 Joint Ventures namely Habib Nigeria Bank

Ltd. (40%) and Himalayan Bank Ltd. (20%) and 2 representative offices in Iran and

Egypt. HBL is currently rated AA+ (Long term) and A1+ (Short term)*. It is the first

Pakistani bank to raise Tier II Capital from external sources.

ORGANIZATIONAL STRUCTURE:

HBL is organized along functional lines with eight core divisions namely Corporate &

International Banking, Retail Banking, International Banking, Audit & B.R.R., Credit

Policy, Asset Remedial Management (ARM), Information Technology

Group an d Human Resources Group.

VISION, MISSION AND VALUES:

Vision:

Enabling people to advance with confidence and success.

Mission:

To make our customers prosper, our staff excel and create value for shareholders.

Values:

Our values are the fundamental principles that define our culture and are brought to life inour attitude and behaviors. It is these values that make us unique and unmistakable. Our

values are defined below:

Excellence

Integrity

Customer Focus

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Meritocracy

Progressiveness

PRODUCTS AND SERVICES OFFERED BY HBL:

Products:

o HBL Muhafiz Rupee Travelers Cheques

o HBL Auto Finance

o HBL Flexi Loans for salaried personnel

o HBL Lifestyles Financing Scheme

o HBL I-Card

o HBL House Financing Loans

o HBL Easy Access

o HBL Fast Transfer

o Haryali Agricultural Loans

o HBL E-Bank

DEPARTMENTS & RESPONSIBILITIES:

1. Account opening department.

2. Cash department.

3. Credit department.

4. Lockers department.

5. Bill clearing department.

6. Foreign exchange department.

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7. I.T department

Account opening Department:

In this department customer open the account in the bank. This gives facility to the

customer for opening new account with the bank that they allow him and operate this

account.

These require many document to open this

account:

Copy of CNIC

Utility bill

Student card

Provisional receipt

Address of customer

Specimen Signature of the customer

posting the account on the system

Cheque book issue to the customer

Secrecy of the customer

Types of the Account

1. Individual account

2. Joint account

3. Business account

4. Current account

5. Saving account

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Individual account:

Bank opens this account by individually. It involves single person only. Bank opens this

account for one person.

Joint account:

Bank opens this account by one or two person. The two people use one account in the

bank. Bank considers one account by two people. The two people of joint account show

one account according to the law

Business account:

In this account, bank only business transaction. It is opened by companies, institution,

organization and partnership business. It is purpose of deal with the businessmen.

Current account:

Bank opens current account to every person. Usually, some current account have to pay

interest by the customer but its rate is low other accounts. Current account offers any

facilities to the customer which is mentioned below:

Debit card

Cheque book to the customer

Automatic bill payments from account

Overdraft facility

Clearing services etc.

Reason for closing customer account:

Bank ay close this account due to some reason:

1. Death of a customer

2. Notice by a customer

3. Customer insanity

Death of a customer:

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In the case death of the customer, bank may close the account and stop all

transaction related to the person. Bank stop further transaction such as cheque issue,

money transfer etc.

Notice by the customer:

Bank may close this account on the demand of the customer. Customer gives

application to the bank for closing this account.

Customers insanity:

Bank terminates this account due to ment al of the customer. Bank stops this

transaction with this customer. It is all too easy for the customers needs by the desires of

others within a bank who interpret the customer needs through their own prism. His

insanity of the customer, to the knowledge of the bank, has the effect of revoking this

authority, and the bank would not be necessary in paying the acceptances. That the bank

has not been officially notified of the customer's insanity does not indicate

Cash department:

Cash department has vital role in the banking sector. All cash transaction represent in this

account such as cash received from customer, import and export transaction, bill

payment etc. It involves cash payment and receipt transaction in it.

These are following perform various functions in this

department:

Acceptance of deposit

Cheque payment

Collection of funds

Remittances

Transfer of funds from one account to another

Verification of signature

Posting

Heading of prize bond

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1. Share certificate

2. Deposits

3. Mortgage of property etc

unsecured

DEPOSIT DEPARTMENT

Bank deals in money and they are merely mobilizing funds within the economy. They

borrow from one person and lend to another, the difference between the rate of borrowing

lending forms their spreador gross profit. Therefore we can rightly state that deposits are

the blood of the bank which causes the body of an institution to get to work. These

deposits are liability of the bank so from point of view of bank we can refer to them as

liabilities.

DEMAND DRAFT:

Demand draft is a written order drawn by a branch of a bank upon the branch of same

or any other bank to pay certain sum of money to or to the order of specified person. It

can be issued to the customers as well as non customer against cash cheque and letter

of instruction. Demand draft is negotiable instruments that can be negotiating at any

time before its cancellation. Its Legal provisions are same as that of cheque.

Following parties are involved in demand draft:

Applicant

issuing branch

Drawee branch

Beneficiary

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A demand draft may be issued against the written request of the customer before issuing

it must be seen that the demand draft is in order.

The DD application must be scrutinized by the counter clerk in respect of following

points.

There should be branch where payment is to be made.

Full name of payer should be mentioned.

Amount in words and figures must be same

The applicant on two places should sign application.

TELEGRAPHIC TRANSFER:

Telegraphic transfer means the transfer of funds from one branch to another branch of

the same bank or upon other bank under special arrangements just like a telegram.

Telegraphic transfer is not negotiable and the funds are not payable to bearer. Minor

cannot avail this facility. In telegraphic transfer the bankers use secret codes. One code is

with issuing person and the second is with another person. When they combine the codesits become an amount that is called check. The payment is made after the confirmation

of the check.

Following parties are involved in TT

Applicant

Drawing branch

Drawee branch

Beneficiary

Following important things should be included in TT:

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Full name of the beneficiary or account number should be mentioned in the

application form.

Instruction regarding mode of payment should be obtained.

A record in the remittance outward register should be maintained.

All the remittance must be controlled through number or codes.

PAY ORDER:

Pay order is an instrument through which payment can be made from one bank to another

bank. Pay order is meant for bank own payment but in practice they are also issued to

customers.

Following parties are involved in pay order:

Applicant

issuing branch

Payee

MAIL TRANSFER:

Mail transfer is not negotiable and the procedure of it is same with the procedure of DD.

When a customer request the bank to transfer his money from this bank to any other bank

of the branch of same bank in the city, outside the city of outside the country the first thing

he has to do is to fill an application form. In which he states that I want to transfer the

money from this bank to that specific bank by mail. If the customer is the account holder

of this bank, the bank will debit his account and the concerned officer will fill forms to

make the mail transfer complete.

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If the customer is not the account holder of the bank, then firstly he has to deposit the

money and then rest of the procedure will be adopted to transfer his money.

Demand Finance & Running Finance:

Demand finance:

This is common form of financing to commercial industrial concerns and is made

available either on pledge or hypothecation of goods, produce or merchandise. In demand

finance the party is finance up to certain limit either at once or as and when required.

The party due to facility of a paying mark prefers the financing up only on the amount it

actually utilizes.

Running Finance:

This form of financing was known as Overdraft when a bank customer requires

temporary accommodation, his banker allows withdrawals from his account and running

finance thus occurs. The accommodations generally allowed against collateral security.

The customer is in advantageous position in a running finance because he has to pay

mark up only on balance outstanding against him on daily products basis.

Pledge:

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

Hypothecation:

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

ownership & possess

FAPC (finance against packing credit):

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It is a type of banks own source finance provided to clients engaged in export

trade. As the term packing indicates that the credit line is granted to an exporter for the

purpose of packing merchandise for shipment to an importer abroad. An exporter should

give documentary proof to the bank consist of L/C in favor of exporter indicating the

description of the merchandise, the purchase price, date of delivery along with other

terms.

FAFB(finance against foreign bills):

It is a post shipment finance facility which is provided by the banks to its clients after

providing the evidence of shipment, he contacts his bank to request him to lodge the

documents. He then provides the request letter with sale contract to grant him finance &

this department grant him finance (90% value of commercial invoice).

IMPORTS

Imports regulation:

Import is being regulated by the ministry of commerce and the government of

Pakistan under the import and export act:

Categories of imports:

Imports are classified into the following categories:

Commercial sector imports

Industrial sector imports

Public sector imports

Registration of importers:

A person who wants to approach the bank for importing goods from abroad, he should

have to get himself registered with the export promotion bureau under registration of

imports and exports act. He must fulfill the following conditions before getting himself

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registered:

NIC NUMBER

NATIONAL TAX NUMBER

MEMBER OF REGISTERED ASSOSITATION

Documentary letter of credit:

A documentary letter of credit is an instrument or document issued by the bank on the

behalf of a customer, authorizing a beneficiary to draw a draft and drafts or sometimes the

requirement of a draft, which will be honored, on presentation by the bank if drawn

accordance with the te3rm and condition specified in the letter of credit.

It is the written undertaking by the bank (issuing bank) pay to the seller (beneficiary) at

the request or as per the instruction given by the opener (applicant) pay at sight or at the

future date, a stated sum of money against the required documents. The documents

include the commercial invoice, certificate of origin, insurance policy or certificate and

the documents of transport relating to the mode sending goods. L/C is therefore is an

arrangement of security for the parties. The conditional guarantee is related to the

documents only and not on the underlying Goods or services.

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Procedure for L.C:

The person applying for the letter of credit must be registered with the EPB. The opening

bank verifies this registration or otherwise exemption. This is mentioned in the I form.

The importer also shows the valid certificate of an organization membership. A category

pass book is issued by the EPB for registered importer specifying his category. This bookis centralized by the centralized banks in the city. It is not necessary for the bank to hold

the original copy of the pass book of all the importers. But sometimes the importer gets

L.C from more than one bank so the bank has to hold the photo copy of this pass book.

The applicant can get the application from any branch of the Habib Bank Limited.

However only some branches are authorized to open L.C. That branches how are not

authorized have to contact with the authorized branches to open an L.C. The authorized

branches in such case require the certificate from the applicant branch that the required

formalities are fulfilled and the approval was obtained with required margin.

For establishment of letter of credit, the importer requests the opening bank with the

following documents:

Credit application form:

Credit application form is an agreement between the bank and the customer on the basis of

which the letter of credit is opened. This form contains the undertaking of the importer that

get the documents from the bank at the mark up price. It contains the following

information:

Name and address of importer.

Name and address of exporter.

Amount in foreign currency.

Terms of credit.

Description of goods.

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Origin of goods.

Port of loading and discharge.

Last date of shipment.

Foreign bank charges.

Terms of shipment. (Partial shipment or transshipment)

Insurance cover note, policy no, and name of insurance company.

Forward booking.

Mode of transmission.

Import registration no.

Any other documents required.

Detailed documents.

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Performa invoice/ purchase order:

A Performa invoice is quotation of seller containing the description and the specification of the goods, price,

and terms of the sale. Sometimes the exporter has their agent in the country. The agent must be registered from

the EPB.

Insurance cover note:

All the goods imported under the documentary credit must always be insured. In accordance with our country

import policy, insured must be issued by a Pakistani insurance company or the foreign company operating in

Pakistan and such company must be approved by the bank. Insurance covered based on the following:

It is issued in the name of issuing bank A/C importer.

The rider should cover against war.

The port of shipment and the port of destination.

Amount of premium prepaid.

Shipment period.

The description of goods should be the same as per the form.

Appendix B:

This Performa replaces the import license and is submitted along with L.C application form duly filled in

triplicate. It is conditional undertaking that the imports goods are not banned, not smuggled. It is also an

undertaking that if the bank is unable to arrange the said currency the importer have to purchase it from other

banks or from any other place. It includes the details and description of goods, codes, class, type, source of

import, country of import, Performa invoice no etc.

I FORM:

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This form is used at the time of retirement of documents against L.C established earlier for reporting to the

transaction to SBP through the bill of entry deptt. It has four copies that are used as follows:

Original is for the use of SBP.

Duplicate for the authorized dealer to be used for processing exchange control.

Triplicate for the authorized dealer record.

Quartiplacte is for the submission in SBP in the case of import where the documents are not

retired.

Approval for establishment of letter of credit:

After scrutiny of the documents, IB-8 along with attached documents is put before the corporate head for

approval. If the amount of application exceeds the power of the corporate head the branch concerned

prepared the memorandum for the corporate e banking head for obtaining his approval.

In case party enjoying regular limit, the L.C is established without adopting the procedure mentioned

above. However the amount of L.C should not exceed the regular limit.

Types of letter of credit:

Revocable:

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

the exporter.

Irrevocable letter of credit:

The letter of credit that can be cancelled by the mutual consent of the both parties. Only one party cannot

cancel it.

Irrevocable confirmed letter of credit:

When an issuing bank authorizes and or request to another bank to confirm his irrevocable credit and adds its

confirmation. Such confirmation constitutes a definite undertaking of such bank in addition to that of the

issuing bank. There are following other letter of credits:

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1. Revolving Credit

2. Transferable Credit

3. Back to Back Credit

4. Green Clause Credit

5. Red Clause Credit

6. Clean Documentary Credit

7. Transit Credit

8. Stand by Credit

9. Sight Credit

Parties to a credit:

The applicant:

The applicant of the letter of credit is called the importer or buyer. The buyer requests to the bank to open a

documentary letter of credit in favor of the seller.

Opening bank (issuing bank or importer bank):

At the request of the importer an issuing bank issues a credit under the instructions in the favor of the

seller.

Advising bank:

An advising bank is a bank in the sellers country. The issuing bank forwards the advice of the credit by mail

or by any mode to the correspondent bank in the exporter country as instructions of the opener.

Beneficiary (exporter):

The person or body receiving the letter of credit from the importer that is opened in favor of him.

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Confirming bank:

The bank that on the requests of the issuing bank adds confirmation to a credit. It is definite undertaking of the

confirming bank, in addition to the issuing bank.

Negotiating bank:

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

and payments.

Reimbursing bank:

Reimbursing bank is the bank, which on the behalf of the opening bank, honors the Reimbursing claim

lodged by the negotiating bank.

Modes of payment:

Sight letter of credit:

The seller submits all the documents with draft in the importer country complying with the all

terms and conditions. The payments are made on the presence of the documents.

Usance letter of credit:

Under these circumstances it is agreed that the payment will be made after a specified period. So

the payment is made after or on the expiry of that date.

CREDIT & ADMINISTRATION DEPARTMENT:

The responsibility of providing administrative support for the lending activities of the Bank, and day-to-day

monitoring of credit-exposure, is vested in the Credit Administration Department (CAD).

FUNCTIONAL RESPONSIBILITIES:

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The main responsibilities under this department are:

Implementation of credit facility and their maintenance according to terms of

credit approved.

Ensure that standard loan documentation for each credit facility is maintained and

the correctness & completeness of such documentation and also responsible for custody of all credit

files.

Maintain the safe custody of all collateral as per banks standard operating procedures;

undertake periodic evaluation and inspection of hypothecated/

pledged inventories in accordance with the terms of credit.

Ensure compliance with

Institutional credit policies & procedures

Local regulatory requirements.

Prepare various portfolio composition reports and other documentation for

submission to GRMs & RMs.

CREDIT FACILITY IMPLEMENTATION PROCEDURE:

Upon approval of credit proposal, the credit proposal and approval are handed over to CAD. Now CAD

determines the nature of documentation required and on receipt of same ensures that all legal documents are

obtained and are legally enforceable. After all these activities it can release the facility for utilization.

PROCEDURE FOR CREDIT APPROVAL:

It is the responsibility of the relationship manager to provide or fulfill the requirement of the customer by

checking his financial and position. The procedure of credit approval starts with the credit proposal. First of all

the customer request to the bank for credit and on the behalf of him the RM check the memorandum. The

Memorandum includes:

The company information.

Purpose of credit.

Assessment of management.

Risks.

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Financial analysis.

Third party or other bank information.

Conclusion and recommendations.

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

check.

EXCESS FACILITY CREDIT BY RM:

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

may be up to

10 percent of excess amount

OR

12.5 million Whichever is less?

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

TYPES OF CREDIT FACILITY:

1) Fund based:

It is first type of credit facility. In this facility the bank actually provides fund to

Customers.

2) Non fund base:

Second type of credit facility that does not provides fun but only give the guarantee. If the

customer is unable to make the payment at maturity date then bank will be responsible to make the

payment.

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Financial Analysis:

2010 2009 2008Balance Sheet

(Ru ees in '000)As at December 31, 2007

AssetsCash & Balances with Treasury Banks 81,516,883 79,527,191 5 6,533,134

Balances with other Banks 35,990,301 29,560,309 39,364,297

Landings to Financial Institutions 30,339,344 5,352,873 6,193,787

Investments 245,016,986 209,421,147 129,833,446

Advances 434,998,560 432,283,588 456,355,507

Other Assets 15,876,545 16,475,939 34,588,444

Operating Fixed Assets 8,835,326 8,172,590 14,751,252

Deferred Tax Asset 34,478,466 40,333,882 12,186,848

887,052,411 821,127,519 749,806,715

Liabilities

Bills Payable 9,774,749 10,041,203 9,828,082

Borrowings From Financial Institutions 37,430,333 48,121,649 46,961,165

Deposits and other Accounts 721,069,137 653,452,460 597,090,545

Subordinated Loans 4,281,835 4,212,080 3,954,925

Liabilities against assets subject to finance lease

Other Liabilities 24,971,618 26,204,580 2 5,663,411

Deferred Tax Liability

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797,527,672 742,031,972 683,498,128

Net Assets 8 9,524,739 79,095,547 6 6,308,587

Represented By:

Shareholder's Equity

Share Capital 10,018,800 9,108,000 7 ,590,000Reserves 27,671,813 25,801,889 23,656,044

Un appropriate Profit 4 4,121,103 36,325,458 3 1,933,178

Total equity attributable to the equity holders of the

Minority Interest 7,713,023 7,860,200 8 90,099

Surplus on revaluation of assets - net of tax

8 9,524,739 79,095,547 6 6,308,587

2010 2009 20Profit and Loss AccountFor the year ended December 31, 2007 (Rupees in '000)

Mark-up/return/interest earned 7 9,999,852 74,751,375 63,376,0Mark-up/return/interest expensed 3 4,090,368 33,088,536 26,525,5

Net Mark-up/interest income 4 5,909,484 41,662,839 36,850,4

Provision against Non-performing loans and advance-net 7 ,559,458 8,276,180 6,904,9

Reversal/provision against off-balance sheet obligations 3 0,895 (51,396) 3 72,5

Reversal of provision against diminution in value of

Bad debts written off directly

7 ,979,626 9,612,138 9,187,4

Net mark-up/interest income after provisions 3 7,929,858 32,050,701 27,663,0

Non-market/interest income

Fee,commision and brokerage income 4 ,928,705 4,620,148 4,518,4

Income/gain on investments 6 07,440 452,823 1 ,300,9

Income from dealing in foreign currencies 2 ,893,454 1,692,776 2 ,374,3

other income 2 ,619,905 3,176,865 3 ,088,9

Total non-mark-up/interest income 1 1,049,504 9,942,612 1 1,282,6

4 8,979,362 41,993,313 3 8,945,7

Non-market/interest expense

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administrative expenses 2 3,053,860 21,733,407 21,425,36

other provision offs-net 1 78,148 372,957 2 00,16

other charges 1 78,700 3 ,540 64,75

Total non-mark-up/interest expenses 5 11,373 397,668 3 23,57

Profit Before Taxation 2 3,922,081 22,507,572 22,013,85

2

Taxation

current 9 ,331,828 7 ,827,137 8 ,308,6

prior years 6 94,898 (1,079,473) 2 33,10

deferred (582,499) 4 39,434 (2,473,89

9 ,444,227 7 ,187,098 6,067,8

Profit after taxation 1 5,613,054 12,298,643 10,864,1

Attributable to:

Equity holders of the Bank

Minority Interest

Basic and diluted earnings per share 1 5.58 1 2.28 1 1.

2010 2009 2008Cash Flow StatementFor the year ended December 31, 2007 Ru ees in '000

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation 25,057,281 19,485,741 16,931,932

Less: Dividend income and share of profit of associated

joint venture companies (318,539) (281,152) ( 1,111,810

Gain on sale of investments - net (288,836) (171,403) (197,242

(607,375) (452,555) (1,309,052

24,449,906 19,033,186 15,622,880

Adjustment for:Depreciation/amortization/adjustments 1,666,058 1,670,958 1 ,625,943

Reversal against diminution in the value of investments 389,273 1,387,354 1 ,909,887

Provision against Non-performing loans and advances-net

Amortization of premium on investments (65) (268) 8 ,077

Gain on sale of property and equipment-net 69,755 257,155 8 54,925

Miscellaneous provisions (16,993) (29,386) ( 41,840

209,043 321,561 5 72,761

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9,876,529 11,883,554 11,834,672

34,326,435 30,916,740 27,457,552

Increase/decrease in operating assets

Government securities

Landings to financial institutions (24,986,471) 840,914 (4,565,657

Loans and advances (10,274,430) (4,851,108) ( 81,087,692

Other assets-net 5,859,907 (1,951,264) (6,355,923(29,400,994) (5,961,458) ( 92,009,272

Increase/decrease in operating liabilities

Deposits and other accounts 67,616,677 81,053,273 6 5,792,418

Borrowings from financial institutions (10,691,316) 4,098,973 ( 12,033,4440

Bills payable (266,454) 260,126 (5,590,148

Other liabilities-net (1,350,947) 4,083,696 5 ,657,085

55,307,960 89,496,068 53,825,911

60,233,401 114,451,350 (10,725,809

Income tax paid-net (10,137,565) (12,265,104) (11,600,790

Net cash flows from operating activities 50,095,836 102,186,246 ( 22,326,599)

CASH FLOWS FROM INVESTING ACTIVITIES

Net investments in securities, associated and joint venture

Dividend income received 319,465 624,628 2 37,291

Fixed capital expenditure (948,433) (1,835,161) ( 2,662,833

Proceeds from sale of fixed assets 51,667 104,288 1 08,033

3

subsidiaries and joint ventures

Net cash flows from investing activities (36,225,716) (78,005,445) 38,163,999

CASH FLOWS FROM FINANCING ACTIVITIES

Dividend Paid (5,450,436) (4,173,059) ( 2,730,251

Net cash flows from (used in )financing activities (5,450,436) (4,173,059) (2,789,119

Cash and cash equivalents at beginning of the year 108,541,351 84,639,657 7 5,518,830

Effects of exchange rate changes on cash and cash

109,087,500 89,079,758 82,849,150

Cash and cash equivalents at end of the year 117,507,184 109,087,500 9 5,897,431

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Liquidity RatiosCurrent Ratio:

Current ratio = current asset/current liabilities

2010

Rs. In 000

2009

Rs. In 000

2008

Rs. In 000

843738619/770745837 772621047/737819892 666335481/679543203

1.0947041 1.0471675 0.9805638

1.1

1.08

1.06

1.04

1.021

0.98

0.96

0.94

0.92

2010 2009 2008

habib

bank

limited

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Acid test ratio

1

0.8

0.6

0.4HABIB

BANK

LIMITED

0.2

Acid test ratio =

0

2010 2009 2008

Current

Asset inventories prepaid expenses/current liabilities.

2010

Rs. In 000

2009

Rs. In 000

2008

Rs. In 000

843738619-434998560

/770745837

772621047-432283588

/737819892

666335481-45635507

/679543203

0.5303176 0.4612744 0.9134077

1

0.8

0.6

0.4HABIB

BANK

LIMITED

0.2

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0

2010 2009 2008

Working capital:

Working capital = current asset/current liabilities

2010

Rs. In 000

2009

Rs. In 000

2008

Rs. In 000

843738619/770745837 772621047/737819892 666335481/679543203

1.0947041

1.0471675 0.9805638

1.1

1.08

1.06

1.04

1.02

1

0.98

0.96

0.94

0.92

2010 2009 2008

HABIBBANK

LIMITED

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Leverage Ratios:

Times Interest Earned= Earnings before Interest and Taxes (EBIT)

Interest Expenses

2010

Rs. In 000

2009

Rs. In 000

2008

Rs. In 000

2 3,922,081/34090368 22,507,572/33088536 22,013,850/26525556

0.7017255 0.6802227 0.829911

0.9

0.8

0.7

0.6

0.50.4

0.3

0.2

0.1

0

2010 2009 2008

HABIB

BANK

LIMITED

Debt Ratio:

Debt Ratio= Total liabilities/ total assets.

2010

Rs. In 000

2009

Rs. In 000

2008

Rs. In 000

797,527,672/887,052,411 742,031,972/821,127,519 683,498,128/749,806,715

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0.8990762 0.9036745 0.9115658

0.915

0.91

0.905

0.9HABIB

BANK

LIMITED

0.895

0.89

2010 2009 2008

Debt-Equity Ratio:

Debt-equity ratio = total liabilities / total share holder equity.

2010

Rs. In 000

2009

Rs. In 000

2008

Rs. In 000

797,527,672/81811716 742,031,972/71235347 683,498,128/63179222

9.7483308 10.416626 10.818401

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0.915

0.91

0.905

0.9HABIBBANK

LIMITED

0.895

0.89

2010 2009 2008

Debt to Tangible Net worth Ratio:

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

Debt to tangible net worth ratio= Total Debt / Tangible Net worth Ratio.

2010

Rs. In 000

2009

Rs. In 000

2008

Rs. In 000

9.7483308 /80689413 10.416626/70922957 10.818401 /51557334

1.2081 1.4687 2.0983

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2.5

2

1.5

1HABIBBANK

LIMITED

0.5

0

2010 2009 2008

Total Capitalization Ratio:

Debt to total capital ratio =long term debt/ (long term debt-shareholder equity).

2010

Rs. In 000

2009

Rs. In 000

2008

Rs. In 000

750322590/(750322590-8

1,811,716)

683869120/(683869120-

71,235,347)

856678881/(856678881-6

3,179,222)

750322590/668510874 683869120/612633773 856678881/7934996591.122379 1.1162772 1.079621

1.2

1

0.8

0.6

0.4

0.2

0

2010 2009 2008

Habib

bank

limited

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Profitability ratios:

Net Profit Margin:

Net profit margin = (Net income/ Net sale) * 100

2010

Rs. In 000

2009

Rs. In 000

2008

Rs. In 000

15,613,054/79,999,852 *100 12,298,643/74,751,375 *100 10,864,112/63,376,047 *100

19.52% 16.45 % 17.14%

20

19

18

17 HABIB

BANK

LIMITED

16

15

14

2010 2009 2008

Return on Assets:

Return on Asset = Profit before Tax / Total Assets *100

2010

Rs. In 000

2009

Rs. In 000

2008

Rs. In 000

(23,922,081/887,052,411)*100 (22,507,572/821,127,519)*100 (22,013,850/749,806,715)*100

2.69681 2.74106 2.93594

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2.95

2.9

2.85

2.8

2.75

2.7

2.65

2.62.55

2010 2009 2008

DuPont Return on Assets:

DuPont return on assets = (Net income/sale)*(sale/total asset) *100

2010

Rs. In 000

2009

Rs. In 000

2008

Rs. In 000

(15,613,054/79,999,852)*(

79,999,852/887,052,411)*100(12,298,643/74,751,375)*(74,751,375/821,127,519)*100

(10,864,112/63,376,047)*(63,376,047/749,806,715)*100

1.7604 1.4975 1.4487

1.8

1.6

1.4

1.2

1

0.8

0.6

0.4

0.2

0

2010 2009 2008

HABIB

BANK

LIMITED

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

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1.8

1.6

1.41.2

1

0.8

0.6

0.4

0.2

0

2010 2009 2008

HABIB

BANK

LIMITED

Return on Operating Assets:

Return on operating assets = (EBIT/operating asset)*100

2010

Rs. In 000

2009

Rs. In 000

2008

Rs. In 000

( 2 3,922,081/887,052,411)*100

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

2.69681 2.74106 2.93594

2.95

2.9

2.85

2.8

2.75

2.7

2.65

2.6

2.55

2010 2009 2008

HABIB

BANK

LIMITED

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Return on Total Equity:

Return on total equity = (Net income/ total equity)*100

2010

Rs. In 000

2009

Rs. In 000

2008

Rs. In 000

(15,613,054/81,811,716 *100 (12,298,643/71,235,347 *100 (10,864,112/63,179,222 *10019.08% 17.26% 17.19%

19.5

19

18.5

18

17.5

17

16.5

16

2010 2009 2008

LIMITED

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

2010

Rs. In 000

2009

Rs. In 000

2008

Rs. In 000

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

57.39% 55.73% 58.14%

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58.5

58

57.5

57

56.5

56

55.5

55

54.5

2010 2009 2008

HABIB

BANK

LIMITED

Activity RatiosTotal Assets Turnover

Total assets turnover = Net sales/ total asset

2010

Rs. In 000

2009

Rs. In 000

2008

Rs. In 000

7 9,999,852 /887,052,411 74,751,375/821,127,519 63,376,047/749,806,715

0.0902 0.0910 0.0845

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58.5

58

57.5

57

56.5

56

55.5

55

54.5

2010 2009 2008

HABIBBANK

LIMITED

Fixed Assets Turnover:

Fixed assets2t0u1r0over = Net s

Rs. In 000

les/ fixed ass2e0t09

Rs. In 000

2008

Rs. In 000

7 9,999,852 /739,205,903 74,751,375/706,687,146 63,376,047/647,715,497

0.1082 0.1057 0.0978

0.11

0.108

0.106

0.104

0.102

0.1

0.098

0.096

0.094

0.092

2010 2009 2008

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39/39

Project on HBL

Submittedto: Mr. Mubashir Ali

Submitted by: Shahid Ashraf , Fahad Akram

Hassan Bilal, M. Nabeel

Course: Credit Management

Quaid I azam school of management sciences

Quaid I azam university islamabad