INTERNSHIP REPORT
United Bank Limited (UBL)
Specialization: Finance
Submitted To:
Sir Ali Mufti
Incharge, Department of Business Administration
Submitted By:
Erum Shahid
Roll Number: BBA-13-MM04
Registration Number: 13-US-M-BUS-18
Session: 2013-2017
Department of Business Administration
University of Sargodha, Sub Campus Mianwali
In The Name Of
Almighty Allah
The Most Gracious
&
The Most Merciful
Dedication
I humbly dedicate my report to my report to Allah Almighty, Who knows All and
have the Knowledge of Unseen, Who made this possible. I would like to dedicate
this report to my parents and my teachers who guided me in the right direction as a
light tower.
Acknowledgement
I got the opportunity to work in the United Bank Limited KNC Chashma Branch
with all the supportive and coordinating staff. I would like to give my deepest
thanks to Sir Abdul Moid, Branch Manager, who gave me the support needed for
my internship. I also like to thanks Sir Irfan Khan, Manager Operations, who
taught me most of the work experience. I also pay my deepest thanks to Madam
Madeeha Mubarak, who helped me in the preparation of my report.
Executive Summary
United Bank Limited is one of the largest bank privatized by the Government of
Pakistan. It has over 1300 branches across Pakistan and overseas. The bank is
growing in the previous years as its total assets are over 1.5 trillion in Pakistani
Rupees.
I worked for six weeks in the KNC Chashma branch and this report includes my
learning and experience in the branch. Topics covered in this report are: history of
the bank, its values, organizational structure, departments and their working,
products and services of the bank.
In the end of report critical analysis of the bank, its SWOT analysis and then the
conclusion is given. Recommendations are also made in the end of report.
Table of Contents
Overview ....................................................................................................................................................... 3
Introduction ............................................................................................................................................... 3
History ...................................................................................................................................................... 3
Vision, Mission and Values of UBL ............................................................................................................. 4
Vision ........................................................................................................................................................ 4
Mission...................................................................................................................................................... 4
Values ....................................................................................................................................................... 4
Organization Structure .................................................................................................................................. 5
Head Office ............................................................................................................................................... 5
Registered Office ...................................................................................................................................... 6
Number of Employees .............................................................................................................................. 6
Introduction of Departments ......................................................................................................................... 7
Corporate banking group .......................................................................................................................... 7
Small and medium enterprise (SME) banking group ................................................................................ 7
Credit administration department.............................................................................................................. 7
Consumer banking group .......................................................................................................................... 8
Investment banking group......................................................................................................................... 8
Treasury and capital markets group .......................................................................................................... 8
International division ................................................................................................................................ 9
Financial institution division..................................................................................................................... 9
Islamic banking group (UBL Ameen) ...................................................................................................... 9
Human resource department ..................................................................................................................... 9
Finance division ...................................................................................................................................... 10
Information technology department ........................................................................................................ 10
Audit department .................................................................................................................................... 10
Products and services of UBL..................................................................................................................... 11
Deposit Products ..................................................................................................................................... 11
Consumer Loans ..................................................................................................................................... 13
Card Products .......................................................................................................................................... 14
Omni – Branchless Banking ................................................................................................................... 15
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UBL Netbanking ..................................................................................................................................... 16
UBL Online............................................................................................................................................. 16
UBL Go-Green........................................................................................................................................ 16
UBL Ameen ............................................................................................................................................ 17
Other Retail Product ............................................................................................................................... 19
Agricultural products .............................................................................................................................. 19
Experience as an Internee ........................................................................................................................... 21
Cash Department ..................................................................................................................................... 21
Clearing Department ............................................................................................................................... 22
ATM Management Department .............................................................................................................. 23
Customer Service Department (Including Account Opening Department) ............................................ 24
Operations Department ........................................................................................................................... 25
Finance Department ................................................................................................................................ 25
Critical Analysis of UBL ............................................................................................................................ 26
Consolidated Balance Sheet (For last three Years) ................................................................................. 26
Profit and Loss Account (For last three years) ....................................................................................... 27
Horizontal Analysis of Balance Sheet .................................................................................................... 28
Horizontal Analysis of Profit and Loss Account .................................................................................... 30
Vertical Analysis of Balance Sheet ......................................................................................................... 32
Vertical Analysis of Profit and Loss Account ........................................................................................ 34
Financial Ratio Analysis ......................................................................................................................... 36
SWOT Analysis of UBL ............................................................................................................................. 41
Strengths ................................................................................................................................................. 41
Weaknesses ............................................................................................................................................. 42
Opportunities........................................................................................................................................... 42
Threats .................................................................................................................................................... 42
Conclusion .................................................................................................................................................. 43
Recommendations ....................................................................................................................................... 44
References and sources ............................................................................................................................... 45
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United Bank Limited
Overview
Introduction:
UBL is a private commercial bank and its head office is located in I.I. Chundrigar Road,
Karachi. Bank has over 1375 branches in Pakistan and 19 overseas branches. According to 2016
financial statements, it has total assets of over Rs. 1.5 trillion. It has total customers over 4
million.
History:
UBL established its first branch in Karachi on 7th November, 1959. It was established by
Agha Hasan Abedi. In 1960, approximately after six months it was founded, new branches were
established in Dacca, Lahore, Lyallpur, Chittagong and Narayanganj. In 1963, it opened its first
branch internationally which was on William street in London, and became the first Pakistani
bank to open an international branch. It was the first bank which introduced computer system in
the banking industry, in 1967. Till 1977, UBL has opened its international branches in Abu
Dhabi, Kingdom of Bahrain, Qatar, Yemen and New York City.
In 1974, Government of Pakistan nationalized the bank. For a period of approximately 28
years, bank worked under the government. During this period, bank launched electronic banking
services for Hajj, opened a representative office in Iran.
In 2002, UBL was privatized by the Government of Pakistan. Majority of its shares were
brought by H E Sheikh Nahayan Mubarak Al Nahayan, head of Abu Dhabi Group and Sir Anwar
Pervez, head of Bestway Group. In 2002, National Bank and UBL merged their operations in UK
to form United National Bank Limited. After privatization, bank is continuously working
towards progress and achieving new heights; it has launched Premium Debit Card with
collaboration of MasterCard, in Pakistan and introduced Go-Green program in which SMS alerts
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are sent to the customer on every transaction and statement in mailed. UBL has been awarded the
best bank of 2016 in the Pakistan Banking Awards.
Vision, Mission and Values of UBL
Vision
To be a world class bank dedicated to excellence, and to surpass the highest expectations of our
customers and all other stakeholders
Mission

Be the undisputed leader in financial services for our customers

Most innovative and fastest growing bank in targeted businesses

Continue to diversify across chosen geographies

Achieve operational excellence with the highest level of compliance

Consistently create leaders through inspired human capital

Contribute positively to the communities we operate in
Values

Customer first

Honesty of purpose

Teamwork

Excellence

Meritocracy
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Organization Structure
This is the organizational structure of the bank
Pressident/CEO
Board of Directors
Regional Managers
Area Managers
Branch Managers
Staff
Head Office:
I.I. Chundrigar Road,
Karachi – 74000, Pakistan.
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Registered Office:
13th Floor, UBL Building, Jinnah Avenue,
Blue Area, Islamabad
Number of Employees:
Exact number of employees is not known but over 15,000 workers are employed in the
bank in 2016. In 2015, 14,623 employees were working in the bank
Comments on the Organizational Structure:
UBL has a centralized organizational structure, in which every branch has to report to the
area manager which then report to the regional manager. The regional manager then transfers the
report on the monthly progress to the main head office. All the orders, policies and procedures
are followed by the branches which are developed in the head office by considering the
prudential regulations of State Bank of Pakistan and banks own polices.
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Introduction of Departments:
Following are some of the major departments of UBL.
Corporate banking group:
Corporate banking group deals with the multinational companies, large corporate
customers which includes both private (i.e. international or large firms) and public sector
(government institutes) clients. Highly skilled and qualified workforce is required for this
group as it manages some of the largest accounts of the bank. So this group formulates its
strategies and polices in such a manner which they are attractive for their current
customer base and also for the new clients. Some of the services provided by the group
are syndicate financing, financing against liquid securities, project financing, working
capital financing, term finance certificates (TFC’s) investment, cash management
services, letter of credit etc.
Small and medium enterprise (SME) banking group:
Commercial banking group is present in almost every branch of the bank. This
group deals with the needs and requirements of medium and small businesses. Usually
needs of those businesses are much smaller than the large corporate clients. Specified
terms and conditions are applied for every SME which are according to the bank’s
policies. Some of the things which are put under consideration are business nature, its
network, its growth in the coming years and high profit turnovers.
Credit administration department:
This department deals with the credit or advancing facilities provided by the bank.
It keeps the record of all the loan documents, necessary securities and documents needed
for the issuance of loan, fulfillment of all the legal aspects, managing the credit policies
and keeping the loans less than the 60% of total net worth (or customer deposits),
management and monitoring of credit portfolio, recoveries of mark ups or interests etc.
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Consumer banking group:
Consumer banking is done in every branch of the bank. It specifically deals with
the individual customer services which includes both making deposits and personal loans.
Different products are provided or offered to the customer, each of the products is
designed according to the target market’s needs. Main products which are offered to the
customers are credit card, debit card, deposit accounts, home loans, car loans, business
loan for an individual etc. Products are renewed and developed according to the
customer’s needs and bank’s policies. Workforce is regularly trained and kept up-to-date
because they are in direct contact with the customers.
Investment banking group:
This group was established in 2002, and UBL was the first bank in Pakistan
which provided investment banking products and services. This group consists of 19
members which are highly skilled. It provides services in debt and capital markets i.e.
TFC’s investments completely by the bank or partially, project and structured finance i.e.
development of risk assessment, equity and advisory i.e. buying and selling of equity or
assets.
Treasury and capital markets group:
This group deals with the foreign exchange in different currencies on behalf of its
customers, manages the balance sheet and liquidity requirements of the bank, deals with
derivatives like forward rate agreements, manages the share capital of the bank etc. The
human resource of the group is highly qualified and manages the crucial capital and
money aspects of the bank.
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International division:
This department deals with the management of international branches of UBL. All
the operations related to overseas branches are handled by this department which includes
global credit risk management and international transactions. Every product is designed
according to the demands of international clients and managed by this division.
Financial institution division:
This division manages the financing activities of the bank for the financial
institutes including both banking and non-banking institutes, i.e. financial needs of local
or foreign banks, insurance companies, DFI’s etc. This division also manages the
financial institutes risk management unit and gives advisory services to the clients for
different management problems.
Islamic banking group (UBL Ameen):
This group deals with the operations of Islamic Banking Business and develops
Islamic banking products and services with Shariah Advisors and makes policies and
procedures. It is a separate division in the bank which manages its operations, services
and products and report to the bank. The workforce of Islamic banking is trained
regularly. Murabaha, diminishing musharaka etc. are the services and related products are
provided by them.
Human resource department:
This department is responsible for the recruitment, selection and hiring of the
workforce. Eligibility criteria, selection process, job specifications and training courses
etc are developed by this department. For selection and hiring purposes different tools
and techniques are introduced, like introduction of interview technique based on behavior
of candidate.
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Finance division:
This division manages the book keeping and financial statements preparation. It
develops polices for the allocation of funds in the bank for its operations like financing
and projects budget analysis. It analyze the market and competitors to improve its polices
for better working.
Information technology department:
UBL has internal software which is called CREAMS (credit risk environment’s
administration and management system) which collects and updates date into the system
which is required for other purposes like valuation of assets and making reports etc. The
software is supported by Oracle software applications, which includes Oracle E-Business
Suite Human Resource Management system, Oracle Payroll, Oracle General Ledger and
Oracle Fixed Assets Management System. These applications have increased the
efficiency of the banking operations and reduced the time taken to done those operations
by 10,000 man hours with the reduction in paper work.
Audit department:
Board Audit Committee is responsible for the auditing of every branch of the
bank. The internal auditing team visits every branch according to its scheduled routine or
sometimes pays surprising visits. They check the operations of the branch and its overall
environment. When any deviation from any bank policy is noted by the audit team then it
is reported to the Head Office, after which recommendations are made to the branch.
These audits are held to improve and control the environment and operations of the
branch and for the proper following of the policies of the bank.
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Products and services of UBL
Following are some of the products and services
Deposit Products:
UBL provides a variety of deposit products which are designed according to the
needs of the individuals, either someone wants to open a saving account or a businessman
wants foreign currency account. Every product’s features are designed at a level to
achieve maximum fulfillment of customer’s requirements.
UBL Mukammal Current Account is a current account for the individuals, traders,
businessman and other commercial entities. It has no minimum balance restriction
and also provides some of the services free of any charges which are ATM debit
card but annual fee is charged, cheque book, account statement, go green SMS
alert, internet banking, country wide inter branch online transactions.
UBL Business Partner Account is a current account which can be used by
individuals, sole proprietors, partnerships and government. At least Rs. 10,000 are
required in the account as minimum balance otherwise Rs. 50 will be deducted
from the account every month. Free services provided are deposits and
withdrawals in both cheque and cash, debit ATM card annual fee, cheque book,
issuance of rupee travelers cheques, one locker free for first year if it is provided
in the branch facility.
UBL Profit and Loss Sharing Savings Account (UBL Rupee Transactional
Account) is a savings account which can sure the security of savings and also the
provide profit on it. Some of the features are



No limitation on withdrawals
Share of profit is credited on half-yearly basis
Profit is calculated on monthly average balance
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UBL UniZar Foreign Currency Savings Account is a savings account which is
opened and maintained in foreign currency. UBL is providing this account in
following five currencies and the minimum deposit required for each currency is





USD (US Dollar) : 500
EURO : 400
AED (UAE Dirham) : 2,000
GBP (Great Britain Pound): 300
SAR (Saudi Arab Riyal) : 2,000
The profit is calculated on the basis of minimum balance at the end of each month
and the profit is given bi-annually and no restrictions on number of transactions.
UBL UniZar Foreign Currency Current Account is a current account which is
maintained in foreign currency. Account can be opened in five currencies i.e US
Dollar, Euro, UAE dirham, British Pound, Saudi riyal. Minimum amount required
for the opening of the account is same as in UBL UniZar Foreign Currency
Savings Account. No restrictions on number of transactions. Zakat is exempted in
this account.
UBL UniZar Foreign Currency Term Deposits Receipt is a term deposit account
in which customer is offered different terms/periods for the maturity of deposit.
Maturity periods are three months, six months and twelve months. The account is
offered in a range of foreign currencies. Upon maturity the deposit along with
profit is given back to the customer. Attractive return rates are provided and profit
is given on the booking month’s rate.
UBL Regular Term Deposit Receipts is a term deposit account which is provided
for a range of tenors starting from one month to six months and one year to ten
years. Rate of return is renewed for every month on the 1st and attractive rates
provided to the customers. Renewal option is also provided before encashment of
the TDR. Profit is given every month and TDR can be en-cashed before the time
of maturity.
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UBL Mahana Aamdani Savings Account is a savings account for the individually
or jointly operated, partnerships, Joint Stock Company, government institutes, self
employed individuals, salaried and retired individuals, housewives, trusts etc. the
account can be opened with Rs. 100 and have no minimum balance requirement.
Profit is calculated on monthly average balance and credited to the account.
UBL Mahana Aamdani Term Deposit is a specially designed term deposit
account for the customers who are dependent on the monthly fixed salary or
income. Minimum investment required for this account is Rs. 25,000 and no
upper balance amount is fixed for the account. Profit is paid monthly, renewal and
encashment before maturity options are available. Tenures given for this account
are three months and six months, one year, three years and five years.
UBL Basic Banking Account is a current account which is suitable for students,
housewives and pensioners. This account has no minimum balance limit and is
opened with Rs. 1,000. Limit for deposits and withdrawals is applied on this
account which is two for each, any transaction above the limit will be charge with
Rs. 50 each. Unlimited ATM withdrawals from UBL ATMs. Zakat is exempted
from this account.
UBL First Minor Savings Account is basically opened for the child aged between
one day and 18 years. This account can be opened with minimum balance of Rs.
100. Profit is calculated on the monthly balance. UBL First Pocket-Money Card
is issued which is used to withdraw from the profits generated on the principal
amount. A debit ATM card can also be issued on the principle amount. Check
book is issued on the names of the child and the parents or guardian jointly.
Consumer Loans:
UBL offers a variety of loans for different purposes like education, marriage, car,
house etc. Some of the products are described below:
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UBL CashPlus, My Personal Loan is a need based product with non-end use
means it can be used for any personal purpose which is up to the customer. Loan
can be issued up to Rs. 2 million, which can be returned on flexible repayment
terms. Rates are attractive and no collateral requirements are needed. Loan is
issued to the person who has a minimum net income of Rs. 25,000, age between
21 to 60 years and for the period of one to five years. Salaried individuals whose
salaries are being credited in UBL are offered this loan.
UBL Address Home Loan Facility is a financing product for the construction or
buying of the new home. This product is available in Karachi, Lahore, Islamabad,
Rawalpindi and Faisalabad. A minimum of Rs. 1,000,000 loan is issued to the
individual who are resident of Pakistan, have minimum monthly income of Rs.
50,000, age between 23 to 65 years. Any salaried individual or self employed
businessman can apply. Rates charged are fixed by the bank; rates fluctuate due to
KIBOR (Karachi Inter-Bank Offered Rate) changing the rates. Applicable rates
are 3.5% + KIBOR for salaried persons and 4.5% + KIBOR for self employed
professional or businessman. The loan is paid back in installments for the tenor
between 3 to 20 years.
UBL Drive is a car financing product which is available for all new and used cars
both local and imported. Loan issuance maximum limit is Rs. 5 Million.
Repayment is done between one to five years. Salaried person who has a
permanent job, salary of Rs. 35,000 per month and age between 21 to 60 years is
eligible for the loan.
Card Products:
Following are some of the card products provide by UBL.
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UBL Wiz is the first prepaid debit card of Pakistan. It can be used locally and
internationally where Visa and MasterCard are accepted. It can be used for online
shopping and shopping at outlets and withdrawal of cash at ATMs. Minimum
balance per card is Rs. 200,000. Minimum online shopping is for Rs. 100,000 per
day and ATM withdrawal of Rs. 40,000 per day. Card can be reloaded through
UBL ATM, UBL Omni Dukan, UBL Netbanking and through contact center if
saving or current account is present in UBL.
UBL Visa Mega Wallet Debit Card is the product issued to the existing or new
account holders, any customer with a UBL Premium Debit MasterCard can also
apply for UBL Visa Mega Wallet Debit Card. It can be used in Pakistan and all
around the world where Visa and MasterCard are accepted. Cash withdrawal from
ATM is Rs. 40,000 per day and shopping limit is of Rs. 100,000 per day.
UBL Credit Card is accepted worldwide which allows instant cash withdrawal.
Free travel accident insurance is also provided whenever someone purchases
airline, train or bus ticket, in case of any mishap occurred during the travel. The
amounts covered in case of any accident are Rs. 3.5 Million for classic card and
Rs.7 Million for Gold Card. E-statements and SMS alerts are send to the
customer.
UBL Premium Debit MasterCard is also a worldwide recognized card with the
acceptance of MasterCard. Highest transaction limit for this card is per day Rs.
400,000 per day, which includes ATM withdrawal of Rs. 200,000 per day and
point of sale (POS) transactions or internet shopping of Rs. 200,000 per day.
Omni – Branchless Banking:
UBL Omni is a product which is available for every citizen of Pakistan in the
reach of UBL Omni Dukan. Dukan which are selected by the bank for this
product are present in more than 900 cities of Pakistan. This product has
overcome the limitation of banking services and made them available to the rural
15
and urban areas. Any person with CNIC and a mobile number can open up this
account. The mobile number of the customer becomes his bank account number.
Omni account can also be opened with Omni mobile app which can be
downloaded by the customer. UBL Omni account provides a variety of services
which includes cash deposit and withdrawal, utility bills payment, receiving or
sending of money, postpaid mobile bill payment and many more. An ATM card is
also issued to the Omni account holders which can be used anywhere in Pakistan.
UBL Netbanking:
UBL Netbanking is an internet banking portal which allows its account holders to
manage their bank accounts from anywhere in the world. This service is available
for 24/7 for all the clients. Bank holders can view their deposit, credit card and
loan accounts. Online shopping, bills payment both utility and phone, funds
transfer, investment in UBL funds etc. can be done with UBL Netbanking. This
service can also be availed on the smart phones by downloading the Netbanking
app.
UBL Online:
UBL Online is an electronic Banking system which allows its customer to access
and see the information of their bank account anytime and anywhere from the
world. It provides statements of account, account balances and transaction history
of the bank account.
UBL Go-Green:
UBL Go-Green is an initiative step taken by the bank to protect its surrounding
environment specially trees. The purpose of this service is to use less paper and save
trees. Instead of paper, the information can be received on the mobile phone or
computers. It provides:
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UBL Go-Green E-Statement allows the customers to receive their bank account
statement anywhere in the world. The statements are sent to the e-mail address
provided by them on daily, weekly, monthly, quarterly and semi annually basis.
UBL Go-Green Merchant Acquiring is the service which is provided to the
businessman and merchants. This service accepts payments from the internet
through the website of clients and secures them. Anyone can pay for the
merchants through the Visa or MasterCards, debit or credit cards.
UBL Go-Green SMS Alerts are sent to the customer whenever cash deposit, cheque
deposit/withdrawal, cash transfer, ATM withdrawal and funds transfer and POS
transactions are made. The service is provided on the registered mobile number
given by the customer.
UBL Ameen:
UBL Ameen offers Islamic banking services and products which are designed
according to the Shariah Standards for the demands and needs of the customers. It
provides Retail Banking, corporate banking and UBL Ameen Drive Car Financing
products and other services.
UBL Ameen Retail Banking Products:
Some of the products are discussed below:
Ameen Asaan Current Account can be opened with Rs. 100. All the funds receive
in this account are on the basis of Qardh (borrowed amount) and will be only used
in Shariah compliant businesses. No minimum or maximum limit is applied on
the account.
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Ameen Asaan Saving Account is an account which can be opened with Rs. 100.
Funds received in this account are treated on the basis of Mudarabah and used in
Shariah compliant business. No minimum balance is required. Profit is calculated
on the monthly average balance and paid semiannually.
Ameen Minor Saving Account is designed for the children under the age of 18
years. Funds are accepted on the basis of Mudarabah and used in Shariah
compliant businesses. Profit is paid monthly and calculated on the basis of daily
average balance. No limit on number of transactions and minimum balance.
Ameen Certificate of Islamic Investment is an investment product which gives
profit payment options on a fixed deposit certificate. There are three profit
payment options, (i) at the time of maturity option in which certificate purchased
should have a minimum amount of Rs. 10,000 and for the time period of one
month to 8 years, (ii) bi-annual payout option (July and January) in which
certificate purchased should have a minimum amount of Rs. 50,000 and for the
time period of one, three, five and six years, (iii) monthly payout option in which
certificate purchased should have a minimum amount of Rs. 50,000 and for the
time period of one, two, three and five years.
UBL Ameen Drive Car Financing is a diminishing Musharakah product in which
bank and the customer buy the car in joint ownership. The customer makes an
agreement with the bank to pay the rent to the bank for the usage of the car and
some of the principle amount to gain the ownership of the car. It is available for
all the new and used cars of local or international brand and also for the imported
cars. Any salaried person with Rs. 35,000 monthly pay, age between 21 and 60
years can apply for this. While businessman can apply for this product is their
monthly income is Rs. 50,000 per month and age between 21 to 65 years. The
rental or payment period is between one to 5 years.
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Other Retail Product:
Some of the other products include insurance products, payroll disbursement product etc.
UBL BetterLife-Bancassurance EFU Life provides insurance products to its
customer by partnering with the EFU insurance company, which includes UBL
BetterLife Child Education Plan, UBL BetterLife Marriage Plan, UBL BetterLife
Savings Plan, UBL BetterLife Retirement Plan and UBL BetterLife Takaful
Plans.
UBL Pay Partner is an electronically managed payroll disbursement system which
is available for the organization having a limit of 50 numbers of employees
minimum. The salary of employees can be disbursed into UBL account or
accounts at other banks.
Hamrah is rupee traveler’s cheque which is offered in denominations of Rs.
10,000 and Rs. 5,000. These cheques have speciall Coded printing and a Rainbow
Effet for security. Theses cheques are available for all citizens, an account with
UBL is not necessary.
Agricultural products:
UBL offers agriculture based financed products, which includes financing for the
production of major or minor crops, development of land, purchase of equipment and
machinery and livestock. There are two basic categories of agriculture loans, farm loans
and non-farm loans.
Farm Loans includes production loans and development loans.
Production loan is available for major and minor crops in Pakistan. It is issued to
the farmers to get agricultural inputs like seeds, fertilizer, sprays etc, minimum
amount for the loan is Rs. 30,000 and can be changed according to the farmer’s
needs.
Development loan are financed for land improvement, tube wells, cold storage
etc. Minimum amount for loan is Rs. 30,000 and can be increased.
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It is also issued for the tractors, mini trucks etc. which is issued on Rs. 100,000 as
minimum limit and Rs. 1,500,000 as maximum limit.
Non Farm Loans includes livestock financing and fisheries financing. In livestock
financing, loan is issued for dairy farming, meat farming, construction of sheds
etc. Minimum amount for loan is Rs. 50,000 and maximum limit according to the
need.
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Experience as an Internee
I worked as an internee in the UBL branch KNC Chashma, Mianwali, branch code 1182. I
learned about the basics of the working operations and processes of the bank. The branch has
following working departments.
Cash Department
Clearing Department
ATM Management Department
Customer Service Department (Including Account Opening Department)
Operations Department
Finance Department
Cash Department:
It handles the cash in the branch, the outflow and inflow of the cash through different
transactions in the bank which mostly includes cash receiving and cash payment procedures.
Cash can be received through
Deposit slips
Bills, cheques
Telegraphic transfer, demand draft and pay-order
Cash payments are made against payment slips, cheques, pay-order and demand draft.
In both of the cases, while paying or receiving the cash, the instruments are checked and verified
by the officer. Instruments are also checked if they are past time or post time, in neither of the
cases no payment is made. Signature is also verified.
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One of the major instrument through which cash is deposited into the account is deposit slip. The
customer fills the slip which has following details.
Account number
Account holder’s name
CNIC number
Signature of bank officer and depositor
Contact number
Amount to be deposited in both words and figures
A copy is given to the depositor after the deposition of cash.
Clearing Department:
Clearing is a process of transfer of funds from one branch of a bank to the other branch of
another bank, which do not involve cash into the transfer process but it is done through the
services of NIFT (National Institutional Facilitation Technologies) which is provided by the
State Bank of Pakistan. A clearing house is present in the SBP which handles all the matters
related to it. Clearing instruments are cheques, demand draft, pay order, traveler’s cheque.
Clearing is made in two ways
Inward clearing in which bank’s cheques are received by the bank which were given to the other
bank. In other words cheques are drawn on the bank. As the cheques are drawn on the bank, the
clearing of those cheques decreases the deposits in the bank. For the clearing of the cheque,
customer account s verified, checked if the instrument is not tempered with and all the
requirements are full filled then the cheque is cleared i.e. funds are transferred to the other bank
through online transfer. If the cheque has to be returned then the reason for return is mentioned
in the clearing slip.
22
Outward clearing is the process in which other bank’s cheques are deposited to the bank. In this
case, cheque is drawn by the bank on the other bank. In case of outward clearing, deposits of the
bank are increased. Outward clearing is of two types
Local cheque clearing is the clearing of the cheque drawn on other banks located in the
same geographic area.
Intercity cheque clearing is the clearing of the cheque drawn on a bank outside the local
geographical area.
In this process of outward clearing, an employee of NIFT comes to the bank and collects all the
cheques and other instruments along with clearing slip is also attached. The cheques applied in
the outward clearing process are stamped with three types of stamps.
Crossing stamp (on front)
Endorsement stamp (at the back)
Clearing stamp
Other items necessary for clearing are, date, signature verification and amount in both igures and
words should be correct. When the process of outward clearing is done then the transactions are
made through online transfer from the bank account by NIFT. When clearing is confirmed by the
NIFT then the accounts are debited or credited in the branch.
Cheques are returned on different reasons which are frozen account, limited balance etc.
ATM Management Department:
ATM management department mainly focuses on the functioning of the ATM machine,
cash requirements and security. ATM manager checks the cash outflow from the machine and
refill the machine when the cash falls than a specified limit. Every day before closing, the cash
balance in the ATM is checked and refilled, so that the machine will work overnight. Filling of
the ATM machine is done by getting cash from the bank vault through debit voucher which is for
23
the bank use only. The debit voucher for the issuance of cash for ATM from vault is signed by
two authorized persons so that any misdealing will be avoided. Date, amount and signature of the
authorized persons are required.
Customer Service Department (Including Account Opening Department):
Customer service department handles the customer and tries to solve their problems and
help them. This department also performs the functions of account opening. The account opening
procedure is done in following steps:
First the account opening form is filled which should be written neat and clean, no over
writing or cutting should be made. The information filled should be easily readable.
The customer is offered with different products and according to his needs and
requirements he selects the product which is suitable for him. After the selection of the product
the account opening form is filled.
First the title of account, date, currency of the account is written. Whether the account
will be single or joint account is decided according to the customer’s needs.
Now the customer’s personal information is filled, his name, his father’s name, gender,
marital status, date of birth, occupation and nationality is noted. Any proof of its residence is
needed.
The documents needed are CNIC, and signatures of the customer on the signature
specimen card provided by the bank. A deposit slip is also filled for the initial deposit in the
account. In case of shaky signatures or illiterate person, customer’s photographs are also
required.
A key or secrete word is also needed, which is a minimum six character word. The
secrete word is preferred to be mother’s name of the customer. This word adds a security to the
account because very few people know the name of the mother.
24
Other documents are required for other specified products, like for a businessman to open
an account his income statement ns other documents are required and for a pensioner a document
called life certificate is required with other documents.
Next of kin is also mentioned in the account opening form so that is case of any mishap
the account information is shared with the next of kin person.
SMS alerts, debit card, cheque book, credit card, locker, e statement and other services
are filled in the account opening form.
Then a part of the account opening form is specified for the bank. There is a section
called Know Your Customer. Questions are asked from the customer, his/her source of funds etc.
and then the verified data is transferred into the system. Account number is allotted to the
applicant’s account and account is opened.
Operations Department:
Operations department handles all of the operations of the branch. Every major
transaction and important processes are handled by this department. Provide best telling services
to the customers. It makes sure that the branch is working according to bank’s policies and
procedures. It manages customer service and tries to provide good quality service and service
without any mistakes or errors. Its handles customers complaints and solve them as a priority.
Finance Department:
Fiancé department is responsible for the overall management of the book keeping record
and accounting activities. It keeps record of daily transactions and manages funds for the daily
operations. Funds allocation is done by the finance department. The advances are made through
this department. All the process for the allotment of loan and till its verification is done by this
department. After the allotment of loan the repayments are also made sure by this department
and necessary measures are taken for the assurance of the payments like collateral is taken at the
time of issuance of an advance etc.
25
Critical Analysis of UBL
Consolidated Balance Sheet (For last three Years)
2016
2015
Rupees in ‘000
2014
ASSETS
Cash and balances with treasury banks
Balances with other banks
Lendings to financial institutions
Investments
Advances
Performing
Non-performing - net of provision
Operating fixed assets
Deferred tax asset – net
Other assets
Total Assets
LIABILITIES
Bills payable
Borrowings
Deposits and other accounts
Subordinated loans
Liabilities against assets subject to finance
lease
Deferred tax liability - net
Other liabilities
Total Liabilities
NET ASSETS
REPRESENTED BY:
Share capital
Reserves
Unappropriated profit
Total equity attributable to the equity holders
of the bank
Non-controlling interest
Surplus on revaluation of assets - net of
deferred tax
Total Liabilities and Share capital
133,467,502
32,267,304
35,484,586
838,262,274
113,762,323
27,713,772
31,304,861
747,598,627
75,660,306
21,948,274
23,435,222
519,602,007
529,818,148
7,963,998
537,782,146
477,649,098
9,629,045
487,278,143
455,078,880
12,286,412
467,365,292
39,298,927
36,677,638
33,335,646
45,179,521
41,851,449
41,106,366
1,661,742,260 1,486,186,813 1,182,453,113
11,759,012
13,395,744
205,865,131
164,232,087
1,245,791,616 1,119,953,064
9,559,255
53,248,526
951,902,296
3,558
4,873
429
5,230,571
4,515,165
2,139,586
29,363,148
28,486,831
28,098,410
1,498,013,036 1,330,587,764 1,044,948,502
163,729,224
155,599,049
137,504,611
12,241,798
42,615,188
68,939,008
12,241,798
41,624,817
59,955,027
12,241,798
37,286,088
52,507,655
123,795,994
113,821,642
102,035,54
4,227,693
128,023,687
5,223,744
119,045,386
4,553,250
106,588,791
35,705,537
36,553,663
30,915,820
163,729,224
155,599,049
137,504,611
1,661,742,260 1,486,186,813 1,182,453,113
26
Profit and Loss Account (For last three years)
2016
Mark-up / return / interest earned
Mark-up / return / interest expensed
Net mark-up / return / interest income
Provision against loans and advances – net
Provision against lendings to financial institutions - net
Provision for diminution in value of investments - net
Bad debts written off directly
Net mark-up / return / interest income after
provisions
Non mark-up / return / interest income
Fee, commission and brokerage income
Dividend income
Income from dealing in foreign currencies
Gain on sale of securities – net
Unrealized gain / (loss) on revaluation of investments
classified as held for trading
Other income
Total non mark-up / return / interest income
Non mark-up / return / interest expenses
Administrative expenses
Other provisions – net
Workers' Welfare Fund
Other charges
Total non mark-up / return / interest expenses
Share of profit of associates
Profit before taxation
Taxation – Current
-Prior
-Deferred
Total tax
Profit after taxation
Attributable to:
Equity shareholders of the bank
Non-controlling interest
Earnings per share - basic and diluted
2015
Rupees ‘000
2014
101,755,044
42,933,935
58,821,109
97,574,003
39,715,160
57,858,843
85,760,646
38,846,868
46,913,778
624,626
(15,500)
898,109
97,781
1,605,016
2,942,024
708,319
173,085
3,823,428
533,523
165,744
459,812
177,222
1,336,301
57,216,093
54,035,415
45,577,477
14,377,568
2,276,408
1,955,790
5,609,581
14,239,098
2,350,112
2,588,176
3,195,016
13,292,093
1,819,136
3,091,592
2,063,436
(1,221)
916,264
25,134,390
82,350,483
16,245
1,298,577
23,687,224
77,722,639
(28,723)
1,118,583
21,356,117
66,933,594
35,022,240
231,368
930,022
69,818
36,253,448
1,057,248
47,154,283
34,004,803
78,143
851,968
202,103
35,137,017
861,704
43,447,326
31,752,088
276,446
673,005
10,427
32,711,966
1,394,686
35,616,314
15,305,737
15,235,612
1,801,172
10,859,677
361,962
2,251,412
1,594,832
19,151,981
28,002,302
(599,084)
16,437,700
27,009,626
369,872
11,591,511
24,024,803
27,782,758
219,544
28,002,302
27,009,626
855,282
27,009,626
23,647,704
377,099
24,024,803
22.70
(Rupees)
21.36
19.32
27
Financial Analysis of the financial statements of UBL
Horizontal Analysis of Balance Sheet
Notes
2016
2015
2014
ASSETS
Cash and balances with treasury banks
Balances with other banks
Lendings to financial institutions
Investments
Advances
Performing
Non-performing - net of provision
Operating fixed assets
Deferred tax asset – net
Other assets
Total Assets
LIABILITIES
Bills payable
Borrowings
Deposits and other accounts
Subordinated loans
Liabilities against assets subject to finance
lease
Deferred tax liability - net
Other liabilities
Total Liabilities
1
2
+17.32%
+16.43%
+13.35%
+12.13%
+50.36%
+26.27%
+33.85%
+43.88%
-15.55%
-32.79%
-21.51%
+13.24%
3
3
+10.92%
-17.29%
+10.36%
+4.96%
-21.63%
+4.26%
+12.38%
+18.86%
+12.54%
+7.15%
+10.03%
+18.89%
4
+7.95%
+11.81%
+1.81%
+25.69%
+40.02%
+9.12%
5
6
7
-12.22%
+25.35%
+11.24%
+40.13%
+208.43%
+17.65%
-42.42%
+29.63%
+7.01%
-100.00%
-26.99%
+15.84%
+3.08%
+12.58
+1035.90%
+111.03%
+1.38%
+27.34%
-67.62%
+53.36%
+21.67%
+7.47%
+5.23%
+13.16%
+23.57%
+2.38%
+14.98%
+11.64%
+14.18%
-2.01%
+16.16%
+8.76%
+11.55%
+6.84%
-19.07%
+7.54%
+14.73%
+11.69%
+30.54%
+7.68%
-2.32%
+5.23%
+11.81%
+18.24%
+13.16%
+25.69%
+151.64%
+23.57%
+9.12%
8
NET ASSETS
REPRESENTED BY:
Share capital
Reserves
Unappropriated profit
Total equity attributable to the equity holders
of the bank
Non-controlling interest
Surplus on revaluation of assets - net of
deferred tax
Total Liabilities and Share capital
9
28
Observations:
1. Cash and balances with treasury are increased by 50% in 2015 due to increase in the local
currency current accounts with the State Bank of Pakistan. While in 2016, it is also
increased due to increase in local currency currents with the State Bank of Pakistan and
with the National Bank of Pakistan. While in 2014, it was decreased due to decrease in
accounts with the SBP.
2. Balances with other banks in 2016, has increased though but the balances in current
account inside Pakistan has decreased while the balances in the current and deposit
account outside the Pakistan has increased. In 2015, the deposit accounts inside and
outside Pakistan increased. In 2014, balances with other banks decreased both inside and
outside Pakistan which caused a total decrease of 32 % in the balances.
3. In 2014, performing bills discounted and purchased decreased while the nonperforming
bills increased due to which nonperforming loans increased by 18%. In 2015, performing
loans increased and non performing loans decreased in the Pakistan which reduced the
provision on advances. In 2016, performing loans further increased due to increase in the
performing loans in the local currency.
4. In 2014, other assets increased due to increase in the markup accrued increased in both
local and foreign currency while in 2015, that change was very slight and a little higher
than 2014. In 2016, advance taxation was increased due to which other assets increased.
5. In 2016, bill payable outside Pakistan have decreased so this head in balance sheet
decreased by 12%. Bills payable outside Pakistan increased tremendously in 2015 while
in 2014, it decreased within Pakistan.
6. In 2014 borrowings increased in local currency within Pakistan mainly due to repurchase
agreement borrowings, in 2015 borrowings increased due to same reason. In 2016 again
because of repurchase agreement borrowings.
7. In 2015, deposits increased in fixed and savings customer deposits. In 2014, due to
increase in customers savings and current accounts. In 2016, due to increase in financial
institutes deposits.
8. In 2015 deferred tax liability increased due to increase in the tax loses recognized by the
subsidiary and surplus on revaluation of assets.
9. In 2016, non-controlling interest which is received from United National Bank Limited
(UBL UK) and UBL fund managers limited is decreased due to decrease in the profit of
the year 2016.
29
Horizontal Analysis of Profit and Loss Account
Mark-up / return / interest earned
Mark-up / return / interest expensed
Net mark-up / return / interest income
Provision against loans and advances – net
Provision against lendings to financial institutions net
Provision for diminution in value of investments net
Bad debts written off directly
Notes
1
2
3
Net mark-up / return / interest income after
provisions
Non mark-up / return / interest income
Fee, commission and brokerage income
Dividend income
Income from dealing in foreign currencies
Gain on sale of securities – net
Unrealized gain / (loss) on revaluation of
investments classified as held for trading
Other income
Total non mark-up / return / interest income
Non mark-up / return / interest expenses
Administrative expenses
Other provisions – net
Workers' Welfare Fund
Other charges
Total non mark-up / return / interest expenses
Share of profit of associates
Profit before taxation
Taxation – Current
-Prior
-Deferred
Total tax
Profit after taxation
Earnings per share - basic and diluted
4
5
6
7
8
9
2016
+4.28%
+8.10%
+1.66%
2015
+13.77%
+2.24%
+23.33%
2014
+13.28%
+7.31%
+18.74%
-78.76%
+451.43%
-60.37%
-155%
-100.00%
+173.92%
+26.79%
-43.51%
-58.02%
+54.05%
-2.33%
+186.12%
+7731.92%
-2.47%
-16.18%
+5.89%
+18.56%
+20.21%
+0.97%
-3.14%
-24.43%
+75.57%
+7.12%
+29.19%
-16.28%
+54.84%
+16.15%
+12.86%
+39.78%
-31.81%
-107.52%
-29.44%
+6.11%
+156.56%
+16.09%
+10.92%
-550.43%
-0.78%
+9.99%
+2.99%
+196.28%
+9.16%
-65.45%
+3.18%
+22.69%
+7.09%
-71.73%
+26.59%
+1838.27%
+7.14%
-38.21%
+11.14%
-15.09%
+33.75%
-95.82%
+10.33%
+8.76%
+0.46%
+24.99%
+366.21%
+16.51%
+3.68%
+40.30%
+397.61%
-261.97%
+41.81%
+12.42%
+30.80%
+484.83%
-57.50%
+25.53%
+21.76%
+6.27%
+10.56%
+24.08%
30
Observations:
1. In 2014, markup earned increased due to increase in on loans and advances to the
customer and call money lending to financial institutes. In 2015, interest earned on loans
and advances to customers. In 2016, interest on investment increased due to which
markup earned increased.
2. Markup expense increased in 2016 due to increase in securities sold under repurchase
agreements. In 2015, the expense increased due to increase in the expenses on deposits
and securities sold under repurchase agreements. In 2014, interest expense on deposits
increased.
3. Charges for the year of net provision for diminution in value of investments increased in 2014
due to which the provision also increased. In 2015 charges for the year again increased. In 2016,
same reason caused increase in the provision.
4. Net gain on sale of securities decreased in 2014 due to decrease in federal government
securities. While in 2015 federal securities increased and in 2016 they increased again.
5. In 2016 loss occurred due to decrease in Pakistan investment bonds, ordinary shares of
listed companies and term finance certificates. In 2015 it increased due to increase
Pakistan investment bonds and ordinary shares of listed companies. In 2014 it decreased
due to huge decrease in ordinary shares of listed companies.
6. In 2016, other income decreased due to decrease in income from dealing in derivatives
and net gain on trading liabilities. In 2015, gain on sale of non banking asset increased. In
2014 other income increased due to increase in charges recovered.
7. Other provision in 2014 decreased due to decrease in impairment loss on non-banking
assets acquired in satisfaction of claims. In 2015 it further decreased due to decrease in
provision against Ijarah assets and other provisions. In 2016, it increased due to increase
in net provision against other assets.
8. Other charges decreased in 2014 due to decrease in penalties imposed by the SBP. In
2015 it increased due to increase in penalties imposed by the SBP and other charges
decreased again due to the same reason as in 2014.
9. Profit after taxation increased but at a slower pace due to increase in deferred taxes in
2016. In 2015 overseas and domestic taxation also increased. While in 2014 taxation
increased in domestic region.
31
Vertical Analysis of Balance Sheet
2016
2015
2014
ASSETS
Cash and balances with treasury banks
Balances with other banks
Lendings to financial institutions
Investments
8.03%
1.94%
2.14%
50.44%
7.65%
1.86%
2.11%
50.30%
6.40%
1.86%
1.98%
43.94%
31.88%
0.48%
32.36%
32.14%
0.65%
32.79%
38.49%
1.04%
39.53%
2.36%
2.47%
2.82%
2.72%
100%
2.82%
100%
3.48%
100%
0.71%
12.39%
74.97%
0.90%
11.05%
75.36%
0.81%
4.5%
80.50%
0.0002%
0.32%
1.77%
90.15%
0.0003%
0.30%
1.92%
89.53%
0.00004%
0.18%
2.38%
88.37%
REPRESENTED BY:
Share capital
Reserves
Unappropriated profit
0.74%
2.56%
4.15%
0.74%
2.8%
4.03%
0.74%
3.15%
4.44%
Total equity attributable to the equity holders
of the bank
7.45%
7.66%
8.63%
0.25%
7.70%
0.35%
8.01%
0.39%
9.01%
2.15%
9.85%
100%
2.46%
10.47%
100%
2.61%
11.63%
100%
Advances
Performing
Non-performing - net of provision
Operating fixed assets
Deferred tax asset – net
Other assets
Total Assets
LIABILITIES
Bills payable
Borrowings
Deposits and other accounts
Subordinated loans
Liabilities against assets subject to finance
lease
Deferred tax liability - net
Other liabilities
Total Liabilities
Non-controlling interest
Surplus on revaluation of assets - net of
deferred tax
Total Liabilities and Share capital
32
Observations:
In year 2014, investments in the assets made 43.49% of the total assets because of the increase in
investment in Federal securities. Cash in hand was decreased so it made 6.4% of the total assets.
Advances made 39.48% of the assets, in which non performing loans had a percentage of 1.04%.
Operating fixed asset is only 2.82% of total assets. On the liability side of the balance sheet,
deposits and other accounts made 80.50% of total liabilities. Borrowings made 4.5% in
liabilities.
In 2015, investments in the assets made 50.30% of the total assets because of the increase in
investment in Federal securities. Cash in hand was increased so it made 7.65% of the total assets.
Advances made 32.79% of the assets, in which non performing loans had a percentage of 0.65%.
Operating fixed asset is only 2.47% of total assets. On the liability side of the balance sheet,
deposits and other accounts made 70.36% of total liabilities. Borrowings made 11.05% in
liabilities, borrowings increased due to repurchase agreement borrowings.
In 2016, investment in the assets further increased to 50.44% due to increase in investment in
Federal securities. Cash in hand was increased so it made 8.03% of the total assets. Advances
made 32.36% of the assets, in which non performing loans had a percentage of 0.48%. Operating
fixed asset is only 2.36% of total assets. On the liability side of the balance sheet, deposits and
other accounts made 79.97% of total liabilities. Borrowings made 12.39% in liabilities,
borrowings increased due to repurchase agreement borrowings.
33
Vertical Analysis of Profit and Loss Account
Mark-up / return / interest earned
Non mark-up / return / interest income
Fee, commission and brokerage income
Dividend income
Income from dealing in foreign currencies
Gain on sale of securities - net
Unrealized gain / (loss) on revaluation of
investments classified as held for trading
Other income
Total non mark-up / return / interest income
Total income earned (interest and non interest)
Mark-up / return / interest expensed
2016
80.19%
2015
80.47%
2014
80.06%
11.33%
1.79%
1.54%
4.42%
11.74%
1.94%
2.13%
2.63%
12.41%
1.69%
2.89%
1.93%
0.001%
0.72%
19.81%
100.00%
0.01%
1.07%
19.53%
100.00%
0.03%
1.04%
19.94%
100.00%
33.56%
32.52%
35.79%
0.49%
2.41%
0.49%
Provision against loans and advances - net
Provision against lendings to financial institutions –
net
Provision for diminution in value of investments –
net
Bad debts written off directly
Total provisions (interest expense)
Total interest expenses
0.70%
0.08%
1.25%
34.81%
0.58%
0.14%
3.13%
35.65%
0.42%
0.16%
1.23%
37.03%
Non mark-up / return / interest expenses
Administrative expenses
Other provisions - net
Workers' Welfare Fund
Other charges
Total non mark-up / return / interest expenses
Taxation
Total expenses (interest and non interest)
27.37%
0.18%
0.73%
0.05%
28.33%
14.97%
78.11%
27.84%
0.06%
0.69%
0.17%
28.77%
13.46%
77.88%
29.26%
0.25%
0.62%
0.01%
30.15%
10.68%
77.86%
21.89%
100.00%
22.12%
100.00%
22.14
100.00%
Profit after taxation
Total (expenses and profit after taxation)
0.01%
0.15%
34
Observations
In 2014, interest income earned by the bank is 80.06% and noninterest income is 19.94% of total
income, so the bank is generating more from the interest income. In the noninterest income, fee,
commission and brokerage income has a higher share than other sources of noninterest income
which is 12.41%. In the expenses, noninterest expenses made the 30.15% and interest expense
37.03% of the total expenses. Major portion of noninterest expenses is taken by the
administrative expenses which are 29.26%.While profit after taxation is 22.14%.
In 2015, interest income earned by the bank is 80.47% and noninterest income is 19.53% of total
income, so the bank is generating more from the interest income. In the noninterest income, fee,
commission and brokerage income has a higher share than other sources of noninterest income
which is 11.74%. In the expenses, noninterest expenses made the 28.77% and interest expense
35.65% of the total expenses. Major portion of noninterest expenses is taken by the
administrative expenses which are 27.84%.While profit after taxation is 22.12%.
In 2016, interest income earned by the bank is 80.19% and noninterest income is 19.81% of total
income, so the bank is generating more from the interest income. In the noninterest income, fee,
commission and brokerage income has a higher share than other sources of noninterest income
which is 11.33%. In the expenses, noninterest expenses made the 28.33% and interest expense
34.81% of the total expenses. Major portion of noninterest expenses is taken by the
administrative expenses which are 27.37%.While profit after taxation is 21.89%.
35
Financial Ratio Analysis:
1. Return on Equity (ROE)
Net profit after interest and tax / Shareholder fund
Year 2014
= 24,024,803 / 102,035,541 = 0.2355 = 23.55%
Year 2015
= 27,009,626 / 113,821,642 = 0.2373 = 23.73%
Year 2016
= 28,002,302 / 123,795,994 = 0.2262 = 22.62%
Interpretation: UBL has high return on shareholder fund ratio which shows high growth in
future, but the ratio was decreased in 2016 due to increase in taxation in both foreign and
domestic regions.
2. Return on Assets (ROA)
Net income after tax / Total assets
Year 2014
= 24,024,803 / 1,182,453,113 = 0.0203 = 2.03%
Year 2015
= 27,009,626 / 1,486,186,813 = 0.0182 = 1.82%
Year 2016
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= 28,002,302 / 1,661,742,260 = 0.0169 = 1.69%
Interpretation: Return on assets is low for UBL which indicates that the management is not
utilizing the all of its assets efficiently for the generation of net income.
3. Profit before Tax Ratio
Earnings before tax / Total income (revenue)
Year 2014
= 35,616,314 / 85,760,646 = 0.4153 = 41.53%
Year 2015
= 43,447,326 / 97,574,003 = 0.4453 = 44.53%
Year 2016
= 47,154,283 / 101,755,044 = 0.4634 = 46.34%
Interpretation: Earnings before tax are from the range of 40 to 46% during last three years, which
indicated that the earnings before tax are increasing. The increase in earnings shows that it is
good in managing the expenses before taxes and tries to reduce the expenses as much as
possible.
4. Return on Capital Employed (RoCE)
(Operating profit / Capital employed) x100
Year 2014
= (34,221,628 / 137,504,611) x 100 = 24.89%
Year 2015
= (42,585,622 / 155,599,049) x 100 = 27.37%
Year 2016
= (46,097,035 / 163,729,224) x 100 = 28.15%
*Capital employed = Total assets – Current liabilities
Interpretation: UBL’s RoCE is increasing during last three years which shows that capital
employed in the business generates 28.15% in return.
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5. Advances to Deposit Ratio (ADR) or Loan-To-Deposit Ratio (LTD)
Loans / Deposits
Year 2014
= 467,365,292 / 951,902,296 = 0.4909 = 49.09%
Year 2015
= 487,278,143 / 1,119,953,064 = 0.4351 = 43.51%
Year 2016
= 537,782,146 / 1,245,791,616 = 0.4317 = 43.17%
Interpretation: this ratio is decreasing in past three years because deposits are growing at a faster
rate than the loans, though loans are growing as well but a decrease in nonperforming loans is
made.
6. Cost to Revenue Ratio
Total cost / Total income
Year 2014
= 34,048,267 / 85,760,646 = 0.397 = 39.7%
Year 2015
= 38,960,445 / 97,574,003 = 0.3993 = 39.93%
Year 2016
= 37,858,464 / 101,755,044 = 0.3781 = 37.81%
Interpretation: UBL had 39% cost on the revenue generated which has decreased in the past year,
means that the cost or expenses in total income are decreasing and bank is working efficiently to
reduce the cost.
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7. Shareholder’s Equity Ratio
Total shareholder’s equity / Total assets
Year 2014
= 102,035,541 / 1,182,453,113 = 0.0863 = 8.63%
Year 2015
= 113,821,642 / 1,486,186,813 = 0.0766 = 7.66%
Year 2016
= 123,795,994 / 1,661,742,260 = 0.0745 = 7.45%
Interpretation: the shareholder’s to equity ratio is decreasing in the past year which means that if
the bank liquidate its assets then a total of 7.45% will be received by the shareholders in other
words they will receive only the 7.45% of the assets.
8. Total Assets Turnover
Net markup / Total assets
Year 2014
= 85,760,646 / 1,182,453,113 = 0.0725 = 7.25%
Year 2015
= 97,574,003 / 1,486,186,813 = 0.0657 = 6.57%
Year 2016
= 101,755,044 / 1,661,742,260 = 0.0612 = 6.12%
Interpretation: UBL has a low ratio for total asset turnover which means that only 6.12% of the
total assets are employed to generate income.
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9. Asset Quality (NPL) Ratio
Nonperforming loan / Total loans
Year 2014
= 12,286,412 / 467,365,292 = 0.0263 = 2.63%
Year 2015
= 9,629,045 / 487,278,143 = 0.0198 = 1.98%
Year 2016
= 7,963,998 / 537,782,146 = 0.0148 = 1.48%
Interpretation: UBL’s NPL ratio is decreasing other the last three years which shows that
nonperforming loans are decreasing and more performing loans are generated by the bank, which
indicates efficiency in recovering loans.
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SWOT Analysis of UBL
SWOT stands for strengths, weaknesses, opportunities and threats. SWOT analysis of any
organization shows the internal strengths and weaknesses, opportunities and threats of an
organization which makes it better to understand the current position and how it can achieve
better by making new and improved policies.
Strengths:

Every product of bank is designed by giving special importance to customers’ needs,

which makes them attractive to the customers.

Highly trained and coordinating workforce is an essential part in bank’s progress.

New products are developed and existing products are improved regularly.
Every person from any level o the society can use the products of the bank as they are
unique for every customer, like products for agriculture sector, salaried, businessman

person etc.

It has a wide branch network which spreads across the Pakistan and abroad.

of the best software, Oracle.

Pakistan in 2016 Bank Awards of Pakistan.

Pakistan.

Good profitability ratios.

Effective and fast services proved both online and offline.

Highly effective and efficient management information system which is supported by one
It is the 2nd largest privatized bank of Pakistan, and it has been awarded with best bank of
Branchless banking, Omni is making banking services available in the rural areas of
It is the 3rd largest bank according to the deposits, in Pakistan.

A very strong competitor in the market.

Highly coordinated and efficient internet banking system.
It is involved in both retail and corporate banking.
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Weaknesses


Administrative expenses are 74% of the income before taxes.

Time consuming documentation processes and procedures.

levels.

No separate training center for the up to date training of the workforce.

Promotions are made on the yearly basis without considering the output and performance
Low number of workforce in a branch which is located in highly populated or active area.
Security system in most of the branches is not highly secure, i.e. bank robberies in
Karachi.
Opportunities

Growing opportunities in the real estate sector and other areas of the market, the bank

should try to grasp those opportunities by making investments in different sectors.

Enter into new market segments by developing new products like student loans.

Try to manage and reduce the administration expenses to increase profit.

Expansion of network of branches in the world.

Increase the product rage for the attraction of new customers.
Increase number of branches in highly populated areas to achieve more customers.
Threats


New banks are starting to operate in Pakistan may oppose as a threat to bank.

customers.
Lack of up to date training of workforce might cause the bank to lose its potential
Lower level of employment will cause a decrease in the customer base due to decrease in
the living standards and living income.
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Conclusion
UBL is the bank showing high growth in the market. Since 1991 it is showing positive growth
and even in the worst economic conditions, the bank managed to continue its operations. UBL
profit has increased by 4% over the prior year. UBL Omni is growing at a fast rate through
42,000 agents in the whole Pakistan. Net provision against interest income has decreased by 58%
with respect to last year. Total assets grew up to 12% in accordance with the last year and
deposits grew up to 11%. 2016 was a good year for the bank and the bank managed to maintain
its position in the market. Efficient management team and high level of dedication to their work
has made the bank to achieve new heights. Bank has variety of products and services from which
every customer and potential customer can take advantage of and continues to give quality
products and services.
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Recommendations
Overall performance of UBL is quite good and the bank is showing growth in the market and
continues to maintain its high quality status. Some of the recommendations are made for the
further improvement in the baking procedures.

Time consuming documentation procedures should be restructured to minimize the time
required by them in the processing, paper work should be minimized as much as possible

and software should be introduced to help the employees in working.
A training center for the employees should be made so that they can learn up to date
knowledge and techniques. Training of the employees will help in the better customer

services and more customers to the customer base of the bank.
Software for the banking activities should be updated every year, though bank has a good
financial position which can afford the updating cost of the software. The updated

software will increase the efficiency of the banking activities and cost reduction.
Bank should market its products using social media and internet. Most of the products
can be very attractive for the potential customers if they are marketed properly like UBL
Omni is a very attractive product for any person who knows how to use a cell phone so it

can be spread through marketing which will increase customer base
UBL has high administrative cost which is 74% of the income before taxes. So the bank
should take measures to reduce this cost and re define its policies and procedures to

minimize administrative cost.
UBL should make fresh recruitments on the basis of merit not on the basis of referral.
And the promotions should be made on the output level and performance comparison
basis between employees. Proper and clear job duties should be assigned to every
employee so that the work is divided equally and no employee is overburdened with
work.
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References and sources
UBL Annual Report 2013
UBL Annual Report 2014
UBL Annual Report 2015
UBL Financial Statements Dec 2016 (Consolidated)
http://www.ubldirect.com/Corporate/index.aspx
https://propakistani.pk/2009/07/29/ubl-goes-live-with-oracle-applications-to-modernize-itsbanking-operations/
http://www.google.com.pk
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