EXECUTIVE SUMMARY

This is an internship report regarding the different products of UBL. It starts with an

introduction about Banking followed by the introduction of UBL. It gives a briefing

about all the financial products of UBL.

This report also includes the different features of these products. All the Services

provided by UBL has also been discussed and explained along with the strength and

weaknesses of the organization.

This report shows and internal architecture of the working of the UBL’sBusiness. It gives

a detail about the supporting department that has helped the business in their daily

working.

Financial analysis such as Ratio analysis, SWOT analysis, PEST analysis, Vertical

analysis of income statement and balance sheet ae also discussed in this report.

Also it discusses the objectives, policies of the organization. There are also some

suggestions/recommendations for UBL.

INTRODUCTION TO THE REPORT

INTRODUCTION:

Students of BBA (H) studying courses leading to Master degree in Finance are

required to undergo an internship programme of six months duration. This is an

essential academic requirement. The internship is followed by comprehensive

report writing, required to submit to the research and development division

(R&DD) of University of Education, Okara. This report is properly evaluated on

the basis of its description and analytical capabilities by internal and external

examiners. I did my internship in United Bank Limited Okara Branch.

PURPOSE OF STUDY:

The purpose of the study is to work in real life situation and learn banking

practice by doing. In this context its objectives are:

i. To analyze banking operations i.e. operational analysis, financial analysis.

ii. To develop concrete and feasible recommendations.

iii. To improve report writing skills.

SCOPE OF STUDY:

The study is confined to banking operations. An attempt, along with all its limitations,

to collect financial data and general statistics of the bank has been made. Keeping in

view the purpose of the study, which is to make an acquaintance with practical doings

in the bank, this seems a comprehensive effort.

LIMITATION OF STUDY:

It is to admit that the study attempts only those aspects, which are closely relevant to

the purpose of the study. facts and figures, which otherwise might be equally

important, but not having a direct bearing on the conclusions arrived at this study,

have been ignored.

The most important limitation from which the study suffers is the non-availability

of information in a manner required for analysis and the secrecy of the bank.

Another important limitation of the study is time and space constraint.

METHODOLOGY OF STUDY:

Both primary and secondary data were used in compilation of the report.

Methodological tools used were:

i. Primary Data:

Personal Observations.

Discussion with Bank Personnel.

ii. Secondary Data:

Brochures/ Manuals of the bank.

Annual Report

State Bank Foreign Exchange Manual

Bank internship reports on UBL available in library.

Journals, newspapers and books.

Internet.

MISSION

To provide innovative and high quality products to

its customers at the lower possible rates.To achieve

all set goals regarding service, performance and

good will.

VISION

To be a world class bank dedicated to excellence

and to surpass the highest expectations of our

customers and all other stakeholders.

Core Values

Honesty and integrity

Fairness and meritocracy

Humility and mutual respect

Caring and socially responsible

Teamwork and collaborative spirit

UBL Profile

Date EstablishedNovember 7, 1959

ChairmanHis Highness Shaikh Nahayan Mabarak Al Nahayan

 Deputy ChairmanSir Mohammed Anwar Pervez OBE

 President & CEOMr. Atif R. Bokhari

 Branches 1121 Domestic, 17 Overseas Branches

 Representative OfficesIranKazakhstanChina

 SubsidiaryUnited Bank AG Zurich, Switzerland United National Bank Limited, UK (Joint venture with NBP) UBL Fund Managers Limited United Executors and Trustees Company Limited

 Associated CompanyOman United Exchange Company, MuscatUBL Insurers Limited

 Offshore Banking UnitExport Processing Zone, EPZ Branch, Karachi, Pakistan

 Registered Office 13 Floor, UBL Building, Jinnah Avenue, Blue Area Islamabad, Pakistan

 Head OfficeState Life Insurance Corp. Building #1,I.I. Chundrigar Road, Karachi, PakistanP.O. Box No.: 4306Phone: (92-21) 111-825-111Gram: "UNITED"Fax: (92-21) 2413492

Overseas

UBL, with an integrated network of over 1121 branches globally, with 17 overseas

locations, gives you direct access to a comprehensive range of better banking facilities to

help you monitor your business internationally.

 We have branches in:

 Bahrain

 Qatar

 Other offices

 Off Shore Banking Unit

 Republic of yemen

 UAE

 United States of America

 

and subsidiaries in:

 United Kingdom

 Switzerland

    

ORGANIZATIONAL STRUCTURE OF

UNITED BANK LIMITED

Organization Chart at Branch Level

Area Manager (A.M)

Internal Audit Branch Manager orArea Operational Manager

Credit Committee

CustomerDeposit

Cash &Clearing

Bills &Remittances

Marketing Advances Accounts

I.T ForeignExchange

FUNCTION HIERARCHY

Organizational Hierarchy of UBL

UBL SETUP

Chairman

Deputy Chairman

Board of Directors

Executive Committee

Managing Director

SEVP

EVP

VP

Officer Grade-I

Non Clerical

Staff

Clerical Staff Officer

Grade-II

Officer

Grade-III

MANAGEMENT OF UBL

BOARD OF DIRECTORS

EXECUTIVE COMMITTEE

Treasury &CapitalMarket

CorporateBanking

InvestmentGroup

Consumer Banking

Human Resource

Mgt.

FinanceDepartment

MarketingDepartment

ITDepartment

Audit&

Inspection

Service&

Quality

AgriLoans

ComercialBanking

Senior Management of UBL

BOARD OF DIRECTORS

Board of Directors is the owners of the bank and governs the Bank’s Affairs,

which currently consists of President Chief Executive Officer & seven directors.

Sheikh Nahyan Mabarak Nahayan chairman

Sir Mohammad Anwar Pervez Deputy Chairman

Amar Zafar Khan President

M.A Manna Deputy CEO

Nauman Hussain Director Operations &

Utilities Mansoor M. Khan

Head Corporate Banking Group

Shaharyar Ahmed Head Investment Banking

group Shahid Waqar Mehmood Head Commercial bank

Risha Moheyuddin Global Treasurer

Khalid Munawar-ud-dinHead Credit Policy

Supervision Muhammad Ejazuddin

Audit Chief

Mehboob A.Khan

Aman Aziz Siddique

Head International Operations (Dubai)

Rukhasana Asghar Global Head Human

Resources

Ali sameer Chief SAM (domestic)

Ameer Karachiwala Chief financial Office/HCA

The CEO has an overall responsibility for the strategic direction, government

relations and to manage the portfolio of business and its functions.

NAME DESIGNATION

His Highness Sheikh Nahayan Mubarak Al

Nahayan

Chairman

Sir Muhammad Anwar Pervaiz, OBE, HPK Deputy

Chairman

Mr. Atif R. Bukhari President & CEO

Mr. Omar Z. Al Askari Director

Mr. Zameer Muhammad Chaudary Director

Mr. Ahmad Waqar Director

Mr. Javed Saqib Malik Director

Mr. Tehsin Khan Iqbal Director

Chairman

His Highness Shaikh Nahayan Mabarak

Al Nahayan

Deputy Chairman

Sir Mohammed Anwar Pervez OBE

President & CEO

 Mr. Atif R. Bokhari

Director

Mr. Omar Ziad Jaafar Al Askari

Director

Mr. Zameer Mohammed ChoudreyDirector

Mr. Ahmad Waqar

Director

Mr. Javed Sadiq Malik

Director

Mr. M. Tahsin Khan Iqbal

Mr. Aly Shah

Barrister-at-law, Company Secretary

EXECUTIVE COMMITTEE

The Head of the Executive Committee is the President of UBL (Mr. Atif R. Bokhari).

Mr. Atif R. Bokhari

President and C.E.O

 

Mr. M.A. Mannan

Group Executive

Consumer/Commercial Bank

 

Mr. Nauman Hussain

Group Operations &

Technology Head

Mr. Risha Mohyeddin

Group Executive Treasury

& Capital Markets

Mr. Aameer Karachiwalla

Group CFO

 

Mr. Ayaz H. Shamsi

Group Executive

Human Resources

Mr. Muhammad Ejazuddin

Group Audit &

Inspection Head

 

Mr. Tariq Mohar

Group Business

Support / Collections Head

 

Mr. Mohammad Asghar

Group Commercial Bank Head

Mr. Ali Sameer

Group Head SAM

Investment Banking

The Largest Investment Bank in Pakistan

Dedicated specialist team of 14 investment bankers. Supported by over 50

relationship managers in six different locations in Pakistan alone.

IBG provides innovative and unique solutions to its clients enabling them to meet

the challenges of an ever- changing market.

Features :

Well established execution experience.

Rich international and domestic investment banking product knowledge.

Strong distribution capability.

Three specialist business areas:  

Project & Structured Finance

Syndications & Debt Capital Market

Equity & Advisory

Awarded the “Largest Investment Bank” award by The CFA Association of

Pakistan for three consecutive years (2003-2005).

Awarded the "Corporate Finance Transaction of the Year" by The CFA

Association of Pakistan for FY 2005.

Current mandates add up to over PKR59 billion (US$967million). A healthy

mixture of Debt, Equity & Advisory transactions.

Structured and executed debt and equity transactions totaling over PKR 45

billion (US$744 million) in 2006, PKR60 billion (US$1billion) in 2005, and

PKR52 billion (US$866 million) in 2004.

Corporate Banking

Our mission is to serve all your corporate needs and ensure your full satisfaction through

product innovation, personalized banking, and top notch service.

The CBG department of UBL defines corporate banking in Pakistan. Amongst the local

banks UBL CBG is the pioneer in providing innovative solutions to its diversified and

satisfied customer base. UBL CBG is considered to be a major player in the financial

market of Pakistan.

The Corporate Banking Group focuses on attracting and servicing large portfolio

customers. Our forte is providing exemplary customer service using the "Single Window"

concept and product superiority. The Relationship Management team manned by highly

qualified individuals from the industry has steadily expanded our customer base and

continues to enhance our cordial relations with our esteemed clients.

Despite the sluggish economic growth in recent years, UBL outperformed all the other

local banks in the corporate banking sector primarily due to CBG's emphasis on

establishing and enhancing relationships with foreign/local blue chip and middle market

customers thereby capturing significant market share.

UBL's appetite for large exposures coupled with dedicated Structured Finance Unit, and

an innovative team of professionals having extensive experience of Corporate Banking

gives it the right platform to succeed in today's competitive and a demanding

environment.

The success of CBG has been established from the fact that UBL received the 'No.1

Euromoney 2000' Best Local Bank award and recognized it to have out performed all

other banks. In year 2000, UBL was also voted as the best Corporate Bank by the

customers of a major foreign bank in a survey. Aggressive marketing combined with

professionalism has led to an increase in UBL's market share with top corporate

customers and in some cases replacing Foreign Banks. Presently, its portfolio includes

the quality names in the country, which were initially confined to foreign banks only.

Introduction to UBL

Banking History

Consensus on the origination of word “Bank” is not yet reached at. Some author’s

opinion is that this word is derived from the words “Bancus” or “Banque”, which mean a

bench and they further relate banking business inception to Jews in Lombardy.

Other authorities state that the word “Bank” is derived form the German word “Back”

which means “Joint Stock fund” and later on due to German occupation of Italy, this

word was Italianated into “Bank. Authors quote Babylonians (few quotes Chinese) who

developed banking system as early as 2000. B.C1

Commercial Banking in Pakistan

Banking started in Pakistan after the bold and emergent decision of formulation of SBP

on July 30, 1948. Thereafter this sector has witnessed enormous growth. In 1974 banks

were nationalized, in the hope that new era of growth could be achieved through it.

However the process is reverse since 1991, up till now MCB, ABL, and UBL have been

privatized and HBL is in the process of its privatization.

BIRTH OF UBL

On November 9, 1959, UBL was notified and included as a private schedule bank with

authorized capital of Rs. 20 million; issued and paid up capital of Rs. 10 million divided

into 1 million shares of Rs. 10/ each. Currently BOD and president/ CEO Mr. Amar Zafar

Khan being a member of this newly formed set up manage UBL.

Chairman His Highness Shaikh Nahayan Mabarak Al Nahayan and Deputy Chairman Sir

Mohammed Anwar Pervez are the two supreme controllers of the bank’s affairs.

1

NUMBER OF BRANCHS

UBL has a large network of branches, which extends to the remotest areas of the country.

In December 1983, there were 1623 branches whereas in 1974 it had only 1238 branches

and in October 2009 these figures show total number of 1112 branches3.

UBL has been very active in increasing its overseas branches network. The first foreign

branches were established in London in 1963. Now UBL has branches in Bahrain, Qatar,

Saudi Arabia, United Arab Emirates, Yemen Arab Republic, UK Switzerland, Egypt,

Oman and The United States. These branches are playing a significant role in channeling

home remittances and foreign trade of Pakistan.

SUBSIDIARIES

UBL has four subsidiaries, namely:

United National Bank Limited (UNB), UK

United Bank AG (Zurich), Switzerland

United Executers and trustees Company Limited

United Bank Financial Services (Private) Limited

FUNCTIONS OF UBL

UBL is a commercial bank, which transacts the business of banking in accordance with

the provisions of BCO, 1962. Section 7 of the Act authorizes banks to engage in the

prescribed form of business. In the light of this section UBL’s functions can be

categorized as under:

Agency services

General Utility Services

3

Underwriting of loans raised by the Government or public bodies and trading by

corporations etc.

Providing specialized services to customers, and

Hajj-related services.

ROLE OF UBL BANKING SECTOR

The impressive growth and development, which UBL achieve, present it undoubtedly the

most dynamic and progressive. In a very shorter period of time it became one of the

leading banks overtaking several other older and its competitor banks4. The major

contributions5 the bank ahs made are enlisted below:

Record setting performance and commitment to serve the customers

Personalized service and dynamic approach

Catalyst of changes

Professional management

Modern banking policy

Human resource development

Small loans (or) micro credits

Pacesetter in economic research established in 1967, department for economic

research.

Utility bills collection

Credit cards (unicard-1970)

Travelers Cheques (Humarah-1971)

4

5

Products and Services

You as an individual can gain and benefit the most through UBL Consumer Banking. In

UBL you get friendly, efficient and attentive personalized banking services - a unique

banking relationship experienced by each UBL client. You can utilize the following

services:

1: DEPOSIT PRODUCTS

UBL Business Partner Account:

THE CURRENT ACCOUNT THAT OFFERS FREEDOMTHE CURRENT ACCOUNT THAT OFFERS FREEDOM

UBL Business Partner comes with unmatched free* offers. We truly value your

partnership and believe in offering you the preference you deserve.

Now individuals and sole proprietorships can become our preferred Business Partner by

maintaining Rs. 250,000/- or above in their current account and get the following services

absolutely free!

Unlimited Real Time Online Transactions

Issuance of Pay Order, Demand Draft & Telegraphic Transfer

UBL Wallet ATM/Debit Card

Cheque Book

Collection / Clearing of Cheques

Lockers, small, medium and large (subject to availability)

No Cheque Return Charges

50% discount on UBL Credit Card Annual Fee

Rupee Transaction A/C

 If you choose to keep a deposit in a secured savings account which also gives an

attractive rate of return, then UBL’s PLS Savings Account will serve all your financial

needs. By keeping your deposits in UBL’s PLS Savings Account you can also avail the

following services:

Special features areSpecial features are:

  No limitation on withdrawals.

Share of profit is credited on half-yearly basis.

Profit is calculated on monthly balance.

UBL offers free accidental and permanent disability

insurance to individual and joint account holders.

UBL Basic Banking Account- BBA :

To accommodate the banking needs of low income groups, United Bank Limited is

pleased to launch the UBL Basic Banking Account Scheme (UBL BBA) from February

25, 2006 across its branch network all over Pakistan. This is primarily aimed toward

helping the low income group to benefit from the banking services without having the

pressure to maintain specific balance amount with the banks. Find below basic product

features of the Product:

The minimum initial deposit at the time of account opening is to be Rs. 1000/-.

Basic Banking Account will be a current account.

There is no minimum balance penalty on UBL BBA accounts, however all

accounts having nil balance for a continuous six month period shall be closed.

All Business Partner waivers allowed if the account holder meets minimum

balance requirement condition as per SOC.

BBA customers will be allowed unlimited free ATM withdrawals from UBL’s

own ATMs. However, withdrawals from other banks’ ATMs will be charged as

per the existing SOC (currently Rs. 15/- per transaction). Annual fees including

issuance and renewal of ATM card will be charged as per existing SOC.

UBL UNIFLEX ACCOUNT:

UBL has introduced a new kind account, ideal for small investors, trader’s businessmen,

and customers from middle-income group. They can now afford an amazing rate of return

plus value added benefits only available from the UBL uniflex PLS saving account.

Amazing rate of return

Convenience of a cheque books

Power of Wallet Visa ATM/Debit card

Online banking facility

Terms and Conditions

All individuals and joint stock holders are eligible for the UBL Uniflex account

Corporations and Partnerships are ineligible

Only one UBL Uniflex on per computerized CNIC shall be allowed to be open in

UBL

If the amount balance touched during the month exceeds Rs 200,000 interest shall

only be paid on Rs. 200,000 and no interest will be paid on exceeding amount

The UBL Uniflex account cannot be overdrawn

All single debit incidents to an account will be considered as separate transaction

Except deduction by the bank for charging service fee, Withholding tax and zakat

deduction

UBL UNISAVER ACCOUNT

UBL UniSaver Account is an innovative way of serving your banking needs. Be it trade,

business or personal finance, the UBL UniSaver allows you maximum flexibility, yet

gives you optimum returns.

Innovative and flexible checking account

Attractive rates of return

Profit is calculated on monthly average balance

Profit payment is on six monthly basis

Higher returns on higher balance

Backed by the bank awarded AAA Credit Rating

PLS SAVING ACCOUNT

You can open a PLS Savings Account with an initial deposit of Rs. 2,000

Your share of profit is credited half-yearly and is calculated on monthly balance

You can withdraw your savings through cheque .

UBL E – TRANSACTION:

When it comes to electronic financial services www.ubl.com.pk is Pakistan’s favorite

Internet destination and why not!. With years of experience in innovation United Bank

offers a wide spectrum of world-class of electronic services and banking products for

trailblazers like you.  

FOREIGN CURRENCY TERM DEPOSITE RECIPTS:

UBL Unizar plus, a highly lucrative foreign currency account offers the following

features:

Account can be opened in 4 currencies

US DOLLARS,

GB POUND STERLING

EURO

J YEN

No restriction on there transfer of funds to anywhere in the world

You can maintain current, saving or term deposit accounts

Attractive rate of return

Resident or non-resident Pakistani firms and companies are eligible to open these

accounts

Minimum balance required: USD 500

Except from ZAKAT

Withdrawals allowed in foreign currency.

REGULAR TERM DEPOSIT

If you wish to make a secured long t6erm investment, UBL,s term deposit receipt is the

smart choice just make an investment and see your deposit go over

You get an attractive rate of return

Your profit is credited to your account every six month

You can avail the roll over or renewed option at any time before encashment

Avail different attractive rates depending on the tenor you choose

Get the pleasure of availing the best rates

Avail the service of 9 - 5 non stop banking

AVAILABLE TENORE

1MONTH, 2MONTH, 3MONTH, 6MONTH, 1YEAR, 2YEARS, 3YEARS

SPECIAL DEPOSITE RECIPTE

If you wish to park funds for a short period then UBL offers Special Notice Deposit

Receipts (SNDR).

Attractive rate of returns

Secure investment

Profit will be disbursed on a half yearly basis

Availability of options to invest funds for 7 days and 30 days.

SNDR can be en-cashed at any time before maturity period

SNDR can be issued through checking account

UBL offers free accidental and permanent disability insurance to individuals

and joint account holders

2: Products of Foreign Exchange2: Products of Foreign Exchange

MONEYGRAM

TEZ RAFTAR

IFTT

Money GramMoney Gram

Receive remittance from 136 countries in 10 minutes .UBL, together with MONEY

GRAM, the internationally recognized worldwide transfer service provides overseas

Pakistanis the benefit of a fast and reliable remittance service.

SpeedSpeed

Money transfer time from any foreign country to Pakistan is only 10 minutes.

ConvenienceConvenience

UBL authorized branches, in Pakistan, are linked to 36000 money gram agents in 136

countries

SecuritySecurity

Professional expertise and expertise and experience of UBL & money gram guarantee

the safety of your money transfer.

FlexibilityFlexibility

The service does not require you to be a UBL account holder.

TEZRAFTARTEZRAFTAR

Free Doorstep Remittances With-in the country or from abroad, UBL offers the most

efficient and price competitive service. With our large network of branches, we are

poised to offer you service almost at your door step.

UBL's new remittance service, TezRaftaar offers all overseas Pakistanis the fastest and

the most convenient delivery of their money to their beneficiaries in Pakistan. Best of all,

TezRaftaar is completely cost free and is available at all UBL branches along the Bank's

Network in the Middle East, UK and US.

Check out its great benefitsCheck out its great benefits::

Fastest delivery to your given address in Pakistan

Doorstep delivery by authorized courier

or credited to the recipient's account

Free of charge transfer service

Open to all including those who are

not UBL account holders

Complete reliability of transaction

3: Cards and Loans

UBL Credit Card

UBL Businessline

UBL Cashline

UBL Address

UBL Drive

Remittances

UBL CREDIT CARD

It is the Pakistan’s 1st Chip Credit Card, that guarantees you both enjoyment and high

value. It assures you global acceptability in more than 22 million establishments

worldwide in 130 countries and in more than 12, 000 outlets within Pakistan.

You

can now withdraw cash through your UBL

Credit Card’s instant cash advance facility from any designated UBL ‘Cards Payments’

Branch nationwide, and at more than 700,000 ATMs and financial institutions

worldwide displaying the VISA/ PLUS logo.

UBL BUSINESSLINE

UBL Businessline… a complete solution to all your Business Financing needs. UBL

Businessline is a running Finance facility that not only provides funds for growth but

also enables you to capitalize on profitable opportunities. With UBL Businessline, now

you will surely say: "Ab Hui … Kamiyaabi Meri Manzill'.

Utilize up to Rs.10 million:

Mark up on utilized amount only:

Faster Processing:

UBL Cash line

UBL Cash line is a flexible loan that provides you cash up to Rs.500, 000 without any

security requirements. It empowers you to take control of your finance. UBL Cash line is

aimed to make your life easier…ZINDAGEE ASAAN. Whether you are a salaried

individual or a businessman, UBL Cash line takes care of your cash requirements

UBL Address

Owning a house of your very own is a cherished dream. A lot of planning and hard work

is involved in making this dream come true. That is why, at UBL we aim to make your

decision easier, by offering you the right ingredients that can help you realize your dream

with absolute convenience.

UBL Address empowers you to become the proud owner of a home by offering a variety

of product and pricing options that are flexible yet affordable. So choose the best product

option and pricing to suit your needs. All product options are amortized and range over a

tenor of 3-20 years.

UBL Drive

Accelerate your life; Drive the way that suits you! UBL Drive is a unique auto financing

product which offers you features, option and flexibility unmatched by any other bank,

because at UBL, You come firs t.

UBL UniSaver

UBL UniSaver Account is an innovative way of serving your banking needs. Be it trade,

business or personal finance, the UBL UniSaver allows you maximum flexibility, yet

gives you optimum returns.

Daily Profits on your daily balance

Higher returns on higher balances

Attractive rate of return

Backed by the bank awarded AAA Credit Rating

ADVANCES

There are two types of Advances which UBL provides:

a) Fund Base Advances

b) Non-Fund Base Advances

FUND BASE ADVANCESFUND BASE ADVANCES

hese are those advances in which actual payment of funds is involved. These funds again

have been dividend into two types.

1. Running Finance or Cash Finance1. Running Finance or Cash Finance

This is a loan, which is provided only to the running businesses to meet their

working capital requirements. The bank decides limit on continuing bases. It

means that the customer can draw the amount as much he is required as approved

by the bank. He can deposit and withdraw the amount on his account.

2. Demand Finance Facility2. Demand Finance Facility

The bank on demand provides this facility. It means that the bank pays the full

amount to the client and mark up is also payable on the full amount. The bank

considers the full amount outstanding.

The bank provides also facility of loan to its own employees against the security

of their immovable property. The rate of markup on these advances is lesser as

compared to the rate of markup on the other advances.

NON-FUND BASE ADVANCESNON-FUND BASE ADVANCES

There are three categories of Financing:

a) Agricultural Finance

b) Seasonal Finance

c) Industrial Finance

Agriculture Loans:-Agriculture Loans:-

Three are three types of agriculture loans:

Short TermShort Term:-

Duration of 1 year

Production loans are short term loan

Medium TermMedium Term:-

Limit upto 5 years

Long TermLong Term:-

Upto 7 years

Development loans are long term loans

Types of Loans:-Types of Loans:-

Production Purposes

Development Purposes

1. Production Loan

Financing is available for Major and Minor crops across Pakistan. Main purpose of

financing is to facilitate farmers to purchase Agri Inputs such as Seeds, Fertilizers,

Pesticides, Sprayers, hired labor etc.

2. Development Loan

Land Development, Equipments and Machinery

Financing for Land Improvement, Water course improvement, Tube wells, Lift pumps,

Deep turbine pumps, Cotton pickers, Godowm Cold Storage, Harvester, Thresher, etc

Loan Tenure 1 to 5 years

Tractor & Vehicle Finance To purchase Tractors, Delivery Vans, Mini Trucks, Motor Cycle and other vehicles used

for marketing Agri Products

LOAN TENURE

1 to 3 years for Motor Cycle

1 to 7 years for Tractor

1 to 5 years for other 4 wheel vehicles

Repayment mode monthly, quarterly and half yearly

4: Other Services

UBL Net Banking

UBL WIZ Card

UBL e-statement

Hamrah

UBL Wallet

Small business scheme

Car financing

UBL ATM

UBL Net Banking:

UBL Net Banking is an internet banking portal offering a simple, convenient and secure

method of accessing bank accounts on the internet. Its never being so easy to access and

manage your finances in a secure real-time, online environment

UBL WIZ CARD

WIZ is easily available with the facility of reload in the selected branches of the UBL.

This can be used for online Purchase and shopping in different shops. And have a facility

of easy withdraw of money from ATM. In Pakistan and in foreign countries, attachment

of VIZA with your WIZ card can be use in those ATM’s and places where VISA is

acceptable.

UBL e-statement:

UBL is pleased to announce the launch of the UBL e-statement facility which it easier for

you to get your statement of accounts and automated transactional debit/credit alerts right

into you inbox.

Hamrah:

UBL has always been adding the forefront in identifying and meeting the financial needs

of its valued customers. UBL was a pioneers an introducing Rupee Travelers Cheque

facility in Pakistan, as early as 1971. In continuation of the same tradition, UBL in the

shape of, “HAMRAH” Rupee Travelers Cheque enhances this facility for the

convenience of its valued customers by offering denomination up to Rupees 10,000.

UBL has a 24 hours customer’s help-line, providing its customers with round the clock

tele-verification of HAMRAH Rupee Travellers Cheques.

UBL Wallet

UBL Wallet VISA as your debit card, you can shop all you want, eat all you can or fill up

car tank without carrying any cash.

UBL WALLET all the Cash you NEED

UBL Wallet, now with the power and international acceptance of VISA!

Your Wallet VISA ATM & Debit Card has all the convenience and security you desire

and the quality you deserve. This Wallet holds all the cash in your bank account.

Available to All UBL Account Holders

UBL offers ATM and Debit Card facility to all account holders at all UBL branches

anywhere in Pakistan, regardless of whether their branch is online or offline.

Nine Supplementary Cards

UBL Wallet \/ISA also gives you the facility of having up to 9 supplementary cards

issued against one primary card. All supplementary cardholders will be able to conduct

ATM/Debit transactions within the limits of the primary card account.

Small Business Scheme

Under the Small Business Scheme, UBL is providing loans on easy terms to those who

wish to set up their own small-scale business. This scheme is aimed at spreading

prosperity in the country by reducing unemployment.

As more and more people start their own industrial units, the country will move steadily

towards economic self-reliance.

New Car Financing

UBL Drive allows you to drive away in your own car by making a down payment of just

15% and to top that with low monthly installments.

UBL Money

UBL money, the personal installment loan from UBL provides you with power, Control

convenience and the flexibility to manage your financial requirements and realize on your

dreams.

It’s about buying new furniture or marriage expenses, financing the education of your

child or enjoying vacations abroad! UBL Money caters your needs handsomely. You can

borrow any sum between 50,000 to 500,000 (PKR) and payoff up till 5 years. We know

what you need at what time. Just give us the opportunity and let us serve you best.

UBL ATM

ATM stands for Auto Teller Machine. In Pakistan ATM are installed at all big and

commercial branches. There are two type of debit cards

1- WALLET GOLD

2- WALLET SILVER.

These are debit cards. In wallet gold card you can withdraw money upto Rs.2,00,00/- and

in silver category you can withdraw money upto 40,000 daily.

An other salient feature of this machine is that you can withdraw money just if you have

debit card of any national bank. Moreover for immediate assistance there is a telephone

installed with ATM and you can get information just by picking up the receiver. You will

directly link with head office where several people are hired for your help.

UBL DEPARTMENTS

1: DEPOSIT DEPARTMENTS

As per the definition of “Banking” under see 5(b) of BCO 1992 one of the main functions

of a bank is to accept deposit. Deposits are the backbone of any bank; other functions of

the bank primarily depend upon the type and size of deposits.

The bank accepts the deposits at a low rate of interest and lends it at higher rate of

interest, the difference between the lending and accepting rate is the Source of income for

the bank. Keeping in view the above factors UBL offers the following types of deposits:

Current Deposit

Saving Deposit

Fixed Deposit

The classification of the deposits in to current, saving and fixed accounts is mainly on

the basis of duration and purpose for which the account is maintained at a bank

CURRENT DEPOSIT

Current deposit is running deposit because, customer can withdraw deposited amount at

any time, whenever he feels need. The customer can withdraw without any prior notice

to the bank. The bank has to pay the cheque provided within the limits of the account

balance. The main thing is that bank does not pay any kind of interest on current

account. Actually this deposit is for the business purpose. The bank cannot invest the

deposited amount under current account heading, because of the fear of withdrawal.

Bank has to keep with it a higher reserve ratio to meet the needs of the current account

holders.

SAVING DEPOSIT

Saving Account is an important source of funds for the bank. The purpose of this

account is to attract the small saving of the general public. Normally workers,

schoolboys and employees of the organizations use the saving account facility. UBL

also provides this facility to the general

public against a certain rate of interest. The new name of this account is now a day is

PLS-Saving Account. If a customer wants to withdraw a large sum of money (above

15000), he will have to give a notice of 7 to 14 days in writing to the bank. Saving

account deposits provide a chance to the bank to invest safely, because customer can

withdraw small amount of balance.

FIXED OR TERM DEPOSITS

Fixed or Time deposits accounts are the major source of the capital for investment for

the bank and cannot be withdrawn as in case of the current account. The amount

deposited can be received back after a certain specified period of time. The rate of

interest paid on fixed Deposits is normally higher than saving Deposits. The rate of

interest also varies due to time period. More the maturity period of the account more

the interest is paid by the bank. After the expiry of the period the customer presents the

receipt to bank and received the amount in cash or bank added in the customer accounts

as agreed between bank and customer.

2: ACCOUNT OPENING DEPARTMENT

A customer can open the following three types of accounts:

1) PLS-Saving Account

2) Current Account

3) Fixed Account

1) Saving Account

Saving account is also divided into two types further,

Individual saving account

Joint Saving Account

I. Opening of Individual Saving Account

An individual person can open this type of account. UBL has defined the following

procedures for the opening of individual saving account:

Signature specimen card, the bank to get authorized signature of the customer as

specimen for avoiding any future discrepancy gives Customer.

Account opening form, when a customer comes to open the new account in the branch

he is given a printed form, to be filled by him. Account opening form consists of full

name, address, and date of birth, occupation, telephone number, and N.I.D. card

number.

Guaranteed by the existing account holder, when the new account holder fulfills all the

requirements then he is asked to give some existing account holder guarantee, so that in

future the new account holder may not fraud with the bank.

II. Opening of Joint Saving Account:

Opening procedure for the joint saving is same as in case of individual saving account.

Just the difference is in the account opening form.

Signature specimen card is also used for the same purpose as for the individual saving

account, to avoid future discrepancy.

Account opening form, joint saving opening from has same information more than one

time because more than one person fills this form to open the account. Briefly is that no

one/single person can open this account, as a result it is called joint saving account.

2). Current account

A person, businessman and organization can open the following types of current

account.

I. Joint Current Account

II. Individual Current Accounts

III. Sole proprietorship Current Account

IV. Partnership Current Account

Joint Current Account

More than one person can open joint current account. Minimum balance of this account

is Rs.l0, 000 approx. If a joint holder dies then bank holds the account and refers case

to the court.

Individual Current Account

Only one person can open individual current account. Minimum balance in this case is

2500, if the balance in the account is less than this limit than bank sends a statement to

account holder to maintain the minimum balance. For withdrawal, checkbook is issued

and used no other instrument is used or accepted by the bank. Procedure for opening

this account is also same as in PLS-Saving account just the difference is in opening

form information, required by the bank.

Sole Proprietorship Current Account

In sole proprietorship organization a person invests his capital and devotes full time to

his business. Sole proprietor opens this account. Minimum balance that required in this

account is Rs. 1000. All the profit paid on balance will go to the sole proprietor only.

The account opening form of this account is different than others because this form is

filled in the name of the organization. The name of proprietor. Place and Date of birth,

Nationality, Passport number and National Identity Card number, have to mention on

this form.

Following documents certified copies are required with the application:

a) Most recent set of Account

b) Current Municipal Licensee

c) Commercial Registration Certificate.

Partnership Current Account

Partnership current account can be opened with the name of Partnership Company.

Before opening of partnership account shareholders has to decide that how many

partners have right to sign on cheque. The procedure is same for opening such account;

the difference is in the account opening form. Account opening form shows the name in

full, nature of business, principal place of business, address, location, and telephone

number, telex number. After that this form is divided into four sides with the name of

A.B.C.D. and showing the same information mentioned earlier.

Rules and Conditions

Bank can close /down any account at any time upon 48 hours write notice, after

the opening of the account.

The account number should be mentioned on all correspondence with the bank

when deposits or withdrawals are made.

The account holder must maintain the minimum balance requirement that is Rs:

1000.

After six-month bank refuse the payment of the cheques (post dated cheques).

Bank will not make payment if cheque is made unauthorized.

Account holder who is unable to sign, he will affix his left-hand thumb.

The cheque amount should not exceed to balance of account.

Any person opening a current account is deemed to have read, understood and

bound by the bank rules and conditions of current account.

3:ACCOUNTS DEPARTMENT

It is said that accounts department is the backbone of the bank. It plays a vital role in

performing different banking functions. The accounts department at UBL is performing

its function manually. Different books of accounts relating with other departments are

maintained here. With the help of these books of accounts, accountant prepares

monthly, quarterly, semi-annually and yearly financial statements.

The working in accounts department mainly depends upon voucher system. For each

and every transaction-taking place in the bank vouchers are prepared and through these

voucher contra entries are passed under different heads.

FUNCTIONS OF ACCOUNTS DEPARTMENT

The accounts department performs the following functions:

(a) To prepare and maintain the vouchers.

(b) To maintain and update the ledgers for term deposits.

(c) To update general ledger.

(d) To prepare different periods statements.

Accounts department Maintains and prepares the following ledgers and books of

accounts:

Daily General Ledger Expenses

Daily General Ledger Incomes/Receipts

Monthly General Ledger Assets

Monthly General Ledger Liability

Daily General Ledger Zonal Expenses

Daily General Ledger Inspection expenses.

Daily General Ledger Regional Expenses

Daily General Ledger Audit Expenses

Preparation of Different Statements

Accounts department prepares these statements,

Statement of Affairs

Statement of provisional Income

Statement of provisional Expenses

Statement of Head office A/C

Balance confirmation Book/Report

Transfer Book

LOCKERS

UBL is also providing lockers facilities to its customers. The account department also

maintains the record about lockers. The basic purpose of locker is to provide safe

custody to client’s valuable ornaments, jewelry or documents. Almost in all branches,

Lockers are available in different sizes at different rates. For availing this opportunity,

customer has to open his account in the same branch/bank.

Locker Operating Procedure:

Bank provides an application form to the applicant who needs to operate a locker in the

branch. This application form contains all rules and regulation regarding to obtain

locker. Specimen signature card is also filled in signed by the applicant. Bank assigns a

password to their customer for secrecy. Each locker has duplicate keys. One (master)

key is kept by the bank, and the other by the customer. In case of opening any locker,

first of all master key is applied and then the customer key. If the locker has been

obtained jointly then at the time of the opening, the person signed the application form,

should be presented there otherwise, the bank will not allow to operate the locker. Bank

officer has to maintain the following register for record keeping purposes of locker.

I. Locker Register

II. Operation Register

III. Key Deposit Register

Types of Locker

There are basically three types of locker at UBL that are as under:

TYPES OF

LOCKERS

RATES OF

LOCKERS

Per Annum

Small Rs. 1200

MediumRs. 1800

Large Rs. 3000

The key deposit fee is Rs. 600. Per locker and it is refundable at the time of closing an

account the breaking charges are Rs. 500 per locker and it is also refundable at the time

of closing of account, provided there is no breaking.

4: BILLS DEPARTMENT

This department basically deals in bills, which come in bank for collection. The bills

are cheques, call deposit, drafts and pay order. These bills are from outstation branches

of UBL or of other banks. This department provides services to customers at low

charges to get their amounts from the nearest branch.

HEADS OF BILLS

There are two main heads of the bills i.e.

Outward Bills For Collection (OBC)

Inward Bill For Collection (IBC)

Outward Bills for Collection

Bills department receives cheques or other kinds of bills from its clients. The condition

under Outward Bills for Collection is that the customer must have his account in the

branch. This branch forwards the cheque with schedule or covering letter to that branch

on which bill is drawn. The checking officer of bills department will cross the cheque

with special bank stamp before forwarding the cheque to the other branch.

Outward Bills for Collection Register

Outward bills for collection register is maintained in order to deep the records of all

bills for outward collections. This register is updated two times, first at time of

receiving the OBCs and secondly at the time when confirmation advice is received

from the other branch, either the cheque will be paid or not by the other bank branch.

After confirmation of the amount, confirmation advice is transferred to the sender

branch. After confirmation of the amount and bills, the account of the customer is

credited against reasonable charges, which is income for the bank.

Inwards Bill for Collection

These bills come to branch for payments so branch has to verify these cheques, pay

orders, drafts and call deposits etc. The party account must be opened in that branch

which sends it to paying branch .The responsibility under IBCs of the branch is to

verify all the bills within three days, and should send the bank advice to the originating

branch.

Inward Bills for Collection Register

Inward bills for collection register are maintained for future record purposes. Care is

made while posting the amount of bills in the register. Each bill is assigned a number

according to the register series. Every year the number starts from one and continues

for the whole year and next year again from one and so on.

5: Clearing Department

The major function of Clearing Department is to receive the cheques, which are drawn on

some other bank. The customer can get the money in his account at UBL, from the

cheques drawn on another bank. The bank accepts these cheques and collects the amount

from that bank on which cheque is drawn through the Clearing House. Bank charges

some commission for this function.

Pay-in Slip

The customer fills pay-in slip. This slip is just like deposit slip. The cheque number,

date, amount and account number must be written on this slip.

Stamping and Scrutinizing

The officer on receipt of cheques and pay-in slip will stamp the pay-in slip with “cheque

received” and give a portion of slip to customer and the remaining portion is attached

with the original cheque.

The original cheque will be marked with two stamps.

United Bank Of Pakistan

Clearing Stamp

At the end of day, all cheques are counted and then scrutinized in bank-wise and sent to

the Clearing House.

Billing and Government Receipt/Payment

This department is performing following functions:

Collection of utility bills

Collection of dues of education institution

Payment of salaries

Payment of pension

6: CASH DEPARTMENT

This is sensitive department of the branch. No other person is allowed to enter in the

premises of cash department. As obvious from name that this department deals in cash

deposits and payments. Cash department is performing its functions/duties manually.

For payments and receipts, it has to maintain certain sheets, books of accounts and

various ledgers, which are as under:

1) Cash received voucher sheet

2) Cash paid voucher sheet

3) Token register

4) Transaction ledger

5) Pay-In-Slip record

6) Cheque book record

7) Cash balance book

7: REMITANCES DEPARTMENT

Current business trends demand fast movement from one geo-graphic end to another.

Latest technology and telecom data transmission has made it possible to make such

transactions with in minutes. UBL Remittances Department performs following

functions.

Demand draft (D.D)

D.D is a negotiable instrument issued by branch of the bank drawn on other branch of the

same bank.

Procedure

Purchaser is asked to fill in an application form duly singed by applicant. Three things

should be maintained in the form.

Name of Payee

Place of payment

Amount of D.D

Telegraphic transfer (T.T)

Transfer of funds to another branch of the same bank with the help of test numbers. If the

test number agrees the bank make payment to the party.

Procedure

The procedure for T.T is same as D.D. But in D.D it is given on a printed-paper and

singed by two officers but, in T.T, only test number is given to the customer.

Mail Transfer (MT)

When the money is not required immediately, the remittances can also be made by MT.

Here the selling officer of the bank sends instructions in writing by mail to the paying

bank for the payment of a specified amount of money. The payment under transfer is

made by debiting the buyer’s account at the sending office and crediting it the recipient’s

account at the paying bank. UBL takes mail charges from the applicant where no excise

duty is charged.

Pay Orders

Pay order is banker cheque issued favoring a named beneficiary. The issuance bank is

discharged by payment in due course. Application for the

PO stamped and the customer’s account balance is checked or cash received for the

amount PO and other charges. Pay Order leaf is typed and crossed if required and signed

by two authorized persons. Thereafter it is delivered to the customer. PO can be cancelled

at original purchaser’s request in writing and surrender the instrument, which then

marked canceled along with other documents and prior entries.

Rupee Traveler Cheques

UBL has launched R.T.C Brand named “Hamrah” in November 1996. These are issued

to applicants with varied denominations without excise duty and commission. When

issued HO account is credited and on encashment the same account is debited. RTC’s lost

cases are communicated to HO and client is either repaid or new RTC’s are issued to

him/her.

Uni Remote

This is a new tool for the transfer of money. This is a step towards the online banking

taken by UBL. This tool transfers money from one branch of UBL to other through

electronic transfer. The customer will have to fill the deposit slip. On the slip he will

write the name and account number of the person to whom the money will transfer, the

name of the branch is also written. The amount is deposited with teller and the receipt is

shown to remittance inchraged. One I.D copy is also attached with slip. The remittances

incharge will transfer if by using device (computer) through online service. The fund

transfer is must be supervised by another authorized officer. Every time for this is five

minutes.

8: IT DEPARTMENT

Information Technology Deptt. is related with all computer activities like to manage the

Central Data Base (CDB) which is placed in Head Office of UBL Karachi in all the

daily transactions in all the branches of the country are up-dated on daily basis. This

Deptt. also makes the web site new news to web site. A spoke branch up-date the daily

transactions through computer networking to the its Central Branch. Suppose all the

withdrawing, deposits, remittances, collection and clearing data of the day is sent to the

Central Branch.

9: AUDIT AND INSPECTION

The responsibility of this department is to audit and inspect the operations of the

branches. Whether the operations are compliance by the branches in a right way or not.

The CCD (Control and Compliance Department) comes under this department. I will

discuss about the CCD in the branch level functions.

10: Human Resources Department

This Deptt. does all the activities related to HR and Personnel Management like Job

Analysis, Job Design, Job Description, Job Redesign, Job Specification, Recruitment (is

the process of finding and attracting capable applicants for employment through

Advertising, Employee Referrals, Private Placement Agencies etc.), Selection by

written tests and interviews, Orientation, Training, Career Planning, Performance

Appraisal (employee performance and accountability), Compensation and Protection,

Union-Management Relations etc. It also involves in the following activities:

  Transfers & Postings

  Scrutinizing bills (Hospital Bill)

  Staff Deceased cases & its Correspondence

  Retired employees Cases & its correspondence.

  Retrenchment cases

  Complaints and its correspondence

QUALITATIVE ANALYSIS

During my six months of internship period I have tried to fully commit myself in the

learning process. I kept critically observing the things that I could analyze and the result

of the exercise is presented as below.

A) Organizational

Existing organizational hierarchy hinders vertical communication and blocks flow

of information among the levels of management.

The workload is not equally distributed.

Coordination level among divisions/departments and employees are poor,

particularly speaking of between the top and lower levels of management.

There is centralization of authority and branch managers are bound and restricted

to take initiative.

Due to overlapping nature of duties and jobs there exists chaos and confusion in

branches.

B) Departmental

During my internship period in UBL, in various departments, I noticed following

departmental problems.

Cash Department:

i. Not very frequently but there are instances of fake currency notes, being

identified. At times notes received from other branches were found to have

certain fake currency notes.

ii. Counting mistakes occur due to overcrowding particularly during the

collection of utility bills. Manual counting system also affects efficiency of

the bank.

iii. Code of conduct of cashiers is found unsatisfactory.

iv. There is generally the lacking in observing and practicing bank’s relevant

procedures and SOP’s.

Remittances Department:

i. Application of tests for authentication of TTs is not known to al concerned

individuals that reduces the efficiency and further the wrong application of tests

prevent payments and the delay could dissatisfy customers.

ii. Telegraphic messages require specific skills and training. The employees are

partially equipped of such knowledge.

iii. Preparation, execution and management of TTs and MTs and particularly DDs

ask for mastering applicable rules and regulations and most of the staff was found

ignorant of those.

Deposit Department:

i. Newly designed AOF has an inbuilt deficiency of restricted space and cannot

accommodate more than two names.

ii. Identification of customer’s signature is very important particularly when cash is

to be withdrawn by him. Manual practices pose problems in those branches where

automation has not been done yet.

iii. In cases where the presence of customer himself is must, is sometime

compromised due to influences of\r fear of loss of customer.

Clearing Department:

i. Wrong endorsement and stamping causes loss to the customers and extra efforts

for the bank to repeat the procedures.

ii. Reasons for the return of the cheques at times are not mentioned on the return

memos.

iii. At times due to lack of training wrong stamps are applied on instruments.

Credit Department:

i. Timelines in cash disbursement is very important which is compromised due to

lengthy processing and documentation requirements.

ii. Relationship Managers need to be fully equipped with the requisite knowledge

and skills as presently plain BA/B.Sc qualified individuals are performing jobs of

MBAs.

iii. Lack of infrastructure for carrying out computerized financial analysis of

borrower’s business.

iv. Large pool of potential borrowers cannot apply for loans due to lack of collaterals.

Heavy collateral requirements restrict credit business of the bank.

v. The credit proposal and other documents at times are not properly and sufficiently

prepared before taking approval.

vi. Filing and record maintenance of credit related documents are not done

efficiently.

Bills Department:

i. Bills are sent to other cities; therefore, extra care should be exercised in making

entries and stamp affixing.

ii. Proper scrutiny at times is not carried out and it causes loss to the bank or increase

procedural timings.

iii. Employees at times mismanage their time and fail to forward bills promptly.

Foreign Exchange Department:

i. Problems of bills and remittances departments equally apply to foreign exchange

department. There is overlapping of functions and complete separation of function

has not been achieved thus leading to a state of confusion and conflict among

employees.

ii. Employees of this department are lacking computer-operating skills.

iii. Knowledge and educational background of employees working in this department

do not match with the job they are doing.

iv. Most of the employees of this department lack the ability to handle the Letters of

Credit.

SWOT Analysis

“A scan of the internal and external environment is an important part of the strategic

planning process”

Environmental factors internal to the firm usually can be classified as Strengths (S) or

Weaknesses (W), and those external to the firm can be classified as Opportunities (O) or

Threats (T). Such an analysis of the strategic environment is referred to as a SWOT

analysis.

Internal Factor: S Strengths W Weaknesses

External Factor: O Opportunities T Threats

The SWOT analysis provides information that is helpful in matching the firm's resources

and capabilities to the competitive environment in which it operates. As such, it is

instrumental in strategy formulation and selection. The following diagram shows how a

SWOT analysis fits into an environmental scan:

SWOT Analysis Framework

Environmental Scan          / \           

Internal Analysis       External Analysis / \       / \Strengths   Weaknesses       Opportunities   Threats

|SWOT Matrix

A SWOT analysis generates information that is helpful in matching an organization’s or

a group’s goals, programs, and capacities to the social environment in which they operate

STRENGTHS

It is one of the largest private banks with a deposit base of Rs. 94883/- millions

showing constant growth over the period from 1999 till the day.

It has a well-knitted and adequately equipped branch networking system that

efficiently covers both the domestic and international markets.

It is involved in both corporate and retail banking.

1056 Branches all over Pakistan

Stands in the list of Profitable bank in stock exchange

Largest number of corporate deals by any bank is Pakistan

3rdlargest Bank of Pakistan in term of deposits

2ndlargest Privatized Bank of Pakistan

The bank is actively emerging and is engaged in international trade and foreign

exchange transactions. Foreign trade volume showed an increase of 17% over the

previous year.

Advances investment of the bank shows a constant growth pattern. The current

year’s growth rate is 32%.

The overall efficiency of the bank operations and management ability can be

noticed by looking at to its income pattern and provisions/write off practices.

o Net revenue from funds increased by 18% for the current period.

o Provisions decreased by 14%.

o Total income increased by 16%.

UBL is actively participating in international markets and has recently introduced

credit cards in UAE, Behrain, and Qatar, being backed up by 24 hours call center

out of UAE.

The bank is owned by parties of financial repute and credit worthiness like, SBP

with 48.69% interest, Best Way group and Abu Dubai group with 25.50% of

interest each. Others are GOP, NBP Trustee Department, State Life Insurance

Corporation etc.

The bank is run by highly professional recruited from and trained by foreign

banks like Citi Bank.

WEAKNESSES

Due to risks such as political, economic and legal etc the bank has suffered losses

the main reason was that of piling up of large amount of unrecoverable loans and

debts which have adversely affected the image of the UBL.

Accumulated losses pushed the bank to cut down its promotional activities in

order to reduce expenses for last few years.

During the nationalization life span of the bank political lords used influence in

bank business and selection of employee at each level and thus adversely affected

the bank’s efficiency and effectiveness.

Administrative expenses are 51% of the mark up revenue.

Promotions are carried out on annual basis ignoring the importance of capabilities

and performance outputs.

The bank has large number of employees who are simple graduates with no

banking knowledge.

Ineffective system of recruiting and selection.

Lengthy credit processing and documentation procedures.

Unsatisfactory working conditions.

All branches need orientation for customer dealing.

No separate training center to train their employees.

Security system in most of the branches is not up to the mark.

OPPERTUNITIES

Growing policies of the GOP on business and economic sectors provide UBL an

opportunity to efficiently meet with the business people requirements of instant

cash facilities e.g. the government intentions of developing housing and

agriculture sectors.

The efficiency of stock market and sound exchange reserve level is providing a

good opportunity for effective investment decisions.

Foreign remittances are another area as present world wide control systems over

transfer of currencies through illegal channels has facilitated the area for the

banks.

Expansion of IT platform and internet based banking system.

Interest of businesses in leasing facilities provides a healthy opportunity for

banks.

There is a large pool of unemployed MBAs who can be hired to achieve

professionalism on its organizational culture.

Outsourcing of promotional companies or use of available excellent promotional

facilities.

Entering new market segments.

Increase the product range to meet the broader range of customers’ needs. •Bank

can extend its network in other cities of Pakistan like other 4 remote cities, it

would increase their sales.

Proper orientation of employees in all branches can help them to cope up with

foreign banks.

By bringing new technology and modern business processes will bring the change

and increase their profitability..

Government is taking very bold steps to promote IT in Pakistan UBL has an

opportunity to improve in IT stock exchange is very volatile and takes immediate

effect so in times of crises conservative investors turns to saving deposits.

UBL is surrounded by many competitors it has an opportunity to aggressive

marketing to increase its business.

Call centre services should be improved to enhance their network

THREATS

Increase in competition due to increasing number of foreign and domestic private

banks offering highly specialized and attractive services.

Growing global technological advancements and adaptation of modern style of

management in banking sectors.

Unemployment, lower level of income and prices like problems in the motherland

coupled with low rate of industrialization, geo political adverse conditions,

religious factor, lack of consistency in policies due to political instability are some

of the other major threats.

Threats are also external factors in the environment, which are not in the favor of

company, which can seriously hamper the company’s ability to serve its

customers.

Expansion of new commercial banks like ASKARI bank, UNION bank and etc..

And their better performance may cause loss of market shares of UBL.

According to World Bank report the Pakistan has become “over banked”

economy with cut throat competition for deposits in the industry the battle is on

for the market shares. The customers have emerged as the main Beneficiaries of

the competition. Now they are getting more personalized services and innovative

product.

All banks are facing a stiff competition to attract new customers. With

privatization program began in Pakistan in 1991, three of five NCBs and three

DFIs were privatized, and eleven new private banks were set up.

Along with the growth in size, the banks are now incorporating innovative

approaches to their traditional commercial banking operations, keeping in the

view the changing demand of the time. UBL face problem.

The political influences affect the performance of bank very badly. Most of the

loans become bad dad debits due to political pressure

No stable government in Pakistan, Government policies change with the change

of government.

The concept of evening and Saturday banking, telephonic and online banking,

ATM’s and credit cards are direct result of the intensive competition. But UBL is

behind the above-mentioned services.

Freezing of foreign currency account by the government of Pakistan is also a fear

for the bank.

Conclusion

This SWOT analysis is a mirror image of the bank’s present conditions. Some efforts are

made and others are still required to be made in order to improve the situation. The

management can develop elaborate strategic plans for capitalizing the available

opportunities. The bank should maintain principal of professional management and

adhere to sound and sophisticated banking rules and regulations so that confidence and

trust of the public in the institutions could be re earned.

PEST ANALYSIS

P E S T is an analytical tool which considers external factors and helps you to think about

their impacts.

• Is a useful tool for understanding the “big picture” of the environment in which

you are operating

• By understanding your environment, you can take advantage of the opportunities

and minimize the threats.

 

• This provides the context within which more detailed planning can take place to

take full advantage of the opportunities that present themselves.

The acronym PEST (or sometimes rearranged as "STEP") is used to describe a

framework for the analysis of these macro environmental factors

PEST Analysis Framework

    Environmental Scan

          /   \

External Analysis     Internal Analysis    

/                       \  

Microenvironment  Microenvironment    

|

P.E.S.T     

A scan of the a external macro-environment in which the firm operates can be expressed in

terms of the following factors

POLITICAL FACTORS

Political factors include government regulations and legal issues and define both formal

and informal rules under which the firms operate. The rule and regulations that the cement

industries follow are as follows

Government type and stability

Fiscal and Monetary Policy

Regulation and de-regulation trends

Social and employment legislation

Tax policy, and trade and tariff controls

Likely changes in the political environment

Employment Laws and Political Stability

Environmental and consumer-protection legislation

ECONOMIC FACTORS

Economic factors affect the purchasing power of potential customers and the firm’s cost

of capital. Economic factors can not be excluded for operating any business including

fertilizers.

Capital availability and Labor costs

Impact of globalization and Exchange Rates

Stage of a business cycle and Capital markets

Inflation and interest rates

Unemployment and supply of labor

Current and projected economic growth

Likely changes in the economic environment

Levels of disposable income and income distribution

Likely impact of technological or other changes on the economy

SOCIAL FACTORS

The social and cultural influences on business vary from country to country. It is very

important that such factors are considered. Factors include:

Health, safety and environment

Demographics: age, gender, race, family size

Cultural aspects, health consciousness, population growth rate, age distribution,

Organizational culture, attitudes to work, management style, staff attitudes

Education, occupations, earning capacity, living standards

Ethical issues, diversity, immigration/emigration, ethnic/religious factors

Media views, law changes affecting social factors, trends, advertisements,

publicity

TECHNOLOGICAL FACTORS

Technology is vital for competitive advantage, and is a major driver of globalization.

Consider the following points:

Technology legislation, new discoveries

Information technology, internet, global and local communications

Technology access, licensing, patents, potential innovation, replacement

technology/solutions, inventions, research, intellectual property issues, advances

in manufacturing

Transportation, energy uses/sources/fuels, associated/dependent technologies,

rates of obsolescence, waste removal/recycling

Does technology allow for products and services to be made more cheaply and to

a better standard of quality?

Do the technologies offer consumers and businesses more innovative products

and services such as Internet banking, new generation mobile telephones, etc?

How is distribution changed by new technologies e.g. books via the Internet,

flight tickets, auctions, etc?

Does technology offer companies a new way to communicate with consumers e.g.

banners, Customer Relationship Management (CRM), etc

Financial Analysis

Financial Analysis

“Financial statement analysis is defined as the process of identifying financial strengths

and weaknesses of the firm by properly establishing relationship between the items of the

balance sheet and the profit and loss account.”

Financial statements are the principal means of reporting the financial condition and

results of operations of a business entity. These statements are meant to assist various

parties in decision making who are interested in the activities of the business.

TECHNIQUES

Ratios analysis

Vertical analysis

Horizontal or Trend analysis

Common size percentages

Comparative statements

Schedule of changes in working capital

Funds analysis

ADVANTAGES

The major benefit is that the investors get enough idea to decide about the

investments of their funds in the specific company.

Secondly, regulatory authorities like International Accounting Standards Board

can ensure whether the company is following accounting standards or not.

Thirdly, financial statements analysis can help the government agencies to

analyze the taxation due to the company.

Moreover, company can analyze its own performance over the period of time

through financial statements analysis.

Financial statements are prepared to meet external reporting obligations and also

for decision making purposes

Common Size Analysis(Balance Sheet)

Common size Analysis

“An analysis of percentage financial statements where all balance sheet items are divided

by total assets and all income statement items are divided by net sales or revenue”

Vertical analysis is the procedure of preparing and presenting common size

statements. Common size statement is one that shows the items appearing on it in

percentage form as well as in dollar form. Each item is stated as a percentage of some

total of which that item is a part. Key financial changes and trends can be highlighted by

the use of common size statements

Component percentage indicates the relative size of each item included in the total known

as component percentage analysis, It also known as vertical or static analysis,

The expression of individual financial statement item as percentages of total helps the

analyst spot trends with respect to the relative importance of these items over time.

Calculation criteria

For Balance sheet each item could be expressed as a percentage of total assets.

For Income statement each item could be expressed as a percentage of total sales

such a statement called as common size statement.

Current Assets %

58

61.61

78.54

2007 2008 2009

By computing component percentages for several successive financial statements, it can

be conclude that, which items are increasing in importance and which are becoming less

significant.

Total Current Assets

United Bank Limited

Balance Sheet (common size analysis )

2007 2008 2009Total C.A 58% 61.61% 78.54%

Operating Fixed Assets

United Bank Limited

Balance Sheet (common size analysis )

2007 2008 2009Operating F.A 1.70% 1.48% 1.72%

Operating Fixed Assets

1.7

1.48

1.72

2007 2008 2009

L.T investment %

11.5

17.53

11.09

2007 2008 2009

Long Term InvestmentUnited Bank Limited

Balance Sheet (common size analysis )

2007 2008 2009L.T Investment 11.5% 17.53% 11.09%

Long Term Assets

United Bank Limited

Balance Sheet (common size analysis )

2007 2008 2009

L.T Assets %

42

38.39

21.45

2007 2008 2009

Current Liabilities

69.36

67.86

71.73

2007 2008 2009

L.T Assets 42.00% 38.39% 21.45%

Current liabilitiesUnited Bank Limited

Balance Sheet (common size analysis )

2007 2008 2009Current liabilities 69.76% 67.86% 71.73%

L.T Liabilities %

29.19

25.65

21.35

2007 2008 2009

Total liabilities %

98.55

93.52

93.09

2007 2008 2009

Long Term LiabilitiesUnited Bank Limited

Balance Sheet (common size analysis )

2007 2008 2009L.T liabilities 98.55% 93.52% 93.09%

Total liabilitiesUnited Bank Limited

Balance Sheet (common size analysis )

2007 2008 2009Total liabilities 98.55% 93.52% 93.09%

Shareholder Equity %

1.45

6.48

6.9

2007 2008 2009

Shareholder EquityUnited Bank Limited

Balance Sheet (common size analysis )

2007 2008 2009Total liabilities 98.55% 93.52% 93.09%

United Bank Limited

Common size analysis of consolidated Balance Sheet

For year ended 31Dec, 2009

  Rs in '000 Common size (%)

Assets 2007 2008 2009 2007 2008 2009Cash/Bal. With Banks 3609108 70463707 35591280 21.5 17.93 15.79lending to F.Is 4370006 3627557 19050791 2.6 1.89 8.45Investment (ST) 9190430 33883311 29580252 5.5 17.66 13.12Advances-Performing (ST) 39489369 43632117 89292490 23.4 22.75 39.61Other Assets 8641263 2641471 3509351 5.1 1.38 1.55Total Current Assets 97782157 118177074 177024164 58 61.61 78.54Investment (LT) 19388131 33623058 25007413 11.5 17.53 11.09Advances-Performing (LT) 28477494 26423058 10312297 16.89 13.77 4.57Advances-Non performing (LT) 11813855 5739798 3671991 7.01 2.99 1.62Operating fixed Assets 2864018 2831534 3884990 1.7 1.48 1.72Deferred Tax Assets 8297500 5026459 5486357 4.92 2.62 2.43Total L.T Assets 70840998 73643958 48363048 42 38.39 21.45

             Total Assets 168623155 191821032 225387212 100 100 100             

Liabilities            B/Payables 1540592 1847025 2991269 0.91 0.96 1.32Borrowings ST 4004130 174533 174533 2.37 0.09 0.07Deposits - Current 102568752 118167469 152580240 60.83 61.6 67.69Lease and Others 8838842 9986608 5933743 5.24 5.2 2.63Total Current Liabilities 116952316 130175635 161679785 69.36 67.86 71.73Fixed Deposits 38747422 43998916 37252204 22.98 22.94 16.52Other Long term Liabilities 21264831 5212755 10883720 6.21 2.72 4.82Total LT Liabilities 49219400 49211671 48135924 29.19 25.65 21.35             

Total Liability 166171716 179387306 209815709 98.55 93.52 93.09             

Shareholder's Equity            Share Capital 22481680 5180000 5180000 13.33 2.7 2.3Reserves 3960453 4258947 4712569 2.35 2.22 2.09Accumulated Losses/Profits -27282709 -722387 454403 -16.18 -0.38 0.2Minority Interest 1168264 1271700 1412932 0.69 0.66 0.62Surplus on revaluation 2123751 2445466 3811599 1.26 1.27 1.69Total 24541439 12433726 15571503 1.45 6.48 6.9

Conclusion

Common size analysis is an analysis of financial statements where the total assets divide

all balance sheet items of asset side and all credit side balances divided by all liability

items, and all income statement items are divided by net sales/revenues. Common size

analyses are extremely helpful to highlight changes over the time in financial

performance and financial conditions of the company. The table shows common size

analysis of the balance sheets for the years 2007, 2008 & 2009.

The common size analysis given in the table shows that there have been improvements in

the current assets in 2009 as compared to 2008, about 17%. But there has been decrease

in fixed assets of about 16%. The main reason for this change is increase in short term

investment showing a constant increase as a percentage to total assets. This implies that

the bank is concentrating now more on non-interest income and the interest rates are

constantly falling.

Short-term advances have shown a significant change of 15% whereas total advances

show a total change of only 6.3%. This is very significant to note that major decrease has

occurred in long-term performing and non-performing advances.

There is decrease in long term assets of about 17% which mainly cause the decrease in

long term advances which are about 13% and 6% decrease in long term investment.

On the liability side the total current liability has shown change of about 4%. The main

reason for which is increase in current deposits, which are about 6%. The long-term

liability of the organization is also decreased by 4%.

Common Size Analysis(Income Statement)

44.6551.9

79.89

0

10

20

30

40

50

60

70

80

90

2007 2008 2009

Gross ProfitUnited Bank Limited

P&L Account (common size analysis )

2007 2008 2009Gross Profit 44.65% 51.9% 79.09%

59

76.2

126.42

0

20

40

60

80

100

120

140

2007 2008 2009

%

49.95

24.44

48.77

0

10

20

30

40

50

60

2007 2008 2009

Total IncomeUnited Bank Limited

P&L Account (common size analysis )

2007 2008 2009Total Income 59% 76.2% 126.42%

United Bank Limited

P&L Account (common size analysis )

2007 2008 2009Total Income 49.95% 24.44% 48.77%

Profit before tax

65.11

12.84

30.39

0

10

20

30

40

50

60

70

2007 2008 2009

Profit after tax

United Bank Limited

P&L Account (common size analysis )

2007 2008 2009Total Income 65.11% 12.84% 30.39%

United Bank Limited

Common size analysis of consolidated Income Statement

For year ended Dec 31, 2009

  Rs in Millions Common size (%)

ITEMS 2007 2008 2009 2007 2008 2009

Mark up revenue 11468 11385 9269 100 100 100

mark up expense 6347 5476 1931 55.35 48.09 20.83

gross profit 5121 5909 7338 44.65 51.9 79.89

provisions and B/Debts 1263 746 564 11.02 6.55 6.08

Net Mark up Income 3858 5163 6773 33.64 45.34 73.07

Non Mark up Return            

Commission & Brokerage 1097 2008 2142 9.57 17.63 23.1Dividends/Exchange and Others 1818 1514 2803 15.85 13.3 30.24

Total Non Mark up Income 2915 3522 4945 25.42 30.94 53.34

Total Income 6773 8686 11718 59 76.2 126.42

Non Mark Up Expense            

Administrative 4669 5879 6639 40.71 51.64 71.62

Other Provision and Charges 632 51 556 5.15 0.44 6

Total non mark up Expenses 5301 5930 7197 46.22 52.08 77.64Profit Before Extraordinary Items 1472 2756 4521 12.84 24.2 48.77

Extraordinary Items -7200 25 0 62.78 0.21  

Profits before tax -5728 2781 4521 49.95 24.44 48.77

Taxation 1739 1319 1704 15.16 11.59 18.38

Profit/Loss after tax -7467 1462 2818 65.11 12.84 30.39

Share of Minority Interest 6 10 21 0.06 0.09 0.22Accumulated Loss Brought Frd. 19821 27283 722 172.2 210.64 7.78Adjustment against sh. Capital 0 25202   0 221.36 0

Appropriation and Transfers            Surplus on revaluation of Assets 0 238   0 2.1 0

Transfer to Statutory Reserve 2 332 527 0.02 2.91 5.68Accumulated Loss Brought Frd. 27283 722 454 237.9 16.34 4.9

Conclusion

The common size analysis of income statement is given in the table. Which shows that

the UBL has been able to control its interest or mark up expense? As a result of decrease

in mark up expense as a percentage of total revenues the gross profit margin has shown a

trend of continuous increase. The increasing G/P Margin shows efficiency of the bank in

controlling cost of sales (Markup expense) and better strategy of pricing, products and

services.

The provision for non-performing loans has a decreasing trend making no provision for

non-performing loans and diminution in value of investment, which increases the profit

of current year. The reduction in provision is a good sign, which shows that the bank is

recovering its disbursed advances. It shows the good credit management of the bank.

There is a great increase in non-markup income, which is about 23%. Among its

individual components investment income has shown a large increase as a percentage of

sales.

Non markup expenses also show a rising trend in absolute amount though the common

size in percentages has shown a mixed trend due to the changes in revenue figures. The

non-performing expanses also increased to about 25%, which is a very high percentage,

but the other aspect of this is that it increased the efficiency and credit management of the

staff.

Like gross profit the net profit margin before tax has also increased with 24% rate. The

extraordinary item expanse has not occurred in 2009 that caused a slight increase in the

net income. The tax expanse is increased about 7% because of the increase in profit. Loss

brought forward from previous year is reduced by 14%.

The common size analysis of the UBL is clearly showing that the bank has shown a lot of

improvement in its performance. The organization shows profit for the first time in the

last 5 years which is a positive sign and it will build up the moral of the employees by

which they can work more effectively and efficiently increasing the performance of the

bank.

Ratio Analysis

Ratio Analysis

. The ratios analysis is the most powerful tool of financial statement analysis. Ratios simply

mean one number expressed in terms of another.

ADVANTAGES

Simplifies financial statements

Facilitates inter-firm comparison

Helps in planning:

Help in investment decesion

Current ratio = Current assets

Current liabilities

LIMITATIONS

Comparative study required

Problems of price level changes

Limited use of single ratios

Personal bias

Incomparable

CLASSIFICATION

Ratios may be classified in a number of ways to suit any particular purpose. Different

kinds of ratios are selected for different types of situations. Mostly, the purpose for which

the ratios are used and the kind of data available determine the nature of analysis. The

various accounting ratios can be classified as follows:

Liquidity ratios

Profitability ratios

Activity ratios

Debt ratios

Market ratios

Current Ratio

The current ratio expresses the relationship of current assets to current liabilities. It is

widely used measure for evaluating a company's liquidity and short-term debt paying

ability.

Formula

Calculation

United Bank LimitedRatio analysis

2007 2008 2009Gross Profit 0.84% 0.91% 1.15%

0.84 0.91

1.15

0

0.2

0.4

0.6

0.8

1

1.2

%

2007 2008 2009

Asset turnover = Net sales

Average assets

Graphical Representation

Asset Turnover

The total assets turnover indicates that generate company turnover. Here all assets are

compared with its turnover. Normally it calculates by dividing sales from its total assets

Formula

Calculation

United Bank Limited

Current Ratio

0.07

0.06

0.04

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

2007 2008 2009

Ratio analysis2007 2008 2009

Asset turnover 0.07% 0.06% 0.04%

Graphical representation

Gross Profit Margin

Measures the gross profit made on sales as a percentage. Ideally as high as possible. Must

also compare profit margins to similar businesses.

Formula:

Gross profit margin = (sales - cost of sales) / sales

Calculation:

United Bank Limited

Asset Turnover

44.65%52.50%

79%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

2007 2008 2009

Ratio analysis2007 2008 2009

Gross Profit Margin 44.65% 52.50% 79%

Graphical representation

Net Profit Margin

Takes account of overheads and administration costs indeed it is used to assess how well

a business has controlled its overheads.

Formula:

Net profit margin = Net profit Net sales

Calculation:

Gross profit margin

-65.12%

12.69%

30%

-70.00%

-60.00%

-50.00%

-40.00%

-30.00%

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

1 2 3

United Bank LimitedRatio analysis

2007 2008 2009Gross Profit Margin -65.12% 12.69% 30%

Graphical representation

Debt to Asset

Total Debt Formula Debt to assets= Total Assets

Calculation

United Bank LimitedRatio analysis

Net profit margin

0.99

0.94

0.93

0.9

0.91

0.92

0.93

0.94

0.95

0.96

0.97

0.98

0.99

2007 2008 2009

2007 2008 2009Debt to assets 0.99% 0.94% 0.94%

Graphical representation

Coverage Ratio

Formula Coverage ratio= EBIT / Interest Expense

United Bank LimitedRatio analysis

2007 2008 2009Debt to assets 0.1% 1.15% 3.34%

Debt to assets

0.1

1.15

3.34

0

0.5

1

1.5

2

2.5

3

3.5

2007 2008 2009

Graphical representation

Debt to Equity

Debt to Equity is the ratio of Total Debt to Total Equity. It compares the funds provided

by creditors to the funds provided by shareholders.

Formula:

Debt-Equity Ratio = Total Liabilities SHE

Coverage ratio

14.5414.4

13.47

12.8

13

13.2

13.4

13.6

13.8

14

14.2

14.4

14.6

2007 2008 2009

Calculation:

United Bank LimitedRatio analysis

2007 2008 2009Debt to equity 14.54% 14.4% 13.47%

Graphical representation

Cash Ratio

Cash ratio is calculated cash plus marketable securities and divided by total current

liabilities.

Formula:

Cash ratio = (Cash + Cash equivalents + marketable securities) Total Current Liabilities

Calculation:

Debt to Equity

9.59% 9.23%

28%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

2007 2008 2009

Return on commonstockholders' equity =

Net income

Average common stockholders ' equity

United Bank LimitedRatio analysis

2007 2008 2009Cash ratio 9.59% 9.23% 28%

Graphical representation

Return on Equity

Return on common stockholders' equity measures profitability from the common

stockholders’ viewpoint. The ratio shows the dollars of income earned for each dollar

invested by the owners.

Formula:

Cash ratio

-887.99%

16.78% 18%

-900.00%

-800.00%

-700.00%

-600.00%

-500.00%

-400.00%

-300.00%

-200.00%

-100.00%

0.00%

100.00%

2007 2008 2009

Calculation:

United Bank LimitedRatio analysis

2007 2008 2009ROE -887.99% 16.78% 18%

Graphical representation

Return on Investment

Formula ROI = Net Profit / Total Assets * 100

Calculation:

United Bank LimitedRatio analysis

ROE

-4.43%

0.76%1.24%

-5.00%

-4.00%

-3.00%

-2.00%

-1.00%

0.00%

1.00%

2.00%

2007 2008 2009

2007 2008 2009ROI -4.43% 0.76% 1.24%

Graphical representation

Advances to Deposits

Formula Advances to deposits=Advances / Deposits * 100

Calculation

United Bank LimitedRatio analysis

2007 2008 2009

ROI

56.46%

46.74% 45%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

2007 2008 2009

Advance to deposits 56.46% 46.71% 45%

Graphical representation

Investment to Deposits

Formula investment to deposits= Investment / Deposits * 100

Calculation

United Bank LimitedRatio analysis

2007 2008 2009

Advances to deposits

20.22%

41.63%

28%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

2007 2008 2009

Advance to deposits 20.22% 41.63% 28%

Graphical representation

Interpretation

YEARS 2007 2008 2009

Current Ratio 0.84 0.91 1.15

Asset Turnover 0.07 0.06 0.04

Debt to Asset 0.99 0.94 0.93

Debt to Equity 14.54 14.4 13.47

Investment to deposits

Coverage Ratio 0.1 1.15 3.34

Gross Profit Margin 44.65% 52.50% 79%

Net Profit Margin -65.12% 12.69% 30%

Return On Investment -4.43% 0.76% 1.24%

Return On Equity -887.99% 16.78% 18%

Advances to Deposit 56.46% 46.74% 45%

Investment to Deposit 20.22% 41.63% 28%

Cash Ratio 9.59% 9.23% 28%

Current Ratio

UBL’s current ratio is increasing over the time. Higher the current ratio higher the ability

to meet the short-term obligations as they come due. The UBL’s current ratio is increased

by 0.18% as compared to 2008. This in turn decreases the risk of insolvency. The change

is occurring due to increase in short term investment and decrease in short term

borrowings.

ASSET TURNOVER

This shows revenue generated per rupee investment in total assets. UBL’s assets turnover

ratio has shown a little decrease. This is because of increase in total assets with

proportionate increase in revenue. Banks have relatively low ATR capital, as they are

selective in advancing loans and generating smaller sales.

DEBT TO ASSET RATIO

The analysis of total debt to assets ratio, there has been decrease of one percent as

compared to 2008 and 6% to 2007. In 2007 every rupee one of assets was being financed

by rupees 0.098 or debt and in 2008 it is 0.94 while in 2009 it is reduced to 0.93 worth of

debt per rupee of asset. Although the decrease is not large enough but it is a good sign for

bank’s creditors. The decrease may be attributed to the substantial decrease in borrowings

from financial institutions but the affect was weakened by an increase in bills payable and

other liabilities.

DEBT TO EQUITY

This ratio measures how the company is leveraging its debt against the capital employed

by its shareholders. Analysis of debt to equity ratio indicates that the current position for

the debt to equity is that for every one rupee in equity provided by the shareholders the

bank has Rs. 13.5 as a debt. This shows that the bank is heavily relying on debt financing.

The reason for huge difference stated in the table is because of losses occurred in 2007

and 2008.

COVERAGE RATIO

This ratio shows the number of times a company can cover or meet its financial charges

or obligations. One of the most commonly used ratios is the interest coverage ratio that

measures the number of times the income is available to pay interest charges. The UBL

interest coverage ratio has shown significant improvement in these three years. The ratio

is increased from 0.10 to 3.34.

GROSS PROFIT MARGIN

Gross profit margin is the difference between the revenue and cost of goods sold. Gross

profit is critical because it represents the amount of money remaining to pay operating

expanses financing cost and taxes. UBL’s gross profit margin per rupee has shown rising

trend in last three years. There is an increase of 27% in 2009 as compared to 2008. this

shows efficiency of the bank to control the cost of sales.

NET PROFIT MARGIN

This ratio shows the profit that is available from each rupee of the sale. After all expanses

have been paid. Net profit margin is also showing an increasing trend. UBL has improved

net profit margin in the current years. The net profit margin has reached to 30% as

compared to 2008 in which it was only 12.69%. While in 2007 it was in negative figure.

It shows a good impact on the UBL’s Balance Sheet.

RETURN ON INVESTMENT

This ratio measures the profitability per rupee of investment in assets. UBL’s return on

investment has shown an improvement more than 100%. In 2009 the ratio is 1.24% while

in 2008 it was 0.76% and in 2007 it was in –ive figures. Although the assets have

increased but the operational recovery of the bank is main cause of increasing this ratio.

RETURN ON EQUITY

This ratio shows the profit as a proportion of the book value of the common shareholders.

The return on equity is also shown a great deal of positive change. In 2009 the ratio is

45% while in 2008 it was only 16% and in 2007it was in negative figures.

ADVANCES TO DEPOSIT RATIO

This ratio shows the companies advances employed per unit of deposit. This ratio of UBL

over the recent three years shows a decreasing trend. In 2007 it was 56% while in 2008 it

was 46% and in 2009 it is 45%.

INVESTS TO DEPOSIT

This ratio shows the company’s investment employed per unit of deposit. This ratio

increased in 2008 as compared to 2007 but in 2009 it again decreased. It is because of

industrial development factors in the country by which lending has been increased and

investment is slightly decreased.

PERSONAL LEARNING

Personal learning is a moral and ethical obligation set by a person to move in a mellow

way to excel in present and future. During the internship I realized following duties.

Cohesiveness

Ever Ready For Challenges

Board Vision

Learning From Cradle To Grave

Always Create Opportunities

Open Communication With The Boss

appearance

Cohesiveness

A team player can achieve more than an individual. Good coordination and cooperation

with peers and other staff members can impulse a person to perform better in difficult

situations. During my internship I noticed that the degree of cohesiveness among the

UBL employees is high that is why UBL is achieving its target quite efficiently.

Ever ready for challenges

If a person can handle problems and challenge adequately, he can grow especially in

Finance field where every thing is well estimated.

Broad vision

“THINK BIG”

Think positively to avoid any kind of discrepancy and hurdle in your task. Positively

thinking and broad vision helps you to achieve some thing different and new.

Learning from cradle to grave

Latest researches and journals can be very helpful in order to generate new ideas.UBL

offers many new courses to the employees to upgrade their knowledge.

Always create opportunities

“Don’t wait for opportunities always create opportunities”

If you are able to create opportunities, success is yours. Now the question is how? The

answer is very simple, by generating new and useful ideas for the organization.

Open communication with boss

To avoid any kind of misunderstanding with your boss, communicate freely with him.

During my internship I analyzed that;

“People don’t leave the organizations they leave their bosses”

So be friendly with your staff and boss and communicate freely to avoid organizational switching.

Appearance

“Treat your self as a product”

Attractive appearance can be very useful to impress others. A professional should be

dressed up properly to influence others.

Recommendations

Recommendations and suggestions are considered to be the most important part of an

internship report, without which no report is considered complete and meaningful. This

part of the report is based on the previous sections i.e. review and analysis. Moreover, for

bringing suggestions, discussions have been conducted with the staff of UBL officers,

who not only provided the basis for recommendations and suggestions but also pointed

out some areas, where the change for the development is utmost important. Realizing the

importance of this section, efforts have been made to give feasible recommendations,

which are categorized under the following headings.

During my internship at the UBL I find out week areas that require improvements for

long-term benefit of the organization. These suggestions and recommendation are as

follows.

The behavior with the customers should be improved.

There is a great need of proper training of employees. Because when ever they

were asked about the latest banking the answer was sorry we don’t know.

Like the other reputed commercial banks UBL should recruited some officers

especially from the fresh MBA’s and M.Com students. Doing so, the more

talented persons would enter in the management and they will try to make the

National Bank compatible with the other banks.

All the branches must be fully equipped.

The behavior with the customer should be improved.

Try to establish effective communication between top-level management and

executive.

Also do marketing through internet

Effective training and qualified, dutiful and vigilant inspection teams are inducted

per force in all the banks. .

This branch is not doing many functions to open the L/C and to deal in export and

import facilities. So bank should hire export staff for such type of activities and

start them in the branch.

CONCLUSION

United Bank Limited is one of Pakistan’s largest financial institutions with large number

of branches, having local as well as over seas branches, a very large number of

customers. This organization is progressing rapidly because it is adopting change with the

passage of time. But there are some drawbacks of this organization like its staff is not as

much qualified as it should. Its daily working is very slow. There is the need of advance

and new technology to make its working fast.

BIBLIOGRAPHY

Web sites

www.ubl.com.pk

www.google.com

www.sbp.com..pk

www.dawn.com

News papers

Banking journal

Dawn news

The Nation

UBL financial reports

Books

Principals of Banking

Principle of Marketing

Principle of Managerial Finance

United Bank LimitedConsolidated Balance Sheet

For year ended 31Dec, 2009

United Bank Limited

Common size analysis of consolidated Balance Sheet

For year ended 31Dec, 2009

  Rs in '000

Assets 2007 2008 2009Cash/Bal. With Banks 3609108 70463707 35591280lending to F.Is 4370006 3627557 19050791Investment (ST) 9190430 33883311 29580252Advances-Performing (ST) 39489369 43632117 89292490Other Assets 8641263 2641471 3509351Total Current Assets 97782157 118177074 177024164Investment (LT) 19388131 33623058 25007413Advances-Performing (LT) 28477494 26423058 10312297Advances-Non performing (LT) 11813855 5739798 3671991Operating fixed Assets 2864018 2831534 3884990Deferred Tax Assets 8297500 5026459 5486357Total L.T Assets 70840998 73643958 48363048       Total Assets 168623155 191821032 225387212       

Liabilities      B/Payables 1540592 1847025 2991269Borrowings ST 4004130 174533 174533Deposits - Current 102568752 118167469 152580240Lease and Others 8838842 9986608 5933743Total Current Liabilities 116952316 130175635 161679785Fixed Deposits 38747422 43998916 37252204Other Long term Liabilities 21264831 5212755 10883720Total LT Liabilities 49219400 49211671 48135924       Total Liability 166171716 179387306 209815709       

Shareholder's Equity      Share Capital 22481680 5180000 5180000Reserves 3960453 4258947 4712569Accumulated Losses/Profits -27282709 -722387 454403Minority Interest 1168264 1271700 1412932Surplus on revaluation 2123751 2445466 3811599Total 24541439 12433726 15571503

  Rs in '000 Common size (%)

Assets 2007 2008 2009 2007 2008 2009Cash/Bal. With Banks 3609108 70463707 35591280 21.5 17.93 15.79lending to F.Is 4370006 3627557 19050791 2.6 1.89 8.45Investment (ST) 9190430 33883311 29580252 5.5 17.66 13.12Advances-Performing (ST) 39489369 43632117 89292490 23.4 22.75 39.61Other Assets 8641263 2641471 3509351 5.1 1.38 1.55Total Current Assets 97782157 118177074 177024164 58 61.61 78.54Investment (LT) 19388131 33623058 25007413 11.5 17.53 11.09Advances-Performing (LT) 28477494 26423058 10312297 16.89 13.77 4.57Advances-Non performing (LT) 11813855 5739798 3671991 7.01 2.99 1.62Operating fixed Assets 2864018 2831534 3884990 1.7 1.48 1.72Deferred Tax Assets 8297500 5026459 5486357 4.92 2.62 2.43Total L.T Assets 70840998 73643958 48363048 42 38.39 21.45             Total Assets 168623155 191821032 225387212 100 100 100             

Liabilities            B/Payables 1540592 1847025 2991269 0.91 0.96 1.32Borrowings ST 4004130 174533 174533 2.37 0.09 0.07Deposits - Current 102568752 118167469 152580240 60.83 61.6 67.69Lease and Others 8838842 9986608 5933743 5.24 5.2 2.63Total Current Liabilities 116952316 130175635 161679785 69.36 67.86 71.73Fixed Deposits 38747422 43998916 37252204 22.98 22.94 16.52Other Long term Liabilities 21264831 5212755 10883720 6.21 2.72 4.82Total LT Liabilities 49219400 49211671 48135924 29.19 25.65 21.35             

Total Liability 166171716 179387306 209815709 98.55 93.52 93.09             

Shareholder's Equity            Share Capital 22481680 5180000 5180000 13.33 2.7 2.3Reserves 3960453 4258947 4712569 2.35 2.22 2.09Accumulated Losses/Profits -27282709 -722387 454403 -16.18 -0.38 0.2Minority Interest 1168264 1271700 1412932 0.69 0.66 0.62Surplus on revaluation 2123751 2445466 3811599 1.26 1.27 1.69Total 24541439 12433726 15571503 1.45 6.48 6.9

United Bank Limited

consolidated Income Statement

For year ended Dec 31, 2009

United Bank Limited

Common size analysis of consolidated Income Statement

For year ended Dec 31, 2009

  Rs in Millions

ITEMS 2007 2008 2009

Mark up revenue 11468 11385 9269

mark up expense 6347 5476 1931

gross profit 5121 5909 7338

provisions and B/Debts 1263 746 564

Net Mark up Income 3858 5163 6773

Non Mark up Return      

Commission & Brokerage 1097 1265 2142

Dividends/Exchange and Others 1818 1514 2803

Total Non Mark up Income 2915 3522 4945

Total Income 6773 8686 11718

Non Mark Up Expense      

Administrative 4669 5879 6639

Other Provision and Charges 632 51 556

Total non mark up Expenses 5301 5930 7197

Profit Before Extraordinary Items 1472 2756 4521

Extraordinary Items -7200 25 0

Profits before tax -5728 2781 4521

Taxation 1739 1319 1704

Profit/Loss after tax -7467 1462 2818

Share of Minority Interest 6 10 21

Accumulated Loss Brought Frd. 19821 27283 722

Adjustment against sh. Capital 0 25202  

Appropriation and Transfers      

Surplus on revaluation of Assets 0 238  

Transfer to Statutory Reserve 2 332 527

Accumulated Loss Brought Frd. 27283 722 454

  Rs in Millions Common size (%)

ITEMS 2007 2008 2009 2007 2008 2009

Mark up revenue 11468 11385 9269 100 100 100

mark up expense 6347 5476 1931 55.35 48.09 20.83

gross profit 5121 5909 7338 44.65 51.9 79.89

provisions and B/Debts 1263 746 564 11.02 6.55 6.08

Net Mark up Income 3858 5163 6773 33.64 45.34 73.07

Non Mark up Return            

Commission & Brokerage 1097 2008 2142 9.57 17.63 23.1Dividends/Exchange and Others 1818 1514 2803 15.85 13.3 30.24

Total Non Mark up Income 2915 3522 4945 25.42 30.94 53.34

Total Income 6773 8686 11718 59 76.2 126.42

Non Mark Up Expense            

Administrative 4669 5879 6639 40.71 51.64 71.62

Other Provision and Charges 632 51 556 5.15 0.44 6

Total non mark up Expenses 5301 5930 7197 46.22 52.08 77.64Profit Before Extraordinary Items 1472 2756 4521 12.84 24.2 48.77

Extraordinary Items -7200 25 0 62.78 0.21  

Profits before tax -5728 2781 4521 49.95 24.44 48.77

Taxation 1739 1319 1704 15.16 11.59 18.38

Profit/Loss after tax -7467 1462 2818 65.11 12.84 30.39

Share of Minority Interest 6 10 21 0.06 0.09 0.22Accumulated Loss Brought Frd. 19821 27283 722 172.2 210.64 7.78Adjustment against sh. Capital 0 25202   0 221.36 0

Appropriation and Transfers            Surplus on revaluation of Assets 0 238   0 2.1 0

Transfer to Statutory Reserve 2 332 527 0.02 2.91 5.68Accumulated Loss Brought Frd. 27283 722 454 237.9 16.34 4.9