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INTRODUCTION UBL established on November 7, 1959 and is one of the major commercial banks of Pakistan.

UBL has assets of over Rs. 620 billion and a solid record of accomplishment of fifty years - in addition to the convenience of 1121 branches serving throughout the country and at several overseas locations. UBL having an integrated network with 17 overseas locations gives direct access to a comprehensive range of better banking facilities to help monitoring business internationally. UBLs branches includes names of countries Bahrain, Qatar, Republic of Yemen, UAE, U.S.A. and others and its subsidiaries are allocated in U.K. and Switzerland. Its subsidiaries include names and locations entitled as United Bank AG Zurich, Switzerland, United National Bank Limited, UK (Joint venture with NBP), UBL Fund Managers Limited and United Executors and Trustees Company Limited. Its associate company is Oman United Exchange Company, Muscat and UBL Insurers Limited. UBL provides a variety of convenience availabilities to its customers. Along with the benefit of choosing from the largest product portfolio, you will get efficient personalized banking services. UBL experts assist the right mix of banking services that helps manage the varied financial situations that one may come across.

MISSION UBLs mission is to serve all your corporate needs and ensure your full satisfaction through product innovation, personalized banking, and top notch service. UBLs mission statement itself tells its serving abilities that it looks for satisfying needs of its customers first. It defines of three major important characteristics product innovation, personalized banking (through customer close interacting relationship) and top-notch service. The CBG department of UBL defines corporate banking in Pakistan. Among the local banks, UBLs CBG is the pioneer in providing innovative solutions to its diversified and satisfied customer base. UBLs CBG considers being a major player in the financial market of Pakistan.

VISION To be the premier organizations operating locally & internationally that provides the complete range of financial services to all segments under one roof UBLs vision statement is to be the leading financial service provider around the globe. The vision statement is vast and UBL is putting its many efforts in achieving its mission and vision possible.

SWOT ANALYSIS

STRENGTHS UBL offering customized products and services aggressively better than its competitors Improved operational efficiency as to its past Courteous Customer service and fast delivery of online and offline services Marvelous Image and Reputation of the bank in the eyes of its customers Extensive branch network UBL product positioning is very effective UBL target the segment like salaried person, business people and self employed person 1100+ branches all over Pakistan Stands in the list of profitable bank in stock exchange Overseas Branches Attractive Salaries and incentives for employees Personnel of UBL are well trained. Majority of employees have many years of experience in banking sector and are an asset for the bank.

WEAKNESSES No standardization in terms of branches some of the branches are very attractive and most of the branches are not very good like other branches. In some regions, urban areas of Pakistan service of UBL is not good as compared to other privatized banks The application time is also quite lengthy. UBL is a step behind in using new technology as compared to other banks Security system in most of the branches is not up to the mark.

OPPORTUNITIES Bank can extend its network in other cities of Pakistan like other for remote cities, it would increase their sales. Proper orientation of employees in all branches can help them to cope up with foreign banks By bringing new technology and modern business processes will bring the change and increase their profitability After improving call centre services enhancing of UBL network can be done

THREATS Large and increasing competition. High operating costs

CORPORATE BANKING GROUP (CBG) The Corporate Banking Group focuses on attracting and servicing large portfolio customers. CBGs forte is providing exemplary customer service using the "Single Window" concept and product superiority. The Relationship Management team manned by highly qualified individuals from the industry has steadily expanded customer base and continues to enhance UBL cordial relations with our esteemed clients. Despite the sluggish economic growth in recent years, UBL outperformed all the other local banks in the corporate banking sector primarily due to CBG's emphasis on establishing and enhancing relationships with foreign/local blue chip and middle market customers thereby capturing significant market share.

UBL PRODUCT/SERVICE RANGE

CORPORATE FINANCE Loan Syndication Structured Finance Term Finance Certificates

FINANCE/CREDIT EXTENSION Local Currency Facilities Overdrafts Demand Finance Working Capital Finance Import Financing Receivable Discounting Pre and Post Export Financing LMM Funding

TRADE Documentary Letters of Credit. Documentary Collection Funds Transfer

INVESTMENT/CASH MANAGEMENT Current & PLS Accounts Foreign Currency Cash Collection Utility Bill Collection Capital Market Hybrid Products FX Spot, Forwards and Hedging Rice/Cotton Financing for Ginners

CBG Offers full spectrum of services

(Reference Source: https://www.ubl.com.pk/corporate/services/)

RELATIONSHIP BANKING Its relationship banking comprises of the following steps and procedures.

Assess and understand customer needs UBL ensures on the name of customer satisfaction. It deals with its customers in a way that can both satisfy UBL and them. To capture the ultimate goal UBL ensures on understanding and assessing its customer needs.

Providing advice on business needs: UBL also work, as an advisor for those who want a healthy business life to ensure good profitability. It provides advises on business needs to its customer so that they can engage a nice sustainable advantage.

Helping in finding Viable Financial Solutions for Business Problems : UBL is a solution recommender by which organizations having finance problems can have the opt. of UBL at first hand service.

Acting as a primary contact for its customers: UBL acts a primary contact for its customers, as of its always highly performing capabilities UBL has no need to hide its name as a customer satisfier for its customers.

CORPORATE FINANCING

The CBG department of UBL defines corporate banking in Pakistan. Amongst the local banks, UBL CBG is the pioneer in providing innovative solutions to its diversified and satisfied customer base. UBLs CBG is one of the major players in the financial market of Pakistan. The Corporate Banking Group focuses on attracting and servicing large portfolio customers. Our forte is providing exemplary customer service using the "Single Window" concept and product superiority. The Relationship Management teams, manned by highly qualified individuals from the industry have steadily expanded our customer base. It continues to enhance our cordial relations with our esteemed clients.

CBG EMPHASIS Despite the sluggish economic growth in recent years, UBL outperformed all the other local banks in the corporate banking sector primarily due to CBG's emphasis on establishing and enhancing relationships with foreign/local blue chip and middle market customers thereby capturing significant market share. UBL's appetite for large exposures coupled with dedicated Structured Finance Unit, and an innovative team of professionals having extensive experience of Corporate Banking gives it the right platform to succeed in current competitive and a demanding environment.

Aggressive marketing combined with professionalism has led to an increase in UBL's market share with top corporate customers and in some cases replacing Foreign Banks. Presently, its portfolio includes the quality names in the country, which initially confined to foreign banks only.

CORPORATE FINANCING CORE TERMINOLOGIES

RELATIONSHIP MANAGER Relationship Managers typically handle operational details. Working as a liaison between different groups of people, a relationship manager facilitates communication, deals with complaints, resolves problems and coordinates planning. However, if we talk about UBL, its relationship manager work of Corporate Financing Group is to deal with its clients in terms of loan or investment transactions. Businesses rely on relationship managers who utilize excellent communication and analysis skills to coordinate complex and interdependent activities.

RELATONSHIP ASSOCIATE In UBL Relationship Associates work under the Relationship Managers in order to fulfill the goal of the relationship management when relationship manager brings the client, the relationship manager then gives the responsibility to the Relationship Associate to tackle up with that client.

STANDARD CREDIT APPLICATION It is an application form, which provides the essential information and details required by most creditors, regardless of what type of credit an individual needs. BROWSER BASIC FACT SHEET (BBFS) AND ECIB These are sheets provided by internal bank resources (BBFS) and the central bank (ECIB) to ensure the clients defaults from any other banks or their personal information of any crime charges or further bankruptcy. ECIB is a report, works as a central authority and State Bank of Pakistan provides this report to all commercial banks in order to reduce crime and defaults of Banks operating in Pakistan.

CREDIT ADMIN DEPARTMENT (CAD) The indicators, which mainly reflect the high quality of banks management, are its prudent financing decisions, proper control of finance and prompt recovery. In this regard, the credit policy of bank plays very important roles; it provides the overall framework, responsibilities, and authorities and facilitates decision-making. Credit department performance is subject to a defined policy on credit control exercised by the SBP. SBP affect credit decisions through the weapons of bank rate, open market operations, variable reserve requirements, selective credit restrictions and prudential regulations. Credits operations are undertaken in accordance to banks credit policy. The policy strictly prohibits violation of SBP/Local central banks rules and suggests financing of self liquidating, cash flow supported and well collateralized transactions, which equate the principle of lending (safety, liquidity, dispersal, remunerations and suitability). UBLs CAD is responsible for monitoring and analyzing of clients documents and figure out the flaws from it. It carefully rectifies the documents and capture the image of falling of them under the SBP and UBL policy. It also checks the routing sheet based on Annual, Interim and Quarter basis. CAD is responsible to communicate with RM in terms of loan approved when it is approved. The final Disbursement Authority Certificate after negotiating with the client is also made by CAD.

CREDIT RISK DEPARTMENT (CRD) This department work is to further analyze client borrowing limit and client ability of paying back. Basically, it does the work of measuring risk or uncertainty of providing loan to the client. It also measures the interest rate that should be given to the client for borrowing. After completing all the calculations and forecasting he forwards the case to CAD.

ECIB ECIB is the short form of Electronic Credit Information Bureau, which is located in Pakistan. ECIB is software for monitoring credit reports FPR Pakistan. The State Bank of Pakistan monitors the Software and all the Financial Institutions in Pakistan are required to have this software installed. A monthly process updates the reports at the State Bank end.

DISBURSMENT AUTHORITY CERTIFICATE It is a certificate, which contains all the elements of loan transaction as prove loan is passed. It includes many necessary details of which the major important points are the opening date of loan provided, the maturity date of loan provided and the limits of loan.

CORPORATE FINANCING OPERATIONS

RM and RA brings Clients

Loan is transferred to the client

RA starts process; fills BBFA and First SCA is placed

CAD does checklist and issues DAC

CORPORATE FINANCING OPERATION PROCESS


RM communicates about the loan transaction to the client CAD gives the words of approved, not approved or things needed to RM

CAD checks through Routing Sheet and check under policies of UBL and State Bank

CRD analyses the risk patterns

Following are the procedural steps followed: STEP 1 Corporate and Investment Banking Groups (IBG) 1. Relationship Manager (RM) and Relationship Associates (RA) are core important personnel in banking who deal with clients regarding corporate financing. 2. 3. 4. 5. Client deals with these two personnel in order start his/her financing process. RM is head, as number of RA is working under him. RM recommends RA according to client profile. RA might be working with many clients, or it may work with one, depending upon size of client transactions with bank.

STEP 2 Client request RA to start process on his/her financing, in exchange of mortgage or security that he/she have deposited which is up to 125%. That is the time when first SCA (Standard Credit Application) is place. SCA is not based on product type, but for individual client. 1. 2. RA responsibility is to start working on BBFS (Brower Basic Fact Sheet) On other hand, ECIB, which is a report, requested from UBL to Central Bank to assist client credit and borrowed history.

STEP 3 Once paper work is complete regarding BBFS and ECIB, RA hands over the documents to CAD (Credit Admin Department) for further analyzing; if more requirements are in need from client to provide. 1. Monitoring and Analyzing of document is done by CAD, and they try to figure out flaws in clients documents. 2. 3. UBLs CAD goes through all documents under the policies of State Bank and UBL. If document fails at this stage, it is send back to Corporate and IBGs RM for further consideration. 4. 5. If documents clear the stage of CAD, it is forward to CRD (Credit and Risk Department). Routing sheet is check on basis of Annual, Interim, and Quarter basis.

STEP 4 CRD (Credit Risk Department) tiers for managers to sign. This may include 3-4 managers, and even a president of UBL. Depending upon Client profile and Financing limit.

1. 2.

CRD job is to further analyze client borrowing limit and client ability of paying back. CRD is also responsible to set interest margin range after reflecting on from which industry client belongs to, such as sugar and textile industries are charge higher interest while refineries and OMC are charge less in comparison.

3.

There might be a point in transaction on which CRD may demand client to cover certain point; such as Current Ratio should be 0.75:0.6 more making loan is made.

4.

After conditions are met Loan is approved by CRD, and case is forward to CAD for further processing.

STEP 5 CAD (Credit Admin Department) brings under notice of RM that loan is approved and UBL is agreed to finance this client, after certain adjustment and requirement covered by client.

As for risk of client getting default bank goes for following risk averse documents options:

Letter of continuity Personal Guarantee Letter of hypothecation of stock D.P Note Mortgage Deed NIC of executants and witness Stock report Insurance policy Party profile STEP 6

Now RM (Relationship Manager) tells client that loan can be disbursed, ready to utilize. One more important thing here, which RM has to take care off, is the nature of loan, 1. Either it is Running Finance, which is for 6month to 1year after that it cleanup or it is Term Finance, which is borrowable for one time. With collateral of 125% 2. Here RM would set KIBOR plus Interest on transaction, which is yet to be made, after negotiating with client. Taking into account range provided by CRD. 3. RM may demand collateral against loan security depend on condition, client profile and UBL policies. In name of beneficially UBL. 4. After Negotiation is done RM would forward case to CAD (Credit Admin Department) for DAC (Disbursement Authority Certificate).

STEP 7 CAD (Credit Admin Department) will issue DAC (Disbursement Authority Certificate) with three major things mention on it. Date- Opening Date Loan- Maturity Date Limits- Open and Maturity

1. 2.

Checklist is done for Property Name, Offer Letter, and Documentations CAD is responsible after loan is made, for its recovery. That is why UBL use inspection team, which throw research on client profile and provided documents.

3.

CAD dispatch loan amount to desire branch, which is requested by client. STEP 8

Branch work as a collection and lending body of loan to final client. 1. 2. Either the loan amount is transfer into new current account for client. Alternatively, it is transfer to old current account of existing client.

EFFECTIVENESS AND FLAWS IN OPERATIONS Besides having so many steps and processes still there are cases where clients get default due to unstable business activities and fake documents.

The I.T based operating softwares and systems in corporate financing process they are using is still not much efficient (according to them) to have a faster processing.

Despite of global resection the party being defaulted UBL is still providing loan at a collateral of 125% which say itself not a save side.

High costs incurring; RM manager can alone handle the job No RA is needed further.

Internalization not strong; leaked databases have been found in UBL. When RA and RM come goes to any other organization UBL loses its clients mostly.

RECOMMENDATIONS Have a more stable process to reduce the chances of error.

They say they are managing implications of new I.T. based systems in order to be more advanced and competitive but the time remaining to implement that software is 6 months. It should implement it as soon as possible.

They should provide loan at the rate between 30% to 35% at least in order to minimize risk patterns.

For few clients with good profile RA is required but this position should be eliminated from the process to reduce cost.

Another aspect of advancement of technology; they should keep open information of client databases in the organization not restricted to RA and RM only.