Report Bank

8/7/2019 Report Bank

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CHAPTER NO 01:

INTRODUCTION TO BANK

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1.0 Introduction

The name bankderives from the Italian word banco "desk/bench", used during the

Renaissance by Florentines bankers who used to make their transactions above a desk

covered by a green table cloth. However, there are traces of banking activity even in ancient

times. In fact, the word traces its origins back to the Ancient Roman Empire where money

lenders would set up their stalls in the middle of enclosed courtyards called macella on a long

bench called a bancu, from which the words banco and bank are derived.

The first banks were probably the religious temples of the ancient world and were probably

established sometime during the 3rd millennium B.C. Banks probably predated the invention

of money. Deposits initially consisted of grain and later other goods including cattle,

agricultural implements, and eventually precious metals such as gold in the form of easy-to-

carry compressed plates. Temples and palaces were the safest places to store gold as they

were constantly attended and well built. As sacred places, temples presented an extra

deterrent to would be thieves. There are extant records of loans from the 18th century BC in

Babylon that were made by temple priests to merchants. By the time of Hammurabi's Code,

banking was well enough developed to justify the promulgation of laws governing banking

operations.

Ancient Greece holds further evidence of banking. Greek temples as well as private and civicentities conducted financial transactions such as loans, deposits, currency exchange and

validation of coinage. There is evidence too of credit, where by in return for a payment from

a client, a money lender in one Greek port would write a credit note for the client who could

"cash" the note in another city saving the client the danger of carting coinage with him on his

journey. Pythius, who operated as a merchant banker throughout Asia Minor at the beginning

of the 5th century B.C., is the first individual banker of whom we have records. Many of the

early bankers in Greek city-states were metics or foreign residents. Around 371 B.C.,

Passion a slave became the wealthiest and most famous Greek banker, gaining his freedom

and Athenian citizenship in the process.

Modern Western economic and financial history is usually traced back to the coffee houses

of London. The London Royal Exchange was established in 1565. At that time money

changers were already called bankers, though the term "bank" usually referred to their offices

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and did not carry the meaning it does today. There was also a hierarchical order among

professionals at the top were the bankers who did business with heads of state, next were the

city exchanges and at the bottom were the pawn shops or "Lombards. Some European cities

today have a Lombard street where the pawn shop was located. After the siege of Antwerp

trade moved to Amsterdam. In 1609 theAmsterdamsche Wissel bank(Amsterdam Exchange

Bank) was founded which made Amsterdam the financial centre of the world until the

Industrial Revolution.

In Pakistan, 1947 there were 487 offices of scheduled banks. These offices decreased to 195

on June 30, 1948. The banks shifted their offices to India. There were two Pakistani banks

with seven branches and 19 foreign banks. The State Bank of Pakistan was set up on July 1,

1948 as the central bank of the country. At that time Reserve Bank of India was working as

central bank for the time being. The establishment of central Bank was necessary because

Reserve of India refused to allow credit agaist securities to Government of Pakistan.

Moreover share in cash of Rs. 750 million from the joint assets was not handed over to

Pakistan.

At present there are 4 public sector commercial banks with 1543 branches. There are 20 local

private banks with 4938 branches, there 11 foreign banks with 82 branches. Moreover there

are 4 specialized banks with 533 branches. Thus there are 39 banks with 7096 branches as on

June 20, 2005.

1.1 Major Pakistani Banks

The data of these banks have been taken from their Annual reports and on the bases of data

Deposit and Assets rating has been done to know about these banks position in term of

market investment and attracting customers.

Banks Assets Rupeesin 000

Assets Rating Deposits Rupeesin 000

Deposit Rating

NBP 635,132,711 1 501,872,243 1

HBL 590,291,468 2 459,140,198 2

UBL 423,320,207 3 335,077,873 3

MCB 342,108,243 4 257,461,838 4

Bank AlFalah 248,313,793 5 222,345,067 5

ABL 192,574,000 6 161,410,000 6

Askari Bank 166,033,588 7 131,839,283 7

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1.2 Commercial role of Banks

However the commercial role of banks is wider than banking:

Issue of banknotes (promissory notes issued by a banker and payable to bearer on

demand).

Processing of payments by way of telegraphic transfer, internet banking etc.

Issuing bank drafts and bank cheques.

Accepting money on term deposit.

Lending money by way of overdraft, installment loan or otherwise.

Safe keeping of documents and other items in safe deposit boxes.

Currency exchange.

Sale, distribution or brokerage with or without advice, insurance etc.

Tofulfill the requirement of MBA degree at National University of Modern Languages I

worked at United Bank Limited (UBL) Cantt Branch Mandra Branchfor the period of Six

weeks. Now I am going to explain in detail the activities and role of the Organization on the

next part of my report.

1.3 President and CEO Message (Atif R. Bukhari)

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.

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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.

1.4 Corporate Profile

United Bank Limited (UBL) was privatized in 2002 with Abu Dhabi Group (UAE) and Best

way Group (UK) each acquiring 25.5% shares and management control in the bank. The

Government of Pakistan (GOP) held 44.7% at year end 2006, having divested approximately

4.2% to the public when the bank was listed on the exchanges in 2005. Another 20-25% is

being divested by the GOP to international investors through a GDR offering, which will

enable listing on the London Stock Exchange.

The Board of Directors of UBL is chaired by H. H. Sheikh Nahayan Mubarak Al Nahayan

who is a prominent member of Abu Dhabis Royal Family. Deputy Chairman of the bank Sir

Mohammed Anwar Pervez is currently chairing the Best way Group which is one of the

largest wholesalers in the UK market. There are 5 other board members including 3

nominees of the GOP.

Mr. Atif Bukhari, president & CEO has been associated with the bank since 2004 and has

extensive prior banking experience as does the senior management team of the bank. The

team has largely remained stable except for the position of Group Head Treasury that has

been vacant far the past 10 months.

As at December 31, 2006, the organization had a total staff strength of 15,369 (FY05:

13,479) employees of which 9,738 were the banks own staff while the remaining were out

sourced resources. Turnover for the year was about 10% while approximately 1,300 new

employees had been hired during the year.

Two major strategic initiatives during the out-going year included the formation of an

insurance company, UBL Insurers Limited and launch of UBL Ameen, the Islamic division

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of the bank. UBL Ameen will target customers through dedicated Islamic banking branches.

UBL was also one of the first few banks to set up an asset management company.

1.5 History of the Company:

UBL was established in 1959 and is one of the major commercial Banks of Pakistan. TheBank is making every effort to meet the up-coming challenges through strategic planning and

making the best use of the resources at its command. A professional team was appointed in

mid 1997 to restructure the bank and to commence right sizing. The management is also in

the process of rationalizing the branch network and identifying and recovering its doubtful

and classified portfolio. It has planned to institute major improvements in customer services

and internal systems to improve efficiency. It also intends to launch innovative products. The

bank is increasing resource mobilization through regular deposit campaigns and accelerating

the process of recovery of outstanding advances and non-performing assets.

UBL has assets of over Rs. 300 billion and a solid track record of forty six years in addition

to the convenience of over 1056 branches serving you throughout the country and also at

several overseas locations.

1.6 Company Description:

UBL is a Banking Company which is engaged in Commercial & Retail Banking and related

services domestically and overseas.

Vision

To be a world class bank dedicated to excellence and to surpass the highest expectations of

our customers and all other stakeholders.

Mission

Our mission is to:

o Set the highest industry standard for quality across all areas of operation on a

sustained basis.

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o Optimize people, processes and technology to deliver the best possible

financial solutions to our customers.

o Become the most sought after investment.

o Be recognized as the employer of choice.

1.7 Management and supporting network

Chairman

His Highness Sheikh Nahayan Mubarak Al Nahayan

Deputy Chairman

Sir Mohammed Anwar Pervez OBE

President and CEO

Mr. Atif R. Bokhari

Directors

Mr. Omar Zaid Jaafar Al Askari

Mr. Zameer Mohammed Chaudry

Mr. Ahmad Waqar

Mr. Muhammad Javed Malik

Dr. Ashfaque Hasan Khan

Company Secretary & Chief Legal

Mr. Aqeel Ahmed Nasir

SEVP/Group Chief Financial Officer

Mr. Aameer Karachi Walla

Representative Offices

Tehran

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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

Offshore Banking Unit

Export Processing Zone, EPZ Branch, Karachi, Pakistan

Head Office

State Life Insurance Corp. Building #1,

I.I. Chandrigar Road, Karachi, Pakistan

P.O. Box No.: 4306

Gram: "UNITED"

Phone: (92-21) 111-825-111

Fax: (92-21) 2413492

1.8 Information technology and Control infrastructure

Currently the bank is using 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 1,059 branches (including 15 over seas branches) of which 640 branches

have on-line connectivity (FY05: 496) with the head-office through an ISDN or satellite

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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 near by 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. The business aspect of this program is expected to improve

performance through implementation of uniform business processes and training is ongoing

in this respect.

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CHAPTER NO 02:

SERVICES

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2.0 Consumer Banking

You as an individual can gain and benefit the most through UBL Consumer Banking. In UBL

you get friendly, efficient and attentive personalized banking services, a unique banking

relationship experienced by each UBL client. You can utilize the following services.

UBL Address

UBL Businessline

UBL Cashline

UBL Credit Card

UBL Drive UBL Money

2.1 Commercial Banking

If you have a small or medium-sized business, UBL can assist you with the right mix of

banking services that will help you manage and grow your business. Our experts will

facilitate you in the varied financial situations that you come across. We will respond to your

needs promptly because we understand how many your customers, your employees and YOU

depend on us.

Agricultural

Foreign Currency Savings

Foreign Currency Term Deposits Receipts

Rupee Transactional Account (RTA)

Regular Term Deposits Receipts

Small Business

Special Notice Deposits Receipts

UBL Business Partner

UBL Wallet

UBL Profit

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Unisaver

UBL PayPlus (loan against salary)

2.2 Corporate Banking

Corporate Banking means Financing to corporate institution which has been declared as

corporate entity. Corporate entity means if more than one company falls in the same line of

business, financing terms will be same to all the corporate institution as whole where as

Enterprise banking means each individual business units will be covered separate according

to the specific requirements for financing. Though more than one company falls in the same

group, the financing terms will differ according to each enterprise demands and needs.

The CBG department of UBL defines corporate banking in Pakistan. Amongst the local

banks UBL CBG is the pioneer in providing innovative solutions to its diversified and

satisfied customer base. UBL CBG is considered to be a major player in the financial market

of Pakistan.

Despite the sluggish economic growth in recent years, UBL out performed all the other local

banks in the corporate banking sector primarily due to CBG emphasis on establishing and

enhancing relationships with foreign/local blue chip and middle market customer's there by

capturing significant market share.

Achievements

The success of CBG has been established from the fact that UBL received the 'No.1 Euro

money 2000' Best Local Bank award and recognized it to have out performed all other banks.

In year 2000, UBL was also voted as the best Corporate Bank by the customers of a major

foreign bank in a survey.

2.3 Investment Banking

Investment banks help companies and governments raise money by issuing and selling

securities in the capital markets (both equity and debt) as well as providing advice on

transactions such as mergers and acquisitions.

UBL has three specialist business areas:

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a. Project & Structured Finance

b. Syndications & Debt Capital Market

c.Equity & Advisory

Project & Structured Finance

Deals with green field projects and expansion initiatives of highly leverages entities that

seek, limited resource financing options.

Syndications & Debt Capital Market

Existing Corporates with significant long term funding requirements that can not be met by

single lenders, either due to per party limits or risk diversification considerations.

Equity & Advisory

Deals with ordinary shares, preference shares, private equity etc and advisory related to

products and services.

Achievements

Awarded the Largest Investment Bank award by The CFA Association of Pakistan

for three consecutive years (2003-2005).

Awarded the "Corporate Finance Transaction of the Year" by The CFA Association

of Pakistan for FY 2005. .

Structured and executed debt and equity transactions totaling over PKR 45 billion

(US$744 million) in 2006.

2.4 Treasury Banking

The Bank as an Authorized Derivative Dealer (ADD) is an active participant in the

derivatives market of Pakistan. Though the ADD license covers the below mentioned

transactions only (permitted under Financial Derivatives Business Regulations issued by

SBP), but the Bank offers a wide variety of derivative products to satisfy customers needs

(specific approval for which is sought from SBP on transaction basis):

Foreign Currency Options

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Forward Rate Agreements

Interest Rate Swaps

These transactions cover both the aspects of market making and hedging.

The authority for approving policies lie with the BOD, who has delegated its powers to

Market Risk Committee (MRC) which runs the affairs in line with policies approved by the

BOD.

2.5 UBL Ameen Islamic Banking

United Bank Limited was awarded the Islamic Banking Branch license by the State Bank of

Pakistan on December 16, 2006. With that they launch of Ameen, UBLs Islamic Banking

initiative. First flagship branch located at M. A. Jinnah Road opened its doors to the public

on December 22, 2006.

At UBL Ameen, it is our aspiration to provide customers with innovative and customized

products and services based on the age old foundations of Islamic Jurisprudence. UBL's aim

is to create new benchmarks in service quality and provide an array of personalized Islamic

products, catering to the diverse and ever challenging demands of clientele.

2.6 Types Of accounts

Basically there are two types of accounts.

2.6.1 Current Account

UBL Business Partner Account

Current account is named as Business Partner account. There is no profit on the deposits kept

in this type of account. The minimum balance required for this type of account is Rs.10, 000.

If a customer fails to maintain this balance Rs.50 are deducted from his account every month.

Account Number of Current account is identified by it code 01. Business accounts with

balance of 500,000 or above are granted certain special facilities and waivers such as no

online charges and no cheque return charges up till a specified number of cheques each

month.

BBA Account

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BBA Account (Basic Banking Account) is a current account and opens with Rs.1000. There

is no minimum balance requirement for this type of account. Account holder this account can

not make more than two deposits and withdrawals in a month form his account. Rs.50 is

detected for every transaction exceeding the second transaction but no restriction on ATM

withdrawals. Account number of this account has a code 021.

2.6.2Saving Account

PLS Saving Account

Profit is earned on the deposits kept in the saving account at the rate of 0.75%. The minimum

balance required for this type of account is also Rs.10, 000. Profit is paid semi annually on

PLS account. Account number of saving account is identified by its code 10.

PLS Unisaver

This type of saving account is open by the amount of Rs. 100,000 and the rate if profit on it is

3%.

2.6.3 Nature of Account

Following types of accounts can be opened:

Business Account

Sole Proprietorship

Partnership ( Registered / Unregistered)

Joint Stock Company (Public / Private)

Others

2.6.4 Documentation to be obtained

Attested Photocopy of a National Identity Card or Passport of the individual.

In case the CNIC doesn't contain a photograph, the bank should also obtain in

addition to the CNIC, any other document such as driver's License etc that contain a

photograph.

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In case of a salaried person, attested copy of his service card or any other accepted

evidence of service.

In case of illiterate person, a passport size photograph of the new account holder

besides taking his right and left thumb impression on the specimen signature card.

Proof of minority for Minor Account to be accompanied by attested B-Form /

Birth Certificate.

In Case of student Account, Student card of the respective College / University is

to be obtained as a proof.

2.7 Sole Proprietorship

The documentary requirements in respect of individual accounts will apply. Attested copies

of the following documents are optional.

Application to open an account on the official letter head of the sole

proprietorship.

National Tax Number (NTN) Sales Tax Registration Certificate (if available).

Evidence of membership trade organization, chamber of commerce etc (if

applicable).

Rubber Stamp of proprietor to be affixed on all the documents along with

Account Opening Form & Specimen Signature Card.

2.7.1 Partnership

Attested photocopies of identity cards of all partners.

Application to open an account on the official letterhead duly signed by all the

partners.

Attested copy of Partnership Deed duly signed by all partners of the firm.

National Tax Number (NTN) / Sales Tax Registration Certificate.

Attested copy of Registration Certificate with Registrar of Firms. In case the

partnership is unregistered, this fact should be clearly mentioned on the Account

Opening Form.

Authority letter, in original, in favor of the person authorized to operate on the

account of the firm.

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Rubber Stamp of partnership is to be affixed on all the documents along with Account

Opening Form & Specimen Signature Card.

2.7 Joint Stock Companies

Certified copies of:

Resolution of Board of Directors for Opening of Account specifying the person(s)

authorized to operate the company account.

Memorandum and Article of Association.

Certificate of Incorporation.

Certificate of Commencement of Business.

Attested photocopies of identity card of all the directors.

2.8 Account Opening Procedure

A customer makes an agreement with the bank in order to open an account. The relationship

between the bank and the customer is created in the basis of this contract. At the time of

opening an account the bank is very careful due to certain obligation. Any one can apply for

opening an account but the bank opens an account after the proper introduction of the

customer. The procedure for opening an account is stated as under:

2.8.1 Account Opening Form

A person can open an account in a particular branch of any bank. He should ask for the

printed account opening form. The customer can get the form according to the nature of

account; the customer fills up the form. He writes his name, address, identity card number,

occupation, and specimen signature. After completing this form the customer binds himself,

act upon the conditions stated in the back side of the form.

2.8.2 Introduction

The account is opened on proper introduction. The old customer introduces the applicant to

the bank. The bank has a right to reject the application if no proper introduction is available

or the customer does not have good reputation. When the customer having good character

and reputation introduces the new customer, the bank considers that new customer is of the

same reputation.

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2.8.3 Submission of Document

At the time of opening an account some customers submit some documents to the bankers. A

partnership deed is required in case of partnership firm. An undertaking from all the partners

about their joint and several liabilities for the debts. The limited companies must provide

their memorandum of association, list of directors.

2.8.4 Specimen Signature

The banker gets the specimen signature of the customer on the printed card. The banker

keeps this card with him for future record. The customer draws cheques on the bank for

taking the money back. The signature on the card and Cheque must tally.

2.8.5 Account Number

The customer completes the account opening form and gets the proper introduction form and

the customer of the same bank branch. The bank has separate accounts opening registers. If

the current account is to be opened, the new account number is allotted in the current account

opening and closing registers. If the saving account is to be opened, new account number is

allotted in the saving accounts opening and closing registers.

2.8.6 Pay- in -Slip

The customer deposits some amount into the bank at the time of opening an account. The pay

in slip is used for depositing cash, cheques and draft.

2.8.7 Initial Deposit

The initial deposit is an amount which is paid into the bank at the time of opening on

account.

2.9 Cheque Books

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2.9.1 Requisitions for Cheque Books

Cheque book requisition cards which include the name and account number of the account

holder specify the type of Cheque book required by him. They are sent to the head office

through NIFT to get printed. Account holder is charged Rs.75 for twenty five leaves Cheque

book and Rs.300 for hundred leaves Cheque book. Cheque books are delivered by the head

office after five to seven days.

2.9.2 Delivery of Cheque Books

Cheque Books are delivered on the daily basis. Following tasks are performed.

Name and account numbers of the account holders are written on the Cheque books.

Date and Cheque numbers are entered in the respective registers according to therespective category of the accounts i.e. current account (twenty five leaves Cheque

book), current account (hundred leaves), and saving account.

Cheque book requisition slips are attached to the Cheque books with Cheque numbers

written on them.

Prefix (serial number) is written on the Cheque books and they are arranged

according so that it would be easy to trace when the customer come for the collection

of Cheque book.

2.9.3 Issuance of Cheque Books

When the customercomes for the collection of Cheque book the requisition slips attached to

it are removed and Cheque book is given to the customer. The collection data is entered in

the register. If the Cheque book is not collected by the customer with in Sixty days after its

delivery it is destroyed.

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CHAPTER NO 03:

LEARNING & EXPERIENCE

3.0 Limitations

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By keeping secret certain facts and knowledge from internees to protect introducing

that knowledge into market and competitors.

Less time opportunity they provide for exploring organizational functions and

operations i.e. Six week

Daily busy routine of employees restrict us to getting their more attention as well less

time opportunity for asking questions.

They prefer to assign work that pending several dates to up dates from internees.

They send different departments according to their own preference and work nature

3.1 Learned (both positives and Negatives)

Positives:

Punctuality.

Knowledge about the UBL business.

Know about the organization culture, policies, administration and reward system

Social skills.

How to perform the task under pressure and rush areas.

Level of dependent and independent.

Ability to deal with complexity, ambiguity and uncertainty.

Self confidence that leads others to feel confident.

How to protect organization / individual privacy interest.

Negatives:

Without any reference they don't call any internee for internship.

Timing problem.

Treat internee as employee.

Overload.

No proper timing for offering prayer.

I observe that some employees use office territory and equipment for personal use.

I observe that some time biasness occurs in treating customers.

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3.2 Skills used and new skills gained

Skills used:

Communication skills.

Computer skills.

Mathematical skills.

Good image building skills.

Willingness to compromise and show flexibility.

New Skills Gained:

Managing time and stress.

Developing self awareness.

Problem defining skills.

Developing new procedures to increase efficiency.

Customer satisfaction skills.

Coordination skills.

Personal Experience

Its develop confident in my personality and experience how to interact with

organization employees, customers, how information pass from upward to downward and

downward to upward in organization hierarchy.

I learned how difficulties new employee (I as internee) face to adjust any new organization

place where the competitive situation, strict rules and regulations, personal difference,

environmental stress, task interdependence, status struggles. This all will help my future

career plans.

Learn how to assigning task and provide routine instructions.

Observe coordinating activities of each workgroup members to keep work

running smoothly.

Develop problem defining skills.

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Participate in handling day to day operational crises as they arise.

Non work related talking (e.g. family or personal matters).

This all will influence my future career plans.

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CHAPTER NO 04:

FINANCIAL ANALYSIS

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4.0 Investment performance

Gross investments increased to Rs. 67.5b from Rs. 63.4b, with the increase coming about

largely in the fixed income portfolio of Rs. 61.0b (FY05: Rs. 58.1b) while the remaining has

been deployed in equities & mutual funds. Total asset size of UBL increased by

approximately 22% to Rs. 423.3b as at December 31, 2006 from Rs. 347.1b at the end of the

previous year.

Percentage change over Period 2006-2007(ASSETS)

NBP UBL ABL MCB

Advances 26.72 42.44 51.44 21.42

Investments 34.27 87.76 86.18 62.76

Cash Balances 33.26 68.43 101.73 67.69

Bal With other banks 20.81 -77.56 79.7 159.71

Lending to Financial Institutions 31.82 38.7 218.82 -89.5

Operating fixed assets 174.19 211.02 59.91 95.84

Percentage change over Period 2006-2007(LIABILITIES)

NBP UBL ABL MCB

Bills payable 305.59 45.4 42.71 22.7

Borrowings 24.31 159.78 36.58 43.9

Deposits and Other Accounts 27.72 35.46 6.54 27.3

Subordinate accounts 14.23 49.94 -69.8

Other liabilities 31.37 101.85 63.97 43.0

National Bank Limited

Total Assets

At the end of the year December 2006, the total assets of the bank have risen to Rs. 635,133

million compared to Rs. 577,719 million in 2005. Advances o fthe bank recorded an increase

of 17.58% in the year while investment of the bank reduced by10.85% in the year. Balances

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with other and lending to financial institutions both have recorded increase of 31.02% and

41.33% respectively compared to year ended December 2005.

2005 2006

Change

(%)

Advances 268,839 316,110 17.58Investments 156,985 139,947 -10.85

Cash Balances 71,197 78,625 10.43

Bal With other banks 31,019 40,642 31.02

Lendings 16,283 23,013 41.33

Operating fixed assets 9,454 9,682 2.4

As on 31st December 2007, the total assets of the bank recorded an increase of 31.93% with a

total of Rs. 762,194 million compared to year ended December 2005. Advances and

investments of the bank both have recorded increase of 26.72% and 34.27% compared to

year ended December 2005. Lending to financial institutions of the bank reduced by 31.82%

in the year as its total reached to Rs. 21,465 million compared to Rs. 16,283 in 2005.

Operating fixed assets of the bank have also increased to Rs. 25,923 million with an increase

of 174.19% in the year.

2005 2007

Change

(%)

Advances 268,839 340,677 26.72

Investments 156,985 210,788 34.27Cash Balances 71,197 94,873 33.26

Balances with other banks 31,019 37,473 20.81

Lending to Financial Institutions 16,283 21,465 31.82

Operating Fixed Assets 9,454 25,923 174.19

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Total Liabilities

As on 31st December 2006, the total liabilities of the bank has to increased to Rs. 553,579

million compared to previous of Rs. 501,901 million in 2005. Bills payables of the bank

dramatically increased by 509.12% in theyear compared to year ended December2005.

Borrowings and deposits of the bank both recorded increase of 33.66% and 8.3%

respectively. Deferred tax liabilities of the bank reduced by 44.52% in the year.

2005 2006

Change

(%)Bills payable 1,741 10,606 509.12

Borrowings 8,757 11,704 33.66

Deposits and Other Accounts 463,426 501,872 8.3

Deferred tax Liabilities 4,463 2,387 -44.52

Other liabilities 23,497 26,596 13.19


million with an increase of 28.68% compared to previous of Rs. 501,901 million in 2005.

Bills payables increased by 305.59% compared to year ended December2005. Borrowingsand deposits of the bank both recorded increase of 24.31% and 27.72% respectively.

2005 2007

Change

(%)

Bills payable 1,741 7,062 305.59

Borrowings 8,757 10,886 24.31


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Deferred tax Liabilities 4,463 5,098 14.23


Equity

As on 31st December 2006, the total equity of the bank has to increased to Rs. 81954million

compared to previous of Rs. 75,818 million in 2005. Share capital of the bank has reached to

Rs. 7091 million with an increase of 20.00% in the year. Reserves and unappropriated of the

bank have increased by 12.34% and 65.57% in the year.

2005 2006

Change

(%)

Share Capital 5,909 7,091 20

Reserves 12,354 13,879 12.34

Un-appropriated Profit 19,372 32,075 65.57

Surplus on revaluation of assets-net of tax 38,182 28,909 -24.29

As on 31st December 2007, the total equity of the bank has to increased to Rs. 116,338

million with an increase of 53.44% compared to previous of Rs. 75,818 million in 2005.

Share capital of the bank has reached to Rs. 8154 million with an increase of 38.00% in theyear compared to 2005. Reserves and unappropriated of the bank have increased by 27.67%

and 134.06% compared to year esnded December 2005.

2005 2007Change

(%)


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Reserves 12,354 15,772 27.67


Surplus on revaluation of assets-net of tax 38,182 47,067 23.27

4.2 Deposit performance

Rate of increase in total deposits of scheduled banks was lower during FY06 with the total

markets deposit base increasing by about 12% to Rs. 2.9 trillion as compared to a growth of

23% during the preceding year. While growth in deposits of UBL was about 16%, it was

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partly driven by deposit taking from overseas operations. Total deposits as of December 31,

2006 amounted to Rs. 335.8b (FY05: Rs. 289.2b). Of this, deposits from domestic operations

amounted to Rs. 271.6b (FY05: Rs. 249.7b), translating into a market share of 9.1% and

placing UBL as the third largest bank in the country in terms of total deposits held. In recent

times, the private sector has mainly led the deposit growth. UBL has maintained its share of

public sector deposits which represent 15.98% of total deposits (FY05: 15.11%).

4.3 Advances performance

The gross advances of the countrys entire banking sector saw a sizable increase to over Rs.

2.4trillion by the end of FY06 (FY05: Rs. 2.0trillion), translating into a growth of 20% in the

overall market size. Growth in UBLs local advances was slightly below the market, though

increased lending from overseas operations resulted in aggregate growth of 20% for the year

2006. Net advances amounted to Rs. 247.3b (FY05: Rs. 204.8b) as at December 31, 2006.

4.4 Term Finance Certificates

The banks capital structure is supported through three subordinated TFC's issued in 2004,

2005 and 2006, each for a tenor of 8 years. The first of these is maturing in August 2012 and

has a total issue amount of Rs. 2b while the maturity of the remaining two having issue

amounts of Rs. 2b each also, would follow in March 2013 and September 2014. The total

outstanding amount was Rs. 5.9b (FY05: 3.9b) as of December 31, 2006.

The first two issues carry fixed rates of 8.5% and 9.5% respectively, while the third issue was

priced at floating rate.

4.5 Profitability

Administrative expenses increased by nearly 40% to Rs. 10.9b (FY05: Rs. 7.9b). The

efficiency of branch structure has room for further improvement. Almost 360 branches held

less than Rs. 100m in deposits at year end, aggregating Rs. 22b. Operating efficiency for the

year was about 39.4% (FY05: 41%).

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1. With a healthier total revenue base, earnings of the bank for the year have improved

to Rs.16.3b (FY05: Rs.10.5b), improving ROA to 2.24% (FY05: 1.71%), Net Profit

Margin improved 37.14% (FY05: 33.61%). Additional Return on Equity increased

31.70% (FY05: 27.45%) while bad debt directly writtenoff against the profit and

loss account totaled Rs.269m (FY05: Rs.38m). Net profit after tax for the year ended

December 31, 2006 was higher by 60% at Rs.9.5b (FY05: 5.9b).

In future years, the bank is likely to sustain strong profitability indicators with the persistent

growth in lending and continued investment in high margin consumer lending.

4.6 Market Leader Banks

The total non-performing loans (NPL's) of the four market leader banks for the year ended

December 2007, increased by 14.37% as total of NPLs have reached to Rs. 82,410 million

against Rs. 72,056 million at the end December 2006. In terms of amount NBP has highest

levels of NPLs with Rs. 36,260 million and Rs. 38,318 million in years ended December

2006 and 2007 respectively as it has the lowest increase in NPLs in group of four with 5.67%

at the end of year December 2007. ABL also managed its NPLs in the period under review as

it just went up only by 8.36%. UBL has the highest increase in its NPLs as it increased by

31.45% at the end of December 2007.

NPL's of Mkt Leader Banks

NBP MCB UBL ABL Total2006 36,260 8,571 16,746 10,479 72,056

2007 38,318 10,725 22,012 11,355 82,410

Change (%) 5.67 25.13 31.45 8.36 14.37

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4.7 RATIO ANALYSIS

4.7.1 Liquidity Ratio

In this ratio we compare Assets with liabilities these ratios are use to judge a firms ability to

meet the short-term Obligations. Short-term liabilities are those which are for one year.

Current ratio

Current Ratio= Current Assets/Current Liabilities

We compare Current Assets with Current liabilities to check whether the company has

enough assets to meet the Short-term Liabilities. CurrentRatio should be at least 1 or more

than it shows that Companys financial position is stable.

In year 2005, the current ratio is 0.2747 which shows that Companys financial performance

is not stable but in banking sector the current deposit of the bank are more that come under

the current liabilities which reduce the UBL current ratio.

In the next year 2006, Current ratio increases at the rate of 0.0768 and reached at 0.3515

which shows that bank trying to improve its position

Current ratio is less then one to find out this reason I check financial statements which

indicates that the current liabilities of the Bank are more due to high current deposits where

5.67

25.13

31.45

8.36

0

5

10

15

20

25

30

35

NBP MCB UBL ABL

2006 2007

0.2747 0.3515

32

Percentage Change in NPLs in 2007 Compared to 2006


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as current asset amount is very less some cash balance bank kept and small amount

receivable from others.

4.7.2 Leverage Ratio

These are those ratios which show the extent to which the firm is financed by debts.

Debt to Equity ratio

Debt to Equity ratio = Total Debts/Stock holders equity

In the year 2005, debt to equity ratio is 15.02 which show that debts are getting higher and

there is a big difference between equity and debts. According to this ratio, the companys

financial position is not good because the company has not enough equity to meet the debts.

In year 2006 it is 13.17 which shows that company is improving somewhat. And the

investment is coming in the company due to which equity is increasing comparatively. Debts

are decreasing and our obligations are going to be paid with the passage of time.

This ratio tells us that creditors are providing higher amount then finance that are provided

by the shareholder. It can be difficulty with creditors recovering the amount.

Debt to Asset ratio

Debt to Asset ratio = Total debts/total assets.

In year 2005 debt to asset ratio is 0.937 it shows that assets are greater than liabilities which

are a good sign for the company. And we can meet our debts through our assets. As less the

debt to asset ratio is better will be the performance of the company. Cash is increasing due to

the receivables and profitability is more in the last year. Thats why assets are increasing.

In year 2006, debt to asset ratio is 0.929 which shows that the company became stable as

compare to last year. Because as less the leverage ratio is better is the performance of the

company. Ratio decreases because liabilities are decreased at greater extent. But assets are

also decreasing because we are paying our payables to cash. And it creates interest of the

creditors to give more loans to the Bank. Because there assets are more than there debts

2006 2007

15.02 13.17

2006 2007

0.937 0.929

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therefore they are able to meet the liabilities. In short, the higher the debt to assets ratio, the

greater the financial risk.

4.7.3 Profitability Ratio

Ratios that relates profit to sales and investment.

Net Profit Margin

Net profit margin = Net profit after tax/revenue*100.

The net profit margin is a measure of the firm's profitability of sales after taking account of

all expenses and income taxes. It tells us a firm's net income per Rupee of sales.

UBL 2005 and 2006, it is 33.614, 37.136 percents out of every sales Rupee constitutes after

tax profits and it is increasing rates may be due to lower selling, administrative and others

expenses.

Return on Investment

Return on Investment = Net profit after tax/total assets*100.

This ratio unfavorable, higher profitability per rupee of sales but slightly lower return oninvestment confirm that UBL employs more assets to generate a rupee of sales. Return on

Equity

ROE = Net profit after tax /Share Holder Equity

2006 2007

27.455 31.705

This ratio tells us the earning power on shareholder's book value investment. A high returnon equity often reflects the firm's acceptance of strong investment opportunities and effective

expenses management.

Here we will compare the ratio of 2005 and 2006 which will than reveal to us that increasing

or decreasing each year. Which will at end attract more shareholders if the return is becoming

higher and higher each year. Also this will indicate that the decisions made by the

2006 2007

33.614 37.136

2006 2007

1.714 2.237

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management about the shareholders funds were profitable. From the table we can see that in

2005 the return was 27.455.In 2005 it increase by 4.25 % and reached to 31.705%.

Tax ratio

Tax ratio = Tax/ Total revenue*100.

2006 2007

19.96 18.91

Tax ratio indicates that there is increase in revenue and reduction in tax liability that

ultimately will increase the company profit after tax.

4.7.4 Activity Ratio

It shows that how efficiently company is using its assets.

Receivable Turnover ratio

RTO = Revenue /Account Receivable

2006 2007

99.05 86.22

This ratio tells us the number of times accounts receivable have been turned over (turned into

cash) during the year. The higher the turnover, shorter the time between the typical revenue

and its cash collection.

Receivable turnover ratio is decreasing from 2005 to 206 that show managements lenient

policy regarding the receivable that may be to remain with them a valuable customer. On the

other hand it should not be strict because it will curtail revenue and profit less due restrictive

issuance of credit to customers.

Average collection period

Average collection period = 360/Receivable turnover

2006 2007

3.63 4.17

This ratio indicates the average length of time in days that a company must wait to collect

revenue after making it, may be compared to the credit terms offered by the company to its

customers.

UBL average collection period is good, figures tells us that organization is collecting its

revenue after making appropriate in 4 days.

Although too high an average collection period is usually bad, a very low average collection

period may not necessarily be good that show sign of a credit policy that is excessively

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restrictive and result of this policy may be curtail revenue and profit less. In this situation,

credit standards used to determine an acceptable credit account should be relaxed somewhat.

In general, the firm should improve its Current ratio and use less assets to generate more

revenue.

4.8 Index Analysis

UBL Bank Limited

Total Assets

At the end of the year December 2006, the total assets of the bank have risen to Rs. 435,990

million compared to Rs. 358,056 million in 2005. Advances of the bank recorded an increase

of 21.18% in the year while investments of the bank increased by 6.78% in the year. Cash

balances and lending to financial institutions have increased by 43.53% and 65.51%.

operating fixed assets of the bank have reached to Rs. 6,362 million with an increase of

16.96%.

2005 2006

Change

(%)

Advances 210,153 254,670 21.18

Investments 61,559 65,735 6.78

Cash Balances 34,155 49,024 43.53

Bal With other banks 18,677 19,418 3.97Lending to Financial Institutions 17,868 29,572 65.51


As on 31st December 2007, the total assets of the bank recorded an increase of 48.10% with a

total of Rs. 530,284 million compared to year ended December 2005. Advances and

investments of the bank both have recorded increase of 42.44% and 87.76% compared to

year ended December 2005. Operating fixed assets of the bank have also increased to Rs.

16919 million with an increase of 211.02% in the year. Balance with other banks reduced by

77.56% in the year compared to year ended December 2005.

2005 2007

Change

(%)

Advances 210,153 299,355 42.44

Investments 61,559 115,586 87.76

Cash Balances 34,155 57,526 68.43

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Balances with other banks 18,677 4,191 -77.56



Total Liabilities


million compared to previous of Rs. 333,783 million in 2005. Bills payables and borrowings

of the bank increased by 10.69% and 70.01% in the year compared to year ended

December2005. deposits of the bank recorded increase of 15.96% with total of Rs. 343,804

million compared to previous of Rs. 296,499 million in 2005. Subordinate accounts and other

liabilities of the bank also increased by 49.99% and 51.15% respectively in the year

2005 2006

Change

(%)

Bills payable 4,181 4,628 10.69

Borrowings 22,751 38,680 70.01


Subordinate accounts 3,999 5,998 49.99


As on 31st December 2006, the total liabilities of the bank has to increased to Rs.

483,863million with an increase of 46.16% compared to previous of Rs. 333,783 million in

2005. Bills payables of the bank increased by 45.40% while the borrowings of the bank

inceased to Rs.59,103 million with an increase 159.78% compared to 2005. deposits of the

bank recorded increase of 35.46% with total of Rs. 401,638 million compared to previous of

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Rs. 296,499 million in 2005. Subordinate accounts and other liabilities of the bank also

increased by 49.94% and 101.85% respectively in the year.

2005 2007

Change

(%)

Bills payable 4,181 6,079 45.4

Borrowings 22,751 59,103 159.78


Deferred tax Liabilities 3,999 5,997 49.94


Equity

As on 31st December 2006, the total equity of the bank has to increased to Rs. 33,177 million

compared to previous of Rs. 24,274 million in 2005. Share capital of the bank has reached to

Rs. 6,475 million with an increase of 25.00% in the year. Reserves and unappropriated of the

bank have increased by 36.79% and 65.98% in the year.

2005 2006Change

(%)


Reserves 6,820 9,330 36.79

Unappropriated Profit 7,790 12,930 65.98


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As on 31st December 2006, the total equity of the bank has to increased to Rs. 33,177 million

with an increase of 74.76% compared to previous of Rs. 24,274 million in 2005. Share

capital of the bank has reached to Rs. 8,094 million with an increase of 56.25 % in the year.

Reserves and unappropriated of the bank have increased by 50.46% and 100.94% in the year.

2005 2007Change

(%)

Share Capital 5,180 8,094 56.25

Reserves 6,820 10,262 50.46


Surplus on revaluation of assets-net of tax 2,922 8,412 187.86

Allied Bank Limited

Total Assets

As on 31st December 2006, the total assets of the bank have reached to Rs. 252,027 million

compared to Rs. 192,574 million in 2005. Advances of the bank have reached to Rs. 144,033

million an increase of 29.52% compared to last year, while the investments of the bank

marginally increased by 4.51% in the year. Lending to financial institutions recorded the

highest increase with 229.74% in the year as its total has reached to Rs. 19,050 million

compared to Rs. 5,777 million in 2005. Cash balances and operating fixed assets have also

recorded significant increases of 56.88% and 36.53% in the year.

2005 2006 Change

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(%)

Advances 111,207 144,033 29.52

Investments 44,927 46,953 4.51

Cash Balances 14,743 23,040 56.88

Bal With other banks 3,292 3,292 0



As on 31st December 2007, the total assets of the bank have reached to Rs. 320,109 million

with an increase of 66.23% compared to Rs. 192,574 million in 2005. Advances of the bank

have recorded a significant increase of 51.44% as its total has reached to Rs. 168,407 million\

compared to Rs. 111,207 million in 2005 while the investments of the bank increased by

86.18% in the year as it balance have become Rs. 83,958 million. Lending to financial

institutions recorded the highest increase with 218.82% in the year as its total has reached to

Rs. 18,419 million compared to Rs. 5,777 million in 2005. Cash balances and operating fixed

assets have also recorded significant increases of 101.73% and 59.91% in the year.

2005 2007 Change (%)

Advances 111,207 168,407 51.44

Investments 44,927 83,958 86.18

Cash Balances 14,743 29,740 101.73

Balances with other banks 3,292 668 79.7



Total Liabilities

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As on 31st December 2006, the total liabilities of the bank have reached to Rs.

234,339million compared to Rs. 178,025 million in 2005. Bills payables of the bank

decreased slightly by 6.97%, whereas borrowings of the bank increased by 89.92% compared

to last year. Deposits and other liabillities of the banks both have recorded increase of

27.64% and 14.48%. while subordinate jumped from nothing to Rs. 2,500 million in the year.

2005 2006

Change

(%)

Bills payable 2,449 2,278 -6.97

Borrowings 9,694 18,410 89.92


Subordinate accounts - 2,500Other liabilities 4,472 5,119 14.48

As on 31st December 2007, the total liabilities of the bank have recorded an increase of

68.65% with a total of Rs. 300,231 million compared to Rs. 178,025 million in 2005. Bills

payables of the bank increased by 42.71% compared to the year ended December 2005,

whereas borrowings of the bank increased by 36.58% compared to 2005. Deposits showed a

marginal increase of 6.54% in the year relative to 2005 while other liabillities of the banks

have recorded increase of 63.97%.

2005 2007

Change

(%)

Bills payable 2,449 3,494 42.71

Borrowings 9,694 22,934 36.58


Subordinate accounts - 2,499


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Equity

As on 31st December 2006, the total equity of the bank has reached to Rs. 17688 million

compared to Rs. 14,650 million in 2005. Share capital of the bank showed no change in the

year, while reaserves of the bank increased by 7.72%. Un-appropriated profit of the bank also

increased by 105.26% compared to the year ended December 2005.

2005 2006

Change

(%)


Reserves 5,693 6,133 7.72



As on 31st December 2006, the total equity of the bank has reached to Rs. 19878 million with

an increase of 36.62% compared to Rs. 14,650 million in 2005. Share capital of the bank

showed an increase of 20.00% over the year ended December 2005. Un-appropriated profit

of the bank increased by 155.17% as its total reached to Rs. 6,971 million compared to Rs.

2732 in the year ended December 2005.

2005 2007Change

(%)

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Reserves 5,693 6,051 6.27



4.9 SWOT ANALYSIS

The SWOT analysis done by me about this institution is as follows

4.9.1 Strengths:

Renovate its branches to fortify its new image

The main focus on customer relationship

The ATM card has as additional facility of using it as a debit card and can be taken

over all over the world

4.9.2 Weaknesses:

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It does not provide the money gram facility region wise.

There is less counter staff.

Helpline staff is not efficient.

Although the employees are provided with different facilities but they are over

burdened.

Credit card statements are not issued properly to the clients on time.

Should retain their senior and efficient employees.

4.9.3 Opportunities:

Quest for quality.

Goal corporate citizenship.

Improved its position from 3rd to 2nd in terms of deposits.

4.9.4 Threats:

To maintain its position and to cope with the advancing technology it needs heavy

capital investment.

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CHAPTER NO 05:

RECOMMENDATION & CONCLUSION

5.1 Recommendations:

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The branch daily expense are increase day by day branch management need to control

the extra expenses

At present, there is no prayer room for ladies in the bank. They either offer their prayers

in the lockers room (or whatever space is available to them). A proper prayer room for

the ladies working in the bank should be made in for them to offer their prayers

comfortably.

At present, all over the bank, if a person is not on his/her seat, his or her phone keeps

ringing unless someone thinks of picking it up. The caller could be an important

customer, or for that matter, could any customer need urgent information and when that

information is not received, it creates a bad image about the bank and its services. In

order for UBL to be a first class bank, it needs to implement a policy that says that a call

in a particular department has to be picked up within, say three rings by any other person

in the same department. After three rings, the call should automatically be transferred to

an answering machine so that the caller can call on another extension (instead of calling

all over again) or leave a message.

There should no discrimination between the contractual and the permanent employee for

training and promotion purpose. Even discrimination should not take place in any

where. So training not only given to the front-end employees but also to the back-end

employees.

Promotions should not be one the basis of seniority and experience but also youngpeople who are more motivated and thus should be given an opportunity to grow.

The employees should be given tasks according to their qualification so that the work

relates to them and they relate to the work.

The employees should be given time to socialize and this can be done by teamwork.

Employees should be paid fairly according to the quality of their work.

They should increase counter for customer convenience.

There should be more then one person in account opening section for quality ofservice

We cant change everything at once. Change is difficult. Making large changes is even more

difficult.

5.2 CONCLUSION:

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After spending six weeks at different departments of the bank, interacting with the

employees, getting their views, observing the organizational structure and design, I have

come up with the conclusion that UBL is a leading commercial bank. UBL got confidence of

the public especially the people related to the business field. The bank is trying to capture

more and more market by introducing more and more innovative products and services. The

staff of the bank is highly qualified and knows their work very well. The staff is very

cooperative which will help in the growth of bank by capturing more customers. A few

employees showed rudeness and were not much cooperative with internees but I think it was

due to the fact that they were heavily loaded with work and because of more work they seem

to be less cooperative.

Another thing which I feel is that their was no peon in the branch. So internees were used in

place of them and we had to do photocopies and faxes.

In the end I want to say that my internship experience at UBL have strengthened my career

plans toward joining banking sector and I hope skills and knowledge which I gained their

will help me in perusing my career plans.

References

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Bank AlFalah Limited (2007). Financial Statements of year 2006. Bank AlFalah Limited,

Rawalpindi, Pakistan.

Habib Bank Limited (2007). Financial Statements of year 2006. Habib Bank Limited,

Rawalpindi, Pakistan.

Irshad, M (2007). Money & Banking Finance. Lahore: Naveed Publisher.

Johnson, P (1987). A History of the Jews. New York: HarperCollins Publishers.

Luthons, F (2005). Organizational behavior (10 edition). New York: McGraw-Hill Irwin.

MCB Bank (2007). Financial Statements of year 2006. MCB Bank, Rawalpindi ,Pakistan.

National Bank of Pakistan (2007). Financial Statements of year 2006. National Bank of

Pakistan, Rawalpindi ,Pakistan.

United Bank Limited (2007). Financial Statements of year 2006. United Bank Limited,

Rawalpindi Pakistan.

Online References

Faryal, A. Sobia, M. Rating Report [online] Avaible http://www.ubl.com.pk.

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