Case Study of Bank Al Habib Limited.: Bahadur Ali (55534) Adnan Jamil (54447) Fouziashaikh (53267) Adnan Zakir

Case Study of Bank Al Habib
Limited.
Bahadur Ali (55534)

Adnan Jamil (54447)
FouziaShaikh (53267)
Adnan Zakir ( )
Case Study of Bank Al Habib Limited. 2012
Contents
Executive Summary.................................................................................................................................. 2
Letter of Acknowledgement................................................................................................................. 2
Introduction................................................................................................................................................. 2
Introduction of Habib Family..........................................................................................................................2
Habib Family's Business Units........................................................................................................................2

BANKING & FINANCE.....................................................................................................................................2
INSURANCE;......................................................................................................................................................2
OTHER;................................................................................................................................................................2
Introduction of Bank Al Habib Limited........................................................................................................2
Capsule Information................................................................................................................................ 2
Bank AL Habib Limited Profile........................................................................................................................2
Total no. of branches:.......................................................................................................................................2
Registered office:................................................................................................................................................2
Principal office:.....................................................................................................................................................2
Strategy Formulation............................................................................................................................... 2
Vision Statement.................................................................................................................................................2
Mission Statement...............................................................................................................................................2
Critical Views.........................................................................................................................................................2
Proposed Mission Statement...........................................................................................................................2
Input Stage............................................................................................................................................................2
The External Audit..........................................................................................................................................2
Opportunities................................................................................................................................................2
Threats............................................................................................................................................................2
Bank ALHabib.............................................................................................................................................................2
External Factors Evaluation (EFE) Matrix..........................................................................................2
Bank AL HABIB.............................................................................................................................................2
Competitor Performance Matrix (CPM) Matrix.................................................................................2
Internal Audit....................................................................................................................................................2
Management Audit.....................................................................................................................................2
Marketing Audit............................................................................................................................................2
Financial Audit..............................................................................................................................................2
HR Audit..........................................................................................................................................................2
Bank Al Habib Limited | Conclusion 1

Strength..........................................................................................................................................................2
Weaknesses...................................................................................................................................................2
Bank AL-Habib..............................................................................................................................................2
Internal Factors Evaluation (IFE) Matrix............................................................................................2
Strategies in Action............................................................................................................................................2
Intensive Strategy..........................................................................................................................................2
Integrative Strategy.......................................................................................................................................2
Diversified Strategy........................................................................................................................................2
Defensive Strategy.........................................................................................................................................2
Matching Stage.....................................................................................................................................................2
BCG Matrix.........................................................................................................................................................2
IE Matrix..............................................................................................................................................................2
Suggestion.........................................................................................................................................................2
Grand Matrix......................................................................................................................................................2
Decision Stage......................................................................................................................................................2
QSPM....................................................................................................................................................................2
Strategy Implementation...................................................................................................................... 2
Annual Objective..................................................................................................................................................2
Policies.....................................................................................................................................................................2
Set Standards.......................................................................................................................................................2
Conclusion.................................................................................................................................................... 2

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 market
expansion of the Bank Al Habib Limited. Aspects like strengths, weaknesses, opportunities
and 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 stable
position and needs to plan a strategy for further growth.
The report finds through QSPM matrix that Horizontal integration is most favorable strategy
for growth and expansion of Bank Al Habib. Bank Al Habib is needed to carefully plan an
Acquisition and Merger strategy and implement accordingly.

Letter of Acknowledgement
First of all thanks to whom who is most merciful and kind to all of his creations
without any discrimination and who make us able to prepare this report.
We are thankful of following personalities for their guidance and help in the
preparation of this report
 Mr. Shah FarazulHasan; who provided us some useful articles

related to our topic.
 Mr. AhmerMukhtarHasan who provided us important information
about the bank Al Habib.
 Mr. Mudassir Khan; who provided us the material related to our
project.
In the end special thanks to Mr. MudassirHussain (Our Strategic

management instructor) whose unlimited efforts are present in our
professional grooming.


Introduction
Introduction of HabibFamily
The Origin of what is now known as the Habib Group of companies can be traced to
HabibEsmail, and his association with the firm of KhojaMithabaniNathoo, a leading metals
dealer established in Bombay in 1841. Habib joined the firm at the age of 13 for a monthly
salary of Rs. 5. Through his hard work and determination he became partner at the age of
18 and also became the president of the Copper and Brass Merchants Association.
He started the firm "Habib& Sons" in 1921 and changed the family name to "Habib". His
four sons namely Ahmed Habib, DawoodHabib, Mohammed Ali Habib and Ghulam Ali Habib
joined the business. The firm expanded rapidly - banking remained a core business.
184 HABIB FAMILY STARTS BUSINESS IN BOMBAY, INDIA

1
192 HABIB & SONS ESTABLISHED IN BOMBAY
0
194 HABIB BANK LIMITED ESTABLISHED IN BOMBAY
1
194 HABIB INSURANCE COMPANY ESTABLISHED IN BOMBAY
2
194 HABIB FAMILY MIGRATES TO PAKISTAN MOVING HABIB BANK,
7 INSURANCE & OTHER BUSINESSES
196 HABIB BANK AG ZURICH ESTABLISHED IN SWITZERLAND
7
HABIB BANK LIMITED NATIONALISED IN PAKISTAN. HABIB FAMILY
197
INVITED BY LATE SHAIKH RASHID TO ESTABLISH HABIB BANK AG
4
ZURICH BRANCHES IN DUBAI
198 HABIB FAMILY DECENTRALISES BUSINESS UNITS BETWEEN A
2 GROWING FAMILY
199 PAKISTAN GOVERNMENT INVITES DAWOOD HABIB GROUP TO
1 ESTABLISH "BANK AL HABIB" IN PAKISTAN
Habib Family's Business Units
BANKING & FINANCE

Bank AL Habib (Pakistan)
Habibsons Bank Ltd (UK & Switzerland)
Habib Overseas Bank Ltd (South Africa)

Habib African Bank Ltd (Tanzania)

HabibAsset Management Ltd (Pakistan)
Axiom Funds (UK)
Al Habib Capital Markets (Pvt.) Ltd (Pakistan)
INSURANCE;
Habib Insurance Co. (Pakistan)
Green shield Insurance Brokers (UAE)
OTHER;
Habib Sugar Mills (Pakistan)
HSM Textile (Pakistan)
HabibMotorcycles Ltd. (Pakistan)
Introduction of Bank Al Habib Limited
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 withother banks in Pakistan on December 31, 1973.
Under the privatization policy of Government of Pakistan, the 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.
It is a venture of the Habib Group, which owns 50% of the shares, 20 % shares are owned
by NIT and 30% are owned by the general public. Bank now has a network of 353 branches
including 11 Islamic Banking Branches and a Wholesale Branch in the Kingdom of Bahrain,
61 sub-branches, and two Representative Offices, one each in Dubai and Istanbul.
(Late) Hamid D. Habib, grandson of the founder a Habib Group, was the first Chairman of
Bank AL Habib Limited. He was a Director in Habib Bank Limited from 1954 and it’s
Chairman from 1971 until 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
ofthebank.
(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 expired in 1994. After his death, Mr. Abbas D. Habib who was the
Joint Managing Director and closely associated with the bank since its inception 1991, was
appointed as the Managing Director & Chief Executive of the Bank.
Capsule Information
Bank AL Habib Limited Profile
Public limited company

Type KSE: BAHL
LSE: BAHL
Founded Karachi, 1991
Principal Office Karachi, Pakistan
Industry Banking
Corporate Banking, Loans, Savings, Consumer

Products
Banking, Islamic Banking etc...
Revenue ▲RS 16.7 Billion(2011)
Employees 6,900

Website www.bankalhabib.com
Current Share Price in Rs. 28.52
Total no. of branches:
Bank now has a network of 353 branches including 11 Islamic Banking Branches and a
Wholesale Branch in the Kingdom of Bahrain, 61 sub-branches, and two Representative
Offices, one each in Dubai and Istanbul.
Abbotabad Kamalia Sugar Mills (Kamalia) QasbaGujrat
Badin Kandhkot Qazi Ahmed
Bahawalpur Karachi Quetta
Bhiria Road (NausheroFeroz) Karkhana Bazar (Vehari) Rahim Yar Khan
Burewala Kasur Rawalpindi
Chakwal Khanbela RohillanWali
Chenab Nagar Khanewal Sadiqabad
Dadyal (A.K.) Khanpur Sahiwal
Daharki Kharian SalehKhana
Daska Khurrianwala Sanghar
Dera Ghazi Khan Khushab Sargodha
Dinga Kotla Arab Ali Khan Shahdadkot
Faisalabad Kunri Shahdadpur
Fazilpur Lahore ShahpurChakar
Ferozwatoan Lala Musa Sheikhupura
GaggoMandi Larkana Shikarpur
Gawadar MandiBahauddin Sialkot
Gambat MathanichanganSwabi Skardu
Ghakhar Mehar Sukkur
Gharo Mehrabpur Tando Adam

Ghotki MianChannu TandoBagho
Gilgit Mirpur (A.K.) TandoAllahyar
Gujar Khan Mirpurkhas TibbaSultanpur
Gujranwala Moro Toba Tek Singh
Gujrat Multan Turbat
Hafizabad Muridke Uch Sharif
Haripur Muzaffargarh Wazirabad
Hingorja (Khairpur) Narowal WahCantt
Hub Nawabshah ZahirPir
Hyderabad Nooriabad (Jamshoro) Off Shore Branches
Islamabad Okara Export Processing Zone, Karachi
Jacobabad Peshawar Manama, Bahrain
Jhelum PirMahal Representative Office
Joharabad Pull Kharan (Shujabad) Dubai, U.A.E.
Istanbul, Turkey
Registered office:
Address: 126-C, Old Bahawalpur Road

Telephone: (92-61) 544539, 111-786-110

Fax: (92-61) 582471
Principal office:
Address: 2nd Floor, Mackinnons Building,

Office I.I. Chundrigar Road,
Karachi

Telephone: (92-21) 2412986-89 , 2417065-68 , 111-786-110


Fax: (92-21) 2425423 , 2412028

Strategy Formulation
Vision Statement
VISION
“To be a quality financial service provider
maintaining the highest standards in
banking practices”.

Mission Statement
MISSION
“To be a strong and stable financial institution
offering innovative products and services while
contributing towards the National economic and
social development”.

Critical Views
Missing in Mission Statement
Customers. No.
Product/Services. Yes.
Markets. No.
Technology. No.
Concern for Survival, Growth, and Profitability Yes.
Philosophy. Yes.
Self-Concept. Yes.
Concern for Public Image. No.
Concern for Employee. No.
Proposed Vision
To be a world-class financial services company that helps consumers and

businesses achieve their goals
OR
To 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
is to create customer loyalty, shareholder value and employee
satisfaction.

Input Stage
The External Audit
Opportunities
 Promote housing finance schemes.
 To attract low cost deposits, particularly from individuals & retail customers.
 To target trade finance.
 More development & enhancement in current IT infrastructure to improve operational

activities & customer satisfaction.
 Enhancement in Islamic Banking network.
 To enter in agricultural sector. Being an agricultural country it is a large segment in

Pakistan but still un-served by the Pakistani Banks.
 SME sectors also an attractive opportunity for Bank. (Current advances ratio is only
5%).
 Consumer bankinghas a huge potential for bank. (Current advances ratio is only
2%).
 Micro Finance Banking is also and opportunitiesfor Bank.
 Involvement in Bancassurance Products.
 More presence in International market.
 Mobile Banking services for facilitating & getting the customer satisfaction.
 Bank AlHabib has an opportunity to merge with some other bank to be listed in top 5
ranking.
 Attractive salary packages & compensation should be awarded to attract good

resource from market.
 Marketing department should be more aggressive in order to fetch market share.

Current market share is around 4.5% (2009: 4.2%) of the total bankingsector
assets.
 To target commodity finance.
 To target foreign trade market.

 There is a lot of cushion available for Bank Al-Habib in terms of expanding its

network of branches.
Threats
 Non aggressive marketing approach.
 Rapid growth of Islamic Banking in Pakistan.
 Anti-money laundering laws effects asset base of BAHL.
 Nonperforming loans (NPL)
 Economic situation effect the asset base of BAHL.
 Day by day competition is increasing not only of the expansion of the banks but also

due to the mergers and acquisitions of the new bank in the market.
 Circumstances of Pakistan are a great threat.
 The conventional banks those having high growth rate and high market share are
always being a threat.
 Large business parties have fewer attractions in being a client of BAHL, mainly
because of excessive amount of documentation.
 A relatively high exposure to textile sector (45%) is mitigated to a certain extent due
to diversification withinsector.

Bank ALHabib
External Factors Evaluation (EFE) Matrix
Opportunities
S.
Successful Key Factors (S.K.F) Weight Ratting Score
No
1 Promote housing finance schemes 0.04 4 0.16

To attract low cost deposits, particularly from individuals & retail
2 0.04 3 0.12
customers.
3 To target trade finance. 0.04 4 0.16
More development & enhancement in current IT infrastructure
4 0.02 3 0.06
to improve operational activities & customer satisfaction.
5 Involvement in Islamic Banking. 0.04 4 0.16
To enter in agricultural sector. Being an agricultural country it is
6 a large segment in Pakistan but still un-served by the Pakistani 0.04 4 0.16
Banks.
SME sectors also an attractive opportunity for Bank. (Current
7 0.04 4 0.16
advances ratio is only 5%).
Consumer banking has a huge potential for bank. (Current
8 0.04 4 0.16
advances ratio is only 2%).
9 Micro Finance Banking is also and opportunities for Bank. 0.04 4 0.16
10 Involvement in Bancassurance Products. 0.03 3 0.09
11 More presence in International market. 0.02 4 0.08
Mobile Banking services for facilitating & getting the customer
12 0.03 3 0.09
satisfaction.
Bank - Al Habib has an opportunity to merge with some other
13 0.02 3 0.06
bank to increase the number of its branches in Pakistan.
Attractive salary packages & compensation should be awarded
14 for motivation of current employees & to attract good resource 0.02 3 0.06
from market.
Marketing department should be more aggressive in order to
15 fetch market share. Current market share is around 4.5% (2009: 0.03 3 0.09
4.2%) of the total banking sector assets.
16 To target commodity finance market. 0.04 4 0.16
17 To target foreign trade market. 0.04 4 0.16
There is a lot of cushion available for Bank Al-Habib in terms of

18 0.04 4 0.16
expanding its network of branches.
Threats
1 Non aggressive marketing approach. 0.04 1 0.04

2 Rapid growth of Islamic Banking in Pakistan. 0.04 2 0.08

3 Anti-money laundering laws effects asset base of BAHL 0.03 2 0.06
4 Nonperforming loans (NPL) 0.03 1 0.03
5 Economic situation effect the asset base of BAHL. 0.03 1 0.03
Day by day competition is increasing not only of the expansion of
6 the banks but also due to the launching of the new bank in the 0.04 2 0.08
market.
7 Circumstances of Pakistan are a great threat. 0.04 2 0.08
More and more banks are launching their operations in Pakistan
8 0.05 2 0.1
which is increasing competition for the Bank AL Habib
The conventional banks those having high growth rate and high
9 0.04 2 0.08
market share are always being a threat.
Large business parties have fewer attractions in being a client of
10 0.05 2 0.1
BAL-IBD, mainly because of excessive amount of documentation.
A relatively high exposure to textile sector (45%) is mitigated to a
11 0.05 2 0.1
certain extent due to diversification within sector
Total Points 1.00 2.93
Bank AL HABIB
Competitor Performance Matrix (CPM) Matrix
BANK HABIBMETRO
Weigh FAISAL BANK
S. No Critical Success Factors AL FALAH BANK
t
Rating Score Rating Score Rating Score
1 Deposits 0.10 4 0.40 2 0.20 1 0.10
2 Branches 0.10 4 0.40 2 0.20 2 0.20
3 Market Share 0.08 4 0.32 2 0.16 2 0.16
4 Management 0.06 2 0.12 3 0.18 2 0.12
5 Assets 0.12 3 0.36 2 0.24 1 0.12
6 Capital 0.12 3 0.36 3 0.36 2 0.24
7 Customer Services 0.11 2 0.22 3 0.33 4 0.44
8 Technology 0.13 2 0.26 4 0.52 2 0.26
9 Return Rate 0.08 2 0.16 2 0.16 2 0.16
10 Islamic Banking 0.10 1 0.10 2 0.20 4 0.40
Total Points 1.00 2.70 2.55 2.20

Internal Audit
Management Audit
Bank Al Habib is an organization following centralized planning and controlling. Planning is

the 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.
Marketing Audit
Bank Al-Habib marketing strategies are not aggressive. They should improve interpersonal
communication skills, marketing department & provide excellent customer services to get
more business by satisfying their customers. Bank has an opportunity to target trade
finance & to attract low cost deposits from individuals & retail customers. Bank Al- Habib
can easily get business from SME sector, Consumer Banking & Micro Finance Banking by
improving their marketing strategy.
Financial Audit
PACRA has maintained the long-term and short-term entity ratings of Bank AL Habib
Limited 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 bank's sustained performance, exceptional asset quality, and
satisfactory financial profile. The ratings draw comfort from prudent risk management
policies and the management's conservative risk appetite.
HR Audit
There is absence of corporate culture & good HR practices in Bank as compare to other
banks. 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.

Strength
 Enjoy the association with Habib Family.
 PACRA has maintained the long-term and short-term entity ratings of Bank AL Habib
Limited at AA+ (Double A plus) and A1+ (A One plus) respectively.
 Standing on an asset base of Rs347 billion as of September 30, 2011 Bank AL Habib
Ltd (BAHL) is the eighth largest commercial bank in the country.
 Secure and easy access to Large numbers of ATMs network of bank Al Habib.
 A wide network of 353branches of BankAlHabib.
 Young savers account of the bank Al Habib is good source of business for bank Al
Habib.
 Variety of financial products and services.
 Less risk in their banking system because of the conservative approach.
 Strong and secure online web based banking system.
 Involve in CSR activities, corporate philanthropy amounting to Rs. 24.7 million by

way of donations during the year of 2011 for social and educational development and
welfare of under-privileged people.
 Follow the prudent controlling Standards.
 Largest 'Saving Account Category' as compare to other banks.
 Bank Al-Habib provides "online as well as physical training" for its employees.
 Decent way of dealing with the customers.
 Sufficient liquidity position.
 Current ratio is above 20% of the total deposits.
 Rapid expansion of branches in the different cities of Pakistan.
 Implement BASEL II Frame work for capital adequacy. Total regulatory capital should
be at least 10 % of risk-weighted assets and the Bank's capitaladequacy ratio is
16.69% (2010: 12.82%).

 The paid-up capital requirement as of31 December 2011 is Rs. 8 billion. The Bank's
paid-up capital as of 31 December 2011 is Rs. 8.786billion
Weaknesses
 Bank Al Habib’s business approach is not aggressive.
 Do not believe on the philosophy of ‘Equal opportunity employer’. Hiring of

female staff is discouraged.
 Absence of corporate culture.
 They are not high risk taker in business activities.
 Absence of good HR practices.
 Less involvement in 'Consumer banking'.
 Difficultand lengthy processto applyfor loan product/service.
 Low incentives like bonuses overtime pay etc.
 No Aggressive marketing for the promotion of their products.

Bank AL-Habib
Internal Factors Evaluation (IFE) Matrix
Strengths
S. No Successful Key Factors (S.K.F) Weight Ratting Score
1 Enjoy the association with Habib Family. 0.03 3 0.09
2 PACRA has maintained the long-term and short-term entity ratings of 0.05 4 0.2
Bank AL Habib Limited at AA+ (Double A plus) and A1+ (A One plus)
respectively.
3 Standing on an asset base of Rs347 billion as of September 30, 2011 0.04 4 0.16
Bank AL Habib Ltd (BAHL) is the eighth largest commercial bank in the
country.
4 Secure and easy access to Large numbers of ATMs network of bank Al 0.03 3 0.09
Habib.
5 A wide network of 353 branches of Bank Al Habib 0.05 3 0.15
6 Young savers account of the bank Al Habib is good source of business 0.03 4 0.12
for bank Al Habib.
7 Variety of financial products and services. 0.03 3 0.09
8 Less risk in their banking system because the conservative approach. 0.04 4 0.16
9 Strong and secure online web based banking system. 0.03 3 0.09
10 Involve in CSR activities, corporate philanthropy amounting to Rs. 0.04 4 0.16
24.7 million by way of donations during the year of 2011 for social
and educational development and welfare of under-privileged
people.
11 Follow the prudent controlling Standards. 0.04 4 0.16
12 Largest 'Saving Account Category' as compare to other banks. 0.05 4 0.2
13 Bank Al-Habib provides "online as well as physical training" for its 0.03 3 0.09
employees all over world.
14 Decent way of dealing with the customers. 0.02 3 0.06
15 No too much threat of the political environment. 0.03 3 0.09
16 Sufficient liquidity position. 0.03 3 0.09
17 Current ratio is above 20% of the total deposits. 0.03 4 0.12
18 The paid-up capital requirement as of31 December 2011 is Rs. 8 0.05 4 0.2
billion. The Bank's paid-up capital as of 31 December 2011 is Rs.
8.786billion
19 Rapidly expansion of branches in the different cities of Pakistan. 0.04 3 0.12
20 Implement BASEL II Frame work for capital adequacy. Total regulatory 0.05 4 0.2
capital should be at least 10 % of risk-weighted assets and the Bank's
capital adequacy ratio is 16.69% (2010: 12.82%).

Weakness
1 Bank Al Habib’s business approach is not aggressive. 0.02 1 0.02
2 Do not believe on the philosophy of ‘Equal opportunity employer’. 0.03 2 0.06
Hiring on female staff is discouraged.
3 Absence of corporate culture. 0.02 1 0.02
4 They are not high risk taker In business activities. 0.03 2 0.06
5 Absence of good HR practices. 0.03 2 0.06
6 Less involvement in 'Consumer Banking'. 0.03 1 0.03
7 Not Easy application is for applying for a credit card. 0.02 2 0.04
8 Too much poor Self marketing Department. 0.03 1 0.03
9 Low incentives like bonuses overtime pay etc. 0.03 1 0.03
10 No Aggressive marketing for the promotion of their products. 0.02 1 0.02
Total Points 1 3.01

Strategies in Action
Intensive Strategy
Market Penetration
Through advertisement campaigns, bank is striving to penetrate in the market.
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 follows
 MoneyGram
 Young saver Account
 Senior Citizen Account
 Foreign Currency Saver
Integrative Strategy
Backward Integration: Bank is not involved in horizontal integration.
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.

Defensive Strategy
Currently bank is not involved in any defensive strategy.

Matching Stage
BCG Matrix
PLS MONTHLY PROFIT PLAN
AL HABIB GROWTH
CERTIFICATE
AL HABIB BACHAT
CERTIFICATE

IE Matrix
4.0 3.01 IFEScore

2.0 1.0
3.0
I II III
3.0
EFEScore
2.93
IV V VI
2.0
VII VIII IX
1.0
Suggestion
IFE SCORE = 3.01
EFE Score = 2.93
Bank AL-Habib EFE & IFE Matrix score lies under “I”so bank is suggested to “Grow &
Build”.

Grand Matrix
RAPID MARKET GROWTH
Alternative Strategies:
 Market development
 Market penetration
 Product development
 Forward integration
 Backward integration
 Horizontal integration
 Conglomerate diversification STRONG
WEAK
COMPETITIVE
COMPETITIVE
POSITION
SLOW MARKET GROWTH

Decision Stage
QSPM
UNRELATED PRODUCT HORIZONTAL
S. DEVIRSIFICATIO DEVELOPMENT INTEGRATION
CRITICAL SUCCESS FACTORS
No WEIGH N

T
AS TAS AS TAS AS TAS
OPPORTUNITIES
1 Promote housing finance schemes 0.04 1 0.04 0 0 0 0
2 To attract low cost deposits, particularly from 0.04 3 0.12 3 0.12 4 0.16
individuals & retail customers.
3 To target trade finance. 0.03 2 0.06 0 0 0 0
4 More development & enhancement in current 0.02 4 0.08 3 0.06 4 0.08

IT infrastructure to improve operational
activities & customer satisfaction.
5 Involvement in Islamic Banking. 0.04 2 0.08 0 0 4 0.16
6 To enter in agricultural sector. Being an 0.03 3 0.09 0 0 0 0

agricultural country it is a large segment in
Pakistan but still un-served by the Pakistani
Banks.
7 SME sectors also an attractive opportunity for 0.02 2 0.04 3 0.06 0 0

Bank. (Current advances ratio is only 5%).
8 Consumer banking has a huge potential for 0.04 2 0.08 4 0.16 0 0

bank. (Current advances ratio is only 2%).
9 Micro Finance Banking is also and 0.04 1 0.04 0 0 0 0

opportunities for Bank.
10 Involvement in Banassurance Products. 0.02 2 0.04 0 0 0 0
11 More presence in International market. 0.02 4 0.08 3 0.06 4 0.08
12 Mobile Banking services for facilitating & 0.01 1 0.01 1 0.01 0 0

getting the customer satisfaction.
13 Bank - Al Habib has an opportunity to merge 0.06 0 0 0 0 4 0.24

with some other bank to increase the number
of its branches in Pakistan.
14 Attractive salary packages & compensation 0.02 3 0.06 1 0.02 4 0.08

should be awarded for motivation of current

employees & to attract good resource from
market.
15 Marketing department should be more 0.03 4 0.12 0 0 4 0.12

aggressive in order to fetch market share.
Current market share is around 4.5% (2009:
4.2%) of the total banking sector assets.
16 To target commodity finance market. 0.03 0 0 0 0 0 0
17 To target foreign trade market. 0.04 0 0 0 0 0 0
18 There is a lot of cushion available for Bank Al- 0.04 2 0.08 0 0 3 0.12

Habib in terms of expanding its network
of branches.

THREATS
1 Non aggressive marketing approach. 0.04 4 0.16 4 0.16 4 0.16
2 Rapid growth of Islamic Banking in Pakistan. 0.04 0 0 1 0.04 4 0.16
3 Anti-money laundering laws effects asset base 0.03 1 0.03 0 0 3 0.09
of BAHL
4 Nonperforming loans (NPL) 0.03 2 0.06 2 0.06 3 0.09
5 Economic situation effect the asset base of 0.03 4 0.12 4 0.12 3 0.09
BAHL.
6 Day by day competition is increasing not only 0.04 1 0.04 3 0.12 3 0.12
of the expansion of the banks but also due to
the launching of the new bank in the market.
7 Circumstances of Pakistan are a great threat. 0.04 4 0.16 3 0.12 3 0.12
8 More and more banks are launching their 0.05 2 0.1 4 0.2 3 0.15
operations in Pakistan which is increasing
competition for the Bank AL Habib
9 The conventional banks those having high 0.04 3 0.12 2 0.08 3 0.12
growth rate and high market share are
always being a threat.
10 Large business parties have fewer attractions in 0.05 0 0 1 0.05 2 0.1
being a client of BAL-IBD, mainly because of
excessive amount of documentation.
11 A relatively high exposure to textile sector 0.04 0 0 0 0 1 0.04
(45%) is mitigated to a certain extent due to
diversification within sector
STRENGTH
1 Enjoy the association with Habib Family. 0.03 4 0.12 2 0.06 4 0.12

2 PACRA has maintained the long-term and 0.05 0 0 3 0.15 4 0.2

short-term entity ratings of Bank AL Habib
Limited at AA+ (Double A plus) and A1+ (A One
plus) respectively.
3 Standing on an asset base of Rs347 billion as of 0.04 4 0.16 4 0.16 4 0.16
September 30, 2011 Bank AL Habib Ltd (BAHL)
is the eighth largest commercial bank in the
country.
4 Secure and easy access to Large numbers of 0.03 0 0 0 0 1 0.03
ATMs network of bank Al Habib.
5 A wide network of 353 branches of Bank Al 0.05 3 0.15 0 0 2 0.1
Habib
6 Young savers account of the bank Al Habib is 0.03 0 0 0 0 0 0
good source of business for bank Al Habib.
7 Variety of financial products and services. 0.03 0 0 0 0 0 0
8 Less risk in their banking system because the 0.04 0 0 1 0.04 2 0.08
conservative approach.
9 Strong and secure online web based banking 0.03 0 0 1 0.03 1 0.03
system.
10 Involve in CSR activities, corporate 0.04 1 0.04 1 0.04 0 0
philanthropy amounting to Rs. 24.7 million by
way of donations during the year of 2011 for
social and educational development and
welfare of under-privileged people.
11 Follow the prudent controlling Standards. 0.04 0 0 1 0.04 2 0.08
12 Largest 'Saving Account Category' as compare 0.05 0 0 0 0 3 0.15
to other banks.
13 Bank Al-Habib provides "online as well as 0.03 2 0.06 4 0.12 1 0.03
physical training" for its employees all over
world.
14 Decent way of dealing with the customers. 0.02 0 0 0 0 1 0.02
15 No too much threat of the political 0.03 4 0.12 4 0.12 2 0.06
environment.
16 Sufficient liquidity position. 0.03 0 0 0 0 1 0.03
17 Current ratio is above 20% of the total 0.03 0 0 0 0 3 0.09
deposits.
18 The paid-up capital requirement as of31 0.05 0 0 0 0 4 0.2
December 2011 is Rs. 8 billion. The Bank's paid-
up capital as of 31 December 2011 is Rs.
8.786billion
19 Rapidly expansion of branches in the different 0.04 2 0.08 2 0.08 2 0.08
cities of Pakistan.

20 Implement BASEL II Frame work for capital 0.05 0 0 0 0 3 0.15

adequacy. Total regulatory capital should be at
least 10 % of risk-weighted assets and the
Bank's capital adequacy ratio is 16.69% (2010:
12.82%).

WEAKNESSES
1 Bank Al Habib’s business approach is not 0.02 4 0.08 4 0.08 4 0.08
aggressive.
2 Do not believe on the philosophy of ‘Equal 0.03 3 0.09 3 0.09 4 0.12
opportunity employer’. Hiring on female staff is
discouraged.
3 Absence of corporate culture. 0.02 2 0.04 2 0.04 3 0.06
4 They are not high risk taker In business 0.03 3 0.09 3 0.09 3 0.09
activities.
5 Absence of good HR practices. 0.03 3 0.09 3 0.09 3 0.09
6 Less involvement in 'Consumer Banking'. 0.03 0 0 3 0.09 1 0.03
7 Not Easy application is for applying for a credit 0.02 0 0 0 0 1 0.02
card.
8 Too much poor Self marketing Department. 0.03 4 0.12 4 0.12 3 0.09
9 Low incentives like bonuses overtime pay etc. 0.03 1 0.03 1 0.03 1 0.03
10 No Aggressive marketing for the promotion of 0.02 3 0.06 4 0.08 3 0.06

their products.
Sum Total Attractiveness Score 1.00 1.33 1.55 2.28

Strategy Implementation
Annual Objective
 Determine Business Plan Drivers
 Determine Acquisition Financing Constraints
 Develop Acquisition Candidate List
 Build Preliminary Valuation Models
 Rate/Rank Acquisition Candidates
 Review & Approve Acquisition Strategy
Policies
 The first and foremost thing is to determine business plan drivers. It is very
important to convert business strategies to set of drivers or a source of motivation to
help the merger succeed in all possible ways.
 There should be a strong understanding of the intended business market, market

share, and the technological requirements and geographic location of the business.
The company should also understand and evaluate all the risks involved and the
relative impact on the business.
 Then there is an important need to assess the market by deciding the growth factors
through future market opportunities, recent trends, and customer's feedback.
 The integration process should be taken in line with consent of the management
from 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 work
culture, 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 the

defined strategies. Once approved, the merger can be taken forward to finalizing a
deal.
Strategy Evaluation
Set Standards
 Reviewing internal and external factors that are the bases for current strategy.
 Measuring performance.
 Taking corrective actions.

Conclusion
After conducting the comparative study of Bank Al Habib Limited, and analyzing three
strategies, we concluded that horizontal integration is the most favorable strategy for Bank
Al Habib. For this purpose it is important to understand the organization’s capabilities and
resources available to plan according to the requirement.

Case Study of Bank Al Habib Limited.: Bahadur Ali (55534) Adnan Jamil (54447) Fouziashaikh (53267) Adnan Zakir

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Case Study of Bank Al Habib Limited.: Bahadur Ali (55534) Adnan Jamil (54447) Fouziashaikh (53267) Adnan Zakir

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Case Study of Bank Al Habib

Bahadur Ali (55534)

Introduction of Habib Family..........................................................................................................................2

Habib Family's Business Units........................................................................................................................2

Introduction of Bank Al Habib Limited........................................................................................................2

Bank AL Habib Limited Profile........................................................................................................................2

Total no. of branches:.......................................................................................................................................2

Proposed Mission Statement...........................................................................................................................2

Bank Al Habib Limited | Conclusion 1

Bank Al Habib Limited | Conclusion 2

Bank Al Habib Limited | Conclusion 3

 Mr. Shah FarazulHasan; who provided us some useful articles

In the end special thanks to Mr. MudassirHussain (Our Strategic

Bank Al Habib Limited | Conclusion 4

Bank Al Habib Limited | Conclusion 5

184 HABIB FAMILY STARTS BUSINESS IN BOMBAY, INDIA

Habib Family's Business Units

BANKING & FINANCE

Bank Al Habib Limited | Conclusion 6

Habib African Bank Ltd (Tanzania)

Introduction of Bank Al Habib Limited

Bank Al Habib Limited | Conclusion 7

Bank AL Habib Limited Profile

Public limited company

Founded Karachi, 1991

Principal Office Karachi, Pakistan

Corporate Banking, Loans, Savings, Consumer

Revenue ▲RS 16.7 Billion(2011)

Bank Al Habib Limited | Conclusion 8

Current Share Price in Rs. 28.52

Total no. of branches:

Abbotabad Kamalia Sugar Mills (Kamalia) QasbaGujrat

Badin Kandhkot Qazi Ahmed

Bahawalpur Karachi Quetta

Bhiria Road (NausheroFeroz) Karkhana Bazar (Vehari) Rahim Yar Khan

Burewala Kasur Rawalpindi

Chakwal Khanbela RohillanWali

Chenab Nagar Khanewal Sadiqabad

Dadyal (A.K.) Khanpur Sahiwal

Daharki Kharian SalehKhana

Daska Khurrianwala Sanghar

Dera Ghazi Khan Khushab Sargodha

Dinga Kotla Arab Ali Khan Shahdadkot

Faisalabad Kunri Shahdadpur

Fazilpur Lahore ShahpurChakar

Ferozwatoan Lala Musa Sheikhupura

GaggoMandi Larkana Shikarpur

Gawadar MandiBahauddin Sialkot

Gambat MathanichanganSwabi Skardu

Ghakhar Mehar Sukkur

Gharo Mehrabpur Tando Adam

Bank Al Habib Limited | Conclusion 9

Ghotki MianChannu TandoBagho

Gilgit Mirpur (A.K.) TandoAllahyar

Gujar Khan Mirpurkhas TibbaSultanpur

Gujranwala Moro Toba Tek Singh

Gujrat Multan Turbat

Hafizabad Muridke Uch Sharif

Haripur Muzaffargarh Wazirabad

Hingorja (Khairpur) Narowal WahCantt

Hub Nawabshah ZahirPir

Hyderabad Nooriabad (Jamshoro) Off Shore Branches