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Habib Bank Limited

RISK MANAGMENT
M.Ali Javid MI10MBA016 MBA(IRM) 2010-2014

HAILEY COLLEGE OF BANKING AND FINANCE UNIVERSITY OF THE PUNJAB, LAHORE

SWOT ANALYSIS
STRENGHTS
1. LONG TERM TRACK RECORD

HABIB Bank is well established bank enjoying long history of over 65 years of experience and profitable operation.
2. PUBLIC CONFIDENCE

HBL is the largest private bank in Pakistan now and people trust is very high.
3. LARGEST BANKING NETWORK

It has the largest branch network among private banks of Pakistan.

4. COST LEADERSHIP

HBL has been very effective in controlling costs as it successfully restructured itself after privatization. During this process more than 1600 employees were relieved under a golden handshake scheme and 110 branches were closed.
5. COMPETATIVE EDGE

Excellent branches appearance gives an edge to HBL over other banks. The branches are well furnished even in less developed areas where other banks branches give a poor view.

WEAKNESS
HBL has the following weakness
1. LACK OF COMMUNICATION

Lack of communication between bank and customers about terms and conditions of products and services. Like centralization of cheque book issuing process.

2. LACK OF MOTIVATION

Employees at branch level are not properly motivated to work by heart. They take the all routines activities as a boring job.
3. LACK OF MANAGERIAL SKILL

Most of the employees lack managerial training as they are not properly educated. Due to seniority, they moved up on the hierarchy line to Grade-I, II, III positions having hardly bachelor degrees. This type of senior staff cannot apply the modern and innovative techniques of management in decision making.

OPPORTUNITIES
Using its strengths, HBL can avail the following opportunities.
1. E-BANKING

Generally speaking, three factors, quickness, easiness and cheapness have become the catchwords for the competitiveness and usefulness of all the business operations. Particularly it is commonplace today to say that banking is undergoing a radical transformation. The symptoms are new products, new players, new channel etc. This information is taking place across all sectors of the banking industry. That is why Habib bank is urgently needs to improve their ability, to think strategically about IT investments.
2. HIGH MARK UP RATES

Markup rates have increased considerably. High markup rates decreased the interest of people in loaning from banks. Habib bank can increase its income by offering loan at lower interest rate than other banks.

3. ONLINE BANKING

It is doing banking transactions through our home P.C. The banks that do business through net have websites. The customer clicks into the website and gets the history of the bank. Then he can demand the necessary application form through net. He fills in the form and passes it on to the bank. The online banking is fast gaining ground in Pakistan. Some software companies are also offering network-banking facilities. So Habib bank could focus heavily on providing online banking faculties to its customers. Currently it is doing the same.

Threats
1. RISING COMPETITION

Other private commercial bank with sound profitability is also a threat to HBL e.g. UBL, Alfalfa, MCB etc. 2. POLITICAL INTERFERENCE For the 2 to 3 years, Pakistan is facing economic and political instability which is a big threat. 3. CONSUMER FINANCING Foreign banks are flourishing in field of consumer financing.
4. WAR OF TERRORISM

Afghan war and has an effect on the economy of Pakistan.

5. STRICT REGULATORY FRAMEWORK

Increased regulations from state bank of Pakistan may affect its business.