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DATE: 29 April 2020

Assignment # 2
FACILITATOR: SIR AMIR
HAMZA

COURSE: STRATEGIC MANAGEMENT

SUBMITTED BY: NAME: WAQAR

AHMAD STUDENT ID: 14851
 BANK Al-HABIB LIMITED

VISION STATEMENT

TO BE OUR CUSTOMERS' MOST CONVENIENT AND TRUSTED BANK

MISSION STATEMENT

TO MAKE BANKING SAFE, SIMPLE, AND PLEASANT

History of Bank

Dawood Habib Group, the sponsor of Bank AL Habib Limited has a long track record in banking
that dates back to the 1920s. The Group was among the founder members of Habib Bank
Limited and played a major role in meeting the financial and banking needs of Pakistan. It was
nationalized along with other Banks in Pakistan on January 1, 1974. Under the subsequent
privatization policy of Government of Pakistan, Dawood Habib Group was granted permission
to set up a commercial bank.

Bank AL Habib was incorporated as a Public Limited Company in October 1991 and started
banking operations in 1992. The Late Hamid D. Habib, grandson of the founder of Habib Group,
was the first Chairman of Bank AL Habib Limited. He was the Director in Habib Bank Limited
from 1954 and its Chairman from 1971 until its nationalization.

After the death of Mr. Hamid D. Habib in May 2000, Mr. Ali Raza D. Habib, who was Director on
the Board, he was appointed the Chairman of the Bank, a position he continued to hold till
October 2016. The Late Rashid D. Habib, who was the Managing Director of Habib Bank Limited
from 1953 till it's nationalization, was appointed as the Managing Director & Chief Executive of
Bank AL Habib Limited until he passed away in 1994.

After his demise, Mr. Abbas D. Habib, the Joint Managing Director and a close associate of Bank
AL Habib since its inception in 1991, was appointed as the Managing Director and the Chief
Executive of the Bank. He currently holds the prestigious position of Chairman of the Board of
Directors while Mr. Mansoor A. Khan has been appointed as Chief Executive effective
November 1, 2016
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In a short span of 28 years, the Bank's assets have grown to more than PKR 1 trillion, with a
network of 775 plus branches and sub-branches, a Wholesale Branch in the Kingdom of
Bahrain, Seychelles and Malaysia and Representative Offices in Dubai, Istanbul, Beijing and
Kenya.

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 Credit Ratings
PACRA Maintains Entity & Instrument Ratings of Bank AL Habib Limited.

Alhamdollilah, Pakistan Credit Rating Agency Limited (PACRA) has maintained the Bank's long term and
short term entity ratings at AA+ (Double A plus) and A1+ (A One plus), respectively. The ratings of
our unsecured, subordinated TFCs have also been maintained at AA (Double A) for TFC-2016 and TFC-
2018, and AA- (Double A minus) for TFC-2017 (perpetual). 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 BAHL's strong performance, exceptional asset quality and healthy financial profile
emanating from a strong equity base. The bank's business strategy derives strength from its strong
positioning in niche market – trade finance. The ratings draw comfort from the bank's experienced
management team, prudent risk management policies and deep rooted relationship with its clients -
borrowers as well as depositors. The ratings incorporate the bank's ability to capitalize on its branch
network, expansion of deposit base via product innovation and diversification of advances portfolio by
establishing relations with business entities in various sectors.

Notably, the bank's deposits emanate from a wide client base, with a major proportion from individuals.
Pakistan's banking landscape - particularly for established banks like BAHL - is experiencing high
competition and requires continued dynamism to retain the existing market position. Meanwhile, a
meaningful representation in the bigger financial services spectrum, along with effective execution of
the management's initiative to further strengthen its operational infrastructure and market positioning
is important.

Investor Information

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 Corporate Social Responsibility
The Bank is fully committed to the concept of Corporate Social Responsibility and fulfills this responsibility by engaging in a
wide range of activities which include:

 Corporate philanthropy amounts to Rs. 159.8 million in donations during the year for health, social and educational
development and welfare of under-privileged people.

 Energy conservation, environmental protection, and occupational safety and health by restricting unnecessary lighting,
implementing tobacco control law and “No Smoking Zone”, and providing a safe and healthy work environment.

 Business ethics and anti-corruption measures, requiring all staff members to comply with the Bank’s “Code of Conduct”.

 Consumer protection measures, requiring disclosure of the schedule of charges and terms and conditions that apply to the
Bank’s products and services.

 Amicable staff relations, recognition of merit and performance, and on-going opportunities for learning and growth of
staff, both on-the-job and through formal training programmes.

 Employment through a transparent procedure, without discrimination on the basis of religion, caste, language, etc.,
including employment of persons with special needs.

 Expansion of the Bank’s branch network to rural areas, which helps in rural development.

 Contribution to the national exchequer by the Bank by way of direct taxes of about Rs. 6.62 billion paid to the
Government of Pakistan during the year; furthermore, an additional amount of over Rs. 12.71 billion was
deducted/collected by the Bank on account of withholding taxes, federal excise duties and sales tax on services, and paid
to the Government of Pakistan/Provincial Governments.

Other Information
“TFP Award 2017” from Asian Development Bank (ADB). The Bank has received Trade Finance Program
Award for leading Partner Bank in Pakistan 2017.

“Bank of the Year (Mid-Size Banks) 2017” by CFA Society Pakistan. This is the sixth time that the Bank
has received this award, having received it earlier for the years 2009, 2010, 2011, 2012 and 2016.

“Top 25 Companies Award” for the year 2017 by the Pakistan Stock Exchange Limited. Criteria for the
award include dividend payout, capital efficiency, profitability, free-float of shares, transparency,
corporate governance & investor relation and compliance with listing of companies & securities
regulations. Alhamdolillah, this is the seventh time that the Bank has been selected for this award.

“The Strongest Bank Balance Sheet in Pakistan, 2013” by The Asian Banker. This certification is based
on the strength, liquidity and sustainability of the balance sheet in a challenging market place.

“Award of Recognition, 2010” from International Finance Corporation (IFC) as the Most Active GTFP
(Global Trade Finance Program) Issuing Bank in Middle East & North Africa for “South-South” Trade.
This is the second consecutive year that the Bank received an award from IFC in recognition of
participation in GTFP.
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“Membership of industry associations and trade bodies of the Bank are KCCI, PBA and 1Link.”

Products & Services

Following are the details and the list of products being offered by Bank Al-Habib Limited:

Apna Current Account

Monthly Saver’s Account
Current Plus Account
Senior Citizen Account
Pensioner’s Account
Mahana Munafa Account
Salana Munafa Account
Young Saver’s Account
Asaan Aacount
Asaan Remittance Account

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 Al-Habib Apna Current
Account

Bank AL Habib offers free life insurance with AL Habib Apna Individual Current Account,
There is no minimum balance requirement for opening and maintaining the account. The
account caters to individuals and professionals looking for a personal account to fulfill their
modern- day banking needs with a host of free facilities including:

ATM/Debit Card,
Free Online Banking,
Free SMS Alerts (Above Transaction of 25,000)
3 Banker's Cheque (Pay Orders),
E-Statement
Internet Banking.

Al-Habib Monthly Save r’s

Account

Bank AL Habib Monthly Saver Account is geared towards promoting the habit of saving. The
Account offers monthly returns and no restriction to withdraw funds. The profit is calculated
on rate of return allocated which may vary according to SBP discount rate policy and profit
is disburse on monthly basis. Financing upto 90% of available balance is offered with
following Facilities

ATM/Debit Card,
Free SMS Alerts (Above Transaction of 25,000)
E-Statement
Internet Banking
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 Al-Habib Current Plus
Account

Bank AL Habib Current Plus Account which is a current account that meets all business and
individual needs. The Account with no minimum balance requirement, offers various free
facilities including:

Personalized Cheque Book

Pay Orders (Banker’s Cheques)
ATM / Debit Card
Internet Banking
Online Banking
Free SMS Alerts (Above Transaction of 25,000)

Al-Habib Senior Citizen

Account

A dedicated savings account for Senior Citizens aged 60 Years & above (At least one of the
accountholders should be of 60 years & above in case of joint account).Bank AL Habib has
launched a monthly savings account titled AL Habib Senior for senior citizens of 60 years
and above to provide convenience and financial independence at old age in 2011. The
account offers high monthly return i.e. 10% per annum at the time of launch and no
restrictions to withdraw funds. Besides, loan up to 90% of deposit amount are also offered
with following facilities:

ATM/Debit Card,
Free Online Banking,
Free SMS Alerts (Above Transaction of 25,000)
Free Banker's Cheque (Pay Orders),
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E-Statement,
Internet Banking.

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 Al-Habib Pensioner’s
Account
A dedicated Pensioner account for Pensioners Bank AL Habib has launched a savings
account titled AL Habib Pensioner’s Saving Account and AL Habib Pensioner’s Current
Account for Pensioners to provide convenience and financial independence at old age in
The account offers high monthly return per annum at the time of launch and no restrictions
to withdraw funds. Besides, loan up to 90% of deposit amount are also offered with
following facilities:
ATM/Debit Card,
Free Online Banking,
Free SMS Alerts (Above Transaction of 25,000)
E-Statement
Internet Banking.

Al-Habib Mahana Munafa

Account
Bank AL Habib offers AL Habib Mahana Munafa Account is a Pak Rupee Term Deposit
Account, featuring monthly payment of profits. The investment is available in five flexible
schemes from one to five years term with profit rates up to 8.50% per annum on a one-year
deposit. The minimum deposit amount is Rs 25,000 and financing facility up to 90% against
deposit is also offered.

Al-Habib Salana Munafa

Account
Bank AL Habib offers AL Habib Mahana Munafa Account is a Pak Rupee Term Deposit
Account, featuring payment of profit at the end of tenure. The investment is available for
one year profit rate up to 8.50% per annum. The minimum deposit amount is Rs 25,000 and
financing facility up to 90% against deposit is also offered.

Al-Habib Young Saver’s

Account
Saving can be fun for young ones Bank AL Habib Young Savers Account is for children under
18 years of age. It is especially designed to allow parents to save for their children’s future.
Being part of the process is fun for kids and teaches them financial discipline from a young
age

 Open the account with as little as PKR 5/-

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 Free ATM / Debit Card (EMV PayPak) for customers
Age 16 years and above
 Free issuance of Banker’s
Cheques
 Free Internet and Mobile
Banking
 Free first cheque book (10
Leaves)
 Free online banking
 Free e-statements
 SMS alert facility
 Incremental rate of Profit Six monthly profit
payout
 Profit calculated on monthly average balance
 No minimum or maximum balance requirement
 The account offers two tiers of profit payout

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 9

Al Habib Asaan Account

Opening a bank account was never so easy If you are a resident Pakistani national and have
never opened a bank account before, Bank AL Habib Asaan Saving Account is just for you.
Easy to open, it is loaded with value added services.

Asaan Current Account is a special account for Pakistani nationals who do not have a Bank
account. Easy to open, all you need is your CNIC and as little as PKR 5/- and enjoy a host of
value added services

 No minimum balance required

 No services charges on account
 Free ATM/Debit Card (PayPak / UnionPay)
 Cheque book facility
 SMS Alerts Facility
 Initial deposit for account opening Rs. 1,000/-
 Two deposit and two withdrawals by cheque (cash or clearing) are
allowed free of charge

Al-Habib Asaan Remittance

Account
It’s a Free, Safe and Easy way to receive remittances Receive money from your loved ones
abroad directly into your account with Bank AL Habib Asaan Remittance Current Account.
Account can be opened with a one-page simplified account opening form. Only individuals
(Joint/Single) can open this account

 For receiving Home Remittances from abroad only

 No initial deposit or minimum balance requirement
 No charges at opening or closure of account
 Free Life Insurance
 Cash withdrawal limit: PKR 50,000 per
day
 Fund transfer limit: PKR 50,000 per day
 Total Credit Balance Limit: PKR 2,000,000
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9

 Cheque book facility

 Free E-statements SMS Alert
Facility
 Free ATM/Debit Card (PayPak / UnionPay)

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 Services
Following services have been offered by bank AL-Habib to its
customers:
Credit Credit Facility
Foreign Trade Services
Telegraphic Transfer Services
Locker’s Facility
Association with Different Companies for remittance For example Money Gram / Ria
etc

THE EXTERNAL FACTORE EVALOATION (EFE)

MATRIX:
It is a strategy tool used to examine company’s external environment and to identify the available
opportunities and threats .EFE Matrix. When using the EFE matrix we identify the key external
opportunities and threats that are affecting or might affect a company. Where do we get these factors
from? Simply by analysing the external environment with the tools like PEST analysis, Porter’s Five
Forces or Competitive Profile Matrix.

Key External Factors

Opportunities Weight Ratings Weighted Score

Increase in Discount Rate 0.10 3 0.30

Acquiring another Bank 0.20 4 0.80
Laws regarding Income Tax become 0.10 2 0.20
easier
Market an undiscovered Sector of market 0.10 4 0.80
like Young Saver’s Account
Threats Weight Ratings Weighted Score
Competitor’s Branch Opening near Your 0.10 3 0.60
Branch
Multinational Banks Enters in Pakistan’s 0.05 2 0.1
Banking Industry 0
Unethical Activities from 0.15 3 0.45
Competitors
Discount Rate Falls 0.05 2 0.1
Changes in Banking Law due to FATF 0.05 3 0
0.1

Covid 19 0.15 3 5
0.45
Total 1 3.9

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Bank Al-Habib has the strong presence in the market as the external factors are threatening them less
whereas many opportunities are there for Bank AL-Habib to accelerate its growth and Bank-Al Habib is
also capitalizing on the Opportunities which is evident from increase in profit of 1 st Quarter of 2020 by
almost 33% as compare to its profit in the 1st Quarter of 2019.

THE INTERNAL FACTORE EVALOATION (IFE)

MATRIX:
It is a strategy tool used to evaluate firm’s internal environment and to reveal its strengths as well as
weaknesses. IFE Matrix. Strengths and weaknesses are used as the key internal factors in the
evaluation. When looking for the strengths, ask what do you do better or have more valuable than your
competitors have.

Strengths
Key Internal Factors Weight Ratings Weighted
Customer Services 0.20 4 0.80Score

Products 0.10 3 0.30

Network Of Branches 0.15 3 0.45
Employees Satisfaction 0.15 4 0.60
Weakness Weight Ratings Weighted
Information Technology 0.10 3 0.60Score
Online Swapping Of Debit Cards 0.10 2 0.20
Minimum Risk Taking 0.15 2 0.30
Inter Branch Customer Inquiry 0.05 2 0.10
Total 1 3.75

Bank Al Habib is going strong and is need to work on his weakness to overcome them so it rating
increases as its strengths are well ahead as compare to its weakness as its customer service is far
better with these highlighted weakness in the above mentioned grid. Bank Al-Habib should improve its
IT department by out sourcing to greater effect which definitely affect the business of Bank Al-Habib in
Positive manner.

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 Competitive Profile Advantage
Competitive Profile Matrix (CPM) is a tool that compares the firm and its rivals and reveals their
relative strengths and weaknesses. In order to better understand the external environment and the
competition in a particular industry, firms often use CPM. The profile matrix identifies a firm’s key
competitors and compares them using industry’s critical success factors. The analysis also reveals
companies relative strengths and weaknesses against its competitors

Bank Al-Habib Habib Metropolitan Bank Meezan Bank

Critical Success Weight Ratings Weighte Ratings Weighted Ratings Weighted

Factors d Score Score
Customer Service 0.15 4 Score
0.60 3 0.45 4 0.60

Network Of 0.10 4 0.40 2 0.20 3 0.30

Branches
Branch 0.05 2 0.10 2 0.10 3 0.15
Environment
Products 0.10 4 0.40 3 0.30 3 0.30
Information 0.10 2 0.2 3 0.3 4 0.40
System
Management 0.10 3 0.30 3 0.30 3 0.30
Business Ethics 0.10 3 0.30 3 0.30 3 0.30
Expected Growth 0.15 4 0.60 3 0.45 4 0.60
in
Industry
Social 0.10 3 0.30 2 0.20 3 0.30
Responsibility
Advertisement 0.05 4 0.20 3 0.15 3 0.15
Total 1 3.4 2.75 3.4
Bank Al-Habib is a growing bank and has been compare with the two of its rivals i.e. Habib
Metropolitan Bank and Meezan Bank and the result was as expected as Meezan Bank and Bank AL-
Habib are Close Competitors are always searching for ways to beat each other

Conclusion:
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Bank Al-Habib is going well as compare to the industry growth as in spam of one year Bank Al-
Habib increases his profits by 33% and have captured the almost 15 % deposit of the total
deposits in Banks. Bank AL-Habib always assure his strong presence in every matter as Hajj
Operations of Bank AL- Habib is more than the expectation of Management and Employees
have been given core values and at The Phase Bank Al-Habib is going on can be a part of Top 5
Banks Pakistan and also having the strongest Balance Sheet as compare other Banks

Recommendations:
Bank Al-Habib is Holding Strong Position in market still with the some flows in IT Department and
Limited access to Staff as Bank AL-Habib IT is the biggest weakness as compare to other banks IT.
Therefore, there is need of revamping the IT Department and keep on doing Goods for the Betterment
of the Society and the Staff to Increase its share of Profit and Deposit.

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TOWS Matrix
The TOWS Matrix is derived from the SWOT Analysis model, which
stands for the internal Strengths and Weaknesses of an organization
and the external Opportunities and Threats that the business is
confronted with. The acronym TOWS is a variant of this and was
developed by the American international business professor Heinz
Weirich. The TOWS Matrix is aimed at developing strategic options
from an external-internal analysis and is a practical tool, particularly
in the fields of business administration and marketing.

Strength Weakness

1)Customer Service 1)Information

2)Products Technology
3)Network Of Branches 2)Online Swapping Of
4)Employees Debit Cards
Satisfaction 3)Minimum Risk
Taking
4)Inter Branch
Customer Inquiry
Opportunity S.O W.O
1) Increase in Discount Rate 1) S1 , O3 1)W3 , O1
2) Acquiring Another Bank 2) S2 , O1 2) W1 , O2
3) Laws Regarding Income Tax becomes 3) S3 , O2
Easier
4) Market an undiscovered Sector of
market like Young Saver’s Account
Threat S.T W.T
1) Competitor’s Branch Opening 1) S1,T1 1) W1 , T2
near Your Branch 2) S3 , T2 2) W3 , T5
2) Multinational Banks Enters in 3) S4 , T3
Pakistan’s Banking Industry
3) Unethical Activities from
Competitors
4) Discount Rate Falls
5) Changes in Banking Law due
to FATF
6) Covid 19
 The SPACE matrix is a management tool used to analyze a company. It is used to
determine what type of a strategy a company should undertake.

The Strategic Position & Action Evaluation matrix or short a SPACE matrix is a

strategic management tool that focuses on strategy formulation especially as related to the
competitive position of an organization.

The SPACE matrix can be used as a basis for other analyses, such as the SWOT analysis,
BCG matrix model, industry analysis, or assessing strategic alternatives (IE matrix).

To explain how the SPACE matrix works, it is best to reverse-engineer it. First, let's take a
look at what the outcome of a SPACE matrix analysis can be, take a look at the picture
below. The SPACE matrix is broken down to four quadrants where each quadrant suggests a
different type or a nature of a strategy:

Aggressive
Conservative
Defensive
Competitive

The SPACE matrix is based on four areas of analysis.

Internal strategic dimensions:

Financial strength (FS)

Competitive advantage (CA)

External strategic dimensions:

Environmental stability (ES)

Industry strength (IS)

Financial strength (FS)

S. Particulars Ratin
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No g
1 Net Profit Margin +4
2 Goodwill Of Bank AL- +5
Habib
3 Total Assets +5
4 Credit Ratings +4
Total 18/4
= 4.5

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Competitive Advantage (CA)
S. Particulars Ratin
SPSAPACCEEMMatartixrix
No g
FS
1 Market Share -2 Conservative FS Aggressive
2 Loyalty Of Both Internal -1 Conservative +6 Aggressive
And External Customers +6
+5
3 Online Network / ATMs -3 +5
+4
4 Service Quality -2 +4
Total -8/4 =
+3
+3
-2 +2
+2
+1 X = +2.25
Environmental Stability (ES) +1 Y = +1.75
CA IS
S. Particulars Ratin CA -6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6
IS
No g -6 -5 -4 -3 -2 -1 -1 -1 +1 +2 +3 +4 +5 +6
1 Inflation Rate -3 -2
2 Competitive Pressure -2 -2
-3
3 SBP Policy -3 -3
4 Technological Change -3 -4
Total -11/4 -4
=- Defensive -5 Competitive
Defensive -5 Competitive
2.75 -6
-6
ES
ES
Industry strength (IS)
S. Particulars Ratin
No g
1 Financial Stability 4
(Strongest Balance
Sheet)
2 Growth Potential 4
3 Efficient and Effective 5
Allocation Of Resources
4 Profit Potential 4
Total 17/4
=4.25

Direction vector co-ordinates

X-Axis = C.A+I.S
= -2.00+4.25
= +2.25
Y-Axis = E.S + F.S
= -2.75+4.5
= +1.75

Conclusion (Space Matrix)

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As it is evident from Bank Al Habib is part of relatively stable Industry and
attractive One also and Bank Al Habib is enjoying the relatively better
Competitive advantage compare to other banks and also protecting it and can go
for acquiring another Small Sized bank this will increase the market share and
overall position will increase of the Bank .

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10

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