INTERNSHIP REPORT United Bank Limited

SUBMITTED BY: Mirza Waleed Ahmad 09022054-068 M.COM (Accounting)

UNIVERSITY OF GUJRAT
SEPTEMBER 23, 2010

INTERNSHIP REPORT United Bank limited

SESSION 2009 2011

Internship report submitted to the department of the administrative sciences in partial fulfillment Of the requirement for the degree of the master of commerce 23, September 2010

Reviewed and Supervised By:

Supervisors:

Name:

Muhammad Kaleem

Signature:

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 re-emerging indications as is evident from its financial statements. UBL on October 19, 2008 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 UBL. The purpose of this report is to study operations and analyze performance of UBL to see whether the bank is successful in its operational performance or not, and recommending possible solutions for problems. For meeting the purpose both secondary and primary data have been used. The whole report has been divided into five main sections as describe below: Section I is introduction to the report and briefly describes the scope, purpose, methodology and limitations faced during the preparation of the report. Section II is the review portion and contains five chapters. First chapter is introducing the organization, UBL which came in to being in 1959. Remaining four chapter are explaining operations and relevant broader but comprehensive set of information of the functional departments of the bank. An attempt has been made so that readers of this report should be able to gain sufficient knowledge of the processing and procedures of the operations carried out by these departments. However in the chapter pertaining to foreign exchange department main focus is a place on the payments regulations and procedures of letter of credits in the light of foreign exchange regulation Act, 1947.

Section III; the analysis part of the report and is comprising of two chapters. Chapter 5 is the critical analysis of the departments and its functions. SWOT analysis is an integral part of this chapter. As an internee I was deeply concerned about the performance level of the UBL and therefore tried to analyze the bank financial performance that is included in chapter 4, this chapter reveals that the bank is trying to regain its position in the present more dynamic and competitive environment. Major findings are included in this summary which is the outcome of these analyses. Sector IV is the recommendation part and is derived from the previous section. Major findings are stated in the later part of this summary. Three action plans are included in section V with the hope that if implemented properly will enhance the banks overall productivity and will also enable it to compete more efficiently and effectively. These plans are related to exploration of new opportunity present in the agriculture sector, effective management and recovery of advances and marketing activities respectively. During the study, findings extracted are listed below: Mark up expense of the bank has reduced and administrative expenses have shown increase. Non-performing advances have reduced; deposits show consistency. Due to lack of job rotation opportunity and lack of informal group existence, employees do not share each other workload. The recent downsizing hustle and bustle trends have affected banks efficiency due to lay-off survival syndrome. i. Presently about 1100 employees have been placed in surplus pools that are unaware of their future. ii. Motivation level of employees is not satisfactory which effects their own and as well as performance of the organization. iii. In proportion to number of accounts and functions performed sizes of branchs buildings are small. iv. Newly developed account opening form carries restricted space where only two applicants names can be incorporated.

2. Recommendations of the report are as under: i. ii. iii. Training for developing managerial leadership should be provided. Political interference in placements etc. should be discouraged. Exercise should be evolved to bring needed cultural and other management changes. iv. Recruitment policies should be changed, MBAs and other business related qualified individuals should be hired. v. vi. vii. viii. HRD should frequently conduct refresher courses. Computer training courses should be imparted. Staffs, who deal with credit, should be properly trained for their jobs. HRD should focus on designing new courses to build organizational image and goodwill. ix. x. xi. Use of cheap means for posting etc. should be curbed. Customer orientation culture should be developed among employees. For enhancing motivation level fair and clear career development policies should be implemented. xii. Relationship managers should be trained to correctly access credit related risks. xiii. Skills should be development of employees to assess management abilities of the borrowers of their business. xiv. Credit officers should be enabled to carry out proper and correct documentation. xv. Credit officers should be equipped with knowledge and skill to analyze, verify and maintain securities in handsome manner. xvi. Various administrative reforms should be made to resolve quickly default cases.

xvii.

Marketing department at Hub branches should be created.

xviii. All employees should participate in marketing operations of the bank. xix. xx. xxi. Marketing at Desk concepts should be practiced. Proper promotional campaign on media should be carried out. Marketing research and development department of the bank should carry out situational analysis and develop short medium and long-term plans.

PREFACE The field of banking has always been a source of inspiration for me during my entire academic career. To work in a bank, to acquaint with its working mechanism was always a point of interest for me and God gave me a golden opportunity to complete my internship at UBL, one of the leading bank in Pakistan and well known in world due to its appearance in the international markets. I had a general idea about the banking, but once I practically started the internship in banking field I observed much about banking, I realized the importance and significance of commercial banking for the development of economy. To adjust myself in such a large commercial organization was not an easy task, but by the grace of Almighty Allah aid my internship in a befitting manner and I learned allot about the overall banking arena. This expanded my vision about the banking sector, which in turn enabled me to make an appraisal of the economic situation of our country. This report is a thorough essence of my rigorous studies which I undergone through in a period of two months in a commercial bank. I have exclusively studied and observed the operations/ functioning of the bank and tried my best to abreast myself with all the dimensions of the banks. The purpose of this report is to evaluate the performance of UBL in diversified avenues and give concrete recommendation for further improvement. Although the bank is functioning satisfactory, but the path to ultimate success is still full of threats and hurdles. It was a great experience to work there and contribute handsomely in the process of appraising its pros and cons and feeling to be a significant part of the bank. I am thankful to all those who helped me in one-way or the other and guided me in the preparation and compilation of this report in a presentable fashion.

Dedication
I would like to dedicate this report to my most dear parents and respected teachers who guided us through our studying period and our still doing their best for us. To be here in this institution at this level, we are just because of our parents, especially their training, guidance, love, affection and motivation. We pray that we can serve our parents as best as we can.

Parents and teachers Blessings are Our Most Valuable Assets

Table of Contents Executive summary Preface Dedication

1. CHAPTER ONE: Introduction to Report
1.0Background of study

1 1 2 2 2 3 3 4 4 4 5 6 9 10 10 11 11 12 21 21 22 22 22 22

1.1 Purpose 1.2 Scope 1.3 Objective 1.4 Methodology

1.5 Organization 1.6 Summary

CHAPTER TWO: Introduction to Organization 2.1 Overall respective sector in Pakistan 2.2 Role of the UBL in the economy of Pakistan 2.3 Overall organization and functions or org in Pakistan 2.4 UBLs office in which you are working
Summary

CHAPTER THREE: Analysis of organization 3.1 Brief history of the UBL 3.1.1 Actual and prescribed functions 3.1.2 Relationship of head office to the branch offices 3.1.3 3.1.5 3.2.1 3.2.2 3.2.3 3.2.4 3.2.5 Number of departments
Current staff of branch Training of employees Work load (it is based on no. of hours worked) Salary structure Promotion system

Current staff of UBL

3.2.6 3.2.7 3.2.8 3.3.1 3.3.2 3.3.3

3.4 3.5

Incentives and motivation Responsibilities and duties

22 23 24 24 25 26 26 26 27 27 29 30 31 32 32 32 33 34 35 35 36 36 37 37 38 57 59 60 68 69

Critical analysis of the branch

Communication system Morale of staff Physical facilities Performance in terms of quality and Quantity Summary

CHAPTER FOUR: Specialization Area 4.1 4.2

4.3 4.4 Policies Strategies/ functions Successes Summary

CHAPTER FIVE: Major Analysis of the firm 5.1 SWOT analysis 5.1.1 5.1.2 5.1.3 5.1.4 5.2.1 5.2.2 5.2.3 5.2.4
Strengths of the firm Weaknesses Opportunities Threats

5.2 PEST analysis

Political and legal environment Economic trend Social cultural environment Technological factor

5.3 Ratio Analysis 5.4 5.5 6 Conclusion References

Porter model Summary

CHAPTER SIXTH: Recommendations

List of abbreviations

70