The field of banking has always been a source of inspiration for me during my entire academic career. To work in a bank, to acquaint with its working mechanism was always a point of interest for me and God gave me a golden opportunity to complete my internship at UBL, one of the leading bank in Pakistan and well known in world due to its appearance in the international markets. I had a general idea about the banking, but once I practically started the internship in banking field I observed much about banking, I realized the importance and significance of commercial banking for the development of economy. To adjust myself in such a large commercial organization was not an easy task, but by the grace of Almighty Allah aid my internship in a befitting manner and I learned a lo about the overall banking arena. This expanded my vision about the banking sector, which in turn enabled me to make an appraisal of the economic situation of our country. This report is a thorough essence of my rigorous studies which I undergone through in a period of two months in a commercial bank. I have exclusively studied and observed the operations/ functioning of the bank and tried my best to abreast myself with all the dimensions of the banks. The purpose of this report is to evaluate the performance of UBL in diversified avenues and give concrete recommendation for further improvement. Although the bank is functioning satisfactory, but the path to ultimate success is still full of threats and hurdles. It was a great experience to work there and contribute handsomely in the process of appraising its pros and cons and feeling to be a significant part of the bank. I am thankful to all those who helped me in one-way or the other and guided me in the preparation and compilation of this report in a presentable fashion.

S. No. Title Page

1.1 1.2 1.3 1.4 1.5 1.6 INTRODUCTION OF THE REPORT Introduction Purpose of Study Scope of Study Limitations of Study Methodology of Report Scheme of Report 1 1 1 2 2 3 I II V VI VII VIII IX

Section # 2 Chapter – 2
2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.8 Introduction to UBL Banking History Banking in Pakistan Towards Islamization of Economy Birth of UBL Number of Branches Subsidiaries Functions of UBL Role of UBL in Banking Sector Computerization of UBL 4 4 4 6 6 7 7 7 9

Chapter – 3
Deposits, Remittances, Credit & Clearing Departments


3.1 3.1.1 3.1.2 3.1.3 3.2 3.2.1 3.2.2 3.2.3 3.2.4 3.2.5 3.2.6 3.3 3.3.1 3.3.2 3.4 3.4.1 3.4.2 3.4.3 3.4.4

Deposit Department Functions performed by Deposit Department Types of Accounts Nature of Accounts Remittances Department Demand Draft Telegraphic Transfer Mail Transfer Pay Order Rupee Travelers Cheque Uniremote Credit Department of UBL Credit department of UBL Nowshera Procedure for Financing Clearing Department Procedure for clearing of Cross cheques IBC LBC OBC

12 12 13 13 14 14 15 15 16 16 16 17 17 17 19 20 21 21 21

Section # 3 Chapter – 4
4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.8.1 4.8.2 4.8.3 Financial Analysis Group and its Operations Basis of Presentation Significant Account Policies Risk Management Concentration of Credits and Deposits Investment Portfolio Profitability 22 22 23 25 26 27 27 28 28 32 34

Common size analysis of Balance Sheet Common size analysis of Income Statement Financial Ratios

Chapter – 5 3

1 Franchise Agriculture Supplies Stores Action Plan 2 7.5.3 4 .1 Techniques for effective Management and Recovery of Advances Action Plan 3 Bibliography Annexure 57 57 59 59 62 68 69 7.3 5.2 Implementation Plan Action Plan 1 7.1 7.2 5.1 Human Resource Department 6.2.4 Qualitative Analysis Qualitative Analysis of UBL SWOT Analysis Strengths Weaknesses Opportunities Threats 41 44 45 46 46 47 Section # 4 Chapter – 6 Recommendations 5.1 Recommendations 6.1 5.2 Credits and Advances 49 49 53 Section # 5 Chapter – 7 7.

No.LIST OF TABLES S. 1 2 3 4 5 Common size Analysis of Balance Sheet Common Size analysis of Income Statement Financial Ratios Cost Schedule of Action Plan Cost/revenue schedule – Marketing Plan 30 33 34 59 67 5 . Title Page No.

30 31 31 31 33 35 35 36 36 37 37 38 38 39 39 40 40 6 .LIST OF GRAPHS S. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Title Total Current Assets Fixed Assets Distribution Short Term Liabilities Long term Liabilities Income composition Current Ratio Asset Turnover Debt to Assets Debt to Equity Coverage Ratio Gross Profit Margin Net Profit Margin Return on Investment Return on Equity Advances to Deposits Investment to Deposits Cash Ratio Page No.

10 11 7 .LIST OF CHARTS S. 1 2 Title Senior Management of UBL Organizational Hierarchy of UBL Page No. No.

List of Acronyms AD ATM ATR AVP AOF BOG BOD CA CP DAC DD DP Note EBIT ESVP EVP FDD FMT FTDR FTT GM GOP GPM HBL IMS LC MCB MT NPM OG1 PLS PO RCAD RF RM ROI RTC STDR SVP SWOT TIE Authorized Dealer. Automated Teller Machine Asset Turn Over Assistant Vice President Account Opening Form Board Of Governor Board Of Director Credit approval Credit Proposal Disbursement Authorization Certificate Demand Draft Demand Promissory Note Earnings Before Interest & Tax Executive Senior Vice President Executive Vice President Foreign Demand Draft Foreign Mail Transfer Foreign term Deposited Receipt Foreign Telegraph Transfer General Manager Government Of Pakistan Gross Profit Margin Habib Bank LTD Institute Of Management Sciences letter Of Credit Muslim Commercial Bank Mail Transfer Net profit Margin Officer Grade 1 Profit & Loss Saving Account Pay Order Regional Credit Administration Department Running Finance Relationship Manager Return On Investment Rupee Traveler Cheque Special term Deposited Receipt Senior Vice President Strength Weakness Opportunities Threats Time Interest Earned 8 .

These include acceptance of deposits and disbursement of advances to individuals and others at higher rates. The whole report has been divided into five main sections as describe below: Section I is introduction to the report and briefly describes the scope. 2. UBL on October 19. best way group and Abu Dhabi group holding 51% of the banks share and thus has emerged as the largest private bank surpassing MCB. Banks perform various fundamental factions. Banking operations and services are one of the basic needs of an economy.e. and recommending possible solutions for problems. The UBL has shown the fastest growth pattern and in a period of just 27 years became the second largest bank of Pakistan. purpose. For meeting the purpose both secondary and primary data have been used. UBL. a commercial bank was established in 1959 as result of reckless efforts made by Agha Hassan Abidi. 2002 was privatized and bought by two financially sound parties of international repute i. which are directly or indirectly contributory towards economic and social development of countries. The bank is showing re-emerging indications as is evident from its financial statements. The bank image however adversely destroyed when it suffered heavy losses during its nationalization period due to political and other factors. The purpose of this report is to study operations and analyze performance of UBL to see whether the bank is successful in its operational performance or not.TT UBL Telegraphic Transfer United Bank LTD EXECUTIVE SUMMARY 1. 9 . methodology and limitations faced during the preparation of the report. 3.

effective management and recovery of advances and marketing activities respectively. These plans are related to exploration of new opportunity present in the agriculture sector. Three action plans are included in section V with the hope that if implemented properly will enhance the bank’s overall productivity and will also enable it to compete more efficiently and effectively. Section III. 4. An attempt has been made so that readers of this report should be able to gain sufficient knowledge of the processing and procedures of the operations carried out by these departments. 1947. findings extracted are listed below: 10 . the analysis part of the report and is comprising of two chapters. As an internee I was deeply concerned about the performance level of the UBL and therefore tried to analyze the bank financial performance that is included in chapter 4.Section II is the review portion and contains five chapters. First chapter is introducing the organization. this chapter reveals that the bank is trying to regain its position in the present more dynamic and competitive environment. SWOT analysis is an integral part of this chapter. Major findings are included in this summary which is the outcome of these analysis. However in the chapter pertaining to foreign exchange department main focus is places on the payments regulations and procedures of letter of credits in the light of foreign exchange regulation Act. During the study. UBL which came in to being in 1959. Chapter 5 is the critical analysis of the departments and its functions. Sector IV is the recommendation part and is derived from the previous section. Remaining four chapter are explaining operations and relevant broader but comprehensive set of information of the functional departments of the bank. Major findings are stated in the later part of this summary.

Recruitment policies should be changed. Presently about 1100 employees have been placed in surplus pools that are unaware of their future. ii. vi. employees do not share each other workload. viii. vi. Non-performing advances have reduced. deposits show consistency. should be discouraged. vii. HRD should frequently conduct refresher courses. Exercise should be evolved to bring needed cultural and other management changes. Mark up expense of the bank has reduced and administrative expenses have shown increase. iii. Recommendations of the report are as under: i. 5. Political interference in placements etc. The recent downsizing hustle and bustle trends have affected bank’s efficiency due to lay-off survival syndrome. iv. iv. Computer training courses should be imparted. Newly developed account opening form carries restricted space where only two applicant’s names can be incorporated. Training for developing managerial leadership should be provided. v. Due to lack of job rotation opportunity and lack of informal group existence. Motivation level of employees is not satisfactory which effects their own and as well as performance of the organization. ii. In proportion to number of accounts and functions performed sizes of branch’s buildings are small. 11 .i. MBA’s and other business related qualified individuals should be hired. v. iii.

Use of cheap means for posting etc. should be properly trained for their jobs. HRD should focus on designing new courses to build organizational image and goodwill. xii. Skills should be development of employees to assess management abilities of the borrower’s of their business. Credit officers should be enabled to carry out proper and correct documentation. All employees should participate in marketing operations of the bank. Credit officers should be equipped with knowledge and skill to analyze. Marketing at Desk concepts should be practiced. viii. xv. 12 . x. Proper promotional campaign on media should be carried out. xvii. xix. xx.vii. xviii. For enhancing motivation level fair and clear career development policies should be implemented. ix. Staffs who deal with credit. xi. verify and maintain securities in handsome manner. xiv. Relationship managers should be trained to correctly access credit related risks. Marketing department at Hub branches should be created. Customer orientation culture should be developed among employees. xvi. xiii. Various administrative reforms should be made to resolve quickly default cases. should be curbed.

1. This is an essential academic requirement.1 INTRODUCTION: Students of M.Com studying courses leading to Master degree in Commerce are required to undergo an internship programme of two months duration. Peshawar.2 PURPOSE OF STUDY: The purpose of the study is to work in real life situation and learn banking practice by doing. The internship is followed by comprehensive report writing. This report is properly evaluated on the basis of its description and analytical capabilities by internal and external examiners. In this context its objectives are: 13 .xxi. Marketing research and development department of the bank should carry out situational analysis and develop short medium and long-term plans. CHAPTER # 1 INTRODUCTION TO THE REPORT 1. I did my internship in United Bank Limited Nowshera Cantt Branch. required to submit to the research and development division (R&DD) of Quaid-e-Azam College Of Commerce.

3 SCOPE OF STUDY: The study is confined to banking operations. ii. which are closely relevant to the purpose of the study. Keeping in view the purpose of the study. have been ignored. An attempt. which otherwise might be equally important. Discussion with Bank Personnel. operational analysis. To analyze banking operations i.e. To improve report writing skills. 1. 14 .4 LIMITATION OF STUDY: It is to admit that the study attempts only those aspects.i. this seems a comprehensive effort. but not having a direct bearing on the conclusions arrived at this study. financial analysis. facts and figures. along with all its limitations. Primary Data:   Personal Observations.5 METHODOLOGY OF STUDY: Both primary and secondary data were used in compilation of the report. iii. 1. which is to make an acquaintance with practical doings in the bank. Another important limitation of the study is time and space constraint. To develop concrete and feasible recommendations. to collect financial data and general statistics of the bank has been made. The most important limitation from which the study suffers is the nonavailability of information in a manner required for analysis and the secrecy of the bank. Methodological tools used were: i. 1.

scope.6 SCHEME OF REPORT: The report is divided into five sections as under: Section-I consists of chapter 1. Internet. which include operational and financial analysis of UBL respectively. identified in the previous section. newspapers and books. In this section background history of UBL. methodology and scheme of the report.ii. limitations. Section-IV summarizes the findings and recommendations of the study. Secondary Data:       Brochures/ Manuals of the bank. 15 . purpose. Section-III consists of chapter 4 and Chapter 5. Journals. 1. Section-V deals with action plan to implement the recommendations. Annual Report State Bank Foreign Exchange Manual Bank internship reports on UBL available in library. its organizational structure. which includes background. and department operations are discussed. Section-II consists of five chapters (Chapter 2-3) and includes organizational review.

(1998) Practice & Law of Banking in Pakistan (6th Ed. Interest to eliminate “interest” from its economy by developing various alternatives. and UBL have been privatized and HBL is in the process of its privatization. up till now MCB. 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. However the process is reverse since 1991. The GOP has shown.CHAPTER # 2 INTRODUCTION TO UBL 2. Thereafter this sector has witnessed enormous growth. which mean a bench and they further relate banking business inception to Jews in Lombardy.1 1 2 Deposits: S A Haq.C1 2. Islamabad 16 . In 1974 banks were nationalized.2 BANKING IN PAKISTAN: Banking started in Pakistan after the bold and emergent decision of formulation of SBP on July 30. this word was Italianated into “Bank.) Council Of Islamic Ideology (1980). Some authors opinion is that this word is derived from the words “Bancus” or “Banque”.1 BANKING HISTORY: Consensus on the origination of word “Bank” is not yet reached at.3. Authors quote Babylonians (few quotes Chinese) who developed banking system as early as 2000. in the hope that new era of growth could be achieved through it. Elimination of Riba from Economy. To achieve this objective various efforts are made with the following outcomes: 2. B. ABL.3 TOWARDS ISLAMIZATION OF ECONOMY2: Interest based transactions/businesses are “Haram” in Islam. 1948. 2.

 Hire purchase.  Rent sharing.3. to be paid in future.  Modaraba: equity sharing of borrower profit and loss on basis of purchase of modaraba certificates.  Ijara: leasing. purchases of goods by banks and their sale to clients at  Bai-Salam.3 Trade Related Modes of Finances: appropriate mark-up in prices. PLS (Modarba) Accounts  Current Accounts: (with no return paid) 2.2 Loans:  Qarz-e-Hasana  Lending on the basis of Service charges 2.  Bai Muajjuai.3. purchase of goods from clients by banks and their resale to the client at increased prices. 2.3.  Purchase of trade bills.4 Investment Type of Modes of Finances:  Musharaka: financing on the basis of profit and loss sharing. 17 .  Financing for development of property on the basis of developmental charges.  Equity participation through purchase of shares.

Senior management of the bank is shown in the chart given at the end of chapter. United Arab Emirates. which extends to the remotest areas of the country. UBL was notified and included as a private schedule bank with authorized capital of Rs. Oman and The United States. issued and paid up capital of Rs. 10 million divided into 1 million shares of Rs. 2.2.5 NUMBER OF BRANCHS: UBL has a large network of branches. UK  United Bank AG (Zurich). 1959. Switzerland 3 UBL (2003) Annual Report 18 . Currently BOD and president/ CEO Mr. UK Switzerland. In December 1983. These branches are playing a significant role in channeling home remittances and foreign trade of Pakistan. Amar Zafar Khan being a member of this newly formed set up manage UBL. Nauman Hussain by the newly privatized bank. 2. Qatar. there were 1623 branches whereas in 1974 it had only 1238 branches and in October 2003 these figures show total number of 1007 branches3. 20 million. UBL has been very active in increasing its overseas branches network. Another development is the appointment of director operation. namely:  United National Bank Limited (UNB). Saudi Arabia. The first foreign branches were established in London in 1963. Yemen Arab Republic. Now UBL has branches in Bahrain. 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.4 BIRTH OF UBL: On November 9. Egypt.6 SUBSIDIARIES: UBL has four subsidiaries. 10/ each.

present it undoubtedly the most dynamic and progressive.. In the light of this section UBL’s functions can be categorized as under:  Agency services  General Utility Services  Underwriting of loans raised by the Government or public bodies and trading by corporations etc. Iqbal Khan. Section 7 of the Act authorizes banks to engage in the prescribed form of business. M. IMS IMS. 2. 1962. United Executers and trustees Company Limited  United Bank Financial Services (Private) Limited 2.  Providing specialized services to customers. 5 19 . 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 4 Cap.8 ROLE OF UBL BANKING SECTOR: The impressive growth and development. which UBL achieve. (2002) Internship Report On UBL Nowshera Cantt Branch. (2002) Internship Report On UBL Main Branch Peshawar.7 FUNCTIONS OF UBL: UBL is a commercial bank. which transacts the business of banking in accordance with the provisions of BCO. (Rtd) Syed Hamid Ali Shah. and  Hajj-related services.

This has also allowed the bank to maintain its leadership within the industry. Professional management  Modern banking policy  Human resource development  Small loans (or) micro credits  Pacesetter in economic research established in 1967. UB-Online a web based service 6 Cap. The use of computers has enabled the bank to save time and efforts. (Rtd) Syed Hamid Ali Shah.  UBL . 7 20 . Every branch has been decorated with microcomputers. anywhere. Karachi IMS. 2002).On line System7: Themes of this service is “Access any time. raise efficiency and deliver the goods speedily to its customers. UBL. PPI Circular. department for economic research. (2002) Internship Report On UBL Main Branch Peshawar. (October 8. Its three computers centers Rawalpindi. any device” which symbolizes comfort.9 COMPUTERIZATION OF UBL: UBL has taken leading start in the introduction of computers in (1966- 1968)6 in important cities. Lahore and Karachi are equipped with the modern mainframe computers of various capacities.  Utility bills collection  Credit cards (unicard-1970)  Travelers Cheques (Humarah-1971)  Diaries and calendars – received prizes too  Promotion of sports 2. convince and connectivity.

which is a well-develop on-line branch-banking package. and statement of accounts for 21 .that can be accessed through multiple media link like. (i) PC via internet (00) Mobile phone with WAP or free SMS) (iii) Personal Digital (iv) assistants and (v) Plain telephone. following are some of the exciting features: o Accounts statement & electronic data interchange o Graphical analysis o Alerts service /facility. The system automatically prepares various report. central bank returns. which can affect money transfers within minutes. Similarly the system used for local transfer of money transactions is called uni-remote. search facility and activity long o The banks as another computer-based system known as “UIBANK”8.  Hajj service: Keeping to its tradition is august 1982 provided electronic facility at its Hajj booth and has installed now modern computers at designated branches (Hajis) and increasing efficiency.ubl. 8 www.  Money Gram facility: The bank has recently employed money gram service system. This facility has reduced the service time to less than six minutes per Haji compare to about half-an-hour to 45 minutes per Haji earlier.

Khan Head Corporate Banking Group Shaharyar Ahmed Head Investment Banking group Aman Aziz Siddique Shahid Waqar Mehmood Head Commercial bank Risha Moheyuddin Global Treasurer Khalid Munawar-ud-din Head Credit Policy Supervision Muhammad Ejazuddin Audit Chief Mehboob A. Annual Report. Karachi.2. (2003).10 MANAGEMENT OF UBL: Chart 2. 22 .1 Senior Management of UBL 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 Rukhasana Asghar Global Head Human Resources Ameer Karachiwala Chief financial Office/HCA Head International Operations (Dubai) Ali sameer Chief SAM (domestic) Source: UBL.

2.11 FUNCTION HIERARCHY: Chart 2. (2003). Annual Report Karachi.2 Organizational Hierarchy of UBL 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 Source: UBL. CH # 3 23 .

1. v. 24 . REMITTENCES.CASH. i. Account opening form (provided by bank) Two photograph (in case of illiterate person) Specimen Signature card (Provided By Bank) Cheque Requisition Form Introduction of Account. CREDIT & CLEARING DEPARTMENTS: DEPOSITE DEPARTEMNT 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.2: Opening of Account: To open an account in UBL the customer will have to fill an account opening form in front of bank officer. Deposits are the backbone of any bank. 3.1. iii.C Copy. Nowshera Cantt Branch accepts deposits under the following three accounts. other functions of the bank primarily depend upon the type and size of deposits. iii.1. Current account PLS Saving account Terms Deposits 3. 3.1: i.I. Documents Required in Account Opening: N. He has to sign in all required places in front of the officer.1: Function perfumed by cash and deposit department in UBL Nowshera Cantt Branch. ii.2. iv. vi. ii.

joint names. individuals. The account can be opened with minimum amount of rupees 1000/-. bank is authorized to recover predetermined charges. These accounts can be opened either in Pakistani rupees or in few major currencies of the world. The banker will run the account according to the rules. but if the customer gives special instructions the Bank will have to follow it. Due to enormous competition UBL has introduced daily profit current account for corporate clients called (UNISEVER) minimum balance required is Rs. If the instructions are not given. Joint account: In this type of account two or more than two persons will open the account. These account are usually maintained for business purpose. charitable organizations. The account will be operated by one account holder in case of (either of the survival). B) PLS Saving Account These accounts were intended with the aim of encouraging thrift among people.Types of Account: a. These accounts can be opened in the name of.000/-. If minimum balance requirement is not met. The basic feature is the profit and loss sharing as according to non-interest based banking system. NATURE OF ACCOUNTS IN UBL NOWSHEREA A) Current Account: These are non-profitable demand accounts. 100. all the account holders will have to sign the check.6%) return on these accounts. trust accounts. 25 . b. Bank offers (4%. Individual Account In this account a single customer operates the account.

Latest technology and telecom data transmission has made it possible to make such transactions with in minutes. Demand draft (D. STDR’S – Special Term Deposit Receipt (local currency): Special Term Deposit Receipts are issued for different periods of maturity ranging from one month to 5 years.D is a negotiable instrument issued by branch of the bank drawn on other branch of the same bank.2 NTDR’s – Notice Term Deposit Receipt (local currency): These are term deposit with special features that these can be withdrawn any time but after giving a predetermined and pre agreed early notice. C) Term Deposits: Term deposits are also called fixed deposits.D) D. Minor’s accounts can be opened on the condition that their guardians shall operate these accounts. Zakat is applicable on local currency saving accounts. having attractive returns. UBL Nowshera Remittances Department performs following functions. The rate of return varies with the duration for which the amount is kept with bank There are two types of term deposits. 26 .2. 3. REMITANCES DEPARTEMNT: Current business trends demand fast movement from one geo-graphic end to another. Interest is paid to the depositor on all fixed or term deposits. There is no limit on denominations. These can be with drawn after a specified period of time.3.Unlike current accounts.

D application form. Telegraphic transfer (T. 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.D.T. That is singed by two officers must having power of attorney.D it is given on a printed-paper and singed by two officers but.A) Procedure For D.T: The procedure for T. They will have to submit a N. If the test number agrees the bank make payment to the party. Mail Transfer (MT) When the money is not required immediately.  Name of Payee  Place of payment  Amount of D.D. 3. 27 . But in D.T): Transfer of funds to another branch of the same bank with the help of test numbers.D Commission is charged on D.2.: Purchaser is asked to fill in an application form duly singed by applicant.I.D. only test number is given to the customer.D as bank income. After depositing cash the remittances incharge prepare a D. 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. Three things should be maintained in the form. in T. the remittances can also be made by MT.T is same as D. The applicant is asked to deposit the cash specified on the application form to the teller.3. A) Procedure for T. UBL takes mail charges from the applicant where no excise duty is charged. Bank also provides this facility to general public who don’t have account in UBL.C copy along with D.

Pay Orders: Pay order is banker cheque issued favoring a named beneficiary. which then marked canceled along with other documents and prior entries. the name of the branch is also written. This tool transfers money from one branch of UBL to other through electronic transfer. The issuance bank is discharged by payment in due course. 3. One I.C Brand named “Hamrah” in November 1996.6 Uni Remote: This is a new tool for the transfer of money. The amount is deposited with teller and the receipt is shown to remittance inchraged.T. This is a step towards the online banking taken by UBL. PO can be cancelled at original purchaser’s request in writing and surrender the instrument.5 Rupee Traveler Cheques: UBL has launched R. RTC’s lost cases are communicated to HO and client is either repaid or new RTC’s are issued to him/her. 28 .2. Application for the PO stamped and the customer’s account balance is checked or cash received for the amount PO and other charges. The remittances incharge will transfer if by using device (computer) through online service. The customer will have to fill the deposit slip. 3. The fund transfer is must be supervised by another authorized officer. These are issued to applicants with varied denominations without excise duty and commission. Thereafter it is delivered to the customer. Pay Order leaf is typed and crossed if required and signed by two authorized persons.2. On the slip he will write the name and account number of the person to whom the money will transfer.D copy is also attached with slip. Every time for this is five minutes. When issued HO account is credited and on encashment the same account is debited.

remunerations and suitability). are its prudent financing decisions. which equate the principle of lending (safety. which mainly reflect the high quality of bank’s management.3.3 CREDIT DEPARTMENT OF UBL General Credit extension is the principal function of a bank. variable reserve requirements. authorities and facilitate decision-making.  Running Finance (for one year)  Demand Finance (3to 5 years) 3. selective credit restrictions and prudential regulations. UBL Credit Policy: Credits operations are undertaken in accordance to bank’s credit policy. Also the indicators. through which pace of activity is accelerated in the various sectors of economy. 3. 29 . SBP affect credit decisions through the weapons of bank rate.3. proper control of finance and prompt recovery. banker will ask the following questions. The policy strictly prohibits violation of SBP/Local central bank’s rules and suggest financing of self liquidating.2 Procedure for Financing from UBL When a party comes for financing. responsibilities. liquidity.3. Credit department performance is subject to a defined policy on credit control exercised by the SBP.1 CREDIT DEPARTMENT OF UBL NOWSHERRA BRANCH Facilities offered by UBL Nowshera. open market operations. cash flow supported and well collateralized transactions. dispersal. In this regard the credit policy of a bank play a very important role as it provides the overall framework.

No lending is done with out purpose. construction business etc. they want to apply for the finances.  Commercial  Residential The bank prefers commercial security. There can be two type of security. He prepare report of at least three pages. Having clear legal opinion RM start preparing credit Approval 30 . The second question arises of the cash flow that how much flow is generated by the party from the current business.2. He acts like a bridge between the two.3.3.2 Business The party must have some specific running business i.2.e. In the first instance the party would prepare the following property documents. The valuator will visit the site and set market value and FSV of the said property.3 Security: The bank will secure itself against the lending.3. Relationship Manager (RM) is mainly responsible for the relationship between the bank and party.1 Purpose: In this the party mentions the purpose. ICM&L and Tajak Builder are on the panel of UBL Nowshera. These document sent for one page legal opinion to any layer on the panel of UBL.3.  AKS Shajarah  Naqsha Tasveeri  Approved Building Plan  Tresh fard  Intaqal Naqal The party is asked to contact any valuator on the panel of UBL. 3.2. general merchandise. 3.

RM rectifies the acceptation and send it back to SRM.A is sent back to RCAD. He forwards the CA to SCO.(CA). He checks the CA and after signing it sent to CAD. SRM studied and pass it to credit officer. 3. they issues DAC. RCAD make a check less list and asked the RM to contact the party to complete the said documents they are. The documents are singed by the RM & AM and then forwarded to UBL RHQ in Peshawar. after his signature the C. Here SRM examines the CA if he found some exception he will send it back to the respective Rm. After his examination the CA is passed on to the credit risk manager. CLEARING OF BILLS: General: Bank can make payments of only open Cheques on the counter payment. A copy of DAC is sent to RM and NICF account is opened and debit transaction starts. Payment of cross Cheques cannot be made on counter its payment is possible through 31 . Whose office is at UBL RUCO at Lahore.P Note  Mortgage Deed  NIC of executants and witness  Stock report  Insurance policy  Party profile After completion of charge document RM send it to RCAD when they found it correct.  Letter of continuity  Personal Guarantee  Letter of hypothecation of stock  D. He has three hours of time to study the CA and if found correct then he pass it to another credit officer.4.

 Inter Branch Transaction  Inter Bank Transaction 3. 32 . Bill for realization.1 Procedure of Clearance of Cross (Cheques): Whenever bank receives a cheque of other bank from the client he cannot make payment on the counter.collecting bankers. The functions of clearing department is divided into two main classes. By special crossing cheque is secured. The bank receives it on other day. It is signed by authorized person. Bill lodged for clearing ……. The half part of slip is given back to the customer. Cr The Cheques are sent on the same day for clearing. Then again on he smile paper the amount of all the Cheques along with the bank names are added and attached to cheque presented for clearing. Cr The other entry passed its Dr. ……. and advice is also attached with the cheque presented for clearing. Dr Bill for collection ………. The following entry is passed on sending the cheque for clearing. Dr Bill lodged.4. The paying bank receives the receipt and the amount is credited in the respective account. after the special crossing and is necessary endorsement the banker write the amount along with cheque number on paper and attach with each slip. HQ account and Cr Party account. On the back of the cheque the stamp is made of payee account will by credited on realization. If it is stolen the paying banker would not suffer because of non-endorsement. The paying banker passed the following. The first job banker has to perform is to put a special crossing across the face of cheque. ………. Along with the cross cheque the customer has to fill the deposit slip.

Cr In case of spoke branch Ho a/c………. Dr Ho a/c……….4. Cr 3.4 OBC When the bank receives the cheque from its customer or from any other spoke branch drawn on any other bank of any other city. after receiving OBCA the bank will passed the following entry. Ho a/c……….4. Of the required amount is available in the account they will match the signature on the cheque along with their SS card. received cheques from their spoke braches as well as from other UBL branches of the country. If all the requirement are completed the bank will send an IBCA to the bank from which cheque is sent 3.2 I B C: It means “Inter Branch Transaction” when UBL received a cheque a drawn on the customers of his branch.3. They send LBC advised to the bank from which the cheque was received.3 L B C: LBC means local branch cheques received for collection. In case of his own customers. Cr 33 . NBP a/c ……….4. drawn of any other bank in Nowshera. Dr Customer a/c………. They sent the cheque to the UBL main branch of that city. Dr Spoke Branch a/c………. UBL Nowshera. They send the cheque to responding bank and after clearing the cheque through clearing houses (which is NBP) in Nowshera. first they will cheque the amount in the account on which cheque is drawn. The following entry is passed after sending LBCA.

2 BASIS OF PRESENTATION The purchase and sales of UBL are restricted to the amount of facility actually utilized and the appropriate portion of mark up there on. Overtime comparison and Common Size analysis are carried out with the view to extract concrete conclusion to describe financial standing and performance of the bank. 4. They strictly observe the rules and regulations as applicable and promulgated by the GOP and or SBP. Pakistan b) Subsidiary Companies  United National Bank Limited. Switzerland  United Executers and Trustees Company Limited  United Bank Financial Services (Pvt) Limited 4. UK  United Bank AG (Zurich).1 THE GROUP AND ITS OPERATIONS The group consists of a) Holding Company United Bank Limited.CH # 4 FINANCIAL ANALYSIS: INTRODUCTION These section efforts have been made to cover all relevant aspects of the financial performance of UBL. 34 .

rescheduled and restructured loans are treated in accordance to SBP regulations. Fees/commissions etc. if any. Debts securities purchased at premium or discount are amortized over their maturity periods.4. 35 . Advances These items are stated net of provisions against non-performing loans as per SBP PR – IIIV. Dividend income is recognized on accrual basis of declaration of dividend up to the year-end. on Letter of Credit and others are recorded on accrual basis. Unquoted securities are valued at the lower of cost and break up value and difference is charged to income.3 SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition Returns on advances and investments are recorded on accrual basis. • Investments: UBL classify its investments as stated below. a) Held for trading b) Held to maturity c) Available for sale-other than the above two types In the light SBP regulations quoted securities are shown at market values and any changes arising are taken to profit and loss account only upon actual realization. Provisions for diminution in the values are made after permanent impairment. Returns on classified assets are recorded on receipt basis.

As a result such differentials are now transferred to retained earnings/accumulated losses as per the Securities and Exchange Commission of Pakistan’s (SECP) clarifications. Owned Such assets are showed at their cost or revalued amount less accumulated depreciation and impairment loss. The finance charges are allocated to accounting periods in a manner so as to provide a constant periodic rate of charge on the outstanding liability. The outstanding obligations are shown as a liability. Gains and losses on sale of fixed assets are included in income currently. a) Sales under Purchase Obligation: These are reflected as liabilities and the b) Purchase under Resale Obligation: The differential of the contracted price and resale price is amortized over the period of their contract and recorded as income. if any. except that the related surplus on revaluation of fixed assets is transferred directly to retained earnings/accumulated losses. No depreciation is charged on freehold land. 36 . surplus on revaluation can now be reversed to the extent of incremental depreciation charged.• Lending/Borrowing from Financial Institutions charges against these are recorded as an expense on pro rata basis. amendment related to section 235 of the Companies Ordinance 1984. Leased Assets under financial leases are stated at cost. During the year. b. • Fixed Assets and Depreciation a.

37 . spot. monitor and manage these risks are as follow.4 RISK MANAGEMENT The bank is primarily subject to interest rate. Deferred tax debits are. 4. forward and swap transactions in the inter bank market and with the State Bank of Pakistan in order to kedge its assets and liabilities and cover its foreign exchange position. recognized only if there is reasonable expectation of realization of the amount. Rental obligations under operating leases are charged to profit and loss account as incurred. whichever is higher. Currency Risk Management For the purpose of efficient management of this risk. however. The bank has designated and implemented a frame work of controls to identify. the group enters into ready. credit and currency risks. During year transactions are converted into Pak rupees applying the exchange rate at the date of respective transactions.• Taxation Current Provision is based on the taxable income for the year or minimum tax computed on the basis of turnover. Gains and losses are included in income currently. using the liability method in respect of those timing differences. which may reverse in the foreseeable future. c. Foreign Currencies: Balances are translated into rupees at the applicable rate of exchange prevailing at the balance sheet date or where applicable at contractual rates. d. Deferred The bank accounts for deferred taxation on major timing differences. Deferred Cost and Lease Payments These are amortized over a period of five years.

5% to private sector. Majority of the depositors fails in the category of individuals.178. 139. Interest rate Risk Management The group is mainly exposed to mark up interest rate risk on its deposit liabilities and its loans and advances and investment portfolios. recommends financial institutions and also controls cross border/country risk.5 CONCENRATION OF CREDIT AND DEPOSITS1 The major class of business for UBL related to advances is the textile and private sectors. The group’s interest is limited since the majority of customer’s deposits are retrospectively reprised on a six monthly basis due to the profit and loss sharing principles. 4.183. The bank’s major credit risk is concentrated in textile sector. 1 UBL (2003) Annual Report 38 . contributing 65% of the total deposits.2% to textile and 74.323M. Most of the loans and advances portfolio comprises of working capital.Credit Risk Management Out of the total assets of Rs. The bank’s financial institution risk management unit assesses. The asset liability committee of the bank reviews the portfolio of the bank to ensure that risk is managed within acceptable limits. To manage it the bank applies credit limits to its customers and obtains collaterals. UBL is advancing 27.879M assets subject to credit risk amounted to Rs. which are reprised on a periodical basis. 958. Credit risk in the portfolio is monitored by the CRM who formulate appropriated policies and procedures to ensure building and maintaining quality credits and efficient credit process.

10% increase in fee and brokerage income and 75% reduction inn write offs/provisions for non-performing assets as compared to year 2002. Provision for diminution in the value of these securities is made after considering permanent impairment. in their value.4% as compared to 14. 4. securities continue to be stated at cost.6 INVESTMENT PORTFOLIO2 UBL employs diversified investment portfolio. Conversely. Any unrealized surplus/deficit arising on such revaluation is taken directly to “Surplus/Deficit on revaluation of securities” in the balance sheet. Where securities are sold subject to commitment to repurchase them at a predetermined price. The 2 3 UBL (2003) Annual Report UBL (2003) Annual Report 39 .6% in 2002 of the total loan portfolio.4. Performing advances increased by Rs. Where an active market is not available. The increase is mainly attributed to 14% increase in the net revenue from funds (NRFF). The bank invests its funds both in risk free assets as well as in risky assets.7 PROFITABILITY3 The operating profit before provisions and write offs increased by 80%. The branches reduced to 1077 from 1112. where as the profit before tax and extraordinary items increased by 62% as compared to last year. This enables it to minimize its unsystematic risk to a great extent. 2 billion as compared to 2002 while NPAs decreased by 53%. Presently NPA constitutes 7. securities purchased under analogous commitments to resell are not recognized on the balance sheet and consideration paid is record in “lending to financial institutions” or “loans and advances” as appropriate. if any. they remain on the balance sheet and a liability is recorded in respect of the consideration received in “Borrowing from Bank” or “Deposits” as appropriate. in accordance with the guidelines given in SBP circular. UBL values its security holding on market value.

Investors are interested in the firm’s ability to sustain profitability over a period of time. 4. Short term creditors are interested in short term liquidity of the business and long term creditors are interested in the long term cash flow which the firm can generate over the long period of time. 40 .8 FINANCIAL ANALYSIS Financial statements are the principal means of reporting the financial condition and results of operations of a business entity. 96 billion of import and export business during the year. The internal users of financial statements like management also analyze financial data for planning and control. an increase of 24. creditors and credit reporting agencies are interested in finding out the credit worthiness of the firm to which they have extended credit or intend to extend credit. and all income statement items are divided by net sales/revenues. These statements are meant to assist various parties in decision making who are interested in the activities of the business. These statements are means to an end of helping stakeholders in decision-making. Financial statements analysis helps in determining the financial conditions at any particular points in time and effectiveness of operations of a firm during a specific period. The various stakeholders of business are interested in the analysis of financials statements. Common size analyses are extremely helpful to highlight changes over the time in financial performance and financial conditions of the company.1 COMMON SIZE ANALYSIS OF BALANCE SHEET 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. Government agencies analyze financial data for tax purposes.8. 4. For handled over Rs. But the focus of interest of all is not the same. To improve the quality of decision making proper analysis of these statements helps a lot.7% as compared to last year.

The table shows common size analysis of the balance sheets for the years 2001. 41 . The common size analysis given in the table shows that there have been improvements in the current assets in 2003 as compared to 2002. which shows that there is a slight change in the organization’s position by decrease in fixed deposits. The main reason for this is that fixed deposits of organization are decreased by 6%. The main reason for which is increase in current deposits.3%. 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 is very significant to note that major decrease has occurred in long-term performing and non-performing advances. On the liability side the total current liability has shown change of about 4%. 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. about 17%. which are about 6%. 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. 2002 & 2003. The long-term liability of the organization is also decreased by 4%.

48 2003 15.69 2.Current Lease and Others Total Current Liabilities Fixed Deposits Other Long term Liabilities Total LT Liabilities Total Liability Shareholder's Equity Share Capital Reserves Accumulated Losses/Profits Minority Interest Surplus on revaluation Total 2001 3609108 4370006 9190430 39489369 8641263 97782157 19388131 28477494 11813855 2864018 8297500 70840998 168623155 1540592 4004130 102568752 8838842 116952316 38747422 21264831 49219400 166171716 Rs in '000 2002 70463707 3627557 33883311 43632117 2641471 118177074 33623058 26423058 5739798 2831534 5026459 73643958 191821032 1847025 174533 118167469 9986608 130175635 43998916 5212755 49211671 179387306 2003 35591280 19050791 29580252 89292490 3509351 177024164 25007413 10312297 3671991 3884990 5486357 48363048 225387212 2991269 174533 152580240 5933743 161679785 37252204 10883720 48135924 209815709 Common size (%) 2001 2002 21.Is Investment (ST) Advances-Performing (ST) Other Assets Total Current Assets Investment (LT) Advances-Performing (LT) Advances-Non performing (LT) Operating fixed Assets Deferred Tax Assets Total L.07 67. 42 .39 100 100 0.5 17.33 2.01 2.21 29.09 2.89 13.65 93.63 71.09 4.94 2.52 2.19 98.62 1.5 17.45 100 1.09 0.2 67.38 58 61.43 21.62 42 38.27 6.86 22.2 0.4 22.99 1.6 1.92 2.45 13.66 1.Table:4-1 Common size analysis of consolidated Balance Sheet assets Cash/Bal.57 1.98 6.55 13.53 16.22 -0.77 7.1 1.91 2.7 2.54 11.32 0.45 0.T Assets Total Assets Liabilities B/Payables Borrowings ST Deposits .69 6.18 0. With Banks lending to F.3 2.83 5.5 17.72 25.24 69.61 1.35 93.35 -16.79 8.9 22481680 5180000 5180000 3960453 4258947 4712569 -27282709 -722387 454403 1168264 1271700 1412932 2123751 2445466 3811599 24541439 12433726 15571503 Source: UBL (2003) Annual Report The trend of switching over the investing in share market or other businesses instead of committing money in advances it is because of fall in interest rates.38 0.09 61.55 78.61 11.26 1.69 1.96 0.37 60.82 21.93 2.12 39.72 2.48 4.89 5.66 23.52 4.75 5.36 22.6 5.7 1.73 16.62 1.

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. Which shows that the UBL has been able to control its interest or mark up expense. products and services. It shows the good credit management of the bank. The tax expanse is increased about 7% because of the increase in profit. which is about 23%. 4. 43 . The reduction in provision is a good sign. which is a very high percentage. The extraordinary item expanse has not occurred in 2003 that caused a slight increase in the net income. There is a great increase in non-markup income.The share capital of the company is static while in 2002 the share capital was decreased because of losses faced by the company. which shows that the bank is recovering its disbursed advances. 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. Among its individual components investment income has shown a large increase as a percentage of sales.8. The provision for non-performing loans has a decreasing trend making no provision for non-performing loans and diminution in value of investment. The increasing G/P Margin shows efficiency of the bank in controlling cost of sales (Markup expense) and better strategy of pricing.2 COMMON SIZE ANALYSIS OF INCOME STATEMENT The common size analysis of income statement is given in the table. Non markup expenses also show a rising trend in absolute amount though the common size in percentages have shown a mixed trend due to the changes in revenue figures. which increases the profit of current year. Loss brought forward from previous year is reduced by 14%. The non-performing expanses also increased to about 25%.

77 1097 1818 2915 6773 2008 1514 3522 8686 2142 2803 4945 11718 9.42 59 17.64 221.15 46.2 0 51.77 18.1 30.38 30.24 53.44 11.95 15.68 4.65 11.91 16.57 15.64 2002 100 48.78 0 71.64 48.44 52. Adjustment against sh.83 79.2 0.06 172.34 126.21 24. 0 2 27283 238 332 722 527 454 0 0.42 2001 11468 6347 5121 1263 3858 2002 11385 5476 5909 746 5163 2003 9269 1931 7338 564 6773 Common size (%) 2001 100 55.9 6.08 73.34 0 5.89 6.59 12.39 0.3 30.The common size analysis of the UBL is clearly showing that the bank has shown a lot of improvement in its performance.85 25.08 24.55 45.1 2.2 23.11 0.02 33.62 6 77.09 51.07 Source: UBL (2003) Annual Report 44 .94 76.9 4669 632 5301 1472 -7200 -5728 1739 -7467 6 19821 0 5879 51 5930 2756 25 2781 1319 1462 10 27283 25202 6639 556 7197 4521 0 4521 1704 2818 21 722 40.9 2.16 65.78 49.22 12.71 5.22 7.35 44.64 0.02 237.84 0.34 2003 100 20. Capital Appropriation and Transfers Surplus on revaluation of Assets Transfer to Statutory Reserve Accumulated Loss Brought Frd. 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. Table: 4-2 Common size analysis of consolidated Income Statement Rs in Millions ITEMS Mark up revenue mark up expense gross profit provisions and B/Debts Net Mark up Income Non Mark up Return Commission & Brokrage Dividends/Exchange and Others Total Non Mark up Income Total Income Non Mark Up Expense Administrative Other Provision and Charges Total non mark up Expenses Profit Before Extraordinary Items Extraordinary Items Profits before tax Taxation Profit/Loss after tax Share of Minority Interest Accumulated Loss Brought Frd.63 13.09 210.36 48.84 62.

99 Debt to Equity 14.65% Net Profit Margin -65.91 0.78% 46.94 14. but there are certain basic ratios that are frequently used. income statement or one from each.59% 2002 0.07 Debt to Asset 0. these ratios can be placed into six different classes.84 Asset Turnover 0.  Liquidity Ratio  Asset Turnover Ratio  Leverage Ratios  Coverage Ratios  Profitability Ratios  Market Value Ratios The calculation and interpretation of these ratios of financial statements of UBL are as follows. Table:4-3 Financial Ratio analysis YEARS 2001 Current Ratio 0.8.4 1.69% 0.50% 12.99% Advances to Deposit 56.74% 41.22% Cash Ratio 9.4.24%Net Profit / Total Assets * 100 18%Net Profit / Total Equity * 100 45%Advances / Deposits * 100 28%Investment / Deposits * 100 28%Cash / Current Liabilities * 100 Source: UBL (2003) Annual Report 45 .63% 9.46% Investment to Deposit 20.04Markup Revenure / Total Assets 0.15 52. Ratios focus on special relationship between two items of balance sheet.47Total Equity / Total Assets 3.76% 16.34EBIT / Interest Expense 79%Gross Profit / Revenue * 100 30%Net Profit / Revenue * 100 1.54 Coverage Ratio 0.15Current Assets / Current Liabilities 0.12% Return On Investment -4.93Total Debt / Total Assets 13. A financial ratio is simply one quantity divided by another. Ratios make it easier to understand a specific relationship between various items of financial statements then looking simply at the raw numbers themselves.23% 2003FORMULA 1.06 0.1 Gross Profit Margin 44.43% Return On Equity -887. The number of financial ratios that might be created is virtually limitless.3 FINANCIAL RATIO ANALYSIS The user of financial statements finds it helpful to calculate ratios when they interpret company’s financial statements.

18% as compared to 2002.94 while in 2003 it is reduced to 0. Banks have relatively low ATR capital.8. there has been decrease of one percent as compared to 2002 and 6% to 2001.3. The change is occurring due to increase in short term investment and decrease in short term borrowings.8.3. Higher the current ratio higher the ability to meet the short-term obligations as they come due. UBL’s assets turnover ratio has shown a little decrease.2 ASSETS TURNOVER: This shows revenue generated per rupee investment in total assets.3. 4. This is because of increase in total assets with proportionate increase in revenue.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. in 2001 every rupee one of assets was being financed by rupees 0. 4.098 or debt and in 2002 it is 0.1 CURRENT RATIO: UBL’s current ratio is increasing over the time.4 DEBT TO EQUITY: This ratio measures how the company is leveraging its debt against the capital employed by its shareholders.3 DEBT TO ASSET RATIO: The analysis of total debt to assets ratio.3. The UBL’s current ratio is increased by this in turn decreases the risk of insolvency. 4. Analysis of debt to equity ratio indicates that the current position for the debt to equity is that for every one rupee in equity 46 . as they are selective in advancing loans and generating smaller sales. 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.

47 . UBL’s gross profit margin per rupee has shown rising trend in last three years. Net profit margin is also showing an increasing trend.34.7 NET PROFIT MARGIN: This ratio shows the profit that is available from each rupee of the sale. 4. One of the most commonly used ratio is the interest coverage ratio that measures the number of times the income is available to pay interest charges. The reason for huge difference stated in the table is because of losses occurred in 2001 and 2002.10 to 3. After all expanses have been paid. This shows that the bank is heavily relying on debt financing. There is an increase of 27% in 2003 as compared to 2002.3. 4.5 COVERAGE RATIO: This ratio shows the number of times a company can cover or meet its financial charges or obligations. this shows efficiency of the bank to control the cost of sales. UBL has improved net profit margin in the current years.8.5 as a debt. The net profit margin has reached to 30% as compared to 2002 in which it was only 12.8.69%.provided by the shareholders the bank has Rs.3. Gross profit is critical because it represents the amount of money remaining to pay operating expanses financing cost and taxes. The UBL interest coverage ratio has shown significant improvement in these three years. It shows a good impact on the UBL’s Balance Sheet.3. While in 2001 it was in negative figure.6 GROSS PROFIT MARGIN: Gross profit margin is the difference between the revenue and cost of goods sold. 4.8. The ratio is increased from 0. 13. 4. In 2003 the ratio is 1. The return on equity is also shown a great deal of positive change.76% and in 2001 it was in –ive figures.11 INVEST TO DEPOSIT: This ratio shows the company’s investment employed per unit of deposit.8 RETURN ON INVESTMENT: This ratio measures the profitability per rupee of investment in assets.3.10 ADVANCES TO DEPOSIT RATIO: This ratio shows the companies advances employed per unit of deposit. In 2003 the ratio is 45% while in 2002 it was only 16% and in 2001it was in negative figures. This ratio of UBL over the recent three years shows a decreasing trend.9 RETURN ON EQUITY: This ratio shows the profit as a proportion of the book value of the common shareholders.8. 4.3. In 2001 it was 56% while in 2002 it was 46% and in 2003 it is 45%. 4.24% while in 2002 it was 0. Although the assets have increased but the operational recovery of the bank is main cause of increasing this ratio. It is because of industrial development factors in the country by which lending have been increased and investment is slightly decreased. This ratio increased in 2002 as compared to 2001 but in 2003 it again decreased.3. UBL’s return on investment has shown an improvement more than 100%. 48 .8.

A) Organizational:  Existing organizational hierarchy hinders vertical communication and blocks flow of information among the levels of management. I kept critically observing the things that I could analyze and the result of the exercise is presented as below. Although the current liabilities also increased but the increase in cash is very high.  The workload is not equally distributed. 49 .  There is centralization of authority and branch managers are bound and restricted to take initiative. particularly speaking of between the top and lower levels of management. In 2003 this ratio has increased by 2%. CH # 5 QUALITATIVE ANALYSIS 5.  Coordination level among divisions/departments and employees are poor.4. The balance of bank is increased with 20%. It shows that how much cash is available to meet the current liabilities.3.12 CASH RATIO: It is the ratio of cash and cash equivalent of current liabilities.8.1 QUALITATIVE ANALYSIS OF UBL During my two months of internship period I have tried to fully commit myself in the learning process.

Code of conduct of cashiers is found unsatisfactory. iii. Remittances Department: 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. being identified. Telegraphic messages require specific skills and training. Manual counting system also affects efficiency of the bank. B) Departmental: During my internship period in UBL. in various departments. • Cash Department: i. ii. iii. • i. Due to overlapping nature of duties and jobs there exists chaos and confusion in branches. At times notes received from other branches were found to have certain fake currency notes. I noticed following departmental problems. iv. There is generally the lacking in observing and practicing bank’s relevant procedures and SOP’s. Counting mistakes occur due to overcrowding particularly during the collection of utility bills. Preparation. Not very frequently but there are instances of fake currency notes. 50 . 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. The employees are partially equipped of such knowledge. ii.

iii. Credit Department: Timelines in cash disbursement is very important which is compromised due to lengthy processing and documentation requirements. ii. ii. is sometime compromised due to influences of\r fear of loss of customer. Relationship Managers need to be fully equipped with the requisite knowledge and skills as presently plain BA/B. Deposit Department: Newly designed AOF has an inbuilt deficiency of restricted space and cannot accommodate more than two names.• i. Clearing Department: Wrong endorsement and stamping causes loss to the customers and extra efforts for the bank to repeat the procedures. In cases where the presence of customer himself is must. ii. iii. • i.Sc qualified individuals are performing jobs of MBAs. • i. Identification of customer’s signature is very important particularly when cash is to be withdrawn by him. Reasons for the return of the cheques at times are not mentioned on the return memos. Lack of infrastructure for carrying out computerized financial analysis of borrower’s business. 51 . At times due to lack of training wrong stamps are applied on instruments. iii. Manual practices pose problems in those branches where automation has not been done yet.

Employees at times mismanage their time and fail to forward bills promptly. Bills Department: Bills are sent to other cities.iv. Most of the employees of this department lack the ability to handle the Letters of Credit. therefore. iv. Knowledge and educational background of employees working in this department do not match with the job they are doing. Employees of this department are lacking computer-operating skills. 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. vi. Filing and record maintenance of credit related documents are not done efficiently. 52 . Heavy collateral requirements restrict credit business of the bank. iii. • i. iii. v. Foreign Exchange Department: Problems of bills and remittances departments equally apply to foreign exchange department. ii. The credit proposal and other documents at times are not properly and sufficiently prepared before taking approval. ii. • i. Proper scrutiny at times is not carried out and it causes loss to the bank or increase procedural timings. Large pool of potential borrowers cannot apply for loans due to lack of collaterals. extra care should be exercised in making entries and stamp affixing.

and to formulate strategies analyzing its internal strengths and weaknesses. The current year’s growth rate is 32%. 53 . Lack of promotional activities. interior layouts and design of furniture in most of the branches. • Advances investment of the bank shows a constant growth pattern. SWOT stands for Strengths. 5. Opportunities and Threats. It is a common approach to make assessments in terms of internal and external environment of the organization.1 STRENGTHS: • • It is one of the largest private banks with a deposit base of Rs. Foreign trade volume showed an increase of 17% over the previous year. Marketing Department Lack of marketing at desk due to lack of training and awareness among employees. external opportunities and threats. coming up is the SWOT analysis for the UBL. ii. • • It is involved in both corporate and retail banking.2 SWOT ANALYSIS: SWOT is useful tool for providing a framework for analysis of an organization.• i.2. 94883/millions showing constant growth over the period from 1999 till the day. The bank is actively emerging and is engaged in international trade and foreign exchange transactions. 5. iii. Weaknesses. It has a well-knitted and adequately equipped branch networking system that efficiently covers both the domestic and international markets. Little attention to the apparent conditions of the bank exterior.

o Provisions decreased by 14%. Behrain. • The bank is owned by parties of financial repute and credit worthiness like. Best Way group and Abu Dubai group with 25. NBP Trustee Department. • Accumulated losses pushed the bank to cut down its promotional activities in order to reduce expenses for last few years. 5.69% interest. o Total income increased by 16%. SBP with 48. Others are GOP. and Qatar. being backed up by 24 hours call center out of UAE. • UBL is actively participating in international markets and has recently introduced credit cards in UAE.• 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. State Life Insurance Corporation etc. 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 has adversely affected the image of the UBL. • 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.2.50% of interest each.2 WEAKNESSES: • Due to risks such as political. 54 . • The bank is run by highly professional recruited from and trained by foreign banks like Citi Bank. o Net revenue from funds increased by 18% for the current period.

Lengthy credit processing and documentation procedures. 55 .• Promotions are carried out on annual basis ignoring the importance of capabilities and performance outputs. Unsatisfactory working conditions. • • • Ineffective system of recruiting and selection.2. • The bank has large number of employees who are simple graduates with no banking knowledge. • The efficiency of stock market and sound exchange reserve level is providing a good opportunity for effective investment decisions.g. 5. • 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. • There is a large pool of unemployed MBAs who can be hired to achieve professionalism on its organizational culture. the government intentions of developing housing and agriculture sectors. Interest of businesses in leasing facilities provides a healthy opportunity for banks. • • Expansion of IT platform and internet based banking system. • Reconstruction of Afghanistan is a golden opportunity where the bank can effectively participate.3 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.

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. lack of consistency in policies due to political instability are some of the other major threats. 5. This SWOT analysis is a mirror image of the bank’s present conditions.4 THREATS: • • Increase in competition due to increasing number of foreign and domestic private banks offering highly specialized and attractive services.2. Unemployment. lower level of income and prices like problems in the motherland coupled with low rate of industrialization. Growing global technological advancements and adaptation of modern style of management in banking sectors. Some efforts are made and others are still required to be made in order to improve the situation. 56 . religious factor. • • Entering new market segments. • • Extensive promotion campaigns run by competitors. Increase the product range to meet the broader range of customers’ needs. The management can develop elaborate strategic plans for capitalizing the available opportunities.• Outsourcing of promotional companies or use of available excellent promotional facilities. geo political adverse conditions.

who not only provided the basis for recommendations but also pointed out some areas. without which no report is considered complete and meaningful. review and analysis.CH # 6 RECOMMENDATIONS Recommendations are considered to be the most important part of an internship report. because the bank is very sensitive organization 57 .e. which are categorized under the following headings. efforts have been made to give feasible recommendations.1 HUMAN RESOURCE DEPARTMENT The importance of manpower cannot be denied in any organization. where the change for the development is utmost important. for bringing suggestions. This part of the report is based on the previous sections i. Moreover. Realizing the importance of this section. In case of banks it is the most valuable asset. discussions have been conducted with the staff of UBL officers. 6.

Critical analysis of UBL necessities recommending suggestions that would increase bank’s efficiency and effectiveness. • Basis for Promotion: A sizeable portion of the officers of UBL. The promotion policy must be too tight and transparent that no one may have the chance to be promoted on criteria other than the required qualification. As for the present excess staff. may be given GHS etc. Without development of managerial leadership. experience and performance.and to be in harmony with this sensitivity. It will enable the management to formulate long term strategies and their proper implementation because the long term policies. the effective utilization of the human resource will be impossible. • Development of Managerial Leadership In services industries like banks the need of managerial skill is much more important. those not found up to the required criteria. UBL should also focus on this area and should avoid deficiencies in managerial leadership. need for proper human resource is felt badly. by applying the modern styles of management. accurately based on calculated risk. It makes positive contribution towards higher effective results. have proved the pivotal role players for organizational sustainable development. are promoted in without test and interviews to officers cadre. • Political interference: The political intervention in the bank needs to be stopped so that the top hierarchy as well as the personnel placed at other important levels of the institution is not changed Just on political grounds and the on going developmental work is not obstructed. • Management Changes on Merit: 58 .

which has already worked amply in the devastation of UBL. the banking business is experiencing rapid changes therefore the HRD should have arrangements for staff trainings to cope with the new changes that may become threats for the interest of the bank. to professionally qualified preferably Masters in their respective fields. • Needs of change in Recruitment Policy: It is important to say that the external level market is full of the required talent like MBA. a cultural change right from the top management down to the front line. • Refresher Courses: The Human of the bank should frequently conduct meaningful refresher courses. to be retained on the basis of ultimate meritocracy with zero tolerance of incompetence. M. Now in this remaining workforce. • Computer Trainings: The present conventional and orthodox training programmes need to be made more comprehensive and reinforced with inclusion of computer training courses. Therefore the recruitment qualification to the officer’s framework should be enhanced for simple graduation. But on the country only graduation with simple subjects is still the requisite qualification for officer’s cadre. now clipping will be more helpful.In UBL. • Training for Credit Management: 59 .. Com etc. seminars and workshops with a view to improve the knowledge of the staff. though vary rare fresh recruitments are made. Due to severe competition and technological developments. This downsizing will leave the bank with the staff. that better suits to the present day needs of banking environment could be included through proper discipline and training. and the bank faces saturation in personnel.

it needs to be implemented in true sense. • Training with Clear Objectives: Training needs assessment is necessary so that only the relevant staff is sent for the training courses. It works as profit maximization devise. 60 . In my opinion the above two programmes marketing excellence and corporate culture. need to rooted out and the culture of ultimate meritocracy in appraising needs be inculcated. • Introduction of New Courses: The human recourses division of the bank should focus on the restoration of the corporate image of the bank by floating programmes such as. courses on corporate culture and others. However.Special trainings on credit management should be imparted to the finance dealing staff. The drawbacks that are obvious like nepotism and favoritism etc. Usually in businesses the wholesalers. added with the best counter service and outdoor informal relationship with the potential customers by the line managers will save the sum of money spent on various media of advertisement. • Change in Appraisal System: The present performance appraisal system is good. marketing excellence. Financing is main fountain bank’s income. retailers and other intermediaries are finished by opening a network of the business own outlets. • Cheaper means for Postings etc. Sound finance are extremely necessary for opening of springs of the smooth inflow of the income.

recognize. • Training for RM’s: 61 .2 CREDITS AND ADVANCES DEPARTMENT: The defaulted loans have showered the process of development of banking sectors in Pakistan and have reduced the lending capacities of banks. which would help in their career development. various suggestions and recommendations have been given with focus on UBL to overcome the drawbacks of this department. • Customers Orientation: Every entrepreneur if concerned about the success of his business. In this regard.The culture of attachment of hopes with the elements outside UBL. In result of which economic growth has reduced and rate of industrialization has become lowered. They need to be provided the deserved respect. for promotion. quality and in time service and to be politely dealt with. transfers. UBL should recognize its customers as the mainstream of the bank’s revenue. carefully and appropriately that his customer is “The King” of the business system and the original spring of the business revenue. Defaulted loans being the major cause for this depression. postings. has to understand. 6. employees should be given opportunities to show their performances. and other benefits requires eradication from the roots. • Career Development: As a matter of personnel policy HRD of UBL should prepare a plan showing the future growth potential of employees on the job performance and evaluation and it should be made known to the employees.

ii.Exclusive mandatory training concerning all possible aspects like. it is the responsibility of UBL. The bank should have expert to examine various changes and developments for years in areas of the borrowing corporation like. financial management and organizational management etc is required to be developed and designed to achieve i. and as a result such loans become bad debts. the bank should take critical view of the financial and should assess changes occurred during the favorable and slack reason for the company. iii. iv. iv. ii. Financial condition Cash generation Ability to pay back Operational performance The focus should be on identifying and explaining significant changes and developments in payback of loans. it has taken. iii. • Fake financial presentation: The bank should confirm that the provided figures by the borrowing organization are fairly audited and that the auditors are on the approved list of the bank and they have clear opinion about the affairs of company and nothing has been made secret. i. profit maximization. Risk assessment ability Understanding of all legal matters Early detection ability Skill of any loans becoming bad Ability to develop and suggest sound strategies when needed. • Poor Management: A large number of industrial units and projects become sick because of poor management. capital flow and operating expenses etc. to avoid this. When a business becomes sick or fails it is unable to return the loans. to ensure that the company to which loan is sanctioned 62 .

enjoys good management skills and reputation. If documents are obtained properly as per terms of the loan it is not difficult for the counsel of the bank to get decree against the defaulter. complete and correspond with the approved facilities. the signer is authorized to execute such documents and signatures are verified. • Length and type of experience Qualification and integrity Reputation of managerial skills and style of management being used SWOT analysis Financial procedures and documentation followed by employees Span of authority and responsibility Decision making skills of employees Risk management of employees Proper Documentation: Loans become irrecoverable through court of law in case of default when the bank fails to prove their claims against the delinquent borrower. For proper and valid documentation the following aspects must be kept in mind. Also to ensure that blank spaces are filled. ii. 63 . Bank should ensure that the documentation are correct. This can only be confirmed. The bank should confirm that standard loan documentation is in place for each credit facility prior to disbursement. iii. lodging the documents in vault. ii. v. maintaining records as per bank operating procedure. Keep track of expiry of borrowing documents. signed and stamped. arrangement for vetting of the legal counsel. viii. documents are dated. iii. If the documents required are different from the bank’s standard approved format. vi. iv. insurance policies etc and follow up for regulation of any approved documentation deferrals. if the bank assesses the management of the borrower party by taking care of i. Act as custodian for legal borrowing documentation. vii. iv. i.

ix. viii. property title deeds. Maintaining computerized record of documentation. vi. to which loan is given. Maintain documentation checklist. iii. vii. shares. as per frequency specified in the credit approval. iv. Division of documentation on the basis of sector. ii. Concerned bank staff should ensure compliance with the institutional credit policies and procedures as laid down in the policy book or credit manual and advised from time to time by the credit committee or top management. updating it properly each time new documentation received. v. vii. govt. using applicable margins. 64 .v.e. • i. securities.e. Securities: Physical verification of the property offered as a security is must rather to rely on the documents. vi. Ensure compliance with local regulatory requirements. Bank must ensure receipt of periodical statements of stock and receivables from customers. adequately covering the bank’s amount. The competent consultants should do valuation of the property and mere completion of formatives should not be taken into account. i. Maintain in safe custody all collateral i. such that the drawing power adequately covers out standings amount at all times. Bank should also do the periodic physical checking and evaluation of pledged inventories as per terms of the approvals. Bank officials must ensure that the goods hypothecated or pledged are covered through a valid insurance policy with appropriate risk coverage. mortgage documents etc. Confirm timely submission of correct information in the prescribed format as may be required by the central bank. Investigation should also be conducted if the property is of ancestral nature or joint property.

Peshawar. v. which are specific and clear. This body will need statutory authority for protection from contempt. Informal body to be set up by the banks jointly with the bar councils and chamber to monitor and publish performance of the banking courts. Exclusive judges are required for Lahore. Administrative Reforms: Fast resolving of loan defaults cases is must. An implementation plan consists of action oriented tools and procedures. CH # 7 IMPLEMENTATION PLAN: Every organization has its own strengths. Immediate steps to appoint more banking court’s judges. any suggestion or recommendation given for it should be supported by its implementation plan. Use of debt recovery agencies regulated by law is to allow. Nothing is impossible in this world. iv. ii. iii. Baluchistan. weaknesses and opportunities for improvements. An implementation plan means that every thing except resources and taking of step to 65 . Possible can become impossible if untried. Sindh High Courts.• i. To ensure feasibility of a project.

start work is ready which shows that implementation plan is the soul of a project.1 ACTION PLAN 1: 7. • Agri-Officers in Branches: Such agri credit officers should be employed who possesses requisite knowledge and know how both of the agricultural field and bank credit fields. 7.1. These branches should extend credit to the shops for their supplies and equipments and to farmer customers. those should provide essential farmer services including leasing of sophisticated farm machinery and advising farmers how to improve productivity.1 Franchised Agriculture Supplies Shops: In order to exploit opportunities available in the existing agriculture market the following steps should be taken. The bank already has such assets. • Location of franchised supplier shops Preferably such shops should be in close proximity of UBL branches in the area. at market rates. A good implementation plan consists of all the steps needed for the accomplishment of a task or tasks. available in its existing HR factory and others can be 66 . • Establishing franchised supplier shops UBL should concentrate efforts towards major agriculture union councils and develop franchised shops. which are well below the 50%to 90% charged by the arties (informal sector). it is clear and helps in identifying the problems to be faced in carrying practical work and provides a full picture of activities and events.

• Cost Schedule a) Credit amount extension The above-mentioned plan has two major cost categories as given below: This amount will be disbursed as per requirement and is to be recovered with added return. Fixed cost. Variable cost which includes petrol and maintenance charges should be incorporated in pricing of the facility extended on average basis. ii. cost of motorbike less tax saving due to depreciation expense should be amortized for a period of five years and distributed equally on average number of customers a mobile agri credit officer will deal with. b) Operation cost Details of the cost are tabulated below and following points are of significance.30/litre 450 13500 Per year 500 TVC + TFC 29000 Total Cost The above plan could be reinforced and made more effective if following supporting activities are undertaken. M/Cycle @50km/day 15000 18000 @40km/day Rs. if so required. 67 . These officers should be provided with motorbikes with per month fixed mileage limit.trained for. i. Table: 7-1 Cost Schedules of Action Plan Fixed Cost Total Variable Cost Mileage/year Petrol/Year Petrol Cost Repair Maintenance Dep.

e) The bank may finance projects such as better storage and marketing services. if the bank is to maintain good quality of its assets. liquidity and profitability.1 Technique For Effective Management and Recovery of Advances: Banks are highly leveraged bodies where advances constitute a major portion of their assets. Principle of good lending This includes safety.2. b. • Through Assessment of Advances: Bench marketing technique should be used to develop comprehensive proposal perform. 7. though the existing Performa is not a bad one. d) The bank may help farmers to acquire needed equipment of saline soil treatment thus enhancing their ability to bring more land under cultivation and improve per area yield. desirability. Effective management and recovery of advances has to be an ongoing process. Compilation of credit information report Through investigation of the borrower’s personal and business related aspects should be conducted. a. The bank can finance projects equipped with measures to treat saline/soda water and soils so as to render if efficacious for agricultural purposes.c) Pakistan loses a significant portion of its agriculture land each year through high soil salinity and poor water treatment. 68 . Following factors should be carefully examined. In this regard following plan is advised for effective management and recovery.2 ACTION PLAN 2 7.

should be properly completed and executed. a) Executants Borrowers/executants should be legally authorized to enter into the contract. essential 69 .• Proper and effective Documentation: Safety of advances depends upon correct documentation. Such registrations must be affected within 21 days of the creation of the charge. d) Execution and Documents: These charge documents should be executed in the bank premises and should be signed in full as per borrower’s specimen signatures. mortgage deed are required to be registered at the office of registrar. where the documents are executed. systematic and continuous evaluation helps to identify potential problem cases before they reach a critical stage. b) The Bank’s printed charge Form The appropriate charge forms such as letters of pledge and hypothecation etc. In addition to compliance with all relevant legal rules and regulations following aspects should be deeply digged into. c) Stamps Charge form should be properly stamped in accordance with the stamp duty as applicable in the province. e) Registration of Charged Documents: Certain charged documents for example. It is. Careful Monitoring As a preventive measure. therefore.

revaluation of securities Other correspondence with borrowers Study of previous review files Analyzing validity of insurance documents Handling of Delinquent Advances Through careful monitoring and periodic reviews delinquent advances could be recognized and should be tactfully and effectively handled. Analysis of operations on financing account Credit report . • Bank accounts operations. policies. viii. ii. It is a wellestablished fact that legal suits cost both money and time. Analysis of overall economic environment. vi. vii. v. Following could prove good sources for effective monitoring. 70 . iv. Analysis of industry specific environment. Good relations with such customers should be maintained endeavors should be focused on ways and means of obtaining repayment without resort to litigation. Personal contacts and site inspections.bearing upto date information Financial statements analysis Inspection and analysis stocks reports Review and updating charge documents Analysis. ix. iii. iv. accounting and management This is periodic monitoring function that should be conducted under following broader guidelines. i. ii. which could be used for more productive endeavors. Review Function: Financial statements. i. v. Borrower’s situation should be analyzed and suggestions for improvement should be monitor advances. iii.

which will come in order. Then the bank has to rely upon the realization of security to liquidate the advances. it should be well advertised. Reputed surveyors should do through. Sufficient time should be given to borrower.Recovery of Advances through realization of securities At times due to unforeseen circumstances beyond the control of the borrower. bearing full particulars of the loans and security should be served to borrower. It has been broken down into the steps. v. There are various steps involved in the given implementation plan. ii. Moreover. the normal plan for repayment may not work out. The offer closest to market value should be accepted 7. when developing a disciplined action/implementation plan for launching financial products. with consideration on strategic approach of the bank. acknowledgement due and should be retained as evidence.3 ACTION PLAN FOR MARKETING DEPARTMENT: This will help the bank to take long-term perspective for its marketing activities. vi. Written offers from several dealers should be invited. i. which believed to be needed. valuation of security. A notice for sale of security. 71 . according to their importance and subjection on one another. In case of auction. iv. vii. Notice should be issued by registered post. Following steps should be followed. iii. to bring order and efficiency to the difficult task of implementation plan.

which is relevant to the target market and competition situation. This will be accomplished through secondary research in Pakistan. The business review provides a qualitative and quantitative decision activities and a rational for all the strategic marketing decisions with in the plan. In this step the data collected from the business review is shaped into meaningful summary points that form the basis of the implementation plan. we first need to understand the scope of banking followed by a comprehensive situational analysis of the financial product. To develop marketing database. e.g. Step 3: Quantifiable deposits’ Collection Target Collection of deposits as an objective represents projected levels of services to be sold. the business review is must. 400 million advertisement expenses in a year. Everything that follows in the plan is designed to meet the objective of collecting deposits through financial product from defining the size of the specific target market establishing marketing objectives This will also determine the amount of advertising and money spent on it in a quantifiable manner. for the first 5 years of its start. Step 2: Problems and Opportunities The problems and opportunities step of UBL is a summary of the challenges that will emerge from the marketing database. 72 . It includes the marketing database not only of UBL but also of other banks. and market place. UBL’s own record of financial products and very often-primary research surveys of potential customers and focus group information. Setting this objective is critical because it is the first task of this implementation plan and it sets the tone of the entire implementation plan for the bank.Step 1: Business Review As we early discussed that this implementation plan will focus on marketing activities of UBL and as a part of the marketing background component.

Step 4: Target Markets and Marketing The target market and marketing objective both are inducted in one step due to their critical link to one another. Target Market: Once the deposits collection being developed as quantifiable objective, the staff of marketing department at the Hub branches and Head Office of bank must determine to whom they will be selling their new financial packages. In response to which bank will raise deposits, making this determination is really defining a target market. Which is a group of people with common characteristics. This part of implementation plan is concerning on marketing efforts towards the portion of population wit similar banking needs and saving habits. Marketing Objectives: Marketing objectives for UBL clearly defines what the bank want from its target market and potential customers. This part of implementation plan focuses on the behavior of customers that will help in setting the marketing objectives.

Step 5: Plan Structure To compete with other banks, UBL needs to set strategies for its new product by including the postings strategy, it will help in image building of the financial package to be launched. Posting: Once the bank has defined its potential market and has established marketing objectives, it must need to develop posting of its financial product. Position is the desired perception of the product within the market target of the bank for example, if the product is launched. Its position should be done in such a way, that customer is fully aware of its major characteristics the bank has stained to build the image of its products as highly profitable package. This positioning strategy is supported by the strategic consideration on various marketing mix tools e.g. advertisement, publicity etc,


Marketing Strategies: though marketing strategies are descriptive and non- qualitative yet has a major impact over getting competitive advantage. These marketing strategies guide to the development and selection of various tactical marketing mix tools and provide direction in broadening the target market, set by the bank.

Step 6: Informational Goals: All steps of this implementation plan are highly dependent, but step 5, 6 & 7 are much more. Informational goals means to set the target the market awareness and attitudes package and fulfill the marketing objective of the bank. Another purpose is to provide direction for what is to be accomplished by each strategic tool in term of informational context.

Step 7: Strategic Marketing Mix: This step is highly concerned with getting attention of the customers towards the service of the UBL offering. Here we are concerned with a new package launched by the bank. Focus will be on that financial product. This step of disciplined implementation plan provides some strategic plans for marketing of the product. These strategic and tactical plans incorporate marketing executed. When implemented, will allow the bank to meet it’s marketing objectives and fulfill the overall marketing strategies and information and communication guidelines, established in the start of the plan. Selection of each marketing tool has its own objective and strategies. Following are the marketing mix tools included in strategic planning process. Financial package/Product This is the service which is provide by the bank as a result of which bank gets deposits and customer takes profit and keeps his money safe.


Branding Branding is the naming of new-marketed financial products e.g. present products of UBL i.e., UBL Sahara, UBL Hamrah Travelers Cheque. This brand or name of service associates with it should be such, which could communicate some message and attract the customers.

Profit Percentage This is the percentage of profit, which the customer expects receives from the bank against his deposits in a scheme of financial package.

Advertising Media Promotional campaigns provide added incentive, encouraging the target market to perform some incremental behavior, which is highly necessary. Communication with the target market should be always there and Electronic and Print Media should be used for promotion of financial product. Following is some financial tabulation for UBL based on some data taken from an advertising agency. This will show the importance of advertising and its benefits in terms of figures. This table gives the plan for one year and is for one financial product, for example, a product of UBL like SAHARA. A conservative approach has been followed to get a framework for reality, and to help in avoiding the slack season of economy.

Table: 7-2 Cost/revenue schedule – Marketing Plan
No. Cost of Of Average deposits by Lending Bank by Total Deposits in Year Difference (Revenue)

Customers Attached



Customers 48 Million 1 Million (7% population) of 5000 2% of D=100 million 5 billion (b x c) (E .A)= 52 million i. iii. 2% given in column E is the difference of percentage between lending and borrowing which is again a conservative approach. Many things in the comparison have been kept constant to understand the importance of advertisement. ii. The bank’s revenue in the F column does not include advertisement expense. which is a major cost here in this comparison. BIBLIOGRAPHY 76 .

S A. • http/. • Meenai. Karachi. K. Prentice Hall International Corporation. C & J. (1998). Karachi.. Annual Report.M Wachowicz. Financial Statement Analysis. Prentice Hall International 77 . Deposit Manual. 6th Edition. • • • • UBL (1999). Charles H. (2002 – 2003). Karachi: the Elahi’s Book Corporation. • Siddiqui. Ed. Karachi. Practice and law of banking in Pakistan.ubl.• Aswathpa. www. (2002). Credit Manual. Van Fundamentals of Financial Management. (1999) Money & Banking in Pakistan. New York. UBL (2000). 10th Edition. J. UBL. A H. (1998). Royal Book Company. (2003) Human Resource and Personnel Management: New Delhi: Tata McGraw Hill Gibson. 7th. Karachi.

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