MADIHA ZAFAR TASMIA TARIQ ANAM KAUSER IQRA ARSHAD FATIMA TAHIR MARYAM ZULFIQAR

MI09BBA005 MI09BBA029 MI09BBA048 MI09BBA059 MI09BBA021 MI09BBA025

 First of all we would like to say thanks to ALLAH Almighty, who gave us such abilities and courage to achieve our assigned task. we would like to thank MAM. RUBINA for her constant support and guidance .

INTRODUCTION
UBL opened up for business on November 7, 1959 with authorized capital of Rs.20 million and Paid-up capital of Rs.10 million and is today one of Pakistan's major banks in terms of deposits and advances with a huge domestic and international network. In its very first year, it mobilized deposits of Rs.70 million and earned a profit of Rs.O.7 million.

BALANCE SHEET AS ON DECEMBER YEAR 2009 & 2010

CURRENT ASSETS
TATAL FIXED ASSETS

2010

2009

ABSOLUTE CHANGE
97764865

PERCENTAGE CHANGE
58.84%

263904681

166139816

TOTAL LONG TERM LIABILITIES

181865849

167624532

(14241317)

-8.50%

TOTAL CAPITAL & RESERVES AND SURP

75134180

67318363

7815817

11.61%

 INTERPRETATION: The comparative balance sheet of the UNITED BANK LIMITED reveals that during 2010 there has been an increase in fixed assets of Rs 97764865 i.e. 58.84% while long term liabilities to outsiders have relatively increase by 14241317 i.e. 8.50% and equity share capital has increase by i.e. 7815817 i.e. 11.61%This fact depicts that the policy of the bank is to purchase fixed assets from the working capital.

BALANCE SHEET AS ON DECEMBER YEAR 2009 & 2010

CURRENT ASSETS
TATAL CURRENT ASSETS

2010

2009

ABSOLUTE CHANGE
43211199

PERCENTAGE CHANGE
38.320%

155974550

112763351

TOTAL CURRENT LIABILITIES

445588832

405479016

40109816

9.89%

Reserves

24101838

21167954

2933884

13.86%

Surplus on revaluation of assets

9006970

9123936

(116966)

-1.28%

 The current assets have increase by Rs. 43211199 i.e. 38.320% and cash has increase by 6105085 i.e. 9.92% and the current liabilities have increase by 40109816 i.e 9.89%. but increase in current assets is more than the increase in current liabilities therefore the bank working capital condition is satisfactory. This is an improvement in the short term liquidity position of the bank. Reserves have increase from 13.86% and surplus has decrease by -1.28% because it shows that the bank has reserves and surpluses for the payments of dividends to shareholders either in cash or by the issue of bonus shares.

INCOME STATEMENT FOR THE YEAR 2009 & 2010

PARTICULARS 2010
34666560

2009
33422190

ABSOLUTE CHANGE
1244370

PERCENTAGE CHANGE

Net mark up/Interest income

3.72%

Net mark up/return/interest income after provision total non mark up / Interest expenses Profit before taxation

26516302

20542975

5973327

29.08%

19719998

18911237

808761

4.28%

17688623

14392181

3296442

22.90%

 INTERPRETATION:
The comparative income statement given above reveals that there has been increase in the Net mark up interest earned and expenses decrease but decrease in expenses more than interest earned Total non mark up has been increase but this is a good part of dealing in foreign currency but increase in fee commission by 4.24% but other incomes has reduce this year e.g. dividend security etc. Profit before taxation of the bank has been increase in this year by22.90%. The over all condition of the bank is satisfactory but bank need to control the bad debts and other expenses.

BALANCE SHEET AS ON DECEMBER YEAR 2009 & 2010

CURRENT ASSETS
TATAL CURRENT ASSETS

2010

2009

2010 percentages
21.05%

2009 percentages
17.61%

155974550

112763351

TOTAL CURRENT LIABILITIES

445588832

405479016

64.56%

63.3%

TATAL FIXED ASSETS

263904681

166139816

36.38%

25.94%

TOTAL LONG TERM LIABILITIES

181865849

167624532

25.07%

27.12%

TOTAL CAPITAL & RESERVES AND SURP

75134180

67318363

10.35%

10.49%

 INTERPRETATION: Balance sheet of UBL show that UBL has relied more on outside funds in both years,in 2010 UBL has 10.49% and 2009 10.35% investment from shareholders. United Bank Limited has good financial planning because banks generally depend more upon outside funds. In 2010 UBL is suffering from inadequacy of working capital because the current liabilities are more than the current assests.In2009 UBL working capital is in a good position. In 2010 and immediate steps should be taken for raising working capital in 2010 or raise long-term loans to raise working capital position.

INCOME STATEMEN FOR THE YEAR 2009 & 2010

PARTICULA RS
Net mark up/Interest income Net mark up/return/inte rest income after provision total non mark up / Interest expenses Profit before taxation

2010
34666560

2009
33422190

2010 percentage
57.68%

2009 percentage 54.13%

26516302

20542975

44.12%

33.27%

19719998

18911237

32.81%

30.62%

17688623

14392181

29.43%

23.31%

 Net mark-up has increased in 2010 as compared to 2009 because mark-up expensed has decreased in 2010 as compared to 2009. Total non mark-up has increased in 2010 as compared to 2009 because provision against loan and advances, lending to financial institutions and bed debts written off directly decreased in 2010 as compared to 2009. Non Mark-up Expenses has decreased in 2010 as compared to 2009. This result increase in profit before taxation as compared to 2009. Profit before taxation has increased in 2010 as compared to 2009 because amount of taxation has decreased in 2010. Therefore earning per share in 2010 is higher as compared to 2009. The overall profitability has increased in 2010 because UBL has succeeded in controlling its expenses

Ratio Analysis Aanlysis of short-term financial position Liquidity Ratio Liquidity refer to the ability of a concern to meet its current obligation as and when these becomes dues. Current ratio Current ratio may be defined as the relationship between current assets and current liabilities. This ratio also know as working capital ratio.

Current ratio= current asset Current liabilities

Interpretation for short-term position of bank: In 2009 the current ratio of 0.27 mean that current asset are 0.27 of current liabilities and in 2010 the current ratio of 0.26 mean that current asset are 0.26 of current liabilities. In 2010 current ratio decease as compared to 2009.

 Quick or Acid Test or Liquid Ratio Quick ratio, also know as Acid Test or Liquid Ratio, is more rigorous test of liquidity than current ratio.
Quick/Liquid or Acid Ratio= Quick or Acid assets Current liabilities

Interpretation:

In 2009, 0.24 and in 2010, 0.21 show bank ability to pay its current liabilities in time. Liquid ratio decrease in 2010 as compared to 2009.

Aanlysis of Long-term financial position

Debt-Equity Ratio

Debt-Equity Ratio=outsider Funds Shareholders funds Interpretation: The Long-term solvency position of bank is not satisfactory. The debt-equity ratio of 8.6 reveals that outsider funds are 8.6 time of shareholder. Moreover in 2010 the ratio decrease up to 8.5.

 OVERALL PROFITABILITY RATIOS:

RETURN ON SHAREHOLDERS INVESTMENT OR NETWORT Return on shareholders investment = Net profit (after interest&tax) *100 shareholders fund Interpretation: The primary objective of business is to maximise its earning this ratio indicates the extent to which this primary objective of business is being achieved.

RETURN ON CAPITAL EMPLOYED:

1) Return on gross capital employed = Adjusted net profits Gross capital employed (2)Return on net capital employed = Adjusted net profits Net capital employed Interpretation:
In 2010 return on gross capital employed is 4.60% and in 2009 5.17% .In 2010 return on net capital employed is 6.32% and in 2009 2.73%

It is the test of the efficiency of the bank. A higher return on capital

employed will satisfy the owner that their money is profitably utilized. In 2010 the bank return on capital is higher than last year so there is chance of peoples to invest in this bank.

 DIRECTOR REPORT:

Net mark-up\interest income has increased in 2010 as compared to 2009 because mark-up\return\interest expensed has decreased in 2010 as compared to 2009. Total non mark-up/return/interest income has increased in 2010 as compared to 2010 because provision against loan and advances, lending to financial institutions and bed debts written off directly decreased in 2010 as compared to 2009. Non Mark-up\Interest income has increase in 2010 as compared to 2009. This result increase in profit before taxation as compared to 2009. Profit before taxation has increased in 2010 as compared to 2009 because amount of taxation has decreased in 2010. Therefore earning per share in 2010 is higher as compared to 2009.

Conclusion Through a difficult year, UBL has demonstrated a good performance. this has been possible through good management. While the bank remain conscious of costs, it continues to make selective investment and new products and new channel to maintain its reputation as a innovator. Although the economic condition remain challenging but UBL performance is satisfactory. UBL net profit after taxation has increased in 2010 as compared to 2009. The earning per share has also increased in 2010.Dividend payout ratio also increase42.4% to 54.8% in 2010.so, we are interested to make investment in UBL shares.

Questions ?