HABIB METROPOLITAN BANK. BANKING INDUSTRY OF PAKISTAN

Pakistan has a well-developed banking system, which consists of a wide variety of institutions ranging from a central bank to commercial banks and to specialized agencies to cater for special requirements of specific sectors. Major factors like global financial disorder, economic slowdown and strict monetary policy were on the top but Pakistani bank cater all these problems. During the year 2012, our country’s trade balance reflects healthy improvement mainly on account of reduced cost of imports. With the International Monetary Fund s Stand-By Arrangement (SBA) and a commitment expressed by the global community to extend monetary aid to Pakistan, the country s foreign exchange reserves have increased significantly, although the rupee continues to depreciate against the dollar. Weakening domestic demand, reduced commodity prices and lower government borrowing from the SBP has also led to a reduction in core inflation. The country s stock exchanges have managed to regain the investors’ confidence after dismal look in 2011 and the market index reflects a positive sentiment. Further, remittance inflows from overseas Pakistanis have remained strong which provided positive support to the economy. These factors, as well as several ongoing policy and structural reforms resulted in improvement in Pakistan’s international ratings by Moody s from Negative to Stable outlook. Although the potential economic crisis has been averted and the economy has stabilized, the country s manufacturing and export activities continue to remain under pressure. Power shortage remains a fundamental detriment to economic growth for which various short and long- term measures are being taken by the government. This is a matter of utmost priority as the rising costs of input needs to be kept under control to compete in the international markets. The economy is also facing severe pressure due to the ongoing war on terror and the rehabilitation of Internally Displaced Persons (IDPs).

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HABIB METROPOLITAN BANK. Habib Bank AG Zurich

Habib Bank AG Zurich was incorporated in 1967 in Zurich, Switzerland by a renowned family of bankers in Pakistan (Habib Family) with a paid-up capital of Swiss Francs 2 million. At the time of formation of HBZ (Habib Bank AG Zurich), the Habib Family also owned Habib Bank Ltd. (HBL) in Pakistan, HBL is one of the largest commercial banks in Pakistan and ranked amongst the 200 largest banks in the world. In 1974 with the nationalization of Pakistani banks, the Habib Family lost the ownership of HBL and was left with only HBZ, which at that time had very modest operations, with only one branch in Zurich.

Since Mr. H.M. Habib was a regular visitor to the court of His Highness Shaikh Rashid Bin Saeed Al Maktoum in Dubai, when the banks in Pakistan were nationalized, H.H. Sheikh Rashid extended an invitation to the Habibs to open a bank in Dubai which they wholeheartedly accepted. A branch of HBZ was opened on August 6, 1974 in Murshid Bazar in Dubai. The first account holder of the bank was H.H. Shaikh Rashid Bin Saeed Al Maktoum.

HBZ, as a foreign bank, now has 8 established branches in the UAE. HBZ has presence in 12 countries through 33 established branches and subsidiaries. The Habib Family has been associated with the banking industry for over six decades. The bank has a strong tradition, solid foundation and a history of superior management. It enjoys a rich fund of goodwill with international banks and the business community, which is associated with the name of Habib.

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HABIB METROPOLITAN BANK. HABIB METROPOLITAN BANK

Habib Metropolitan Bank was incorporated in Pakistan as a Public Limited Company in 1992 under the name, Metropolitan Bank Limited. The Bank commenced, duly licensed, full scheduled commercial-banking operations in October 1992.

Metropolitan Bank, from October 1992 to September 2006, remained a highly rated bank and, vide its nationwide 51-branch on-line network, established as a distinguished provider of trade finance services.

On October 26, 2006 Habib Bank A G Zurich`s Pakistan Operations merged into Metropolitan Bank Limited and the merged entity was named Habib Metropolitan Bank Limited. Demonstrating a strong commitment to Pakistan economy, HBZ is the principal shareholder of HABIBMETRO. In September 1982, the number of Metro bank branches, offices and subsidiaries surpassed the 200 mark. A year later, Metro bank topped the entire private domestic bank in total resources with PKR 8.8 billion. The bank continued to experience steady growth through the years and in September 1989; it increased its authorized capital stock from PKR 2 billion to PKR 5 billion. The bank’s total capital funds on June 30, 2006 stood at PKR 57.3 billion. Its consolidated resources amounted to P588.1 billion as of the same period. As of June 2007 assets reached PKR 669.1 billion ($14.5 billion) (PKR 46=$1).

HABIB METRO operates in all major cities of the country. The Bank ranks within Top 10 in Pakistan with a strong vision to be the most respected Financial Institution. HABIBMETRO has its primary focus on retail banking and trade finance and also offers highly innovative E- Banking solutions and Consumer Banking to its customers. The Bank’s Islamic Banking Division is fully capable of catering to customers seeking Shariah compliant products.

The Pakistan Credit Rating Agency (PACRA) has allotted both long-term and short-term ratings of Habib Metropolitan Bank Limited at “AA+” (Double A plus) and “A1+” (A one plus), respectively. These ratings, being the highest amongst the local sector Private Banks, denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.

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HABIB METROPOLITAN BANK.

HMB VISION:

Based on a foundation of trust, to be the most respected financial institution, delighting customers with excellence, enjoying the loyalty of a dedicated team, meeting the expectations of regulators and participating in social causes while providing superior returns to shareholders.

HMB MISSION:

. To retain and expand the customer base by providing a competitive, specialized and personal quality service. . To provide a comprehensive range of commercial, consumer and private banking services to a broad base of personal and business customers especially from our niche market. . To support the sound and efficient operations of the bank by regular monitoring and development of the infrastructure in terms of human resource, IT, procedures and processes. . To be a well and conservatively managed bank, showing reasonable and controlled growth, ensuring an adequate return for the shareholders. . To keep risks to a minimum through a clear policy of broad diversification in terms of geography and product mix by spreading the bank's credit and trade financing activities over a wide range of customers with emphasis on secured, short-term and self- liquidating lending.

HMB MOTTO:

Service with Security: The motto is a reflection of the bank's drive towards excellence with continual emphasis on its conservative management philosophy which is also evident from the mission statement.

Customer base/key suppliers:

HMB's niche market consists of the trading segment generally banking for their import and export needs. The bank also has a good client base of local customers and is now moving to capture high net-worth client base for priority and private banking services. The key suppliers are our correspondent banks, IT suppliers and consultants, auditors, banking institutions and relevant vendors.

Customer service:

Since its inception, HMB has focused in distinguishing itself by providing superior services to its customers. With its roots running deep into the long tradition of banking in Pakistan since 2006, the Bank has retained its status as a family owned bank, giving priority to customer satisfaction and its reputation rather than profits.

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HABIB METROPOLITAN BANK. Achievements: These above credit ratings denote, . HMB is one of the top ten banks in Pakistan . A very high credit quality, . A very low expectation of credit risk and . A very strong capacity for timely payment of financial commitments.

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HABIB METROPOLITAN BANK. MARKET ANALYSIS

SWOT ANALYSIS

1) STRENGTHS: . Large capital base. . Rank in top 10 bank of Pakistan. . Continuous growth in ROE. . The bank’s management realizes the necessity of existence of effective internal controls to ensure smooth operations in the current technical and swift business environment. . Loyal management: . The bank has efficient and experienced management making significant. . Credit rating in long-term “AA+” and in the short term “A1+”. . The financial statements, prepared by the management of the bank present fairly the state of affairs. . Loans are given only to known, reputable clients to avoid chances of fraud. Very low nonperforming loan.

2) WEAKNESSES: . Only valued client is important. . Bad portfolio diversification (54% advances to Textile industry) . Advertisement on electronic media has not been seen. . Declining standards of banking after merger. Inter- organizational conflicts after merger. . Compromises upon polices to keep customers happy. . Old Management. (No creativity) . No further growth in branches. . Majority of shares are owned by the one family. . Low consumer finance. . Less job satisfaction of employees. . Customers facing problem of NADRA verification while opening their accounts because its process is time consuming.

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HABIB METROPOLITAN BANK. 3) OPPORTUNITIES: . Scope in Islamic Banking. . To go global fully . Low exposure to consumer banking providing opportunity to explore the segment. . The year 2010 will prove to be another demanding year for the bank with scattered. Diversification, innovation and mission driven approach are the key to success which bank should adopt. . Progressive but cautious business expansion with strategic branch network extension and introduction of innovative products in all areas of business. Branch network need extension. . Should emphasize much on e-banking. Profit margin will be good. . The bank being Swiss incorporated, it bank follows dual banking regulation i.e of Pakistan as well as Switzer-land which attracts foreign investors. . SBP policy to allow Islamic Banking business separately. . Bank introduces Islamic banking in country that attracts large number of people.

4) THREATS: . Adverse impact of “Credit Crisis” can badly effect on HMB. . Facing a strong competition by its competitors. High reliability on only one market segment i.e. Textile. (54%) . Inconsistency in government policies. . Increasing competition in the banking sector. Entry of many foreign banks. . Strict policies of the State Bank of Pakistan. . Geopolitical condition of country.

1. Threat of Entry: (Medium) . No restriction from SBP for new banks. SBP gives free hand to enter in this industry because there is a big scope in this industry. To start a new bank there is a need of large financial resources in order to compete with existing banks and Government current interest policy is also a problem for new entrant. . Existing banks have great customer loyalties and they differentiate their services. . New entrant’s need network of branches and to get favorable location for branches is also difficult. Existing banks has also advantage of expertise and diversity of their branches.

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HABIB METROPOLITAN BANK.

2. Intensity of Rivalry among Existing Competitors: . Degree of difference between products is very low. . Competition in existing firms has very high due to numerous and equally balanced competitors. Due to entrance of new foreign banks, competition increased. . There are high exit barriers due to high fixed cost, Govt. and social restriction. . Banking industry growth is medium to high due to competition increases day by day. . Some banks have new technology which gave advantage to them.

3. Threat of Substitute Products: Islamic mode of financing is a substitute for conventional banking system. Habib Metropolitan bank also start Islamic banking in Karachi and Lahore.

4. Bargaining Power of Buyers: Giant client bargain highly. Products or services have no high difference. Buyer has full information about whole banking industry in Pakistan then he/she may give tuff time for Bargaining. Switching cost is not high from one bank to another; prospective banks charge low fees for switching. Banking products/services may unimportant to the quality of the buyers.

5. Bargaining Power of Supplier: The State Bank of Pakistan control the whole banking industry and National Bank of Pakistan control the securities etc. They have power given by the Govt. of Pakistan. They control the cash requirements of the banks and all other banks follow the instructions given by the SBP.

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HABIB METROPOLITAN BANK. ANALYSIS OF ADVANCES PORTFOLIO

Segment 2013:

Textile 54.03% Exports/Imports 7.21% Chemical and pharmaceuticals 3.65% Wholesale and retail trade 2.98% Electronics and electrical 2.29% Others 29.84%

Market Share in Advances

29.84% Textile Exports/ Imports Chemical and Pharmaceuticals Wholesale and Retail Trade 54.03% Electronics and electrical 2.29% Others 2.98% 3.65% 7.01%

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HABIB METROPOLITAN BANK. RISK ANALYSIS

2012 2011 2010 Non-performing 0.53% 0.90% 1.00% assets to total loans and lease Non-performing 4.08% 5.95% 7.18% assets to equity Loss to total loans 0.001% 0.04% 0.09% Provision to total 0.37% 0.78% 1.00% loans Capital adequacy 11.88% 12.50% 10.62% Total loans to total 81.30% 74.20% 84.49% deposits

1) Credit Risk: The HMB strategy is to minimize credit risk through a strong pre-disbursement credit analysis, approval and risk measurement process added with product, geography and customer diversification. The Bank, as its strategic preference, provides loans only to strong parties. Major portion of the Bank credit portfolio is Textile industry (54%) which is highly profitable business in Pakistan but it may riskier and not a good diversification of portfolio, if textile industry slump then it will crash the whole bank. The bank has very low rate of Non- performing loans. The ratios of risks are as under and we can see that they reduce the risk as per their objective.

2) Market Risk: Market risk is the possibility that fluctuation in interest rates, foreign exchange or stock prices will change the market value of financial products leading to a loss. The HMB has formalized liquidity and market risk management policies which contain action plans to strengthen the market risk management system.

3) Foreign Exchange Risk: Foreign Exchange Risk is the probability of loss resulting from adverse movement is exchange rates. The HMB is not in the business of actively trading and market making activities but a conservative risk approach and the Bank’s business strategy to work with export oriented (Textile) client’s gives the ability to meet its foreign exchange needs.

4) Interest Rate Risk: Interest rate risk is the risk that the value of the financial instrument will fluctuate due to changes in the market interest rates. The HMB’s interest rate exposure is low due to the short-term nature of the majority of business transactions. Interest rate risk is also controlled through flexible credit pricing mechanism and variable deposit rates.

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HABIB METROPOLITAN BANK. 5) Liquidity Risk: HMB manages the liquidity position on a continuous basis. The Bank’s liquidity position is based on “self reliance” with a wide branch network to expand the Bank deposit base. The Bank’s liquidity profile generally consists of short-term, secured assets, in line with the Bank’s credit strategy.

ANALYSIS OF CREDIT RATING:

The Pakistan Credit Rating Agency (PACRA) has maintained the long-term and short-term entity ratings of Habib Metropolitan Bank Ltd. 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 strong position of the bank in its respective niche – self-liquidating trade finance to corporate and SMEs. While consolidating its strength, the management continues to focus on product innovation, enhanced reach through network expansion, and technology up gradation for ensuring quality services to its customers, thereby retaining its relative positioning in the face of intensifying competition within the sector. The bank continues to maintain outstanding asset quality – an outcome of conservative risk appetite as well as effective risk management. The ratings also take into account the bank’s association with a geographically diversified international sponsoring group – Habib Bank AG Zurich (HBZ). About the bank: HMB, commencing operations in 1992, is listed on all bourses of Pakistan. Subsequent to recent merger, the bank is a 51% owned subsidiary of HBZ, incorporated in Switzerland. HBZ, with consolidated assets of above US$6bln, has operations in eight countries directly and through subsidiaries. This provides inherent strength to the bank given high credibility and standing of HBZ. The Chief Executive of the bank is a former Governor of the State Bank and also a former president of Habib Bank Limited, one of the largest banks in the country. A highly professional team of senior executives including the executive director, who has emerged as the key professional in evolving the bank’s strategy as well as its implementation, assists the chief executive. The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity.PACRA’s comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate grading. PACRA’s opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security’s market price or suitability for a particular investor.

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HABIB METROPOLITAN BANK. HABIB METRO OPERATIONS REVIEW

BRANCH BANKING:

Habib Metropolitan Bank or HMB has numerous branches more than one hundred and eighty branches in Pakistan including cities like in the chart.

Habib Metropolitan Bank established their internet banking in the month of November 2004, Habib Metropolitan HMB’s Islamic Banking Division delivers goods and facilities which are Sharia acquiescent.

Habib metropolitan is your choice, this bank has all the possible services that one bank should have. Its online banking system is quite beneficial for the people who want to enjoy portability and power on the world of information technology.

One can go deep through the vision line of the bank and can have an idea that it is a foundation of trust to be the greatest appreciated economic institution, appreciating clienteles with excellence, enjoying the devotion of dedicated team, meeting the prospects of controllers and contributing in social foundations though providing greatest revenues to stockholders. Customers satisfactory are the result of HMB’s quality and clients seems to be very much satisfied.

Habib Metropolitan Bank Ltd continued to expand its footprint by opening 29 new branches in the year 2013. In doing so, the Bank enhanced its outreach to 21 new cities that it did not have physical presence in heretofore. The attainment of this planned initiative takes Habib Metro's branch count to 212 branches that are spread across 49 cities pan-Pakistan. The Bank now enjoys a stronghold in industrial belts in the North, and bolsters its trade business epicenter in the South.

In its inception, Habib Metro closed the third quarter of the year with a declared profit- before-tax of Rs 4.07 billion. This, in addition to increase in deposit base and advances, enabled the Bank to further strengthen its financial standing. SEGMENTS

1) International Trade:

Habib Metropolitan Bank offers full range of Trade Finance products and services to its customers. Due to its wide network of correspondent banking arrangements with most reputed international banks, it offers seamless trade services to importers and exporters. Refinance and other trade related products are also made available to eligible customers.

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HABIB METROPOLITAN BANK.

GLOBAL TRADE FINANCE FACILITY (GTFP):

Habib Metropolitan Bank Limited is the first bank in Pakistan to join the Global Trade Finance Programme (GTFP) of International Finance Corporation (IFC). By virtue of our joining the GTFP, our bank is now listed in a panel of prominent banks in 70 countries.

INTERNATIONAL FINANCE CORPORATION (IFC):

Through this programme, IFC will extend guarantees on our behalf, which will provide us opportunities to globally expand our trade business by enhancing our presence in the emerging markets and countries with which we have negligible or no business

TRADE FINANCE FACILITATION PROGRAM (TFFP) OF ASIAN DEVELOPMENT BANK (ADB):

Habib Metropolitan Bank Limited has also joined Trade Finance Facilitation Program (TFFP) of Asian Development Bank (ADB). ADB’s main partners are governments, private sector, nongovernment organizations, development agencies, community-based organizations and foundations. Our association with ADB’s TFFP program as an issuing bank reflects the level of understanding and confidence they have in the operational efficiency of our institution.

. Documentary Collections . Documentary Credits . Import Letters of Credit . Advising of Export Letters of Credit . Standby Letters of Credit . Foreign Bills Purchased – Negotiation/Discounting . Structured Trade Financing . Local Currency Export Refinance Facility through SBP . Foreign Currency Export Financing (FCEF) through SBP . Foreign Currency Loans for International Trade

2) Foreign Remittances: . Global remittance facility available through our extensive correspondent bank network. . Need assistance for remittance of funds to Pakistan

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HABIB METROPOLITAN BANK. 3) HMB Rent Free Lockers: . Secure . Rent Free Lockers . Refundable security deposit . Available in,

SIZE Security Deposits SMALL Rs. 20,000 MEDIUM Rs. 35,000 LARGE Rs. 60,000 EXTRA LARGE Rs. 100,000

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HABIB METROPOLITAN BANK. PRODUCTS AND SERVICES 1. CONSUMER DIVISION 1. HABIBMETRO Auto Finance: . HABIBMETRO Auto Finance is available up to Rs. 3 Million. . Minimum Down Payment is 15% of the total amount. . Processing Fee is Rs. 4,000/-. . Vehicle to be registered in the name of customer and marked HPA with the Bank.

2. HABIBMETRO Auto Leasing: . HABIBMETRO Auto Leasing is offered to all our Commercial & Corporate Clients. . Minimum down Payment is as low as 10% of the total amount. . Auto lease limit depends on the strength of the Company’s financials and credit checks. . A Processing fee is charged at 0.5% of the Lease amount. . The Vehicle is to be registered in the name of the Bank . The Insurance cost to be borne by the customer.

3. HMB Personal Loans: . Clean loans are offered up to Rs. 500,000/- . . A Processing Fee of 1% of the loan amount or Rs. 2,000/- is charged, whichever is higher.

4. HMB Education Loans:

Financing for Education Loans are available for,

. Graduation, Post Graduation, PHD, Diploma courses and Financing for Tuition fee, Books and materials. . A Mark–up is charged at concessional rate. . There is No processing fee. . Convenient repayment options are offered. . The Tenor is from 6 to 60 months.

5. POS (Point of Sale) Machine: . Now you can withdraw cash from all HMB branches cash counters easily and without any delay. . Each HMB branch is now equipped with a POS machine available on their Cash Counters. . No need to issue cash cheques and no need to wait. . Cash can be withdrawn up to Rs. 250,000/- via HMB ACCESS (ATM / Debit card).

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HABIB METROPOLITAN BANK. 2. Electronic Banking a. HMB Tele Info Service: . Dial 0800 HABIB / 0800 42242 for info services. . Instant access to the information you need at any time, from anywhere. . Teleinfo is a 24 hour telephone banking service to give you information you need – easily, instantly. . Following services can be accessed 24/7 . Account Balance. . Cheques in Clearing. . Indicative Foreign Exchange Rates. . Faxed back account statements. b. HABIBMETRO GSM Mobile Banking:

HABIBMETRO also introduce mobile banking facility, which would be available on request to all our existing and new account holders. Account holders who subscribe to this facility would receive SMS messages on their designated mobile phones for all types of transactions that they had requested. c. HABIBMETRO WebInfo Service: . Online Banking . Access your account from your home or office or anywhere in the world. . Login through webinfo username and password. . Login through your HABIBMETRO ACCESS (ATM/Debit Card).

Following services can be accessed 24/7,

. Up-to-date Account Balance. . Cheques in Clearing. . Account statement . Indicative Foreign Exchange Rates. d. HABIBMETRO Access ( ATM / Debit Card ): . HABIBMETRO Debit Cards are FREE, and available to our valued clients at all HABIBMETRO branches. . Make transactions up to the credit balance available in your account . Withdraw cash through convenient POS terminals at all HABIBMETRO branches . Daily ATM With drawl Limit Rs 30,000/-

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HABIB METROPOLITAN BANK. 3. Corporate Banking a. Cash Management Services: . This Service is best suited for Corporate clients with Rs.500 Million and above in local Sales and collections. . Service involves Bulk collection of cash and cheques from all over Pakistan where HABIBMETRO branches are available. . Funds are collected and credited to customer’s accounts (cash/transfer) the same day. . Online Banking supported by the state of the art hPLUS technology. . Customers benefit with outright savings of time & money. . Product is very competitively priced. . Upto date tracking of funds with online reports available through webinfo and teleinfo services. b. Short Term and Long Term Finance:

The bank also offers short term working capital financing including under sharia compliant modes, exports/import financing and long-term finances to Corporate/Commercial customers as well as SMEs trade & industry. It also extends Agricultural credit; specialized financing tailored to customer’s needs and is also a regular member of Syndicated financing club. c. E-Salary: . Through this service Salary disbursement to the employees of our valued corporate customers is done electronically. . The Opening and maintenance of all salary accounts are managed form a central location. . There are no charges on minimum balance in salary accounts. . The individual Salary accounts are also eligible to apply for HMB Personal & Auto Loans. . All banking services that include Electronic fund transfer (EFT) , Demand Draft (DD) , Telegraphic Transfer (TT) are available to e-Salary account holders. . The Minimum monthly salary disbursement per corporate customer is Rs. 1 Million. . Charges per salary Rs. 50/- or minimum of Rs. 5,000/-. . Free ATM / Debit Cards will be issued to all e-salary customers at the time of opening accounts. . Free Web/Teleinfo services to facilitate balance inquiry and other services 24/7.

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HABIB METROPOLITAN BANK. 4. OTHER PRODUCTS AND SERVICES

a. HABIBMETRO Privilege 55+ Savings Deposit:

HABIBMETRO now Offer “Privilege 55+”, a saving account with unique features with best rates, Extended Life Insurance and bonus profit.

How it Works:

. A savings account for 55 years old & above. . Initial Investment Requirement-Rs.25,000/- . Profit will be calculated on average balance maintained in the account during the month. . Unique Bonus Profit Feature on maintaining certain minimum Balance* . Free Life Insurance up to 65 years, a unique feature available only to HABIBMETRO privilege 55+ customers.

Free Services:

. Online funds transfer within HABIBMETRO ( same / intercity) . Personalized Cheques Book(s) . Statement of Account Half yearly . HABIBMETRO ATM / Debit Card (first card only) . Web info & Tele info services . Utility Bills payment via call center . Mobile top ups via call center

b. Basic Banking Account: . Account Opening with Rs. 1,000/- . No minimum balance required. . Non-remunerative account. . First cheque book of 25 leaves issued free of charge. Additional cheque book(s) at Rs. 100/- per book. . No limit on number of ATM / Deposit transactions. . Two cheque transactions will be allowed free per calendar month. Charge of Rs. 25/- per cheque will be applied from the third cheque onwards.

Free Services:

. ATM / Debit Card . Web Info & Teleinfo . Yearly statement of account . Online Funds Transfer

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HABIB METROPOLITAN BANK. c. HMB Current Account: . The minimum amount required to open the account is Rs 5,000/- . Minimum balance to maintain in the account is Rs 1,000/- . This is a checking account with no limit on the number of transactions. . No profit is paid in this account . There are no deduction of Zakat or any levies on this account

Free Services:

. Cheque Book(s) . Statement of Account . HMB ATM / Debit Card . Web info & Teleinfo Services . Pay Order d. HABIBMETRO Izafa Certificates: . Izafa Certificates are issued in multiple(s) of Rs. 10,000/-, 25,000/-, 250,000/- and 2,500,000/-. . HABIBMETRO Izafa certificates are offered as 7 years Deposits Certificate. . Offering attractive Profit rates upto 14.29 % p.a . Investment doubles in Seven years. . Easy Loan Facility. . In cashable any time. . No Penalties. . Your profit grows daily. . Can be linked to any of the regular accounts. e. HABIBMETRO Multiplier Account: . The minimum amount required to open and maintain the account is Rs. 1 Million. . Profit is accrued on a DAILY product basis and credited to your account monthly. . Accrual of Profit is on balance of Rs. 1 Million and above. . In case balance of Rs. 1 Million not maintained for any day profit will be paid @ 6.00% p.a. for the month.

Free Services:

. Cheque Book(s) . Statement of Account . HABIBMETRO ATM / Debit Card . Pay Order . Webinfo & Teleinfo Services

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HABIB METROPOLITAN BANK. f. HABIBMETRO Saving Plus Account: . Eligibility : Individuals Only . Initial Deposit : Rs. 25,000/- . Indicative profit rates . Profit payment basis : Average balance maintained during the month . Profit payment frequency : Quarterly Basis

Free Features:

. Cheque Book. . Payment Orders. . Statements of Account. . ATM / Debit Card. . Web Info & Teleinfo. . Online Funds Transfer. . SMS Alert: Balance & Account Debit. . Electronic Funds Transfer within HABIBMETRO. g. PLS Saving Account (Free Life Insurance): . The minimum amount to open and maintain this account is Rs. 1,000/-. . Profit will be calculated on average balance maintained in the account during the month. . Free life Insurance cover. . Free insurance is equal to the average six monthly balance in case of death. . The minimum qualifying average balance for Life Insurance is Rs. 15,000/-. . The maximum sum assured is Rs. 1,000,000/- .

Free Services:

. Cheque Book(s) . Statement of Account . HABIBMETRO ATM / Debit Card . Webinfo & Teleinfo Services . Pay Order

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HABIB METROPOLITAN BANK. h. HABIBMETRO Premium Deposit Scheme:

HABIBMETRO offers investment opportunity for our valued account holders. HABIBMETRO Premium Deposit Scheme offers profit rates up to 10% per annum. You may deposit your funds for 1, 3 & 5 years, with quarterly and half yearly profit payment options to suit your need.

Who can avail this Opportunity:

There are no restrictions as to the eligibility of depositors and the scheme is open for any investors / account holder.

Indicative Profit Rates:

On a deposit of Rs. 100,000/- the profit will be paid as under.

Tenor Quarterly Profit Half Yearly profit Rate p.a Rate p.a 1 Year 8.30% 8.40% 3 Year 8.60% 8.70% 5 Year 8.90% 9.00%

Features:

. Minimum investment amount is Rs. 25,000/- (Rupees Twenty Five Thousand Only). The funds can be placed in multiples of Rs. 5,000/- as per customer’s needs. . Profit will be paid on Quarterly or Half yearly basis as per customer decision at the time of booking the deposit. Profit will be credited directly to your PLS Savings / Current account and can be withdrawn by HABIBMETRO Access ATM/Debit Card or Cheque book. . Upon maturity, principal plus profit payable will be credited to your link account unless rollover instructions are given at least 3 (Three) working days before maturity. . All payments will be subject to Zakat (as per rules). . The loaning facility offered is essentially of temporary nature and the account holder(s) can obtain the loan up to 80% of the amount placed in the scheme.

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HABIB METROPOLITAN BANK. i. HMB MAKRO Prepaid Cards:

HMB and Makro-Habib Pakistan have together launched a prepaid card program.

Prepaid Gift card:

. The Gift card has a fixed value of Rs 1,000 and is a disposable card. . Available at all Makro stores; for purchases over Rs 10,000, please visit nearest HMB branch in Karachi & Lahore. . Provides well-structured, hassle-free solutions to your home or business for extending benefits to your employees; these benefits may be part of their monthly wages, payrolls or periodic bonuses. . Gift card is most ideal to channel your social contributions to the underprivileged by eliminating the risk of any misuse.

Prepaid Shopping card:

. The Shopping Card carries value of Rs 10,000 which can go up to Rs 250,000 in multiples of Rs 5,000. . This is a multiple-use, reloadable card. . Carries great benefit for your family or business to make daily/periodic purchases with no risk of cash losses or misuse. j. HABIBMETRO Super Current Account: . The minimum amount required for opening and maintaining this account is Rs. 100,000/- . This is a current account, which can be operated from any HABIBMETRO branch nationwide. . Cheques are acceptable at all HABIBMETRO branches across Pakistan. . A non remunerative account. . No deduction of Zakat or any levies on this account. . Profit will be paid on monthly basis and will be credited directly to your PLS Savings / Current account. Profit can be withdrawn by HABIBMETRO Access ATM/Debit Card or Cheque book. . Upon maturity, principal plus profit payable will be credited to your link account unless rollover instructions are given at least 3 (Three) working days before maturity. . All payments will be subject to Zakat (as per rules), withholding tax and other government levies as applicable from time to time. . The account holder(s) can avail the loan up to 80% of the amount placed in the scheme.

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HABIB METROPOLITAN BANK.

Free features:

. Cheque Book . Payment Orders . Statements of Account . ATM / Debit Card . Web Info & Teleinfo . Online Funds Transfer . Rent free Lockers . Minimum investment amount is Rs. 25,000/- (Rupees Twenty Five Thousand Only). k. HABIBMETRO Mahana Scheme:

HABIBMETRO offers highly attractive investment opportunity for our Valued account holders. HABIBMETRO Mahana Scheme offers profit rates up to 9.30% per annum. You may deposit your funds for 1, 3 & 5 years, with monthly profit payment to suit your need.

Who can avail this Opportunity:

There are no restrictions as to the eligibility of depositors and the scheme is open for any investors / account holder.

Indicative Profit Rates:

Period Indicative Profit Investments in multiples of rates 1 Year 8.10 % p.a. Rs 25,000/- or Rs. 250,000/- (Rs. 168.75/- p.m. on Rs. 25,000/-) 3 Year 8.40 % p.a. Rs 50,000/- or Rs. 500,000/- (Rs. 350/- p.m. on Rs. 50,000/-) 5 Year 8.70 % p.a. Rs 100,000/- or Rs. 1,000,000/- (Rs. 725/- p.m. on Rs. 100,000/-)

. Minimum investment amount is Rs. 25,000/- (Rupees Twenty Five Thousand Only). . Profit will be paid on monthly basis and will be credited directly to your PLS Savings / Current account. Profit can be withdrawn by HABIBMETRO Access ATM/Debit Card or Cheque book. . Upon maturity, principal plus profit payable will be credited to your link account unless rollover instructions are given at least 3 (Three) working days before maturity. . All payments will be subject to Zakat (as per rules), withholding tax and other government levies as applicable from time to time.

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HABIB METROPOLITAN BANK. Habib Metropolitan Bank - Islamic Banking Division

Mission:

“HMB mission is to provide full range of Sharia’ah compliant products and services to our customers with no compromise on Sharia’ah rulings.”

Introduction To Islamic Banking Division:

Habib Metropolitan Bank has developed sufficient expertise, necessary infrastructure, information technology, and manpower to run Islamic banking operation.

Banking customers who wish to avail Islamic banking products and services are welcome to contact us to accomplish their banking requirements.

Our Islamic Banking Division is headed by an experienced banker who is responsible for the overall operational activities of the Islamic Banking Division. The Division has the advisory services of reputable Shari’ah advisors who also help in developing Islamic Banking Products. Islamic Banking Products

1) Deposits Products: . Islamic Current Deposits Account . Islamic PLS Account . Islamic Investment Certificates . Historical Profit Rates  Local Currency  Foreign Currency . Current Weightages  Local Currency  Foreign Currency

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HABIB METROPOLITAN BANK.

Financing Products:

. Local murabahah for financing raw material for locally manufactured goods and local murabahah for financing finished goods for local traders. . Local & import murabaha for financing raw material and finished goods for importers and exporters for trade finance . Ijara (Islamic lease) for financing equipments and machinery consumer and commercial vehicles . Ijara (Islamic lease) financing for consumer and commercial vehicles . Commercial property financing on diminishing musharakah basis . House financing on diminishing musharakah basis

Shariah Adviser - Profile of Mufti Abdul Sattar Laghari

Mufti Abdul Sattar Laghari holds a Shahada tul A'almiah (Dars e Nizami) and a Master scholar from Jamia Darul-Uloom, Korangi, and Karachi. He holds Specialization (Takhassus) in Islamic Fiqh and Fatwa from Darul Ifta wal Irshad Nazimabad 4 Karachi with Master in Islamic Studies from University of Karachi.

Mufti Laghari also holds a certificate of 1 year correspondence course in Islamic Law from Shariah Academy International Islamic University Islamabad Pakistan along with certificates of various courses on Islamic Banking and Finance conducted by Prominent learning Centers in Pakistan & Malaysia. He was a class topper in Islamic Banking Certificate Course # 20 conducted at NIBAF Karachi.

He has been providing Shariah Advisory services since 2005. He has previously worked as Shariah Advisor of one of the largest Bank of Pakistan and is part of NBFI & Mudarabah Association of Pakistan. Mufti Laghari has remained a member of sub committees for review of some AAOIFI shariah standards at State Bank of Pakistan. He is a master trainer in Islamic banking and Finance and has conducted extensive courses throughout Pakistan. During his career he has also issued numerous fatawas on general as well as financial & Islamic Banking issues.

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HABIB METROPOLITAN BANK. Company Profile

Company Registration Number K-03892 (CUIN: 0028018) Company National Tax Number 0711167-3 Registered Office Ground Floor, Spencer's Building, I. I. Chundrigar Road, Karachi - 74200, Pakistan Phone: (92-21) 111-14-14-14 Fax: (92-21) 3263 0404 - 05 Website: Parent Company Habib Bank AG Zurich (www.habibbank.com) Subsidiary Company Habib Metropolitan Financial Services (www.hmfs.com.pk)

Board of Directors

Mr. Kassim Parekh Chairman Mr. Ali S. Habib Director Mr. Bashir Ali Mohammad Director Mr. Mohamedali R. Habib Executive Director Mr. Muhammad Hyder Habib Director Mr. Tariq Ikram Director Mr. Sohail Hasan Director Mr. Syed Zubair Ahmad Shah Director Mr. Sirajuddin Aziz President & CEO

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HABIB METROPOLITAN BANK. Shareholding Pattern

As on December 31, 2012

Particulars Shareholding Percentage Individuals 135,931,712 12.97% Investment Companies 2,199,985 0.21% Joint Stock Companies 6,839,705 0.65% Directors, Chief Executive 26,399,746 2.52% Officer and their spouse and minor children Executives 2,435,958 0.23% NIT / ICP 72,247,125 6.89% Associated Companies, 536,277,786 51.18% undertakings and related parties Banks, DFIs, NBFIs, 141,170,915 13.47% Insurance companies, Modarabas & Mutual Funds Mutual Funds 73,859,157 7.05% Foreign Investors 111,431,450 10.63% Co-operative Societies 9,843,073 0.94% Charitable Trusts 631,619 0.05% Others 901,034 0.09% Shares held by 3,018 1,047,831,480 100.00% Shareholders

Memberships:

. International Chamber Of Commerce . Karachi Bankers Club . Management Association of Pakistan . Overseas Investors Chamber of Commerce & Industry . Pakistan Banks' Association . Swiss Business Council . The Institute of Bankers Pakistan

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HABIB METROPOLITAN BANK. FUTURE OUTLOOK OF HABIB METROPOLITAN BANK

Up-till now HMBL has not been able to come up with different products in retail banking, branch banking, insurance, and mortgage. With the presence of large foreign banks like Citibank, RBS and Standard Chartered one finds it convenient to believe that HMBL faces tough competition in consumer banking from these worldwide giants. HMBL's net interest margin is one of the highest in the industry. Interest income is the major the major source of income for HMBL.

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HABIB METROPOLITAN BANK.

Conclusion

. Major factors like global financing disorder, economic slowdown and strict monetary policy were on the top but Pakistan bank caters all these problems. HMB is one of the top ten banks it is expected to play a major role in pioneering these newer markets. . Currently, the banking sector is facing two major problems. The first one is the decline in credit demand due to slowdown in the economic activities due to poor law and order situation, power crisis, inflationary pressure, and high interest rates. The other problem is . The mounting amount of NPLs (non-performing loans). With the exception of a few banks all the banks are exhibiting considerable rise in NPLs. These two issues are collectively dampening the banking sector s performance. . HMB offers branch banking,e-banking,consumer banking international banking and also offers Islamic banking to facilitate their customers. . At year-end, HMB s equity stands at Rs 18.9 billion at a comfortable 11.9% capital adequacy level against the required 10%. . The credit ratings denote a very high credit quality, a very low expectation of credit risk and a very strong capacity for timely payment of financial commitments.

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