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First of all, we would like to say ALHAMDULLILAH for giving us the strength
and health to complete this report until it done. We are very grateful to
Almighty ALLAH who has given us the power and capability to think and judge
the matters and then to make use of the sacred abilities.
Then I am heartily thankful to our teacher KHALID JAMIL ANSARI whose
encouragement, guidance and support from an initial to the final level enabled
us to build up an understanding of the subject not capable to prepare it.
Last but not a least, we offer our regards and blessings to all our friends and
not forgotten to our family for providing everything, such as money, to buy
everything that are related to this project work and their guidance, which is
the most needed for this project. They also encouraged us and supported us to
complete this task

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Executive Summary:

This report provides an analysis and evaluation of the current and prospective
position of Bank Al Habib in the banking industry. This report focuses on the
growth and marketexpansion of the Bank Al Habib Limited. Aspects like
strengths, weaknesses, opportunitiesand threats of Bank Al Habib are
highlighted.Methods of Analysis include IFE, EFE, CPM, BCG, IE, Grand
Strategy, and QSPM matrices.After analyzing of matrixes, it is indicated that
Bank AL Habib has a strong and stableposition and needs to plan a strategy
for further growth.The report finds through QSPM matrix that Horizontal
integration is most favorable strategyfor growth and expansion of Bank Al
Habib. Bank Al Habib is needed to carefully plan anAcquisition and Merger
strategy and implement accordingly.

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DAWOOD HABIB GROUP, the sponsor of Bank AL Habib Limited, has a long
track record in banking which dates back to the 1920's. It was among the
founder members of Habib Bank Limited which played a major role in
meeting the financial and banking needs of Pakistan, and which was
nationalized along with other Banks in Pakistan on January 1, 1974. Under the
subsequent privatization policy of Government of Pakistan, DAWOOD HABIB
GROUP was granted permission to set up a commercial bank. Bank AL Habib
was incorporated as a Public Limited Company in October 1991 and started
banking operations in 1992.

(Late) Hamid D. Habib, grandson of the founder of Habib Group, was the first
Chairman of Bank AL Habib Limited. He was a Director in Habib Bank Limited
from 1954 and its Chairman from 1971 until its nationalization. After the
death of Mr. Hamid D. Habib in May 2000, Mr. Ali Raza D. Habib, who was
Director on the Board, was appointed the Chairman of the Bank, a position he
continues to hold.

(Late) Rashid D. Habib, who was the Managing Director of Habib Bank Limited
from 1953 till its nationalization, was appointed as the Managing Director &
Chief Executive of Bank AL Habib Limited until he passed away in 1994. After
his death, Mr. Abbas D. Habib who was the Joint Managing Director and
closely associated with the Bank since its inception in 1991, was appointed as

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the Managing Director & Chief Executive of the Bank, a position which he
continues to hold.
Habib Esmail, founder of Habib Group, started his career in Bombay in 1891 at
the age of 13 on a salary of Rs. 5 per month in a firm that dealt in copper and
brass utensils. He worked day and night, arriving before the shop opened,
staying till late in the night, and then walking home to save money on
conveyance. No wonder that in the short span of five years, at the age of 18, he
was made a partner in the firm. Even at that young age, he had established an
excellent reputation for honesty, hard work, fair play, trustworthiness,
humility. These values continue to guide the activities of Habib Group to this

During the next 17 years, he captured over 60 percent of the local utensils
business and diversified into export of copper, cotton scrap iron and
manganese ore, selling to East Africa, Italy, France and Great Britain. Being a
person of great insight, he sent his representatives to Europe in 1912 and
established branch offices in Genoa and Vienna. Simultaneously, he initiated
business relationships with Japan and China.

His reputation for honesty and fair play was so well known that his customers
and local merchants would leave their surplus funds with him for safe-
keeping and investment, thus establishing the foundation of the family's
banking business. In 1921, he started Habib & Sons. The firm traded in cotton,
oil seeds, and bullion and acted as a merchant bank. It eventually became the
flagship of the family and the parent family and the parent company of Habib
Bank Limited.

Habib Bank Limited was established in Bombay in 1941 by the sons of Habib

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Esmail. The bank had over 30 branches operating in India at the time of
partition. Quaid-e-Azam Mohammad Ali Jinnah reposed confidence in the
bank by opening his personal account. On the creation of Pakistan in 1947,
and following the advice of the Quaid-e-Azam, Habib Family shifted all of its
businesses including Habib Bank to Pakistan. The bank played a vital role in
meeting the financial and banking needs of Pakistan. It continued to record
tremendous growth and progress and emerged as the leading private-sector
commercial bank in Pakistan when it was taken over by the Government of
Pakistan along with all other Pakistani banks on January 1, 1974.

In 1991, the government again decided to allow the private sector to establish
commercial banks in the country. Dawood Habib Group was amongst the first
to be granted permission to set up a new bank under this policy. Bank AL
Habib Limited was incorporated in October 1991 by the grandsons of Habib
Esmail and started operations in January 1992. Although Bank AL Habib
commenced operations in 1992, it embodies the same high standards of
integrity, prudence, and trust which have characterized Habib Family's
banking operations in Pakistan and abroad for about 70 years. The bank is
particularly conscious of the trust reposed in it by the depositors, and its
prime duty is to protect and honour this trust all times. Guided by the values
taught and practiced by Habib Esmail more than a century ago, the bank has
continued to grow and progress in all areas of its operations. In a short span of
20 years, the Bank's assets have grown to more than Rs. 380 billion, with a
network of 442 branches and sub-branches, a Wholesale Branch in the
Kingdom of Bahrain, and Representative Offices in Dubai, Istanbul and Beijing,

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Board Of Directors:

Name Designation Occupation
Mr. Ali Raza
D. Habib
Chairman Businessman
Mr. Abbas D.
Director &
Mr. Anwar
Haji Karim
Director Industrialist
Director Former President,
Askari Commercial
Bank Ltd.
Mr. Murtaza
H. Habib
Director Industrialist
Mr. Qumail
R. Habib
Syed Mazhar
Director Former Banker
Mr. Manzoor
Director Chief Operating
Officer NIT

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Mr. Safar Ali


Former President,
Soneri Bank Limited
Syed Hasan
Ali Bukhari
Director Former MD & CEO -
Mackinnon Mackenzie
& Co. of Pakistan/
Corporate Advisor
Company Secretary:
Banks company secretary is as follows:

Name Designation Occupation
A. Saeed

Management Team:

Chief Executive & Managing Director
Executive Director
Group Head & Company Secretary

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Group Head
Information Technology Division
General Manager
International Division
General Manager
Projects Division
General Manager
Credit Division
General Manager
Compliance Division
General Manager
General Manager
Audit Division
General Manager

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Centralized Processing Unit

General Manager
Customer Services Division
General Manager
Finance Division
General Manager & CFO
Karachi / Sindh & Balochistan Zones


Deputy General Manager
Northern Zone
General Manager
Central Zone
General Manage

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Vision and Mission:
"To be a quality financial service provider maintaining the highest
standards in banking practices".
"To be a strong and stable financial institution offering innovative products
and services while contributing towards the National economic and social

Proposed Vision:

To be a world-class financial services company that helps consumers
and businesses achieve their goalsORTo become the leading, technology-
driven and global financial institution, providing distinctively unique range of
financial services.

Proposed Mission Statement:

To be the preferred provider of targeted financial service in our communities
based on strong customer relationships. We will strengthen these
relationships by providing the right solutions that combine our technology,

expertise and financial strength. Our goal isto create customer loyalty,
shareholder value and employee satisfaction.

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Huge Deposits:
The bank has stable growth in deposits since its emergence. BAHL is the Eight
largest bank in Pakistan and because of its 23 years long existence it is the
trustworthy bank in Pakistan and outside Pakistan.
Advances on Sound Basis:
The loan facility provided by the bank is on sound basis. They have many
checks and documentation that secure their money after advancing. With
their strategy there are very less chances of non-recovery from the debtor
Because of its 465 Domestic and 4 Overseas Branches they have very good
infrastructure and are prevailing now outside Pakistan also. BAHL continually
looks for ways to become more efficient and to increase their profit margins
BAHL has launched their products and varied services with particular brand
names that is now-a-days a competitive strategy in its own. They are
launching same schemes that are already existant in the banking sector but
because of giving them brand names they are creating unique identity. Their
popular brands are BAHL Wallet (ATM card), BAHL Address (House loans),
BAHL Drive (Car financing), (Online Banking Service), HAMRAH (Traveler
Cheque), Click N Remit , TezRaftar (Remittance Service) etc.

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Fast Service:
Another very important aspect of BAHL is its fast service. Every thing goes
very quickly. If you are looking for a loan, or you want to deposit money or
you want to pay your bills their service is so fast that they respond the
customer very quickly. Like other banks customer do not have to wait for the
long time.
BAHL has financial strength as they are gaining profit from the advances that
they provide to the organizations.
BAHL is providing lot of services to its customers like in case of remittances
they have services like Click N Remit online service, Tezraftar is another
remittances service, BAHL -Online their online service, Money gram is their
service for foreign currency remittance from outside Pakistan and Hamrah is
their service regarding rupee traveler cheque.
Promotion Criteria:
The promotion criterion of employees is made up of passing the diploma
examination of Pakistan institute of bankers and other business qualifications.
Good Reputation:
Because of its quality management, marketing, innovation in products and
services they have established a good reputation in the banking sector.

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BAHL is centralized. It means authority is not delegated to branch level.
Manager cant take initiative regarding different decisions such that for giving
Low Promotional Activity:
The majority of people are not well aware about the products of BAHL.
Promotion activity of their services is very low.
Lack Innovation:
BAHL Management lacks innovation they introduce the same products that
are already existent in the market.
Low Salaries:
BAHL officers salaries are low as compared to other private banks.
Low Motivation Level:
There is low level of motivation in the employee of the bank.
Less Specialized Skill:
In BAHL there is lack of specialized skill because of job rotation policy of
human resource department. The bank should concentrate upon increasing its
abilities on individual service basis.

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Mobile Banking:
Mobile banking is a concept that has started to find its roots in the banking
sector. So it is a big opportunity for BAHL to avail this chance at big level.
International Expansion:
Opportunities exist for expansion of BAHL chains in the international arena, in
particular in Bahrain and Dubai. Particular attention must be given to the
individual country's customs and cultural practices to be successful
Trade Shows:
BAHL should organize trade shows for the promotion of export for that they
should finance the companies those who wanted to internationalize and
wanted to introduce their product and services outside Pakistan.
An external opportunity exists in efforts to improve the social environment of
local communities and society in general by offering innovative, community-
involvement programs

Rapid Changes:
The rapidly changing environment in the banking sector and the quick
response of the other banks to these changes can be a threat for BAHL.

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Customer Behavior:
What customer really wants is a difficult thing to identify as to identify the
customer perception and its behavior is complex procedure. So the changing
needs of the customer can be a threat for the banks.
Governmental Policies:
Changing governmental policies and instability in politics can be seen as a
threat for the banking sector.
Competition can be the greatest threat for the BAHL. As old banks have
started changes and many new banks are emerging as a strong entity so BAHL
will face a strong threat from this competition unless they adopt pro- active
approach to handle these threats.

Internal Audit:

Management Audit :

Bank Al Habib is an organization following centralized planning and
controlling. Planning isthe responsibility of the senior management group
more particularly the board of directors,and to check any deviation from the
prescribed plan, there is head office under them.

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Marketing Audit:

Bank Al-Habib marketing strategies are not aggressive. They should improve
interpersonalcommunication skills, marketing department & provide
excellent customer services to getmore business by satisfying their customers.
Bank has an opportunity to target tradefinance & to attract low cost deposits
from individuals & retail customers. Bank Al- Habibcan easily get business
from SME sector, Consumer Banking & Micro Finance Banking byimproving
their marketing strategy.

Financial Audit:

PACRA has maintained the long-term and short-term entity ratings of Bank AL
HabibLimited 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
strongcapacity for timely payment of financial commitments.The ratings
reflect the banks sustained performance, exceptional asset quality,
andsatisfactory financial profile. The ratings draw comfort from prudent risk
managementpolicies and the managements conservative risk appetite.

HR Audit:

There is absence of corporate culture & good HR practices in Bank as compare
to otherbanks. They provide training & promotion to their employees but
salary packages & compensation is not good which should be at least market
competitive to attract good resource from market

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Market Penetration:

Through advertisement campaigns, bank is striving to penetrate in the
Market Development:

The Bank is operating 11 Islamic banking branches in Pakistan.

Product Development:

Bank is continuously involved in new product development. Some are as


Young saver Account

Senior Citizen Account

Foreign Currency Saver

Backward Integration:

Bank is not involved in horizontal integration.

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Forward Integration:

Bank is not involved in horizontal integration.

Horizontal Integration:

Bank is not involved in horizontal integration.

Diversified Strategy

Related Diversification

The Bank has 66.67% shares holding of AL Habib Capital Markets (Pvt.) Ltd.

The bank has 30% shares holding of Habib Asset Management Limited.

Un-related Diversification
The Bank has 6.24% shares holding of HabibSugar Mills.

Strategy Implementation:

Annual Objective:

Determine Business Plan Drivers

Determine Acquisition Financing Constraints

Develop Acquisition Candidate List

Build Preliminary Valuation Models

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Rate/Rank Acquisition Candidates

Review & Approve Acquisition Strategy


The first and foremost thing is to determine business plan drivers. It is
veryimportant to convert business strategies to set of drivers or a source of
motivation tohelp the merger succeed in all possible ways.

There should be a strong understanding of the intended business market,
marketshare, and the technological requirements and geographic location of
the business.The company should also understand and evaluate all the risks
involved and therelative impact on the business.

Then there is an important need to assess the market by deciding the growth
factorsthrough future market opportunities, recent trends, and customer's

The integration process should be taken in line with consent of the
managementfrom both the companies venturing into the merger.

Restructuring plans and future parameters should be decided with exchange
of information and knowledge from both ends. This involves considering the
workculture, employee selection, and the working environment as well.

At the end, ensure that all those involved in the merger including
management of the merger companies, stakeholders, board members, and
investors agree on thedefined strategies. Once approved, the merger can be
taken forward to finalizing adeal.

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Strategy Evaluation:

Set Standards:

Reviewing internal and external factors that are the bases for current strategy.

Measuring performance.

Taking corrective actions.


BAHL expects its strong customer focus to drive the banks future business
strategy. On the domestic side bank has already launched its consumer

banking business. Increased investment is targeted in developing Human
Resources ; Infrastructure and internal system support the

aggressive consumer initiative and explorations of new avenue generation.
The first step under this initiative is the launch of the banks ATM / Debit
Card, branded as BAHL Wallet. Furthermore BAHL has plans to introduce a
full suite of innovative consumer finance products designed to capture a
significant share of the local consumer financing market and tap into the
current growth in demand of such financing.

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