HABIB METROPOLITAN BANK HABIB METROPOLITAN BANK (A Subsidiary of habib bank AG Zurich )(A Subsidiary of habib bank AG Zurich )

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“In The Name Of Allah The Most Merciful And Beneficent”

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ASSIGNMENT ONHABIB METROPOLITAN

BANKInstitution:

HAILEY COLLEGE OF BANKING & FINANCE

Submitted by:

Aroosh Mehmood M10MBA026

Anum Arshad M10MBA043

Dania Shah M10MBA069

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Submitted to:

Sir Raiz Ahmed Mian

ACKNOWLEDGEMENT

First of all we thank to ALLAH ALMIGHTY gave us this beautiful life .

We are very grateful to our respected SIR AHMED RAIZ MAIN who gave us this opportunity to make the project on HABIB METROPOLITAN BANK and helping

us to having all the information about the bank

I would also thank to my parents and my group members for co-operate .

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Contents:

DESCRIPTION Page #

Economic and banking review ………………………………………..07 Habib Metropolitan Bank

History & Introduction…………………………………………...08 Vision……………………………………………………………..09 Mission…………………………………………………………...10

PACRA maintains ratings of Habib metropolitan…………………...11Bank ltd. (Hmb)

Achievements…………………………………………………………...12 Corporate Information……………………………………………….....12

i. Board of Directors....................................................................12ii. Chairman..................................................................................12

iii. Directors...................................................................................12

iv. Audit Committee.......................................................................12

v. Company sectary......................................................................12

Competitors.....................................................................................13PRODUCTS.........................................................................................14

vi. HMB Premium Deposit Scheme...............................................14

vii. Basic Banking Account ...........................................................15

viii. HMB Access (ATM / Debit Card) .............................................16

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ix. HMB Auto Finance ...................................................................16

x. HMB Auto Lease ......................................................................16

xi. HMB Call Account ....................................................................17

xii. HMB Current Account ..............................................................17

xiii. HMB Education Loans .............................................................18

xiv. HMB Izafa Certificate................................................................18

xv. HMB Multiplier Account ...........................................................18

xvi. HMB Mahana Scheme ............................................................19

xvii. HMB Personal Loans ............................................................19

xviii. HMB Saving Account ............................................................19

xix. PLS Saving Account with Free Life Insurance..........................20

xx. Super Current Account ............................................................ 20

xxi. HMB MAKRO Prepaid Card......................................................21

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Services ..........................................................................................22Cash Management Services ......................................................22E-Salary Accounts .....................................................................22HMB Call Centre .........................................................................23HMB GSM Mobile Banking .........................................................23HMB Rent Free Lockers .............................................................24HMB Tele Info Service ...............................................................24HMB Web Info Service ...............................................................24POS (Point of Sale) Machine ......................................................25Short / Long Term Finance ........................................................25

Financials..........................................................................................28Branches & ATMS ............................................................................29Electronic Banking ............................................................................30

Internet Banking............................................................................30Phone Banking ...........................................................................30

International Banking .........................................................................31Corporate Bank Network................................................................31Foreign Remittances......................................................................33Swift Banking ...............................................................................36

Islamic Banking...................................................................................37HMB Islamic Banking.....................................................................37Islamic Banking Products...............................................................38Financing Products.........................................................................38Islamic Banking Branches..............................................................38Shariah Adviser..............................................................................39

Rates & Exchange .............................................................................39Deposit Rates................................................................................39Exchange Rates............................................................................40

Corporate Information Snap Short......................................................43SWOT ANALYSIS...............................................................................45PEST ANALYSIS………………………………………………………….49RISK MANAGEMENT……………………………………………………..51RECOMMENDATIONS……………………………………………………53CONCLUSION……………………………………………………………..54

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Economic and banking review   During the year 2009, our country s trade balance reflects healthy improvement mainly on account of reduced cost of imports. With the International Monetary Fund s Stand-By Arrangement (SBA) and a commitment expressed by the global community to extend monetary aid to Pakistan, the country s foreign exchange reserves have increased significantly, although the rupee continues to depreciate against the dollar. Weakening domestic demand, reduced commodity prices and lower government borrowing from the SBP has also led to a reduction in core inflation. The country s stock exchanges have managed to regain the investors confidence after dismal look in 2008 and the market index reflects a positive sentiment. Further, remittance inflows from overseas Pakistanis have remained strong which provided positive support to the economy. These factors, as well as several ongoing policy and structural reforms resulted in improvement in Pakistans international ratings by Moody s from Negative to Stable outlook. Although the potential economic crisis has been averted and the economy has stabilized, the country s manufacturing and export activities continue to remain under pressure. Power shortage remains a fundamental detriment to economic growth for which various short and long-term measures are being taken by the government. This is a matter of utmost priority as the rising costs of input needs to be kept under control to compete in the international markets. The economy is also facing severe pressure due to the ongoing war on terror and the rehabilitation of Internally Displaced Persons (IDPs).

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Habib Metropolitan BankHistory & Introduction

Habib Metropolitan Bank was incorporated in Pakistan as a Public Listed Company in 1992 under the name, Metropolitan Bank Limited. The Bank commenced, duly licensed, full scheduled commercial-banking operations in October 1992.

Metropolitan Bank, from October 1992 to September 2006, remained a highly rated bank and, vide its nationwide 51-branch on-line network, established as a distinguished provider of trade finance services.

On October 26, 2006 Habib Bank A G Zurich’s Pakistan Operations merged into Metropolitan Bank Limited and the merged entity was named Habib Metropolitan Bank Limited (HMB). Demonstrating a strong commitment to Pakistan economy, HBZ is the principal shareholder of HMB.

HMB operates in all major cities of the country. The Bank ranks within Top 10 in Pakistan with a strong vision to be the most respected Financial Institution. HMB has its primary focus on retail banking and trade finance and also offers highly innovative E-Banking solutions and Consumer Banking to its customers. The Bank’s Islamic Banking Division is fully capable of catering to customers seeking Shariah compliant products.

The HBZ Group is heir to a rich tradition of banking and commerce dating back to more than 160 years. The group’s flagship and HMB’s principal, HBZ (incorporated 1967) enjoys International ranking of 687 in terms of capital. With Headquarters in Switzerland, the HBZ Group also operates in Hong Kong, Singapore, United Arab Emirates, Kenya, South Africa, United Kingdom and North America.

The Pakistan Credit Rating Agency (PACRA) has allotted both long-term and short-term ratings of Habib Metropolitan Bank Limited at “AA+” (Double A plus) and “A1+” (A one plus), respectively. These ratings, being the highest amongst the local sector Private Banks, denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.

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Vision Statement

“Based on a foundation of trust,to be the most respected financial institution,delighting customers with excellence,enjoying the loyalty of a dedicated team,meeting the expectations of regulators and participating in social causes while providing superior returns to shareholders.”

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Mission Statement

"The Mission of the Habib metropolitan Bank is to foster a sound economic and financial environment which promotes the development of its stakeholders

and encourages a culture of excellence and leadership."

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PACRA MAINTAINS RATINGS OF HABIB METROPOLITAN

BANK LTD. (HMB)

The Pakistan Credit Rating Agency (PACRA) has maintained the long-term and short-term entity ratings of Habib Metropolitan Bank Ltd. at “AA+” (Double A plus) and “A1+” (A one plus) respectively. These ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.The ratings reflect the strong position of the bank in its respective niche – self-liquidating trade finance to corporate and SMEs. While consolidating its strength, the management continues to focus on product innovation, enhanced reach through network expansion, and technology up-gradation for ensuring quality services to its customers, thereby retaining its relative positioning in the face of intensifying competition within the sector. The bank continues to maintain outstanding asset quality – an outcome of conservative risk appetite as well as effective risk management. The ratings also take into account the bank’s association with a geographically diversified international sponsoring group – Habib Bank AG Zurich (HBZ).

About the bank: HMB, commencing operations in 1992, is listed on all bourses of Pakistan. Subsequent to recent merger, the bank is a 51% owned subsidiary of HBZ, incorporated in Switzerland. HBZ, with consolidated assets of above US$6bln, has operations in eight countries directly and through subsidiaries. This provides inherent strength to the bank given high credibility and standing of HBZ. The Chief Executive of the bank is a former Governor of the State Bank and also a former president of Habib Bank Limited, one of the largest banks in the country. A highly professional team of senior executives including the executive director, who has emerged as the key professional in evolving the bank’s strategy as well as its implementation, assists the chief executive.The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity.PACRA’s comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate grading.

PACRA’s opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security’s market price or suitability for a particular investor.

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AchievementsThese above credit ratings denote

HMB is one of the top ten banks in Pakistan A very high credit quality, A very low expectation of credit risk and A very strong capacity for timely payment of financial commitments.

Corporate Information:Board of Directors

Chairman & PresidentKassim Parekh

Chief ExecutiveAnjum Iqbal

DirectorsMuhammad H.Habib

Raza S. Habib

Bashir Ali Muhammad

Anwar H. J apanwala

Ronaid V. Emerson

Firasat Ali

Mohamedali R. Habib (Executive Director)

Audit CommitteeReza S. Habib

Kassim Parekh

Mohamedali R. Habib

Company SecretaryMuhammad Imran

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COMPETITORS:

Arif Habib Bank

MCB

Bank al Habib

National Bank of Pakistan

Bank Alfalah

Standard Chartered Bank

PRODUCTS

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1. HMB Premium Deposit Scheme:

HMB now offers yet another highly attractive investment opportunity for our valued account holders. HMB Premium Deposit Scheme offers profit rates up to 12.35% per annum. You may deposit your funds for 1, 3 & 5 years, with quarterly and half yearly profit payment options to suit your need.

Who can avail this Opportunity?There are no restrictions as to the eligibility of depositors and the scheme is open for any investors / account holder.

Indicative Profit Rates:On a deposit of Rs. 100,000/- the profit will be paid as under.

Tenor Quarterly Profit Half Yearly profitRate p.a Amount (Rs) Rate p.a Amount (Rs)1 Year 12.00% 3,000 12.20% 6,1003 Year 12.20% 3,050 12.30% 6,1505 Year 12.30% 3,075 12.35% 6,175

Amount of Deposit:Minimum investment amount is Rs. 25,000/- (Rupees Twenty Five Thousand Only). The funds can be placed in multiples of Rs. 5,000/- as per customer’s needs.

Profit Payment:Profit will be paid on Quarterly or Half yearly basis as per customer decision at the time of booking the deposit. Profit will be credited directly to you’re PLS Savings / Current account and can be withdrawn by HMB Access ATM/Debit Card or Cheque book.

Maturity:Upon maturity, principal plus profit payable will be credited to your link account unless rollover instructions are given at least 3 (Three) working days before maturity.

Zakat, Withholding Tax & Other Levies:

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All payments will be subject to Zakat (as per rules), withholding tax and other government levies as applicable from time to time.

Easy Loan Facility:

The loaning facility offered is essentially of temporary nature and the account holder(s) can obtain the loan up to 80% of the amount placed in the scheme.

Premature Encashment:

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

2.Basic Banking Account

Account Opening with Rs. 1,000/- No minimum balance required. Non-remunerative account. First cheque book of 25 leaves issued free of charge. Additional cheque

book(s) at Rs. 100/- per book. No limit on number of ATM / Deposit transactions. Two cheque transactions will be allowed free per calendar month.

Charge of Rs. 25/- per cheque will be applied from the third cheque onwards.

Free Services ATM / Debit Card Web Info & Tele info Yearly statement of account Online Funds Transfer

3: HMB Access (ATM / Debit Card)

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

Make transactions up to the credit balance available in your account Withdraw cash through convenient POS terminals at all HMB branches Debit card Merchant list

Karachi Lahore Islamabad

Guidelines

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Card Holders Guideline Download Forms

Download E-Banking Form MNET Atm Claim Form

4: Habib Auto Financing

HMB Auto Finance is available up to Rs. 3 Million. Minimum Down Payment is 15% of the total amount. Processing Fee is Rs. 4,000/-. Vehicle to be registered in the name of customer and marked HPA with

the Bank.

5: Habib Auto Leasing

HMB Auto Leasing is offered to all our Commercial & Corporate Clients. Minimum down Payment is as low as 10% of the total amount. Auto lease limit depends on the strength of the Company’s financials

and credit checks. A Processing fee is charged at 0.5% of the Lease amount. The Vehicle is to be registered in the name of the Bank The Insurance cost to be borne by the customer.

6: HMB Call Account

Placements can be made in multiples of Rs 100,000. Account can be linked to any of the regular accounts. A profit earning account. Funds can be placed overnight Funds can be transferred to and from the account overnight for

placements. Free Services

Cheque Book(s) Statement of Account HMB ATM / Debit Card Stop payment of Cheques Pay Order Web info & Tele info Services

7: HMB Current Account

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The minimum amount required to open the account is Rs 5,000/- Minimum balance to maintain in the account is Rs 1,000/- This is a checking account with no limit on the number of transactions No profit is paid in this account There are no deduction of Zakat or any levies on this account. Free Services

Cheque Book(s) Statement of Account HMB ATM / Debit Card Web info & Tele info Services Pay Order

8: HMB Education Loans

Financing for Education Loans are available for Graduation Post Graduation PHD Diploma courses Financing for Tuition fee, Books and materials. A Mark–up is charged at concessional rate. There is No processing fee. Convenient repayment options are offered. The Tenor is from 6 to 60 months.

9: HMB Izafa Certificates

Izafa Certificates are issued in multiple(s) of Rs. 10,000/-, Rs. 25,000/-, Rs.100,000/-, Rs. 250,000/-, Rs. 1,000,000/- and Rs. 2,500,000/-.

HMB Izafa certificates are offered as 7 years Deposits Certificate. Offering attractive Profit rates upto 14.29 % p.a Investment doubles in Seven years. Easy Loan Facility. Encashable any time. No Penalties. Your profits grow daily. Can be linked to any of the regular accounts.

10: HMB Multiplier Account

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

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

Accrual of Profit is on balance of Rs. 1 Million and above. Profit Rates In case balance of Rs. 1 Million not maintained for any day profit will be

paid @ 5.00% p.a. for the month.

Free Services: Cheque Book(s) Statement of Account HMB ATM / Debit Card Stop payment of Cheques Pay Order Web info & Tele info Services

11: HMB Mahana Scheme

1,3 & 5 year Deposit Schemes in multiples of Rs. 25,000/- & Rs. 100,000/-

Easy loan facility. Encashable any time. Monthly Profit credited to your account automatically.

12: HMB Personal Loans

Clean loans are offered up to Rs. 500,000/- . A Processing Fee of 1% of the loan amount or Rs. 2,000/- is charged,

which ever is higher.

13: HMB Saving Plus Account

Eligibility : Individuals Only Initial Deposit : Rs. 25,000/- Indicative profit rates Profit payment basis : Minimum balance during a month Profit payment frequency : Quarterly Basis

+ Free Services Cheque Book

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Payment Orders Statements of Account ATM / Debit Card Web Info & Tele info Online Funds Transfer

14: PLS Saving Account (Free Life Insurance)

The minimum amount to open and maintain this account is Rs. 1,000/-. The minimum amount to maintain this account is Rs. 500/-. Free life Insurance cover. Free insurance is equal to the average six monthly balances in case of

death. The minimum qualifying average balance for Life Insurance is Rs.

15,000/-. The maximum sum assured is Rs. 1,000,000/-

Free ServicesCheque Book(s)Statement of AccountHMB ATM / Debit CardWeb info & Tele info Services Pay Order

15: HMB Super Current Account

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

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

Cheques are acceptable at all HMB branches across Pakistan. A non remunerative account. No deduction of Zakat or any levies on this account.

Free ServicesCheque BookPayment OrdersStatements of AccountATM / Debit CardWeb Info & Tele infoOnline Funds TransferRent Free Lockers

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16: HMB MAKRO Prepaid Cards

HMB and Makro Co-branded Prepaid Cards: Convenient, Secure and Effective.HMB and Makro-Habib Pakistan have together launched a prepaid card program. As you are already aware, Makro is one of the leading international chains of wholesale stores in the world; in Pakistan, they have entered into a joint venture with the House of Habib to establish and run Makro stores.This card program carries two exciting products namely the Gift Card and the Shopping Card which can both be used exclusively to make purchases at all Makro stores in Pakistan.The prepaid cards are issued free of cost and can be purchased from all Makro stores or any HMB Branch in Karachi and Lahore through cash or by debit to your HMB account by issuing a requisition letter signed by the designated account signatories.In Pakistan, Makro Stores are located at:

Manghopir Road, Karachi Lines Area, Karachi Stargate, Karachi Ravi Road, Lahore Model Town, Lahore.

Salient features

Prepaid Gift card:

The Gift card has a fixed value of Rs 1,000 and is a disposable card. Available at all Makro stores; for purchases over Rs 10,000, please visit nearest HMB branch in

Karachi & Lahore.Provides well-structured, hassle-free solutions to your home or business for extending benefits to your employees.

These benefits may be part of their monthly wages, payrolls or periodic bonuses.

Gift card is most ideal to channel your social contributions to the underprivileged by eliminating the risk of any misuse.

Prepaid Shopping card:

The Shopping Card carries value of Rs 10,000 which can go up to Rs 250,000 in multiples of Rs 5,000.

This is a multiple-use, reload able card. Carries great benefit for your family or business to make daily/periodic

purchases with no risk of cash losses or misuse. Check your shopping card balance & latest transactions by calling toll

free at our

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Bank’s 24/7 Call Centre 0800-Habib (42242). If the card is lost, the same may be blocked and re-issued through our

Call Centre.

SERVICES1: Cash Management Services

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

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

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

Customers benefit with outright savings of time & money. Product is very competitively priced. Up to date tracking of funds with online reports available through

web info and tele info services.2: E-Salary

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

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

There are no charges on minimum balance in salary accounts. The individual Salary accounts are also eligible to apply for HMB

Personal & Auto Loans. All banking services that include Electronic fund transfer (EFT),

Demand Draft (DD), Telegraphic Transfer (TT) are available to e-Salary account holders.

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

Charges per salary Rs. 50/- or minimum of Rs. 5,000/-. Free ATM / Debit Cards will be issued to all e-salary customers at

the time of opening accounts. Free Web/Tele info services to facilitate balance inquiry and other

services 24/7

3: 24 Hours Call Center

0800 – HABIB (42242)

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24 hours card blocking of HMB access (ATM /Debit Card) in case of loss or theft.

Location of branch addresses, telephone numbers, fax and ATM points.

Various departments in the Head Office with contact details Tele info and Web info Services, Deposit Products and Rates offered

on various tenors and types of accounts. Products and Services e.g. General Banking, Consumer Finance,

Schedule of Charges etc.

4: HMB GSM Mobile Banking

We are pleased to introduce HMB mobile banking facility, which would be available on request to all our existing and new account holders.

Account holders who subscribe to this facility would receive SMS messages on their designated mobile phones for all types of transactions that they had requested.

Following inquiries can be requested by the customers for their accounts.

Balance Inquiries 1. Daily Balance2. All Debit Balances3. Debit Balance Over <X> Amount4. Debit Balance Below <X> Amount5. Credit Balance Only6. Credit Balance Over <X> Amount7. Credit Balance Below <X> Amount

Transaction Inquiries 1. All Transactions2. All Debit Transactions3. Debit Transactions Over <X> Amount4. Debit Transactions Below <X> Amount5. All Credit Transactions6. Credit Transactions Over <X> Amount7. Credit Transactions Below <X> Amount

Other Inquiries1. Inward Remittances2. Other Bank’s Cheque Cleared

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3. Other Bank’s Cheque Returned4. Your Cheque Cleared5. You’re Cheque Returned6. PAD Logged

(<X> Amount refers to any amount specified by the account holder)

5: HMB Rent Free Lockers

Secure Rent Free Lockers Refundable security deposit Available in, Size Security Deposit

Small Rs. 20,000

Medium Rs. 35,000

Large Rs. 60,000

Extra Large Rs. 100,000

6: HMB Tele Info Service

Dial 0800 HABIB / 0800 42242 Instant access to the information you need at any time, from anywhere. Tele info is a 24 hour telephone banking service to give you information

you need – easily, instantly. Following services can be accessed 24/7

Account Balance Cheques in Clearing. Indicative Foreign Exchange Rates. Faxed back account statements.

7: HMB Web Info Service

Online Banking. Access your account from your home or office or anywhere in the world. Login through web info username and password. Login through your HMB ACCESS (ATM/Debit Card).

Following services can be accessed 24/7 Up-to-date Account Balance. Cheques in Clearing. Account statement.

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Indicative Foreign Exchange Rates.

8: POS (Point of Sale) Machine

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

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

No need to issue cash cheques and no need to wait. Cash can be withdrawn up to Rs. 250,000/- via HMB ACCESS (ATM / Debit card).

9: Short Term and Long Term Finance

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

SPECIAL SERVICES

House of Habib Flood Efforts

HOH has donated Rs. 10 million to the Prime Minister’s Relief Fund for the flood affecters. In addition, 2000 Swedish water purifiers (Life Straw) costing Rs. 2,500/- each were distributed for ensuring potable water to the affecters apart from 2500 sachets of water purifiers. The cost of both these items aggregated to Rs. 5.1 million.

In Muzaffargarh alone, approximately 900 families were registered for aid. Issuance of ration cards and distribution commenced from the mills of HOH. For tankers of drinking water is supplied daily to the relief camps set up by different agencies and NGOs. A medical camp was set up at Basti Nawan in collaboration between HOH, Team Rubican and PMA; about 1200 people were treated

SPECIAL SERVICES (Cont’d)

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In these camps. The two medical teams consisted of four doctors from Team Rubicon (an NGO of USA) and three female, three female doctors along with 3 paramedics from Pakistan Medical Association. The documentary by CNN on flood and relief work was aired on 8th and 9th September, 2010 from 4- 7 p.m (PST) showing the medical camps that were set up in collaboration with HOH.

House of Habib Flood Efforts

In Sindh the relief operations have been undertaken in Hyderabad, thatta/ keti Bandar and karampur, a town near sukkur. Food ratios for 350 families and medication for 750 people were sent to karampur. In Hyderabad (Habib Faram vicinity) a clinic was established on 1st September 2010, and medical treatment is being continuously provided to the flood affecters through it. Food family packs have been distributed to 450 affected families which would sustain them for two weeks. Registration of affected families has been done for rehabilition stage/ efforts.

In Punjab 10, 000liters of drinking water is being supplied daily to relief camps set up different agencies and NGOs. 343 family food packs were distributed just before Eid-ul-Fitr. Post Eid phase of relief efforts started from 15th September 2010, with a medical cam being set up with the help of an NGO (HOPE) in Muzaffargarh. Water purifiers were also distributed to the affected people of the area.

For the flood affected, the House of Habib has so far served 19, 427 hot meals, distributed family food packs to 32, 268 people, provided 670, 000 liters of drinking water apart from medical assistance to 21,879 people. So far it has collected Rs. 103 million for this noble cause out of which has already been utilized. This outstanding performance can only be lauded.

Financials:Year over year, Habib Metropolitan Bank Limited has seen their bottom line shrink from 3.3B to 2.7B despite an increase in revenues from 3.0B to 3.2B. An increase in the percentage of sales devoted to SGA costs from 98.56% to

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106.93% was a key component in the falling bottom line in the face of rising revenues.

Currency inMillions of Pakistan Rupees

As of: Dec 312006

RestatedPKR

Dec 312007

RestatedPKR

Dec 312008

RestatedPKR

Dec 312009PKR

TOTAL REVENUES 4,495.5 6,458.9 8,016.6 7,883.7

Cost of Goods Sold 109.7 69.3 113.4 116.9

GROSS PROFIT 4,385.8 6,389.6 7,903.2 7,766.8

Selling General & Admin Expenses, Total 1,240.2 2,184.8 2,989.1 3,431.0

EBT, EXCLUDING UNUSUAL ITEMS 3,144.4 4,204.4 4,767.0 4,229.4

Merger & Restructuring Charges -- -- -- -2.7

EBT, INCLUDING UNUSUAL ITEMS 3,144.4 4,204.4 4,767.0 4,226.7

Income Tax Expense 1,047.2 1,407.0 1,471.9 1,480.2

Earnings from Continuing Operations 2,097.2 2,797.4 3,295.1 2,746.6

NET INCOME 2,097.2 2,797.4 3,295.1 2,746.6

NET INCOME TO COMMON INCLUDING EXTRA ITEMS 2,097.2 2,797.4 3,295.1 2,746.6

NET INCOME TO COMMON EXCLUDING EXTRA ITEMS 2,097.2 2,797.4 3,295.1 2,746.6

Another table of financials

For the Year Dec '09 Dec '08 Dec '07 Dec '06 Dec '05 Dec '04

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(Rupees in million)

Shareholders Equity 18,889 16,150 13,359 10,665 5,093 3,588

Paid-up Capital 7,528 6,022 5,018 3,005 1,560 1,200

Total Assets 237,412 182,711 172,867 148,668 79,564 67,891

Deposits 142,457 128,433 121,141 102,493 56,713 48,596

Advances 102,293 108,261 89,827 83,324 43,519 40,122

Investments 111,680 53,632 61,736 39,556 22,804 15,560

Profit before Tax 4,214 4,764 4,045 3,143 2,098 1,411

Profit after Tax 2,739 3,293 2,964 2,096 1,506 835

Earnings Per Share 3.64 5.47 5.37 9.32 9.65 6.95

Dividends (%) 16 (B)10 (C) 25 (B)

67 (B)-I*20 (B)-F*10 (C)-F*

- 33.33 (B) 30 (B)

No. of Staff 2,695 2,473 2,300 1,963 1,143 1,045

No. of Branches 120 110 100 82 51 47

‘I ‘= interim and ‘F’= financials

Branches and Atms:

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Over 150+ branches in 21 citiesof Pakistan Over 110+ online branches 101+ ATM machines are operated in the country

HMB operates in more than 20 countries across the world.

Electronic Banking:

1:Phone Banking

Dial 0800 HABIB / 0800 42242 Instant access to the information you need at any time, from anywhere. Tele info is a 24 hour telephone banking service to give you information

you need – easily, instantly. Following services can be accessed 24/7

Account Balance. Cheques in Clearing. Indicative Foreign Exchange Rates. Faxed back account statements.

2:Internet Banking (Online Banking)

Access your account from your home or office or anywhere in the world. Login through web info username and password. Login through your HMB ACCESS (ATM/Debit Card).

Following services can be accessed 24/7 Up-to-date Account Balance.

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Cheques in Clearing. Account statement Indicative Foreign Exchange Rates.

International Banking:

1: Correspondent Bank Network Habib Metropolitan Bank Limited

HEAD- OFFICE INTERNATIONL DIVISIONCOUNTRYWISE LIST OF BANKS TO BE USED FOR IMPORT LC ADVISING

COUNTRY BANK COUNTRY BANKAFGHANISTAN CZECH. REP .

STANDARD CHARTERED BANK COMMERZBANK AG

HSBC BANK PLCARGENTINABBVA ‐ BANCO FRANCES

DE

DENMARKDANSKE BANK A/S

AUSTRALIA EGYPTHSBC BANK AUSTRALIA LIMITED

JPMORGAN CHASE BANK, N.A.

BNP PARIBAS LE CAIRE (FORMERLY BANQUE DU CAIRE ET DE PARIS)

ESTONIAAUSTRIA NORDEA BANK FINLAND PLC ESTONIA BRANCH

UNICREDIT BANK AUSTRIA AG

RAIFFEISENLANDESBANK OBEROESTERREICH

ETHIOPIA

FINLAND

BAHRAIN CITIBANK INTERNATIONAL PLC, FINLAND BRANCH

NORDEA BANK FINLAND PLCUNITED BANK LTD

BANGLAD ESH FRANCEBANK ASIA LIMITED

HSBC

SHAHJALAL ISLAMI BANK

BNP PARIBAS‐ SA (FORMERLY BANQUE NATIONALE DE PARIS S.A.)

HSBC FRANCE (FORMERLY HSBC CCF) COMMERZBANK AG

BELGIUMFORTIS

GERMANYCOMMERZBANK AG

STANDARD CHARTERED BANK

DZ BANK AG DEUTSCHE ZENTRAL GENOSSENSCHAFTSBANK HSBC TRINKAUS UND BURKHARDT AG

UNICREDIT BANK AG (HYPOVEREINSBANK

BRAZILCITIBANK NA

BULGARIACITIBANK NA

Page | 30

CANADA GREECE

HABIB CANADIAN BANK CITIBANK INTERNATIONAL PLC ‐ GREEK BRANCH

BNP PARIBAS GRECE

UNICREDIT BANK AG (HYPOVEREINSBANK) ATHENS ALPHA BANK AE

NG

CHILEBANCO SANTANDER

BANCO DEL DESARROLLO

CHINACITIBANK (CHINA) CO., LTD.

HSBC BANK (CHINA) COMPANY LIMITED BANK OF CHINA LTD

STANDARD CHARTERED BANK (CHINA) LIMITED JPMORGAN CHASE BANK (CHINA) COMPANY LIMITED

HBZ FINANCE LIMITED

CITIBAN

ZAGREBACKA BANKA DD STANDARD CHARTERED BANK (HONG KONG) LIMITED

KUWAIT SWITZERLANDCITIBANK NA HABIB BANK AG ZURICH

BNP P

KYRGYZSTAN

QATARDOHA BANK

STANDARD CHARTERED BANK

CITIBANK TAIWAN LIMITED

JPMORGAN CHASE BANK, N.A.

ING BANK N.V., BUCHAREST BRANCH

RUSSIACITIBANK, MOSCOW

JPMORGAN CHASE BANK

BANQUE SAUDI FRANSI

BANK AL JAZIRA‐

STANDARD CHARTERED BANK TANZANIA LTDTHAILAND

CITIBANK NA

HSBC

TUNISCITIBANK NA

HSBC

CITIBANK NATURKEY

Page | 31

2: Foreign Remittances

Global remittance facility available through our extensive correspondent bank network.

Need assistance for remittance of funds to Pakistan Please select one of the following formatted letters for presentation to

your bankers For Remittances in GPB

Date: _________________ for GPB

The Manager

____________________

____________________

____________________

Dear Sir,

Please debit my Account No. __________________With you, and remit a sum of GBP_____PoundSterling__________________________________________________________________________________________________________________________

To

Habib Bank AG ZurichHabib House42 Moorgate LondonEC2R 6JJ UKFor credit toA/C No: 7-1-1-20110-402-19601SWIFT: MPBLPKKA

Habib Metropolitan Bank LimitedI.I. Chundrigar RoadKarachi

For further credit toBranch Name: _________Account No: ____________Account Name: ____________

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Yours faithfully

For Remittances in USDDate: _________________ FOR USD

The Manager

________________

________________

________________

Dear Sir,

Please debit my Account No._____________with you, and remit a sum of

US$__________________________US Dollars________________________

____________________________________________________________________

To

Habib American Bank99. Madison AvenueNew York- U.S.A.

For credit toA/C No: 2072-9532SWIFT: MPBLPKKA Habib Metropolitan Bank LimitedI.I. Chundrigar RoadKarachiFor further credit toBranch Name: ____________Account No: ______________Account Name: _____________Yours faithfully

For Remittances in Euro

Date: ___________ FOR EURO

The Manager

Page | 33

__________________

__________________

__________________

Dear Sir,

Please debit my Account No. _______________with you, and remit a sum of EURO____________________EURO_____________________________________________________________________________________________________________

To

Commerz bank A.G Kaiserplatz, Frankfurt, Germany.

For credit toA/C No: 50040000/400880742200SWIFT: MPBLPKKAHabib Metropolitan Bank LimitedI.I. Chundrigar RoadKarachi

For further credit toBranch Name: ________________Account No: __________________Account Name: ________________

Yours faithfully

3:SWIFT BANKING

PAY TO:

US DOLLARS

Page | 34

1. Habib American Bank

99, Madison Avenue

New York- U.S.A.

New York 10016

Alc # 2072-9532

Routing No.ABA026007362

Swift Code: HANYUS33

2. Citibank N.A

New York- U.S.A.

A/c # 36082351

Swift Code: CITIUS33

3. Standard Chartered Bank

New York- U.S.A.

A/c # 3582073088001

Swift Code:SCBLUS33

POUND STERLING

PAY TO:

1. Commerzbank AG Alc # 50040000/400880742200

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Kaiserplatz

Frankfurt – Germany Swift Code: COBADEFF

For credit to Account of (Beneficiary’s Bank)

Beneficiary Customer

Habib Metropolitan Bank Ltd.

Main Branch

Karachi- Pakistan

Swift Code: MPBLPKKA001

Customer A/c#_________

Name:________________

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Islamic Banking:1: Habib Metropolitan Bank -Islamic Banking Division

Mission

Our mission is to provide full range of Sharia’ah compliant products and services to our customers with no compromise on Sharia’ah rulings

Introduction to Islamic Banking Division

Habib Metropolitan Bank has developed sufficient expertise, necessary infrastructure, information technology, and manpower to run Islamic banking operation.

Banking customers who wish to avail Islamic banking products and services are welcome to contact us to accomplish their banking requirements.

Our Islamic Banking Division is headed by an experienced banker who is responsible for the over all operational activities of the Islamic Banking Division. The Division has the advisory services of reputable Shari’ah advisors who also help in developing Islamic Banking Products.

2: Islamic Banking Products

Deposits Products

Islamic Current Deposits Account Islamic PLS Account Islamic Investment Certificates Historical Profit Rates

Local Currency Foreign Currency

Current Weight ages Local Currency Foreign Currency

3:Financing Products:

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Local murabahah for financing raw material for locally manufactured goods and local murabahah for financing finished goods for local traders.

Local & import murabaha for financing raw material and finished goods for importers and exporters for trade finance.

Ijara (Islamic lease) for financing equipments and machinery consumer and commercial vehicles.

Ijara (Islamic lease) financing for consumer and commercial vehicles. Commercial property financing on diminishing musharakah basis. House financing on diminishing musharakah basis.

4: Islamic Banking Branches

Branch Address Telephone Fax

Al-Falah Court Branch Ground Floor, Alfalah Court, I. I. Chundrigar Road, Karachi

(021)2215361-63 (021)2215358

Zaibunnisa Street Branch SB-4/4, Zaibunnisa Street, Saddar,

Karachi

(021)5650711-4 (021)5650650

Rashid Minhas Rd. Branch F-L, 3/15, Block 5, Gulshan-e-Iqbal,

Karachi

(021)4819985-86, 88 (021)4819989

5: Shariah Adviser

We have a prominent Islamic scholar as our Shariah Adviser who is a specialist in Islamic Fiqh and is qualified from renowned Islamic Academia.

He is a Research Scholar affiliated with SBP and ICAP.and a member of various committees formed for promoting the cause of Islamic Banking in Pakistan and abroad.

Rates and Charges: 1: Deposit Rates

Indicative Profit Rates payable on PLS Deposits Schemes effective from July, 21 2010.

Page | 38

Type of Deposit Rates per annum

PLS Savings Accounts   5.00% p.a.

SNTD 7 days 5.00% p.a.

  30 days & over 5.00% p.a.

Term/Fixed Deposits 1 month 6.00% p.a.

  3 months 7.50% p.a.

  6 months 8.25% p.a.

  1 year 9.50% p.a.

  2 years 10.00% p.a.

  3 years 11.00% p.a.

  4 years 11.25% p.a.

  5 years 11.50% p.a.

HMB Savings Plus Accounts Up to Rs.100,000/-Over Rs.100,000/- up to Rs.1 MillionOver Rs.1 Million

Individuals only5.00% p.a.8.00% p.a.5.00% p.a.

HMB Multiplier Accounts Up to Rs.1 MillionOver Rs.1Million

- 5.00% p.a.8.00% p.a.

HMB Izafa Certificate (With effect from December 1, 2010)

for 6 years 16.67% p.a.

HMB Mahana Scheme (With effect from December 1, 2010)

(i)For 1 year - min. placement Rs. 25,000 

11.70%Rs. 244 p.m.

(ii)For 3 years - min. placement Rs. 50,000 12.12%

Rs. 505 p.m.

(iii)For 5 years - min. placement Rs. 100,000 12.24%

Rs. 1,020 p.m.

TERMS OF USE

In the case of term deposits not en-cashed on maturity, principal amount will automatically be renewed for the same period for which the Deposit was originally placed.

On premature withdrawal of Term Deposits, the profit will be paid as per the rate applicable for period deposit held.

Page | 39

All above Indicative Profit Rates are subject to Government of Pakistan Levies as applicable from time to time.

In all above products Zakat / Govt. levies will be applicable as per rules. In case balance of Rs. 1 Million not maintained for any day profit will be

paid @ 5.00% p.a. for the month.

2: Exchange Rates RATES FOR PUBLIC PER UNIT OF CURRENCY

COUNTRY SELLINGTT & OD BUYINGTT CLEAN BUYING O/DT/CHEQUES

U.S.A. 85.8500 85.6500 85.4810

U.K. 133.3680 133.0144 132.7438

CANADA 84.6981 84.4758 84.3280

AUSTRALIA 84.7597 84.7421 84.4143

JAPAN 1.022754 1.019764 1.017980

DENMARK 15.2038 15.1604 15.1338

SAUDIARABIA 22.8927 22.8382 22.7982

SWITZERLAND 88.5508 88.2899 88.1354

U.A.E. 23.3739 23.3182 23.2774

HONGKONG 11.0384 11.0117 10.9924

SINGAPORE 65.3597 65.1579 65.0438

SWEDEN 12.5651 12.4962 12.4743

THAILAND 2.8484 2.8380 2.8330

EURO 113.2190 112.9038 112.6821

BILL BUYING RATES PER UNIT OF CURRENCY UNDER L/C

PERIOD U.S.A U.K AUSTRALIA EURO CANADA

30 DAYS 85.2276 132.3291 83.8993 112.3509 83.9182

60 DAYS 84.7630 131.5759 83.1156 111.7185 83.3968

Page | 40

90 DAYS 84.3406 130.8899 82.3346 111.1424 82.8723

120 DAYS 83.9182 130.1990 81.5794 110.5680 82.3763

150 DAYS 83.4958 129.5149 80.7734 109.9928 81.8333

180 DAYS 83.0735 128.7938 79.9538 109.4227 81.2781

  OFFICIAL BUYING RATES FORWITHDRAWL FROM OLD F.C.A/C.

 

PERIOD U.S.A

U.S.A. 85.7950

U.K. 134.6724

JAPAN 1.020600

EURO 114.0902

  RATE FOR CURRENCY NOTES

LIBOR FOR CALCULATING INTEREST ON SPECIAL US DOLLAR BONDS

 

null null LIBOR

6 MONTHS US DOLLAR 0.4578 20.12.2010

Page | 41

 

PERIOD U.S.A U.K

U.S.A. 85.2218 86.2793

U.K. 132.3494 134.0348

JAPAN 1.014665 1.027868

EURO 112.3393 113.7851

KIBOR RATES

One Week Two Weeks One Month Three Months Six Months Nine Months Twelve Months Two Years Three Years

12.54 12.77 13.11 13.41 13.61 13.95 14.11 14.21 14.32

Corporate Information Snap Short:Habib Metropolitan Bank Limited Company Snapshot

Business Description:

Habib Metropolitan Bank Ltd. is a financial company engaged in commercial banking and brokerage services. Its products and services include HMB Access, HMB Auto Finance, HMB Auto Leasing, HMB Basic Account, HMB Call Account, HMB Current Account, HMB Education Loan, HMB Izafa Certificate, HMB Multiplier Account, HMB Mahana Scheme, HMB Personal Loan, HMB Savings Plus Account and PLS Savings Account with Free Life Insurance. The Bank operates 120 branches, including four Islamic banking branches in Pakistan. The Bank is a subsidiary of Habib Bank AG Zurich. The Bank's subsidiary, Habib Metropolitan Financial Services Limited, is engaged in equity brokerage services.

Wright Quality Rating: DLC1

Page | 42

At year-end, HMB s equity stands at Rs 18.9 billion at a comfortable 11.9% capital adequacy level against the required 10%.

Stock Data: Recent Stock Performance:

Current Price (12/10/2010): 25.65

Habib Metropolitan Bank Limited Key Data:

Ticker: HMB

Country: Pakistan

Page | 43

1 Week 2.1% 13 Weeks 22.4%

4 Weeks 35.0% 52 Weeks -1.5%

Exchanges: KAR

Major Industry: Financial

Sub Industry: Commercial Banks

2009 Sales 25,082,193,000

(Year Ending Jan 2010).

Employees: 1,659

Currency: Pakistan Rupees

Market Cap: 22,397,400,450

Fiscal Yr Ends: December

Shares Outstanding: 873,193,000

Share Type: Ordinary

Closely Held Shares: 595,085,145

Page | 44

SWOT ANALYSIS:STRENGTHS:

Large capital base. Rank in top 10 bank of Pakistan.

Page | 45

Continuous growth in ROE. The bank’s management realizes the necessity of existence of effective

internal controls to ensure smooth operations in the current technical and swift business environment.

Loyal management. The bank has efficient and experienced management making

significant. Credit rating in long-term “AA+” and in the short term “A1+”. The financial statements, prepared by the management of the bank

present fairly the state of affairs. Loans are given only to known, reputable clients to avoid chances of

fraud. Very low nonperforming loan. Effectively handled the current economic recession. Bank is continuously focusing on developing new and innovative

products to attract their target market. Strong customer relationship. Asset utilization is very good.

WEAKNESSES:

Only valued client is important. Bad portfolio diversification (54% advances to Textile industry) Advertisement on electronic media has not been seen. Declining standards of banking after merger. Inter- organizational

conflicts after merger. Compromises upon polices to keep customers happy. Old Management. (No creativity) No further growth in branches. Majority of shares are owned by the one family. Low consumer finance. Less job satisfaction of employees. Customers facing problem of NADRA verification while opening their

accounts because its process is time consuming. Promoting generally on seniority basis. Attitude of senior manager at head office has to change towards junior

staff.

OPPORTUNITIES:

Scope in Islamic Banking. To go global fully Low exposure to consumer banking providing opportunity to explore the

segment.

Page | 46

The year 2010 will prove to be another demanding year for the bank with scattered. Diversification, innovation and mission driven approach are the key to success which bank should adopt.

Progressive but cautious business expansion with strategic branch network extension and introduction of innovative products in all areas of business. Branch network need extension.

Should emphasize much on e-banking. Profit margin will be good. The bank being Swiss incorporated, it bank follows dual banking

regulation i.e of Pakistan as well as Switzer-land which attracts foreign investors.

SBP policy to allow Islamic Banking business separately. Bank introduces Islamic banking in country that attracts large number of

people. Greater profitability can be achieved through strong internal control. New schemes for deposits and finances should be introduced regularly. Opportunity to open branch in ruler area to increase its branch network

and gain more profit.

THREATS:

Adverse impact of “Credit Crisis” can badly effect on HMB. Facing a strong competition by its competitors. High reliability on only

one market segment i.e. Textile. (54%) Inconsistency in government policies. Increasing competition in the banking sector. Entry of many foreign

banks. Strict policies of the State Bank of Pakistan. Geopolitical condition of country. Global liquidity crisis has constrained banks to stop lending. Current economic crunch. Political instability. Rising deposit rates. Foreign banks in market having more marketing budgets. People losing trust in banks. Decline in private and public sector credit due to tight monetary policy.

Page | 47

PEST ANALYSIS Political:

Page | 48

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

Monopolies Legislation Taxation Policy Foreign Trade Regulations

Economic Economy of Pakistan is facing issues about

Unemployment, Inflation, Illiteracy, Corruption Business Cycles Interest Rate

all the above issues hinders business growth.

Socio Cultural issues Cultural issues can be there but still as there are a number of multinational companies there, therefore, culture issues are not prominent.

Population Demographics Income Distribution Social Mobility Lifestyle Changes Levels of Educations

Technological

Speed of Technology Transfer New Discoveries / Development Investment on Research Rate of Obsolescence

RISK MANAGEMENTCredit risk:

Page | 49

The HMB strategy is to minimize credit risk through a strong pre-disbursement credit analysis, approval and risk measurement process added with product, geography and customer diversification. The Bank, as its strategic preference, provides loans only to strong parties. Major portion of the Bank credit portfolio is Textile industry (54%) which is highly profitable business in Pakistan but it may riskier and not a good diversification of portfolio, if textile industry slump then it will crash the whole bank. The bank has very low rate of Non-performing loans. The ratios of risks are as under and we can see that they reduce the risk as per their objective.

Market Risk:

Market risk is the possibility that fluctuation in interest rates, foreign exchange or stock prices will change the market value of financial products leading to a loss. The HMB has formalized liquidity and market risk management policies which contain action plans to strengthen the market risk management system.

Foreign Exchange Risk:

Foreign Exchange Risk is the probability of loss resulting from adverse movement is exchange rates. The HMB is not in the business of actively trading and market making activities but a conservative risk approach and the Bank’s business strategy to work with export oriented (Textile) client’s gives the ability to meet its foreign exchange needs.

Interest rate risk:

Interest rate risk is the risk that the value of the financial instrument will fluctuate due to changes in the market interest rates. The HMB’s interest rate exposure is low due to the short-term nature of the majority of business transactions. Interest rate risk is also controlled through flexible credit pricing mechanism and variable deposit rates.

Liquidity risk:

HMB manages the liquidity position on a continuous basis. The Bank’s liquidity position is based on “self reliance” with a wide branch network to expand the Bank deposit base. The Bank’s liquidity profile generally consists of short-term, secured assets, in line with the Bank’s credit strategy.

RECOMMENDATIONS

Page | 50

Diversify the portfolio

Introduction of new products/services in the market

Hire new management

Give importance to all customers

Increase the branches all over the country

Improve standard of banking

Start advertisement as soon as possible

Conclusion

Major factors like global financing disorder, economic slowdown and strict monetary policy were on the top but Pakistan bank caters all

Page | 51

these problems. HMB is one of the top ten banks it is expected to play a major role in pioneering these newer markets.

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

HMB offers branch banking,e-banking,consumer banking international banking and also offers Islamic banking to facilitate their cutomers

At year-end, HMB s equity stands at Rs 18.9 billion at a comfortable 11.9% capital adequacy level against the required 10%.

The credit ratings denote a very high credit quality, a very low expectation of credit risk and a very strong capacity for timely payment of financial commitments.

Page | 52