An Internship report on

United Bank Limited

Syedwala Tehsil&District Nankana Sahib.

Submitted by;
Ehsa Haider
Section; c (afternoon)
Session; 2009-2013

Submitted to;

Hailey College of Commerce, University of the Punjab, Lahore.for the

degree of b.com (hons)

Sep 2013

Dedication

This report is dedicated to my beloved mother who has loved and taken care of me for all of
my life and who taught me is to do my best and to try until succeed.

PREFACE

It is the requirement of the B.COM (Hons) course, Hailey College of Commerce that all
students of B.com (Hons) have to spend two months in any organization to get practical
exposure and to get familiarized with the ways to live in the organizational environment
which is dramatically different from the educational environment. That two months period
called Internship Period , if spent properly and sincerely, enables the students to be more
confident, more knowledgeable, more responsible and, above all, more committed to its work
in the practical field. In this regard, I have been assigned to do internship of two month period
in United Bank Limited, Syedwala Tehsil&District Nankana Sahib.
It has enabled me to understand the practical scenario and sharpen my decision making
power and utilizing the resources in an effective manner, so that our resources generate
maximum profit.
In preparing this report, I have put all of my best efforts to provide with maximum
knowledge. Despite of my all the coherent efforts, I do believe that there will always be a
room for improvement in the efforts of learner like me.

Letter of transmittal

Professor Nasir Sarfraz

Assistant professor
Hailey College of commerce,
University of the Punjab,
Lahore.
Respected sir,
I was assigned the task of writing an internship report based on internship experiences by Hailey
College of Commerce, university of the Punjab, Lahore under your supervision, I completed my two
month internship (July-Sep) 2013 at United Bank Limited.
I would like to inform you that I have practically applied the knowledge of the courses I acquired
while doing my b.com (hons). Second objective was to learn from the practical applications, any new
frontiers that will make me more effective in a way that benefits me in the future during my practical
life. I hope to inspire not only by writing in positive, optimistic way, but also by providing a real
sense of the unlimited opportunities ahead for business students in Industrial sector of Pakistan.
I am highly obliged, that with your help, guidance and motivation. I have successfully completed my
report on the above mentioned Bank. I have done the work with the best of my efforts and hope that it
comes up to the touch stone.
Ehan haider
Session 2009-2013
Section (c) Afternoon

Areas covered by report

Introduction to the report

Introduction to Ubl
Company profile
Ubl departments
Ubl product and services
Ubl branch analysis
Qualitative analysis
Swot analysis
Suggestion and recommendation

Acknowledgement
My report will remain incomplete if I do not mention the efforts made by individuals who
helped me in completing this work.

First of all I will thank my ALLAH ALMIGHTY Who has enabled me to complete this report.
Secondly, I would like to pay gratitude to my principal Prof. Dr. Liaqat Ali who has made the
internship compulsory in order to make us able to get know-how about the practical work. At the end,
I am obliged to the teachers who have provided me with the guidelines about the format of internship
report, while exploring and enhancing my abilities, and making me able to work efficiently
throughout internship period with experienced persons

Executive Summary

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 reemerging 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.
United Bank Limited is one of the banks playing a very important role in the economic development
of Pakistan. Its providing high quality services, manage customer experience efficiently, have
comparative advantage due to its innovative technology and provide high profit to its stakeholder.
In order to maintain and improve its services in the competitive market UBL Human Resource
Department plays a very important role.
You will find in this report the complete HR function of UBL. Here is the Vision, Mission statement
and the methods followed by UBL for analyzing and evaluating its jobs. How UBL recruit and select
new employees. The methods used by UBL training and developing new skills in their employees.

Table of Contents
8

Topic Description

Page no.

Dedication

Preface

Letter of Transmittal

Area covered by

Acknowledgement

Executive Summary

Table of Contents

8
1. Introduction to the Report

Introduction

12

Purpose of study

12

Scope of Study

13

Limitation of Study

13

Methodology of Study

13
2. Introduction to UBL

Banking history

14

Banking in Pakistan

14

Banking towards Islamization of economy

14

Birth of UBL

15

Number of branches

16

Subsidiaries

16

Objectives of UBL

16

Role of UBL in banking sector

17

Computerization of UBL

17

Overview of UBL

18

Future plan of Ubl

23

Earlier Management of UBL

24
3. Company Profile

Vision of UBL

25

Mission of UBL

25

UBL Culture

26

Challenges faced by the organization

26

Functions of UBL

27

Functional Hierarchy

29
4. UBL Departments

UBL Departments

29

Deposit Department

30

Human Resource Department

32

Advance Department

36

Lockers Department

37

Foreign Exchange Department

37

Clearing Department

38

Billing Department

38

Account Department

38

Computer Department

39
5. UBL Product & Services

UBL Products

40

UBL Money

41

UBL Chip credit card

41

UBL Business line

41

UBL Address

42

UBL Drive

42

UBL Deposit

42

UBL Services

43

UBL Whiz

43

UBL Net banking

43

UBL E-statement

44

UBL Hamrah

44

UBL Wallet

44

Remittances

44

10

 UBL ATM Cards

45

UBL Online banking

45

6. UBL Branch Analysis

Introduction

46

The Group and its Operations

46

Basis of Presentation

46

Branch Hierarchy

47

Significant Accounting Policies

48

Risk Management

50

Concentration of Credits & Deposits

50

Investment Portfolio

51

Financial Analysis

51

7. Qualitative Analysis
Qualitative Analysis of UBL

60

Organizational

60

Departmental

60

UBL SWOT Analysis

63

Strengths

63

Weaknesses

65

Opportunities

66

Threats

67

8. Suggestions & Recommendations

Recommendations

68

11

1. Introduction to the Report

a) Introduction:
Students of b.com (hons) studying courses leading to degree in commerce are required to
undergo an internship program of two months duration. This is an essential academic
requirement. The internship is followed by comprehensive report writing. This report is
properly evaluated on the basis of its description and analytical capabilities by internal and
external examiners. I did my internship in United Bank Limited.

b) 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:
i.

To analyze banking operations i.e. operational analysis, financial analysis.

ii.

To develop concrete and feasible recommendations.

iii.

To improve report writing skills.

12

c) 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.

d) 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.

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

i.

Primary Data:
Personal Observations.
Discussion with Bank Personnel.

ii.

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

13

2. Introduction to UBL
a) 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 who developed banking system as early as 2000. B.C

b) 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.

c) Banking towards Islamization of economy

Interest based transactions/businesses are Haram in Islam. The GOP has shown interest to
eliminate interest from its economy by developing various alternatives. To achieve this
objective various efforts are made with the following outcomes:
1) Deposits
PLS (Modarba) Accounts
Current Accounts: (with no return paid)

2) Loans
Qarz-e-Hasana
Lending on the basis of Service charges
3) Trade Related Modes of Finances

14

 Bai Muajjuai; (purchases of goods by banks and their sale to clients at

appropriate mark-up in prices)
Bai-Salam; (purchase of goods from clients by banks and their resale to the
client at increased prices, to be paid in future)
Financing for development of property on the basis of developmental charges.
Purchase of trade bills.
Ijara: (leasing)
Hire purchase.

4) Investment Type of Modes of Finances

Musharaka: (financing on the basis of profit and loss sharing)
Modaraba: (equity sharing of borrower profit and loss on basis of purchase of
Modaraba certificates)
Rent sharing.
Equity participation through purchase of shares.

d) Birth of UBL
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 Mubarak 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.

e) Number of branches

15

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
branch was 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. These branches are playing a significant role in channeling home remittances
and foreign trade of Pakistan.

f) Subsidiaries
UBL has four subsidiaries, namely:

United National Bank Limited (UNB), UK

United Bank AG (Zurich), Switzerland

United Executers and trustees Company Limited

United Bank Financial Services (Private) Limited

g) Objectives of UBL
The united bank limited sets its goal annually does revision of them and takes monthly
feedback.

To provide the online facility in every branch of bank.

To achieve the goals which are in profit terms

Make best efforts to win the trust and confidence of its customers.

To offer the varieties of services to meet the requirement of domestic as well as

foreign customers.

To make it leading bank in banking sector.

To adopt modern banking techniques.

Operations proficiently assigned by the government.

Efficient in providing evening time facilities.

To make sure the provision of home remittance facility to its customers.

To get all the branches computerized.

16

Boost the financial sector all over the world particularly in Pakistan.

h) Role of UBL in 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
banks overtaking several other older and its competitor banks. The major contributions the
bank has made are enlisted below:

Record setting performance and commitment to serve the customers

Professional management and modern banking policy

Human resource development

Small loans (or) micro credits and utility bills collection

Pacesetter in economic research established in 1967, department for economic

research.

Credit cards (unicard-1970)

Travelers Cheques (Humarah-1971)

Diaries and calendars received prizes too

Promotion of sports

i) 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.
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.

OVERVIEW OF UNITED BANK LIMITED

17

CORE VALUES
Trust
We are the trustees of public funds and serve with integrity & commitment. Ethical behavior is of
critical importance to us. We adopt full compliance with internal and external policies and
procedures, operating within the legal framework

Customer Focus
We continuously seek to exceed our customers expectations, forging and maintaining long term
relationships

Innovation
We strive to be the market leaders in innovative products and services offering customized
financial solutions with flawless execution

Teamwork
The diversity of our people is our strength. We inspire and challenge each other working together to
achieve synergy

Achievement
Our people are our most valuable asset. We are committed to a result oriented culture. Our goals are
clear and merit is the only criterion for reward

Social Responsibility
As responsible citizens we contribute to the social welfare of the community we live in.

18

Brief History
United bank was established in June 1959 and the company was registered on July 24, 1959. United
Bank Limited started the operations on 7 November 1959 with its first branch namely McLeod Road
now I.I Chundrigar Road at Karachi. On 9th November 1959 the Gazette of Pakistan notified and
included UBL in its list of scheduled banks operating in Pakistan.
Some Key Information about the UBL Established
Date of Establish

November 7, 1959

President & CEO

Mr. Atif R. Bokhari

Branches (as on Feb. 2006)

1100+ domestic, 17 overseas branches,

Employees (as on April. 2006)

Over 8254 Employees

Representative Office

Tehran

Associated Company

Oman United Exchange Company, Muscat

Offshore Banking Unit

Export Processing Zone, EPZ Branch, Karachi, Pakistan

Head Office

State Life Insurance Corp. Building

#1, I.I.Chundrigar Road, Karachi, Pakistan

19

Branches in overseas
United States of America
United Kingdom
Qatar
UAE
Bahrain
Republic of Yemen
Zurich
Off Shore banking Unit

20

Branches in Pakistan

21

REGION WISE BRANCHES NET WORK OF UBL

Lahore East Region
Lahore East
Lahore West Region
Lahore West
Faisalabad Region
Faisalabad
Gujranwala Region
Gujranwala
Islamabad Region
Islamabad
Sargodha Region
Sargodha
Peshawar Region
Peshawar
Mardan Region
Mardan
Sahiwal Region
Sahiwal

25

Karachi North Region

Karachi North

27

24

Karachi South Region

Karachi South

31

19

Karachi Central Region

Karachi Central

18

08

Hyderabad Region
Hyderabad

11

21

Rawalpindi Region
Rawalpindi

20

15

Quetta Region
Quetta

08

20

Bahawalpur Region
Bahawalpur

05

13

Multan Region
Multan

24

14

Jehlum Region
Jehlum

16

FUTURE PLAN OF UNITED BANK LIMITED

United Bank Limited is to make on environment, which have an understanding of reliability

in the whole structure of the bank. With a strong financial base, a promising team and the right
resources, United Bank Limited has proved to be a reliable partner indeed. United Bank Limited
understands the special needs of the business, trading and agricultural sectors. Strategically located
branches in small towns and cities provide warm services and advice to the small businessmen and
local traders. United Bank Limited speaks their language; it understands their needs and provides
22

tangible results. By responding in a timely manner with a flexible approach. United Bank Limited
provides its clients with the reliable financial service and support they require to successfully achieve
their business objectives. With a solid foundation of over 5
0 years in Pakistan and having recently completed 10 successful years of privatization, United Bank
Limited is strongly positioned to lead the banking sector in the new millennium. You can feel safe in
our hands.

23

Earlier Management of UBL:

Senior Management of UBL
Sheikh Nahayan Mubarak Nahayan chairman

Sir Mohammad Anwar Pervez Deputy Chairman

Amar Zafar Khan

President
M.A Manna
Deputy CEO
Nauman Hussain
Director Operations & Utilities
Mansoor M. Khan
Head Corporate Banking Group
Shaharyar Ahmed
Head Investment Banking group

Risha Moheyuddin
Global Treasurer
Khalid Munawar-ud-din
Head Credit Policy Supervision
Muhammad Ejazuddin
Audit Chief
Mehboob A. Khan

Shahid Waqar Mehmood

Head Commercial bank
Aman Aziz Siddique

Rukhasana Asghar
Global Head Human Resources

Ali Sameer
Chief SAM (domestic)

Ameer Karachiwala
Chief financial Office/HCA

Head International Operations (Dubai)

24

3.COMPANY PROFILE
a) Vision of UBL

To be the premier organization operating locally & internationality that provides the
complete range of financial services to all segments under one roof

b) Mission of UBL

The mission of United Bank Limited is to provide the financial services to the general public
at the most reasonable rate.

To cope out the rapidly changing environment

To provide fully modern and atomized services to their customers

To provide personalized banking system

To mobilize the domestic saving

25

c) UBL Culture
United Bank Limited culture is the personality of the organization. Culture is comprised of
the assumptions, values, and norms of organization members and their behaviors. The
organizational culture of UBL is that it always provides profit to its stakeholder and never
misrepresents its financial reports and will never do any unethical act which harms its client
and competitor. The employees of UBL will always be helping and friendly with its
customers. The norms of UBL are it always follows the Laws of country and maintain its
goodwill. The core value for UBL is as follow;

Honesty and integrity

Fairness and meritocracy
Commitment and dedication
Teamwork and collaborative spirit
Caring and socially responsible

d) Challenges faced by the organization

UBL is a step behind in using new technology as compared to other banks

Large and increasing competition.
High operating costs and facing recession era
Lack of huge deposits

e) Functions of UBL
The main functions of UBL are listed below

26

 Collecting cheques & bills exchange from its customers.

Collecting interest due, divided pensions and other sums to customers.
Transfer of money from place to place.
Acting as executor, trustee or attorneys for the customer.
Acting as an executer, trustee or attorneys for the customer.
Providing safe custody and facilities to keep jewelry, documents or securities.
Issuing of travelers cheques to give credit facilities to travel.
Issuing of letter of credit to facilitate imports and export.
Accepting bills of exchange on behalf of customers.
Purchasing shares for the customers.
Undertaking foreign exchange business.

Functional Hierarchy
Organizational Hierarchy of UBL

Chairman
27

Deputy Chairman
Board of Directors
Executive Committee
Managing Director

SEVP
EVP

VP

Officer Grade-I

Non Clerical
Staff

Clerical Staff

Officer
Grade-II

Officer
Grade-III

4. UBL DEPARTMENTS

28

1. Deposit department
2. Human Resource department
3. Advances department
4. Lockers department
5. Foreign department
6. Clearing department
7. Bills department
8. Account department
9. Computer department

a) Deposit department
UBL receive money in the following accounts:
Current deposit

29

 PLS Term Deposit Receipt

Foreign currency deposit account
PLS Saving Account

1. Current deposits:
This type of account allows the client to deposit or withdraw money as and when he likes. In
This if he can deposit and withdraw money several times in a day. Usually, this type of
account is opened by businessmen. On this type of account not interest is allowed but the
bank deducts service charges. A new rule passed if the money is less then Rs. 10000 then after
every month 50 rupee will be detect from the respective account. Only zakat and teacher
account are secured from that rule.

2. PLS Term Deposit

If you wish to make a secured long-term investment, UBLs Term Deposit Receipt is the smart
choice, just make an investment and see your deposit grow over time. By investing in UBL
TDRs:
You get an attractive rate of return.
Your profit is credited to your account every six months.
Your investment is secured
.

3. Foreign Currency Deposit Account

If you wish to make a secured long-term foreign currency investment, UBLs Foreign
Currency Term Deposit Receipt is a smart choice, just make an investment and see your
deposit grow over time. By investing in UBL TDRs:

30

 You get to choose from different range of currencies i.e. US Dollar, British Pound,
and Euro etc.
You can avail different attractive rates depending on the currency you choose.
You get the pleasure of availing the best rate of return in the market. This is what
you call value for money.
You can open an account in any of the 174 branches offering foreign currency
accounts.
You get to take your profit home every six months.
You get to make a secured investment

4. PLS Saving Account

For all you savers if you choose to keep a deposit in a secured savings account, which also
gives an attractive rate of return then UBLs PLS, Savings Account will serve all your
financial needs.

31

b) Human Resource Department

The most important asset of UBL is its people. To maximize its work force investment, the
Aim of the Human Resource department is to enhance the UBL as the best place to work.
In the area of Human resources their goal is to maximize the return on the banks annual $4
billion investment in personnel expense by improving efficiency of HR operations.
For this purpose and to follow the instructions regarding HR, the department of HR plays an
important role. The main functions of this department are to;
Assess the need of employees where, ever required.
Provide equity opportunities for all the applicants.
Select the most appropriate person for the job.
For the purpose of selection conduct interviews, tests etc.
Provides training opportunities to the employee both on the job and outside job.
Motive the employee through the programs adopted by the head office.
Evaluate the performance of the employees with the help of their immediate boss.
Recommend reward and promotion for the employees.

32

i.

Objectives of the Human Resource Department:

To accomplish the organization goals and support its strategies, HR dept. has the
following objectives.
To establish employee recruitment and selection system for hiring the best possible
employees consistent with the organization needs.
To maximize the potential of each employee in order to attain the organization
goals and insure individual carrier growth and personal dignity.
To retain the employees whose performance helps the organization realize its goals
and release those, whose performance is unsatisfactory?
To ensure organizational compliance with state and federal laws those are
applicable to HR management function.

ii. Recruitment & Selection

Human Resource is the most important assets of the organization. It is with people that
quality performance really begins and ends. Recruitment represents first contact that a
company has with potential employees. A well-managed and well-planned recruitment
effort results in quality applicants.
UBL has very well planned and well-managed recruitment process .UBL recruitment
process begins with the determination of current and anticipated (short-long term)
personnel needs. After it, the requirement of the job is determined by combining the job
specifications. They first try to recruit people internally. If the applicants are not available
internally then they go for external recruitment.

iii. Performance Appraisal

33

Performance appraisal is the process of assessing qualitative and quantitative aspects of an

Employees job performance .The UBL performance appraisal process answers the
following questions:
How well am I doing?
How can I do better?
How well are our employee doing individually and collectively?
The appraisal program of the bank has different methods and different categories for
employees.

For clerical staff, they are using job description method.

For managers they use performance planning and coaching evaluation (PPC & E)
programs. It is similar concepts like management by objective.

iv. Performance Planning Coaching and Evaluation (PPC & E)

The Banks PPC &E process is designed to help the employees to work with the manager
to improve its contributions to achieve the goals of the unit. The PPC& E have three
salient features.
The establishment of the performance plans.
BY the coaching of manager.
The evaluation of the overall combinations.

v.

Subordinate Evaluation
34

The UBL is using latest performance appraisal techniques. Subordinates evaluation is one
of them. These evaluations are used in conjunction with other sources of performance
appraisal information.

vi.

The bank and Career Development

UBL wants to create an environment that encourages its employees and provides career
development paths.

vii. Family Resource Program

The program can help with personal matters ranging from finding childcare to helping
older relative who live out of town. The bank has programs to help employees balance
work and family life.

viii. Employees Assistance Program

The program provides information and outside referrals to employees and their families
may be struggling with personal programs.

ix. UBL Club

The club offers employee opportunities to develop leadership skills network and socialize
with co-workers.

c) Advances Department
There are two types of advances, which UBL provides:

35

 FUND BASE ADVANCES

NON- FUND BASE ADVANCES

1. Fund base Advances

These are those advances in which actual payment of funds is involved. These funds
again have been dividend into two types.

Running Finance or Cash Finance:

This is a loan, which is provided only to the running businesses to meet their
working capital requirements. The bank decides limit on continuing bases. It
means that the customer can draw the amount, as much he is required as
approved by the bank.

He can deposit and withdraw the amount on his

account. The markup is payable on the outstanding amount only.

Demand Finance Facility:

The bank on demand provides this facility. It means that the bank pays the full
amount to the client and mark up is also payable on the full amount. The bank
considers the full amount outstanding. The bank provides also facility of loan
to its own employees against the security of their immovable property. The
rate of mark up on these advances is lesser as compared to the rate of mark up
on the other advances.

2. Non- Fund based Advances

There are two types of this loan

Issuance of Letter of Credit

Issuance of Letter of Guarantee

d) Lockers Facility Department:

First customer should be account holder in bank.

36

Customer completes locker agreement form.

Customers signatures are taken on Locker Hire Agreement.

Customers signatures must be stamped with Admitted stamp.

Fill the application Access to Locker.

Key account is opened in system.

Hand over the Key to the customer after key account opened in system.

Advance charges collected by the customer. (Charges are taken annually)

Registers are maintained annually.

The bank has the locker facility for the convenience of their account holder. The bank provides
the four types of lockers, which are small, medium, large and extra larger, (and the charges of the
lockers respectively are Rs.500/-, Rs.1000/-, Rs.1500/-, Rs.2000/-, Rs.3000/-.) The bank collect
the security when the account holder access the locker which is Rs. 1500/- and when the account
lost the key due to own negligence then the account holder will pay the breakage fees to the bank
and pay the charges to the lock master. And when customers want to release the account then the
account holder fill a form of release of locker no. And withdraw the locker in the presence of
custodian and custodians of the locker pay back the security, which the bank kept at the time of
locker opening. In the absence of account holder a next of kin or a person who has the power of
attorney to operate account of the accountholder if he/she has the proof by court and he/she will
prove in the bank by this or her lawyer can open the locker.

e) Foreign & Exchange Department

The main functions of foreign exchange department are:

To open the letter of credit (LC) facilitates imports and export.

This department also deals with foreign currency accounts.

This department deals with inward & outward remittances.

This department also performs some general functions relating to foreign exchange
e.g. private travel exchange quotas, business travel quotas etc.

37

f) Clearing Department
Every bank acts as both paying as well as collecting bank. A large part of this work is carried out
through the bankers clearing house wherever it is established for a bank, following are the
requirement of being a member of clearing house:

It must be scheduled bank i.e. it is registered by state bank of Pakistan.

50 cheques per day must be drawn on it for continuously three months.

It must have account with state bank of Pakistan.

Sufficient balance should be in this account.

A clearing house is place where representatives of all the banks of the city get together
and settle the payments & receipts of cheques drawn on each other

g) Billing Department
A BILL is amount of charges from the seller to buyer. Bills department performs the function of
collection of these bills.

h) Account Department
The daily working of all the departments is completed and compile in this department for the
preparation of cash cum day book for the ultimate preparation of daily statement of affairs of
the branch.

In A/C department all the subsidiary ledgers are include maintenance of income and
expenditure subsidiary ledgers are prepared.

Generals types of statements called by head office are prepared.

Income statement and expenditure statement at the end of each month is prepared. If
there is any mistake in any record it is checked and removed in A/C department.

i) Computer Department
38

The IT vision is to create a central database linked to all the hubs, through a strong
communication backbone, which will allow the customers to maintain one account with the
bank and operate it from anywhere in the country.
In preparation of numerous applications including the core online retail banking application,
UNIBANK's front-end systems were vastly enhanced to a GUI version under Oracle D/2000.
The new product UNIBANK2000 has a multi branch facility and runs in a client/server
environment. The concept of a universal teller was introduced, which has greatly improved the
counter services. More functionality was added like signature verification, printing of
remittance instruments, etc. Full Online/Offline computerization of Hubs and off-line
computerization of all PLS and CD accounts was achieved during the year.
Going forward, UNIBANK 2000 will be installed in all Hub branches by the end of that year.
UBL is also working on a value added Internet service, which will provide encrypted Internet
access to customers as well as employees.

5. UBL Product and Services

39

a)

UBL Products
You as an individual can gain and benefit the most through UBL consumer banking.
In UBL you get friendly, efficient and attentive personalized banking services. A unique
banking relationship experienced by each UBL client. You can utilize the following products.
1.

UBL Money

2.

UBL Chip Credit Card

3.

UBL Business line

4.

UBL Address

5.

UBL Drive

6.

UBL Deposit

1) UBL Money
UBL Money, the personal installment loan from UBL provides you with power, control,
convenience and the flexibility to manage your financial requirements and realize your

40

dreams. UBL Money is a fixed installment loan. It gives you access to funds starting from
Rs. 50,000/- up to a maximum of Rs. 500,000/- without any collateral.

2) UBL Credit Card

Welcome to the world of UBL Credit Cards. It is Pakistans 1st chip credit card, which
guarantees you both enjoyment and high value. It assures you global acceptability in more
than 22 million establishments worldwide in 130 countries and in more than 12, 000 outlets
within Pakistan. This unique high tech CHIP guarantees your security while conducting
transactions within Pakistan and around the world. CHIP based credit cards have proven to
be the most secure way of conducting credit card transactions globally. Win your prizes
instantly! Visit selected UBL Chip Reward outlets and get exciting gifts on the spot. The
more you visit, the more you get. All you do is dip the Chip to win free meals, free
household goods, free electronic items, free clothes and a lot more.

3) UBL business line

UBL Business line a complete solution to all your business financing needs. With UBL
business financing facility, you can now take your business to greater and newer heights,
and achieve the level of success that you truly deserve. UBL business line is a running
finance facility that not only provides funds for growth but also enables you to capitalize on
profitable opportunities. With UBL business line, now you will surely say: It is a Credit
Line/ OD Facility against residential property. It is an evergreen credit line that the
customer can use for his/her business expansion

4) UBL Address

41

You have always dreamt of having a permanent address. Now you can turn your dreams into
reality with UBL Address - the unique offering that makes you the owner of your home
while remaining within your limited income. UBL Address understands your home
financing needs and offers you a variety of fixed, floating & adjustable rate options because at UBL, you come first.

5) UBL Drive
Drive is a unique auto-financing product, which offers you feature, options and flexibility
unmatched by any other bank, because at UBL, You come first.

6) UBL Deposit
UBL has taken progressive steps and has introduced innovative products and services to
provide you a variety of banking and financing services like UBL profit, Business partner,
Uni-saver, foreign currency savings and foreign currency term deposits receipts.

b)

UBL Services

42

UBL has taken progressive steps and has introduced innovative products and services to provide
you a variety of banking and financing services. As an individual or a group you can get much
through UBL services. You can utilize the following services:
1.
2.
3.
4.
5.
6.
7.
8.

UBL WIZ
UBL Net banking
UBL e-statement
UBL Hamrah
UBL wallet
Remittances
UBL ATM cards
UBL online banking

1) 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. It is available is three types. i.e. UBL Wiz
Travelers, UBL Wiz Ladies, & UBL Wiz Teen.

2) UBL Net banking

UBL net banking is an internet banking portal offering a simple, convenient and secure
method of accessing bank accounts on the internet. It's never been so easy to access and
manage your finances in a secure, real-time, online environment; anywhere, anytime. Using
UBL net banking, the customers have access to their bank accounts 24 hours a day, 7 days a
week and can keep a close eye on their account balances, print account statements, pay bills,
transfer funds, track purchases and schedule their recurring payments at the touch of a button
and much more.

3) UBL e-statement
UBL brings a simple solution to all your problems by introducing the UBL e-statements
facility. UBL is pleased to announce the launch of the UBL e-statement facility which makes
it easier for you to get your statement of accounts and automated transactional debit/ credit
alerts right into your inbox. Available for all rupee and foreign currency account holders, you
43

now do not have to wait for six months to receive a paper based statement of your account any
more. All you need to do is tell UBL the frequency of statements you require and UBL will
ensure that it reaches your inbox.

4) UBL Hamrah
In continuation of the same tradition, UBL in the shape of "Hamrah" rupee travelers cheque
enhances this facility for the convenience of its valued customers by offering denominations
up to Rs. 10,000. UBL "Hamrah" has been designed keeping in mind, both convenience and
security - be it business, property, trade or personal needs. "Hamrah" rupee traveler cheques
are the ideal and safest way of carrying cash when travelling anywhere in Pakistan.

5) UBL Wallet
Introducing the new UBL wallet card is now with the international power of VISA. UBL
wallet, now with the power and international acceptance of VISA! Your Wallet VISA ATM &
Debit Card has all the convenience and security you desire and the quality you deserve. This
Wallet holds all the cash in your bank account.

6) Remittances (UBL Tez Raftaar)

Free doorstep remittances within the country or from abroad, UBL offers the most efficient
and price competitive service. With our large network of branches, we are poised to offer you
service almost at your door step. UBL's new remittance service, Tez Raftaar offers all
overseas Pakistanis the fastest and the most convenient delivery of their money to their
beneficiaries in Pakistan. Best of all, Tez Raftaar is completely cost free and is available at all
UBL branches along the bank's network in the Middle East, UK and US.

7) UBL ATM Cards

Annual Fee (Rs.)
Card
Type

Primary

Supplementary

Daily Limits (Rs.)

ATM

Debit

Funds

Withdrawal

Card

Transfer

44

Gold

500

250

40,000

100,000

500,000

Silver

300

150

20,000

50,000

300,000

ATM Location

Karachi

Sargodha

Muree

Hyderabad

Multan

Faisalabad

Sukkar

Gujranwala

Sialkot

Raheem Yar
Khan
Bahawalpur

Peshawar

Abbotabad

Wazirabad

Lahore

Wahcant
Rawalpindi

Islamabad

Gujrat

Quetta

8) UBL Online Banking

With UBLs state of the art online banking, you can access your account from more than 350
branches located in 71 cities across Pakistan. Your account gets to travel with you and can be
accessed throughout Pakistan, be it Karachi, Kotli Main, Nalka Kohala or Mandara.
Now UBL enables you to do all the following transactions in minutes through designated
online branches. Salient features of online banking are:
Cash Deposit and account statement
Cheque Encashment
Stop Payment

6. UBL Branch Analysis

a) Introduction
These section efforts have been made to cover all relevant aspects of the financial performance of
UBL. Overtime comparison and common size analysis are carried out with the view to extract
concrete conclusion to describe financial standing and performance of the bank.

45

b) The Group and its Operations

The group consists of;
i. Holding Company
United Bank Limited, Pakistan
ii. Subsidiary Companies

United National Bank Limited, UK

United Bank AG (Zurich), Switzerland

United Executers and Trustees Company Limited

United Bank Financial Services (Pvt) Limited

c) 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.

Branch hierarchy

46

Cheif manager

manager
operations

manager
international
banking

manager
credits

accounts
department

imports
department

leasing
department

cash
department

exports
department

home finance
department

foreign
exchange
department

car finance
department

account
opening
department

remittences
department

Internal audit
department

marketing
department

credit card
department

clearing
department

d) Significant Accounting Policies

Following are the significant accounting policies of UBL.

1) Revenue Recognition
Returns on advances and investments are recorded on accrual basis. Debts securities
purchased at premium or discount are amortized over their maturity periods. Dividend

47

income is recognized on accrual basis of declaration of dividend up to the year-end.

Returns on classified assets are recorded on receipt basis, rescheduled and restructured
loans are treated in accordance to SBP regulations. Fees/commissions etc. on letter of
credit and others are recorded on accrual basis.

2) Investments
UBL classify its investments as stated below;
a) Held for trading
b) Held to maturity
c) Available for sale-other than the above two types
In the light state bank Pakistan regulations quoted securities are shown at market values
and any changes arising are taken to profit and loss account only upon actual realization.
Unquoted securities are valued at the lower of cost and breakup value and difference is
charged to income. Provisions for diminution in the values are made after permanent
impairment, if any.

3) Lending/Borrowing from Financial Institutions

Sales under Purchase Obligation: These are reflected as liabilities and the
charges against these are recorded as an expense on pro rata basis.

Purchase under Resale Obligation: The differential of the contracted price and
resale price is amortized over the period of their contract and recorded as income.

4) Fixed Assets and Depreciation

a. Owned
Such assets are showed at their cost or revalued amount less accumulated
depreciation and impairment loss, if any. No depreciation is charged on freehold
land. Gains and losses on sale of fixed assets are included in income currently,
except that the related surplus on revaluation of fixed assets is transferred directly
to retained earnings/accumulated losses.

48

b. Leased
Assets under financial leases are stated at cost. The outstanding obligations are
shown as a liability. The finance charges are allocated to accounting periods in a
manner so as to provide a constant periodic rate of charge on the outstanding
liability.
c. Foreign Currencies
Balances are translated into rupees at the applicable rate of exchange prevailing at
the balance sheet date or where applicable at contractual rates. During year
transactions are converted into Pak rupees applying the exchange rate at the date of
respective transactions. Gains and losses are included in income currently.
d. Deferred Cost and Lease Payments
These are amortized over a period of five years. Rental obligations under operating
leases are charged to profit and loss account as incurred.

5) Taxation
Provision is based on the taxable income for the year or minimum tax computed on the
basis of turnover, whichever is higher. The bank accounts for deferred taxation on major
timing differences, using the liability method in respect of those timing differences, which
may reverse in the foreseeable future. Deferred tax debts are, however, recognized only if
there is reasonable expectation of realization of the amount.

e) Risk Management:
The bank is primarily subject to interest rate, credit and currency risks. The bank has
designated and implemented a frame work of controls to identify, monitor and manage these
risks are as follow;

1. Currency Risk Management

For the purpose of efficient management of this risk, the group enters into ready, spot,
forward and swaps transactions in the interbank market and with the state bank of
Pakistan in order to kedge its assets and liabilities and cover its foreign exchange
position.

49

2. Credit Risk Management

The banks major credit risk is concentrated in textile sector. To manage it the bank
applies credit limits to its customers and obtains collaterals. Credit risk in the portfolio
is monitored by the credit risk management who formulate appropriated policies and
procedures to ensure building and maintaining quality credits and efficient credit
process. The banks financial institution risk management unit assesses, recommends
financial institutions and also controls cross border/country risk.

3. Interest Rate Risk Management

The group is mainly exposed to mark up interest rate risk on its deposit liabilities and
its loans and advances and investment portfolios. The asset liability committee of the
bank reviews the portfolio of the bank to ensure that risk is managed within acceptable
limits. Most of the loans and advances portfolio comprises of working capital, which
are reprised on a periodical basis.

f) Concentration of Credit and Deposits

The major class of business for UBL related to advances is the textile and private sectors.
UBL is advancing 27.2% to textile and 74.5% to private sector. Majority of the depositors
fails in the category of individuals, contributing 65% of the total deposits.

g) Investment Portfolio
UBL employs diversified investment portfolio. The bank invests its funds both in risk free
assets as well as in risky assets. This enables it to minimize its unsystematic risk to a great
extent.

h) Financial Analysis
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
50

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.

Return on Equity:
FORMULA: Net Profit/ Equity
Years

2012

2011

2010

2009

2008

ROE

22.52%

23.70%

19.80%

19.50%

21.90%

51

ROE Ratio
27.50%
23.70%

21.90%

2007

2008

19.50%

19.80%

2009

2010

2011

22.52%

2012

Interpretation:
This ratio indicates the company earned 22.52% in 2012 on each Rupee of equity investment. So this
earning is less as compared to 2011 and 2007 but greater than in 2008, 2009 and 2010.

52

Return on Asset:
FORMULA: Net Profit/Total Assest100
Years

2012

2011

2010

2009

2008

ROA

2%

2.1%

1.7%

1.5%

1.5%

ROA Ratio
2.10%

2.00%

1.70%
1.50%

2008

1.50%

2009

2010

2011

2012

Interpretation:
This ratio means that company earned 2% on each Rupee of investment. So the earning of bank in
2012 is lesser than previous years.

53

Debt Ratio:
Formula: Debt ratio= Total Debt/Total Assets100
Years
Debt

2012
89.49%

2011
90%

2010
90%

2009
90%

2008
92%

Debt Ratio
92.00%

90.00%

90.00%

90.00%
89.49%

2008

2009

2010

2011

2012

Interpretation:
This ratio indicates that company has financed 89.49% from debt and 11.51% from asset in 2012.The
higher this ratio, the greater the firm indebtedness and more financial leverage it has.

54

Gross Spread Ratio:

FORMULA: Net Mark up income/ Gross income
Years
GSR

2011
56%

2010
57.8%

2009
53.9%

2008
53.7%

2007
58.7%

Interpretation:
The Net Mark up income for the year 2011 is greater from the last couple of years but less than 2010
and 2007. The Net Mark up income is greater because the company is growing at a rapid, and
receiving more mark up ratio as compare to gross income.

Advance to Deposit Ratio (Net):

FORMULA: Advances/ Deposits
Years
ADR

2012
50.47%

2011
53.1%

2010
60.6%

2009
72%

2008
76.8%

Interpretation:
The Advances to the deposits Ratio is 50.47 percent for the year 2012 and is lower from the previous
years. This is because the bank did not give too much advances.

55

Income to Expense ratio:

FORMULA: Income/ Expense
Years
Times

2012
2.40

2011
2.56

2010
2.40

2009
2.61

2008
2.39

Interpretation:
The income to expense ratio is lesser than previous years it means company earned more income than
expense.

Growth in Gross Income:

Years
Gross Income

2012
20.21%

2011
17.5%

2010
0%

2009
15.1%

2008
16.4%

Interpretation:
These values indicate that growth in gross income is highest in 2007 but in 2012 gross income is
greater as compared to remaining years.

Dividend per Share:

FORMULA: Dividend/ Number of outstanding Shares
Years
DPS

2012
10.90

2011
7.50

2010
5

2009
2.50

2008
2.50

Interpretation:
The Dividend per Share is significantly increased in year 2012 due to the overall good business
activities of the bank.

56

Dividend Yield:
FORMULA: Dividend per Share/ Share price
Years
Dividend

2012
9.76%

2011
14.3%

2010
7.3%

2009
4.3%

2008
6.8%

Yield

Interpretation:
Typically companies with good growth potential retain a high proportion of earnings and have a low
dividend yield, whereas companies in more mature industries pay out a high portion of their earnings
and have a relatively high dividend yield. So the dividend yield of PPCL is greater in 2011 as
compared to previous years but less in year 2012,so it also lies in later category.

Earnings per Share (EPS):

FORMULA: Net Profit /Total No. of Equity Shares100
Years
EPS

2012
15.71

2011
12.66

2010
9.12

2009
8.26

2008
8.24

Interpretation:
EPS is increasing as compare to previous year and this shows better financial position in market.
This also shows that Bank is growing towards success at rapid rate.

Price Earnings Ratio:

FORMULA: Market Price per Share of common stock/Earnings per Share
Years
PER

2012
5.5

2011
4.14

2010
7.48

2009
7.08

2008
4.48

Interpretation:
This value indicates that investors were paying 5.5 PKR for each 1.00 PKR of Earnings in 2012.

57

UNITED BANK LIMITED

Summarized Balance Sheet of Three Years

Rs in '000
Assets

Common size (%)

2010

2011

2012

2010

2011

2012

Cash/Bal. With Banks

3609108

70463707

35591280

21.5

17.93

15.79

lending to F.Is

4370006

3627557

19050791

2.6

1.89

8.45

Investment (ST)

9190430

33883311

29580252

5.5

17.66

13.12

Advances-Performing (ST)

39489369

43632117

89292490

23.4

22.75

39.61

Other Assets

8641263

2641471

3509351

5.1

1.38

1.55

Total Current Assets

97782157

118177074

177024164

58

61.61

78.54

Investment (LT)

19388131

33623058

25007413

11.5

17.53

11.09

Advances-Performing (LT)

28477494

26423058

10312297

16.89

13.77

4.57

Advances-Non performing (LT) 11813855

5739798

3671991

7.01

2.99

1.62

Operating fixed Assets

2864018

2831534

3884990

1.7

1.48

1.72

Deferred Tax Assets

8297500

5026459

5486357

4.92

2.62

2.43

Total L Assets

70840998

73643958

48363048

42

38.39

21.45

Total Assets

168623155 191821032

225387212

100

100

100

B/Payables

1540592

1847025

2991269

0.91

0.96

1.32

Borrowings ST

4004130

174533

174533

2.37

0.09

0.07

Deposits Current

102568752 118167469

152580240

60.83

61.6

67.69

Lease and Others

8838842

5933743

5.24

5.2

2.63

Total Current Liabilities

116952316 130175635

161679785

69.36

67.86

71.73

Fixed Deposits

38747422
21264831

37252204
10883720

22.98
6.21

22.94
2.72

16.52
4.82

Liabilities

9986608

43998916
5212755

58

Other Long term Liabilities

Total LT Liabilities

49219400

Total Liability

49211671

48135924

29.19

25.65

21.35

166171716 179387306

209815709

98.55

93.52

93.09

Share Capital

22481680

5180000

5180000

13.33

2.7

2.3

Reserves

3960453

4258947

4712569

2.35

2.22

2.09

Accumulated Losses/Profits

-27282709 -722387

454403

-16.18 -0.38

0.2

Minority Interest

1168264

1271700

1412932

0.69

0.66

0.62

Surplus on revaluation

2123751

2445466

3811599

1.26

1.27

1.69

Total

24541439

12433726

15571503

1.45

6.48

6.9

Shareholder's Equity

7. Qualitative Analysis
a) Qualitative Analysis of UBL
59

During my two months of internship period I have tried to fully commit myself in the learning
process. I kept critically observing the things that I could analyze and the result of the exercise is
presented as below.

1) Organizational

Existing organizational hierarchy hinders vertical communication and blocks flow

of information among the levels of management.

The workload is not equally distributed.

Coordination level among divisions/departments and employees are poor,

particularly speaking of between the top and lower levels of management.

There is centralization of authority and branch managers are bound and restricted
to take initiative.

Due to overlapping nature of duties and jobs there exists confusion in branches.

2) Departmental
During my internship period in UBL, in various departments, I noticed following
departmental problems.
Cash Department
i.

Not very frequently but there are instances of fake currency notes, being
identified. At times notes received from other branches were found to have
certain fake currency notes.

ii.

Counting mistakes occur due to overcrowding particularly during the

collection of utility bills. Manual counting system also affects efficiency of
the bank.

iii.

Code of conduct of cashiers is found unsatisfactory.

Remittances Department
i.

Application of tests for authentication of TTs is not known to al concerned

individuals that reduces the efficiency and further the wrong application of
tests prevent payments and the delay could dissatisfy customers.

60

ii.

Telegraphic messages require specific skills and training. The employees are
partially equipped of such knowledge.

Deposit Department
i.

Identification of customers signature is very important particularly when

cash is to be withdrawn by him. Manual practices pose problems in the
branch where automation has not been done yet.

ii.

In cases where the presence of customer himself is must, is sometime

compromised due to influences of\r fear of loss of customer.

Clearing Department
i.

Wrong endorsement and stamping causes loss to the customers and extra
efforts for the bank to repeat the procedures.

ii.

Reasons for the return of the cheques at times are not mentioned on the
return memos.

iii.

At times due to lack of training wrong stamps are applied on instruments.

Credit Department
i.

Relationship Managers need to be fully equipped with the requisite

knowledge and skills as presently plain BA/B.Sc qualified individuals are
performing jobs of MBAs.

ii.

Large pool of potential borrowers cannot apply for loans due to lack of
collaterals. Heavy collateral requirements restrict credit business of the bank.

iii.

The credit proposal and other documents at times are not properly and
sufficiently prepared before taking approval.

Bills Department
i.

Employees at times mismanage their time and fail to forward bills promptly.

61

 Foreign Exchange Department

i.

Problems of bills and remittances departments equally apply to foreign

exchange department. There is overlapping of functions and complete
separation of function has not been achieved thus leading to a state of
confusion and conflict among employees.

ii.

Knowledge and educational background of employees working in this

department do not match with the job they are doing.

iii.

Most of the employees of this department lack the ability to handle the
Letters of Credit.

Marketing Department
i.

Lack of marketing at desk due to lack of training and awareness among

employees.

ii.

Lack of promotional activities.

iii.

Little attention to the apparent conditions of the bank exterior, interior

layouts and design of furniture in the branch.

b) UBL SWOT Analysis

SWOT is useful tool for providing a framework for analysis of an organization. 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.

62

1.

Strengths:

Strengths are the internal competencies possessed by UBL in comparison with its
competitors.

UBL with an integrated network gives you direct access to a comprehensive range
of better banking facilities to help you monitor your business internationally.

It is one of the largest private banks with a deposit base of Rs. 94883/- millions
showing constant growth over the period from 2009 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.
o Net revenue from funds increased by 18% for the current period.
o Provisions decreased by 14%.
o Total income increased by 16%.
63

UBL is actively participating in international markets and has recently introduced

credit cards in UAE, Behrain, 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, state
bank of Pakistan 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 from and trained by foreign banks
like City Bank.

Largest bank of Pakistan.

Example: Ubl is the 3rd largest bank of Pakistan in terms of deposits.

2. Weaknesses:

64

Weaknesses are the internal attributes of the bank to decrease in comparison with
competing 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 has 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.

Administrative expenses are 51% of the mark up revenue.

Promotions are carried out on annual basis ignoring the importance of capabilities
and performance outputs.

The bank has large number of employees who are simple graduates with no
banking knowledge.

Ineffective system of recruiting and selection.

Lengthy credit processing and documentation procedures.

Unsatisfactory working conditions.

No standardization in terms of branches.

Example: some of the branches are very attractive and most of the branches are not
very good like other branches.

3.

Opportunities

65

An opportunity is an external component lies in outside the organization. They would be

beneficial for the company. An opportunity is any chance to follow a new or revised
strategy or business, which would be of benefit to the UBL.

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.

Reconstruction of Afghanistan is a golden opportunity where the bank can

effectively participate.

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.

Outsourcing of promotional companies or use of available excellent promotional

facilities.

Entering new market segments.

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

Bringing new technology.

Example: by Bringing new technology and modern business processes, will bring
the change and will increase their profitability

4.

Threats
66

Threats are also external factors in the environment, which are not in the favor of
company, which can seriously hamper the companys ability to serve its customers.

Large and increasing competition.

Example: An Increase in competition due to increasing number of foreign and
domestic private banks offering highly specialized and attractive services.

Growing global technological advancements and adaptation of modern style of

management in banking sectors.

Extensive promotion campaigns run by competitors.

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.

67

8. Suggestions & Recommendations

Recommendations
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. 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.
The following are the suggestions that I have recommend for the united bank limited.

a) General
The behavior with the customers should be improved.
There is a great need of proper training of employees. Because when ever they were
asked about the latest banking the answer was sorry we dont know.
Like the other reputed commercial banks UBL should recruited some officers
especially from the fresh MBAs and M.Com students. Doing so, the more talented
persons would enter in the management and they will try to make the UBL compatible
with the other banks.

68

 Try to establish effective communication between top-level management and

executive.
Also do marketing through internet.
This branch is not doing many functions to open the L/C and to deal in export and
import facilities. So bank should hire export staff for such type of activities and start
them in the branch.
The bank must have to apply the marketing strategies to attract the customers which
are depositors, like other banks are doing such as City Bank and in the Pakistan.

b) Human Resource Department

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.

1. Development of Managerial Leadership:

In service 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.

2. Political interference:
The political intervention in the bank needs to be stopped so that the top hierarchy as
well as the personnel placed at other important levels of the institution is not changed
Just on political grounds and the on going developmental work is not obstructed. 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.

69

3. 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 who do not found
up to the required criteria may be given GHS etc.

4. Management Changes on Merit:

In UBL, though very 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.

5. 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.

6. 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

70

trainings to cope with the new changes that may become threats for the interest of the
bank.

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

8. 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.

9. Training with Clear Objectives:

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

10. 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.

11. 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 programs such as, marketing excellence,
courses on corporate culture and others. It works as profit maximization devise. In my
opinion the above two programs marketing excellence and corporate culture, added
with the best counter service and outdoor informal relationship with the potential

71

customers by the line managers will save the sum of money spent on various media of
advertisement.

12. 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 needs to be provided the
deserved respect, quality and in time service and to be politely dealt with.
13. 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.

c) 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;
i.

Financial condition

ii.

Cash generation

iii.

Ability to pay back

iv.

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.

72

d) Poor Management
A large number of industrial units and projects become sick because of poor management.
When a business becomes sick or fails it is unable to return the loans, it has taken, and as a
result such loans become bad debts.
To avoid this, it is the responsibility of UBL, to ensure that the company to which loan is
sanctioned enjoys good management skills and reputation. This can only be confirmed, if the
bank assesses the management of the borrower party by taking care of

e)

i.

Length and type of experience

ii.

Qualification and integrity

iii.

Reputation of managerial skills and style of management being used

iv.

SWOT analysis

v.

Financial procedures and documentation followed by employees

vi.

Span of authority and responsibility

vii.

Decision making skills of employees

viii.

Risk management of employees

Proper Documentation

Loans become irrecoverable through court of law in case of default when the bank fails to prove
their claims against the delinquent borrower. If documents are obtained properly as per terms of
the loan it is not difficult for the counsel of the bank to get decree against the defaulter. For
proper and valid documentation the following aspects must be kept in mind.
i.

The bank should confirm that standard loan documentation is in place for each credit
facility prior to disbursement. If the documents required are different from the
banks standard approved format, arrangement for vetting of the legal counsel.

ii.

Bank should ensure that the documentation are correct, complete and correspond
with the approved facilities. Also to ensure that blank spaces are filled, documents
are dated, signed and stamped, the signer is authorized to execute such documents
and signatures are verified.

73

iii.

Keep track of expiry of borrowing documents, insurance policies etc and follow up
for regulation of any approved documentation deferrals.

iv.

Maintain documentation

checklist,

updating

it

properly each

time

new

documentation received.
v.
vi.

Maintaining computerized record of documentation.

Division of documentation on the basis of sector, to which loan is given.

f) Securities
i.

Physical verification of the property offered as a security is must rather to rely on the
documents. Investigation should also be conducted if the property is of ancestral
nature or joint property.

ii.

Maintain in safe custody all collateral i.e. shares, govt. securities, property title
deeds, mortgage documents etc.

iii.

Bank must ensure receipt of periodical statements of stock and receivables from
customers, as per frequency specified in the credit approval.

iv.

Bank should also do the periodic physical checking and evaluation of pledged
inventories as per terms of the approvals, i.e. using applicable margins, such that the
drawing power adequately covers out standings amount at all times.

v.

Bank officials must ensure that the goods hypothecated or pledged are covered
through a valid insurance policy with appropriate risk coverage, adequately covering
the banks amount.

vi.

Concerned bank staff should ensure compliance with the institutional credit policies
and procedures as lay down in the policy book or credit manual and advised from
time to time by the credit committee or top management.

vii.

Ensure compliance with local regulatory requirements.

viii.

Confirm timely submission of correct information in the prescribed format as may

be required by the central bank.

74

INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2012

Mark-up / return / interest earned

Mark-up / return / interest expense
Net mark-up / interest income
Provision against loans and advances - net
Provision against lendings to financial institutions net
Provision for 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
Income from dealing in foreign currencies
Gain on sale of securities - net
Unrealized gain / (loss) on revaluation of investments classified as
held for trading
Other income
Total non mark-up / interest income
Non mark-up / interest expenses
Administrative expenses
Other provisions - net
Workers' Welfare Fund
Other charges
Total non mark-up / interest expenses
Profit before taxation
Taxation - Current
- Prior years
- Deferred

2012
7 3,507,415
3 4,947,698
3 8,559,717

2011
7 0,450,897
3 1,025,869
3 9,425,028

3, 245,268
1 68,492
4 38,149
2 84,991
4, 136,900
3 4,422,817

6, 194,973
3 45,858
4 10,085
3 40,416
7, 291,332
3 2,133,696

8, 162,535
2, 664,242
1, 862,585
4 64,386

6, 949,191
7 86,496
2, 078,260
5 18,710

2 ,236
3, 975,234
1 7,131,218
5 1,554,035

(43,750)
2, 429,346
1 2,718,253
4 4,851,949

Profit after taxation

2 3,528,112 1 9,784,894
3 61,928
2 26,204
5 31,106
5 13,121
1 03,962
1 04,939
2 4,525,108 2 0,629,158
2 7,028,927 2 4,222,791
8, 947,398
8, 946,039
4 97,000
6 79,290
(422,199)
(902,201)
9, 022,199
8, 723,128
18,006,728
1 5,499,663

Earnings per share - basic and diluted

----------- (Rupees) ----------1 5.71

12.66

75