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Banking operations and services are one of the basic needs of an economy. These include acceptance of deposits and disbursement of advances to individuals and others at higher rates. Banks perform various fundamental factions, which are directly or indirectly contributory towards economic and social development of countries. UBL, a commercial bank was established in 1959 as result of reckless efforts made by Agha Hassan Abidi. The UBL has shown the fastest growth pattern and in a period of just 27 years became the second largest bank of Pakistan. The bank image however adversely destroyed when it suffered heavy losses during its nationalization period due to political and other factors. The bank is showing re-emerging indications as is evident from its financial statements. UBL on October 19, 2002 was privatized and bought by two financially sound parties of international repute i.e. best way group and Abu Dhabi group holding 51% of the banks share and thus has emerged as the largest private bank surpassing MCB. 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, and recommending possible solutions for problems. For meeting the purpose both secondary and primary data have been used. Firstly is the introduction to the report and briefly describes the scope, purpose, methodology and limitations faced during the preparation of the report. Next is the review portion and contains five chapters. First chapter is introducing the organization, UBL which came in to being in 1959. Remaining four chapter are explaining operations and relevant broader but comprehensive set of information of the functional departments of the bank. 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. Next is the analysis part of the report and is comprising of two chapters. Chapter 5 is the critical analysis of the departments and its functions. SWOT analysis is an integral part of this chapter that I did. 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.Then I did marketing analysis of UBL. This chapter reveals that the bank is trying to regain its position in the present more dynamic and competitive environment. Major findings are included in this summary which is the outcome of this analysis. In the last is the recommendation part and is derived from the previous section. Major findings are stated in the later part of this summary.

Students of BBA studying courses leading to bachelors degree in Commerce are required to undergo an internship programme of two months duration. This is an essential academic requirement. The internship is followed by comprehensive report writing, required to submit it. This report is properly evaluated on the basis of its description and analytical capabilities by internal and external examiners. I did my internship in United Bank Limited (mission chowk sahiwal).

Purpose of Study
The purpose of the study is to work in real life situation and learn banking practice by doing. In this context its objectives are: To analyze banking operations i.e. operational analysis, financial analysis. To develop concrete and feasible recommendations. To improve report writing skills.

Scope of Study
The study is confined to banking operations. An attempt, along with all its limitations, to collect financial data and general statistics of the bank has been made. Keeping in view the purpose of the study, which is to make an acquaintance with practical doings in the bank, this seems a comprehensive effort.

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

Primary Data
Personal Observations Discussion with Bank Personnel

Secondary Data
Brochures/ Manuals of the bank. Annual Report State Bank Foreign Exchange Manual Journals, newspapers and books Internet


Banking History
Consensus on the origination of word Bank is not yet reached at. Some authors opinion is that this word is derived from the words Bancus or Banque, which mean a bench and they further relate banking business inception to Jews in Lombardy. Other authorities state that the word Bank is derived from the German word Back which means Joint Stock fund and later on due to German occupation of Italy, this word was italianated into Bank. Authors quote Babylonians (few quotes Chinese) who developed banking system as early as 2000 B.C.

Banking in Pakistan
Banking started in Pakistan after the bold and emergent decision of formulation of SBP on July 30, 1948. Thereafter this sector has witnessed enormous growth. In 1974 banks were nationalized, in the hope that new era of growth could be achieved through it. However, the process is reverse since 1991, up till now MCB, ABL, and UBL have been privatized and HBL is in the process of its privatization.

Profile: United Bank Limited Ticker: UBL Exchanges: KAR 2009 Sales: 73,819,000,000 Major Industry: Financial Sub Industry: Commercial Banks Country: PAKISTAN Employees: 8738

On November 9, 1959, UBL was notified and included as a private schedule bank with authorized capital of Rs. 20 million; issued and paid up capital of Rs. 10 million divided into 1 million shares of Rs. 10/ each. Currently BOD and president/ CEO Mr. Amar Zafar Khan being a member of this newly formed set up manage UBL. Chairman His Highness Shaikh Nahayan Mabarak Al Nahayan and Deputy Chairman Sir Mohammed Anwar Pervez are the two supreme controllers of the banks affairs. Another development is the appointment of director operation, Nauman Hussain by the newly privatized bank. Senior management of the bank is shown in the chart given at the end of chapter. The Group's principal activities are to provide commercial banking and other financial services. The Group offers personal banking, cash management, retail loans and other financial services. These services include deposits, savings/current bank account, vehicle loans, personal loans, retail trade finance, global banking, lending to priority sector and small scale sector, foreign exchange and export finance, corporate loans and equipment loans. The Group operates through 1078 branches within Pakistan and 17 branches outside Pakistan.

To be the first choice investment solution provider. Renowned for quality, added value and innovative service at an affordable cost to our investors

Offer value added products & services while adhering to the highest level of ethical standards Attract, develop & retain exceptional talent that shapes our passion for excellence and our commitment to teamwork Listen carefully to all our stakeholders and deliver winning solutions Be a responsible corporate citizen

Respect Excellence Customer Focus Quality Honesty

UBL Network
UBL has a large network of branches, which extends to the remotest areas of the country. In December 1983, there were 1623 branches whereas in 1974 it had only 1238 branches and in October 2003 these figures show total number of 1007 branches. UBL has been very active in increasing its overseas branches network. The first foreign branches were established in London in 1963. Now UBL has branches in Bahrain, Qatar, Saudi Arabia, United Arab Emirates, Yemen Arab Republic, UK Switzerland, Egypt, Oman and The United States. The Group operates through 1078 branches within Pakistan and 17 branches outside Pakistan. These branches are playing a significant role in channeling home remittances and foreign trade of Pakistan.

Profile of UBL Mission Chowk Sahiwal

The branch started its operations on 9th November 1962. It had the staff of 32 employees. Due to its excellent position, it received a warm welcome from the masses in a very short period it achieved a pre-eminent position. Currently this branch is working with five officers of deposits and vaults department, account department, cash department, bills and remittance department, and advances department.

Functions of UBL
UBL is a commercial bank, which transacts the business of banking in accordance with the provisions of BCO, 1962. Section 7 of the Act authorizes banks to engage in the prescribed form of business. In the light of this section UBLs functions can be categorized as under: Agency services General Utility Services Underwriting of loans raised by the Government or public bodies and trading Providing specialized services to customers, and Hajj-related services Accepting various types of deposits

Role of UBL Banking Sector

The impressive growth and development, which UBL achieve, present it undoubtedly the most dynamic and progressive. In a very shorter period of time it became one of the leading bank overtaking several other older and its competitor banks4. The major contributions the bank has made are enlisted below: Record setting performance and commitment to serve the customers Personalized service and dynamic approach Catalyst of changes Professional management Modern banking policy Human resource development Small loans (or) micro credits Utility bills collection Credit cards (unicard-1970) Travelers Cheques (Humarah-1971) Diaries and calendars received prizes too Promotion of sports

Computerization of UBL
UBL has taken leading start in the introduction of computers in (1966- 1968) in important cities. Its three computers centers Rawalpindi, Lahore and Karachi are equipped with the modern mainframe computers of various capacities. Every branch has been decorated with microcomputers.

United bank limited was computerized in July 2003. UBL motto is: Where you come first

The use of computers has enabled the bank to save time and efforts raise efficiency and deliver the goods speedily to its customers. This has also allowed the bank to maintain its leadership within the industry.

UBL has taken progressive steps and has introduced innovative products and services to provide you a variety of banking and financing services.

i) UBL - Online System

Themes of this service is Access anytime, anywhere, any device Which symbolizes comfort, convince and connectivity

UB-Online a web based service that can be accessed through multiple media link like, (i) PC via internet (ii) Mobile phone with WAP or free SMS) (iii) Personal Digital (iv) assistants and (v) Plain telephone; Following are some of the exciting features: i) Accounts statement & electronic data interchange ii) Graphical analysis iii) Alerts service /facility iv) Search facility and activity long The banks as another computer-based system known as UNIBANK, which is a welldevelop on-line branch-banking package. The system automatically prepares various report, central bank returns, and statement of accounts for customers.

ii) Money Gram Facility

The bank has recently employed money gram service system, which can affect money transfers within minutes. Similarly the system used for local transfer of money transactions is called uni-remote.

iii) Hajj Services

In order to meet the customers needs. UBL offers HAJJ scheme. The salient features of this scheme are: Interest free Loan up to 25000 Personal guarantee of a person acceptable to the branch manager Payment of the loan is in 45 days before departure of HAJJ

iv) UBL Wallet

This scheme offers debit card / ATM to the customers for withdrawal of money.

V) UBL Drive
UBL offer car finance loan to its clients and has made it very easy to get cars for its clients.

vi) UBL First

This service offers saving account for children with minimum of deduction. Pehli Bachat, pahla Account

vii) UBL Business Line A complete solution to your business financing needs.
With UBL business line, now you will surely say: Ab Hui..... Kamyabi Mari Manzil It is a credit line facility against residential property. It has the following criteria,

Monthly income Rs.25000 Age 23-65 Resident of Pakistan Self employed businessman

viii) UBL Tez Raftaar

UBL's new remittance service, TezRaftaar offers all overseas Pakistani people the fastest and the most convenient delivery of their money to their beneficiaries in Pakistan. Best of all, TezRaftaar is completely cost free and is available at all UBL branches along the Bank's Network in the Middle East,UK and US. TezRaftaar has following features: Guaranteed delivery within 24 hours to your given address in Pakistan. Door step delivery by authorized courier or credited to the recipient's account. Free of charge transfer service.

ix) Hamrah
UBL has always been adding the forefront in identifying and meeting the financial needs of its valued customers. UBL was a pioneer an introducing Rupee Travelers Cheque facility in Pakistan, as early as 1971. In continuation of the same tradition, UBL in the shape of, HAMRAH Rupee Travellers Cheque enhances this facility for the convenience of its valued customers by offering denomination up to Rupees 10,000. UBL "Hamrah" has been designed keeping in mind, both convenience and security be it business, property, trade or personal needs. "Hamrah" Rupee Traveller Cheques are the ideal and safest way of carrying cash when travelling anywhere in Pakistan. UBL has a 24 hours customers help-line, providing its customers with round the clock tele-verification of HAMRAH Rupee Travellers Cheques.


Salient Features
Absolutely FREE - No Bank Commission, No Excise Duty Whatever the value of "Hamrah" purchased, no Bank Commission or Excise Duty will be charged.

Special Facility of Refund

Indicate choice of designated UBL Branch for refund which will be within days only. Most convenient while in transit anywhere in Pakistan

Exclusive Security
Secured with specially "Coded" printing and RAIN BOW Effect" for added security.

x) UBL Wiz
UBL Wiz is Pakistans first ever Prepaid VISA Debit Card that provides the convenience, security and benefits of an ATM and Debit Card, locally and internationally. More than just an ATM card, you can use your UBL Wiz everywhere VISA cards are accepted. Whether you are using it online, paying for petrol, shopping or dining, you are accessing money directly from your prepaid card, without having to visit the bank.



Senior Management of UBL



To open an account in UBL the customer will have to fill an account opening form in front of bank officer. He has to sign in all required places in front of the officer.

Documents Required in Account Opening

N.I.C Copy. 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

Nature of Account
According to nature there are two types of accounts. Individual account Business account

1-Individual Account
The customer is marked as walk in, marketed or a referral; he/she is a public figure or not. Moreover what will be the customer's sources of funds? What would be the usual mode of transaction and what would be the intentions of account with UBL. Who will be the ultimate beneficiary and what the approximate value of transaction per month is.

2-Business Account
The customer is marked as a walk in, marketed or referred customer. Name of parent and other companies are entered. Geographical area of activity is mentioned. How the business earns is mentioned to know the business type. Then similarly mode of transaction, ultimate beneficiary, initial deposit and approximate maximum value of transaction per month is


recorded. Finally after fulfilling all the necessary requirements, the officer here by recommends to open the account of the customer.

Types of Business Account

Sole proprietorships Partnership Joint stock company

Documentation to be obtained Individuals

Photocopy of CNIC/Alien Registration No./ passport Photocopy of service card/employment card/student card

Sole Proprietorship
NTN/Sales Tax Registration Certificate Application to open account on sole proprietorship letter head

Photocopy of CNIC of all partners Application to open account on partnership letter head signed by all partners Attested copy of Partnership deed Copy of Registration certificate with Registrar of Firms Authority letter in favour of person responsible to operate the account.

Joint Stock Companies

Certified copies of: Resolution of BODs for opening of account and certifying the person responsible to operate it


Memorandum and Article of Association Certificate of Incorporation and Commencement of business CNIC of all the directors


i) Current Account
These are non-profitable demand accounts. The account can be opened with minimum amount of rupees 1000/-. These accounts are usually maintained for business purpose. Due to enormous competition UBL has introduced daily profit current account for corporate clients called (UNISEVER) minimum balance required is Rs. 100,000/-. If minimum balance requirement is not met, bank is authorized to recover predetermined charges.

ii) PLS Saving Account

These accounts were intended with the aim of encouraging thrift among people. These accounts can be opened either in Pakistani rupees or in few major currencies of the world. Bank offers (4%- 6%) return on these accounts. The basic feature is the profit and loss sharing as according to non-interest based banking system. These accounts can be opened in the name of; individuals, joint names, trust accounts, charitable organizations. Unlike current accounts, Zakat is applicable on local currency saving accounts. Minors accounts can be opened on the condition that their guardians shall operate these accounts.

iii) Term Deposits

Term deposits are also called fixed deposits. These can be withdrawn after a specified period of time. Interest is paid to the depositor on all fixed or term deposits. The rate of return varies with the duration for which the amount is kept with bank. There are two types of term deposits. STDRS Special Term Deposit Receipt (local currency) Special Term Deposit Receipts are issued for different periods of maturity ranging from one month to 5 years, having attractive returns. There is no limit on denominations. NTDRs 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.

Current business trends demand fast movement from one geo-graphic end to another. Latest technology and telecom data transmission has made it possible to make such transactions within minutes. UBL Mission chowk Remittances Department performs following functions.

i) Demand Draft (D.D)

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

Procedure for D.D.

Purchaser is asked to fill in an application form duly singed by applicant. Three things should be maintained in the form. Name of Payee Place of payment Amount of D.D

Commission is charged on D.D as bank income. The applicant is asked to deposit the cash specified on the application form to the teller. After depositing cash the remittances incharge prepare a D.D. That is signed by two officers must having power of attorney. Bank also provides this facility to general public who dont have account in UBL. They will have to submit a N.I.C copy along with D.D application form.

ii) Telegraphic Transfer (T.T)

Transfer of funds to another branch of the same bank with the help of test numbers. If the test number agrees the bank make payment to the party.

Procedure for T.T

The procedure for T.T is same as D.D. But in D.D it is given on a printed-paper and signed by two officers but, in T.T, only test number is given to the customer.


iii) Mail Transfer

When the money is not required immediately, the remittances can also be made by MT. Here the selling officer of the bank sends instructions in writing by mail to the paying bank for the payment of a specified amount of money. The payment under transfer is made by debiting the buyers account at the sending office and crediting it the recipients account at the paying bank. UBL takes mail charges from the applicant where no excise duty is charged.

iv) Pay Orders

Pay order is banker cheque issued favoring a named beneficiary. The issuance bank is discharged by payment in due course. Application for the PO stamped and the customers account balance is checked or cash received for the amount PO and other charges. Pay Order leaf is typed and crossed if required and signed by two authorized persons. Thereafter it is delivered to the customer. PO can be cancelled at original purchasers request in writing and surrender the instrument, which then marked canceled along with other documents and prior entries.

v) Rupee Traveler Cheques

UBL has launched R.T.C Brand named Hamrah in November 1996. These are issued to applicants with varied denominations without excise duty and commission. When issued HO account is credited and on encashment the same account is debited. RTCs lost cases are communicated to HO and client is either repaid or new RTCs are issued to him/her.

This is a new tool for the transfer of money. This is a step towards the online banking taken by UBL. This tool transfers money from one branch of UBL to other through electronic transfer. The customer will have to fill the deposit slip. On the slip he will write the name and account number of the person to whom the money will transfer, the name of the branch is also written. The amount is deposited with teller and the receipt is shown to remittance inchraged. One I.D copy is also attached with slip. The remittances incharge will transfer if by using device (computer) through online service. The fund transfer is must be supervised by another authorized officer. Every time for this is five minutes.


Account Department
It is the most important of a bank. One can have a complete view of the functions and performance of bank from the accounts. The department is responsible for; Keeping record of each and every transaction. Maintenance accounts. Preparation of several daily, monthly, quarterly, half yearly. And yearly reports. Analysis of the report. Efficient management of funds. Giving recommendations for improvement in the functions and methods.

Record Keeping
For every transaction a supporting voucher is prepared. From all the departments vouchers are transferred to the accounting department. In the department voucher are sorted out and are maintained under 37 heads. Vouchers are matched with the activity report. A voucher is printed slip and for matching purpose the account number and the account title printed on the slip are used. The activity report shoes every transaction that takes place as well as the name of the operator carrying out the transaction. The activity report shows the final balance of every account. Daily a sheet showing the total number of voucher is transferred to the Voucher Register. Microfilm of each voucher is made and if there is any mistake it is also pointed out and relevant changes are made in the records of accounting department. Vouchers are kept in records for particular period of time and then destroyed. After that if any of the voucher is to be checked, microfilm is used for reference.


General Credit extension is the principal function of a bank, through which pace of activity is accelerated in the various sectors of economy. Also 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 a bank play a very important role as it provides the overall framework, responsibilities, authorities and facilitate 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.

UBL Credit Policy

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).

Credit department Facilities

Facilities offered by UBL SAHIWAL Running Finance (for one year) Demand Finance (3to 5 years)

Procedure for Financing from UBL

When a party comes for financing, banker will ask the following questions. Purpose: In this the party mentions the purpose; they want to apply for the finances. No lending is done without purpose. Business: The party must have some specific running business i.e. general merchandise, construction business etc. The second question arises of the cash flow that how much flow is generated by the party from the current business.


The bank will secure itself against the lending. There can be two type of security. Commercial Residential

The bank prefers commercial security. Relationship Manager (RM) is mainly responsible for the relationship between the banks and party. He acts like a bridge between the two. In the first instance the party would prepare the following property documents. AKS Shajarah Naqsha Tasveeri Approved Building Plan Tresh fard Intaqal Naqal The party is asked to contact any valuator on the panel of UBL. ICM&L and Tajak Builder are on the panel of UBL. The valuator will visit the site and set market value and FSV of the said property. He prepares report of at least three pages. This document sent for one page legal opinion to any layer on the panel of UBL. Having clear legal opinion RM start preparing credit Approval (CA). The documents are signed by the RM & AM and then forwarded to UBL RHQ in Peshawar. Here SRM examines the CA if he found some exception he will send it back to the respective Rm. RM rectifies the acceptation and sends it back to SRM. SRM studied and pass it to credit officer. He has three hours of time to study the CA and if found correct then he pass it to another credit officer. After his examination the CA is passed on to the credit risk manager. He checks the CA and after signing it sent to CAD. He forwards the CA to SCO. Whose office is at UBL RUCO at Lahore, after his signature the C.A is sent back to RCAD. RCAD make a check less list and asked the RM to contact the party to complete The said documents they are. 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

After completion of charge document RM send it to RCAD when they found it correct, they issues DAC. A copy of DAC is sent to RM and NICF account is opened and debit transaction starts.

Clearing of Bills
Bank can make payments of only open Cheques on the counter payment. Payment of cross Cheques cannot be made on counter its payment is possible through collecting bankers. The functions of clearing department are divided into two main classes. Inter Branch Transaction Inter Bank Transaction

Procedure of Clearance of Cross (Cheques)

Whenever bank receives a cheque of other bank from the client he cannot make payment on the counter. The first job banker has to perform is to put a special crossing across the face of cheque. By special crossing cheque is secured. If it is stolen the paying banker would not suffer because of non-endorsement. On the back of the cheque the stamp is made of payee account will be credited on realization. It is signed by authorized person. Along with the cross cheque the customer has to fill the deposit slip. The half part of slip is given back to the customer. after the special crossing and is necessary endorsement the banker write the amount along with cheque number on paper and attach with each slip. Then again on the smile paper the amount of all the Cheques along with the bank names are added and attached to cheque presented for clearing, and advice is also attached with the cheque presented for clearing. The following entry is passed on sending the cheque for clearing. Bill lodged for clearing . Dr Bill for collection . Cr


The Cheques are sent on the same day for clearing. The bank receives it on other day. The paying bank receives the receipt and the amount is credited in the respective account. The paying banker passed the following.

Inter Branch Transaction (IBC)

It means Inter Branch Transaction when UBL received a cheque a drawn on the customers of his branch; first they will cheque the amount in the account on which cheque is drawn. Of the required amount is available in the account they will match the signature on the cheque along with their SS card. If all the requirement are completed the bank will send an IBCA to the bank from which cheque is sent.

Local Branch Cheques (LBC)

LBC means local branch cheques received for collection. UBL, received cheques from their spoke braches as well as from other UBL branches, drawn of any other bank in sahiwal. They send the cheque to responding bank and after clearing the cheque through clearing houses (which is NBP) in Sahiwal. They send LBC advised to the bank from which the cheque was received.

Other Branch Cheques (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. They sent the cheque to the UBL main branch of that city, after receiving OBCA the bank will pass the following entry. In case of his own customers.

It is facility given to customers for collection of their outstation checks. The checks undergo a process of clearing. Collection involves; Outward Bill for Collection Inward Bill For Collection

1-Outward Bill for Collection

The process is as follows:

All of the outstation checks become a part of OBC. These checks are given OBC numbers which is a serial number) from OBC Register Information relating to the check is entered in the register such as Date, Check Number, Bank on which is drawn, and amount of check. These checks along with OBC FORWARD SCHEDULE are sent to the cities where the banks are forwarded to the MAIN BRANCHES of BAL in respective cities. If a check is meant for a city where BAL has no branch then it is directly forwarded to the branch on which it is drawn.

2-Inward Bill for Collection

The process is as follows All of the checks that are received from other cities become a part of inward Bill for Collection Each check is given IBC Number (which is a serial number) from IBC Registeer. Information of a check received is entered in the register such Date,CheckNo., Presented By, Amount, Date of Payment, Reason of Return, Other Remarks, Name of Bank on which check is drawn. A credit voucher is printed for each check. Record in the register are regularly updated and on realization after posting in the computer the outstanding amounts are encircled in the register


These section efforts have been made to cover all relevant aspects of the financial performance of UBL. Overtime horizontal and vertical analysis and ratio analysis are carried out with the view to extract concrete conclusion to describe financial standing and performance of the bank.

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. They strictly observe the rules and regulations as applicable and promulgated by the GOP and or SBP handled over Rs. 96 billion of import and export business during the year, an increase of 24.7% as compared to last year.

Financial statements are the principal means of reporting the financial condition and results of operations of a business entity. These statements are meant to assist various parties in decision making who are interested in the activities of the business. These statements are means to an end of helping stakeholders in decision-making. To improve the quality of decision making proper analysis of these statements helps a lot. 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 financial statements. But the focus of interest of all is not the same. For example, 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. 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. Investors are interested in the firms ability to sustain profitability over a period of time. Government agencies analyze financial data for tax purposes. The internal users of financial statements like management also analyze financial data for planning and control.


Cash and other balances with treasury banks Balances with the other banks Lending to financial institution Investments Advances Performing Non-Performing 293,373,007 5,981,729 299,354,736 Fixed assets Deferred tax assets net Other assets Total Assets 16,918,844 11,925,428 530,283,956 243,237,819 4,072,074 247,309,893 5,234,463 906,661 10,008,132 423,265,873 57,526,451 4,191,128 24,781,723 115,585,646 48,939,840 14,034,476 29,572,070 67,260,338

Bills payable Borrowings from financial institutions Deposits and other accounts Sub-ordinates loans Deferred liabilities Other liabilities Total Liabilities 6,079,341 59,103,350 401,637,816 5,996,696 2,232,344 12,813,005 487,862,552 4,560,649 38,490,586 335,077,873 5,998,344 9,275,034 393,402,486

Net Assets
Share capital Reserves Inappropriate profit Share holders equity Surplus on revaluation of assets

8,093,750 10,261,958 15,653,703 34,009,411 8,411,993 42,421,404

6,475,000 8,298,873 12,429,853 27,203,726 2,659,661 29,863,387


Cash and other balances with treasury banks Balances with the other banks Lending to financial institution Investments Advances Performing Non-Performing 342,663,339 11,428,374 354,091,713 Fixed assets Deferred tax assets net Other assets Total Assets 21,925,669 608,876 17,241,991 619,744,051 361,863,689 9,275,986 371,139,675 18,021,445 2,005609 17,621,844 605,539,341 61,160,678 5,407,470 23,162,130 136,145,524 50,069,965 7,497,174 22,805,341 116,328,288

Bills payable Borrowings from financial institutions Deposits and other accounts Sub-ordinates loans Other liabilities Total Liabilities 561,676,528 5,147,259 35,144,823 492,036,103 11,989,800 14,489,343 558,807,328 5,194,449 44,195,886 483,560,062 11,993,848 16,732,337

Net Assets
Share capital Reserves Inappropriate profit Share holders equity Surplus on revaluation of assets

11,128,907 18,959,537 22,187,802 52,276,246 8,660,477

10,117,118 15,501,513 16,604,076 42,222,777 1,639,982



UNITED BANK LIMITED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2007 2007 (Rupees in 000) Mark up/return/interest earned Mark up/return/interest expense Net mark up/interest income Provisions against loans and advances-net Provision/(reversal)for diminution in Value of investments-net Bad debts written off directly (6,303) 935,123 6,422,046 Net mark up/return/interest income After provisions Non-mark up / interest income Fee, commission and brokerage income Dividend income/gain on sale Of investment Income from dealing in foreign currencies Gain on sale of securities Unrealized loss on revaluation of investments Classified as held for trading Other income Total mark up/return/interest income (15,755) 1,617,563 8,992,351 (3,335) 738,330 6,948,388 827,328 849,367 659,726 280,864 5,165,066 548,782 4,435,465 837,338 17,687,310 18,547,936 74,573 269,349 2,316,858 41,045,543 16,936,187 24,109,356 1,689,467 32,991,603 12,126,809 20,864,794 1.972,936 2006

Non-mark up / interest expenses Administrative expenses Other provisions/write offs/ (reversals) Other charges Total non-mark up/interest expenses

26,679,661 13,420,977 236,281 17,430 13,674,688

25,496,324 10,952,275 226,313 25,980 11,204,568

Profit before taxation



Taxation current -prior year - Deferred

5,075,600 442,667 (915,884) 4,602,383

3,412,791 45,225 1,365,508 4,823,524 9,468,232 7,350,813 16,819,045

Profit after taxation Inappropriate profit brought forward

8,402,590 12,429,853 20,832,443

Transfer from surplus on revaluation Of fixed assets net of tax Profit before appropriations Appropriations 20,895,471 16,913,499 63,028 94,454


UNITED BANK LIMITED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2009 2009 2008 (Rupees in 000) Mark up/return/interest earned Mark up/return/interest expense Net mark up/interest income Provisions against loans and advances-net Provision against lending to financial institution Provision/(reversal)for diminution in Value of investments-net Bad debts written off directly 945,342 1,485,976 12,615,374 Net mark up/return/interest income After provisions Non-mark up / interest income Fee, commission and brokerage income Dividend income/gain on sale Of investment Income from dealing in foreign currencies Gain on sale of securities Unrealized loss on revaluation of investments Other income Total mark up/return/interest income 1,213881 629,418 (3,006) 3,297,839 11,669,561 31,747,435 Non-mark up / interest expenses Administrative expenses Other provisions/write offs/ (reversals) Workers welfare fund Other charges Total non-mark up/interest expenses Extraordinary items 16,608,561 642,274 397,547 64,552 17,712,934 15,519,634 450,390 336,999 258,321 16,565,344 29

60,857,035 28,163,787 32,693,248 9,623,204 560,852

51,919,229 24,061,790 27,857,439 4,509,956 -

2,219,815 1,367.514 8,097,285 19,760,154


5,925,082 606,347

6,249,015 587,989

1,795,319 200,804 (19,547) 1,866,034 10,679,614 30,439,768

Profit before taxation Taxation current -Prior years - Deferred

14,034,501 6,930,585 76,328 (2,165,099) 4,841,814

13,874,424 6,090,351 435,072 (984,119) 5,541,304 8,333,102 15,653,703 23,986,823

Profit after taxation Inappropriate profit brought forward

9,192,687 16,604,076 25,796,763

Transfer from surplus on revaluation Of fixed assets net of tax Profit available for appropriations 253,014 26,049,777 253,018 24,239,841

Basic and diluted earnings/share




UNITED BANK LIMITED VERTICAL ANALYSIS OF BALANCE SHEET In percentages 2007 ASSETS Cash Balances with the other banks Lending to financial institution Investments Advances PERFORMING NON-PERFORMING Operating Fixed assets Deferred tax assets net Other assets Total assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinates loans Other liabilities Total liabilities Net Assets Share capital Reserves Inappropriate profit Surplus on revaluation of assets Total equity 1.14 11.14 75.74 0.11 0.42 100 7.99 23.79 30.17 46.02 19.82 100 0.92 7.87 86 2.14 2.92 100 7.88 23.96 36.7 39.32 3.74 100 0.92 6.3 88 2.15 3 100 10.9 21.28 36.28 42.4 14.21 100 55.32 1.128 3.19 2.24 100 59.75 1.53 3 0.33 2.91 100 55 2 3.5 0.098 2.78 100 10.84 0.794 4.67 21.79 8.3 1.24 3.75 19.21 10 0.87 3.74 22 2008 2009



2007 Mark up/interest earned Mark up/interest expense Net mark up/interest income Provisions against loans and advances Provision against diminution in Value of investments-net Bad debts written off directly Net mark up/return/interest income after provisions Non-mark up interest income Fee, commission and brokerage income Dividend income/gain on sale of investment Income from dealing in foreign currencies Gain on sale of securities Unrealized loss on revaluation on investments Other income Total mark up/return/interest income 12 1.33 2.01 2.06 0.03 3.94 21.9 43 9.26 0.01 100% 41.26 58.73 4.11

2008 100% 46 53.6 9

2009 100% 46.3 54 16

4.3 2.63

0.92 2



12 1.13 3.46 0.39 0.04 3.6 20.5

10 0.99 1.99 1.03 0.0005 5.42 19.17

Non mark up/interest expense Administrative expenses Other provisions/write offs/ (reversals) Workers welfare fund Other charges Total non-mark up/interest expenses 65 32.6 5.75 0.04 33.3 59 29.9 0.86 0.64 31.9 52.16 27.3 1.05 0.65 23.1

Profit before taxation Taxation current -Prior years 12.3 1.07 11.73 0.84 11.38 0.13

- Deferred




Profit after taxation Inappropriate profit brought forward Transfer from surplus from revaluation of Fixed assets Profit available for appropriation

20.4 30.2 0.15

16.05 30.15 0.48

15.1 42.4 0.42




Vertical analysis is a technique for evaluating financial statement data that expresses each item in a financial statement as a percentage of the base amount.

The advances and the loans constitute the major portion of the total assets. This is typical for a bank, as banks dont have considerable fixed assets. The investments have been decreased in 2009 as compared to 2008. The portion of cash has increased by the year.

On the liability side, a deposit is the major account. The percentage of deposits and bills payable is decreasing. Borrowings and the other liabilities are increasing. As a whole liabilities are decreasing.

Since the bank is on its way to expansion and for the purpose of expansion it needs to have borrowings.


Equities There is a decreasing trend in the share capital, reserves. Inappropriate profit in the year 2009 has an increasing trend which indicates a good sign for the growth of UBL.

Interest Income
There is a decreasing trend in the net mark up/interest income after provisions. Total non-mark up/interest income is decreasing.

Interest Expense
Total non-mark up/interest expense also showed decreasing trend.

Profit before taxation is decreasing. Profit after taxation is also decreasing.


UNITED BANK LIMITED HORIZONTAL ANALYSIS OF BALANCE SHEET In percentages 2007 ASSETS Cash Balances with the other banks Lending to financial institution Investments AdvancesPERFORMING NON-PERFORMING Operating Fixed assets Deferred tax assets net Other assets Total assets Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinates loans Other liabilities Total liabilities Share capital Reserves Inappropriate profit Surplus on revaluation of assets 33.29 53.55 19.86 -0.03 38.14 -14.55 -25.22 20.39 100 30.59 15.13 25 51.05 6.07 -80.51 -0.091 -20.48 1.75 -0.034 -13.41 24 10 22.30 33.63 428 20.61 46.89 223 19.16 -2.15 23.35 55.07 6.52 47.77 14.19 5.31 23.20 21.66 -70.38 -0.0002 -25 17.54 -70.13 -16.19 71.84 -12.96 78.88 7.98 0.64 22.15 -27.87 1.56 17.04 2008 2009

25 23.65 25.94 261



2007 Mark up/interest earned Mark up/interest expense Net mark up/interest income Provisions against loans and Advances Provision against diminution in Value of investments-net Bad debts written off directly Net mark up/return/interest Income after provisions Non-mark up interest income Fee, commission and brokerage Income Dividend income/gain on sale Of investment Income from dealing in foreign Currencies Gain on sale of securities Unrealized loss on revaluation of investments Other income Total mark up/return/interest Income Non mark up/interest expense Administrative expenses Other provisions/write offs/ (reversals) Other charges Total non-mark up/interest expenses 22.54 4.40 -32.90 22.04 29.4 25.40 202.4 372.41 119.11 -34.46 16.45 -4.64 -91.54 247.17 -14.36 24.4 39.6 15.55

2008 26.49 42.07 15.54

2009 17.21 17.04 17.77



-35318 46.23

-57.41 8.66







117 -76.35 24.06 15.3

57.61 213 -84.62 76.73



15.63 90.61 1833 21.13

7.10 42.60 17.97 75


Profit before taxation Taxation current -Prior years - Deferred Profit after taxation Inappropriate profit brought forward Transfer from surplus on revaluation of Fixed assets Profit available for appropriation -33.27 23.54 301 16 -0.0016 7.46 48.72 878.81 -32.92 -11.25 69.09 19.99 -1.71 7.45 -0.83 116 13.80 -82.45 120 10.32 6.07


Interest Income
There is an increasing trend in the net mark up/interest income after provisions. Total non mark up/interest income is increasing.

Interest Expense
Total non-mark up interest expense also showed an increasing trend.

Profit before taxation is increasing. Profit after taxation is also increasing.

The level of cash has also increased in 2009 as compared to 2008. Balances with the other banks have increased in 2009. Investments have increased in 2009. Advances have an increasing trend in 2009 as compared to 2008. Operating fixed assets have showed down growth in 2009. Other assets are also getting more in 2009 as compared to last year.

Deposits have increased in 2009 as compared to last year. Borrowings from the other banks are increasing. Although the bank is on its way to expansion and for the purpose of expansion it needs to have borrowings. Bills payable are increasing. Sub-ordinate loans are also increasing. Deferred tax liabilities are increasing. Other liabilities are also increasing.

There is an increasing trend in share capital, reserves, inappropriate profits and surplus on revaluation of fixed assets in the year of 2009 which indicates a good sign for the growth of UBL.



The user of financial statements finds it helpful to calculate ratios when they interpret companys financial statements. A financial ratio is simply one quantity divided by another. Ratios focus on special relationship between two items of balance sheet, income statement or one from each. Ratios make it easier to understand a specific relationship between various items of financial statements then looking simply at the raw numbers themselves. The number of financial ratios that might be created is virtually limitless, but there are certain basic ratios that are frequently used, these ratios can be placed into six different classes. 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.

It tells the firms ability to satisfy its short term obligations as they come due.

a. Working capital
Working capital=current assets current liabilities

For 2009: Working capital=418,085,744 387,458,476 =30,627,268

Year Working capital

2007 16,895,025

2008 21,218,138

2009 30,627,268


b. Current Ratio
Current ratio= current assets/current liabilities Higher the current ratio, the more liquid the firm is considered.

For 2009: Current ratio=418,085,744/387,458,476 =1.08

Year Current ratio

2007 1.06

2008 1.07

2009 1.08

Current ratio
1.09 1.09 1.08 1.07 1.06 1.05 1.04 2007 2008 2009 1.06 1.08


Measure the speed with which various accounts are converted into sales or cash inflows or outflows. It is also called Efficiency Ratio. The activity ratios are of following types: a. Inventory turnover b. Average collection period c. Total assets turnover d. Average payment period e. Fixed assets turnover ratio

a. Total Assets Turnover

It indicates the efficiency with which the firm uses its assets to generate sales. The higher a firms total assets turnover, the more efficiently its assets has been used.

Total Assets Turnover = Sales/Total assets

For 2009: Total Assets Turnover = 32,991,603/423,320,207 = 7.7

Year Total Assets Turnover

2007 3.38

2008 5.8

2009 7.7

Total assets turnover

8 6 4 2 0 7.7 5.8 3.38




We analyze that the current total assets turnover of the firm is very strong as compared to the previous years. It shows that bank generates Rs. 7.7 of sales against each rupee of the asset.

It measures the proportion of total assets financed by the firms creditors. The higher the ratio, the greater the firms degree of indebtedness and more the financial leverage it has.

Debt Ratio = Total liabilities/ Total assets

For 2009: Debt Ratio = 393,456,820/423,320,207 = 92%

Year Debt Ratio

2007 93.6%

2008 93%

2009 92%

Debt ratio
94% 94% 93% 93% 93% 93% 93% 2007






The ratio indicates, more than half of the assets are financed by debts. The ratio is greater in 2007. Debt ratio indicate the greater the risk and more financial leverage it has. It also shows that firm has paid some portion of the debt during the year 2008 and 2009.

Profitability ratios enable us to evaluate the firms profit with respect to a given level of sales, a certain level of assets or the owners investment. The profitability ratios are of following types:

a. Gross Profit Margin

It measures the percentage of each sales dollar remaining after the firm has paid for its goods. Gross Profit Margin = Gross profit / Sales

For 2009: Gross Profit Margin = 20,864,794 / 32,991,603 = 63.2%

Year Gross Profit Margin

2007 81%

2008 70%

2009 63.2%

Gross profit margin

100% 50% 81% 70% 63%

2007 2008 2009


In 2009 gross profit margin of the bank is 63.2%. It is greater in the previous years. The firm needs to cut its cost of goods sold in order to increase its gross profit margin.

b. Net Profit Margin

It measures the percentage of each sale dollar remaining after all costs and expenses including interest, taxes and preferred stock dividends have been deducted.

Net Profit Margin = Earnings available for common stock / Sales

For 2009: Net Profit Margin = 9,468,232 / 32,991, 603 = 28.6%

Year Net Profit Margin

2007 40%

2008 29.5%

2009 28.6%

Net profit margin

40% 40% 30% 20% 10% 0% 2007
Net profit margin is 28.6% in 2009 that is less than the previous years.






c. Earnings per Share

It represents the number of dollars earned during the period on the behalf of each outstanding shares of common stock.

Earnings per Share = Earnings available for common stock / no. of shares of common stock outstanding

For 2009: Earnings per Share = 9,468,232 / 647, 500,000 = 14.62

Year EPS

2007 7.15

2008 9.19

2009 14.62

15 10 5 14.62 9.19


2007 2008 2009

The EPS is more in the 2009 as compared to previous years. It is quite satisfactory. It means that Rs. 14.62 is earned on each share.


d. Return on Common Equity

It measures the return earned on the common stockholders investment.

Return on Common Equity = Earnings available for common stock / Common stock equity

For 2009: Return on Common Equity = 9,468,232 / 27, 203, 726 = 35%

Year Return on common equity

2007 21.3%

2008 32%

2009 35%

Return on common equity

40.00% 32.00% 30.00% 21.30% 20.00% 10.00% 0.00% 2007 2008



The findings on equity are 35% in 2009 which is greater than that of previous years. It is quite satisfactory. This ratio is used for measuring the over efficiency and performance of the firm as the primary objective of firm is to maximize its profits.


e. Return on Total Assets

It measures the overall effectiveness of management in generating profits with its available assets.

Return on Total Assets = Earnings available for common stock / Total Assets

For 2009: Return on Total Assets = 9,468,232 / 423,320,207 = 2.24%

Year Return on total assets

2007 1.35%

2008 1.7%

2009 2.24%

Return on total assets

2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2.24% 1.35% 1.70%




The return on investment of the bank is 2.24% in 2009. It is greater than the previous years. It shows that the firm generates Rs. 2.24% for each Rs. 100 of the investment.


Inventory turnover relates a firms market value as measured by its certain accounting values.

a. Price/Earnings Ratio
Inventory turnover measures the amount that investors are willing to pay for each dollar of a firms earnings. Higher the P/E ratio, greater will be the investors confidence.

P/E Ratio = Market Price per share of common stock/ earnings per share P/E Ratio = 15.47/14.62 = 1.06

This figure indicates that investors are willing to pay Rs.1.06 of each Rs. 1.00 of banks earnings.

b. Market/Book Ratio
It provides an assessment of how investors view the firms performance.

Book value per share of common stock=Common stock equity/no. Of shares of common stock outstanding

Market/Book ratio= Market price per share of common stock/book value per share of common stock For 2009: Book value per Share= 27,203,726/ 647,500,000 =4.2 Market/Book Ratio=65/4.2 =15.47



The ratio indicates that the investors are currently paying Rs. 15.47 for each Rs. 1.00 of book value of the companys stocks.

c. Cash Ratio
Cash Ratio= cash and cash equivalents + marketable securities / current liabilities

For 2009: Cash Ratio=48,939,840+0 / 387,458,467 =0.126

Year Cash ratio

2007 0.094

2008 0.106

2009 0.126

The cash ratio indicates the immediate liquidity of the firm. A high cash ratio indicates that the firm is not using its cash to its best advantage. In 2008, the cash ratio was 0.106% while in 2009 it has increased to 0.126%.

The revenue has increased to Rs. 32,991,603,000 from Rs. 20,158,860,000 of the last year showing an increase. The higher volumes enabled the company to earn a pre-tax profit of Rs. 14,291,756,000 greater as compared to previous year which was Rs. 9,481,648,000. Gross profit ratio was 63.2%. The earnings per share increased to Rs. 14.62 from Rs. 9.19 of previous period. Moreover its market ratios like M/b ratio is 15.47 and P/E ratio is 1.06. Its stock price provides capital gain to its share holders due to high market prices. So after analyzing all ratios I have decided to purchase the shares of UBL because there is a continuous increase in earnings per share.


SWOT is useful tool for providing a framework for analysis of an organization in strategic planning process. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It is a common approach to make assessments in terms of internal and external environment of the organization, and to formulate strategies analyzing its internal strengths and weaknesses, external opportunities and threats, coming up is the SWOT analysis for the UBL.

It is one of the largest private banks with a deposit base of Rs. 94883/- Millions showing constant growth over the period from 1999 till the day. It has a well-knitted and adequately equipped branch networking system that efficiently covers both the domestic and international markets. It is involved in both corporate and retail banking. The bank is actively emerging and is engaged in international trade and foreign exchange transactions. Foreign trade volume showed an increase of 17% over the previous year. Advances investment of the bank shows a constant growth pattern. The current years growth rate is 32%. The overall efficiency of the bank operations and management ability can be noticed by looking at to its income pattern and provisions/write off practices. Net revenue from funds increased by 18% for the current period. Total income increased by 16%. UBL is actively participating in international markets and has recently introduced credit cards in UAE, Bahrain, and Qatar, being backed up by 24 hours call center out of UAE.


The bank is owned by parties of financial repute and credit worthiness like, SBP with 48.69% interest, Best Way group and Abu Dubai group with 25.50% of interest each. Others are GOP, NBP Trustee Department, State Life Insurance Corporation etc. The bank is run by highly professional recruited form and trained by foreign banks like Citi Bank.

Due to risks such as political, economic and legal etc the bank has suffered losses the main reason was that of piling up of large amount of unrecoverable loans and debts which have adversely affected the image of the UBL. Accumulated losses pushed the bank to cut down its promotional activities in order to reduce expenses for last few years. During the nationalization life span of the bank political lords used influence in bank business and selection of employee at each level and thus adversely affected the banks efficiency and effectiveness. Unsatisfactory working conditions. Lengthy credit processing and documentation procedures. Administrative expenses are 51% of the mark up revenue. Ineffective system of recruiting and selection. The bank has a large number of employees who are simple graduates with no banking knowledge. Promotions are carried out on annual basis ignoring the importance of capabilities and performance outputs.

Growing policies of the GOP on business and economic sectors provide UBL an opportunity to efficiently meet with the business people requirements of instant cash facilities e.g. the government intentions of developing housing and agriculture sectors. The efficiency of stock market and sound exchange reserve level is providing a good opportunity for effective investment decisions. Foreign remittances are another area as present worldwide control systems over transfer of currencies through illegal channels has facilitated the area for the banks. Expansion of IT platform and internet based banking system. Interest of businesses in leasing facilities provides a healthy opportunity for banks.

There is a large pool of unemployed MBAs who can be hired to achieve professionalism on its organizational culture. Entering new markets segments. Increase the product range to meet the broader range of customers needs. Outsourcing of promotional companies or use of available excellent promotional facilities.

Increase in competition due to increasing number of foreign and domestic private banks offering highly specialized and attractive services. Although it is ahead of many banks like HBL is a constant threat to UBL. Growing global technological advancements and adaptation of modern style of management in banking sectors. Extensive promotion campaigns run by competitors. Mostly banks have threat of mergers and acquisitions due to capital less than Rs. 1 billion. Unemployment, lower level of income and prices like problems in the motherland coupled with low rate of industrialization, geo political adverse conditions, religious factor, and lack of consistency in policies due to political instability are some of the other major threats.

This SWOT Analysis is a mirror image of the banks present conditions. Some efforts are made and others are still required to be made in order to improve the situation. The management can develop elaborate strategic plans for capitalizing the available opportunities. The bank should maintain principal of professional management and adhere to sound and sophisticated banking rules and regulations so that confidence and trust of the public in the institutions could be re-earned.


In analyzing the macro-environment, it is important to identify the factors that might in turn affect a number of vital variables that are likely to influence the organizations supply and demand levels and its costs .The "radical and ongoing changes occurring in society create an uncertain environment and have an impact on the function of the whole organization". A number of checklists have been developed as ways of cataloguing the vast number of possible issues that might affect an industry. A PEST Analysis is one of them that are merely a framework that categorizes environmental influences as political, economic, social and technological forces. Sometimes two additional factors, environmental and legal, will be added to make a PESTEL analysis, but these themes can easily be subsumed in the others. The analysis examines the impact of each of these factors (and their interplay with each other) on the business. The results can then be used to take advantage of opportunities and to make contingency plans for threats when preparing business and strategic plans.

1- Political Environment
Militancy operation in FATA, NWFP and Swat its impact on other parts of the country The return of Benazir Bhuttos and her subsequent assassination Unstable political situation affect banks policies Talibinization affected our repute in the world Investors hesitate investing in Pakistan Violence in Karachi

2- Economic Indicators

Gross Domestic Product (GDP) Inflation Increased Balance of payment Debt of the government increased


Decrease in FDI (Foreign direct investment) Financial crisis made it BAL management difficult to survive

3- Socio Cultural Environment

Low saving culture Religious culture and people hesitate to accept interest on deposits 70% rural population and very low literacy rate

4- Technological Factors
Banks turning to heavy IT investments which differentiate their products Provide response times improve customer satisfaction products and services are gaining faster acceptance like ATM, Master cards, Telebanking, Internet banking and mobile banking

Four Ps of Market
The marketing analysis of the bank focuses the promotional campaign, the four Ps of marketing are also in vision of the bank that it uses for its marketing (called 4 pillars) i.e., product, price, place (distribution) and promotion. For more lucidity they shall be explained briefly here.

Service Provided by Bank

Commission and Bank Charges Received

Placement of Services i.e. Network of its Branches

Promotion of Services

1- Product
The products at UBL include various banking services, which are its Deposits (PLS and NonPLS), Remittances, and ATM & VISA Cards, Lockers etc. Bank also provides Credit Extension service.

2- Price
The amount of money the customers pay for the product of a company. BAL provides different products and services to its customers. Pricing of products/services means the commission to be paid by the customer in of services provided by the bank. The commission paid for the services mainly includes: Mark up/ interest Bank charges Fees and bank commission etc. The prices for various services of Bank are given in the booklet "the Schedule of Bank Charges". The prices at the bank are quite competitive with those of other banks working nationally.

3- Place
The activities a bank undertakes to make products and services easily available or accessible to the customers. UBLs objective has been to expand its branch network to meet clients needs. Bank is well positioned and geographically poised, to cater for increasing business demands, from its existing potential clientele. During last year under review, UBL opened 8 new branches and presently it has 1148 branches, spread all over Pakistan covering major business centers and cities. Bank plans to add more branches to its growing network.

4- Promotion
All activities that a company undertakes to communicate and promote its products.


This is an age of competition. Numerous organizations are providing financial services to customers. In this world of growing competition, the only way to prosper for a bank is to adopt proper marketing and promotional techniques. Various promotional techniques such as advertising, personal selling (BDO) etc. are used by bank. The promotional strategies of the Bank vary according to the market conditions. However, the following techniques are mostly used: Advertising Various Information / Marketing Broachers Personal Selling These are some of the marketing techniques that the bank adopts in order to capture market and attract clients.

Market Shares
As such no financial organization in Pakistan is unable to determine the correct market share of the banking industry. Also banks do not disclose certain confidential information to the general public and internees. Still generally foreign banks in Pakistan contribute to about 35% to the whole banking industry. Out of which Askari, Citi, Standard Chartered, Muslim Commercial, ABN-AMRO banks share the major market.


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 ALLAHA 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. People there I found are really very supportive and helps me a lot in learning new things and also how to tackle with work activities.To adjust myself in such a large commercial organization was not an easy task, but by the grace of Almighty Allah aids my internship in a befitting manner and I learned a lot 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. 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. In my 6 weeks Internship, I learned about the all basic operations of the bank. The services and the product it offers to its customer like UBL Drive, Wallet, and First and UBL Business line. And the basic function of all departments of bank. Like in accounts department the type and nature of account, how to open an account what are its requirement and procedure. In remittance department, the procedure for demand draft, telegraphic transfer and uni-remote.UBL provides online transfer of money from one branch to another branch and also to other banks via uni-remote service. In clearing department, the procedure of clearing of checks and deposit slips, afterwards ledgers are checked. In that department, yesterday checks and deposits and all other slips are cleared next day. UBL is full of experienced and professional traditional bankers. As it perfectly suit the environment we are operating in, you attitude has helped UBL in capturing masses. In the private sector, no doubt its a fast growing bank, but here's something that's still unrealistic to the policy makers. The line of unsatisfied customers is increasing, not because we are not serving well, it's because customers are not understanding the YOU attitude right. Every customer wants to make sure his work is done at the first convenience, but they are not

concerned about the responsibility with which every employee is working. We need to put in some guidelines for our customers, as they walk in. This will not only save their time but will also motivate staff members to work more promptly, because if customer and employee engage into some unhealthy quarrel, the whole environment will be disturbed. Back to my real learning. In my eight week Internship, I worked in customer service department, as well as in clearing department. Because of some work load, I was unable to learn much about other cash and accounting department. Here is my countdown learning of eight weeks.

Account Opening Penning down information and keying it into the system does seem a simple and tedious job but it is not. My initial five days at customer service department was the liveliest experience of my internship. Though physically I was there just to assist the account opening officer, but it turned out to be much more for me. That is when I first actually imitated as a presenter of UBL to customers, when to many people, I'm their hope. UBL offers a variety of options for anyone; to everyone. You are an investor, regular businessman, middle man, salaried person or a house wife; UBL serve you in every way it can through its commendable and reliable services, because at UBL, YOU come first. Working at Customer Service Department, I did counter with different types of customer and opened their accounts under the supervision of the officer. When you have the sole responsibility to open the accounts, it's always very important to understand the needs of your customer. Understanding the psyche of customer is very important. Until and unless you're completely satisfied that the customer has genuine reason and need to open the account, don't do so.

Currency and Type of Account It offers you all the eight different types of accounts mentioned before. First understand why the customer is here and what type of account suits him a lot. Scale down all the options suiting his investment or requirement and help him choose what is best for him. Outline all the salient features of that particular account to him and make him tick the best box. Mark the currency box if the customer wishes to deposit in currency, in case, other than PKR.


UBL Wallet ATM/Debit Card Here first define your customer what ATM card is, what are its features and what is the difference between its different options. Enter the name of the customer in Name on card field. Then is the option of supplementary ATM card. A customer can issue up to 9 supplementary cards. If supplementary card is required, a UBL Wallet VISA card requisition form is filled in which details about supplementary card holders is penned.



Recommendations are considered to be the most important part of an internship report, without which no report is considered complete and meaningful. This part of the report is based on the previous sections i.e. review and analysis. Moreover, for bringing suggestions, discussions have been conducted with the staff of UBL officers, who not only provided the basis for recommendations but also pointed out some areas, where the change for the development is utmost important. Realizing the importance of this section, efforts have been made to give feasible recommendations, which are categorized under the following headings.

Human Resource Management

The importance of manpower cannot be denied in any organization. In case of banks it is the most valuable asset, because the bank is very sensitive organization and to be in harmony with this sensitivity, need for proper human resource is felt badly. Critical analysis of UBL necessities recommending suggestions that would increase banks efficiency and effectiveness.

Development of Managerial Leadership

In services industries like banks the need of managerial skill is much more important. It makes positive contribution towards higher effective results. Without development of managerial leadership, the effective utilization of the human resource will be impossible. UBL should also focus on this area and should avoid deficiencies in managerial leadership, by applying the modern styles of management.

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 ongoing developmental work is not obstructed. It will enable the management to formulate long term strategies and their proper implementation because the long term policies, accurately based on calculated risk, have proved the pivotal role players for organizational sustainable development.


Basis for Promotion

A sizeable portion of the officers of UBL, are promoted in without test and interviews to officers cadre. 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, experience and performance. As for the present excess staff, those not found up to the required criteria, may be given GHS etc.

Management Changes on Merit

In UBL, though vary rare fresh recruitments are made, and the bank faces saturation in personnel, now clipping will be more helpful. This downsizing will leave the bank with the staff, to be retained on the basis of ultimate meritocracy with zero tolerance of incompetence. Now in this remaining workforce, a cultural change right from the top management down to the front line, that better suits to the present day needs of banking environment could be included through proper discipline and training.

Needs of Change in Recruitment Policy

It is important to say that the external level market is full of the required talent like MBA, M. Com etc, but on the country only graduation with simple subjects is still the requisite qualification for officers cadre, which has already worked amply in the devastation of UBL. Therefore the recruitment qualification to the officers framework should be enhanced for simple graduation, to professionally qualify preferably Masters in their respective fields.

Refresher Courses
The Human of the bank should frequently conduct meaningful refresher courses, seminars and workshops with a view to improve the knowledge of the staff. Due to severe competition and technological developments, 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.


Computer Trainings
The present conventional and orthodox training programmers need to be made more comprehensive and reinforced with inclusion of computer training courses.

Training for Credit Management

Special trainings on credit management should be imparted to the finance dealing staff. Financing is main fountain banks income. Sound finance is extremely necessary for opening of springs of the smooth inflow of the income.

Training with Clear Objectives

Training needs assessment is necessary so that only the relevant staff is sent for the training courses.

Change in Appraisal System

The present performance appraisal system is good. However, it needs to be implemented in true sense. The drawbacks that are obvious like nepotism and favoritism etc. 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 programmers such as, marketing excellence, courses on corporate culture and others. Usually in businesses the wholesalers, retailers and other intermediaries are finished by opening a network of the business own outlets. It works as profit maximization devise. In my opinion the above two programmers marketing excellence and corporate culture, 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. Cheaper means for Postings etc. The culture of attachment of hopes with the elements outside UBL, for promotion, transfers, postings, and other benefits requires eradication from the roots.

Customers Orientation
Every entrepreneur if concerned about the success of his business has to understand, recognize, carefully and appropriately that his customer is The King of the business system

and the original spring of the business revenue. UBL should recognize its customers as the mainstream of the banks revenue. They need to be provided the deserved respect, quality and in time service and to be politely dealt with.

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. In this regard, employees should be given opportunities to show their performances, which would help in their career development.

Credits and Advances Departments

The defaulted loans have showered the process of development of banking sectors in Pakistan and have reduced the lending capacities of banks. In result of which economic growth has reduced and rate of industrialization has become lowered. Defaulted loans being the major cause for this depression, various suggestions and recommendations have been given with focus on UBL to overcome the drawbacks of this department.

Training for RMs

Exclusive mandatory training concerning all possible aspects like, financial management and organizational management etc is required to be developed and designed to achieve 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

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. The bank should have expert to examine various changes and developments for years in areas of the borrowing corporation like; 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, profit maximization, capital flow and operating expenses etc. the bank should take critical view of the financial and should assess changes occurred during the favorable and slack reason for the company.

Limitation of Study
It is to admit that the study attempts only those aspects, which are closely relevant to the purpose of the study, facts and figures, which otherwise might be equally important, but not having a direct bearing on the conclusions arrived at this study, have been ignored. The most important limitation from which the study suffers is the non- availability of information in a manner required for analysis and the secrecy of the bank. Another important limitation of the study is time and space constraint.


As UBL is a multinational organisation and is working many countries. As far as, my steps concerned if I become the manager in this company I would take the following steps.There are certain things which I observed during my internship. If I were the manager there I decide to take some steps for its prosperity. There should be training programmes for employees for better performance skills. The banking environment is decentralized thats good but on the other hand this is creating a bad impact because the employees are taking its negative advantage. So there should be a control on employees and strictness. They come late and sometimes go back before time. There is no break time so employees go and come late after lunch. A proper system of break has to make. There should be R&D department properly held. Many of them like to chat with other employees and spend their time in gossiping. There are no proper systems of hiring new employees there are simple graduates. They must be replaced with fresh business master or bachelors for a proper system to run. These were some defaults that I felt during my internship and if I were the manager I will correct them.


Area Manager- Mr. Tariq-03018690098 Operation Manager-Mr. Usman,

UBL Annual Report 2007-06 UBL Annual Report 2008-07 UBL Annual Report 2009-08

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