Habib Bank Limited

Strategic Management Experiential Learning Project

Spring 2022
Group Members:

Submitted to:
 Table of Contents

1 Company Description:............................................................................................................................................................ 2
1.2 Vision:.......................................................................................................................................................................... 5
Proposed Vision:......................................................................................................................................................................... 5
1.3 Mission:........................................................................................................................................................................ 5
Proposed Mission:....................................................................................................................................................................... 5
2 PEST Analysis....................................................................................................................................................................... 6
3 Porter’s 5 Forces Model......................................................................................................................................................... 7
4 External Factor Evaluation (EFE) Matrix...............................................................................................................................9
5 Competitive Profile Matrix...................................................................................................................................................10
Culture........................................................................................................................................................................................... 11
Internal Audit................................................................................................................................................................................. 12
Value Chain Analysis....................................................................................................................................................................16
Supporting activities in the banking value chain are as follows:...........................................................................................17
IFE Matrix..................................................................................................................................................................................... 19
HBL STRATEGIES.......................................................................................................................................................................21
Generic Strategies.......................................................................................................................................................................... 22
CORPORATE STRATEGIES.......................................................................................................................................................22
Strategic Path.....................................................................................................................................................................22
GROWTH STRATEGIES........................................................................................................................................................22
Incremental Growth...........................................................................................................................................................22
International Growth.........................................................................................................................................................23
Merger................................................................................................................................................................................. 23
CORPORATE LEVEL STRATEGIES.....................................................................................................................................23
Growth strategy:................................................................................................................................................................23
Related Diversification:......................................................................................................................................................23
Cost Leader Ship strategy:................................................................................................................................................23
Differentiation Strategy:....................................................................................................................................................23
DIVISIONAL LEVEL STRATEGY.........................................................................................................................................23
Strategy Analysis:..........................................................................................................................................................................25
BCG Matrix:............................................................................................................................................................................. 25
SWOT Analysis:.......................................................................................................................................................................26
IE Matrix................................................................................................................................................................................... 28
Grand Strategy Matrix............................................................................................................................................................... 29

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 QSPM....................................................................................................................................................................................... 30
Strategy Implementation................................................................................................................................................................ 30

Executive Summary

This report reflects the Strategic management efforts done at HBL and their outcomes on Global
level. It shows that how strategic management is helping HBL Bank in creating, maintaining and
retrieving the information when required. It starts with company’s general overview, the brief
history, Values of HBL, the organogram, the challenges the product lines and detail information
regarding different automated systems used by them in taking timely decisions. The report
consists of my best efforts which I did in gathering information regarding Strategic management
at HBL Bank. This report elaborates that HBL is clearly the first choice of everyone who
believes in qualitative approach of banking. It pertains environment of highly responsible
workforce. Bank is enjoying a healthy market share and taste of good status in terms of its
operative features and customer support. HBL is experiencing a good reputation and reasonable
mark up with respect to prevailing market mark up with assurance of satisfaction and support.
The management style is a kind of participative management in which employees are encouraged
to share their ideas in decision making which enables bank to utilize knowledge, skills and
abilities of its employees and meets its objective efficiently and being more innovative. As the
motivation and reward system of HBL bank are also up to the expectation of employees so that
employees are very much satisfied and it helps them to retain their valuable workforce.
Ultimately the report projects that HBL inherits strong organizational culture having values for
leaders as well as for employees and the organizational behavior is up to the mark for any
company in Pakistan.

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 1 Company Description:
History:
Habib Bank Limited (HBL) was established on 25th August 1941; just one year after the historic
Pakistan resolution was adopted in Lahore for carving an independent homeland for the Muslims
of subcontinent. It was founded with the blessing of Quaid-e-Azam (Great Leader) Mohammad
Ali Jinnah, the architect and founder of Pakistan. HBL is proud of the fact that the Quaid-E-
Azam demonstrated his faith and confidence in HBL by opening his personal account in our
Bombay branch in the year 1946. The first prime minister of Pakistan Quaid-e-Millat Liaqat Ali
Khan, on the independence day of Pakistan (August 14, 1947) appreciated the service of the
bank in these words. “I wish every success to HBL and hope that it will continue to play an
important and useful role in the industrial and commercial life of the Muslim nation” The
commitment of HBL towards the cause of the economic uplift of Pakistani people was
successfully tested when the subcontinent was partitioned in 1947. The new born country faced
serious financial difficulties. Habib Bank joined hands with the government of Pakistan and
placed all its services at their disposal for nation building activities. Throughout the decades,
HBL has held the mantle of a dynamic leader, by adding value to the lives of its customers. It
was HBL that introduced products such as Debit Cards, ATMs, Travellers Cheques, etc., to the
Pakistani market. Management at Habib Bank caters to the needs of millions with our quality
products & services. Today, Habib Bank is truly the bank of the people, providing its customers
convenience and satisfaction all over the world. Habib Bank Plaza, the second tallest building in
Pakistan, is the proud symbol of HBL’s leadership in Pakistan’s corporate.

Present Status:
The Habib Bank Group is leader in Pakistan’s services industry. Today, HBL has more than
1,400 branches all over Pakistan and presence in 25 countries across five continents. With a
revamped customer oriented philosophy, HBL are pursuing new avenues of leadership through
innovation, as HBL gear up to face the challenges of the new millennium. A huge network of
1425 domestic branches, with largest bank in Pakistan and 55 international branches have
enabled HBL to provide comprehensive services that meet customer needs. This has ensured
thriving client relationship that forms the backbone of the Bank’s operations. Today, HBL plays
a central role in Pakistan’s financial and economic development. It has come a long way from its
modest beginnings in Bombay in 1941 when it commenced operations with a fixed capital of
25,000 rupees. Impressed by its initial performance, Quaid-e-Azam Mohammad Ali Jinnah asked
the bank to move its operations to Karachi after the creation of Pakistan. HBL established itself
in the Quaid’s city in 1943 and became symbol of pride and progress for people of Pakistan.
Habib Bank has a pioneer in providing the innovative banking services. These have included the
installation of the first main frame computer in Pakistan followed by first ATM and more
recently internet banking facilities in approximately 1600 domestic branches.

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 Privatization:
The year 2003 was marked by the implementation of the Government of Pakistan’s program for
privatizing the Bank. Amongst the qualified bidders, the Agha khan Fund for Economic
Development (AKFED) offered the highest bid, which was accepted by the Government of
Pakistan in December. HBL’s privatization is the largest in Pakistan’s history and management
takes great pride in fact that the bidding took place within four months of the commencement of
the due diligence process in September 2003. With this change the anticipates further progress as
AKFED brings considerable expertise in international finance and business and is familiar with
conditions in Pakistan, where it already has extensive operations in various fields.

Economic Landscape:
The country is now in the process of warming its relations with the neighbors. Consequently the
political stability has translated into direct economic benefit for Pakistan. G.D.P. growth has
exceeded. The capital market performance has been, once again, very impressive and KSE has
performed at par with all other stock markets of the world.

The banking sector has played an important role in sustaining this growth: consumer financing
has enhanced purchasing power and created new demand while the low interest rates has
contributed to making exports price competitive. The state bank of Pakistan (SBP) has played a
supportive monetary policy role to sustain and improved the current growth improved current
growth momentum.

Financial Highlights:
HBL now ranks amongst the top corporate entities in Pakistan in terms of profitability. This large
jump is also reported profit the net interest income and profit growth of the bank has been
achieved in an environment that can be termed unique for the sector in Pakistan. The improved
economic fundamentals have allowed the government to slash its borrowing requirements and
this , combined with substantial inflows of remittance , has resulted in a large buildup of excess
liquidity in the banking sector.

Future Outlook:
For a bank to deliver quality services, it is imperative that technology be an integral part of all
aspects of its operations. At Habib Bank, strategy has been to utilize cutting edge technology to
serve customer efficiently and in a cost effective manner. HBL strive to accomplish this while
maintaining a strong personalized approach in our customer relationship. HBL embarked on an
ambitious plan in 2009 to revamp its technology platform. The technology initiative includes:

 Online inter-branch funds transfer

 Alternate delivery channels e.g. POS terminal
 ATM network for cash withdrawal, fund transfer, payment of utility bills etc
 E-commerce
 Internet banking

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  PC based banking for corporate customers
 Automation of treasury and trade finance
HBL corporate website has recently been revamped and now provides a customer friendly,
information rich and technologically advanced environment to its clientele enhancement of the
Bank’s communications network to provide online connectivity.

Habib Bank’s corporate email users Implementation of a Virtual Private Network (VPN)
yielding the following benefits:

Centralized processing of batch branches offering daily consolidation of data for customer
service and risk management Implementation of technology in HBL international centers as with
our other areas of operations, HBL recognized that at international centers too, technology is a
key consideration for bank to ensure the competitive edge and maintain effective internal control.
To that end significant steps have been taken towards automation and offering technology related
faculties at our overseas centers.

Organizational Chart:

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1.2 Vision:
“Enabling people to advance with confidence and success”

Proposed Vision:
Excellence in all that we do by exceeding the highest expectation of our customer and all other
stakeholder.

1.3 Mission:
“To make our customers prosper, our staff excel and create value for shareholders”

Problem: The mission statement of HBL was too short and vague. It does not contain all 9
components of a mission, hence the proposed version of mission statement is below:

Proposed Mission:
“To be recognized as the leading financial institution of Pakistan and a dynamic international
bank in the emerging markets, providing our customer with a premium set of high tech
innovative financial products, granting superior value to our stakeholders, customer and
employees”

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2 PEST Analysis

POLITICAL AND LEGAL ENVIRONMENT

Banks are strongly affected by the political and legal considerations. This environment is
composed of regulatory agencies and government law that influence and limit various
organizations and individuals. Mostly these laws create new opportunities for business. State
Bank of Pakistan regulates all banks working in Pakistan and Prudential Regulations are
designed to monitor and issue commandments for all banks providing financial services in
Pakistan. This legislation has following main purposes

• To protect banking companies from unfair competition

• To protect consumers from unfair business practices adopted by banks
• To protect the interest of the society from unbridled business behavior

Since all the banks act under the supervision of State Bank of Pakistan and has pure separate
body thus political interference is very low.

ECONOMIC TRENDS

A banking market requires better consumer market in volume along with higher borrowing
power. The available borrowing power depends on:

• Consumer income
• Saving rates
• Consumption patrons
• Rates of interest
• Budget deficit
• Exchange rates
• Cost of living
• Inflation

SOCIO-CULTURAL ENVIRONMENT

A society is shaped by beliefs, norms and values. People in a society consciously and
unconsciously interact with: Themselves Others Organizations and Society.

Following are the main factors which arise because of change in socio-cultural environment.

• Consciousness about services

• Concern for environment
• Improved customer relation

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TECHNOLOGICAL FACTORS

Forces of technological advancement have played the most dramatic role in shaping the lives of
people. The rate of change of technology has greatly affected the rate of growth of economy.
New technology is creating deep rooted affects which could be observed in long run. The
improvement techniques involved in online banking and on the go banking with one touch ease
of access to the financial services at mobile phone or internet.

3 Porter’s 5 Forces Model

Rivalry among existing competitors (High):

There are 28 small medium and large banks providing financial services in Pakistan. There is a cut throat
competition in this industry as SBP regulates discount rate and other financial regulations, HBL has to
compete in the same market with identical products and services to the same target audience.
Only 11-15% of the total population of Pakistan is registered to any bank for financial services, so this is
a huge opportunity for HBL to grasp that market.
HBL advertise their products very often, Pakistan Super League was purchased by HBL to promote the
bank globally.

Threat of substitute product and services (High):

Banks are basic necessity of Pakistan since day 1 whether it be paying bills or tuition fees or doing any
financial transaction people of Pakistan rely on bank rather than any substitute channel. However due to
ease of reach and hassle of waiting in queues the demand for banks is decreasing day by day along with
virtual banking system using mobile and internet it is also causing a threat to over the counter banking
system of Pakistan.

Bargaining power of Supplier (Low):

Since SBP regulates the banking system and all monitory policies of Pakistan, the bargaining power of
supplier is very low. The banks have to cash their availability, good quality service and range of products
they offer to create an edge over the market competitors and has low control of bargaining power of being
a supplier. Along with the huge competition it is not a simple task.

Bargaining power of Buyer (High):

The bargaining power of buyers in this industry is very significant due to huge competition and easy to
switch option having more or less same products and services. This creates leverage to customer because
they can switch easily along with the banking industry cannot take any initiative without the approval of
SBP thus huge competition will outrun the competitive advantage.

Threat of New Entrant (Low):

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Since Banking industry is closely monitored by government local and globally and ever since the terrorist
funding and money laundering the restrictions and regulations are very strict so government does not
allow banking license to new party so entrance of new competitor is very low also because banking
industry require huge amount of capital for any new competitor to step into the market so that also creates
a barrier into the market.

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 4 External Factor Evaluation (EFE) Matrix
Key External Factors Weight Rating Weighted
Score

OPPORTUNITIES

1. Government reforms to uplift economy 0.08 3 0.32

2. Fast cash transfer as compare other local markets 0.07 2 0.21
3. Diversification towards Islamic Banking Services 0.06 3 0.18
4. Providing premium and priority Banking services 0.07 2 0.14
5. Agriculture finance and Micro Finance Facility to farmers 0.07 2 0.14
and households
6. SME financing 0.05 2 0.10
7. Personal Loans and Consumer Banking 0.04 2 0.08
8. Expansion in Rural areas 0.06 3 0.18
9. International Expansion Plans 0.07 2 0.14

THREATS

10. Political interference in Banking Activities 0.07 1 0.07

11. Economic Downfall 0.08 2 0.16
12. High discount rates by SBP 0.05 1 0.05
13. Law and order situation affecting economic activities 0.07 2 0.14
14. High interest rates and strict monetary policy 0.06 2 0.12
15. High Inflation rate due to deficit financing by Government 0.04 1 0.04
16. Power shortage affecting industries overall performance 0.06 2 0.12
Total 1.00 2.19

Total weighted score is 1.0. The average total weighted score is 2.1 which means that
organization is responding well to the opportunities and threats in its industry. Keeping in
consideration there are elements which can boost the progress of organization and can ultimately
flourish the organization. This will be the resultant that firm`s strategies take advantage of
existing opportunities and minimize the adverse risk arise from the external forces.

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 5 Competitive Profile Matrix

CRITICAL
SUCCESS WEIGHTING
FACTORS S NBP HBL MCB UBL
Ratin Scor Ratin Scor Ratin Scor Ratin Scor
g e g e g e g e
Financial position 0.10 4 0.40 4 0.40 4 0.40 4 0.40
Management 0.05 4 0.20 4 0.20 4 0.20 3 0.15
Geographic Coverage 0.10 4 0.40 4 0.40 3 0.30 3 0.30
Service Quality 0.15 2 0.30 3 0.45 2 0.30 3 0.45
Foreign Branches 0.05 2 0.10 3 0.15 2 0.10 2 0.10
Brand Image 0.05 2 0.10 3 0.15 2 0.10 3 0.15
E-Com and Tech 0.10 2 0.20 3 0.30 3 0.30 4 0.40
Advertisement 0.15 2 0.30 3 0.45 2 0.30 4 0.60
Products 0.15 4 0.60 3 0.45 3 0.45 3 0.45
Market share 0.10 4 0.40 3 0.30 2 0.20 2 0.20
Total 1.00   3.00   3.25   2.65   3.20

Competitive Profile Matrix of company assess on its general strength rating. It identifies firm
major competitors and its particular strengths and weaknesses in relation to its competitors so
that the company can identify the improvement needed key factors that are valuable for their
target market but the company unable to capture.

We have taken top 3 banks of Pakistan to run the CPM Analysis over HBL. It includes 1 national
government bank and rest top tier private banks. Upon discovering the critical success factors we
identified 10 factors that influence the sector. After analysis we can conclude that HBL is rated
the highest rank earning total of 3.25 points overall and runner-up was UBL scoring 3.2. While
HBL is still at top but the competitors are very close and the company needs to take steps in
terms of technology and or do something unique to avoid this cut throat competition.

Recommendation: In baking industry product, Service Quality & advertisement are the three
key & crucial elements HBL score is 3.00 which is good as compare to other banks but they need
to focus in to these factors to make it better.

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Recommendations:

Overall bird eye view of HBL shows a vibrant picture of bank but since the competition is very close and
in this tough to act market the leading position is very hard to retain. As MCB acquired NIB and UBL is
running very close to HBL, the Bank should focus on the elements in which they can excel like customer
service quality. Following are the more recommendations:

 HBL should focus on opportunities which aligns with their strengths

 HBL should focus more on expanding in rural areas of Pakistan
 Bank should also focus more on technology which drives youngsters of Pakistan to use HBL to
fulfill their banking needs
 HBL should tap the huge chunk of those Pakistani who does not have a bank account.
 The bank should also focus on customer experience

Culture
HBL have created a challenging environment that encourages creativity and commitment. In
their pursuit of excellence HBL has always focused on attracting, developing and retaining their
best talent in the marketplace.

HBL’s dynamic culture offers diverse growth opportunities across Pakistan and in 25 countries
around the world. HBL fosters a work environment where employees can identify their potential
whether locally or in the international arena. Thus they enable their employees to achieve their
professional goals while keeping in synch with their bank’s overall objective.

HBL encourage its employees to explore this section to find out about current job opening and
how to submit your resume.

In this educational era, HBL stays ahead by bearing educational cost for its employees, whether
an employee wants to continue his education or get professional certification, HBL takes care of
that.

Innovative culture

HBL has innovative culture. HBL promotes the new ideas and appreciate its employees for
giving new and innovative ideas. That helps the employees in achieving their goals and they try
to show their best at job.

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Customer-responsive culture

HBL has customer –responsive culture. The employees of the HBL are continues in their desire
to please the customers and provide good service to their customers and satisfy the needs of
customers.

Focus on individual development

HBL focus on individual development, HBL try to create the good culture, in which every
employee can adjust, work properly, learn the new thing and give best.

Trust and openness

In HBL, top management have full trust on their employees. Mostly employees are honest and
they

Employee’s Empowerment

In HBL, managers have trust on their employees and they want that their employees also try to
make decisions at their own job level

Value Chain Analysis

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Marketing:

Just like other businesses marketing has a special significance for the banking industry too.
Competition has grown intense in this sector and there are more international players in the
market. As such marketing becomes important for banks to avoid the competitive pressures too.
Attracting and retaining customers requires more focus on marketing. Moreover, segmentation is
important for banking and insurance companies as all the consumer segments cannot be targeted
in the same manner. The banks and insurance companies target different customer segments with
suitable plans and services. Brand image is also an important concern for the banking brands.
Most often the brand image is influenced by the service quality. Still, marketing plays an
important role in raising brand awareness and it is why banking companies spend so much on
advertising and other aspects of marketing. Visibility remains an important concern if brands are
to expand their customer base. It is also why banks focus heavily on marketing of their brand and
its services. Post-recession growth in the developing countries has remained slow and therefore
attracting and retaining customers was somewhat difficult for the brands. So, in this period they
were mainly forced to rely on marketing to retain their customer base. The marketing activities in
the HBL is mainly made up of sales support, branding and advertising activities. However, its
overall aim is to maximize profits by driving sales higher.

Sales:
Sales is also an important function in HBL value chain which is because of the importance of
sales for banks. The HBL is highly competitive and apart from entering new markets and finding
new customers, it is important that the banks retain their existing customers. The sales function
serves a very important role at this point where it does not just sell but also works at customer
engagement and retention.  Another important thing about this function is that it is the main
connecting point between the bank and its customers. This function’s performance also has an
important effect on the bank’s personality and image.

Product:

The products offered by the HBL is also an important part of their value chain. From loans to
deposits, banks provide several kinds of products and services. However, in a banking context,
rather than just having a great product portfolio, it becomes impertinent for the banks to provide
great service.  HBL provide a series of products and services, some of which are tangible and
several intangible. From deposits and loans to credit cards and foreign exchange services, HBL
provide plethora of products and services.

Transactions:
Technology has made this task easier and millions of transactions are carried out every day
throughout the world online and offline. From ATMs to online payments, simply millions
exchange hands in the form of transactions. Variety of payment clearance systems and settlement
systems are used by banks globally. Some of them are ACH networks, ATMs, bankcard
networks and check clearing systems. Another method of transaction prevalent in HBL is the
internet based bill payment system. The debit and credit cards have remained at the forefront of
this growth in electronic payments.

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Supporting activities in the banking value chain are as follows:

Technology:
The role of technology has grown increasingly important in HBL. Specifically, several of the
most important developments have taken place during the last two to three decades. Technology
can also be a source of competitive advantage for the banks since it helps deliver better services
than the competitors. Technology has made banking easier and also improved the bank’s
productivity. Several of the services can be availed of online and customers do not always need
to go to the branch to receive their services.

Human Resources:
Despite the growing role of technology human resources continue to play an important role in
the value chain of HBL. Their importance in HBL is higher because trust plays an important role
in banking sector.

Infrastructure:
Infrastructure also plays a key role in the banking industry. From physical infrastructure to
technology and particularly IT, infrastructure plays an important role in the growth and
functioning HBL. Due to increased competition, the importance of IT in banking industry has
also grown.

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IFE Matrix

Weight Rating Weighted Score

Strengths      
       
Brand Name 0.1 4 0.4
Strategic Alliance 0.05 4 0.2
Largest private bank 0.05 4 0.2
Largest Network 0.15 3 0.45
Largest Foreign branches
network 0.1 4 0.4
       
Weakness      
       
Lacks in Customer service 0.15 2 0.3
Non Compliance with SBP 0.07 2 0.14
Untrained staff 0.1 1 0.1
Slow processes 0.1 1 0.1
No new innovation 0.13 1 0.13
1 2.42

Ratings Represents
1 Major Weakness
2 Minor Weakness
3 Minor Strength
4 Major Strength

IFE Matrix (internal factors Evaluation matrix) explains the influence of internal factors like
strengths and weaknesses for strategic decision making. By running IFE model a company can
determine the weaknesses to overcome and using strengths to prospect opportunities prevailing
into the market.

For HBL the brand name and its huge network is the most prime strength which if they utilize
properly they can generate huge profit by providing banking facilities to their customer in whole
Pakistan. The bank being the largest private bank with the largest number of branches overall
Pakistan, is unable to monitor and cater SBP compliance and provide same customer service
across Pakistan and abroad. Their slow processes and no new innovation for a long time is also

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causing a root problem for the competitors to make move and HBL is facing neck to neck
competition with UBL and other banks.

Overall score of IFE Matrix is 2.42 which is below the average score, this means that the bank
needs to strictly monitor the policies to cater weaknesses urgently.

Recommendation:

The two most important factors to be successful in banking industry are Brand name and bank
worldwide network. From the IFE matrix it can be seen that HBL is performing well in their both
the segments that is, HBL works on increasing branch networks and have the huge number of
branch network both locally and internationally. Secondly, HBL works on increasing their brand
name which achieved by providing maximum number of products at one place, they being a
customer friendly and customer oriented bank have managed to attain the positive and strong
brand image which plays vital part in the growth of their business.

 Focus on lower class in most of the advertisements

 Promote International Marketing at higher priority
 Promote Islamic Banking on large scale
 Services marketing is what people are asking on higher scale
 Increase Promotional activities are required
 People want to see innovation with information

Some weaknesses which HBL is facing at the moment is lack of training and new innovations.
As, in banking in industry it has been seen overall that innovation takes place gradually. HBL
must work on the innovation and they should implement new techniques which can give rapid
results with the advancements in technology. This can be achieved by updating systems and
reducing the turnaround time of tasks.

HBL should train their staff to the finest quality level which then can then render their services in
accurate and efficient manner. Trained staff are considered to be the assets of the business and
these assets can be an integral part in the growth and prosperity of the HBL business growth

HBL take great pride in staff and they are particularly appreciative of the work done by our high
performers. They have their highest admiration. On HBL part, they remain committed to
building human capacity and are fully aligned to invest as much as required in training the
people to assist them in becoming the best of the best. As HBL progress, they remind their self
that quality begins with meritocracy. Merit has been and will remain a core value for HBL. The
bank is vigorously pursuing processes that allow fair and transparent recruitment practices. There
is growing emphasis on achieving the highest level of best practices in undertaking staff
assessments, in staff promotions and in job placements. With the vision set to create higher and

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higher benchmarks, HBL is committed in transforming HBL to take its place as a leading bank in
industry best practices, globally. Countrywide programs were organised to recognise high
performers and strengthen teamwork. “Khwab75” was launched wherein the bank enabled the
dreams of 75 employees. The bank also selected 5 staff members in a totally transparent manner,
who received what were termed as life altering rewards. The bank’s management has been
tasked to develop and implement more programs and better schemes for the staff which, over
time, will not only make HBL a lifetime employer but also genuinely improve the quality of life
for those who show commitment and dedication.

HBL STRATEGIES
HBL PSL
To take a further step for marketing, HBL purchased the legal license of Pakistan’s 1st cricket
league named PSL, HBL takes credit for the sponsorship of Pakistan Super League, which later
was renamed to HBL PSL which enabled the HBL to gain a lot of fame globally.

Discounts/Global Alliances
HBL has alliances with different brands of different areas of life, be it lifestyle, dine in,
accessories, traveling or anything HBL’s debit card and credit card offers different discounts on
those listed brands those are revised semiannually.

Products and Services

HBL provides a large range of products and services to its business and individual customers
some of which are as follows.

PRODUCTS
 HBL Muhafiz Rupee Traveler’s Cheques
 HBL Auto Finance
 HBL Flexi Loans for salaried personnel
 HBL Lifestyles Financing Scheme
 HBL i-Card
 HBL House Financing Loans
 HBL Easy Access
 HBL Fast Transfer
 Haryali Agricultural Loans
 HBL E-Bank
SERVICES
 Retail banking
 Commercial banking
 Corporate banking

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  Phone banking
 Islamic banking
 Cash management
 Asset management
 Agriculture loans
 Commercial banking
 Corporate banking
 Islamic banking
 Investment banking
 Working capital
 Procurement of inventory
 Procurement of machinery
 Expansion of production facilities
 Import of raw materials
 Exports
 Guarantees
 Project finance
 Debt capital markets & syndications
 Equity capital markets & advisory.

Generic Strategies
The bank follows low price strategies, as there is a cut throat competition and not a lot to focus or
differentiate the solely market share depends upon the lowest cost and number of products that any
bank can offer along with the availability of branches.

CORPORATE STRATEGIES
Strategic Path
From the very beginning the main focus of the management of HBL is the implementation of
growth strategies. During the entire period of continuous straggle they adapted almost all types
of strategies according to situation and market demand of that time except restructuring of
defensive strategies. HBL never faced any type of liquidation, bankruptcy, sale or removal of
any business unit. Their main strength is to avoid insecure financing. It is big organization that
ever during their dark periods of straggle; they never lose their market share. If we talk about

GROWTH STRATEGIES
Incremental Growth
HBL’s key areas of operations encompass product offering and services in retail and consumer
banking. They introduce their products to expand their client’s base by bringing innovation and
improving the channels of distribution. They put their all efforts to reduce the business and make
their services accessible for all customers.

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International Growth
With a presence in 25 countries subsidiaries in Hong Kong and the UK, affiliates in Nepal,
Nigeria, Kenya and Kyrgyzstan and representation offices in Iran and China. HBL is also the
largest domestic multinational. The bank is expanding its presence in principal international
markets including the UK, UAE, SOUTH AND CENTRAL ASIA, AFRICA and the far EAST.

Merger
 HBL merged “Standard Bank” in earlier times
 HBL acquired Barclays bank
CORPORATE LEVEL STRATEGIES
HBL has following corporate level strategies.

Growth strategy:
HBL has adopted growth strategy by expanding its operations. HBL actually have different
products and services for both individuals and business customers. HBL product and services for
individual customers are credit cards, debit cards, and deposit accounts. HBL product and service
for business customer are commercial banking, cash management and asset management.

Related Diversification:
HBL has also adopted related diversification strategy, because at first function of HBL was only
accepting deposit and advancing loans but now HBL has many related functions like flexi loans,
ATM and credit cards.

BUSINESS LEVEL STRATEGY

Cost Leader Ship strategy:
At business level HBL has adopted cost leadership strategy in a way that cost of advancing loans
is less as compare to some other well reputed banks like Alfalfa,bank Al habib, MCB.

Differentiation Strategy:
At business level, HBL has also adopted differentiation strategy by introducing some new
products into the market earlier to other banks like debit cards.

DIVISIONAL LEVEL STRATEGY

Following are the main divisional level strategy fallowed by HBL

 To establish sound relationships with top industrial groups and various multinationals.
 To make the bank customer focused
 To increase the no of online branches
 To increase the ATM network to further improve the bank market shares.
 To implement the performance appraisal process to provide motivation and merit
oriented culture in the bank
 To improve extensive tanning to the employees in the process, products, marketing and
selling skills.

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  Upgrading skills level of employees.

HBL CURRENT STRATEGIES

HBL being one of the largest bank in Pakistan works on following current strategies which leads
them towards becoming the most profitable bank in Pakistan.

Financial technology has emerged as the banking of tomorrow. This year HBL launched its in-
house developed mobile banking application, literally bringing banking to our customer’s
fingertips. HBL Mobile was the first of its kind in Pakistan to provide biometric authentication
based sign in to our customers, providing them with additional comfort from advanced security.
At HBL, they are conscious that as the nation’s bank of choice we cater to a wide spectrum of
customers. For those who prefer to bank with HBL at one of our branches, we are modernizing
our network to improve efficiencies and shorten transaction time, thereby enhancing our
customers’ banking experience

HBL`s current strategies are diversified in 3 division which are:

1. Corporate Level Strategies

2. Business Level Strategies
3. Divisional Level Strategies

HBL has worked on all three levels at their best and want to incorporate strategies at all the three
levels. HBL current strategies are towards innovations and advancement of technology. With the
increasing approach of new dynamics of Banking which is Islamic Banking, HBL is keener to
shift their majority operations towards Islamic Banking which can give them extra mileage and
advantage to be the proactive Islamic Bankers in the industry. The strategy is to train the staff
and develop them on the professional and personal level for the best possible outcomes for
banking industry as a whole.

Cricket unites Pakistan and HBL is synonymous with cricket in Pakistan. With HBL landmark
support of the Pakistan Super League we have once again demonstrated our commitment to
bringing the people of Pakistan together. The global success of Pakistan’s First Street Children
Football Team has kept our flag flying high and allowed them to display their energy, verve and
skill to an international audience. HBL is proud to have been a staunch supporter of this team
and showcase their success. HBL is committed to providing the youth of Pakistan every
opportunity to hone their skill and display their talent in the international arena.

HBL has always focused towards adoption of change in culture and environment as to be with
the modern era in banking industry. The way to implement any change in the bank/ organization
takes decades to adopt, due to which behavior have to be cultivated as a pyramid of unique
feature is hard to change and if changes that do not change the particular, it divert itself to the
other factors and it is a chain of changes towards the betterment of Bank.
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HBL celebrated its 75th anniversary in 2016 and recognized the contributions of our high
achievers. This year, once again, HBL exceeded the targets we had set for ourselves, and the
management team delivered outstanding results. HBL’s revenues were over Rs.100 billion (over
$ 1 billion), including fee income of Rs.18.7 billion ($ 178 million); the bank registered pre-tax
profit of Rs.56.5 billion ($ 540 million) and post-tax profit of Rs.34.2 billion ($ 327 million).
During the year, over Rs.250 billion ($2.4 billion) were added to the bank’s deposit base,
resulting in a 15% increase. Loan growth was also an impressive Rs. 111 billion ($1.1 billion)
with strong performance from all business segments, especially from consumer and retail loans.
The overall balance sheet recorded a 13% increase and crossed Rs. 2.5 trillion ($24.0 billion),
making HBL by far the largest bank in the country. With the acquisition of PICIC Asset
Management Company, HBL Asset Management doubled in size and realigned itself to push
forward with a wide range of products in the market. This was a particularly good year for the
Corporate, Investment and Islamic Banking businesses who closed on some key transactions
during the year, amounting to over Rs. 200 billion ($ 1.9 billion). Home Remittance initiatives
resulted in inflows of over $ 5 billion, thereby registering a record 27% market share for the
bank; new products and services resulted in a record throughput of over Rs.1.7 trillion ($16.3
billion) in our Cash Management business.

HBL’s core strategy of pursuing financial inclusion has started taking root with the bank
processing over 560 million transactions for more than 9.5 million customers through its strong
domestic network of 1,677 branches, 2,000 ATMs and nearly 15,000 POS terminals. HBL’s
standing in the marketplace and its all-round performance won us several accolades, notably,
‘Bank of the Year in Pakistan’ by The Banker and ‘Safest Bank in Pakistan' by Global Finance
as well as the ‘Best Retail Bank in Pakistan’ by the Asian Banker, amongst others. Our brand, of
which we are extremely proud, outstripped the competition in an independently administered
survey and was named ‘Brand of the Year, Banking - Pakistan’ at the World Branding Awards.
The combination of solid profitability and a prudent dividend policy resulted in an equity base of
Rs.196 billion ($ 1.9 billion) with our capital adequacy ratios being well ahead of requirements.
Having achieved a coveted AAA rating.

Strategy Analysis:
BCG Matrix:
HBL has a lot of potential to grasp the market share, almost 80% of the population of Pakistan has no or
limited access to Banks. Upon which the market growth is huge for consumer banking auto loan and
house loans. HBL’s Islamic Banking is still under question mark as the market growth is huge but HBL is
not able to achieve market share as the competitors have the major share of the market. Corporate
banking is at constant stage as the market growth is very low and HBL has good market share. HBL’s
young savers account runs into dog as the market share is very low and the market growth is also very
low.

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 Consumer
BankingAuto
LoanHouse Loan Islamic banking

Recommendations: Corporate Banking

Young Savers Account
HBL should focus more on Islamic Banking as the market is growing very quickly and under the
regulations of SBP, all banks are strictly advised to focus on Islamic banking. Moreover Young savers
account is under dog there is no need of investing on it along with that consumer banking needs to be
more advertised and penetrate into market as these products are hot running products into the market.

SWOT Analysis:
Strengths:

 The staff of the bank is skilled, well trained and competent.

 HBL is having Centralized decision making.
 Pioneer of ATM
 Highest Bank reserves
 HBL has the fastest mode of home remittance of 3 days.
 Every 10th Pakistani is the account holder of HBL.
 Brand Name
 Strategic Alliance
 Largest private bank
 Largest Network
 Largest Foreign branches network
Weaknesses:

 Marketing department of HBL is not so effective.

 Poor system of recovery.
 HBL has become victim of political, legal and socio cultural pressure.
 Unsatisfied Staff
 Lacks in Customer service
 Non Compliance with SBP
 Untrained staff
 Slow processes
 No new innovation
 Non popularity of travelers cheques, deposits of having a large network of branches.
Opportunities:

 Government reforms to uplift economy

 Fast cash transfer as compare other local markets
 Diversification towards Islamic Banking Services
 Providing premium and priority banking services
 Agriculture finance and Micro Finance Facility to farmers and households
 SME financing
 Personal Loans and Consumer Banking
 Expansion in Rural areas

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  International Expansion Plans
THREATS

 Political interference in Banking Activities

 Economic Downfall
 High discount rates by SBP
 Law and order situation affecting economic activities
 High Inflation rate due to deficit financing by Government
 Power shortage affecting industries overall performance
 High interest rates and strict monetary policy

IE Matrix
THE INTERNAL - EXTERNAL (IE) MATRIX
IFE Total Weighted Score

Strong Average Weak

3.0 to 4.0 2.0 to 2.99 1.0 to 1.99

High
3.0 to 3.99
I II III

Medium
2.0 to 2.99
IV V VI

Low
1.0 to 1.99
VII VIII IX

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Location: Strategies:

Quadrants I, II and IV = Grow and build

Quadrants III, V and VII = Hold and maintain
Quadrants VI, VIII and IX = Harvest or divest

Division Revenues in Net Income in Net Income

Billion PKR Billion PKR (% ) IFE Score EFE Score
Bank
113.000 34.200 30% 2.42 2.19
AlFalah

Strategy Recommended:

HBL position lies in Sector-V and it has strong IFE as well as High EFE score. Therefore bank should apply the Hold and
maintain strategies ( Market penetration an product development are two commonly employed strategies for these types of
division.

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Grand Strategy Matrix
GRAND STRATEGY MATRIX

RAPID MARKET
GROWTH

Quadrant II Quadrant I

WEAK STRONG
COMPETITIVE COMPETITIVE
POSITION POSITION

Quadrant III Quadrant IV

SLOW MARKET
GROWTH

Recommended Strategy:

The evaluation reveal following the factors to be followed, because it fall in 2nd Quadrant:
1 Market Development
2 Market Penetration
3 Product development
4 Forward Integration
5 Backward Integration
6 Horizontal Integration
7 Concentric diversification

Recommendation:

As the HBL falls under 2nd quadrant the bank should focus more on market development as there are
almost 80% of the market to capture. Along with the new product development needs to be made as there
is still a lot of room to improve.

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QSPM
Product Development Market Penetration
S. # Key Internal & External Factors Weight
(Conventional Banking) (Islamic Banking)

Strengths AS TAS AS TAS

1 Brand Name 0.1 4.00 0.40 3.00 0.30
2 Strategic Alliance 0.05 4.00 0.20 3.00 0.15
3 Largest private bank 0.05 3.00 0.15 3.00 0.15
4 Largest Network 0.15 4.00 0.60 4.00 0.60
5 Largest Foreign branches network 0.1 4.00 0.40 3.00 0.30

Weaknesses
6 Lacks in Customer service 0.15 2.00 0.30 2.00 0.30
7 Non Compliance with SBP 0.07 1.00 0.07 1.00 0.07
8 Untrained staff 0.1 1.00 0.10 2.00 0.20
9 Slow processes 0.1 3.00 0.30 1.00 0.10
10 No new innovation 0.13 1.00 0.13 2.00 0.26
11
SUB TOTAL 1.00 2.65 2.43

Opportunities
Government reforms to uplift economy 0.08 3 0.24 3.00 0.24
Fast cash transfer as compare other local markets 0.07 2 0.14 2.00 0.14
1 Diversification towards Islamic Banking Services 0.06 3 0.18 4.00 0.24
2 Providing premium and priority Banking services 0.07 2 0.14 4.00 0.28
Agriculture finance and Micro Finance Facility to farmers and
3 0.07 2 0.14 2.00 0.14
households
4 SME financing 0.05 2 0.10 2.00 0.10
5 Personal Loans and Consumer Banking 0.04 2 0.08 1.00 0.04
6 Expansion in Rural areas 0.06 3 0.18 3.00 0.18
7 International Expansion Plans 0.07 2 0.14 4.00 0.28
8 Threats
Political interference in Banking Activities 0.07 1 0.07 2.00 0.14
Economic Downfall 0.08 2 0.16 3.00 0.24
9 High discount rates by SBP 0.05 1 0.05 3.00 0.15
10 Law and order situation affecting economic activities 0.07 2 0.14 2.00 0.14
11 High interest rates and strict monetary policy 0.06 2 0.12 2.00 0.12
12 High Inflation rate due to deficit financing by Government 0.04 1 0.04 2.00 0.08
13 Power shortage affecting industries overall performance 0.06 2 0.12 2.00 0.12
14
15 SUB TOTAL 1.00 2.04 2.63
SUM TOTAL ATTRACTIVENESS SCORE 4.69 5.06

Recommendation:

As per QSPM, the bank should focus more on Islamic Banking via market penetration as the upcoming
market growth of banking industry especially Islamic banking is huge.

Strategy Implementation
The bank mainly focuses on conventional banking, the market penetration campaigns are designed for
conventional banking only focusing saving and current accounts. The bank is forgetting the rest of the

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products that they can easily capture i.e consumer banking and Islamic banking. The strategies needs to
be change and they should focus on Islamic banking along with consumer banking to increase their
revenues as the both products are the most profit generating products.

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