UBL Finance Internship Report

8/11/2019 UBL Finance Internship Report

1/61

Yusha

Cell: 0301-3335005

Email: [email protected]

Yusha

Cell: 03013335005

Email: yusha143@gmail com


2/61

THE

ISLAMIA UNIVERSITYOF BAHAWALPUR

Submitted To ; Miss. Sunds S!!een

Submitted B" ;

Mu!mmd Ib##

M.com (Finance) 41

Yusha

Cell: 03013335005



3/61

I dedicate this work of mine to my

Teachers, My Parents and to all MyFriends, who truly help and guide me in

completing this project.

Yusha

Cell: 03013335005



4/61

Master of commerce (M.COM) is a program in which we studied about business and

finance. In Pakistan the banking sector is at the maturit stage and banking sectors are the

best institutes in which we are easi! understand the practica! e"perience. Master of

commerce gi#es us and opportunit to touch the practica! e"perience about business and

finance as the internship. $he Internship program in an important part to gi#e students an

opportunit to ha#e e"perience of practica! fie!d. %n!ess and unti! the students e"perience

the no#e!t of practica! work& their know!edge of what the stud in theoretica! courses

remains incomp!ete. $he most important point in an Internship program is that the student

shou!d spend their time in a true manner and with the spirit to !earn practica! orientation of

theoretica! stud framework.

$his Internship 'eport is on m i" weeks practica! training at $UBL% UNITE& BAN'

LIMITE& (HUNA WALA HASIL PUR.In this Internship 'eport I ha#e tried to gi#e

detai!s about the %nited ank *imited& working and the functions of different departments

of the bank.

MUHAMMA& IBRAR

Yusha

Cell: 03013335005



5/61

First of a!!& I thank m respected teachers for pro#iding me

comprehensi#e know!edge about Commerce Courses and a!so for

pro#iding me the opportunit to comp!ete m Internship Program in

%* to enhance m practica! know!edge about banking sector of

Pakistan. I am a!so indebted to the fo!!owings because without their

he!p& I wou!d not be ab!e to achie#e this practica! know!edge.

Yusha

Cell: 03013335005



6/61

TABLE OF (ONTENTS

(!)te# No.*

Purposes of tud++++++++++++++++++++++++++++++++++++++++++++++++++ 1,

cope of tud++++++++++++++++++++++++++++++++++++++++++++++++++++++ 1,

*imitations of tud++++++++++++++++++++++++++++++++++++++++++++++++ 1,

Methodo!og of 'eport+++++++++++++++++++++++++++++++++++++++++++++ 1-

cheme of 'eport++++++++++++++++++++++++++++++++++++++++++++++++++++ 1-

(!)te# No. +

e#e!opment Finance++++++++++++++++++++++++++++++++++++++++++++++++ 14

easona! Finance++++++++++++++++++++++++++++++++++++++++++++++++ 1/

Commercia! Finance+++++++++++++++++++++++++++++++++++++++++ 10

(!)te# No.,

ccount epartment+++++++++++++++++++++++++++++++++++++++++++++ 12

(!)te# No.-

irth of %*++++++++++++++++++++++++++++++++++++++++++++++++++++ 13

ubsidiaries++++++++++++++++++++++++++++++++++++++++++++++ 13

Functions of %*++++++++++++++++++++++++++++++++++++++++ ,

Management of %*+++++++++++++++++++++++++++++++++ ,-

Function of 5ierarch+++++++++++++++++++++++++++++++++ ,4

(HAPTER NO.

eposit epartment++++++++++++++++++++++++++++++++++++++++ ,/

'emittances epartment+++++++++++++++++++++++++++++++++++++++++++++++++,2

Muhammad Ibrar

M.Com (Finance)

0

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005

Email: usha143 mail com


7/61

Credit epartment of %*+++++++++++++++++++++++++++++++++++++ ,3

C!earing epartment+++++++++++++++++++++++++++++++++++++++++++++++++++ -1

(HAPTER NO./

Introduction++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++Introduction++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ -4-4

Financia! na!sis+++++++++++++++++++++++++++++++++++++++++++++++++++++ -6

Common si7e ana!sis of a!ance heet+++++++++++++++++++++++++++ 4

Common si7e ana!sis of Income tatement++++++++++++++++++++++++++++41

(HAPTER NO.0

8ua!itati#e na!sis of %*+++++++++++++++++++++++++++++++++++++++++++++++42

(HAPTER NO.1

9O$ na!sis+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++/

P:$ na!sis++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++/-

(HAPTER NO.2

Marketing epartments %*++++++++++++++++++++++++++++++++++++++++++++/0

(HAPTER NO.*3

'ecommendations ; uggestions+++++++++++++++++++++++++++++++++++++/6

(HAPTER NO.**

Persona! *earning++++++++++++++++++++++++++++++++++++++++++++++++++ +++++/3

BIBLO4RAPHY

Anne5u#e

Muhammad Ibrar

M.Com (Finance)

2

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



8/61

E6E(UTIVE SUMMARY

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

introduction about anking fo!!owed b the introduction of UBL. It gi#es a briefing about a!!the financia! products of UBL.

$his report a!so inc!udes the different features of these products. !! the er#ices

pro#ided b UBLhas a!so been discussed and e"p!ained a!ong with the strength and

weaknesses of the organi7ation.

$his report shows and interna! architecture of the working of the UBLrecommendations for UBL.

(HAPTER NO.*

Muhammad Ibrar

M.Com (Finance)

6

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



9/61

INTRO&U(TION7

tudents of M.Com studing courses !eading to Master degree in Commerce are

re?uired to undergo an internship programme of i" 9eaks duration. $his is an

essentia! academic re?uirement. $he internship is fo!!owed b comprehensi#e report

writing& re?uired to submit to the Is!amia %ni#ersit ahawa!pur ahawa!nagar

campus In epartment of Commerce. $his report is proper! e#a!uated on the basis of

its description and ana!tica! capabi!ities b interna! and e"terna! e"aminers. I did m

internship in %nited ank *imited Chuna 9a!a ranch.

PURPOSE OF STU&Y7

$he purpose of the stud is to work in rea! !ife situation and !earn banking practice b

doing. In this conte"t its ob=ecti#es are@

i. $o ana!7e banking operations i.e. operationa! ana!sis& financia! ana!sis.

ii. $o de#e!op concrete and feasib!e recommendations.

iii. $o impro#e report writing ski!!s.

S(OPE OF STU&Y7

$he stud is confined to banking operations. n attempt& a!ong with a!! its !imitations&

to co!!ect financia! data and genera! statistics of the bank has been made. Aeeping in

#iew the purpose of the stud& which is to make an ac?uaintance with practica! doings

in the bank& this seems a comprehensi#e effort.

LIMITATION OF STU&Y7

Muhammad Ibrar

M.Com (Finance)

3

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



10/61

It is to admit that the stud attempts on! those aspects& which are c!ose! re!e#ant to

the purpose of the stud. Facts and figures& which otherwise might be e?ua!!

important& but not ha#ing a direct bearing on the conc!usions arri#ed at this stud&

ha#e been ignored.

METHO&OLO4Y OF STU&Y7

oth primar and secondar data were used in compi!ation of the report.

Methodo!ogica! too!s used were@

i. P#im#" &t7

Persona! Obser#ations.

iscussion with ank Personne!.

ii. Se8ond#" &t7

rochures> Manua!s of the bank.

nnua! 'eport

tate ank Foreign :"change Manua!

ank internship reports on %* a#ai!ab!e in !ibrar.

Bourna!s& newspapers and books.

Internet.

(HAPTER NO.+

Muhammad Ibrar

M.Com (Finance)

1

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



11/61

&e9e:o)ment inn8e

*oan pro#ide for tractors agricu!ture instrument tubewe!! turbine& !and !e#e!ing etc

$ractor !oans are reco#er within fi#e ear& on ha!f ear! basis other agricu!ture instrument

!oans repaid within three ear ,/ borrower contribution the borrower can app! for !oan&

the borrower worth can be decide on its propert

If a person ha#e1 acher !and

$hen the patwari make its unit with some specific process these unit mu!tip! 4 and ha#e

some #a!ue or amount then 6 of this #a!ue can obtain b borrower for this process

fo!!owing thing are re?uired

Procedure for *oan pp!

1. Ahasra+e+girdawari@this the actua! record of cu!ti#ated !and

,. 'egister ha?daran+e+7ameen @ownership of !and

-. gri credit officer (CO)

4. $he work of CO is to #isit the site and in#estigate about the borrower a!so #isit in

tehsi! for !ega!! documents for !and and actua! !and record

/. Proposa!

fter in#estigating the CO submit a report to head office in this report the fo!!owing thing

or re?uirements are mentioned

$erm and condition

ecurit support

Recommendation

9orth of !and !oan amount

B# on


12/61

fter appro#a! the proposa! the branch entries in DPOOAE and #erif this passbook b

patwari and re?uest the patwari p!eases transfer this !and temporar toward bank

A


13/61

*oons pro#ide for shops medicine sere& business etc the fo!!owing re?uirement are necessar.

Procedure@

Propert documents GOC@ no ob=ection certificate

G:C@ non encumbrance certificate

ma!! amount estimate b bank

bo#e 1 mi!!ion C estimator

:M>'M@ propert for securit

In 8se o #ene=:

pp!ication re?uest for renewa! !oan

a!ance sheet

Profit !oss ca!cu!ation.

(HAPTER NO.,

Muhammad Ibrar

M.Com (Finance)

1-

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



14/61

A88ount &e)#tment

In simp!e word account department performs the fo!!owing functions.

$he dai! working of a!! the departments is comp!eted and compi!e in this department for the

preparation of cash cum da book for the u!timate preparation of dai! statement of affairs of

the branch.

In >C department a!! the subsidiar !edgers are inc!ude maintenance of income and

e"penditure subsidiar !edgers are prepared.

Henera!


15/61

$he books used for record keeping in accounts department are@

P"ment boo>

S8#o:: boo>

(s!ie#?s boo>s

T#nse# boo>

@ou#n: :eds

P"ment boo>7

t the end of business a!! the instruments are entered in paing book. Cashier writes grand

tota! of these instruments in words and figures signs in fu!! on it and send it to the officer.

Officer check and put initia! in front of each and e#er entr and signed in fu!! on grand tota!.

S8#o:: boo>s

It is designed for credit #ouchers i.e. for the amount deposited against the issuance of $$s or

s etc.

Re8ei9in< 8s!ie# boo>

Part goes to cashier and deposit the cash. Cashier takes the cash enters the #oucher in

recei#ing cashier


16/61

$ransfer book is used to keep record of that transaction in which there is no cash

in#o!#ement. the amount of one che?ues is transfer from one account to other account in the

same bank& the account in the same bank& the account from which the che?ues wi!! be drawn

is written on right page which is r. page and the account in which the che?ues is deposited

is written on !eft page of transfer book which is Cr. Page.

@ou#n: :ed


17/61

'e?uirements for ccount Opening

$i% A88ount O)enin< Fo#m

It is a form that contains the account number& date& tit!e of the account introducer


18/61

For this account in addition to abo#e said documents nationa! I card of a!! the

account opening parties is re?uired. !so in the bo" of specia! instruction it shou!d be c!ear!

mentioned that one person


19/61

On Go#ember 3& 13/3& %* was notified and inc!uded as a pri#ate schedu!e bank with

authori7ed capita! of 's. , mi!!ionJ issued and paid up capita! of 's. 1 mi!!ion di#ided into

1 mi!!ion shares of 's. 1> each. Current! O and president> C:O Mr. mar afar Ahan

being a member of this new! formed set up manage %*. Chairman 5is 5ighness haikh

Gahaan Mabarak ! Gahaan and eput Chairman ir Mohammed nwar Per#e7 are the

two supreme contro!!ers of the bank


20/61

%* is a commercia! bank& which transacts the business of banking in accordance with the

pro#isions of CO& 130,. ection 2 of the ct authori7es banks to engage in the prescribed

form of business. In the !ight of this section %*


21/61

Pacesetter in economic research estab!ished in 1302& department for economic

research.

%ti!it bi!!s co!!ection

Credit cards (unicard+132)

$ra#e!ers Che?ues (5umarah+1321)

(OMPUTERIATION OF UBL7

%* has taken !eading start in the introduction of computers in (1300+1306) in important

cities. Its three computers centers 'awa!pindi& *ahore and Aarachi are e?uipped with the

modern mainframe computers of #arious capacities. :#er branch has been decorated with

microcomputers.

$he use of computers has enab!ed the bank to sa#e time and efforts raise efficienc

and de!i#er the goods speedi! to its customers. $his has a!so a!!owed the bank to maintain its

!eadership within the industr.

UBL C On :ine S"stem77

$hemes of this ser#ice is Dccess an time& anwhere& an de#iceE which smbo!i7es

comfort& con#ince and connecti#it. %+On!ine a web based ser#ice that can be accessed

through mu!tip!e media !ink !ike& (i) PC #ia internet () Mobi!e phone with 9P or free

M) (iii) Persona! igita! (i#) assistants and (#) P!ain te!ephone

o ccounts statement ; e!ectronic data interchange

o Hraphica! ana!sis

o !erts ser#ice >faci!it& search faci!it and acti#it !ong

Mone" 4#m 8i:it"7

24Muhammad Ibrar& (,1) Internship 'eport On %* Chuna 9a!a ranch 5asi! Pur

Muhammad Ibrar

M.Com (Finance)

,1

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



22/61

$he bank has recent! emp!oed mone gram ser#ice sstem& which can affect mone

transfers within minutes. imi!ar! the sstem used for !oca! transfer of mone transactions is

ca!!ed uni+remote.

HDD se#9i8e7

Aeeping to its tradition is august 136, pro#ided e!ectronic faci!it at its 5a== booth

and has insta!!ed now modern computers at designated branches (5a=is) and increasing

efficienc. $his faci!it has reduced the ser#ice time to !ess than si" minutes per 5a=i

compare to about ha!f+an+hour to 4/ minutes per 5a=i ear!ier.

Muhammad Ibrar

M.Com (Finance)

,,

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



23/61

MANA4EMENT OF UBL7

(!#t +.* Senio# Mn


24/61

FUN(TION HIERAR(HY7

O#


25/61

&EPOSITE &EPARTEMNT

s per the definition of DankingE under see /(b) of CO 133, one of the main functions of

a bank is to accept deposit. eposits are the backbone of an bankJ other functions of the

bank primari! depend upon the tpe and si7e of deposits.

Fun8tion )e#umed b" 8s! nd de)osit de)#tment in UBL(!un W: B#n8!

Chuna 9a!a ranch accepts deposits under the fo!!owing three accounts.

i. Current account

ii. P* a#ing account

iii. $erms eposits

O)enin< o A88ount7

$o open an account in %* the customer wi!! ha#e to fi!! an account opening form in front of

bank officer. 5e has to sign in a!! re?uired p!aces in front of the officer.

&o8uments Reui#ed in A88ount O)enin


26/61

b. @oint 88ount7

In this tpe of account two or more than two persons wi!! open the account. $he

account wi!! be operated b one account ho!der in case of (either of the sur#i#a!). If the

instructions are not gi#en& a!! the account ho!ders wi!! ha#e to sign the check.

NATURE OF A((OUNTS IN UBL NOWSHEREA

A% (u##ent A88ount7

$hese are non+profitab!e demand accounts. $he account can be opened with minimum

amount of rupees 1>+. $hese account are usua!! maintained for business purpose. ue to

enormous competition %* has introduced dai! profit current account for corporate c!ients

ca!!ed (%GI::') minimum ba!ance re?uired is 's. 1&>+. If minimum ba!ance

re?uirement is not met& bank is authori7ed to reco#er predetermined charges.

B% PLS S9in< A88ount

$hese accounts were intended with the aim of encouraging thrift among peop!e. $hese

accounts can be opened either in Pakistani rupees or in few ma=or currencies of the wor!d.

ank offers (4+ 0) return on these accounts. $he basic feature is the profit and !oss

sharing as according to non+interest based banking sstem. $hese accounts can be opened in

the name ofJ indi#idua!s& =oint names& trust accounts& charitab!e organi7ations.

%n!ike current accounts& akat is app!icab!e on !oca! currenc sa#ing accounts. Minor


27/61

ST&R?S S)e8i: Te#m &e)osit Re8ei)t $:o8: 8u##en8"%7

pecia! $erm eposit 'eceipts are issued for different periods of maturit ranging from

one month to / ears& ha#ing attracti#e returns. $here is no !imit on denominations.

,.+.,.+ NT&R?s Noti8e Te#m &e)osit Re8ei)t $:o8: 8u##en8"%7

$hese are term deposit with specia! features that these can be withdrawn an time but

after gi#ing a predetermined and pre agreed ear! notice.

REMITAN(ES &EPARTEMNT7

Current business trends demand fast mo#ement from one geo+graphic end to another. *atesttechno!og and te!ecom data transmission has made it possib!e to make such transactions

with in minutes. %* Chuna 9a!a 'emittances epartment performs fo!!owing functions.

&emnd d#t $&.&%

. is a negotiab!e instrument issued b branch of the bank drawn on other branch of the

same bank.

A% P#o8edu#e Fo# &.&.7

Purchaser is asked to fi!! in an app!ication form du! singed b app!icant. $hree things shou!d

be maintained in the form.

Game of Paee

P!ace of pament

mount of .

Commission is charged on . as bank income. $he app!icant is asked to deposit the cash

specified on the app!ication form to the te!!er. fter depositing cash the remittances incharge

prepare a .. $hat is singed b two officers must ha#ing power of attorne.

ank a!so pro#ides this faci!it to genera! pub!ic who don


28/61

Te:e


29/61

(RE&IT &EPARTMENT OF UBL

UBL (#edit Po:i8"7

Credits operations are undertaken in accordance to bank*oca! centra! bank


30/61

$he bank prefers commercia! securit. 'e!ationship Manager ('M) is main! responsib!e for

the re!ationship between the bank and part. 5e acts !ike a bridge between the two.

In the first instance the part wou!d prepare the fo!!owing propert documents.

A ha=arah

Ga?sha $as#eeri

ppro#ed ui!ding P!an

$resh fard

Inta?a! Ga?a!

$he part is asked to contact an #a!uator on the pane! of %*. ICM;* and $a=ak ui!der

are on the pane! of %* Chuna 9a!a. $he #a!uator wi!! #isit the site and set market #a!ue

and F of the said propert. 5e prepare report of at !east three pages. $hese document sent

for one page !ega! opinion to an !aer on the pane! of %*. 5a#ing c!ear !ega! opinion 'M

start preparing credit ppro#a! (C). $he documents are singed b the 'M ; M and then

forwarded to %* '58 in Peshawar. 5ere 'M e"amines the C if he found some

e"ception he wi!! send it back to the respecti#e 'm.

'M rectifies the acceptation and send it back to 'M. 'M studied and pass it to credit

officer. 5e has three hours of time to stud the C and if found correct then he pass it to

another credit officer. fter his e"amination the C is passed on to the credit risk manager.

5e checks the C and after signing it sent to C. 5e forwards the C to CO. 9hose

office is at %* '%CO at *ahore& after his signature the C. is sent back to 'C.

'C make a check !ess !ist and asked the 'M to contact the part to comp!ete the said

documents the are.

*etter of continuit

Persona! Huarantee

*etter of hpothecation of stock

.P Gote

Mortgage eed

GIC of e"ecutants and witness

Muhammad Ibrar

M.Com (Finance)

-

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



31/61

tock report

Insurance po!ic

Part profi!e

fter comp!etion of charge document 'M send it to 'C when the found it correct& the

issues C. cop of C is sent to 'M and GICF account is opened and debit transaction

starts.

(LEARIN4 OF BILLS7

4ene#:7

ank can make paments of on! open Che?ues on the counter pament. Pament of cross

Che?ues cannot be made on counter its pament is possib!e through co!!ecting bankers. $he

functions of c!earing department are di#ided into two main c!asses.

Inter ranch $ransaction

Inter ank $ransaction

P#o8edu#e o (:e#n8e o (#oss $(!eues%7

9hene#er bank recei#es a Che?ue of other bank from the c!ient he cannot make pament on

the counter. $he first =ob banker has to perform is to put a specia! crossing across the face of

che?ue. specia! crossing che?ue is secured. If it is sto!en the paing banker wou!d not

suffer because of non+endorsement. On the back of the che?ue the stamp is made of paee

account wi!! b credited on rea!i7ation. It is signed b authori7ed person. !ong with the

cross che?ue the customer has to fi!! the deposit s!ip. $he ha!f part of s!ip is gi#en back to the

customer. after the specia! crossing and is necessar endorsement the banker write theamount a!ong with che?ue number on paper and attach with each s!ip. $hen again on he

smi!e paper the amount of a!! the Che?ues a!ong with the bank names are added and attached

to che?ue presented for c!earing& and ad#ice is a!so attached with the che?ue presented for

c!earing. $he fo!!owing entr is passed on sending the che?ue for c!earing.

i!! !odged for c!earing LL. r

Muhammad Ibrar

M.Com (Finance)

-1

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



32/61

i!! for co!!ection LLL. Cr

$he Che?ues are sent on the same da for c!earing. $he bank recei#es it on other da. $he

paing bank recei#es the receipt and the amount is credited in the respecti#e account. $he

paing banker passed the fo!!owing.

i!! for rea!i7ation. LL. r

i!! !odged. LLL. Cr

$he other entr passed its r. 58 account and Cr Part account.

I B (7

It means DInter ranch $ransactionE when %* recei#ed a Che?ue a drawn on the customers

of his branchJ first the wi!! Che?ue the amount in the account on which Che?ue is drawn. Of

the re?uired amount is a#ai!ab!e in the account the wi!! match the signature on the Che?ue

a!ong with their card. If a!! the re?uirement are comp!eted the bank wi!! send an IC to

the bank from which Che?ue is sent

L B (7

*C means !oca! branch Che?ues recei#ed for co!!ection. %* Chuna 9a!a& recei#ed

Che?ues from their spoke braches as we!! as from other %* branches of the countr& drawn

of an other bank in Chuna 9a!a. $he send the Che?ue to responding bank and after

c!earing the Che?ue through c!earing houses (which is GP) in Chuna 9a!a. $he send *C

ad#ised to the bank from which the Che?ue was recei#ed. $he fo!!owing entr is passed after

sending *C.

GP a>c LLL. r

5o a>cLLL. Cr

Muhammad Ibrar

M.Com (Finance)

-,

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



33/61

OB(

9hen the bank recei#es the Che?ue from its customer or from an other spoke branch drawn

on an other bank of an other cit. $he sent the Che?ue to the %* main branch of that

cit& after recei#ing OC the bank wi!! passed the fo!!owing entr. In case of his own

customers.

5o a>cLLL. r

Customer a>cLLL. Cr

In case of spoke branch

5o a>cLLL. r

poke ranch a>cLLL. Cr

(HAPTER NO./

INTRO&U(TION

$hese section efforts ha#e been made to co#er a!! re!e#ant aspects of the financia!

performance of %*. O#ertime comparison and Common i7e ana!sis are carried out with

Muhammad Ibrar

M.Com (Finance)

--

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



34/61

the #iew to e"tract concrete conc!usion to describe financia! standing and performance of the

bank.

SI4NIFI(ANT A((OUNTIN4 POLI(IES

Re9enue Re8o


35/61

surp!us on re#a!uation can now be re#ersed to the e"tent of incrementa! depreciation

charged. s a resu!t such differentia!s are now transferred to retained

earnings>accumu!ated !osses as per the ecurities and :"change Commission of

Pakistan


36/61

RIS' MANA4EMENT

$he bank is primari! sub=ect to interest rate& credit and currenc risks. $he bank has

designated and imp!emented a frame work of contro!s to identif& monitor and manage these

risks are as fo!!owJ

(u##en8" Ris> Mn


37/61

a periodica! basis. $he groupdeficit arising on such re#a!uation is taken direct! to

Durp!us>eficit on re#a!uation of securitiesE in the ba!ance sheet. 9here an acti#e market is

not a#ai!ab!e& securities continue to be stated at cost. Pro#ision for diminution in the #a!ue of

these securities is made after considering permanent impairment& if an& in their #a!ue.

9here securities are so!d sub=ect to commitment to repurchase them at a predetermined

price& the remain on the ba!ance sheet and a !iabi!it is recorded in respect of the

consideration recei#ed in Dorrowing from ankE or DepositsE as appropriate. Con#erse!&

securities purchased under ana!ogous commitments to rese!! are not recogni7ed on the

ba!ance sheet and consideration paid is record in D!ending to financia! institutionsE or D!oans

and ad#ancesE as appropriate.

PROFITABILITY

$he operating profit before pro#isions and write offs increased b 6& where as the profit

before ta" and e"traordinar items increased b 0, as compared to !ast ear. $he increase

is main! attributed to 14 increase in the net re#enue from funds (G'FF)& 1 increase in

fee and brokerage income and 2/ reduction inn write offs>pro#isions for non+performing

assets as compared to ear ,6.

Muhammad Ibrar

M.Com (Finance)

-2

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



38/61

Performing ad#ances increased b 's. , bi!!ion as compared to ,6 whi!e GPs decreased

b /-. Present! GP constitutes 2.4 as compared to 14.0 in ,6 of the tota! !oan

portfo!io. $he branches reduced to 122 from 111,. $he bank hand!ed o#er 's. 30 bi!!ion of

import and e"port business during the ear& an increase of ,4.2 as compared to !ast ear.

FINAN(IAL ANALYSIS

Financia! statements are the principa! means of reporting the financia! condition and resu!ts

of operations of a business entit. $hese statements are meant to assist #arious parties in

decision making who are interested in the acti#ities of the business. $hese statements are

means to an end of he!ping stakeho!ders in decision+making. $o impro#e the ?ua!it of

decision making proper ana!sis of these statements he!ps a !ot. Financia! statements ana!sis

he!ps in determining the financia! conditions at an particu!ar points in time and

effecti#eness of operations of a firm during a specific period.

$he #arious stakeho!ders of business are interested in the ana!sis of financia!s statements.

ut the focus of interest of a!! is not the same. For e"amp!e& creditors and credit reporting

agencies are interested in finding out the credit worthiness of the firm to which the ha#e

e"tended credit or intend to e"tend credit. hort term creditors are interested in short term

!i?uidit of the business and !ong term creditors are interested in the !ong term cash f!ow

which the firm can generate o#er the !ong period of time. In#estors are interested in the

firm


39/61

e"treme! he!pfu! to high!ight changes o#er the time in financia! performance and financia!

conditions of the compan. $he tab!e shows common si7e ana!sis of the ba!ance sheets for

the ears ,2& ,6 ; ,3.

$he common si7e ana!sis gi#en in the tab!e shows that there ha#e been impro#ements in the

current assets in ,3 as compared to ,6& about 12. ut there has been decrease in fi"ed

assets of about 10. $he main reason for this change is increase in short term in#estment

showing a constant increase as a percentage to tota! assets. $his imp!ies that the bank is

concentrating now more on non+interest income and the interest rates are constant! fa!!ing.

hort+term ad#ances ha#e shown a significant change of 1/ whereas tota! ad#ances show a

tota! change of on! 0.-. $his is #er significant to note that ma=or decrease has occurred in

!ong+term performing and non+performing ad#ances.

$here is decrease in !ong term assets of about 12 which main! cause the decrease in !ong

term ad#ances which are about 1- and 0 decrease in !ong term in#estment.

On the !iabi!it side the tota! current !iabi!it has shown change of about 4. $he main

reason for which is increase in current deposits& which are about 0. $he !ong+term !iabi!it

of the organi7ation is a!so decreased b 4.

(ommon sie n:"sis o 8onso:idted B:n8e S!eet

Rs in '000 Common size (%)

assets 2007 2008 2009 2007 2008 2009

Cash/Bal. With Banks 3609108 70463707 35591280 21.5 17.93 15.79

lending to F.Is 4370006 3627557 19050791 2.6 1.89 8.45

Investent !"#$ 9190430 33883311 29580252 5.5 17.66 13.12

%dvan&es'(e)*o)ing !"#$ 39489369 43632117 89292490 23.4 22.75 39.61

+the) %ssets 8641263 2641471 3509351 5.1 1.38 1.55

#otal C,))ent %ssets 97782157 118177074 177024164 58 61.61 78.54

Investent !-#$ 19388131 33623058 25007413 11.5 17.53 11.09%dvan&es'(e)*o)ing !-#$ 28477494 26423058 10312297 16.89 13.77 4.57

%dvan&es'on e)*o)ing !-#$ 11813855 5739798 3671991 7.01 2.99 1.62

+e)ating *ied %ssets 2864018 2831534 3884990 1.7 1.48 1.72

e*e))ed #a %ssets 8297500 5026459 5486357 4.92 2.62 2.43

#otal -.# %ssets 70840998 73643958 48363048 42 38.39 21.45

Total Assets 168623155 191821032 225387212 100 100 100

Liabilities

B/(aales 1540592 1847025 2991269 0.91 0.96 1.32

Muhammad Ibrar

M.Com (Finance)

-3

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



40/61

Bo))oings "# 4004130 174533 174533 2.37 0.09 0.07

eosits ' C,))ent 102568752 118167469 152580240 60.83 61.6 67.69

-ease and +the)s 8838842 9986608 5933743 5.24 5.2 2.63

#otal C,))ent -iailities 116952316 130175635 161679785 69.36 67.86 71.73

Fied eosits 38747422 43998916 37252204 22.98 22.94 16.52+the) -ong te) -iailities 21264831 5212755 10883720 6.21 2.72 4.82

#otal -# -iailities 49219400 49211671 48135924 29.19 25.65 21.35

Total Liability 166171716 179387306 209815709 98.55 93.52 93.09

Shareholder's !"ity

"ha)e Caital 22481680 5180000 5180000 13.33 2.7 2.3

ese)ves 3960453 4258947 4712569 2.35 2.22 2.09

%&&,,lated -osses/()o*its '27282709 '722387 454403 '16.18 '0.38 0.2

ino)it Inte)est 1168264 1271700 1412932 0.69 0.66 0.62

",)l,s on )eval,ation 2123751 2445466 3811599 1.26 1.27 1.69

Total 24541439 12433726 15571503 1.45 6.48 6.9

(OMMON SIE ANALYSIS OF IN(OME STATEMENT

$he common si7e ana!sis of income statement is gi#en in the tab!e. 9hich shows that the

%* has been ab!e to contro! its interest or mark up e"penseN s a resu!t of decrease in mark

up e"pense as a percentage of tota! re#enues the gross profit margin has shown a trend of

continuous increase. $he increasing H>P Margin shows efficienc of the bank in contro!!ing

cost of sa!es (Markup e"pense) and better strateg of pricing& products and ser#ices.

$he pro#ision for non+performing !oans has a decreasing trend making no pro#ision for non+

performing !oans and diminution in #a!ue of in#estment& which increases the profit of current

ear. $he reduction in pro#ision is a good sign& which shows that the bank is reco#ering its

disbursed ad#ances. It shows the good credit management of the bank.

Muhammad Ibrar

M.Com (Finance)

4

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



41/61

$here is a great increase in non+markup income& which is about ,-. mong its indi#idua!

components in#estment income has shown a !arge increase as a percentage of sa!es.

Gon markup e"penses a!so show a rising trend in abso!ute amount though the common si7e

in percentages has shown a mi"ed trend due to the changes in re#enue figures. $he non+

performing e"panses a!so increased to about ,/& which is a #er high percentage& but the

other aspect of this is that it increased the efficienc and credit management of the staff.

*ike gross profit the net profit margin before ta" has a!so increased with ,4 rate. $he

e"traordinar item e"panse has not occurred in ,3 that caused a s!ight increase in the net

income. $he ta" e"panse is increased about 2 because of the increase in profit. *oss

brought forward from pre#ious ear is reduced b 14.

$he common si7e ana!sis of the %* is c!ear! showing that the bank has shown a !ot of

impro#ement in its performance. $he organi7ation shows profit for the first time in the !ast /

ears which is a positi#e sign and it wi!! bui!d up the mora! of the emp!oees b which the

can work more effecti#e! and efficient! increasing the performance of the bank.

(ommon sie n:"sis o 8onso:idted In8ome Sttement

Rs in #illions Common size (%)

$T#S 2007 2008 2009 2007 2008 2009

a)k , )even,e 11468 11385 9269 100 100 100

a)k , eense 6347 5476 1931 55.35 48.09 20.83

g)oss )o*it 5121 5909 7338 44.65 51.9 79.89

)ovisions and B/ets 1263 746 564 11.02 6.55 6.08

et a)k , In&oe 3858 5163 6773 33.64 45.34 73.07

on a)k , et,)nCoission B)oke)age 1097 2008 2142 9.57 17.63 23.1

ividends/&hange and +the)s 1818 1514 2803 15.85 13.3 30.24

#otal on a)k , In&oe 2915 3522 4945 25.42 30.94 53.34

#otal In&oe 6773 8686 11718 59 76.2 126.42

on a)k ense

%dinist)ative 4669 5879 6639 40.71 51.64 71.62

+the) ()ovision and Cha)ges 632 51 556 5.15 0.44 6

Muhammad Ibrar

M.Com (Finance)

41

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



42/61

#otal non a)k , enses 5301 5930 7197 46.22 52.08 77.64

()o*it Be*o)e t)ao)dina) Ites 1472 2756 4521 12.84 24.2 48.77

t)ao)dina) Ites '7200 25 0 62.78 0.21

()o*its e*o)e ta '5728 2781 4521 49.95 24.44 48.77

#aation 1739 1319 1704 15.16 11.59 18.38

()o*it/-oss a*te) ta '7467 1462 2818 65.11 12.84 30.39

"ha)e o* ino)it Inte)est 6 10 21 0.06 0.09 0.22

%&&,,lated -oss B)o,ght F)d. 19821 27283 722 172.2 210.64 7.78

%d:,stent against sh. Caital 0 25202 0 221.36 0

%)o)iation and #)ans*e)s

",)l,s on )eval,ation o* %ssets 0 238 0 2.1 0

#)ans*e) to "tat,to) ese)ve 2 332 527 0.02 2.91 5.68

%&&,,lated -oss B)o,ght F)d. 27283 722 454 237.9 16.34 4.9

FINAN(IAL RATIO ANALYSIS

$he user of financia! statements finds it he!pfu! to ca!cu!ate ratios when the interpret

compan


43/61

Finn8i: Rtio n:"sis

ARS 2007 2008 2009&R#LA

C,))ent atio 0.84 0.91 1.15C,))ent %ssets / C,))ent -iailities

%sset #,)nove) 0.07 0.06 0.04a)k, even,e / #otal %ssetset to %sset 0.99 0.94 0.93#otal et / #otal %ssets

et to ;,it 14.54 14.4 13.47#otal ;,it / #otal %ssets

Cove)age atio 0.1 1.15 3.34BI# / Inte)est ense

100

et,)n +n ;,it '887.99= 16.78= 18=et ()o*it / #otal ;,it > 100

%dvan&es to eosit 56.46= 46.74= 45=%dvan&es / eosits > 100

Investent to eosit 20.22= 41.63= 28=Investent / eosits > 100

Cash atio 9.59= 9.23= 28=Cash / C,))ent -iailities > 100

(URRENT RATIO7

%*


44/61

rupee of asset. !though the decrease is not !arge enough but it is a good sign for bank


45/61

trend in !ast three ears. $here is an increase of ,2 in ,3 as compared to ,6. this shows

efficienc of the bank to contro! the cost of sa!es.

NET PROFIT MAR4IN7

$his ratio shows the profit that is a#ai!ab!e from each rupee of the sa!e. fter a!! e"panses

ha#e been paid. Get profit margin is a!so showing an increasing trend. %* has impro#ed net

profit margin in the current ears. $he net profit margin has reached to - as compared to

,6 in which it was on! 1,.03. 9hi!e in ,2 it was in negati#e figure. It shows a good

impact on the %*


46/61

$his ratio shows the compandepartments and emp!oees are poor& particu!ar!

speaking of between the top and !ower !e#e!s of management.

$here is centra!i7ation of authorit and branch managers are bound and restricted to

take initiati#e.

Muhammad Ibrar

M.Com (Finance)

40

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



47/61

ue to o#er!apping nature of duties and =obs there e"ists chaos and confusion in

branches.

B% &e)#tment:@

uring m internship period in %*& in #arious departments& I noticed fo!!owing

departmenta! prob!ems.

(s! &e)#tment7

i. Got #er fre?uent! but there are instances of fake currenc notes& being

identified. t times notes recei#ed from other branches were found to ha#e certain

fake currenc notes.

ii. Counting mistakes occur due to o#ercrowding particu!ar! during the co!!ection of

uti!it bi!!s. Manua! counting sstem a!so affects efficienc of the bank.

iii. Code of conduct of cashiers is found unsatisfactor.

i#. $here is genera!! the !acking in obser#ing and practicing bank


48/61

ii. Identification of customer


49/61

ii. Proper scrutin at times is not carried out and it causes !oss to the bank or increase

procedura! timings.

iii. :mp!oees at times mismanage their time and fai! to forward bi!!s prompt!.

Fo#ei


50/61

It has a we!!+knitted and ade?uate! e?uipped branch networking sstem that

efficient! co#ers both the domestic and internationa! markets.

It is in#o!#ed in both corporate and retai! banking.

$he bank is acti#e! emerging and is engaged in internationa! trade and foreign

e"change transactions. Foreign trade #o!ume showed an increase of 12 o#er the

pre#ious ear.

d#ances in#estment of the bank shows a constant growth pattern. $he current ear


51/61

Promotions are carried out on annua! basis ignoring the importance of capabi!ities and

performance outputs.

OPPERTUNITIES7

Hrowing po!icies of the HOP on business and economic sectors pro#ide %* an

opportunit to efficient! meet with the business peop!e re?uirements of instant cash

faci!ities e.g. the go#ernment intentions of de#e!oping housing and agricu!ture

sectors.

Ho#ernment is taking #er bo!d steps to promote I$ in Pakistan %* has an

opportunit to impro#e in I$ stock e"change is #er #o!ati!e and takes immediate

effect so in times of crises conser#ati#e in#estors turns to sa#ing deposits.

%* is surrounded b man competitors it has an opportunit to aggressi#e

marketing to increase its business.

Increase the product range to meet the broader range of customers< needs.

THREATS7

$hreats are a!so e"terna! factors in the en#ironment& which are not in the fa#or of

compan& which can serious! hamper the compan


52/61

!ong with the growth in si7e& the banks are now incorporating inno#ati#e

approaches to their traditiona! commercia! banking operations& keeping in the #iew

the changing demand of the time. %* face prob!em.

$he po!itica! inf!uences affect the performance of bank #er bad!. Most of the !oans

become bad dad debits due to po!itica! pressure

Go stab!e go#ernment in Pakistan& Ho#ernment po!icies change with the change of

go#ernment.

$he concept of e#ening and aturda banking& te!ephonic and on!ine banking& $M


53/61

POLITI(AL FA(TORS.

$he po!itica! arena has a huge inf!uence upon the regu!ation of businesses& and the spending

power of consumers and other businesses. Kou must consider issues such as@

1. 5ow stab!e is the po!itica! en#ironmentN

,. 9i!! go#ernment po!ic inf!uence !aws that regu!ate or ta" our businessN

-. 9hat is the go#ernments position on marketing ethicsN

4. 9hat is the go#ernments po!ic on the economN

/. oes the go#ernment ha#e a #iew on cu!ture and re!igionN

0. Is the go#ernment in#o!#ed in trading agreements such as :%& GF$& :G& orothersN

E8onomi8 F8to#s.

Marketers need to consider the state of a trading econom in the short and !ong+terms. $his is

especia!! true when p!anning for internationa! marketing. Kou need to !ook at@

1. Interest rates.

,. $he !e#e! of inf!ation :mp!oment !e#e! per capita.

Muhammad Ibrar

M.Com (Finance)

/-

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



54/61

-. *ong+term prospects for the econom Hross omestic Product (HP) per capita& and so

on.

SO(IO(ULTURAL FA(TORS.

$he socia! and cu!tura! inf!uences on business #ar from countr to countr. It is #er

important that such factors are considered. Factors inc!ude@

1. 9hat is the dominant re!igionN

,. 9hat are attitudes to foreign products and ser#icesN

-. oes !anguage impact upon the diffusion of products onto marketsN

4. 5ow much time do consumers ha#e for !eisureN

/. 9hat are the ro!es of men and women within societN

0. 5ow !ong are the popu!ation !i#ingN re the o!der generations wea!thN

2. o the popu!ation ha#e a strong>weak opinion on green issuesN

TE(HNOLO4I(AL FA(TORS.

$echno!og is #ita! for competiti#e ad#antage& and is a ma=or dri#er of g!oba!i7ation.

Consider the fo!!owing points@

1. oes techno!og a!!ow for products and ser#ices to be made more cheap! and to a better

standard of ?ua!itN

,. o the techno!ogies offer consumers and businesses more inno#ati#e products and

ser#ices such as Internet banking& new generation mobi!e te!ephones& etcN

-. 5ow is distribution changed b new techno!ogies e.g. books #ia the Internet& f!ight tickets&

auctions& etcN

4. oes techno!og offer companies a new wa to communicate with consumers e.g.banners& Customer 'e!ationship Management (C'M)& etc

Muhammad Ibrar

M.Com (Finance)

/4

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



55/61

(HAPTER NO.2

A(TION PLAN FOR MAR'ETIN4 &EPARTMENT7

$his wi!! he!p the bank to take !ong+term perspecti#e for its marketing acti#ities& with

consideration on strategic approach of the bank. $here are #arious steps in#o!#ed in the gi#en

imp!ementation p!an& which wi!! come in order& according to their importance and sub=ection

on one another. Moreo#er& to bring order and efficienc to the difficu!t task of

imp!ementation p!an. It has been broken down into the steps& which be!ie#ed to be needed&

when de#e!oping a discip!ined action>imp!ementation p!an for !aunching financia! products.

Ste) *7 Business Re9ie=

s we ear! discussed that this imp!ementation p!an wi!! focus on marketing acti#ities of

%* and as a part of the marketing background component& the business re#iew is must. It

inc!udes the marketing database not on! of %* but a!so of other banks. $o de#e!op

marketing database& we first need to understand the scope of banking fo!!owed b a

comprehensi#e situationa! ana!sis of the financia! product& and market p!ace& which is

Muhammad Ibrar

M.Com (Finance)

//

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005


Yusha

Cell: 03013335005



56/61

re!e#ant to the target market and competition situation. $his wi!! be accomp!ished through

secondar research in Pakistan. %*etins

Principa!s of anking

Marketing

Yusha

Cell: 03013335005


Yusha

Cell: 03013335005

http://www.dawn.com/http://www.nation.com.pk/http://www.dawn.com/http://www.nation.com.pk/

UBL Finance Internship Report

Documents

Transcript of UBL Finance Internship Report