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organization to ensure that it can fulfil all the tasks required to achieve its objectives.
The management has two types:
1. Centralization
2. Decentralization
Centralization Management
Centralization Management tends to concentrate decision making at the top organization.
Decentralization Management
Decentralization Management disperse decision making and authority throughout and further down
the organization hierarchy.
Centralization/ Decentralization
UBL is a centralization organization.
Formalization
One of the never concept in the organizational design in the team base structure which is made up of
works-groups or teams that performs the organization’s work. UBL has high departmentalization and
more formalization.
Work Specialization
Work Specialization is the degree to which the work necessary to achieve organizational goals is
fragmented into various jobs. These jobs are performed parallel to each other and their combined
result is counted as the organizational goals. Another term for this is division of labor. UBL is
emphasizing on work specialization and job specification.
INTERNSHIP REPORT
United Bank Limited (UBL)
Specialization: Finance
Submitted To: Mam Sobia
Department of Business Science
Internship Report
On
UBL
Anum Waheed
Roll No. 091631004
Session: 2016-2020
Almighty Allah
&
I humbly dedicate my report to my report to Allah Almighty, Who knows All and
have the Knowledge of Unseen, Who made this possible. I would like to dedicate
this report to my parents and my teachers who guided me in the right direction as a
light tower.
Acknowledgement
I got the opportunity to work in the United Bank Limited paki-thathi Branch
with all the supportive and coordinating staff. I would like to give my deepest
thanks to Sir Muhammad Aslam Gondal Branch Manager, who gave me the
support needed for my internship. I also like to thanks Sir Sajjad, Manager
Operations, who taught me most of the work experience. I also pay my deepest
thanks to Madam Asia , who helped me in the preparation of my report.
Executive Summary
United Bank Limited is one of the largest bank privatized by the Government of
Pakistan. It has over 1300 branches across Pakistan and overseas. The bank is
growing in the previous years as its total assets are over 1.5 trillion in Pakistani
Rupees.
I worked for six weeks in the Paki-Thathi branch and this report includes my
learning and experience in the branch. Topics covered in this report are: history of
the bank, its values, organizational structure, departments and their working,
products and services of the bank.
In the end of report critical analysis of the bank, its SWOT analysis and then the
conclusion is given. Recommendations are also made in the end of report.
Table of Contents
CHAPTER#1 INTRODUCTION
1.10 Product
1.11 Price
1.12 Place
1.13 Promotion
1.17 Strenght
1.18 Weekness
1.19 Opportunities
1.20 Threats
1
CHAPTER#6 TRAINING PROGRAMME
1.23 Problem
1.24 Recommendation
1.25 Conclusion
1.26 Reference & Resources
2
United Bank Limited
CHAPTER#1 INTRODUCTION
Overview
Introduction:
UBL is a private commercial bank and its head office is located in I.I. Chundrigar Road,
Karachi. Bank has over 1375 branches in Pakistan and 19 overseas branches. According to 2016
financial statements, it has total assets of over Rs. 1.5 trillion. It has total customers over 4
million.
History:
UBL established its first branch in Karachi on 7th November, 1959. It was established by
Agha Hasan Abedi. In 1960, approximately after six months it was founded, new branches were
established in Dacca, Lahore, Lyallpur, Chittagong and Narayanganj. In 1963, it opened its first
branch internationally which was on William street in London, and became the first Pakistani
bank to open an international branch. It was the first bank which introduced computer system in
the banking industry, in 1967. Till 1977, UBL has opened its international branches in Abu
Dhabi, Kingdom of Bahrain, Qatar, Yemen and New York City.
In 2002, UBL was privatized by the Government of Pakistan. Majority of its shares were
brought by H E Sheikh Nahayan Mubarak Al Nahayan, head of Abu Dhabi Group and Sir Anwar
3
Pervez, head of Bestway Group. In 2002, National Bank and UBL merged their
operations in UK to form United National Bank Limited. After privatization, bank is
continuously working towards progress and achieving new heights; it has launched Premium
Debit Card with collaboration of MasterCard, in Pakistan and introduced Go-Green program in
which SMS alerts are sent to the customer on every transaction and statement in mailed. UBL
has been awarded the best bank of 2016 in the Pakistan Banking Awards.
4
Vision, Mission and Values of UBL
Vision
To be a world class bank dedicated to excellence, and to surpass the highest expectations of our
customers and all other stakeholders
Mission
Customer first
Honesty of purpose
Teamwork
Excellence
Meritocracy
Objectives:
Make best efforts to win the trust and confidence of its customers.
Boost the financial sector all over the world particularly in Pakistan.
6
CHAPTER#2 MANAGEMENT SYSTEM
Organization Structure
7
This is the organizational structure of the bank
Pressident/CEO
Board of Directors
Regional Managers
Area Managers
Branch Managers
Staff
8
Head Office:
Board of Directors :
9
Registered Office:
Number of Employees:
Exact number of employees is not known but over 15,000 workers are employed in the
bank in 2016. In 2015, 14,623 employees were working in the bank
UBL has a centralized organizational structure, in which every branch has to report to the
area manager which then report to the regional manager. The regional manager then transfers the
report on the monthly progress to the main head office. All the orders, policies and procedures
are followed by the branches which are developed in the head office by considering the
prudential regulations of State Bank of Pakistan and banks own polices.
10
Introduction of Departments:
Commercial banking group is present in almost every branch of the bank. This
group deals with the needs and requirements of medium and small businesses. Usually
needs of those businesses are much smaller than the large corporate clients. Specified
terms and conditions are applied for every SME which are according to the bank’s
policies. Some of the things which are put under consideration are business nature, its
network, its growth in the coming years and high profit turnovers.
This department deals with the credit or advancing facilities provided by the bank.
It keeps the record of all the loan documents, necessary securities and documents needed
for the issuance of loan, fulfillment of all the legal aspects, managing the credit policies
and keeping the loans less than the 60% of total net worth (or customer deposits),
management and monitoring of credit portfolio, recoveries of mark ups or interests etc.
11
Consumer banking group:
Consumer banking is done in every branch of the bank. It specifically deals with
the individual customer services which includes both making deposits and personal loans.
Different products are provided or offered to the customer, each of the products is
designed according to the target market’s needs. Main products which are offered to the
customers are credit card, debit card, deposit accounts, home loans, car loans, business
loan for an individual etc. Products are renewed and developed according to the
customer’s needs and bank’s policies. Workforce is regularly trained and kept up-to-date
because they are in direct contact with the customers.
This group was established in 2002, and UBL was the first bank in Pakistan
which provided investment banking products and services. This group consists of 19
members which are highly skilled. It provides services in debt and capital markets i.e.
TFC’s investments completely by the bank or partially, project and structured finance i.e.
development of risk assessment, equity and advisory i.e. buying and selling of equity or
assets.
This group deals with the foreign exchange in different currencies on behalf of its
customers, manages the balance sheet and liquidity requirements of the bank, deals with
derivatives like forward rate agreements, manages the share capital of the bank etc. The
human resource of the group is highly qualified and manages the crucial capital and
money aspects of the bank.
12
International division:
This department deals with the management of international branches of UBL. All
the operations related to overseas branches are handled by this department which includes
global credit risk management and international transactions. Every product is designed
according to the demands of international clients and managed by this division.
This division manages the financing activities of the bank for the financial
institutes including both banking and non-banking institutes, i.e. financial needs of local
or foreign banks, insurance companies, DFI’s etc. This division also manages the
financial institutes risk management unit and gives advisory services to the clients for
different management problems.
This group deals with the operations of Islamic Banking Business and develops
Islamic banking products and services with Shariah Advisors and makes policies and
procedures. It is a separate division in the bank which manages its operations, services
and products and report to the bank. The workforce of Islamic banking is trained
regularly. Murabaha, diminishing musharaka etc. are the services and related products are
provided by them.
This department is responsible for the recruitment, selection and hiring of the
workforce. Eligibility criteria, selection process, job specifications and training courses
etc are developed by this department. For selection and hiring purposes different tools
and techniques are introduced, like introduction of interview technique based on behavior
of candidate.
13
Finance division:
This division manages the book keeping and financial statements preparation. It
develops polices for the allocation of funds in the bank for its operations like financing
and projects budget analysis. It analyze the market and competitors to improve its polices
for better working.
UBL has internal software which is called CREAMS (credit risk environment’s
administration and management system) which collects and updates date into the system
which is required for other purposes like valuation of assets and making reports etc. The
software is supported by Oracle software applications, which includes Oracle E-Business
Suite Human Resource Management system, Oracle Payroll, Oracle General Ledger and
Oracle Fixed Assets Management System. These applications have increased the
efficiency of the banking operations and reduced the time taken to done those operations
by 10,000 man hours with the reduction in paper work.
Audit department:
Board Audit Committee is responsible for the auditing of every branch of the
bank. The internal auditing team visits every branch according to its scheduled routine or
sometimes pays surprising visits. They check the operations of the branch and its overall
environment. When any deviation from any bank policy is noted by the audit team then it
is reported to the Head Office, after which recommendations are made to the branch.
These audits are held to improve and control the environment and operations of the
branch and for the proper following of the policies of the bank.
14
CHAPTER#3 MARKETING MIX
Promotion:
The marketing communication strategies and techniques all fall under thepromotion heading. These
may include advertising, sales promotions, special offers and public relations. Whatever the channel
used, it is necessary for it to be suitable for the product, the price and the end user it is being marketed
to. It is important to differentiate between marketing and promotion. Promotion is just the
communication aspect of the entire marketing function
15
Place:
Place or placement has to do with how the product will be provided to the customer. Distribution is a
key element of placement. The placement strategy will help assess what channel is the most suited to a
product. How a product is accessed by the end user also needs to compliment the rest of the product
strategy.
Price:
the actual amount the end user is expected to pay for a product. How a product is priced will directly
affect how it sells. This is linked to what the perceived value of the product is to the customer rather
than an objective costing of the product on offer. If a product is priced higher or lower than its
perceived value, then it will not sell. This is why it is imperative to understand how a customer sees
what you are selling. If there is a positive customer value, than a product may be successfully priced
higher than its objective monetary value. Conversely, if a product has little value in the eyes of the
consumer, then it may need to be underpriced to sell. Price may also be affected by distribution plans,
value chain costs and markups and how competitors price a rival product.
UBL Mukammal Current Account is a current account for the individuals, traders,
businessman and other commercial entities. It has no minimum balance restriction
16
and also provides some of the services free of any charges which are ATM debit
card but annual fee is charged, cheque book, account statement, go green SMS
alert, internet banking, country wide inter branch online transactions.
17
U
UBL UniZar Foreign Currency Current Account is a current account which is maintained in
foreign currency. Account can be opened in five currencies i.e US Dollar, Euro, UAE dirham,
British Pound, Saudi riyal. Minimum amount required for the opening of the account is same as in
UBL UniZar Foreign Currency Savings Account. No restrictions on number of transactions. Zakat
is exempted in this account.
UBL UniZar Foreign Currency Term Deposits Receipt is a term deposit account in
which customer is offered different terms/periods for the maturity of deposit.
Maturity periods are three months, six months and twelve months. The account is
offered in a range of foreign currencies. Upon maturity the deposit along with
profit is given back to the customer. Attractive return rates are provided and profit
is given on the booking month’s rate.
UBL Regular Term Deposit Receipts is a term deposit account which is provided
for a range of tenors starting from one month to six months and one year to ten
years. Rate of return is renewed for every month on the 1st and attractive rates
provided to the customers. Renewal option is also provided before encashment of
the TDR. Profit is given every month and TDR can be en-cashed before the time
of maturity.
18
BL Mahana Aamdani Savings Account is a savings account for the individually or jointly operated,
partnerships, Joint Stock Company, government institutes, self employed individuals, salaried and
retired individuals, housewives, trusts etc. the account can be opened with Rs. 100 and have no
minimum balance requirement. Profit is calculated on monthly average balance and credited to the
account.
UBL Mahana Aamdani Term Deposit is a specially designed term deposit account
for the customers who are dependent on the monthly fixed salary or income.
Minimum investment required for this account is Rs. 25,000 and no upper balance
amount is fixed for the account. Profit is paid monthly, renewal and encashment
before maturity options are available. Tenures given for this account are three
months and six months, one year, three years and five years.
UBL Basic Banking Account is a current account which is suitable for students,
housewives and pensioners. This account has no minimum balance limit and is
opened with Rs. 1,000. Limit for deposits and withdrawals is applied on this
account which is two for each, any transaction above the limit will be charge with
Rs. 50 each. Unlimited ATM withdrawals from UBL ATMs. Zakat is exempted
from this account.
UBL First Minor Savings Account is basically opened for the child aged between
one day and 18 years. This account can be opened with minimum balance of Rs.
100. Profit is calculated on the monthly balance. UBL First Pocket-Money Card
is issued which is used to withdraw from the profits generated on the principal
amount. A debit ATM card can also be issued on the principle amount. Check
book is issued on the names of the child and the parents or guardian jointly.
Consumer Loans:
UBL offers a variety of loans for different purposes like education, marriage, car,
house etc. Some of the products are described below:
19
U
BL CashPlus, My Personal Loan is a need based product with non-end use means
it can be used for any personal purpose which is up to the customer. Loan can be
issued up to Rs. 2 million, which can be returned on flexible repayment terms.
Rates are attractive and no collateral requirements are needed. Loan is issued to
the person who has a minimum net income of Rs. 25,000, age between 21 to 60
years and for the period of one to five years. Salaried individuals whose salaries
are being credited in UBL are offered this loan.
UBL Address Home Loan Facility is a financing product for the construction or
buying of the new home. This product is available in Karachi, Lahore, Islamabad,
Rawalpindi and Faisalabad. A minimum of Rs. 1,000,000 loan is issued to the
individual who are resident of Pakistan, have minimum monthly income of Rs.
50,000, age between 23 to 65 years. Any salaried individual or self employed
businessman can apply. Rates charged are fixed by the bank; rates fluctuate due to
KIBOR (Karachi Inter-Bank Offered Rate) changing the rates. Applicable rates
are 3.5% + KIBOR for salaried persons and 4.5% + KIBOR for self employed
professional or businessman. The loan is paid back in installments for the tenor
between 3 to 20 years.
UBL Drive is a car financing product which is available for all new and used cars
both local and imported. Loan issuance maximum limit is Rs. 5 Million.
Repayment is done between one to five years. Salaried person who has a
permanent job, salary of Rs. 35,000 per month and age between 21 to 60 years is
eligible for the loan.
Card Products:
Following are some of the card products provide by UBL.
20
UBL Wiz is the first prepaid debit card of Pakistan. It can be used locally and
internationally where Visa and MasterCard are accepted. It can be used for online
shopping and shopping at outlets and withdrawal of cash at ATMs. Minimum
balance per card is Rs. 200,000. Minimum online shopping is for Rs. 100,000 per
day and ATM withdrawal of Rs. 40,000 per day. Card can be reloaded through
UBL ATM, UBL Omni Dukan, UBL Netbanking and through contact center if
saving or current account is present in UBL.
UBL Visa Mega Wallet Debit Card is the product issued to the existing or new
account holders, any customer with a UBL Premium Debit MasterCard can also
apply for UBL Visa Mega Wallet Debit Card. It can be used in Pakistan and all
around the world where Visa and MasterCard are accepted. Cash withdrawal from
ATM is Rs. 40,000 per day and shopping limit is of Rs. 100,000 per day.
UBL Credit Card is accepted worldwide which allows instant cash withdrawal.
Free travel accident insurance is also provided whenever someone purchases
airline, train or bus ticket, in case of any mishap occurred during the travel. The
amounts covered in case of any accident are Rs. 3.5 Million for classic card and
Rs.7 Million for Gold Card. E-statements and SMS alerts are send to the
customer.
UBL Premium Debit MasterCard is also a worldwide recognized card with the
acceptance of MasterCard. Highest transaction limit for this card is per day Rs.
400,000 per day, which includes ATM withdrawal of Rs. 200,000 per day and
point of sale (POS) transactions or internet shopping of Rs. 200,000 per day.
21
Omni – Branchless Banking:
UBL Omni is a product which is available for every citizen of Pakistan in the
reach of UBL Omni Dukan. Dukan which are selected by the bank for this
product are present in more than 900 cities of Pakistan. This product has
overcome the limitation of banking services and made them available to the rural
and urban areas. Any person with CNIC and a mobile number can open up this
account. The mobile number of the customer becomes his bank account number.
Omni account can also be opened with Omni mobile app which can be
downloaded by the customer. UBL Omni account provides a variety of services
which includes cash deposit and withdrawal, utility bills payment, receiving or
sending of money, postpaid mobile bill payment and many more. An ATM card is
also issued to the Omni account holders which can be used anywhere in Pakistan.
22
UBL Netbanking:
UBL Netbanking is an internet banking portal which allows its account holders to
manage their bank accounts from anywhere in the world. This service is available
for 24/7 for all the clients. Bank holders can view their deposit, credit card and
loan accounts. Online shopping, bills payment both utility and phone, funds
transfer, investment in UBL funds etc. can be done with UBL Netbanking. This
service can also be availed on the smart phones by downloading the Netbanking
app.
UBL Online:
UBL Online is an electronic Banking system which allows its customer to access
and see the information of their bank account anytime and anywhere from the
world. It provides statements of account, account balances and transaction history
of the bank account.
UBL Go-Green:
UBL Go-Green is an initiative step taken by the bank to protect its surrounding
environment specially trees. The purpose of this service is to use less paper and save
trees. Instead of paper, the information can be received on the mobile phone or
computers. It provides:
23
UBL Go-Green E-Statement allows the customers to receive their bank account
statement anywhere in the world. The statements are sent to the e-mail address
provided by them on daily, weekly, monthly, quarterly and semi annually basis.
UBL Go-Green SMS Alerts are sent to the customer whenever cash deposit,
cheque deposit/withdrawal, cash transfer, ATM withdrawal and funds transfer and
POS transactions are made. The service is provided on the registered mobile
number given by the customer.
UBL Ameen:
UBL Ameen offers Islamic banking services and products which are designed
according to the Shariah Standards for the demands and needs of the customers. It
provides Retail Banking, corporate banking and UBL Ameen Drive Car Financing
products and other services.
Ameen Asaan Current Account can be opened with Rs. 100. All the funds receive
in this account are on the basis of Qardh (borrowed amount) and will be only used
in Shariah compliant businesses. No minimum or maximum limit is applied on
the account.
24
Ameen Asaan Saving Account is an account which can be opened with Rs. 100.
Funds received in this account are treated on the basis of Mudarabah and used in
Shariah compliant business. No minimum balance is required. Profit is calculated
on the monthly average balance and paid semiannually.
Ameen Minor Saving Account is designed for the children under the age of 18
years. Funds are accepted on the basis of Mudarabah and used in Shariah
compliant businesses. Profit is paid monthly and calculated on the basis of daily
average balance. No limit on number of transactions and minimum balance.
25
Other Retail Product:
Some of the other products include insurance products, payroll disbursement product etc.
UBL Pay Partner is an electronically managed payroll disbursement system which is available for
the organization having a limit of 50 numbers of employees minimum. The salary of employees
can be disbursed into UBL account or accounts at other banks.
Agricultural products:
UBL offers agriculture based financed products, which includes financing for the
production of major or minor crops, development of land, purchase of equipment and
machinery and livestock. There are two basic categories of agriculture loans, farm loans
and non-farm loans.
Farm Loans includes production loans and development loans.
Production loan is available for major and minor crops in Pakistan. It is issued to
the farmers to get agricultural inputs like seeds, fertilizer, sprays etc, minimum
amount for the loan is Rs. 30,000 and can be changed according to the farmer’s
needs.
Development loan are financed for land improvement, tube wells, cold storage
etc. Minimum amount for loan is Rs. 30,000 and can be increased.
26
It is also issued for the tractors, mini trucks etc. which is issued on Rs. 100,000 as
minimum limit and Rs. 1,500,000 as maximum limit.
Non Farm Loans includes livestock financing and fisheries financing. In livestock
financing, loan is issued for dairy farming, meat farming, construction of sheds
etc. Minimum amount for loan is Rs. 50,000 and maximum limit according to the
need.
27
Experience as an Internee
I worked as an internee in the UBL branch, Pakki-Thathi branch code 0504. I learned about the
basics of the working operations and processes of the bank. The branch has following working
departments.
Cash Department
Clearing Department
Operations Department
Finance Department
Cash Department:
It handles the cash in the branch, the outflow and inflow of the cash through different
transactions in the bank which mostly includes cash receiving and cash payment procedures.
Cash can be received through
Deposit slips
Bills, cheques
Cash payments are made against payment slips, cheques, pay-order and demand draft.
In both of the cases, while paying or receiving the cash, the instruments are checked and verified
by the officer. Instruments are also checked if they are past time or post time, in neither of the
cases no payment is made. Signature is also verified.
28
One of the major instrument through which cash is deposited into the account is deposit slip. The
customer fills the slip which has following details.
Account number
CNIC number
Contact number
Clearing is a process of transfer of funds from one branch of a bank to the other branch of
another bank, which do not involve cash into the transfer process but it is done through the
services of NIFT (National Institutional Facilitation Technologies) which is provided by the
State Bank of Pakistan. A clearing house is present in the SBP which handles all the matters
related to it. Clearing instruments are cheques, demand draft, pay order, traveler’s cheque.
Clearing is made in two ways
Inward clearing in which bank’s cheques are received by the bank which were given to the other
bank. In other words cheques are drawn on the bank. As the cheques are drawn on the bank, the
clearing of those cheques decreases the deposits in the bank. For the clearing of the cheque,
customer account s verified, checked if the instrument is not tempered with and all the
requirements are full filled then the cheque is cleared i.e. funds are transferred to the other bank
through online transfer. If the cheque has to be returned then the reason for return is mentioned
in the clearing slip.
29
Outward clearing is the process in which other bank’s cheques are deposited to the bank. In this
case, cheque is drawn by the bank on the other bank. In case of outward clearing, deposits of the
bank are increased. Outward clearing is of two types
Local cheque clearing is the clearing of the cheque drawn on other banks located in the
same geographic area.
Intercity cheque clearing is the clearing of the cheque drawn on a bank outside the local
geographical area.
In this process of outward clearing, an employee of NIFT comes to the bank and collects all the
cheques and other instruments along with clearing slip is also attached. The cheques applied in
the outward clearing process are stamped with three types of stamps.
Clearing stamp
Other items necessary for clearing are, date, signature verification and amount in both igures and
words should be correct. When the process of outward clearing is done then the transactions are
made through online transfer from the bank account by NIFT. When clearing is confirmed by the
NIFT then the accounts are debited or credited in the branch.
Cheques are returned on different reasons which are frozen account, limited balance etc.
ATM management department mainly focuses on the functioning of the ATM machine, cash
requirements and security. ATM manager checks the cash outflow from the machine and refill
the machine when the cash falls than a specified limit. Every day before closing, the cash balance
in the ATM is checked and refilled, so that the machine will work overnight. Filling of the ATM
machine is done by getting cash from the bank vault through debit voucher which is for
30
the bank use only. The debit voucher for the issuance of cash for ATM from vault is signed by
two authorized persons so that any misdealing will be avoided. Date, amount and signature of the
authorized persons are required.
Customer service department handles the customer and tries to solve their problems and
help them. This department also performs the functions of account opening. The account opening
procedure is done in following steps:
First the account opening form is filled which should be written neat and clean, no over
writing or cutting should be made. The information filled should be easily readable.
The customer is offered with different products and according to his needs and
requirements he selects the product which is suitable for him. After the selection of the product
the account opening form is filled.
First the title of account, date, currency of the account is written. Whether the account
will be single or joint account is decided according to the customer’s needs.
Now the customer’s personal information is filled, his name, his father’s name, gender,
marital status, date of birth, occupation and nationality is noted. Any proof of its residence is
needed.
The documents needed are CNIC, and signatures of the customer on the signature specimen card
provided by the bank. A deposit slip is also filled for the initial deposit in the account. In case of
shaky signatures or illiterate person, customer’s photographs are also required.
A key or secrete word is also needed, which is a minimum six character word. The secrete word is
preferred to be mother’s name of the customer. This word adds a security to the account because
very few people know the name of the mother.
31
Other documents are required for other specified products, like for a businessman to open
an account his income statement ns other documents are required and for a pensioner a document
called life certificate is required with other documents.
Next of kin is also mentioned in the account opening form so that is case of any mishap
the account information is shared with the next of kin person.
SMS alerts, debit card, cheque book, credit card, locker, e statement and other services
are filled in the account opening form.
Then a part of the account opening form is specified for the bank. There is a section
called Know Your Customer. Questions are asked from the customer, his/her source of funds etc.
and then the verified data is transferred into the system. Account number is allotted to the
applicant’s account and account is opened.
Operations Department:
Operations department handles all of the operations of the branch. Every major
transaction and important processes are handled by this department. Provide best telling services
to the customers. It makes sure that the branch is working according to bank’s policies and
procedures. It manages customer service and tries to provide good quality service and service
without any mistakes or errors. Its handles customers complaints and solve them as a priority.
Finance Department:
Finance department is responsible for the overall management of the book keeping record
and accounting activities. It keeps record of daily transactions and manages funds for the daily
operations. Funds allocation is done by the finance department. The advances are made through
this department. All the process for the allotment of loan and till its verification is done by this
department. After the allotment of loan the repayments are also made sure by this department
and necessary measures are taken for the assurance of the payments like collateral is taken at the
time of issuance of an advance etc.
32
Critical Analysis of UBL
Consolidated Balance Sheet (For last three Years)
2016 2015 2014
Rupees in ‘000
ASSETS
Cash and balances with treasury banks 133,467,502 113,762,323 75,660,306
Balances with other banks 32,267,304 27,713,772 21,948,274
Lendings to financial institutions 35,484,586 31,304,861 23,435,222
Investments 838,262,274 747,598,627 519,602,007
Advances
Performing 529,818,148 477,649,098 455,078,880
Non-performing - net of provision 7,963,998 9,629,045 12,286,412
537,782,146 487,278,143 467,365,292
LIABILITIES
Bills payable 11,759,012 13,395,744 9,559,255
Borrowings 205,865,131 164,232,087 53,248,526
Deposits and other accounts 1,245,791,616 1,119,953,064 951,902,296
Subordinated loans
Liabilities against assets subject to finance
lease 3,558 4,873 429
Deferred tax liability - net 5,230,571 4,515,165 2,139,586
Other liabilities 29,363,148 28,486,831 28,098,410
Total Liabilities 1,498,013,036 1,330,587,764 1,044,948,502
REPRESENTED BY:
Share capital 12,241,798 12,241,798 12,241,798
Reserves 42,615,188 41,624,817 37,286,088
Unappropriated profit 68,939,008 59,955,027 52,507,655
Total equity attributable to the equity holders
of the bank 123,795,994 113,821,642 102,035,54
33
Profit and Loss Account (For last three years)
2016 2015 2014
Rupees ‘000
Mark-up / return / interest earned 101,755,044 97,574,003 85,760,646
Mark-up / return / interest expensed 42,933,935 39,715,160 38,846,868
Net mark-up / return / interest income 58,821,109 57,858,843 46,913,778
Attributable to:
Equity shareholders of the bank 27,782,758 27,009,626 23,647,704
Non-controlling interest 219,544 855,282 377,099
28,002,302 27,009,626 24,024,803
(Rupees)
Earnings per share - basic and diluted 22.70 21.36 19.32
34
Financial Analysis of the financial statements of UBL
Horizontal Analysis of Balance Sheet
Notes 2016 2015 2014
ASSETS
Cash and balances with treasury banks 1 +17.32% +50.36% -15.55%
Balances with other banks 2 +16.43% +26.27% -32.79%
Lendings to financial institutions +13.35% +33.85% -21.51%
Investments +12.13% +43.88% +13.24%
Advances
Performing 3 +10.92% +4.96% +12.38%
Non-performing - net of provision 3 -17.29% -21.63% +18.86%
+10.36% +4.26% +12.54%
LIABILITIES
Bills payable 5 -12.22% +40.13% -42.42%
Borrowings 6 +25.35% +208.43% +29.63%
Deposits and other accounts 7 +11.24% +17.65% +7.01%
Subordinated loans -100.00%
Liabilities against assets subject to finance
lease -26.99% +1035.90% -67.62%
Deferred tax liability - net 8 +15.84% +111.03% +53.36%
Other liabilities +3.08% +1.38% +21.67%
Total Liabilities +12.58 +27.34% +7.47%
REPRESENTED BY:
Share capital
Reserves +2.38% +11.64% -2.01%
Unappropriated profit +14.98% +14.18% +16.16%
Total equity attributable to the equity holders
of the bank +8.76% +11.55% +6.84%
35
Observations:
1. Cash and balances with treasury are increased by 50% in 2015 due to increase in the local
currency current accounts with the State Bank of Pakistan. While in 2016, it is also
increased due to increase in local currency currents with the State Bank of Pakistan and
with the National Bank of Pakistan. While in 2014, it was decreased due to decrease in
accounts with the SBP.
2. Balances with other banks in 2016, has increased though but the balances in current
account inside Pakistan has decreased while the balances in the current and deposit
account outside the Pakistan has increased. In 2015, the deposit accounts inside and
outside Pakistan increased. In 2014, balances with other banks decreased both inside and
outside Pakistan which caused a total decrease of 32 % in the balances.
3. In 2014, performing bills discounted and purchased decreased while the nonperforming
bills increased due to which nonperforming loans increased by 18%. In 2015, performing
loans increased and non performing loans decreased in the Pakistan which reduced the
provision on advances. In 2016, performing loans further increased due to increase in the
performing loans in the local currency.
4. In 2014, other assets increased due to increase in the markup accrued increased in both
local and foreign currency while in 2015, that change was very slight and a little higher
than 2014. In 2016, advance taxation was increased due to which other assets increased.
5. In 2016, bill payable outside Pakistan have decreased so this head in balance sheet
decreased by 12%. Bills payable outside Pakistan increased tremendously in 2015 while
in 2014, it decreased within Pakistan.
6. In 2014 borrowings increased in local currency within Pakistan mainly due to repurchase
agreement borrowings, in 2015 borrowings increased due to same reason. In 2016 again
because of repurchase agreement borrowings.
7. In 2015, deposits increased in fixed and savings customer deposits. In 2014, due to
increase in customers savings and current accounts. In 2016, due to increase in financial
institutes deposits.
8. In 2015 deferred tax liability increased due to increase in the tax loses recognized by the
subsidiary and surplus on revaluation of assets.
9. In 2016, non-controlling interest which is received from United National Bank Limited
(UBL UK) and UBL fund managers limited is decreased due to decrease in the profit of
the year 2016.
36
Horizontal Analysis of Profit and Loss Account
Notes 2016 2015 2014
Mark-up / return / interest earned 1 +4.28% +13.77% +13.28%
Mark-up / return / interest expensed 2 +8.10% +2.24% +7.31%
Net mark-up / return / interest income +1.66% +23.33% +18.74%
37
Observations:
1. In 2014, markup earned increased due to increase in on loans and advances to the
customer and call money lending to financial institutes. In 2015, interest earned on loans
and advances to customers. In 2016, interest on investment increased due to which
markup earned increased.
2. Markup expense increased in 2016 due to increase in securities sold under repurchase
agreements. In 2015, the expense increased due to increase in the expenses on deposits
and securities sold under repurchase agreements. In 2014, interest expense on deposits
increased.
3. Charges for the year of net provision for diminution in value of investments increased in 2014
due to which the provision also increased. In 2015 charges for the year again increased. In 2016,
same reason caused increase in the provision.
4. Net gain on sale of securities decreased in 2014 due to decrease in federal government
securities. While in 2015 federal securities increased and in 2016 they increased again.
5. In 2016 loss occurred due to decrease in Pakistan investment bonds, ordinary shares of
listed companies and term finance certificates. In 2015 it increased due to increase
Pakistan investment bonds and ordinary shares of listed companies. In 2014 it decreased
due to huge decrease in ordinary shares of listed companies.
6. In 2016, other income decreased due to decrease in income from dealing in derivatives
and net gain on trading liabilities. In 2015, gain on sale of non banking asset increased. In
2014 other income increased due to increase in charges recovered.
7. Other provision in 2014 decreased due to decrease in impairment loss on non-banking
assets acquired in satisfaction of claims. In 2015 it further decreased due to decrease in
provision against Ijarah assets and other provisions. In 2016, it increased due to increase
in net provision against other assets.
8. Other charges decreased in 2014 due to decrease in penalties imposed by the SBP. In
2015 it increased due to increase in penalties imposed by the SBP and other charges
decreased again due to the same reason as in 2014.
9. Profit after taxation increased but at a slower pace due to increase in deferred taxes in
2016. In 2015 overseas and domestic taxation also increased. While in 2014 taxation
increased in domestic region.
38
Vertical Analysis of Balance Sheet
2016 2015 2014
ASSETS
Cash and balances with treasury banks 8.03% 7.65% 6.40%
Balances with other banks 1.94% 1.86% 1.86%
Lendings to financial institutions 2.14% 2.11% 1.98%
Investments 50.44% 50.30% 43.94%
Advances
Performing 31.88% 32.14% 38.49%
Non-performing - net of provision 0.48% 0.65% 1.04%
32.36% 32.79% 39.53%
LIABILITIES
Bills payable 0.71% 0.90% 0.81%
Borrowings 12.39% 11.05% 4.5%
Deposits and other accounts 74.97% 75.36% 80.50%
Subordinated loans
Liabilities against assets subject to finance
lease 0.0002% 0.0003% 0.00004%
Deferred tax liability - net 0.32% 0.30% 0.18%
Other liabilities 1.77% 1.92% 2.38%
Total Liabilities 90.15% 89.53% 88.37%
REPRESENTED BY:
Share capital 0.74% 0.74% 0.74%
Reserves 2.56% 2.8% 3.15%
Unappropriated profit 4.15% 4.03% 4.44%
Total equity attributable to the equity holders
of the bank 7.45% 7.66% 8.63%
39
Observations:
In year 2014, investments in the assets made 43.49% of the total assets because of the increase in
investment in Federal securities. Cash in hand was decreased so it made 6.4% of the total assets.
Advances made 39.48% of the assets, in which non performing loans had a percentage of 1.04%.
Operating fixed asset is only 2.82% of total assets. On the liability side of the balance sheet,
deposits and other accounts made 80.50% of total liabilities. Borrowings made 4.5% in
liabilities.
In 2015, investments in the assets made 50.30% of the total assets because of the increase in
investment in Federal securities. Cash in hand was increased so it made 7.65% of the total assets.
Advances made 32.79% of the assets, in which non performing loans had a percentage of 0.65%.
Operating fixed asset is only 2.47% of total assets. On the liability side of the balance sheet,
deposits and other accounts made 70.36% of total liabilities. Borrowings made 11.05% in
liabilities, borrowings increased due to repurchase agreement borrowings.
In 2016, investment in the assets further increased to 50.44% due to increase in investment in
Federal securities. Cash in hand was increased so it made 8.03% of the total assets. Advances
made 32.36% of the assets, in which non performing loans had a percentage of 0.48%. Operating
fixed asset is only 2.36% of total assets. On the liability side of the balance sheet, deposits and
other accounts made 79.97% of total liabilities. Borrowings made 12.39% in liabilities,
borrowings increased due to repurchase agreement borrowings.
40
Vertical Analysis of Profit and Loss Account
41
Observations
In 2014, interest income earned by the bank is 80.06% and noninterest income is 19.94% of total
income, so the bank is generating more from the interest income. In the noninterest income, fee,
commission and brokerage income has a higher share than other sources of noninterest income
which is 12.41%. In the expenses, noninterest expenses made the 30.15% and interest expense
37.03% of the total expenses. Major portion of noninterest expenses is taken by the
administrative expenses which are 29.26%.While profit after taxation is 22.14%.
In 2015, interest income earned by the bank is 80.47% and noninterest income is 19.53% of total
income, so the bank is generating more from the interest income. In the noninterest income, fee,
commission and brokerage income has a higher share than other sources of noninterest income
which is 11.74%. In the expenses, noninterest expenses made the 28.77% and interest expense
35.65% of the total expenses. Major portion of noninterest expenses is taken by the
administrative expenses which are 27.84%.While profit after taxation is 22.12%.
In 2016, interest income earned by the bank is 80.19% and noninterest income is 19.81% of total
income, so the bank is generating more from the interest income. In the noninterest income, fee,
commission and brokerage income has a higher share than other sources of noninterest income
which is 11.33%. In the expenses, noninterest expenses made the 28.33% and interest expense
34.81% of the total expenses. Major portion of noninterest expenses is taken by the
administrative expenses which are 27.37%.While profit after taxation is 21.89%.
42
Financial Ratio Analysis:
Year 2014
Year 2015
Year 2016
Interpretation: UBL has high return on shareholder fund ratio which shows high growth in
future, but the ratio was decreased in 2016 due to increase in taxation in both foreign and
domestic regions.
Year 2014
Year 2015
Year 2016
43
= 28,002,302 / 1,661,742,260 = 0.0169 = 1.69%
Interpretation: Return on assets is low for UBL which indicates that the management is not
utilizing the all of its assets efficiently for the generation of net income.
44
5. Advances to Deposit Ratio (ADR) or Loan-To-Deposit Ratio (LTD)
Loans / Deposits
Year 2014
= 467,365,292 / 951,902,296 = 0.4909 = 49.09%
Year 2015
= 487,278,143 / 1,119,953,064 = 0.4351 = 43.51%
Year 2016
= 537,782,146 / 1,245,791,616 = 0.4317 = 43.17%
Interpretation: this ratio is decreasing in past three years because deposits are growing at a faster
rate than the loans, though loans are growing as well but a decrease in nonperforming loans is
made.
Year 2015
Year 2016
Interpretation: UBL had 39% cost on the revenue generated which has decreased in the past year,
means that the cost or expenses in total income are decreasing and bank is working efficiently to
reduce the cost.
45
7. Shareholder’s Equity Ratio
Year 2015
Year 2016
Interpretation: the shareholder’s to equity ratio is decreasing in the past year which means that if
the bank liquidate its assets then a total of 7.45% will be received by the shareholders in other
words they will receive only the 7.45% of the assets.
Year 2015
Year 2016
Interpretation: UBL has a low ratio for total asset turnover which means that only 6.12% of the
total assets are employed to generate income.
46
9. Asset Quality (NPL) Ratio
Year 2015
Year 2016
Interpretation: UBL’s NPL ratio is decreasing other the last three years which shows that
nonperforming loans are decreasing and more performing loans are generated by the bank, which
indicates efficiency in recovering loans.
47
SWOT Analysis of UBL
SWOT stands for strengths, weaknesses, opportunities and threats. SWOT analysis of any
organization shows the internal strengths and weaknesses, opportunities and threats of an
organization which makes it better to understand the current position and how it can achieve
better by making new and improved policies.
Strengths:
Every product of bank is designed by giving special importance to customers’ needs,
which makes them attractive to the customers.
New products are developed and existing products are improved regularly.
Highly trained and coordinating workforce is an essential part in bank’s progress.
Every person from any level o the society can use the products of the bank as they are
unique for every customer, like products for agriculture sector, salaried, businessman
person etc.
It has a wide branch network which spreads across the Pakistan and abroad.
Highly effective and efficient management information system which is supported by one
of the best software, Oracle.
It is the 2nd largest privatized bank of Pakistan, and it has been awarded with best bank of
Pakistan in 2016 Bank Awards of Pakistan.
Branchless banking, Omni is making banking services available in the rural areas of
Pakistan.
It is the 3rd largest bank according to the deposits, in Pakistan.
Good profitability ratios.
A very strong competitor in the market.
Effective and fast services proved both online and offline.
Highly coordinated and efficient internet banking system.
It is involved in both retail and corporate banking.
48
Weaknesses
Administrative expenses are 74% of the income before taxes.
Time consuming documentation processes and procedures.
Promotions are made on the yearly basis without considering the output and performance
levels.
Low number of workforce in a branch which is located in highly populated or active area.
No separate training center for the up to date training of the workforce.
Security system in most of the branches is not highly secure, i.e. bank robberies in
Karachi.
Opportunities
Growing opportunities in the real estate sector and other areas of the market, the bank
should try to grasp those opportunities by making investments in different sectors.
Expansion of network of branches in the world.
Enter into new market segments by developing new products like student loans.
Increase the product rage for the attraction of new customers.
Try to manage and reduce the administration expenses to increase profit.
Increase number of branches in highly populated areas to achieve more customers.
Threats
New banks are starting to operate in Pakistan may oppose as a threat to bank.
Lack of up to date training of workforce might cause the bank to lose its potential
customers.
Lower level of employment will cause a decrease in the customer base due to decrease in
the living standards and living income.
49
Conclusion
UBL is the bank showing high growth in the market. Since 1991 it is showing positive growth
and even in the worst economic conditions, the bank managed to continue its operations. UBL
profit has increased by 4% over the prior year. UBL Omni is growing at a fast rate through
42,000 agents in the whole Pakistan. Net provision against interest income has decreased by 58%
with respect to last year. Total assets grew up to 12% in accordance with the last year and
deposits grew up to 11%. 2016 was a good year for the bank and the bank managed to maintain
its position in the market. Efficient management team and high level of dedication to their work
has made the bank to achieve new heights. Bank has variety of products and services from which
every customer and potential customer can take advantage of and continues to give quality
products and services.
50
Recommendations
Overall performance of UBL is quite good and the bank is showing growth in the market and
continues to maintain its high quality status. Some of the recommendations are made for the
further improvement in the baking procedures.
51
References and sources
http://www.ubldirect.com/Corporate/index.aspx
https://propakistani.pk/2009/07/29/ubl-goes-live-with-oracle-applications-to-modernize-its-
banking-operations/
http://www.google.com.pk
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