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It is a common practice at universities during the completion of the
masters and bachelors program to attain practical experience in
different fields. Institute of Management Sciences, requires students to
undergo a Eight weeks internship program. The selection of the firm is
based on the choice of the student. The institute requires an internship
report based on the theoretical and practical learning of the student.
The concern of this report is to study and analyze the performance of
United Bank Limited (UBL) in the banking industry of Pakistan.
Main purpose of this program is to make students familiar with the
practical work, as there is great difference between what they have
learnt during their MBA and how the job is practically done.
Another important aspect of the internship program is that internee is
placed in most of the departments of the organization through job
rotation. It provides a glance of each department, as the period is too
short for learning in detail.
Other objectives of the study are as follows:
 To gather relevant information then interpret and analyze it in a
useful manner.
 To define and describe various functions of the bank.
 To highlight the outline facilities and products offered by UBL to
its customers.
 To analyze the bank through different techniques i.e. Horizontal,
Vertical, Trend and SWOT analysis.
 To get exposure and to develop the interpersonal communication
 It is a compulsory requirement for the award of Master’s Degree
in Business Administration.

 This report is concerned with the performance of the UBL Main
Branch D.I.Khan.
 It enlightens the consumer banking functions at the UBL
University Campus branch however the financial analysis is
based on the national operations of the bank.
 It will help the present and prospective students of the
department in making assignments and writing reports on the
 It can also provide help to UBL’s management in identifying their
Strengths, Weaknesses, Opportunities and Threats.
 It can also provide assistance to students seeking financial data
for analysis.

Banks play a central and very important role in the economic life of a
country, that’s why they are considered as the lifeblood of modern
economy. Today no one can deny the importance of banking in the
economy. They facilitate and expedite trade and commerce and
provide a variety of services that one can’t imagine with out banks.
I have chosen the United Bank Limited for my internship because it has
a large network of domestic and foreign branches. Besides this, UBL
plays an important role in the economic development of Pakistan.


The methodology for the collection of information and data was based
on the two primary modes of data.
Sources of Primary data:
 Personal Observation.
 Interviews of Personnel.
Sources of Secondary data:
 Annual Reports
 Previous internship Reports.

 Brochures.
 Books.
 Web sites.

The report is arranged in the following sequence.
This section has one chapter.
Chapter 1:
This is an introductory chapter which describes the background,
purpose, scope, methodology and scheme of the report.
This section includes the review of United Bank Limited. This section is
comprised of four chapters.
Chapter 2:
This chapter encompass the history of UBL, its growth and role in
Chapter 3:
This chapter goes in detail study about the about the organizational
structure of United Bank Limited.
Chapter 4:
This chapter is the lengthiest chapter of the report. It precisely tells
about the several departments working at UBL University Campus
Branch and their functions. The departments discussed are Cash
Department, Deposits Department, Remittance Department and
clearing department.
Chapter 5:
This chapter describes the corporate banking and financial products of
UBL. The products includes UBL Wallet, UBL Drive, Cashline, Unisaver
This section also have four chapter and it is about the analysis of
United Bank Limited.
Chapter 6:
This chapter makes the financial analysis of UBL. Financial analysis is
made on the National performance of the bank.
Chapter 7:

Chapter number seven describes the strengths, weakness,
opportunities and threats of United Bank Limited.
Chapter 8:
This chapter presents the graphical presentation of six years financial
statements of UBL.
Chapter 9:
This chapter discuss the critical analysis of UBL University Campus
This section also contains one chapter.
Chapter 10:
This chapter gives the finding and recommendations based on the
critical analysis of the organization.

Bank is an institution, which deals in money. It receives savings of the
people as deposits, which is a loan for a bank, and therefore it pays
interest on it. It gives this amount of money to business enterprises as
loans and receives interest on it. By keeping the rate of interest low on
deposits and high on advance it makes profit. According to Prof.
Crowther “bank is an institution which gets loans to lend and in this
way created credit money.”

• J.W Gilbert in his principles and practice of banking defines a
banker in this word; “A banker is a dealer in capital, or more
properly, a dealer in money. He is an intermediate party between
the borrowers and the lender. He borrows of one party and lends to
• In law of banking Dr. Herbert L. Hart defines ‘bankers’ or ‘bank’
as: “ A person carrying on the business of receiving money, and
collecting drafts for customers subjects to the obligation of honoring
cheques drawn upon him for time to time by the customers to the
extent of the amount available on their current accounts.
• The Americans defined the term banker in a very, board sense
as under by ‘banking’ we mean the business of dealing in credits,
and by a ‘bank’ we include every person, firm or company having a
place of business where credits are opened by deposits or collection
of money is advanced or loaned on stocks, bonds, bullion, bills of
exchange, or promissory notes or where stocks, bonds, bullion, bills
of exchange, promissory notes are received for discount or sale

At the time of independence, the areas which now constitute Pakistan
were producing only food grain and agriculture raw materials for Indo

Pak subcontinent. Of which 487 branches were located in West
Pakistan. By 30th June 1948 the number of officers of scheduled banks
in West Pakistan declined form 487 to only 195.
The separation of East Pakistan and is repercussion in the form of
economic depression; demonetizations of currency in 1972, and the
rampant world-wide inflation have caused a lot of difficulties to the
banking system in Pakistan. In July 1941, West Pakistan had only 81
bank branches; but by December 1977, the number increased
appreciably; and there is now one branch of bank of every 5000 heads
of population. In July 1948, the total bank credit amount to about Rs.
20 corers. During the period of 1971, the number of schedule banks
increase from 2 to 17 by end of June 1971.


Commercial banks play a role of vital importance in the economic
growth of a country. Banks mobilize idle savings of public and provide
finance to various sectors of economy. In spite of vital importance,
there was shortage of branches of commercial banks in the areas of
sub-continents, which now constitute Pakistan. “When Pakistan got
independence, there were only 487 branches of commercial banks,
which were further reduced to 195 as at 30/09/47 due to shifting of a
number of branches to India or U.K. The Reserve Bank of India, which
was made responsible to exercise control over banking sector in both
the dominions, did not perform its duties properly in Pakistan.”1
“The State Bank of Pakistan was established on 01/07/1948. After the
establishment of State Bank of Pakistan, banking expansion got
momentum but real progress was not achieved until 1959, when a
dynamic banker Mr. Agha Hassan Abedi conceived the idea of opening
a bank different from others. His dream was translated into reality on

Siddiqi Asrar H. “Practice and law of Banking in Pakistan” 6th ed. Royal book Co. Karachi


07/11/1959 when first branch of UBL was opened at Macleod Road
Karachi (now known as I.I. Chundrigar Road).”2
This achievement was secured after passing through many problems
and after completion of a lot of legal formalities. UBL was established
on 24/07/1959 as a public limited company with registered office at I.I.
Chandrigar road Karachi. The authorized capital was RS. 20,000,000
issued, subscribed and paid up capital was. RS. 10,000,000 divided into
1,000,000 shares of RS. 10each.

The first Board of Governors of UBL consisted of the following


1 Mr. Ismail Ibrahim Chairman

2 Mr. Muhammad Shafiq Saigol Managing Director
3 Mr. Muhammad Rafiq Saigol Director
4 Mr. M.Bashir Saigol Director
5 Mr. A. Razaq Dada Director
6 Mr. Mian M.Yahya Director
7 Mr. M. Saeed Saigol Director
8 Mr. Agha Hassan Abidi Director and General

Ibid p-19.

“The names and tenure of various presidents of UBL after
nationalization are given here under3”;

S.No Name of President From To

1 Mr. Mushtaq Ahmad Khan 01/01/74 31/12/76
2 Mr. Kh. Zai Ud Din 01/01/77 31/12/79

3 Mr. Sami 01/01/80 01/02/82

4 Mr. M. Sadiq Dar (Acting 04/02/82 31/12/82

5 Mr. Tajammal Husain 01/01/83 15/07/88

6 Mr. Amjad Ali 16/07/88 04/02/89

7 Mr. Maqbool A Soomro 7/02/89 18/07/89

8 Mr. Salim Malik 19/07/89 01/08/90

9 Mr. Maqbool A Soomro 01/08/90 15/05/93

10 Mr. Aziz ullah Mamon 15/05/93 4/08/96

11 Mr. Shafi Arshad 4/08/96 14/07/97

12 Mr. Zubayr A Soomro 14/07/97 15/01/00

13 Mr. Amar Zafar Khan 15/01/00 18/05/04

14 Mr. Atif R. Bokhari 18/05/04

Business Recorder “ Atif R. Bokhari appointed as UBL’s President” , Karachi, 18th May 2004

There are various views about the origin of the word ‘banking’. One
view is that it is derived from the word, ‘banquet’ which means a
‘bench’. The other view is that it has originated from the German word,
‘bane’ which means a joint stock firm.
• Merchants
• Money lenders
• Gold smiths.
In old days merchants issued documents, which were used as money
for the transaction of goods and services, money lenders used to deal
in credit. They took loan form the people on interest to give it to some
other on higher rate of interest and in this way they used to make
profit. Goldsmith used to keep gold and silver of the people as deposits
and issued slips, which circulated as their depositors to transfer a part
or whole of their deposits in the name of another depositor by issuing
an order slip. This order slip gradually turned to be a cheque. With the
passage of time gold smiths learned by experience that the depositors
do not draw most part of the deposits and remain lying idle with them.
Therefore, they used it to give loans to the people. This initiated the
creation of credit money.


When Pakistan independent there were only 487 branches of
commercial banks which were further reduced to 195 in 1947. Due to
shifting of a number of branches to India, or U.K the Reserve Bank of
India which was made responsible to exercise control over banking
sector in both the dominions, did not perform its duties properly in
The State Bank of Pakistan was established on 1968. After the
establishment of State Bank of Pakistan, banking expansion got

momentum but real progress could not be achieved until 1969 when a
dynamic banker Mr. Agha Hassan Abidi conceived the idea of opening a
bank different from others. So United Bank Ltd opened first branch in
Karachi at November 06, 1959.
United Bank Ltd was established as Public limited company on
July 24, 1959. The authorized capital was Rs. 20,000,000/-, Issued
capital and paid up capital was Rs. 10,000,000/- divided in-to
1,000,000 sharers of Rs. 10/- each share.


To be world class bank dedicated to excellence and surpass the highest
expectation of our customer and other stake holders.

Our mission is to set the highest industry for quality across all areas of
operation on the sustain bases optimize people, process and
technology to deliver the best possible financial solutions to our
customers become the most sought after investment and be
recognized as employer of choice

All the businesses have certain objectives, banks are also not an
exception and have their specific objectives for which they are
The following are the main objectives of UBL.
Details of the above objectives are as follows.

1. To Maximize Profits:
The first and basic objective of UBL is to earn more and profit by
providing loan to various individuals and financial institutions and
by performing other utility function for public.

2. To Maximize Deposits:
The major source of the bank profit is the interest on loans, which
is contributed and collected from the public by providing them
low rate of interest and extension of loans from the same capital
to various businesses at high rate of interest. Greater the
deposits of banks the greater will be the profit.
3. To Contribute Economic Development:
UBL provide loan to various industries and other financial to
contribute. In the way the UBL play an important role in the
economic development of our country.
4. To Serve The Society:
It is another objective of UBL to serve the society by providing
various utility functions to the public.
5. To Minimize Expenditure:
Bank always tries to minimize its expenditure so it holds strict
control over wastage of money at every stage. The branch
expenditure must not increase more than 20% of last years
6. Provide Facilities To Staff And Utilization Of Staff:
The bank gives best possible facilities to the working staff and at
the same time the bank utilizes the staff most effectively.


As stated before, a Board of Directors consisting of one chairman, one

Deputy Chairman, one President & CEO, five directors from UBL and
company secretary. Hence the board of directors is a 9-member team,
which manages the overall operations of the bank.
Under the board of directors is the executives committee consisting of
7 members including the president and chairman of UBL and the
Secretary of UBL. These members of the Executive Committee, except
Secretary, are in-charge of many divisions. These members are all
Senior Executive Vice Presidents (SEVP). There are 20 divisions, which
have their own heads who are Senior Executive Vice Presidents (SEVP),
Executive Vice Presidents (SVP) or Senior Vice Presidents (SVP). The
SVEP of international division manages the overseas filed operations of
the 26 UBL branches located in 10 different countries.
In the Domestic field operations, UBL has established its presence all
over the country. Its filed operations are one of the most extensive
among the leading banks in Pakistan. Every province has a Provincial
Chief, usually an SEVP, who overlooks the operations of UBL in that
particular province. Under the provincial chief is the General Managers
who is either EVP or SVP. The general managers are responsible for
either a number of regional areas or in-charge of various provincial
departments such as Administration, Recovery, General inspection,
Loan etc. The number of general managers depends upon the
complexity and extensiveness of the field operations in the province.
Below the general manager are the circle executives who are senior
vice president (SVP) or Vice-Presidents (VP).
The circle executives are in-charge of geographical circle areas such as
Islamabad circle, Peshawar North circle, South circle etc. In each circle
area, there are a number of zones such as Peshawar Cantt Zone,
Peshawar city Zone etc. There is Zonal Head for every Zone who is

either a Vice President (VP) or Additional Assistant Vice President
In each Zone, there are a number of bank branches, which are
managed by branch managers who are Grade-1or 2 officers. In each
branch, in turn, there are a number of graded officers and non-graded
employees (e.g. peon and gunman).
In the UBL organization, the employees are promoted to higher ranks.
In Grade-1, it includes the AVP, VP, SVP, EVP, and SEVP. The difference
in salaries and power is primarily due to seniority in the organization
and competence.



Senior Executive Vice

–President (SEVP)

Executive Vice President


Senior Vice President


Vice President (VP)

Additional /Assistant
Vice President

Grade -1

Grade -II

Grade -III

Clerk, Cashier etc

Non –Clerical staff

UBL Main branch was established on 1979, on Main Branch D.I.Khan to
provide the banking facilities to the business community and
inhabitants of sector Main and also provide general banking services to
citizen and near by area.

UBL has 1000 branches in all over the Pakistan.

UBL has 10 branches in all over the world (UAE, USA, UK).


Like every bank, UBL also has divided its functions into different
departments in every branch to carryout the activities in proper way.
Following are the common departments.
1. Deposit Department.
2. Cash department.
3. Remittances department.
4. Collection cell, clearing department.

Every bank performs two basic functions one is accepting deposits and
the other are lending of money, deposit department performs the
function of accepting deposits from the customers.
Types of Accounts:
There are three types of accounts:
A. Current Accounts
B. Saving Accounts
C. Fixed Accounts
A. Current Account:
In current account, there is no restriction on the account holder for the
withdrawal of money. He can take as much money as he wants and no
profit is given on this account. Now a days the current account is open
with Rs 10,000/-. It can be further classified into the following types:
 Individual Account:
Individual account is opened in the name of a single person. The
person in whose name is it opened can only operate it. The bank
doesn’t pay any interest on it.

 Joint Account:

Two or more persons open the joint account and the bank follows
their instructions for the conduct of the account.
 Proprietorship Account:
A proprietorship firm is a business unit whose ownership and
management are vested in one person. This individual assumes
all risk of loss or failure of the enterprise and receives all profits
from successful operations.
 Partnership Account:
“Partnership is an avocation of two or more persons who have
agreed to share the profit of a business managed by all or by
some of them on behalf of all.”4 A deed is prepared on the stamp
paper by the partners approved by Sub-Registrar and presented
to the bank. The bank follows this deed during the conduct of
account. This is, when the partnership is registered.
In case of unregistered firm, the bank takes the instruction from
the party at the bank on account opening form.
B. Saving Account
In the saving account, the client receives certain profits on his account.
The saving account with an amount of Rs 2,000/-. The saving accounts
are of two types;
 Individual account: It is opened and conducted by a single
 Joint account: It is opened and operated by two or more
persons. The account holder regarding handling of the account
gives instructions.
C. Fixed Account
The deposits that can be withdrawn after a specified time are referred
to as fixed or term deposits. The account holder keeps a specified
amount of money for a definite period of time. The amount deposited is
not withdraw able by checks and after the maturity of the account, the
account holder receives the actual money along with return at rate,
previously agreed upon.
Nassir M Saeed. “Introduction to Business” Updated ed. Imtiaz Publishers.Lahore p-33

A single individual, partners and companies, too can maintain such
accounts as well. The period for which the bank keeps these deposits
ordinarily varies from three months to sixty months in accordance with
the agreement made between the customer and the bank.

It is a special type of account designed for corporate savers. This
account can be opened with minimum Rs.100,000. The minimum profit
rate is 4% while maximum limit is 8%. Profit is paid on daily product
basis. Any one can open this account.
Special Features are:
 Daily Profits on your daily balance
 Higher returns on higher balances
 Attractive rate of return
 Backed by the bank awarded AAA Credit Rating


This dept is concerned with transfer of money from one place to

another place. Remittance can take place in three different ways.

When a customer requests the bank to transfer his money from this
bank to any other bank or the branch of the same bank in the city/
outside the city or outside the country, the first thing he has to do is to
fill an application form in which he states that I want to transfer the
money from this bank to another bank. If the customer is the account
bolder of bank, then the bank will debit his account. The concerned
office will fill the different forms to make the mail transfer complete.
Three forms used for this purpose are listed below;
• Debit voucher
• Credit voucher
• Mail transfer register
If the customer is not the account holder of bank, then firstly he has to
deposit the money and then the above said procedure will be adopted
to transfer his money.

This type of transfer is simple. After filling the application form, the
concerned officer fills the telegraphic form. This telegram is sent to the
required bank. Which on receiving it immediately makes the payment
to the customer and afterwards the vouchers are sent to the bank by
ordinary mail.

DD is just a check and is issued when the customer wants to take the
draft personally. The idea behind it is that as the cash is not safe to be

kept along and a check in the shape of a draft is safer and one can
easily get cash by presenting it in the bank, on whose favor it has been
Draft is only issued when the customer is known to the bank and the
bank has the confidence that the customer will not do anything wrong
with the draft. For the preparation of a draft, first of all customer has to
fill an application form, then the concerned officer fills the following
before delivering the draft to the customer. The forms filled for this
purpose are as follows;
 Demand draft register
 Credit vouchers

A clearinghouse is an association of commercial banks, set up in a
given locality for the purpose of inter-change and settlement of credit
claims. The function of clearing house is performed by the central bank
of a country by tradition or by law.
In Pakistan, the clearing system is operated by SBP. If the SBP has no
office at a place, the National Bank of Pakistan (NBP) as a
representative of SBP acts as a clearing agent.
The mechanism whereby checks are exchanged in bulk and the cross
obligations of the banks are off set is now explained in brief.
Check as we know, is an effective method of making payments. When
checks are drawn on one bank of drawer, the mutual obligations are
settled by the internal bank administration and there arise no inter-
bank debits from the use of check. The total liabilities of the bank
remain unchanged.
In practice, the person receiving a check is rarely a deposition of the
check in the same bank as the drawer. He deposits the check with his
bank (other than that of the drawer) for the collection of the amount.
Now the bank, in which the check has been deposited, becomes a
creditor of the drawer’s bank. The debtor bank will pay his amount of
the check by transferring it form cash reserves, if there are no

offsetting transactions. In the course of every day life, there is large
number of checks drawn on a bank, deposited in other banks. The
banks, on which the checks are drawn, become in-debt to the banks in
which the checks are deposited.
At the same time, the creditor banks receive large amount of checks
drawn on other banks giving claims of payment to them. It will be most
uneconomical and confusing if banks had to transfer cash for meeting
each other’s liability. The easiest safest and the most efficient way is to
offset the net payment. This facility of net inter bank payments is
provided by the clearinghouse.
The representatives of the local commercial banks meet at a fixed time
on all the business days of the week. The meeting is held in office of
the bank, which officially performs the duties of a clearinghouse. The
representatives of the commercial banks deliver the cheques payable
at other local banks and received by them. Totals are also made of all
the checks presented by or to each bank. The difference between the
total represents the net amount payable to or by it. Banks keep two
books regarding clearinghouse.
• Onward clearing book. For the purpose of recording all the checks
that are received by the bank in the first clearing uses this. Details
of checks are recorded in this book.
• Outward clearings book. This book uses outward clearing register for
the purpose of recording all the details of the checks that the bank
has delivered to other banks in first clearing.
Cash department performs the important functions of receiving the
money and payment of money receipts to customers from their
The money which comes to the bank, it is recorded by cash
department. The deposits of all customers of the bank are controlled
by means of ledger account,. Every, customer has its own ledger
account and have separate ledger cards.

Payments made by cash department could be easily explained under
the following headings.

“Cheque is a bill of exchange drawn on a specified banker and not
expressed to be payable otherwise then on demand.”5
Kinds of Cheque:
i. Bearer Cheque:
It is eatable at the counter this Cheque can also be collected through
ii. Order Cheque:
It is also cashable on the counter but its holder must satisfy the banker
that the proper man to collect the payment of the Cheque and he has
to show his identity through an account holder of the bank. It can also
be collected through clearing.
iii.Cross Cheque:
It is not cashable on the counter, it can only be credited to the payee’s
Issuing a Cheque Book:
The second main function of account opening department to issue the
cheque books. When a customer applies for a new cheque books,
he/she has to present the cheque book issuing requisition slip with
his/her two signatures to the officer concerned, the officer will verify
the signature and after the verification of signature cheque book will be

Nasir M Saeed. “Banking currency and Finance” Ed. 1994-95, Lyallpur Nafees Printing Press, Faisalabad


 Minimum monthly income: Rs.15,000
 Age: 23 to 65 years
 Resident Pakistani
 Self-employed businessman/professional or salaried individual
 Minimum loan size: Rs. 500,000
Every one have always dream of having a permanent address. Now
UBL can turn dreams into reality with UBL Address, the unique offering
that makes customer’s the owner of their home while remaining within
their limited income.
UBL Address understands customer’s home financing needs and offers
them a variety of fixed, floating & adjustable rate options.
 Fixed Rate Options:
Fix repayments for 20 years today. The fixed markup rate gives
you peace of mind and allows you to plan your cash flows better.
 Mark-up Monthly, Principal Annually (20 years)
For the first time in Pakistan, UBL address provides an alternative
to high monthly rentals by offering a flexible repayment option to
suit your cash flows:
 Pay only markup for 11 months every year.
 Pay 5% of principal along with the markup in 12th month
every year.
 Enables a fast principal repayment and hence lowers total
markup over life of the loan.
 Installment reduce every year.
Example, on the loan of Rs. 1,000,000 your annual principal repayment
will be Rs. 50,000 while you will only pay the markup as monthly
installment (as indicated in the graph below).

 Pay As You Select (PAYS)
In addition to normal financing, UBL Address offers customers the
facility to design their own repayment plan to suit their present and
future expected cash flows.
 PAYS-Up (10 yrs, 15 Yrs)
PAYS-Up allows customers to start with low installments that increase
every year.
For example, on a 15 year loan of Rs. 1,000,000 monthly installment
will begin from Rs. 9,270* in year one and will rise to Rs. 15,679 in year

 PAYS-Down (10 yrs, 15 Yrs)

PAYS-Down allows customers to pay higher installments initially, with
installments reducing in subsequent years.
No pre-payment penalty after the initial 3 years. *The installment
amount mentioned is for indicative purposes.
For example, on a 15 year loan of Rs. 1,000,000 monthly installment
will begin from Rs. 12,652 in year one and will fall to Rs. 9,631 in year

 Floating Rate
In this option, customers get a fixed rate for a period of 12
months, that gets re-priced annually.
 Adjustable Rate
Mark-up rate will be fixed for a period of 3, 5, 7, or 10 years, and
will be adjustable after the fixed rate period.
 Zero Prepayment Penalty Option
The Zero Pre-payment Penalty option allows customers to pay off
their loan anytime after the third year without paying any pre-
payment penalty.
 Makes paying off customers loan amount so much easier.
 Customers can choose between the fixed rate and floating
rate options.
 Fulfill Your Dreams
UBL address empowers you to:
 Become the proud owner of a home by purchasing your
very own house/flat/land.
 Avail a facility to give your existing house or flat a brand
new look.
 Construct your dream house according to your wishes.
 Choose your own loan repayment period from anywhere
between 3-20 years.

 Combine your income with that of your spouse and
enhance your Loan amount.

Many customer’s wished for a loan that is flexible enough to be used
anywhere, anytime, and as many times as they wanted. UBL
introduces Cashline, the most flexible loan, providing loan up to Rs.

 Flexible
UBL Cashline is truly the most flexible loan that gives the
freedom to turn customer’s dreams into reality today. Unlike
ordinary personal loans, UBL Cashline has No Pre-payment
 UBL Cashline can pay bills.
 UBL Cashline can buy appliances for their valued
 UBL Cashline can provide loan for home décor.
 UBL Cashline can provide you new furniture have always
dream of.
 UBL Cashline can transform wheels into a dream car.
 UBL Cashline can fly off to a dream destination too.
 UBL Cashline can send payments to third parties in other
 With UBL Cashline customers can sit back and relax.
 Convenient
UBL Cashline gives the convenience of access to cash through
multiple options 24 hours a day.



In today world no country can keep itself self-sufficient in every area of
life. So they have to trade with other countries for the things which she
does not have. But such business required a medium, which is
acceptable to the countries concerned. So they usually do business
through the medium of stable currencies of the world. For such
International Business Transaction the banks utilize the services of its
foreign exchange department. This plays very crucial and important
role in International trade. The services which Foreign Exchange
Department of the bank offer is the parallel banking with general
banking, an additional function of import and export business
controlled by State Bank of Pakistan.
In UBL its Foreign Exchange Department as per State Bank of Pakistan
regulations carries out the International banking. The State Bank of
Pakistan exercises full control over the Foreign Exchange Business. No
transaction can be considered effective without permission from the
State Bank of Pakistan under Foreign Exchange Control Act, 1947.
Foreign Exchange Regulations are issued through the Exchange Control
Department of the State Bank of Pakistan.
Any transaction in the International Banking shall be carried out at
rates determined by the State Bank of Pakistan. For this purpose the
State Bank of Pakistan fix the rate of US dollar. This is done by formula
approved by State Bank of Pakistan and was published daily by Foreign
Exchange Rate Committee in Karachi Head Offices. It also makes sure
that the rate approved are conveyed to the branches on the same day.
 Foreign Currency Accounts
 Foreign Exchange Remittance Facility
 Advances in Foreign Exchange

UBL is an authorized commercial bank offer the facility of Foreign
Currency Account in 4 Currencies which are U S Dollar, Japanese Yen,
German Mark and U K Pound Sterling. Bull's top management has
authorized a few selected branches for dealing in foreign currency
The procedure for opening foreign currency account is similar to
opening of local currency account, except that in case of foreigners the
bank require photo copy of the applicant's passport. The customer may
open Foreign Currency A/C. in any of the above mentioned Foreign
Currency. Similarly interest on the A/C will also be made in the
currency in which the account is maintained.
Broadly there are two types of foreign currency accounts.
 Current Account
 Saving Account
Just like local currency current account holder. No interest is given to
the Foreign Currency Account holder. Foreign Currency Accounts are
also exempted from Zakat, Income Tax and Wealth Tax.
UBL offers a very handsome rate of return on such account. The profit
is paid in the currency in which the account in opened. This account
also exempted from Zakat, Income Tax and Wealth Tax.
Foreign Currency Department of UBL also has a very extensive system
for the purchase and sale of Foreign Currencies. UBL deals in the
purchase and sale of the following foreign currencies.

The currency of one country is legal tender only in the same country
and not in other country. So what should the businessmen do while
doing International business. To overcome such difficulty the business
is done through Foreign Exchanges. So the importer will need the
currency of the Exporting Country. The International Business is carried
out by transferring credit from debtor's country to the creditor country.
Foreign remittances can be done in the following ways:

 Telegraphic Transfer ( TT)

 Mail Transfer (MT)
 Foreign Demand Draft (FDD)
UBL plays a vital role in facilitating the import and export business of
the country. In this respect UBL also gives loans to importer only in the
Pakistani currency. The facility of loan is given in the form of running
finance to the customer. UBL keeps a vigilant eye on the account
holder's account that applies for the Foreign Exchange Loan.


Financial ratio analysis over time, It is often useful to express balance
sheet and income statement items as percentages. The percentages
can be related to totals, such as total assets or total net sales, or to
some base year called common-size analysis and index analysis
respectively the evaluation of levels and trends in financial statement
percentages over time affords the analyst insight into the underlying
improvement or deterioration in financial condition and performance.
While a good portion of this insight is revealed in the analysis of
financial ratio, broader understanding of the trends is possible when
analysis is extended to included the foregoing considerations. These
two type of analysis are extremely helpful in comparing firms whose
data differ significantly is size because every item on the financial
statements gets placed on a relative or standardized basis.
An analysis of percentage financial statements where all balance sheet
items are divided by total assets and all income statement items are
divided by net sales or revenues.


FROM 1998-2003
2003 2004 2005 2006 2007 2008
Current Assets
Cash & Cash 15.412 15.298 12.322 23.995 19.821 24.244
Marketable 15.272 11.644 6.231 4.714 16.812 9.066
Accounts 34.622 39.581 47.778 47.313 39.513 45.822
Inventory - - - - - -
Others 13.689 13.940 16.792 10.045 3.997 3.991

78.996 80.463 83.123 86.068 80.143 83.123
Fixed Assets
Operating Fixed 2.020 1.818 1.781 1.698 1.476 1.724
Long Term 18.984 17.720 15.096 12.234 18.381 15.153
21.004 19.537 16.877 13.932 19.857 16.877
100.00 100.00 100.00 100.00 100.00 100.00
0 0 0 0 0 0
Liabilities &
Payables 88.015 86.909 86.037 92.355 87.328 88.450
Unearned Revenue 0.002 0.001 - - - -
Other Current 4.941 6.076 6.676 4.676 4.735 2.615
92.957 92.986 92.713 97.030 92.063 91.065
Long Term
Notes Payables 0.618 0.975 0.765 0.914 0.963 1.327
Bonds Payable - - - - - -
Minority Interest - - - 0.693 0.663 0.627
Preferred Stock - - - - - -
Other long term 2.480 2.247 2.189 1.862 1.767 2.390
3.099 3.222 2.954 3.468 3.393 4.344
Paid in Capital
Common Stock 16.059 14.531 14.485 13.332 2.700 2.298
Retained Earnings 2.737 2.431 2.634 2.349 2.220 2.091
18.796 16.962 17.118 15.681 4.921 4.389
Accumulated 14.85 13.17 12.78 16.18 0.377 0.202
Profits/losses 3 0 5 0
100.00 100.00 100.00 100.00 100.00 100.00
0 0 0 0 0 0

The common size analysis of the balance sheet of UBL is based on

relative figures keeping in view the absolute figures available in the
annual report of UBL for the financial year 1998, 1999, 2001, 2003.

Financial analysis is the process of identifying the financial strengths
and weaknesses of the firm by properly establishing relationships
between the items of balance sheet and profit & loss account. Financial
analysis can be undertaken by management of the firm, or by parties
outsides the firm such as creditors, investors and others. The nature of
analysis is depending on the purpose of the analyst.
Trade creditors are interested in firm’s ability to meet their claims over
a very short period of time. Their analysis will, therefore, confine to the
evaluation of the firms liquidity position.
Suppliers of long term debt on the other hand are concerned with
firm’s long-term solvency and survival. They analysis the firms
profitability over time, its ability to generate cash to be able to pay
interest and repay interest and repay principal and the relationship
between various sources of founds (Capital structure relationship).
Long-term creditor do analyses the historical financial statements by
they place more emphasis on the firms projected financial statement s
to make analysis about its future solvency and profitability
Investors who have invested their money in the firm’s capital are most
concerned about the firm’s steady growth in earnings. As such, they
concentrate on the analysis of the firm’s present and future
profitability. They are also interested in the firms finical structure of the
extent it influences the firms earnings ability and risk.
Management of the firm would be interested in every aspect of the
financial analysis. It is their overall responsibility to see that the
resources of the firm are used most effectively and efficiently and that
the firm’s financial condition is sound.
Ratio analysis is powerful tool of financial analysis. A ratio is defined as:
“The quotient of two mathematical expression” and as “the

relationship between two or more things”. In financial ratio analysis a
ratio is used as benchmark for evaluating the financial position and
performance of a firm.
The ratio analysis involves comparison for a useful interpretation of the
financial statements. A single ratio I it self does not indicate favorable
of unfavorable condition. It should be compared with some standard.
Such as past ratio calculated from the past financial statements of the
same firm.


Year 2003 2004 2005 2006 2007 2008

Current 110,587,44 124,488,88 129,015,86 145,130,21 153,731,49
Assets 1 1 7 5 1
130,132,43 143,864,46 134,554,66 163,615,46 176,596,79
Liabilitie 205,249,386
5 1 2 5 8
0.85 0.87 0.96 0.89 0.87 0.91
Source: UBL Annual Report 1998,1999,2001,2003
“Current ratio is defined as current assets divide by current liabilities,
which shows the firm liquidity in the short run.”6 Current ratio states
that whether the firm is able to pay its current liabilities with its current
assets, if it do not so, then it should be insolvent in the short run.
Current Ratio = Current Ratio / Current Liabilities
If the current ratio of the firm is equal to or above than 1, then the firm
is able to pay its current liabilities with its current assets. The banking
industry maintains the current ratio of 0.907.
Van Horne, James C. and Wachowicz, JR., John M, (1998). “Fundamentals of Financial Management”.
11TH Edition. USA: Prentice-Hall, Inc P-127

Internship Report By Waqar Ahmad 2002 MBA

The current ratio of United Bank Limited for six years is below 1, which
means that if the bank is liquidate in the short run than it will not be
able to pay its current liabilities. But on the other hand if we compare
the current with the industry averages than it is good enough because
UBL current ratio is near to the industry ratio. The best current ratio is
for the year 2000 which is 0.96. The quality of the current ratio can be
affected through accounts receivable turnover ratio which is very low
for the six years; it means that we cannot collect our receivables in

Year 2003 2004 2005 2006 2007 2008

Cash &
Cash 21,576,211 23,668,066 19,125,145 40,461,095 38,020,175 54,642,071
e 21,379,354 18,014,668 9,670,896 7,949,639 32,248,362 20,433,829
Current 130,132,43 143,864,46 134,554,66 163,615,46 176,596,79
Liabilities 5 1 2 5 8
0.33 0.29 0.21 0.30 0.40 0.37
Source: UBL Annual Report 1998,1999,2001,2003
Cash ratio is a more conservative option to know the short run liquidity
of the firm. In cash ratio the current assets are cash and marketable
securities divided by current liabilities. As we know that the
marketable securities are the current assets which are extremely liquid
and very near to cash. It is understood that the cash ratio should be
less than current and quick ratio.
Cash Ratio = Cash + Marketable Securities / Current Liabilities
Due to the fact that the advances and other assets requires time to
convert into cash. Therefore to know that to what extent the firm is
near to cash. Obviously the cash ratio is less tan the current ratio. In

the first three years there is a negative trend and the best ratio is for
year 2002 i-e 0.40.

Year 2003 2004 2005 2006 2007 2008

134,470,44 148,849,73 139,138,97 142,181,02 183,104,47
Liabilitie 215,040,240
2 9 6 2 2
Total 139,991,64 154,716,10 155,211,11 168,623,15 191,821,03
Assets 4 1 6 5 2
0.961 0.962 0.896 0.843 0.955 0.954
Source: UBL Annual Report 1998,1999,2001,2003

This ratio states to what extent the firm assets are financed through
debt. The ratio is calculated by dividing the firm total debt divide by
total assets.
Debt to Assets ratio = Total Debt / Total Assets
This ratio is very important for creditors, because with the help of this
ratio the creditors can make the decision’s whether to lend an advance
to the bank or not.
The higher the debt ratio the greater the financial risk and vice versa.
The UBL for six financial years have very high debt ratio, which shows
greater financial risk. For 1998 the debt ratio is 0.96 which shows that
the 96% of the assets are financed through debt. Similarly for six
years more than 80% of the assets are financed through debt. This
ratio shows a red alert to the creditors of the bank and to those who
want to lend to the bank.


Year 2003 2004 2005 2006 2007 2008

134,470,44 148,849,73 139,138,97 169,463,73 183,104,47
Liabilitie 215,040,240
2 9 6 1 2
22,481,680 22,481,680 22,481,680 22,481,680 5,180,000 5,180,000
3,831,817 3,761,331 4,087,899 3,960,453 4,258,947 4,712,569
Debt to
Equity 5.11 5.67 5.24 6.41 19.40 21.74
Source: UBL Annual Report 1998,1999,2001,2003
This ratio states that how much finance is contributed by the creditors
and other financial institutions to the capital of the company in relation
to the shareholders.
Debt to Equity Ratio = Total Debt / Total Equity
The lower the debt to equity ratio, the lower the financial risk for the
creditors and vice versa. In the case of UBL the said ratio is in the
range of 5.11 to 6.41 for the first four years. For year 1998 the
creditors are contributing Rs 5.11 and the share holders contributing Rs
1. This is due to the following reasons;
 Credit worthiness of UBL
 Creditors have no idea of financial leverage ratios
In 2002 and 2003 the debt to equity ratio has drastically increased due
to the reduction of share capital from 22.481 billion to 5.18 billion.


2003 2004 2005 2006 2007 2008

8,699,226 10,274,435 10,416,460 11,468,051 11,527,524 9,269,494
NProfit (18,413,31 (17,046,42 (16,265,28 (16,540,21 (15,445,58
Loss 7) 1) 4) 9) 8)
(212) (166) (156) (144) (134) 17
Source: UBL Annual Report 1998,1999,2001,2003
This ratio gives a measure of net income Rupees generated by each
Rupee of Markup earned. It is desirable for the said ratio to high. NPM
is greatly depends on the company policies regarding use of common,
preferred and debt financing, administration and selling expenses,
financial charges, minority interest, income from other sources etc.
The NPM is greatly depends on the efficiency of the company.
Net Profit Margin = Net Income / Markup earned
Due to heavy losses in first five years of analysis the NPM is in
negative. This is due to the fact that the management is not efficient
and due to the previous years losses hence the ratio is in negative. In
2003 the NPM is 17% which shows that if the sale is Rs 100 the net
profit is Rs 17 which is good comparing the previous five years of
analysis. The performance in 2003 is excellent due to the privatization
of UBL. Due to the privatization heavy layoffs and downsizing actions
were taken. This restructuring or rightsizing results in reduction in the
number of banks and its employees. In 1999 UBL has 1417 branches
but at present at has only 1096 branches which shows restructuring or


2003 2004 2005 2006 2007 2008

8,699,226 10,274,435 10,416,460 11,468,051 11,527,524 9,269,494
Total 139,991,64 154,716,10 155,211,11 168,623,15 191,821,03
Assets 4 1 6 5 2
6.214 6.641 6.711 6.801 6.010 4.113
Source: UBL Annual Report 1998,1999,2001,2003
Measure the activity of the assets and ability of the firm to generate
markup earned through the use of its assets. The higher the said ratio
the higher will be the performance of the management.
Total Assets Turnover = Markup Earned / Total Assets
For the first four years of analysis there is positive trend in the said
ratio and it is above than 6%, which shows that if our assets are of Rs
100 then our markup earned are of Rs 6. In 2003 the ratio is reduced
to 4, the main reason is the assets are increased but on the other hand
the markup earned is reduced due to the decrease in number of

On the basis of “SWOT” analysis, one can analyze the present status
and performance of an organization and can make conclusions and
The “SWOT” analysis consists of four words that are S, W, O & T, which
stand for Strengths, Weaknesses, Opportunities and Threats

Something an organization is good at doing is termed as its strength.
UBL’s strengths are:
1. Experience of operation, as the bank was established on 15th of
November, 1959.
2. Bank’s emphasis on consumer banking by providing them with
innovative saving schemes, products and services suiting best to their
life style.
3. Best and optional policies and attractive compensation packages
for employees, which really improved their commitment, dedication
and hard work towards the accomplishment of bank’s objectives.
4. Easy access to the customers at their residential localities
through a well spread branch network.
5. Professional and skilled management as UBL provides proper
training to their employees.
6. UBL has very large network of domestic and foreign branches
and all the branches are connected to Local Area Network (LAN). So,
the remittances are transferred in seconds through UniRemote. UBL
has more than 1000 domestic and 15 overseas branches.

Weakness is something an organization lacks at doing that. For UBL
these are:
1. Customers having accounts with small amounts are not given the
same attention given to those with large amounts.
2. Higher number of branches affecting maintenance in consistency
and same working atmosphere.
3. Political, legal and sauce cultural pressure. Every commercial
bank is legally required to deposit the daily reserve requirement
with the SBP. Similarly due to the political powers some political
parties are able to get loan on low terms and conditions, then the
same loans then stuck off as it was practiced in the history of
4. Lengthy advancement procedures. For advancement every
borrower either sole proprietorship, partnership, joint stock
companies, individual etc is require to fulfill certain conditions for
loan. Depending on the nature of loan sometimes the loan
process take too much time due to legal formalities such as
documentation, providing of guarantee, pledge, hypothecation.
5. Promotion is purely based on seniority, so young processionals
having high qualification are having any chance of promotion.
6. The software developed for daily recording of the operations is
7. Most of the personnel are not qualified, they are mainly rankers
so they don’t know the logic of operation.

An external situation, which an organization can benefit from, is called
opportunity for that organization. UBL can grab the following
1. Growing policies of the Government on business and commerce
sector provides UBL an opportunity to efficiently meet the
business people’s requirements of instant cash financing
2. Customer’s feedback on different products and services has
really improved the bank’s performance and encouraged the
atmosphere for other future policies.
3. UBL has an opportunity to expand its new technological
advancement like Tele bank and Internet banking facilities in
order to serve the customers more efficiently. Especially, E-
Banking is a new opportunity which is a flourishing business in
foreign countries and can also be here, if UBL takes the
4. Due to efficient and experienced management group, UBL can
improve and expand its foreign operations successfully.
5. Increasing need and potential of leasing in Pakistan provides UBL
an opportunity to utilize its skills and efficiencies in leasing
business as well.
An external situation posed to harm organization’s interests is
regarded as threat to that organization. UBL worries about the
1. Mushroom growth of other commercial banks reduces the market
share of UBL.
2. A tremendous number of foreign banks are opening their
branches in the country.
3. Also the increasing operations of private banks pose threat to

4. Highly specialized and attractive services offered by foreign
banks to their customers.
5. Lack of consistency in Government’s policies regarding business
and economic sector.
6. Growing global technological advancement will also affect
Pakistan, the industries will be capital intensive, they will require upto
date technology and at the same time they will require huge capital. It
is a treat for UBL because if it is not able to provide loans to that
industries then definitely the market share will be taken away by other
7. Strict regulations of the Government over credit facilities to the
customers as well as to meet the prudential regulations.
8. Loss of confidence of overseas customers due to freezing of

The SWOT analysis is a mirror to the bank of its present condition.

From this analysis, we can conclude that the bank has done some
professional changes in its banking system. But still there are chances
for improvement. The management can develop elaborate strategic
plans for capitalizing the available opportunities. One area where the
bank has done some work is the improvement in customer services.
But to get the desired results, the bank should develop long-term
objectives and prepare appropriate courses in order to achieve them.
The bank should maintain principle of professional management and
adhere to the sound and sophisticated banking rules and regulations to
build confidence of the people in the institution.


A two months internship program can never provide all the information
about an organization. One roughly gets to spend a single week in each
department. So in this section only some of the problems have been
pinpointed and possible solutions have been suggested. The concerned
personnel of the department narrated some of these problems.

The function of the cash department has already been explained
following are some of the problems observed over there.
Although not very frequently, but there are instances of fake currency
being identified in bundles. Some time currency notes already checked
by other banks were found to be fake. This problem is very crucial
because it results in the loss of the bank.
The SBP is also very strict about it and has very strict regulations about
such indices.
This problem has more frequency of occurrence. This happens
sometimes due to rush on customer cash collector. There are times
when the rush is not so much but chances of human error are always
there. This results into problems especially for the cash department,
because people working there are responsible for it. If the book and the
hard currency don’t reconcile with each other the loss has to be
compensated by the cash department.

 Training

The cash department should be frequently provided with refresher
courses in currency identification. Scanners should be provided to
check the fake notes.
 Counting Machines
Good quality counting machines should be provided to the cash
department. This would not only reduce the chances of counting
mistakes but would also speed up the procedure and thus enhance
customer satisfaction.
 The denomination of cash received/ paid should be recorded on the
back of voucher.
 Insurance limits and warranties of cash in safe, cash on counter and
cash in transit should be observed.
 The manger should physically check the closing cash in accordance
with the details given in the cash office daily cash position book and
cash office receipts and payment scrolls.
The function of the clearing department has already been explained in
the concerned section. Following are the problems observed in that

Proper endorsement and stamping are must for smooth clearing
procedure. A wrong endorsement could cause the cheques be
returned. This results in loss to the customer and extra effort for the
bank, which has to repeat the procedure.
This is another important aspect. If proper entries are not done and
relative vouchers are not passed, the bank could have problems. They
are related to maintenance of books and other losses.

Training provides one with the solution. The clearing personnel should
be continuously updated on endorsement and other procedures
There should be co-ordination between clearing and other concerned
departments so as to enhance customer satisfaction.
When the check received in clearing is returned due to any reason,
that reason should be stated clearly and explicitly. A check returned
quoting a wrong reason would increase the procedure and thus time
span. It also will bring a bad name to the bank.

 Banks crossing stamp should be immediately affixed on the check
received for collection / clearing register.
 The parties should cross check before it is received.
 Check returned in clearing/ collection should be recorded in return
register and acknowledgement should be obtained from clients.


 Bills are sent to other cities and as such involve greater time.
Therefore such procedure should be exercised that all relative
entries are carefully made and proper stamp affixed. If this is not
done the bill will be returned causing loss to the parties and the
 Proper checking should be done as to see whether signatures are
there on and the payees name mentioned.
 The bills should be sent as quickly as possible so that the funds are
secured for payment quickly.
 Courier service etc. should be used and intimation of the funds
should be requested for as quickly as possible.

All the prescribed procedures should be fulfilled before and after the
opening of accounts. e.g. the account opener must give his/her identity
card. If this requirement is not fulfilled the bank can come under SBP
audit objection.

Care should be exercised both at the time of disbursing and depositing
cash. The signatures should be verified on the checks and entries
should be made in ledger. The check should be cancelled properly. All
vouchers should be signed in duplicate and authorization obtained on
 Accounts to be opened under proper interaction.
 Accounts opening from should be duly filled and placed under safe
 Formation for opening of different types of accounts to be
 All relative books/ledger/A/C ledger cards should be properly
maintained checked and balanced.


Some of the problems identified in bills and remittance department
apply to foreign bills and remittances, which include delay in
transmission and intimation, wrong test application, missing signature
and beneficiary’s name etc. on bills. Some times the intimation of
remittances and bills realization from foreign correspondents is
delayed. The reason is that they are not conveyed to branch but
through the Karachi branch.
One suggestion is to provide the branch with the telex machine. This
would enable the branch to send and receive the messages directly.

This would increase the speed and efficiency and ultimately customer
satisfaction. In addition to this, TT messages being transmitted or the
bills being sent for collection should be carefully scrutinized to save the
future delays and repetitions. These things consume extra energy and
expenditure. All the above activities should be accompanied by proper
maintenance of record, vouching and reporting to the SBP.
The telegraphic transfers are authenticated by codes called test. These
tests should be carefully applied because a wrong test will prevent the
responding bank from payment and delay could dissatisfy the

The message should be carefully prepared because the responding
branch no matter what it says will execute the message.
 Prompt Payment
The TT information should be executed as quickly as possible. Other
wise the essence of TT will be lost. The DD should be carefully
prepared and the inter branch credit advice should be dispatched
quickly to the concerned branch.
 The authorized key holders should operate the telegraphic test keys
with foreign banks.
 Traveler check opening stock – sales = closing stock.
 Rate of exchange on all transactions should be applied currently
and services charges are recovered as per standing instructions.

1- Akhtar, S.M. Economic Development of Pakistan 1st Edition,
( United Publisher, Lahore, 1987).
2- Edmister, Robert O. Finical Institutions 2nd Edition,( Mc Graw Hill
New York, 1986).
3- Haque Irfan-ul A Compendium of Pakistan Economy, 1st
(Royal Book Co.Karachi,1987).
4- Johnson, Hazel S. Financial Institution and markets. A Global
Perspective, (Mc Graw Hill Mc.New York 1993)
5- Khans Shahrakh Rafi, Profit and Loss Sharing. 1st Edition
(Oxford University London Karachi,1987).
6- Meenia, S.A Money Banking and Financial Market 3rd Edition
(Oxford University Press Karachi 1984).
7- Mishkin, Frederic S. Money Banking Se Financial Markets,3rd
Edition (Hourper Collins New York 1992).
8- Saeed, Khawaja Amjad, Financial Institution in Pakistan. 1st
edition (Royal Book Co. Karachi.l985).
9- Siddqi, Asrar H. Practice and law of banking in Pakistan.(Royal
Book Co. Karachi 1993).
10- Singh Karam Sc Tanna Suresh, Bankers Student Text,
(Hutchinson, London, 1989).
11- Sinkey Joseph F. Commercial Bank Financial management 2nd
Edition. (Macmillan Publishing Co.New York 1986).
12- Interview with Vice President UBL .Mushtaq A Mirza
13- Internet