6.

OBJECTIVES OF STUDYING THE ORGANIZATION

UBL has been working energetically to meet the challenges to provide the
maximum facilities to its customer in the whole country. A measure of this understanding
is progressive measure such as expanding network of UBL branches. UBL has gained a
prestige & possess quite good history behind it being a leading bank in Pakistan. This
bank has been very good in terms of providing excellent services in Pakistan when need
arose. I am willing to get comprehensive update information about an organization.
These following information and studies have increased my skills to express business
principles and financial system. The objectives can be listed as below:-

 To get knowledge about various departments of UBL.

 To get knowledge about daily business activities of UBL.
 To understand the role played by a bank in the economy of a country.
 Practical study of accounting and financial system in UBL.
 To study administration procedures/matters of UBL.
 To enhance my practical skills.
 7. OVERVIEW OF THE ORGANIZATION

UBL has assets of over Rs. 300 billion and a solid track record of forty six years - in
addition to the convenience of over 1000 branches serving you throughout the country and
also at several overseas locations.

Date Established November 7, 1959

Chairman Shaikh Nahayan Mabarak Al Nahayan

Deputy Chairman Mohammed Anwar Pervez OBE

President & CEO Mr. Atif R. Bokhari

Branches 1112 Domestic, 17 Overseas Branches

Representative Offices Tehran

Subsidiary United Bank AG Zurich, Switzerland

United National Bank Limited, UK
(Joint venture with NBP)
UBL Fund Managers Limited

Associated Company Oman United Exchange Company, Muscat

Head Office State Life Insurance Corp. Building #1,

2
 I.I. Chundrigar Road, Karachi,
Pakistan

Name of major share holding in the bank

Name of Share Holders No. of Shares %of Share

His Highness Shaikh Nahayan 65241408 6.45
H.E. Dr. Mana’a Saeed 55778837 5.51
Bestway (Holdings) Limited 1289989257 12.75
Sir Mohammad Anwar pervez OBE 51597656 5.10
Bestway cement limited 77396483 7.65
Govt of Pakistan 199936901 19.76

Bank’s up-to-date information

DEC 08 DEC07 CHANGE

Branches all 1136 1095 +41
automated
Online branches 894 802 +92
ATMs 354 313 +41
Credit Rating AA+/ A-1+ AA+/ A-1+ Re-affirmed
(JCR-VIS)

3
 7.1 BRIEF HISTORY OF THE ORGANIZATION

UBL opened up for business on November 7, 1959 with authorized capital of Rs.20
million and Paid-up capital of Rs.10 million. In its very first year, it mobilized deposits of
Rs.70 million and earned a profit of Rs.O.7 million. It continued to grow rapidly and
soon became one of the largest banks in the country. The main reasons for its exemplary
growth were the introduction, in many instances for the first time in Pakistan, of
professional management, computers, economic and business research, latest managerial
practices and customer orientation.

UBL remained in the private sector for 15 years until it was nationalized on January 1,
1974 with other Pakistani banks. The bank continued to grow rapidly even after
nationalization. Its resource base expanded, the number of branches increased, and
overseas operations grew. As an organization, UBL has grown rapidly except in the last
couple of years when it ran into some problems.

In 1996, its deposits totaled Rs.105.9 billion; advances amounted to Rs.68.6 billion;
assets totaled Rs.177 billion and the number of branches was 1701, including 27 overseas
branches. UBL has had its share of problems, most of which were the result of the
conglomeration of some unpredictable factors. More recently, the lack luster growth of
the economy has undermined the banking sector's profitability and competitiveness.

UBL's new management has developed a well-thought-out plan for its growth and
profitability. In the main, it focuses on accelerated loan recovery, surplus asset disposal,
improving credit systems, operational controls, reporting and monitoring. From a
practical standpoint, the use of better technology, focusing on the appropriate market
segment, and project and specialized finance will facilitate rapid and sustainable growth.
The world's financial system or, to use the latest jargon, financial architecture, has
changed greatly. New products have been introduced, the riskiness of financial systems
has increased and the lines of demarcation between the various types of financial
institutions have become blurred.

4
Improvement in consumer service and prompt attention to customer needs lie at the heart
of UBL's promotional strategy. All planning is directed and geared to customer service
and satisfying the client's diverse needs. The UBL of the past was renowned for its
customer service and the management plans to put new life into it. To that end, training
programmers have been accelerated and upgraded and the staffs are encouraged to
revamp their skills.

On October 19th 2002, biggest event occurred in the history of UBL, when it was
privatized. The government handed over the management of United Bank Limited, the
third largest bank of the country, to the successful bidder - Consortium Of Abu Dhabi
Group (UAE) & Bestway Holding Limited (UK). The sale agreement for the transfer of
shares was signed by Privatization Minister and Bestway Holding, Sheikh Nahayan
Mubarak Al Nahayan at a ceremony. This event was declared as a “New Journey For
UBL”.

On May 18th 2004, Atif Bokhari took over the charge as new Chief Executive Officer of
United Bank Ltd from Amar Zafar Khan, who served UBL for more than seven years.
In the view of highly impressive growth and development achieved during its 48 years of
experience, UBL has come to be accepted as one of the most progressive and dynamic
components of the banking industry in Pakistan.

5
President’s massage:

At UBL, we value our people as our greatest asset and it is this philosophy that forms the
basis of our focused, committed and long term investment in the people that form this
great institution.

We believe in hiring bright, talented, highly motivated and driven individuals across our
businesses and geographies. Our selection process, by necessity, is challenging and one
that ensures that our standards of excellence are maintained.

The diversity of and performance our businesses provide a wide spectrum of exciting
career opportunities for the right individuals. Our leading market position and our
ambitious vision for the future ensure our long term commitment to providing the highest
quality training and workplace practices for all our employees.

Our vibrant and competitive culture will bring out the best in you; our performance
driven reward mechanism will drive you to perform beyond your estimation and you will
have a lot of fun along the way!

We look forward to a bright future and the best among you have a unique opportunity to
be part of it.

Atif R. Bokhari
President & CEO

6
VISION
To be a world class bank dedicated to excellence, and to surpass the highest expectations
of our customers and all other stakeholders.

Excellence:

 Meeting ever- growing standards

 Consistent in our growth
 Best in class in any business we initiate
 Strive to provide world class service
 Your expectations- our Goals
 Wow impact on every encounter.

UBL we believe in achieving excellence in every aspect of our work, as well as in our
relationships with customers and other stakeholders. Excellence to us is not simply a
matter of delivering on a few selected parameters, no is it restricted to basic service and
delivery matters. For us excellence has to transcend throughout the entire organization,
all its business functions and divisions and the entire branch network.

World class:

Innovative Product Process

Inspirational Employees Impact
Consistent Results Quality Product

We are now committed to go well beyond the realm of the ordinary, and after our
customers a more comprehensive range of banking and financial products and services,
compared to any other similar institution in the market today. This would not only allow
then to experience unparalleled convenience but also empower then to make better
business decisions.

7
 Customers:

 Start and end point of everything we do

 Our customers - our existence

Our customers both internal and external mean everything to us. They have always been
our strength, our pride and the driving force behind our success.
We look up this relationship in making UBL the bank of our customer’s choice.

Mission:

Our mission is to:

 Set the highest industry standard for quality across all areas of operation, on a
sustained basis;
 Optimize people, processes and technology to deliver the best possible financial
solutions to our customers;
 Became the most sought after investment;
 Be recognized as the employer of choice;

8
 7.2 NATURE OF THE ORGANIZATION

United Bank Limited is one of the largest commercial bank in the country. The
nature of the organization is public service-oriented. In the view of highly impressive
growth and development achieved during its 50 years of experience, UBL has come to be
accepted as one of the most progressive and dynamic components of the banking industry
in Pakistan.

A Bank, like the society it serves should be dynamic as banking is about people
customers with their needs and opportunities and staff with skills, experience and
resources. UBL has shown dynamism since its inception. There have been many changes
in the structure, functions and the services provided. These changes reflect the changing
requirements of our developing economy as a whole and those of Industry, Commerce
and private Individuals.

9
 BUSINESS ACTIVITIES

Three specialist business areas:

• Project & Structured Finance
• Syndications & Debt Capital Market
• Equity & Advisory

10
A multi-faceted customized approach focused towards client satisfaction

Offers a full spectrum of Investment Banking services under one roof

11
Further are the details of different products that UBL offer

DEBT AND CAPITAL MARKETS

• Loan Syndications
• Term Finance Certificates (TFC)
• Listed TFC
• Privately Placed TFC
• Securitization
• Commercial Paper (CP)

LOAN SYNDICATION

• Raising term financing from financial institutions

• Can be used to raise large financing amount
• Results in the use of bank lines by the corporation
• Plain vanilla product
• Advantage of bilateral-type operation as primary interface is with the
Agent Bank only.
• IBG acts as an Advisor, Arranger and/or Trustee of the loan facility

12
TFC
• Redeemable capital issued under section 120 of the Companies
Ordinance, 1984
• Capital market alternative to traditional bank debt
• Replicates the cash flows of a coupon-bearing bond
• First TFC in Pakistan issued by Packages Limited in 1995
• IBG acts as an Arranger and Structuring Agent and Trustee

LISTED TFC
• Listed TFCs are made available to the general public in addition to
institutional investors through listing on the stock exchange
• Facilitate trading in the secondary market
• Offered through both Private Placement (Pre-IPO) and Initial
Public Offer (IPO)
• Listing creates liquidity through bid and offer quotes in the
secondary market
• Increasingly growing with 14 companies offering TFCs worth
PKR 16.8 billion at the Karachi Stock Exchange alone in 2005.
• This trend also continued in the year 2006 and UBL IBG had
significant market share of listed TFC issues in 2006

PRIVATELY PLACED TFC

• Privately-Placed TFCs are not offered to the public

13
 • Offered to a single principal investor or to a group of institutional
Investors, allowed under Section 120 of the Companies Ordinance,
1984
• Arranging a Privately-Placed TFC issue takes considerably less
time. Can be achieved in a matter of 4-8 weeks
• Approvals are not required from regulatory authorities (stock
exchanges, SECP) and the credit-rating of the entity and
instrument need not be obtained

SECURITIZATION

14
 • Securitization designed to improve the risk profile of the facility
for the Issuer
• IBG acts as Structuring Agent and Arranger
• Asset Backed Securitization (ABS)
• Bonds or notes backed by financial assets
• Pools of financial assets are sold to SPV
• SPV converts these pools to marketable securities in the form of
Asset Backed Securities

COMMERCIAL PAPER

• An unsecured promissory note with a maturity period ranging from

thirty days to one year
• A money market instrument which can be issued by rated
companies to diversify their short term sources of financing
• Transferable by endorsement and delivery
• Commercial Paper is issued at a discount calculated on the basis of
the mark-up which is determined by the Issuer
• The Issuer to maintain a minimum current ratio of 1:1 and to
maintain a minimum Debt/Equity ratio of 60:40

PROJECT & STRUCTURES FINANCE

15
PROJECT FINANCE

FEATURES

 Assets have a high degree of ‘specificity’

 Clear source of cash flows with high degree of certainty
 Transparency of information
 Claimants don’t want commingling with other assets and ‘projects’
 Often, guarantees of government or of partners/customers

STRUCTURED FINANCE

 A non-traditional lending method tailored to specific client needs.

 Allows borrowing against the value of a specific asset, project or
income stream rather than on the basis of the borrower’s own
credit rating.
 In general a structured finance solution seeks to isolate the risk of
the loan facility from the overall risks of the borrower’s business.
 Companies with capitalization issues, i.e. who cant borrow any
further on the strength of their existing balance sheets.
 Service entities with little or no tangible assets of worth, e.g.
technology and telecom.
 Where the financing risks are too large for the borrower and/or
lenders to cope with, e.g. cross-border

16
GENERIC PROJECT FINANCE STRUCTURE

UBL – THE PREFERRED PROJECT FINANCE PARTNER

17
  Special focus on the Project Finance with a solid portfolio of
Project Finance executed deals and mandates.
 Advised/financed a broad range of Project Finance transactions
including LPG container terminal, refineries, oil pipelines, power
generation and distribution amongst others.
 Project Finance transaction successfully completed during 2005
amounted to PKR 6,550 million

DEAL TEAM

EQUITY CAPITAL MARKETS

• Equity Listing

18
 • Ordinary Shares
• Preference Shares
• Pre-IPO – Private Placement
• Private Equity

ADVISORY

• Mergers & Acquisitions Advisory

• Privatization Advisory/Transition Management Advisory
• Restructuring Advisory

EQUITY LISTING

• Listing can be through offer for sale by existing sponsors or

through issue of new shares
• In offer for sale, proceeds go to sponsors
• In issue of new shares, cash flows accrue to the Company
• Listing can be of Ordinary Shares or Preference Shares

MERGERS & ACQUISITION ADVISORY

 Provide financial advice to the buyer / seller of an

asset; cannot advise both buyer and seller at the
same time
 Sell-side Advisory encompasses
 Marketing of opportunity
Valuation
Formulation of sale strategy
 Buy-Side Advisory includes
Due diligence
Valuation

19
 Formulation of bid strategy

7.3 BUSINESS VOLUME

As for as business volume of the firm is concerned, the financial analysis of
Balance Sheet and Profit & Loss Statement of last five years (attached as Annexes)
reflects a progressive business volume given under:

Lending to
Years / Interest
Financial Deposits Advances Profit
Particulars Income
Institution
2004 18,360,633 185,071,502 144,151,055 11,660,073 3,701,544
2005 17,867,552 230,256,627 204,810,470 17,698,136 5,949,032
2006 29,572,070 289,226,299 247,309,893 25,496,324 9,468,232
2007 24,781,723 400,974,539 299,354,736 26,679,662 8,402,591
2008 22,805,341 483,560,062 371,139,675 30,439,768 8,333,120

The business volume of the firm since 2004 can be analyzed by the “graphically
view” which shows that the Total income & profit after taxation for the last five years. It
highlights that the Income & Profit of the firm is increasing gradually, indicating business
growth expansion every year.

20
 BUSINESS VOLUME

1,001,000,000
Interest Income
801,000,000
Advances
601,000,000

401,000,000 Deposits

201,000,000 Lending to Financial

Institution
1,000,000
2004 2005 2006 2007 2008
YEARS

Profit

10,000,000
8,000,000
6,000,000
Profit
4,000,000
2,000,000
0
2004 2005 2006 2007 2008

21
 7.4 NUMBER OF EMPLOYEES

The total number of employees1 working in UBL are Eight Thousand Eight
Hundred Fifty-one 8851 as on 2008. The staff is quite efficient and qualified in its
respective field. In few past years bank conducted new and fresh blood qualified and
having professional education, they are proving a good worth for the banking business
with the help of their professional degree and knowledge by implementation in practical
concerned field. The detail of total number of employees2 of UBL is as under:-

STAFF STRENGTH 2008 2007

Permanent 8838 9373
Contractual Basis 13 09
Bank’s own staff Strength 8851 9382
at the end
Out sourced 6192 5522
Total number of employees 15,043 14,904

The numbers of employees with their designation at the Airport branch of UBL
are as under:-
Branch Manager BM 1
Branch Operation Manager – CSM 1
Foreign Exchange – OG-II 2
Remittances – CSR 4
Clearing CSR 1
Customer Relations Officers 1
Guards (Contractual Employees) 2

22
 7.5 PRODUCT LINES
The bank provides its customer various product lines; to cater their need of
investments and other social or business requirements. UBL offer the following products
and Services:-

 DEPOSITS
1. Business Partners
2. Rupee Trans A/C
3. Basic Banking Account
4. UBL UniFlex
5. UBL UniSaver
6. UBL Profit COD
7. UBL eTransaction
8. Term Deposits Reciepts
9. FCY Savings (Foreign Currency Sagings)
10. FCY Terms Deposits (Foreign Currency Terms Deposits)

 LOANS & CARDS

1. UBL Address
2. UBL Businessline
3. UBL Cashline
4. UBL Drive
5. UBL Credit Card
6. UBL Money
7. Agricultural & nbsp Loan
8. UBL Small Business – SME Loan

 SERVICES
1. UBL Better life Bancassurance
2. UBL Net banking
3. UBL e-statement

23
 4. UBL Wallet
5. Charity & Donations

 MISCELLANEOUS
1. UBL Click n Bank
2. UBL Click n Remit
3. UBL TeZRaftaar
DEPOSTIS

UBL Business Partner

UBL Business Partner is your banking companion at all UBL branches across
Pakistan. Walk-in anytime at any UBL branch and have the convenience of 9 to 5
non-stop banking:

 Rupee Deposits & Withdrawals (both cheque & cash)

 Issuance of Pay Order, Demand Draft & Telegraphic Transfer
 Locker Access
 Foreign Currency Cash Deposits & Withdrawals
 Foreign Currency Traveler’s Cheque/Demand Draft
 Utility Bills Payment
 Consumer Loans / Credit Card Payment
 Statement of Account Issuance & Balance Inquiry
 Issuance of Hamrah Rupee Traveler’s Cheques

UBL Business Partner comes with unmatched free* offers. We truly value your
partnership and believe in offering you the preference you deserve. Now
individuals and sole proprietorships can become our preferred Business Partner by
maintaining Rs. 25,000/- or above in their current account and get the following
services absolutely free.
 Unlimited Real Time Online Transactions
 Issuance of Pay Order, Demand Draft & Telegraphic Transfer

24
  UBL Wallet ATM/Debit Card
 Cheque Book, Collection / Clearing of Cheques
 50% discount on UBL Credit Card Annual Fee
 No Cheque Return Charges, UBL net banking

Rupee Transactional Account

If you choose to keep a deposit in a secured savings account which also gives an
attractive rate of return, then UBL’s PLS Savings Account will serve all your
financial needs. By keeping your deposits in UBL’s PLS Savings Account you
can also avail the following services:
 No limitation on withdrawals
 Share of profit is credited on half-yearly basis
 Profit is calculated on monthly balance
 UBL offers free accidental and permanent disability insurance to
individual and joint account holders

UBL Basic Banking Account – BBA

To accommodate the banking needs of low income groups, United Bank Limited
is pleased to launch the UBL Basic Banking Account Scheme (UBL BBA) from
February 25, 2006 across its branch network all over Pakistan. This is primarily
aimed toward helping the low income group to benefit from the banking services
without having the pressure to maintain specific balance amount with the banks.
The minimum initial deposit at the time of account opening is to be Rs. 1000/-
Basic Banking Account will be a current account. There is no minimum balance
penalty on UBL BBA accounts, however all accounts having nil balance for a
continuous six month period shall be closed. Maximum of two deposit and two
withdrawals (cash or clearing) per month are allowed free of charge. However,
any transaction (cash or clearing) after those mentioned above will be charged a
flat fee of Rs. 50/-, in addition to the regular charges of services. This charge will
be system generated end of day, once the customer exhausts his free transaction
limits. The statement of account will be issued once a year for UBL BBA

25
customers in June. Issuance of duplicate statement will entail a charge of Rs. 50/-.
UBL BBA will also be Zakat Exempt accounts

UBL Uniflex Account

UBL has introduced a new checking account ideal for small investors, traders,
businessmen and customers from middle income group. They can now afford an
amazing rate of return plus value added benefits only available from the UBL
UniFlex PLS Savings Account. There are following terms and conditions for
UBL Uniflex Account:-

 All individual and joint account holders and sole proprietorships are
eligible for the UBL UniFlex Account (scheme); Corporations and
partnerships are ineligible for the scheme.

 Only one UBL UniFlex account per Computerized National Identity Card
(CNIC) shall be allowed to be opened in UBL, regardless of the branch;
no doubling shall be allowed even as joint account or sole proprietor.

 The Bank shall determine from time to time the rate of

interest/return/profit payable on the account/deposit in accordance with the
prevailing profit and loss sharing rules and regulations of the State Bank
of Pakistan and the policies of the Bank which are subject to change from
time to time and the account holder/depositor agrees to accept such rate of
interests/return/profit at the time such change was made.

 If the minimum balance touched during any calendar month exceeds

Rs.200,000/-, interest/return/profit shall only be paid on Rs.200,000/- and
no interest/return/profit will be paid on the amount exceeding this limit.

 Interest/return/profit shall be accrued monthly, based on minimum balance

touched during the month, and disbursed six monthly directly into the
UniFlex account.

26
  The UBL UniFlex account cannot be overdrawn.

 Accounts that are closed in the middle of a month will not be eligible for
any interest/return/profit for the broken period of that month.

 Wallet VISA card is optional; charges as per Schedule of Bank Charges

(SOC).

 All single debit incidents to an account will be considered as separate

transactions except deductions by the bank for charging service fee,
Withholding Tax and Zakat deductions.

 All transactions, including the two withdrawals allowed will be charged as

per the Schedule of Bank Charges (SOC).

 The UniFlex Account Holder shall be required to maintain the minimum

balance requirement of Rs. 10,000/- during each calendar month. Service
charges where the average balance during the month is less than
Rs.10,000/- shall be applied as per the Schedule of Bank Charges (SOC).

UBL Unisaver Account

UBL UniSaver Account is an innovative way of serving your banking needs. Be it

trade, business or personal finance, the UBL UniSaver allows you maximum
flexibility, yet gives you optimum returns. There are the following features
offered by bank on this product:-

 Innovative and flexible checking account

 Attractive rates of return

 Profit is calculated on monthly average balance

 Profit payment is on six monthly basis

 Higher returns on higher balances

27
UBL Profit COD

Now you can earn a higher income on your surplus cash by investing it in UBL
Profit Certificate of Deposit. UBL Profit helps you earn extra income with your
hard earned money, while providing absolute trust and security.

Two Types of Profit Payment Options:

 Profit Payment at Maturity

 Monthly Profit Payment

UBL eTransation

When it comes to electronic financial services www.ubl.com.pk is Pakistan’s

favorite Internet destination and why not!. With years of experience in innovation
United Bank offers a wide spectrum of world-class of electronic services and
banking products for trailblazers like you.
Regular Term Deposits Receipts

If you wish to make a secured long term investment, UBL’s Term Deposit
Receipt is the smart choice, just make an investment and see your deposit grow
over time. By investing in UBL Term Deposit Receipts:

 You get an attractive rate of return.

 Your profit is credited to your account every six months.

 You have the flexibility to choose from a wide range of tenors.

 You can avail the Rollover or Renewed option at any time before
encashment

 You can get your TDR en-cashed at any time before maturity period.

 Avail different attractive rates depending on the tenor you choose.

 Avail the services and facility of 9 - 5 non stop full service banking in all
UBL branches across the country.

28
  UBL offers free accidental and permanent disability insurance to
individual and joint account holders

FCY Savings

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

Special features are:

 Choose from different range of currencies i.e. US Dollars, British Pounds,

and Euros etc.

 There are no cash handling (Cash Deposit & Cash Withdrawals) charges
from the customers.

 Avail different attractive rates depending on the currency you choose.

 Unlimited withdrawals and deposits, making it easier for you to fulfill

your routine business needs.

 Avail the services and facility of 9 - 5 non stop full service banking in all
foreign currency handling branches such as foreign currency traveler
cheque and demand draft issuance against cash and foreign currency cash
deposits and withdrawals.

 You can withdraw funds in either foreign currency or in Pakistan Rupees,

whatever your requirement may be.

 UBL offers the widest reach across the country with an increasing number
of more than 228 foreign currency dealing branches.

29
  You get to take your profit home every six months.

 Zakat exempted

 UBL offers free accidental and permanent disability insurance to

individual and joint account holders

UBL’s Foreign Currency Term Deposit Receipt

If you wish to make a secured long term foreign currency investment, UBL’s
Foreign Currency Term Deposit Receipt is a smart choice, just make an
investment and see your deposit grow over time.

 Choose from different range of currencies i.e. US Dollars, British Pounds,

and Euros etc.
 Term deposits in foreign currency are offered for the following periods of
maturity with variable rates of return:
 There are no cash handling (Cash Deposit & Cash Withdrawals) charges
from the customers.
 Avail different attractive rates depending on the currency you choose.
 Get the pleasure of availing the best rates of return in the market.
 Three Months
 Six Months
 Twelve Months
 Flexible options of rollover or renew the TDR at the time of encashment.
 Avail the services and facility of 9 - 5 non stop full service banking in all
foreign currency handling branches.
 UBL offers the widest reach across the country with an increasing number
of more than 228 foreign currency dealing branches.
 You can withdraw funds in either foreign currency or in Pakistan Rupees,
whatever your requirement may be.

30
  Zakat exempted
 For all FCY Term Deposits, fixed rate of return on booking month's rate.
 Special Rates available from for USD 500,000 and above or equivalent.
 UBL offers free accidental and permanent disability insurance to
individual and joint account holders

LOANS & CARDS

UBL ADDRESS

Owning a house of your very own is a cherished dream. A lot of planning and
hard work is involved in making this dream come true. That is why, at UBL we
aim to make your decision easier, by offering you the right ingredients that can
help you realize your dream with absolute convenience.
UBL Address empowers you to become the proud owner of a home by offering a
variety of product and pricing options that are flexible yet affordable. So choose
the best product option and pricing to suit your needs.
All product options are amortized and range over a tenor of 3 - 20 years.

Eligibility Criteria

 Minimum monthly income: Rs.15,000

 Age: 23 to 65 years

 Resident Pakistani

 Self-employed businessman/professional or salaried individual

 Minimum loan size: Rs. 500,000

UBL Businessline

UBL Businessline is a running Finance facility that not only provides funds for
growth but also enables you to capitalize on profitable opportunities. “It is a
‘Credit Line/ OD Facility’ against Residential Property. It is an evergreen credit

31
line that the customer can use for his/her business expansion”. UBL Businessline
credit line is here to solve all your cash flow problems. You can utilize up to
Rs.10 million with the help of which you can now focus on your business
expansion and growth. UBL Businessline offers you the facility of availing a
financing of up to 70 % of your property value. Now that you can avail a higher
amount against your assets, you can plan your growth and expansion exactly the
way you want to. In addition financing is offered to customers that are already
availing a similar facility from any other bank. With UBL Businessline, now you
no more need to pay for the entire credit line that you own. Businessline gives you
the facility to pay mark up only on the amount that you utilize. With UBL
Businessline, now you no more need to pay for the entire credit line that you own.
Businessline gives you the facility to pay mark up only on the amount that you
utilize. If you fall in the following criteria, then UBL Businessline is just the right
choice for you :
 Minimum monthly income: Rs. 25,000
 Age: 23 – 65 and a Pakistani Resident
 Self Employed Professional / Self Employed Businessman.

UBL Cashline

UBL Cashline is a flexible loan that provides you cash up to Rs.500,000 without
any security requirements. It empowers you to take control of your finances. UBL
Cashline is aimed to make your life easier…ZINADGEE ASAAN. Whether you
are a salaried individual or a businessman, UBL Cashline takes care of your cash
requirements.

Flexibility

 No fixed monthly installment.

 Principal repayment at your convenience.
 No prepayment penalty.
 Markup only on utilized amount.

32
  Worry free payment of bills, shopping, child’s education, short-term
business needs or just about any thing you can think of!

How can you get Cashline?

If you are:
 A salaried person of 21 to 60 years and your monthly net salary is
Rs. 100,000 or more;
or
 A self employed business person/professional of 21 to 65 years and your
monthly net take home income is Rs. 100,000 or more.

UBL Drive

UBL Drive is a unique auto financing product which offers you features, options
and flexibility unmatched by any other bank, because at UBL, You come first.
UBL Drive allows you for New Car Financing to drive away in your own car by
making a down payment of just 15% and to top that with low monthly
installments. However With UBL Drive you can buy your favorite used car (up
to 5 years old) at the most affordable rates. UBL Drive is not just a car loan; it’s a
financing facility that gives you Cash on your car, you can get up to 75% of your
car value. Drive in with your car and drive out with cash. UBL Drive is the quick
and hassle free route to the car of your choice. Offering you for the first time in
Pakistan, No Down Payment and processing charges till your application is
approved. After approval, you can take your Purchase Order to any of our
authorized dealers, pay the Total Cash Outlay amount and simply drive away with
your preferred car. UBL Drive offers you the Comprehensive insurance,
Insurance financing for the first year and Discounted rates with take a car security
device installed at customers' cost.

UBL Money

UBL Money, the Personal Installment Loan from UBL provides you with power,
control, convenience and the flexibility to manage your financial requirements

33
and realize your 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. UBL Money provides you the flexibility to manage your
monthly installments according to your income stream. You can select any tenor
from 1 to 5 years in a multiple of 6 months. UBL Money provides you the
flexibility to manage your monthly installments according to your income stream.
You can select any tenor from 1 to 5 years in a multiple of 6 months. The
features for UBL Money are as under:-

 Zero-prepayment penalty option

 Complimentary Credit Insurance
 Competitive mark up

You can pay your installments through any UBL designated branch and drop box
and UBL net banking. The eligibility Criteria for this product is:-

You are within the age bracket of:

For salaried individuals - 21-60 years

For the self employed or Businessmen - 21-65 years

Your monthly gross income is

For salaried individuals - Rs. 10,000/-

For the self employed or Businessmen - Rs. 25,000/-

You have been Employed for the last 6 months or have been in business for the
last 2 years.

SERVICESES

UBL Netbanking

UBL netbanking 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

34
to access and manage your finances in a secure, real-time, online environment;
Anywhere, Anytime. Using UBL netbanking , 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.

UBL E-Statement

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 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 us the frequency of statements you require and we will ensure that it reaches
your inbox. you don’t need to pay any additional cost in order to get benefit from
this facility. UBL believes in providing value-added service to customers and all
you need to get started is your email address! As an alternative to printed
statements, UBL e-statements eradicate the hassle of paperwork, box filling and
the chance of having your unattended documentation read by others. UBL e-
statement can be delivered to you in the following frequencies, Daily, Weekly,
Monthly, Quarterly, Semi-Annually. Whenever there is an activity in your
account, an email shall be sent to you with the complete transaction details. You
UBL e-statement shall be sent to you in an easy to read Adobe Acrobat format.

UBL "Hamrah"

UBL has always been at the forefront in identifying and meeting the financial
needs of its valued customers. UBL was the pioneer in introducing Rupee
Travellers Cheque facility in Pakistan, as early as 1971. In continuation of the
same tradition, UBL in the shape of "Hamrah" Rupee Travellers Cheque enhances
this facility for the convenience of its valued customers by offering

35
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 Traveller Cheques are the ideal and safest way of
carrying cash when travelling anywhere in Pakistan. Hamrah RTC's are now
accepted at more than 2000 places such as hotels, shops, real estate agents,
jewllers, car dealers, etc and of course at all our UBL branches. UBL has a 24-
Hours customer help-line, providing its customers with round the clock
verification of "HAMRAH" travelers cheques.

UBL Wallet :-

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. With UBL Wallet VISA as your debit card, you can shop all you want,
eat all you can or fill up your car tank without carrying any cash. Simply use your
UBL Wallet VISA for direct debit from your bank account, along with the
convenience of using signature based verification instead of a PIN (Personal
Identification Number). The debit card facility is being offered in association
with the Orix andVISA networks, which means that you can use your UBL Wallet
VISA to conduct a debit transaction at any outlet in Pakistan that displays the
ORIX or VISA logos. The Orix network offers connectivity at more than 5,000
outlets across the country, whereas your UBL Wallet VISA card is also
acceptable at 22 million VISA merchant locations, local and international.

UBL BetterLife-Bancassurance

We are pleased to announce the launch of UBL BetterLife Plans under the
umbrella of Bancassurance, in partnership with EFU LIFE Assurance
Company in selected 100 Branches.
What is Bancassurance?
Bancassurance is the selling of insurance and banking products through the same
channel, most commonly through bank branches.

36
 Product Offering
UBL BetterLife plans are advanced insurance products specifically designed to
benefit the customers, providing the better and secured future to your family and
loved ones.

Description

UBL BetterLife Child Education Plan Accumulation of target funds for education
of your children and ensuring that goal is achieved even if the parent dies earlier.
For more details,
UBL BetterLife Marriage Plan Endowment funds for your children in an
organized and disciplined manner for use in later life.
For more details, UBL BetterLife Savings Plan Flexible open ended savings
product with life insurance protection to your family and loved ones.
For more details, UBL BetterLife Retirement Plan Accumulating retirement
funds for your regular retirement income.

NRP SERVICES

UBL has taken progressive steps and has introduced innovative products and

services to provide you a variety of banking and financing services.

Remittance - UBL Click N Remit, Tezraftaar

Accounts - UBL Click N Bank
Investments - UBL Funds Manager
Electronic Access - UBL netbanking, Orion

ATM
ATM is the abbreviation of automated teller machine. ATM is the modern
technology screen touch system. ATM functions on a PIN (Personal Identification
Number) based system, ensuring complete security of customer transactions. ATMs
feature a Virtual Human Assistant, who guides customers in conducting their ATM

37
transactions. It allows customers to get a printed statement of their account that shows all
recent transactions. Customer can swiftly withdraw the desired amount by selecting from
one of the options of listed denominations. United bank limited is having the ATM
facility. UBL has its own network of 214 ATMs in 60 cities, which continues to expand by
the day.

8. ORGANIZATIONAL STRUCTURE

The organizational structure of the organization is conventional. In 1986, the

organizational structure of domestic operations of the bank was reformed and
decentralized on the basis of provinces.

As a result provincial headquarters were established at Karachi, Lahore, Peshawar

and Quetta in order to meet the needs of sanctioning loans and other facilities to the trade,
industry and agriculture of each province. Azad Kashmir was serrated from NWFP and
made separate region.

Board of Directors governs the Bank’s Affairs, which currently consists of

President, Deputy Chairman, Chief Executive Officer and seven Directors. The CEO has
an overall responsibility for the strategic direction, government relations and to manage
the portfolio of business and its functions.

The Head of the Executive Committee is the President & C.E.O. The other
members of the executive committee are designated as follow.

1. Group Executive Consumer/Commercial Bank

2. Group Operations & Technology Head
3. Group Executive Treasury & Capital Markets
4. Group CFO
5. Group Executive Human Resources

38
 6. Group Audit & Inspection Head
7. Group Business Support / Collections Head
8. Group Commercial Bank Head
9. Company Secretary Chief Legal

UBL is the largest Commercial Bank in Pakistan. IBG provides innovative and
unique solutions to its clients enabling them to meet the challenges of an ever- changing
market. Organogram is attached in the last of the report Annexure 1-7.

In 2007 the bank re structured its network all over the country, by sub divided the
branch into retail banking and sales. Up to now each branch has two (2) managers,
 Branch Manager
 Customer services manager ( CSM )

The branch manager’s function is to increase the deposits for the bank, where as
customer service manager is look after the operation of the branch. So both manager has
different task and duties which no doubt increase the efficiency of branch.
The key concept of this Re structuring is to minimize the burden of operational task on
Branch Manager and put him/her aggressively pursuing the deposits for the Bank.
This re structuring also change the reporting cycle of branch which now look like this,
FOR BRANCH MANAGERS

GM RBH DM BM

FOR CUSTOMER SERVICE MANAGER

R.H. R.O.H. D.C.S.M. C.S.M.

KEY HIGHLIGHTS:
 Launch of clusters (South, Centre and North).
 Regions grow from 14 to 21.
 Areas to be renamed as districts and the number to increase from 60 to 81.

39
  Each district has a range of six to 25 branches.

OBJECTIVES OF RESTRUCTURING NETWORK:

 Empowering the clusters, regions districts and branches by delegation of sales
and therefore revenue ownership.
 Allowing the regions a manageable span of control, leading to higher
productivity and motivation from staff and branch network.

BRANCH NETWORK UP-GRADE

BUSINESS PROCESS RE-ENGINEERING

PROXIMA:
• Transform branches from Deposit focus to Sales and Customer Service
oriented.
• Leverage branches networks as a distribution channel to increase cross
selling opportunities.
• Synergize with core banking application

GENESIS:

• Implication of new core banking system.

• Provide and negotiate real-time customer and product date to all branches.
• Robust, intelligent control and risk management.

40
8.2 ORGANIZATION STRUCTURE OF UBL AIR PORT BRANCH

The structure of UBL AIRPORT branch is same as all branches of UBL have. The airport
branch is the Hub Branch in Karachi so the working load is almost double as compare to
the other branches and the other reason of increased work load is due to the branch
location . the branch is situated at the airport which is highly busy location and due to the
security reason other cooperative customers prefers the airport branch for there daily
transaction .
There are two side of organization structure of airport branch one is Sales and other is
Operation. The Branch Manager NAYYARSULTANA deal in sales side of the branch
and look after other customer related issues.
The Operation side of the branch is look after by Mr. IFTIKHAR ALI who is
CUSTOMER SERVICE MANAGER. Following staff is working under him.
Account opening and ATM officer, who responsibility is to look after all the account
and ATM related issues. This person is also perform some IT related matter in the
branch.
Clearing officer, who’s responsibility is to look after those matter which relate to
clearing the cheque and other cross cheque deposit issue.
The branch is also have a senior accountant who’s responsibility is to look after the all
account related transaction, watching all CD and PLS accounts and this person also
provide feed back and produced all reports which time to time head office needs. This
officer is also collect other account information from the other 15 branches which
working under the Airport branch.

41
The branch is also have foreign exchange department who’s officer duty is to look
after the all 5 foreign currencies related matter and this person is also look after the
Import activity and LC related issues.
Branch have 1 senior taller and 2 junior female taller this staff look after the all cash
related issues, receive cash from customers, other cash deposits and also perform online
transition and issue pay orders, bank draft.
Branch also have Utility Bill Department and this lady officer is receive utility bills and
Airport school fees vouchers.
Other all this staff branch has two other officers
Consumer product officer is look after consumer product like Personal Loans, Auto
Loans and other product and the
2nd officer is look after the insurance product which bank newly offer for their customers.
There are two guards available in the branch to look after the security related issues.
The organogram is attached at the end of report

Main Offices

Head Office

State Life Insurance Corp.

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

42
Foreign branches:

Bahrain 3
Qatar 2
Republic of Yemen 3
UAE 8
USA 1
RETAIL BANK STRUCTURE
NO. Of
CLUSTERS REGIONS DISTRICTS BRANCHES
Hyderabad 4 56
Karachi central 3 40
Karachi north 3 32
Karachi south 3 32
South Quetta
Sukkur
5
4
39
56
Bahawalpur 4 47
Faisalabad 6 71
Gujranwala 4 59
Lahore east 3 33
Lahore west 3 34
Multan 4 61
Sahiwal 4 55
Central Sargodha
Sialkot
4
3
50
32
Azad Kashmir 4 71
Islamabad 3 38
Jhelum 4 71
Mardan 5 74

North Peshawar
Rawalpindi
5
3
72
42
TOTAL 21 81 1065
Total network of 1065 branches by Dec 31st, 2007

43
 8.3 REVIEW OF VARIOUS DEPARTMENT

Corporate Banking
The main objective of the Corporate Banking is to look after the special
customers who gives huge amount of deposits or take higher amounts of Advances. And
these types of customers are called corporate customers. These types of customers need
special care and services as well. The mission is to serve all corporate clients needs by
providing total solution and ensuring full satisfaction through product innovation,
personalized banking, and quality services. The (Corporate Banking Group) CBG focuses
on attracting and servicing large portfolio customers. Our forte is providing exemplary
customer service using the "Single Window" concept and product superiority.

The Corporate Banking Group focuses on attracting and servicing large portfolio
customers. Our forte is providing exemplary customer service using the "Single Window"
concept and product superiority. The Relationship Management team manned by highly
qualified individuals from the industry has steadily expanded our customer base and
continues to enhance our cordial relations with our esteemed clients.

Consumer Banking

The consumer bank is divided on business lines based on product offerings. These
are led by the product teams who encapsulate the futuristic features, the marketing team
who has set a new trend in the banking industry through catchy taglines in Urdu and the
sales teams which have broken all sales records. Business is further supported by
dedicated cross-functional teams comprising of credit, operations, collections and
finance.
The consumer bank’s portfolio includes;
UBL’s visa credit card which has the distinction of being the first EMV chip-enabled
card in South Asia.
UBL Address & UBL drive the home and auto loan products respectively, which

44
captured the bulk of the market share within the first few months of their launch.
UBL cashline (running finance) and UBL businessline (business finance) are the
flexible credit line facilities with competitive mark ups.

Investment Group

This department supports the Corporate Department. When a company wants to

install a new project and require the finance from the bank then it is the responsibility of
Investment Department to analyze the targets of the project and success or failure of the
project. If it is feasible to loan that party then they pass the loan otherwise not. This is
called the Project Finance. UBL’s Investment Banking Group continues its leadership
position in providing innovative and unique financial solution to its clients by
anticipating their changing requirements and developing new products and services. UBL
(Investment Banking Group) IBG offers full spectrum of services. The bank has been
declared :-

1. The Largest Investment Bank in Pakistan

2. Well established execution experience
3. Rich international and domestic investment banking product knowledge
4. Awarded the “Largest Investment Bank” award by The CFA Association
of Pakistan for three consecutive years (2003-2005).
5. Current mandates add up to over PKR59 billion (US$967million). A
healthy mixture of Debt, Equity & Advisory transactions 1

Human Resource Department

This Department does all the activities related to Human Resources (HR) and
Personnel Management like Job Analysis, Job Design, Job Description, Job Redesign,
Job Specification, Recruitment (is the process of finding and attracting capable applicants
for employment through Advertising, Employee Referrals, Private Placement Agencies
etc.),

45
Selection by written tests and interviews, Orientation, Training, Career Planning,
Performance Appraisal (employee performance and accountability), Compensation and
Protection, Union-Management Relations etc. It also involves in the following activities:
 Transfers& Postings
 Mandatory Leaves and its observance.
 Staff leaves and other related staff matters
 Goals of all Staff
 Monthly Statement of Staff
 Disciplinary Action Cases
 Cases Retired employees & its correspondence
 All Staff Deceased cases & its Correspondence
 Complaints and its correspondence

Finance Department
The primary responsibility of Finance department is to provide reliable, consistent
and timely information to management, shareholders, regulators and internal business
groups to help them take appropriate decisions for improved performance of the bank.

Information Technology Department

Information Technology (IT) Department is related with all computer activities

like it manage the Central Data Base (CDB) which is placed in Karachi Head Office of
UBL, where all the daily transactions in all the branches of the country are up-dated on
daily basis. The area of major focus for IT Department is the building of infrastructure for
the launch of the consumer business. UBL made significant investments in consumer
related best in class computer systems, which have supported the launch of feature rich
consumer banking products.

46
 The IT department is responsible for the smooth functioning of the Software
system used by the Bank. The software being used by UBL is termed as BS i.e Banking
System. The network used by the UBL is LAN (Local area network) while other
branches are also using WAN (wide area network). The software used by the UBL is
“SPARC”. If we get a detailed overview of the functional responsibilities of the IT
department the following areas are covered:

 General, Application, and Administrative control.

 End of day/Month/Half year/Year reports.
 Program Update.
 BS testing.
 BS release update.
 User PC backup.
 BS user setup.
 E-Mail user setup.
 Anti-Virus Installation and Up-Date.

Audit and Inspection

The responsibility of this department is to audit and inspect the operations of the
branches. This department checks whether the operations are compliance by the branches
in a right way or not. The Control and Compliance Department (CCD) comes under this
department. Audit has a support role to play by helping line management in achieving
their business goals by ensuring that the operational risks are properly controlled and kept
at minimum acceptable level.

Audit group is committed to meet its objective that is to act as an independent

appraiser that reviews systems, controls and quality of performance with the vision to
protect the interest of stakeholders and to safeguard the assets of the organization besides
the implementation of an effective and efficient internal control systems.

47
 Cash Department

This is sensitive department of the UBL branch. No other person is allowed to

enter in the premises of cash department. As obvious from name that this department
deals in cash deposits and payments. Cash department is performing its functions/duties
manually. For payments and receipts, it has to maintain certain sheets, books of accounts
and various ledgers, which are as under:

 Cash received voucher sheet

 Cash paid voucher sheet
 Token register
 Transaction ledger
 Pay-In-Slip record
 Cheque book record
 Cash balance book

Clearing Department
This department welcomes the cheques and other negotiable instruments drawn
upon local branches of other banks. State Bank of Pakistan has a clearinghouse, in which
the bank representative brings cheques and other Institutions and mutual claims of each
bank on other are off set and a settlement is made by the payments. Clearing system is
helpful for both the customers and bank in saving of time, labor and currency
involvement.

Bills Department

This department basically deals in bills, which come in bank for collection. The
bills are cheques, call deposit, drafts and pay order. These bills are from outstation
branches of UBL or of other banks. This department provides services to customers at
low charges to get their amounts from the nearest branch.

Head Of Bills

48
There are two main heads of the bills i.e.

 Outward Bills For Collection (OBC)

 Inward Bill For Collection (IBC)

Foreign Exchange Department

Foreign. Exchange Department of the Bank accepts under noted Foreign
Currency from account holders. State Bank of Pakistan provides exchange rates on daily
basis. And daily transactions are recorded at their current exchange rates.
 US Dollar
 British Pound Sterling
 Japanese Yen
 UK Euro
 Saudi Rial, etc.

49
 9. STRUCTURE & FUNCTIONS OF THE FINANCE
DEPARTMENT

The finance and accounting system is a tool for accumulating the financial
activity at any Organization. The primary responsibility of Finance department is to
provide reliable, consistent and timely information to management, shareholders,
regulators and internal business groups to help them take appropriate decisions for
improved performance of the bank. The UBL’s funding from various sources, most of
which is specified for certain types of expenditures. To enable the administrators of these
funds to monitor and report on the activity of the funds, the accounting system must
maintain separate records of each source of funds, and the expenditures from each source.
This is accomplished by establishing separate accounts in the system, much as a bank
establishes separate accounts for each depositor. There are the following key persons of
UBL whose are performing these responsibilities of Finance Department for bank. The
organogram of the department is attached at the end of the report.

 Hamza Hasan (Assistant Vice President, Project & Structured Finance)

 Mehvish Virani, CFA (Assistant Vice President, Project & Structured Finance)
 Nadia Ishtiaq (Manager, Equity & Advisory)
 Ali Asad (Manager, Project & Structured Finance)
 Shazad Amjad (Assistant Manager, Equity & Advisory)
 Qasim Ali Karamat (Assistant Manager, Project & Structured Finance)
 Sarah Shaikh (Assistant Manager, Project & Structured Finance)
 Saeed iqbal (executive Vice President, Group Head Investment Banking)
 Rizwan Hammed Chapra, CFA (Senior Vice President, Head Syndications &
Debt Capital Market)

50
 The Bank’s Internal Audit Department provides an independent appraisal of the
adequacy and effectiveness of the Bank's internal control systems and quality of
performance as well as test compliance with laid down procedures. The head of
department reports directly to the Governor. This department can delve into every aspect
of the Bank’s work with the aim of providing independent advice to the Bank’s senior
management in the conduct of their work as well as ensure that the Bank is taking
appropriate levels of risk.

The department performs a function that is similar to the Financial Supervision

Department. However, it focuses on the micro finance sector which is concerned about
the

Credit and financing needs of that section of the population that does not have access to
the banking system. This is currently a small part of the Gambian financial system but
has been growing rapidly.

The responsibility of this department is to audit and inspect the operations of the
branches. This department checks whether the operations are compliance by the branches
in a right way or not. The CCD (Control and Compliance Department) comes under this
department. Audit has a support role to play by helping line management in achieving
their business goals by ensuring that the operational risks are properly controlled and kept
at minimum acceptable level.

Audit group is committed to meet its objective that is to act as an independent

appraiser that reviews systems, controls and quality of performance with the vision to
protect the interest of stakeholders and to safeguard the assets of the organization besides
the implementation of an effective and efficient internal control systems. The final audit
is of the bank is being done by the A.F. Ferguson & Co. (Chartered Accounts). This is a
well reputed audit firm in Pakistan and overseas as well. All the final audit operations
been performed by this firm.

51
9.2. Finance & Accounting Operations

Finance is the art and science of managing money. The primary responsibility of
finance division is to provide reliable, consistent and timely information to management,
shareholders, regulators and internal business groups to help them take appropriate
decisions for improved performance of the bank. The vision of Finance Department -- a
highly automated and fully integrated Bank, that is customer centric and capable of
meeting all external and internal customer expectations. It is said that accounts
department is the backbone of the bank. It plays a vital role in performing different
banking functions. The accounts department of UBL is performing its function
computerized. The working in accounts department mainly depends upon voucher
system. For each and every transaction-taking place in the bank vouchers are prepared
and through these voucher contra entries are passed under different heads. Accounts
department controls the expenses and their right allocation of such expenses to the right
and appropriate accounts. There are two types of vouchers prepared for this purpose,
which are :-
o Petty voucher
o Adjustment voucher

FUNCTIONS OF THE FINANCE DEPARTMENT

An overview of the functions and activities of Finance department of UBL are as under

The Department has an overall responsibility to establish and maintain standard

accounting procedures in order to ensure consistency and uniformity in the Financial
Management of the bank, add value to the accounting system as well as compliance with
internal control procedures, which would help to achieve the business objective and to
conduct smooth and efficient banking business operations.

52
 There are the following core functions and responsibilities of Finance Department
in United Bank Limited :-

 To be primary source of financial information and to ensure the integrity

of financial management information.
 Establish and maintain standardized accounting procedures for power
plant to utilize the available financial resources in the most effective and
efficient manner.
 Maintain accounting records and to prepare Financial Statements in
accordance with the Bank Policy, International Financial Reporting
Standards (IFRS) and International Accounting Standards (IAS) and best
practices.
 Keep up to date record to help management in taking the adequate course
of action in any instance.
 Facilitating the Customers by providing efficient accurate position of their
deposits.
 Provide management reports when required by the management.

9.3. Role of Financial Managers

The financial manager of a firm plays an important role in the company’s goals,
policies and financial success. The Financial Manager’s role or responsibilities can be
classified into following categories.

Financial Analysis, Forecasting and Planning :-

Financial Manager has to determine the proper amount of funds to employ in the
organization, designating the size of the organization and its rate of growth and
have to monitor the firm’s financial position.

Investment Decisions :-
Financial Manager must be efficient in allocation of funds to specific assets. A
financial manager makes the long term capital budget and expenditure decisions.

53
 Financing and Capital Structure Decisions :-
Finance Manger has to determines both the mix of short term and long term
financing and equity/debt finance and raises funds on the most favorable terms
possible.

Management of Financial Resources:-

Finance Manger manages working capital and maintains optimal level of
investments in each of the current assets.

The role of the CFO as financial manager

The CFO wears many hats. He is

• A member of the senior executive team who decides upon both the strategic and
tactical direction of the operations of his firm
• He face the company’s financial community, responsible for the preparation and
integrity of the firm’s financial results.
• Responsible for managing the firm’s financial decisions.
• He is also the financial risk manager for his company, protecting the company
against adverse changes in the financial market and the financial conditions of his
customers and vendors.

In large corporations, the primary duties of the CFO may be to oversee and manage a
large accounting department, while coming up with ways to maximize profit to the
company. A CFO might, for example, evaluate the way in which employees work to
determine the way to most efficiently get work done for the least amount of money.
Again, these responsibilities could be shared with other corporate heads or with general
managers or lower level supervisors.

A chief financial officer is a top executive in a company who manages all aspects of
financial matters and decisions. In a small company, a chief financial officer may directly
perform many accounting tasks, while executives at larger corporations typically review

54
reports and numbers from various divisions within their companies. This type of
professional oversees accounting departments, creates budgets for new product research,
development, and marketing, and manages pay scales and benefits for employees.
Financial officers usually hold advanced degrees in finance or business management, and
are compensated very well for their services.

Responsibilities towards Shareholders

The Chief Financial Officer is required to provide all the necessary data to be
presented in the “Director’s Report”. For this purpose Chief Financial Officer
must ensure the following.

• The financial statement, prepared by the management of company, present fairly

its states of affairs, the results of its operation, cash flows and changes in equities.
• Proper books of accounts of the company have been maintained
• Appropriate accounting policies have been consistently applied in preparation in
financial statements and accounting estimates are based on reasonable and
prudent judgment.

A company's CEO may be the person who sets broad risk guidelines and approves an
overall strategic risk plan. But to build and maintain an effective risk-management
approach, it often falls to the chief financial officer to play the central executive role.
Although the nature and extent of their role varies, CFOs are uniquely situated to build
and communicate an integrated risk view, optimize business decisions, and build a strong
risk culture.

9.4. Use of Electronic Data in Decision Making

Today is time of Computer Technology and UBL has the distinction of being
ahead of all of its local and foreign competitors in this regard. This was made possible

55
due to a comprehensive effort on part of Bank management to effect shift from traditional
Manual Banking system to Biggest Online Banking setup in the country.

Operations of UBL have been significantly streamlined post-privatization,

however further plans for improving operational efficiency are under-way. Currently the
bank is using an internally developed distributed database software called unibank.

This software is utilizing Oracle Financials at the back end. As all daily banking
transactions are stored at the respective branches, consolidation at the head office takes
place at day end. UBL has a total of 1,056 branches (including 15 over seas branches) of
which 640 branches have on-line connectivity with the head-office through an ISDN or
satellite connection while the remaining are still to be brought on-line.

Out of the total off-line branches there are at least 211 branches in the far-flung
areas of the country (FATA, parts of Kashmir) which are not automated. Critical
information from these offices is physically delivered to a nearby located main branch.
The bank has specialized software to support its various functions and the focus for some
time has now been on enterprise application integration (middleware). The management
launched a transformation program in 2006 which aims to accomplish bank-wide
business and technology reengineering.

In order to make the existing field staff abreast of changes in procedural working
due to changes in procedural working due to introduction of IT based system, intensive
training facilities are provided in this technology at all the two Staff Training Centers.

Accounting System of the Organization

UBL is following the “double entry system” of accounting. This system is helpful
in maintaining the proper books of accounts according to prudential accounting system. It
segregates the entries according to their proper allocated account heads. The accounts

56
department of UBL is performing its function computerized. Different books of
accounts relating with other departments are maintained here through computer software.
With the help of these books of accounts, accountant prepares daily, weekly, monthly,
quarterly, semi-annually and yearly financial statements.

Report Preparation
The accounts department has to prepare the report for the internal control as
well as for the financial reporting purpose. For this reason there are many different types
of reports prepared by the accounts department. These reports vary from each other
depending upon the information reported and the period for which these reports are
prepared. These reports are prepared by using the general Ledger that is updated by the
system during the EOD (end of day) process. Some of the reports are as follows:

Daily Reports:

⇒ Daily Position: This report summarizes the daily position of all the main heads
of the bank i.e. different deposits, TDR/NDR, cash etc
⇒ Balance Sheet: This report also summarizes the balance sheet heads of the bank
up to the last working day.
⇒ Summary Sheet: This report is sent to the reconciliation unit. It summarize the
all the head that have been credited to the Central Branch Control (CBC)
Account. It is prepared on branch wise basis.
⇒ Reconciliation Reports: This is prepared in order to reconcile any outstanding
and exceptional entry reported by the other branches through the reconciliation
unit made by any of the functional department of the bank.
⇒ SBP Reconciliation Statement: This report is used in order to report the
balance of the UBL with the SBP in the current account with SBP. As the banks
have to keep liquid cash with the SBP so this report list any increase/decrease of
the balance with the SBP.
⇒ Advances: This report summarizes the figures of the deposit accounts as well as
the loan accounts of the customer with the bank.

57
 ⇒ Statement of Financing: This report summarizes the amount of financing
extended to the customers.
⇒ Detailed trial balance: This report summarizes all the balances in the different
heads in the income, expenses, deposits, financing and other related heads.
⇒ Daily expense vouchers: This report summarizes the daily expenses.

Weekly Reports:

⇒ Balance sheet: The balance sheet is prepared on the basis of the whole week
activity by using the General Ledger of the weekend.
⇒ Trial Balance: This is same as of the daily trial balance but is prepared with
the span of one week by using the General Ledger of the weekend.
⇒ Deposit Comparative Position: This report summarizes the comparative
position of the different deposit accounts category, TDR/NDR, and foreign
currency accounts.
⇒ Risk Assets Liabilities Statement: This statement summarizes the status of
liabilities of the bank, status of risk assets ( short term and long term), status of
risk assets ( consumer finance) like net lease value, net deposit, net financing
amount, financing against FE 25 and SBP refinance position.
⇒ Daily Statement of Deposits: It states the retail deposits ( current account ,
margin account, foreign deposits), hot deposits ( deposits of security on loaning in
big amount in current account), cash in hand in both local and foreign currency.

Monthly statements

⇒ Profit and loss statement: This statement is the income statement prepared for
the month summarizing the revenue generated and the expenses incurred during
the month.
⇒ General Ledger: This ledger has the detailed information of all the heads in
deposit, financing, TDR/NDR, expenses, income and other related accounts. This
is a very extensive report prepared by the system.

58
 ⇒ Cost of Funds Statement.
⇒ Crucial Expense Statement.
⇒ Month wise analysis of expenses.
⇒ Actual Budget Analysis.
⇒ Liabilities and Assets Statement.
⇒ Variance analysis: Comparison of balance sheet.
⇒ Quarterly Statements:
⇒ Tax Statements: These statements include staff tax statement, services tax
statement and supplier’s tax statement.

Reconciliations
Reconciliation of Inter Branch is done by matching ledger entries to the
statement entries. When an entry is properly matched, the date under which it is
appearing in the ledger is noted against the entry in the statement and ledger vice versa.
The matching, investigation, and reconcilement of all accounts entries are done as
frequently as the statement is received.

Vouchers
Each and every transaction in the bank is made through vouchers; the final place
is accounts department for recording these vouchers. Officer in the accounts departments
arranges these vouchers according to heads of accounts. These vouchers are of two
types:
• Debit Vouchers
• Credit Vouchers
These two vouchers are again classified into three following types of vouchers:

• Cash Voucher
• Clearing Voucher

59
 • Transfer Voucher
All the daily transaction in cash, transfer and clearing is done through these vouchers. A
sheet is prepared on which all the vouchers, passed during any one working day are
consolidated and summarized. This sheet is called supplementary sheet. It provides help
in preparing Cash Book. There are two types of supplementary sheets:
1. Debit Supplementary Sheet:
In which all debit Cash Voucher, Clearing Voucher, Transfer Voucher are
included.
2. Credit Supplementary Sheet:
In which all credit Cash Voucher, Clearing Voucher, Transfer Voucher are
included.

Cash Book

It is maintained to keep the record of daily receipts and daily paid vouchers.
Cashbook is consisted on the opening balance and the closing balance of the day. For
correct balance of the cash book there is a need to arrange all the vouchers.

Ledger for Term Deposits

One of the functions of accounts department is to maintain and update the term
deposit ledgers and books manually. Term deposit receipt or TDR ledger is updated after
every month for estimation of profit on customer accounts. Accountant has to prepare
different ledger for all schemes of term deposit. With the help of TDR the accountant
prepares provisional ledger/Summary ledger and also statement of provisional expenses.
The profit after every six-month will be the expense of the branch.

Updating General Ledger

When vouchers are recorded in cashbook then the balance of each head of
account is posted to its ledger account. There are two main heads of the general ledgers,
Income account & Expenditure account. All the accounts fall under one of these two

60
main heads. Separate ledger is maintained for every head of account. In UBL all the daily
transactions in deposits, cash, clearing, transfer remittance, foreign exchange; advances
are performed through these daily computerized ledgers. Accounts department Maintains
and prepares the following ledgers and books of accounts:
⇒ Daily General Ledger Expenses
⇒ Daily General Ledger Incomes/Receipts
⇒ Monthly General Ledger Assets
⇒ Monthly General Ledger Liability
⇒ Daily General Ledger Zonal Expenses
⇒ Daily General Ledger Inspection expenses.
⇒ Daily General Ledger Regional Expenses
⇒ Daily General Ledger Audit Expenses

The format of the entire above ledger is approximately same. General ledger tells
about A/C No., description, previous Balance, Dr. amount, Cr. amount and running
balance.

Finance System of the Organization

Financial system of UBL includes from how to generate finance & where to
utilize it. The primary focus of UBL financial system is on automating processes within
the bank and to develop robust databases that will provide a ‘single source of truth’ for all
internal and external exporting reporting. These databases will form the foundation on
which other applications will be built.
Report of Financial Statements
For obtaining credit, party has to submit the last two to five years Balance Sheet
and Profit & Loss Statement (Income Statement) duly attested to authorized auditors. It is
preferred that the statements should be properly prepared and audited by Chartered
Accountants that give the true picture of the business. But in some cases as I observed in
UBL most of the clients who lie in the category of Consumer Banking Client don’t have
their Financial Statements.

61
 In Such case UBL has to prepare the financial statement on the behalf of
customer and it is mentioned in other relative documents that the financials submitted are
self / un-audited. There is a high percentage of risk involved in it.

9.5. Sources of Funds

Funds are the main element for carrying out the operations in any business
concern. Its importance remains evident in the banking sector as well. The following are
the main sources of funds for UBL.

As on 31st December
Rs. '000.00
Particular/Years 2004 2005 2006 2007 2008
Share Capital 5,180,000 5,180,000 6,475,000 8,093,750 10,117,188
Deposits 230,256,62 289,226,29 335,077,87 400,974,53 483,560,062
7 9 3 9
Advances 144,151,05 204,810,47 247,309,89 299,354,73 371,139,675
5 0 3 6
Investments 54,953,728 63,029,944 67,260,338 115,585,64 116,328,288
6

9.6. Generation of Funds

The bank generate its funds through different kind of activities like offering new
and attractive kind of deposits to its all kind of customers, lending to other financial
institutions. Deposits and fund generating activities are life blood for any banking
organization. It runs its business activities well as the blood in a human body in other
words we can say that the fund generating activities are backbone for any banking
organization. For this purpose bank lends the amount to at a high rate and accepts the
deposits from the general public at a low return. Deposits are main source of generating
funds for any banking organization and for the general public to meet the financial needs.
The difference between the lending and accepting rate is the source of income for the
bank. Deposits, Lending to Financial Institutions, Investments and Profitability of UBL

62
for the last five years is under :-

As on 31st December
Rs. '000

Particular/years 2004 2005 2006 2007 2008

230,256,62 289,226,29 335,077,87 400,974,53 483,560,062
Deposits 7 9 3 9
Lending
Financial 18,360,633 17,867,552 29,572,070 24,781,723 22,805,341
Institutions
54,953,728 63,029,944 67,260,338 115,585,64 116,328,288
Investments 6
Borrowings
from Financial 11,975,684 21,790,480 38,490,586 59,103,350 44,195,886
Institutions

Profit 3,701,544 5,949,032 9,468,232 8,402,591 8,333,120

9.7. Allocation of Funds

Funds are allocated on “need to do” basis. Surplus funds are invested in different
other schemes to earn more by investing in risk free opportunities. Banks offering the
attractive deposits to its customers is the major activity of any banking organization. By
this banking organization has to collect a handsome amount that can be allocated further
to earn more. For this purpose bank can make capital mix and offer outstanding shares,
landing to financial institutions and borrowing from financial institution are major
sources by which we can analyze the bank allocation of fund. Allocation of funds for
UBL can be analyzed by the following table.

Description
2004 2005 2006 2007 2008
/Years
Lending to
Financial 18,360,633 17,867,552 29,572,070 24,781,723 22,805,341
Institution
54,953,728 63,029,944 67,260,338 115,585,64 116,328,288
Investment
6

63
 Deposits and 230,256,62 289,226,29 335,077,87 400,974,53 483,560,062
other accounts 7 9 3 9
Borrowings from
Financial 11,975,684 21,790,480 38,490,586 59,103,350 44,195,886
Institution

10. Critical Analysis of the Theoretical Concept Relating to

Practical Experiences

To observe that whether the techniques that we read in the books are being used
practically or not. It is because sometimes, it is heard that there is a difference between
theory and practice. But I personally believe that it cannot be true. Theory is based on
practical experiences and observation s of the writer.

So I think that if there is really a difference between bookish theories and the
practices in an organization it may be because there are some deficiencies in that
particular organization, that was my objective of specially studying the Finance
Department of UBL and it is also because my specialization is in Finance.
Theoretical concepts which vary from my practical experiences are following.

 Atleast 24 hours login transaction detail update in uni-bank.

 Critical failures in electronic transaction system.
 To maintain clients, violaty basic banking practices e.g Acceptance of cash
beyond banking hours.
 Issuing of instruments / honoring of instruments beyond time / office hours.

Financial Analysis (Ratios, Horizontal & Vertical Analysis)

Financial Analysis: is a process which involves reclassification and summarization of

information through the establishment of ratios and trends. Financial analysis involves
the use of various financial statements

64
Financial Statements:
“Financial statements are like a perfume, to be sniffed but not swallowed”
These statements do several things.
Balance Sheet: Balance sheet represents a snapshot of the firm’s financial position at
moment in time. It summarizes the assets, liabilities and owner equity of a business at a
moment in time, usually the end of a year or a quarter.
Total assets = Total liabilities + Owner equity
Income Statement: Income statement (Profit & Loss Statement) depicts a summary of
the firm’s profitability over time. It summarizes the revenues and expenses of the firm
over a particular period of time, again usually a year or a quarter ending with net income
or loss for the period.
The Objectives of Financial Statement Analysis: The overall objective of financial
statement analysis is the examination of a firm’s financial position and returns in relation
to risk. This must be done with a view to forecasting the firm’s future prospective.
For the purpose of understanding, the financial statements like balance sheet &Income
statement will be used.

Horizontal Analysis

“An analysis of percentage financial statements where all balance sheet or income
statement figures for a base year equal 100% and subsequent financial statement items
are expressed as percentage of their values in the base year.”

This technique is also known as comparative analysis. It is conducted by setting

consecutive balance sheet, income statement or statement of cash flow side-by-side and
reviewing changes in individual categories on a year-to-year or multiyear basis. The most
important item revealed by Comparative financial statement analysis is trend. A
comparison of statements over several years reveals direction, speed and extent of a
trends.

65
 11. FINANCIAL ANALYSIS

11.1 BALANCE SHEET

UNITED BANK LIMITED

TABLE FORM
ASSETS
Rs.000

Assets 2004 2005 2006 2007 2008

Cash
balances
with other 23,844,435 34,074,786 48,939,840 57,526,451 50,069,965
treasury
banks
Balances
With Other 17,699,334 12,717,100 14,034,476 4,191,128 7,497,174
Bank
Lending to
Financial 18,360,633 17,867,552 29,572,070 24,781,723 22,805,341
Institutions

Investments 54,953,728 63,029,944 67,260,338 115,585,646 116,328,288

Advances 144,151,055 204,810,470 247,309,893 299,354,736 371,139,675

Operating 3,969,006 4,449,324 5,234,463 16,943,950 18,021,445

Fixed Assets

Deferred tax
asset-net 5194892 2273005 906661 - 2055609

Other Assets 4,439,580 7,829,770 10,008,132 11,740,697 17,154,985

66
 LIABILITIES
Rs.000

LIABILITIES 2004 2005 2006 2007 2008

Bills payable 3,811,284 4,159,964 4,560,649 6,079,341 5,194,449

Borrowing
From 11,975,684 21,790,480 38,490,586 59,103,350 44,195,886
Financial
Institution

Deposits 230,256,627 289,226,299 335,077,873 400,974,539 483,560,062

Other
liabilities 5,704,749 6,204,746 9,275,034 13,316,657 16,265,478

CAPITAL
Rs.000

REPRESENTED 2004 2005 2006 2007 2008

BY
Share capital 5,180,000 5,180,000 6,475,000 8,093,750 10,117,188
Reserves 5,915,923 6,225,461 8,298,873 10,261,958 15,501,513

Un Appropriated
Profit 3,274,439 7,350,813 12,429,853 15,653,703 16,604,076

Surplus 2,993,664 2,911,996 2,659,661 8,411,993 1,639,982

67
 UNITED BANK LIMITED
BALANCE SHEET (LIABILITIES)
Rs.000

LIABILITIES 2004 2005 2006 2007 2008

Bills Payable 3,811,284 4,159,964 4,560,649 6,079,341 5,194,449

Borrowings
From
Financial 11,975,684 21,790,480 38,490,586 59,103,350 44,195,886
Institution

Deposits
230,256,627 289,226,299 335,077,873 400,974,539 483,560,062

Other
liabilities 5,704,749 6,204,746 9,275,034 13,316,657 16,265,478

Share Capital 5,180,000 5,180,000 6,475,000 8,093,750 10,117,188

Un
Appropriated 5,915,923 6,225,461 8,298,873 10,261,958 15,501,513
Profit
Reserves 3,274,439 7,350,813 12,429,853 15,653,703 16,604,076

Surplus on
Revaluation 2,993,664 2,911,996 2,659,661 8,411,993 1,639,982
of Assets

68
 11.2 INCOME STATEMENT ACCOUNT

UNITED BANK LIMITED

TABLE FORM
Rs.000

ITEMS 2004 2005 2006 2007 2008

Mark
up/Interest 9,233,881 20,158,860, 32,991,603 41,045,543 52,253,361
earned
Mark
up/Interest 1,732,760 6,045,948 12,126,809 16,936,187 24,117,702
expenses
Net Mark up
Interest 7,501,121 14,112,912 20,864,794 24,109,356 28,135,659
Income

Provisions 7,162,247 12,685,104 18,547,936 17,687,310 20,038,375

Non Mark up
Interest 4,497,826 5,013,032 6,948,388 8,992,352 10,401,394
Income
Non Mark up
interest 6,770,345 8,216,488 11,204,568 16,565,344 13,674,688
Expenses
Profit Before 4,889,728 9,481,648 14,291,756 13,004,974 13,874,424
Tax
Profit After
Tax 3,701,544 5,949,032 9,468,232 8,402,591 8,333,120
Profit
Available For - 9,317,619 16,913,499 20,895,472 24,239,841
Appropriation

69
 11.3. RATIO ANALYSIS

• PROFITIBILITY RATIO.

• SOLVENCY RATIO.

• GENERAL RATIO.

PROFITABILITY RATIO

RETURN ON TOTAL ASSETS

ITEMS 2004 2005 2006 2007 2008

Profit After 3,701,544 5,949,032 9,468,232 8,402,591 8,333,120

tax
Total Assets 272,612,663 347,048,951 423,265,873 530,124,331 605,072,482
Return On 21.32% 27.45% 31.70% 19.80% 19.0%
Total Assets

70
 35

30

25

20

%AGE
return on total assets
15

10

0
2004 2005 2006 2007 2008
YEARS

COMMENTS:

Return on total Assets shows increase from 2004 to 2006 and in 2006 its higher side in
studied 5 years which shows the UBL is effectively uses its all available assets to
generate revenue. But in 2007 its decline due to the economic shocks faces country, but
UBL shows stability in 2008 which is good sign.

RETURN ON EQUITY

ITEMS 2004 2005 2006 2007 2008

PROFIT After 3,701,544 5,949,032 9,468,232 8,402,591 8,333,120

tax
Share holder 14,089,592 14,317,457 14,433,534 25,767,701 27,258,613
Equity
Return on 26.271% 41.550% 54.310% 31.390% 30.570%
Equity
Share holder Equity = share capital+ Reserves + Surplus

71
 RETURN ON EQUITY

60

50

40
%AGE

RETURN ON
30
EQUITY
20

10

0
2004 2005 2006 2007 2008
YEARS

COMMENTS:

ROE measures the over all firm performance. ROE compares net profit after tax to the
equity that share holders invested in the bank. For the UBL, this ratio also shows the
constant increase till 2006. A high return on equity often reflects the firm’s acceptance of
strong investment opportunities and effective expense management. And higher the
return on equity might simply be the result of assuming excessive financial risk.

RETURN ON DEPOSITS

ITEMS 2004 2005 2006 2007 2008

NET PROFIT 3,701,544 5,949,032 9,468,232 8,402,591 8,333,120

Total 230,256,627 289,226,299 335,077,873 400,974,539, 483,560,062
Deposits
Return On 1.607% 2.056% 2.825% 2.095% 1.723%
Deposit

72
 RETURN ON DEPOSITS

2.5

2
%AGE 1.5
RETURN ON
DEPOSITS
1

0.5

0
2004 2005 2006 2007 2008
YEARS

COMMENTS:

This ratio indicates to what extent deposits which represent funds mobilization on the
part of the bank contribute towards income generation. Although the other ratios
regarding the profitability are showing satisfactory position of the bank but still bank
need to increase its utilization of resources in order to increase its profitability because
the banks have to pay heavy taxes on their profit.

73
 MARGIN OF PROFIT:

ITEMS 2004 2005 2006 2007 2008

Profit after Tax 3,701,544 5,949,032 9,468,232 8,402,591 8,333,120

Mark up, 9,233,881 20,158,860, 32,991,603 41,045,543 52,253,361
Interest
Net profit 40.1% 29.51% 28.70% 20.47% 15.95%
Margin

MARGIN OF PROFIT

45
40
35
30
%AGE

25
MARGIN OF PROFIT
20
15
10
5
0
2004 2005 2006 2007 2008
YEARS

COMMENTS:

Profit margin for UBL is on decreasing side and it is because of the increasing of mark up
interest earned. The whole banking sector faces the same declining trend.

74
 EARNING PER SHARE

ITEMS 2004 2005 2006 2007 2008

Profit After 3,701,544 5,949,032 9,468,232 8,402,591 8,333,120

tax
Total No. 518,000,000 647,500,000 809,375,000 1,011,718,750 1,011,718,750
Of Shares
Earning 7.15 9.19 11.70 8.31 8.24
Per Share
(Rs.)

EARNING PER SHARE

14
12
10
%AGE

8 EARNING PER
6 SHARE

4
2
0
2004 2005 2006 2007 2008
YEARS

COMMENTS:

Earning per share indicate the amount of earnings for each common share held. Earning
per share is useful indicator of the operating performance of the bank. UBL earning per

share is on higher side in 2006 which is Rs. 11.70.

75
 LIQUIDITY OR SOLVENCY RATIOS

LOAN TO ADVANCE RATIO

ITEMS 2004 2005 2006 2007 2008

Total Loans 11,975,684 21,790,480 38,490,586 59,103,350 44,195,886

Total 144,151,055 204,810,470 247,309,893 299,354,736 371,139,675
Advances
Loan to 8.308% 10.639% 15.564% 19.743% 11.908%
Advance
Ratio

LOAN TO ADVANCE RATIO

25

20

15
%AGE

LOAN TO ADVANCE
RATIO
10

0
2004 2005 2006 2007 2008
YEARS

COMMENTS:

Lower the ratio is better for lending institutions. In this case ratio is decreased to 11.9%
from 19.7%. Which is better for bank .It shows that bank loans have decreased as
compared to its advances.

76
 LOAN TO TOTAL ASSETS

ITEMS 2004 2005 2006 2007 2008

Total Loans 11,975,684 21,790,480 38,490,586 59,103,350 44,195,886

Total Assets 272,612,663 347,048,951 423,265,873 530,124,331 605,072,482
Loan to 4.4% 6.3% 9.1% 11.14% 7.3%
Total Assets

LOAN TO TOTAL ASSETS

12

10

8
%AGE

LOAN TO TOTAL
6
ASSETS
4

0
2004 2005 2006 2007 2008
YEARS

COMMENTS:

It shows the empirical relation between loan and assets of bank. Here this ratio has
increasing trend till 2007 but in 2008 it again on decline, which shows better performance
of bank.

77
 ADVANCES TO TOTAL DEPOSITS

ITEMS 2004 2005 2006 2007 2008

Advances 144,151,055 204,810,470 247,309,893 299,354,736 371,139,675

Total 230,256,627 289,226,299 335,077,873 400,974,539, 483,560,062
Deposit
0.63 0.71 0.74 0.75 0.77

ADVANCE TO TOTAL DEPOSITS

0.9
0.8
0.7
0.6
%AGE

0.5 ADVANCE TO
0.4 TOTAL DEPOSITS
0.3
0.2
0.1
0
2004 2005 2006 2007 2008
YEARS

COMMENTS:

As deposits show an increase, the advances also increased. Bank is now providing the
advances and loans to more customers as compared to previous year. This shows an
increase in area of activity of bank.

78
 CASH TO DEPOSIT:

ITEMS 2004 2005 2006 2007 2008

Cash 23,844,435 34,074,786 48,939,840 57,526,451 50,069,965

Deposits 230,256,627 289,226,299 335,077,873 400,974,539, 483,560,062
Cash to 10.35% 11.78% 14.61% 14.35% 10.35%
Deposits

CASH TO DEPOSIT

16
14
12
10
%AGE

8 CASH TO DEPOSIT
6
4
2
0
2004 2005 2006 2007 2008
YEARS

COMMENTS:

This ratio shows that how much cash is available to meet the demand liabilities of
depositors. The graph shows its higher position in 2006 which is 14.61% and then to next
year it stabilize but it decline in 2008 which shows banks cash position is disturb and
UBL management is to improve it in future.

79
 PROPRIETRY RATIO:

ITEMS 2004 2005 2006 2007 2008

Share 14,089,592 14,317,457 14,433,534 25,767,701 27,258,613

Holder Fund
Total Assets 272,612,663 347,048,951 423,265,873 530,124,331 605,072,482
Proprietary 5.17% 4.13% 4.12% 5.05% 4.51%
Ratio

PROPRIETARY RATIO

4
%AGE

PROPRIETARY
3
RATIO
2

0
2004 2005 2006 2007 2008
YEARS

COMMENTS:

It is the ratio of funds belonging to shareholders to the total assets of the company. In this
case this ratio has increased till 2007 and in 2008 it slightly down.

80
 DEBT RATIO

ITEMS 2004 2005 2006 2007 2008

Total 255,248,632 325,380,681 393,402,486 487,702,927 561,209,723

Liabilities
Total 272,612,663 347,048,951 423,265,873 530,124,331 605,072,482
Asset
Debt 93.63% 93.76% 93% 92% 92.8%
Ratio

DEBT RATIO

94

93.5

93
%AGE

92.5 DEBT RATIO

92

91.5

91
2004 2005 2006 2007 2008
YEARS

COMMENTS:

The decreasing debt ratio shows the decreased share of debt in total assets as compared to
owner’s equity. The lower the share of the debt more will be the secure financial
position.

81
 GENERAL RATIOS

COST OF BORROWINGS

ITEMS 2004 2005 2006 2007 2008

Mark up 1,732,760 6,045,948 12,126,809 16,936,187 24,117,702

Paid
Deposits 230,256,627 289,226,299 335,077,873 400,974,539 483,560,062
Cost of 0.75% 2.10% 3.62% 4.22% 4.98%
Borrowing

COST OF BORROWING

4
%AGE

COST OF
3
BORROWING
2

0
2004 2005 2006 2007 2008
YEARS

COMMENTS:

It is a comparison between mark-up paid and deposits, the lower the mark up paid is
better for institution.

82
ADMIN. EXPENSE TO DEPOSIT

ITEMS 2004 2005 2006 2007 2008

Admin. 6,794,311 7,874,013 10,952,275 13,420,977 15,519,634

Exp.
Deposit 230,256,627 289,226,299 335,077,873 400,974,539 483,560,062
Ratio 2.95% 2.72% 3.26% 3.34% 3.20%

ADMIN. EXPENSE TO DEPOSIT

4
3.5
3
2.5
%AGE

ADMIN. EXPENSE
2
TO DEPOSIT
1.5
1
0.5
0
2004 2005 2006 2007 2008
YEARS

COMMENTS:

It shows the cost incurred to manage and collect the deposits. And UBL case this ratio
shows stability.

83
COMMENTS:

In consumer product the UBL shows mix trend. But in drive, cash line and business lie
the % shows improvement which prove the positive performance of UBL management
towards there customers.

84
 11.4. Horizontal Analysis of Balance Sheet

The horizontal financial statements analysis is done by restating amount of each

item or group of items as a percentage. Such percentages are calculated by selecting a
base year and assign a weight of 100 to the amount of each item in the base year
statement. Thereafter, the amounts of similar items or groups of items in prior or
subsequent financial statements are expressed as a percentage of the base year amount.
The resulting figures are called index numbers and this analysis is also called Index
Analysis. Here are the Horizontal Analysis balance sheets of UBL and the actual balance
sheets from where the data been take are attached as “Annexes” at the end of this report.

Horizontal Analysis of UBL

Particulars/Years 2004 2005 2006 2007 2008

Assets % % % % %
Cash & Balances with Treasury Banks 100 143 205 241 210
Balances with Other Banks 100 72 79 24 42
Landings to Financial Institutions 100 97 161 135 124
Investment 100 115 122 210 212
Advances 100 142 172 208 257
Fixed Assets 100 112 132 427 454
Deferred Tax Assets – Net 100 44 17 - 40
Other Assets 100 176 225 264 386
TOTAL 100 127 155 194 222

Analysis of UBL Assets

In horizontal analysis all calculations are calculated on the basis of base year 2004. In
short, the standardization of balance sheet and income statement items as percentages of
totals and indexes to a base year often gives us insights additional to those obtained from
the analysis of financial ratios.

The Assets of the United Bank Limited balance sheet show the constant growth in
every year. In Balance Sheet Cash and balance with treasury banks & Operating fixed
asset show the constant growth in every year. Cash and balance with treasury banks in

85
2005 is 143.% and in 2006 that is 205% which is increased. In 2007 that is 241% that is
increased 36% from the previous year . In 2008 that is 210% which was 31% decrease
from 2007. the reason of this decline is due to new rule and regulation of State bank of
Pakistan. And the economic condition of the country and the whole world.

Balances with other banks shows increase in 2006, but decline in 2007 that is
24% which is 55% less than 2006 due to deteriorating performance. In 2008 it is 42%
which increase slightly from the previous year.

Lending to financial institutions is 97% in 2005. In 2006 that is 161% that is

64% increased from 2004. But in 2007 that is 135% which is 26.% less than 2006 due to
some problems in the implementation of management policies. In 2008 it is still decline
from the last year just because of non performing loan increase in the country.

Fixed Asset in 2005 is 112%, in 2006, 2007, 2008 that is 132%, 427%, 454% that
shows the gradual increase in every year. Constant increase in Operating fixed asset show
the growth and development of United Bank Limited.

Deferred tax asset-net in 2005 that is 44%, in 2006 that is decreased and reached
at 17% and in 2008 that is 40% which is 23% increase from 2006. That’s all show the
efficient working & effective implementation of United Bank Limited management
policies.

Investments, advances and other assets also show the constant growth, in few
years that is shows increase. These changes are minor and overall show the stability &
development of the organization.

86
 Analysis of UBL Liabilities
Horizontal Analysis of UBL
Particulars/Years 2004 2005 2006 2007 2008
Liabilities % % % % %
Bills Payable 100 109 120 159 136
Borrowings 100 182 321 493 369
Deposits & Other Accounts 100 127 146 174 210
Other Liabilities 100 109 163 233 285

Share Capital 100 100 125 156 195

Reserves 100 105 140 173 262
Un-appropriated Profit 100 224 380 478 507
Surplus on Revaluation of Assets - Net 100 97 89 281 55
TOTAL 100 125 172 244 253

As the asset of the United Bank Limited is growing every year, liabilities at the
same time also increasing.

Bills Payable in 2005 is 109% and in 2006 that is 120% which is 11% greater. In
2007 it reached to 159% and in 2008 it is 136% that is 23% decreased from 2007.

In the case of Borrowing from financial institutions. It is increasing from 2004 to

2007. and at 2007 its reached to its highest point but in 2008 it is decline 124% from
2007 which is good sign, and show that the UBL growing to overcome on borrowing
from financial institution.

UBL working on several policies and trying to adopt and implement the policies
through which they can reduce their liabilities. No doubt that the liabilities is on
increasing side the basic reason of this is the economic condition in the 2007-08.

87
 Share capital of the United Bank Limited remain same in 2004,2005 years that is
5,180,000, however its increased in 2006 by 6,475,000.And from 2006 the share capital
in increasing. Reserves of the United Bank Limited are constantly increasing every year.
In 2005 reserves are 105%, in 2006 is 140%, and in 2007 is 173% and 262% in 2008
which is 89% more than the 2007.

Surplus on revaluation of fixed asset is 97% in 2005, 89% in 2006 which show
decreasing trend in 2007 it’s again on higher side which 281% and in 2008 UBL
overcome and the ratio is decrease from 2007 and shows 226% decrease.

In 2004 UBL shows profit. It is just because the successful implementation of

policies of United Bank Limited. In 2005 United Bank Limited had 224% which is
increased from the previous year and in 2008 it is 507%, un-appropriated profit which
was huge increased.

88
11.5. Horizontal Analysis of Income Statement of United Bank
Limited:-

Income statement (Profit & Loss Statement) depicts a summary of the firm’s profitability
over time. It summarizes the revenues and expenses of the firm over a particular period of
time, again usually a year or a quarter ending with net income or loss for the period.
Description / Years 2004 2005 2006 2007 2008
Mark up /Interest Earned 100 218 357 444 566
Mark up/Interest Expensed 100 349 700 977 1392
Net Mark up /Income 100 188 278 321 375
Provisions against loans
100 421 683 1895 2389
and advances total
Net Markup/Income After
Provisions 100 177 259 247 280

Non Mark up / Interest income

Fee comm. & Brokerage Income 100 154 268 312 381
Dividend Income 100 18 76 50 53
Income From dealing in
100 101 99 124 272
Foreign Currency
Other Income 100 123 69 151 136
Total non-mark-
100 111 154 200 231
up/Income

Non Mark up / Interest expenses

Administrative Expense 100 116 161 197 228
Other Provisions/(Reversal) - 100 67 70 134
Other Charges 100 67 248 167 2470
Total non-mark-up /
100 121 165 245 2002
Interest Expense
Profit Before Taxation 100 194 292 266 284
Taxation 100 297 406 387 466
Profit After Taxation 100 161 256 227 225
Inappropriate Profit
100 236 531 898 1130
brought forward
Profit available for
- 100 181 224 260
appropriation

89
Comments on Horizontal Analysis of Income Statement:-

Net Markup/Income can be obtained by subtraction of Markup Interest Expense from

Markup/Interest Earned. For the purpose of horizontal analysis we have taken the year
2004 as base year. During the year 2005 net interest income is 188%, after that from the
year 2005 it shows the gradual increase which is showing that bank is earning a better
rate of interest income rather than its expanses. The management of the UBL Bank
Limited is managing its business activities very well on yearly basis.

Non-markup/Income included the fee commission and brokerage income, dividend,

accounts maintaining fee, gain on sale of securities or other income. The total non-
markup income is been 111% as compared to the base year which shows a little bit
increase, however its showing increasing trend for further three years which is showing
that the bank is earning well because of well control efforts of the management of the
UBL Bank Limited. The UBL Bank Limited is offering well reputed services to its
customers so they are attracting to the bank and the rate of earning for the bank is getting
well year by year.

Non-markup/Interest Expense can be obtained by taking the administrative expenses,

other provision and charges, its expenses are showing also increasing trend, which is
showing that the expenses are on higher side due to implementing new polices by
management of the UBL.
Profit Before Taxation can be obtained by subtracting the expenses from total income.
In the analysis table the profit before taxation is showing also increasing trend
respectively. The profit before taxation is the amount which is due for the tax levied by
the government. It shows that bank is doing its business well, attracting and offering
services to its customer upto their satisfaction level so that its earning ratio is good and
showing increasing trend.

Profit after Taxation, after deducting the due taxes on total income earned during the
year the balance amount can be said profit after taxation that also showing an increasing
trend which show that the health of business for UBL Bank Limited is good and
competing well in the banking sector of the country.

90
 11.6. Vertical Analysis of Income Statement
A method of financial statement analysis in which each entry for each of the three
major categories of accounts (assets, liabilities and equities) in a balance sheet is
represented as a proportion of the total account. The main advantage of analyzing a
balance sheet in this manner is that the balance sheets of businesses of all sizes can easily
be compared. It also makes it easy to see relative annual changes in one business
Vertical Analysis of UBL
Particulars/Years 2004 2005 2006 2007 2008
Assets % % % % %
Cash and Balances with
8.75 9.82 11.56 10.85 8.27
Treasury Banks
Balances with Other Banks 6.50 3.66 3.32 0.79 1.24
Lending’s to Financial
6.74 5.15 6.98 4.67 3.77
Institutions
Investment 20.15 18.16 15.89 21.80 19.22
Advances 52.90 59.01 58.42 56.47 61.34
Fixed Assets 1.45 1.28 1.24 3.19 2.98
Taxation Recoverable
Deferred Tax Assets - Net 1.91 0.67 0.23 - 0.34
Other Assets 1.63 2.25 2.36 2.21 2.83
TOTAL 100 100 100 100 100

91
 Particulars/Years 2004 2005 2006 2007 2008
Liabilities % % % % %
Bills Payable 1.40 1.20 1.08 1.15 0.86
Borrowings 4.39 6.28 9.11 11.15 7.30
Deposits & Other Accounts 84.46 83.34 79.15 75.64 79.92
Sub-Ordinate Loans 1.28 1.15 1.42 1.13 1.98
Liabilities against Assets -
Finance Lease 0.00 - - - -
Other Liabilities 2.09 1.79 2.19 2.51 2.90
Deferred Tax Liabilities - - - 0.42 -

Share Capital 1.90 1.49 1.53 1.53 1.67

Reserves 2.17 1.79 1.96 1.94 2.56
Un-appropriated Profit 1.20 2.12 2.94 2.95 2.74
Surplus on Revaluation of
Assets – Net 1.10 0.84 0.63 1.60 0.27
TOTAL 100 100 100 100 100

Vertical Analysis of UBL Data

In vertical financial statement analysis, the various components of balance sheet

express as the percentages of the total asset of the organization. Vertical/Cross-
sectional/common size statements came from the problem in comparing the financial
statements of the organization that differs in size. In the balance sheet, for example the
assets as well as the liabilities and equity are each expressed as 100% and each item in
these categories is expressed s a percentage of the respective totals.

The expression of individual financial statement items as percentages of totals

helps the analyst to spot trends with respect to the relative importance of these items over
time. The strategies may include increase/decrease the holding of certain assets. The
analyst may observe the trend of the increase in the assets and liabilities.

92
 The trends and ratios for vertical analysis shown in the table some of the
important reasons for this change in assets and liabilities can be discussed as under.

Cash & Balances with Treasury showing the ratios 8.75, 9.82, 11.56, 10.85 and
8.27 for the years 2004 to 2008 respectively. For the 2004 bank has increased the
deposits with treasury to comply with the statutory requirements issued from time to
time, in the year 2004 and 2005 deposits with SBP increased to meet the statutory
requirement and to meet the maximum cash reserves and capital requirements pertaining
to the foreign branches. However during the year there is a big change in balances with
treasury that is being kept to meet the day to statutory requirements, cash reserves and
capital requirements and also represents the US $ settlement account being maintained
with State Bank of Pakistan.

Balances with Other Bank, the vertical ratio are 6.50, 3.66, 3.32, 0.79 and 1.24
for the years 2004-2008 respectively which are also showing a gradual increase in first
year and showing decrease in last four years. During the year 2004 this is increased
because by keeping this bank can earn a better mark up on the amount or balances kept
with other banks. During the year 2004 there was 90 percent increase in banks current
deposits by last year and 26.43 percent is increase in deposits accounts as per previous
years. For the year 2005 2006 both deposits been decreased because mark up rates.

Lending to Financial Institutions are showing the mix trend in balance sheet.
For the year 2004 the mark up rates were better so lending to financial institutes is
showing a better position in the balance sheet however during the year mark rates been
increase so there is declining in lending to financial institution up to the year 2005
however during the year 2006 there is increase in lending because mark up rates
increased and bank soled the collateral also.

Fixed Assets are showing overall a positive trend for the bank. The fixed been
depreciated by the auditors on the rates as 5% charged to buildings, 10% charged to
furniture and fixture, 20-25% to electrical, office equipment and computer equipment and

93
20% charged vehicles. During the year 2004 2005 and 2006 the fix asset show decline
trend but in 2007 and 2008 in fixed assets shows increasing trend because of the
purchase of electrical, office and computer equipment to enhance the capability of the
bank, and addition in vehicles and furniture and fixture is also the cause behind this on
the other hand the bank has sold out the old one also. During the year 2005 there is a
major change showing in the balance sheet due to increase in the property and
equipments of the bank, intangible assets and capital work in progress also increased
during this year. Assets like building, furniture and fixture, equipments and vehicles
revalued and depreciated at the specified rates as previous practice of the bank. For the
year 2006 fixed assets increased because of increase in capital work in progress
comprises on civil works and advances to suppliers and contractors, property and
equipments also for the betterment environment for employees to enhance their ability to
work and for customers as well. Similarly for the year 2006 there is an addition fixed
like building, furniture and fixture, equipments and vehicles by purchasing new assets
and also there is deletion in amount by selling the old assets and also by giving the
retirement benefits to employees and there is deletion in amount due to depreciation
charged on these assets too at specified rate.

Bills Payable and borrowing from Financial institutions, as for as concerned

to bills payable and borrowings from financial institutions these are showing the
increasing trends as shown in the above table which is showing the increasing trend in
liabilities of the bank, borrowing has been made by local currency, foreign currency,
secured loans from financial institutions and borrowed from State Bank of Pakistan to run
its day to day need and requirement of the business.

Deposits and other Accounts shows an increasing trend in its percentages for
that shows the bank management trying to continuously to compete with their
competitors well by offering the new attractions to the general public customers and
corporate sectors customers, so that the deposits are increasing every year and also
helpful for the business volume of the bank.

94
 In the case of other liabilities there is increasing trend too because of interest
payable on local currency and foreign currency, proposed cash dividend, forward foreign
exchange contacts etc and also there is an increase in deferred liabilities too during the
year 2004 because the management has increased the entitlement of employees in respect
of leaves prior to their retirement from 180 days to 365 days.

Share Capital shows the increasing change form the year 2004 to 2005 but
during the year 2006 and 2007 the bank issued bonus shares for Rs.1,295,000 million
which results the change in total share capital to Rs,6,475,000 million

Profit as for as concerned to the profit for the bank, there is loss during the year
2003, after that there is positive increase in the profit rate which shows that bank
management is doing well and trying to cop up on the deficiencies, and improving the
business and trying to compete well in the market.

95
 11.7. Vertical Analysis of Income Statement

Description / Years 2004 2005 2006 2007 2008

100.0 100.0 100.0 100.0

Total Markup & Non Markup Income 100.00
0 0 0 0
Mark up/Interest Earned 84 77 73 71 68
Mark up/Interest Expensed 16 23 27 29 31
Net Mark up/Income 68 54 46 41 37
Provisions against loans and advances
3.1 5.4 5.1 11 11
total
Net Mark up/Income After Provisions 65 48.4 41 30 26
Non-mark-up/Interest Income
Fee commission and Brokerage Income 15 10 10 9 8
Dividend Income 10 0.77 1.85 0.95 0.76
Income From dealing in Foreign Currency 6.1 2.6 1.46 1.4 2.4
Gain on sale of Securities - 1.4 0.62 1.46 0.33
Other Net Income 10 4.6 1.6 2.78 1.9

Total non-mark-up/Income 41 19 15 15 14

Total Income 106 67 56 46 40

Non-mark-up/Interest Expense
Administrative Expense 62 30 24 23 20
Other Provisions / (Reversal) (0.31) 1.3 0.5 0.41 0.58
Other Charges 0.09 0.02 0.05 0.03 0.33
Total non-mark-up/Interest Expense 62 31 25 23 22

Profit Before Taxation 44 36 32 22 18

Taxation 11 14 11 8 7

Profit After Taxation 34 23 21 14 11

Unappropriated Profit brought forward 13 12.5 16 21 20

Profit available for appropriation 47 35 37 36 32

96
Comments on Vertical Analysis of Income Statement:-

The vertical analysis of the income statement is showing the following trends by
comparing the last year ark up interest earned is on increasing side which show good
performance of UBL in last year it decline slightly which show the impact of economic
condition of the country.
As shown in the above table net markup income after provisions is showing a gradual
decrease which shows the negative sign for the bank. In the first three years it is little bit
in control by the management but after 2007 its shows decreasing trend which shows that
UBL facing problem in implementing some polices.

While analyzing the total non markup income is showing decrease in 2005 but after that
UBL management is stabilize it which shows the good sign for the bank. It shows that
the earning on non markup activities is going well so that the non markup income is also
increasing. The bank management is not emphasizing on the non markup earning
activities.

Non-mark-up/Interest Expense the above table is showing overall decreasing trend for
the last five years. Which are showing that the management done the good efforts to
control the administrative expenses, provisions and other charges. So that the banks
earning ration is getting better as showing the profit before taxation in the above table.

Profit before taxation is showing decreasing trend due to the market condition and the
over all world wide economic condition. The over all banking sector in Pakistan showing
declining trend in making profit. In UBL case the declining trend is minimize by the
active decision making regarding all activity.
The same condition is showing in Profit after taxation.

97
 11.8. COMPETITORS IN BANKING SECTOR
 NATIONAL BANK OF PAKISTAN
 MUSLIM COMMERCIAL BANK LIMITED
 HABIB BANK LIMITED
 ALLIED BANK LIMITED

MARKET SHARE IN TERM OF ASSETS

During the year total assets for banks under review have increased by 22.8% from Rs.
4,122.5 billion at December 2006 to Rs. 5,063.4 billion at December 2007. The major
growth in terms of amount was in Large Size Banks which registered an increase of Rs.
607.8 billion.

The major increase was witnessed in NBP Rs. 126.7 billion,.

Banking Survey 2007

98
 MARKET SHARE IN TERM OF DEPOSITS

Deposits for banks under review increased by 22.3% to Rs. 3,846.3 billion in 2007 (from
December 2006) compared to an increase of 20.7% between 31 December 2005 and 31
December 2006 (Rs. 3,145.5 billion).

Large Size Banks registered a growth of 18.8% in 2007 (Rs. 2,733.5 billion) as compared
to 16.4% in 2006 (Rs. 2,302 billion).

Banking Survey 2007

99
 MARKET SHARE IN TERM OF LOAN AND ADVANCES

Total advance of banks under review increased by 14.5% from Rs. 2,298.2 billion as at
December 2006 to Rs. 2,632.1 billion at December 2007. Advances of Large Size Banks
increased by 12.1% in 2007 as compared to 24.6% in 2006. Advances of Medium Size
Banks increased by 14.6% and Small Size Banks grew by 43.7%. The ratio of provision
against NPL to total advances also improved due to provisions made during the year as a
result of withdrawal of the benefit of FSV for the computation of provision against NPL
for most type of advances.

100
 Banking Survey 2007

MARKET SHARE IN TERM OF PROFITABILITY

For banks, under review profit before tax decreased by 8.3% to Rs.110.7 billion in 2007
compared to Rs. 120.7 billion in 2006 and Rs.91.3 billion in 2005.
Among Large Size Banks, BAF registered an increase of 162.5% in profit before tax,
MCB 19% and NBP 7.1%. In terms of amount NBP posted the highest profit figure of
Rs. 28.5 billion which is approximately 28.5% of total profit before tax of the Large Size
Banks followed by MCB and HBL with Rs. 22.5 billion and Rs. 15.1 billion
respectively.
The main reasons for reduction in the profitability was additional provision against NPL
due to the elimination of benefit of FSV and downturn in consumer and individual
banking. The additional provision made due to withdrawal of FSV benefit against most
types of advances amounted to approximately Rs. 25 billion.

Banking Survey 2007

101
11.9. Future Prospects of the Organization
 Customer focus
 Developing human resources, infrastructure and internal system.
 Improvement in solvency
 Improvement in non performing loans, role of SBP
 Political and economic condition

12. Short-Falls/Weaknesses

SWOT ANALYSIS:

STRENGTH

 strong and trusted name

 one of the largest branch network
 ability to develop and launch new product
 international presence

WEAKNESSES

 lack of motivated employee

 high turnover rate
 over employment

102
  employees reluctant to change
 change difficult to achieve
OPPERTUNITIES

 increase service delivering channels

 launch SME products
 focus on consumer banking
 investment in human resources
 penetration in regional markets

THREATS

 intense credit risk

 increased competition
 destabilization of macroeconomic condition
 interest/ markup risk
 liquidity risk

13. Conclusion

The analysis of shortfalls/weaknesses narrated above tells us about the

present vital concern. The internship of UBL given me as exposure to the

103
accounting atmosphere. It helped me greatly in understanding the financial
system. The experience I got during the internship will help me in
understanding the decision-making and how to solve daily problems
encountered during the practical working environment.

14. Specific Recommendations

During my internship at the UBL I find out week areas that require improvements
for long-term benefit of the organization. These suggestions and recommendation are as
follows:

 UBL may have to improve its inside and outside decorum of the bank to attract its
customer.
 The bank may have to start new attractive promotional activities to enhance the
banking business in the region by offering new products and services for existing
and new customers. Non-productive activities needed to be stopped which are not
fruitful for the banking business of UBL.
 The branches of UBL, facing losses need to pay special attention to improve the
performance of these branches by conducting or posting the efficient staff having
good personal relations. They can be helpful to improve the performance and can
also increase the funds for such branches.
 Though CD, PLS, and advances are computerized but, in my opinion all banking
operations need to be computerized to improve the working efficiency of the
employees and banking business as well.
 The bank may have to draw a comprehensive and uniformed recruitment policy in
order to induct the competent and professional employees to meet the deficiency
of staff. The political involvement need to be minimized on all the operations of
UBL, such political involvement can effect all the departments of any
organization.

104
  The bank may have to make it possible thorough implementation of all policies
and specially rules and regulations. The equality in policies and implementation
of rules and regulations will bring more mental satisfaction and will increase the
working efficiency of their employees.

15. References & Sources

In order to collect data, I used the following modes of research.

a. Personal Observations
b. Existing documents.
c. Annual reports of the organization
d. Previous reports on UBL

Books

JAE K. SHIM, JOEL G. SIEGEL,

Managerial Finance,

Chapter “Financial Analysis”.

Internet :-

During the preparation of this report I also got the benefit of internet and for this purpose
I used the following sites :-

www.ubl.com.pk

www.google.com

http://www.kpmg.com.pk

www.sbp.org.pk

105
Annexure A

106
Annexure B

107
Annexure C

108
Annexure D

109
Annexure E

110
Annexure F

111
Annexure G

112
Annexure H

113
Annexure I

114
Annexure J

115
116
Organogram Of Finance Department

117
 Organization Chart of Airport Branch

UBL Branch’s organizational chart of account is as under :-

Branch Manager

Branch Operational
Manager

Foreign
Remittance Collection Compliance
Exchange

OG-I & OG-I & OG-I, OG-III,

CROs
OG-II OG- III Contractual

118
119