United Bank Limited

Bosan Road Gol Bagh Branch, Multan

A REPORT SUBMITTED TO INSTITUTE OF MANAGEMENT SCIENCES, BZU
MULTAN, IN PARTIAL FULLFILLMENT AND REQUIREMENTS FOR THE DEGREE
OF MASTER IN BUSINESS ADMINISTRATION

Submitted By

MARYAM SHABBIR
MB13- 13

Institute of Management Sciences, Multan

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 PREFACE

In Masters of Business Administration, Internship Program is an important part to give

students an opportunity to have experience of practical field. Unless and until the students
experience the novelty of practical work, their knowledge of what they study in theoretical
courses remains incomplete. The most important point in an Internship Program is that the
student should spend their time in a true manner and with the spirit to learn practical orientation
of theoretical study framework.

This internship report is on my six weeks practical training at United Bank Limited
Bosan Road Branch, Multan. In this internship report I have tried to give details about the United
Bank Limited, working and the functions of different departments of the bank.

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 ACKNOWLEDGEMENT

All praise to ALMIGHTY ALLAH alone, the Omnipresent and the most Merciful and
compassionate. The words are bound, knowledge is limited and time is short to express His
dignity. It is one of infinite blessings of ALLAH that he best owed me with the potential and
ability to contribution towards the deep oceans of knowledge already existing. I pay hum-age to
greatest personality of the universe; HOLY PROPHET HAZARAT MUHAMMAD (PBUH) Who
is forever torch bearer and spring of guidance in every sphere of life. I am deeply indebted and
also express my gratitude to my respected teachers at BZU MULTAN for their support.

At the very outset, I am very thankful to Mr. Khalid (Branch Manager) for providing me
the opportunity to have an excellent learning experience during my internship at United Bank Ltd
Bosan road branch Multan. The person to whom I would like to give my regards is the Mam
Shaista (Customer service relationship officer) at UBL, who gave me very useful tips and
information. I might not be able to complete my internship without his cooperation and his kind
behavior. I am thankful to all my teachers of BZU Campus Multan.

I also take this opportunity to express a deep sense of gratitude to all the staff members of
UBL for their cordial support, valuable information and guidance, which helped me in
completing this task through various stages specially

Mr. Khalid Branch Manger

Mr. Yasir Operational Manger

Mam Shaista CSR officer

Mr. Samar CSR

Mr. Naeem Chief Cashier

Lastly, I thank almighty, my parents and friends for their constant encouragement without
which this internship would not be possible.
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 EXECUTIVE SUMMARY

Banking operations and services are one of the basic needs of an economy. These include
acceptance of deposits and disbursement of advances to individuals and others at higher rates.
Banks perform various fundamental factions, which are directly or indirectly contributory
towards economic and social development of countries.

The purpose of this report is to study operations and analyze performance of UBL to see
whether the bank is successful in its operational performance or not, and recommending possible
solutions for problems. For meeting the purpose both secondary and primary data have been
used.

United Bank Limited (UBL) is the second largest bank of Pakistan with assets of over Rs.
1 Trillion and a solid track record of fifty six years - in addition to the convenience of over 1320
branches serving its customers throughout the country and also at several overseas locations. In
this six weeks internship program I have learned about banking from experienced managers
running these sections.

This report contains the information and learning about UBL that I learnt during the 06
weeks internship period in United Bank limited. This report deals with History & Nature
(Business) of the UBL, its Products and Services, information about main offices and also the
review of various departments of the Bank. This report also contains Finance & Accounting
operations of the UBL, role of Financial Manager (Branch Manager), Use of Electronic Data in
core decision making and the Sources, Generation and Allocation of funds used in the banking
operations of the UBL.

Recognizing the need of Islamic banking, UBL also provided number of Islamic banking
services like Islamic Deposit Schemes and Islamic Fund Based Facilities.

At the end of this report, on basis of my observation during internship, financial analysis
and SWOT analysis of UBL is provided. Suggestions are also recommended as per learning from
analysis. This report will provide a better and brief learning about United Bank Limited.

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Sr. No. Content Page No.

1 PREFACE

2 DEDICATION

3 ACKNOWLEDGEMENT

4 EXECUTIVE SUMMARY

5 1. INTRODUCTION 2

6 2. ORGANIZATIONAL STRUCTURE 15

7 3. MY LEARNING’S 23

8 4. FINANCIAL STATEMENTS, VERTICAL and TREND 32

ANALYSIS

9 5. RATIO ANALYSIS 39

10 6. SWOT ANALYSIS 52

11 7. PEST ANALYSIS 55

12 8. RECOMMENDATIONS 56

13 9. ANNAXURE 62

14 10. REFERENCES 63

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 1. INTRODUCTION

1.1 Brief history of the organization:

About UBL:

The history of UBL can be divided into four main Phases:

 Formulation
 Nationalization
 Privatization
 UBL Today

1.1.1. FORMULATION:

In June 1957, Mr. Agha Hassan Abidi decided to open a Bank different from others, to
provide modern facilities to trade and industry and to promote thrift and habit of saving amount
common thereby stimulating the economy as a whole. Necessary formalities completed for
obtaining registration certificate from State Bank of Pakistan to perform business activities. After
passing through all these formalities on 7th November, 1959 United Bank Ltd came into
existence as a Schedule bank.

The Head office of the Bank was established in the New Jubilee Insurance House, 1.1
Chundrigar Road Karachi. It was registered as a joint stock company. The bank was incorporated
with an Authorized Capital of Rs 20,000,000 and issued and subscribed and paid up capital of RS
10, 00,000. Saigol family owned it and Agha Hassan Abedi was its first managing Director.

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1.1.2. NATIONALIZATION:

As a policy of nationalization fourteen commercial banks was merged into five big banks
. So consequently on 21st December 1974 Commerce Bank and Union bank was merged with the
UBL. Mr. Mushtaq Ahmed khan Yousafi took over the charge of UBL. Now, there are six
directors, a secretary and a president.

1.1.3. PRIVATIZATION OF UBL:

UBL was the largest privatization attempted by the government of Pakistan, launched in
June 2001, with 21 interested parties. It was impacted by the adverse developments of the
September 11, 2001 and was finally concluded in October 2002, which left stage only three
bidders. The consortium comprising Best way Group (BG), out of the U.K. and Abu Dhabi
Group (ADG) from the U.A.E. were finally the winners at a record price. Sale proceed was Rs
12350 million. This signaled the strong confidence reposed by these investor groups, in the
improved governance of the country, the economic potential, the banking opportunity and the
existing management of the bank.

1.1.4. UBL TODAY:

Today the bank has taken progressive steps. The United Bank Limited (UBL)
management has launched its new corporate identity and changed its 44 year-old-logo following
its privatization. UBL has started the Online Banking & Click n Remit services.

CHAIRMAN:

 His Highness Shaikh Nahayan Mabarak Al Nahayan.

DEPUTY CHAIRMAN:

 Sir Mohammed Anwar Pervez OBE.

PRESIDENT & CEO: Wajahat Hussain

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BRANCHES:

 1320 Online , 15 Overseas Branches.

REPRESENTATIVE OFFICES:

 Tehran
 Kazakhistan
 China

SUBSIDIARY:

 United Bank AG Zurich, Switzerland.

 United National Bank Limited, UK (Joint venture with NBP).
 UBL Fund Managers Limited.
 ASSOCIATED COMPANIES:
 Oman United Exchange Company, Muscat.
 UBL Insurers Limited.

OFFSHORE BANKING UNIT:

 Export Processing Zone, EPZ Branch, and Karachi, Pakistan.

HEAD OFFICE:

 State Life Insurance Corp. Building #1,

 I.I. Chundrigar Road, Karachi, Pakistan
 P.O. Box No.: 4306
 Phone: (92-21) 111-825-111
 Gram: "UNITED"
 Fax: (92-21) 2413492.

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1.2 NATURE OF THE ORGANIZATION

UBL is a Banking Company, which is engaged in Commercial & Retail Banking and
related services domestically and overseas. UBL was set up in 1959 by Agha Hassan Abedi and
is today one of Pakistan's major banks in terms of deposits and advances. The Group's principal
activities are to provide commercial banking and other financial services. The Group offers
personal banking, cash management, retail loans and other financial services. These services
include deposits, savings/current bank account, vehicle loans, personal loans, retail trade finance,
global banking, lending to priority sector and small scale sector, foreign exchange and export
finance, corporate loans and equipment loans.

In 1971 the Government of Pakistan nationalized it. In 2002, the Government of Pakistan
sold it in an open auction to a consortium of Abu Dhabi Group and Best way Group. Since its
privatization the bank has been successfully turned around and remains a robust and strong
performer in all major segments of its operations. In 2002 it merged its operations in the UK with
those belonging to National Bank of Pakistan to form United National Bank Limited, of which it
owns 55%, with National Bank of Pakistan owning the remainder.

The Bank 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 rightsizing. 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.

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1.2.1. VISION STATEMENT:

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

1.2.2. MISSION STATEMENT:

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

1.2.3 Core Values:

 Honesty and Integrity

 Commitment and Dedication
 Fairness and meritocracy
 Team work and collaborative spirit
 Humility and Mutual respect
 Caring and socially responsible

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1.3. NUMBER OF EMPLOYEES

1.3.1. BOARD OF DIRECTORS:

Name Designation
His Highness Shaikh Nahayan Mabarak Al Nahayan Chairman
Sir Mohammed Anwar Pervez, OBE, HPK Deputy Chairman

Mr. Atif R. Bokhari President & CEO

Mr. Omar Ziad Jaafar Al Askari Director

Mr. Zameer Mohammed Choudrey Director

Dr. Ashfaque Hasan Khan Director

Mr. Muhammad Sami Saeed Director

Mr. Aqeel Ahmed Nasir Company Secretary

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1.4. PRODUCT LINES

Consumer Commercial CB & Basic Complementry/

Banking Banking Banikng Other Services
Accounts Insurance
UBL Business
UBL
Certificate
Agriculture Partner (CA) UBL Net
Address Products

PLS UniSaver banking

UBL Small UBL e-
BusinessLi Business PLS UniSaver
ne Schemes
statement
UBL Investment Plus
and Saving
CashLine Accounts
UBL Rupee
UBL Transaction
Credit Account (PLS
Cards Saving)

UBL Drive
UBL UniFlex

UBL e-Transaction
Money (CA)

1.4.1. DEPOSIT PRODUCTS:

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

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UBL UNIFLEX ACCOUNT:

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

UBL PROFIT COD:

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

PLS REGULAR TERM DEPOSITS RECEIPTS:

If customer wish to make a secured long term investment, UBL’s Term Deposit Receipts
the smart choice. UBL Term Deposit Receipts provides an attractive rate of return. The profit is
credited to the customer account every six months. Customer has the flexibility to choose from a
wide range of tenors. Customer can avail the Rollover or Renewed option at any time before
encashment. Customer can get TDR en-cashed at any time before maturity period.

FOREIGN CURRENCY SAVINGS & FOREIGN CURRENCY TERM DEPOSITS

RECEIPTS:

United Bank offers the best rates of return on Foreign Currency Deposits in the market.
Accounts can be opened in US Dollar, Pound Sterling, Euro, and Japanese Yen at designated
branches. All Pakistani nationals residing in Pakistan and outside Pakistan can also open Foreign
Currency Accounts. Resident Firms and companies including Investment Banks can open
Accounts.

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UBL E-TRANSACTION ACCOUNT:

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

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

1.4.2. LOANS & CARDS

UBL MONEY:

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

UBL Money is a fixed installment loan. It gives you access to funds starting from Rs.
50,000/- up to a maximum of Rs. 500,000/- without any collateral. UBL Money provides you the
flexibility to manage your monthly installments according to your income stream. You can select
any tenor from 1 to 5 years in a multiple of 12 months.

UBL BUSINESSLINE:

UBL Businessline is a running Finance facility that not only provides funds for growth
but also enables you to capitalize on profitable opportunities.

UBL CASHLINE:

UBL Cashline is a flexible loan that provides you cash up to Rs.500, 000 without any

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 security requirements. It empowers you to take control of your finances. UBL Cashline is
aimed to make your life easier .Whether you are a salaried individual or a businessman.

UBL DRIVE:

UBL Drive allows you to drive away in

your own car by making a down payment of just 15% and to top that with low monthly
installments. With UBL Drive you can buy your favorite used car (up to 5 years old) at the most
affordable rates. UBL Drive is not just a car loan; it’s a financing facility that gives you Cash on
your car.

UBL ADDRESS:

UBL Address empowers you to become the proud owner of a home by offering a variety
of product and pricing options that are flexible yet affordable. So choose the best product option
and pricing to suit your needs

UBL PAYPLUS:

If you are a permanent employee of a company (Government, Semi-Government, MNC

or Local Corporate Entity/Private/Public Limited), which disburses salary through UBL, then
UBL PayPlus (loan against salary) is the right product for you. Through UBL PayPlus, you can
now easily avail a loan based on your salary level.

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UBL CREDIT CARD:

UBL Credit Card provides the following facilities:

 To share the value, excitement and benefits

 Each time UBL Card members use their UBL Credit Card to purchase airline,
train or bus tickets, they are automatically covered against any sort of accident
that might befall them while traveling. The coverage amounts are:

1.4.3. AGRICULTURAL PRODUCTS

PRODUCTION LOAN:

Financing is available for Major and Minor crops across Pakistan. Main purpose of
financing is to facilitate farmers to purchase Agriculture Inputs such as Seeds, Fertilizers,
Pesticides, Sprayers, hired labor etc.

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DEVELOPMENT LOAN:

LAND DEVELOPMENT, EQUIPMENTS AND MACHINERY:

Financing for Land Improvement, Water course improvement, Tube wells, Lift pumps,
Deep turbine pumps, Cotton pickers, Godown, Cold Storage, Harvester, Thresher, etc

TRACTOR & VEHICLE FINANCE:

To purchase Tractors, Delivery Vans, Mini Trucks, Motor Cycle and other vehicles used
for marketing Agri Products. Loan Tenure: 1 to 3 years for Motor Cycle, 1 to 7 years for Tractor,
and 1 to 5 years for other 4 wheel vehicles. Other features are:

1.4.4. OTHER SERVICES

UBL E-STATEMENT:

UBL has launched the UBL e-statement facility which makes it easier for customers to
get their statement of accounts and automated transactional debit/ credit alerts right into their
inbox. It is available for all Rupee and Foreign Currency Account holders. UBL statement facility
is:

 Absolutely free of cost.

 Accessible when you need it.
 Security.
 Automated transactional debit/ credit alerts.

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UBL WALLET:

UBL offers ATM and Debit Card facility to all account holders at all UBL branches
anywhere in Pakistan, regardless of whether their branch is online or offline.

UBL Wallet VISA ATM & Debit Card has the entire convenience and security account
holder’s desire and the quality they deserve. This Wallet holds all the cash in customer’s bank
account. UBL Wallet VISA also gives the facility of having up to 9 supplementary cards issued
against one primary card. All supplementary cardholders will be able to conduct ATM/Debit
transactions within the limits of the primary card account.

UBL WIZ:

UBL Wiz is Pakistan’s first ever Prepaid VISA Debit Card that provides the convenience,
security and benefits of an ATM and Debit Card, locally and internationally. More than just an
ATM card, you can use your UBL Wiz everywhere VISA cards are accepted. Whether you are
using it online, paying for petrol, shopping or dining, you are accessing money directly from
your prepaid card, without having to visit the bank.

UBL NETBANKING:

UBL net banking is an Internet Banking portal offering a simple, convenient and secure
method of accessing bank accounts on the Internet.

Using UBL net banking, the customers have access to their bank accounts 24 hours a day,
7 days a week and can keep a close eye on their account balances, print account statements, pay
bills, transfer funds, track purchases and schedule their recurring payments at the touch of a
button and much more Receive customized alerts.

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 2. ORGANIZATIONAL STRUCTURE
Head Office

Provisional Head Quarters

Zonal Office

Hub Branches

Branches

2.1. Main Offices:

2.1.1. HEAD OFFICE:

The Bank's registered office and principal office is situated at State Life Building No. 1,
I. I. Chundrigar Road, Karachi.

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2.1.2. BRANCHES:
Domestic Branches 1320

Overseas Branches 15

2.1.3. PROVISIONAL HEADQUARTERS:

Province Region (City)

Baluchistan Quetta
N.W.F.P Peshawar

Punjab Lahore

Sindh Karachi

2.1.4. OVERSEAS NETWORK:

HUB Name Branches

United Arab Emirates 7
Bahrain 3

Yemen 2

Qatar 1

United States of America 1

Export Processing Zone, Karachi 1

Total Branches 15

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 2.2. Departments of the UBL
2.2.1 HUMAN RESOURCE DEPARTMENT: (HR)

UBL is the place for you if you are willing to materialize all your deliverables in alignment with
the organization’s holistic vision to grow and excel. Committed and competent work force is the
primary asset in providing value addition to stakeholders of a business organization.

HR Division is responsible for attracting, selecting and recruiting the right people from
the market. UBL is proud of its highly professional, transparent and objective approach in its
recruitment and selection processes. After applying the eligibility criteria, which depends on the
Job grade, a series of selection procedures are applied before hiring employees. Normally the
candidates go through the process of test, group discussion and interview. The Interview is
conducted by a team of internal as well as external professionals of the related area.
Sophisticated recruitment and selection tools like oracle based data management system; online
application and behavioral based interviewing techniques have been introduced.

Consolidation of Bank's budgets, its monitoring and constant review of various financial
indicators. Finance Division works as the back bone for all Banks’ operations.

The Division, which reports directly to the President and Chief Executive of the Bank, has
been instrumental in preparation of Bank's business plans and future strategies.

2.2.2 INFORMATION TECHNOLOGY DEPARTMENT:

Operations of UBL have been significantly streamlined post-privatization, however

further plans for improving operational efficiency are under-way. Currently the bank is using data
software called SYMBOL for all its transactions record. 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.

Information Technology Department is related with all computer activities like to manage
the Central Data Base (CDB) which is placed in Head Office of UBL Karachi in all the daily
transactions in all the branches of the country are up-dated on daily basis. This Department also
makes the web site new news to web site

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2.2.3 AUDIT DEPARTMENT:

The responsibility of this department is to audit and inspect the operations of the
branches. Either the operations are Regulated by the branches in a right way or not. The Board
Audit Committee (BAC) comprising three members meets every quarter and is responsible,
among other things, for ensuring the effectiveness of the internal audit function and systems for
monitoring compliance.

Internal audit procedures include routine branch and business function audit as well as
special surprise audits. There is also a dedicated compliance division mainly to follow up on the
recommendations advised by the audit team. The deliberations of BAC however reflect concern
regarding the overall control environment. The audit and inspection department has been
highlighting issues with regard to operational control weaknesses at the branch level.

2.2.4 CASH DEPARTMENT :

This is sensitive department of the branch. No other person is allowed to enter in the
premises of cash department. As obvious from name that this department deals in cash deposits
and payments. Cash department is performing its functions/duties manually. For payments and
receipts, it has to maintain certain sheets, books of accounts and various ledgers

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 3. MY LEARNINGS
Standing in the IMS dept. of Bzu, I heard the good news of me having a six week
opportunity to interact with a world class bank. All these six weeks were full of events, full of
learning and most importantly full of professional working. Here 'professional' regards in all
from clerical to managerial work. In these six weeks period, the best thing to me was the
authority and dependency of customers upon me, when they come with a hope that I'm there to
guide them. Knowing all is not learning, the real learning is to convey right. I tried to learn real,
see real UBL, and tried to comprehend the difference between what we look from outside and
what is going on inside.

UBL is full of experienced and professional traditional bankers. As it perfectly suit the
environment we are operating in, you attitude has helped UBL in capturing masses. In the private
sector, no doubt its a fast growing bank, but here's something that's still unrealistic to the policy
makers. The line of unsatisfied customers is increasing, not because we are not serving well, it's
because customers are not understanding the YOU attitude right. Every customer wants to make
sure his work is done at the first convenience, but they are not concerned about the responsibility
with which every employee is working. Back to my real learning’s in my six week internship, I
worked in customer service relationship (CRO) department, as well as in Clearing
department. Because of some work load, I was unable to learn much about other cash and
accounting department. Here is my countdown learning of six weeks.

CLEARING DEPARTMENT:

My initial days at clearing department was the liveliest experience of my internship. Though
physically I was there just to assist the customer service officer, but it turned Out to be much
more for me. That is when I first actually imitated as a presenter of UBL to customers, when to
many people, I'm their hope. Working at Customer Service Department, I did counter with
different types of Customer and filled the deposits slips under the supervision of the officer. It’s
always very important to understand the needs of your customer.

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 .

3.1 Clearing of Cheques:

3.2.1 Outward Clearing:

My experience at Bosan road branch started from the clearing department. Right in the
morning cheques collected from the drop box simply flood over my table. According to all I
learnt through listening, viewing and questioning is summarized below.

3.2.2 Documentation of Consumer Cheques:

All the cheques collected are first categorized into

 Credit Cards
 Auto Loans
 Personal Loans
 Cash Line
 Verified cheques are then validated before being documented into the drop
box collection sheet for our daily drop box collections record. To anticipate the approval
of cheques, we need to validate some important specifications of all the cheques. They
are:
 Date: Cheque should not be post dated or out of date.
 Figures: Amount in words and figures should match.
 Signature: Drawers signature must be clear.
 Intercity: Cheques must not be of other cities. Intercity clearing cheques
for consumer departments are not entertained
 Payee’s Name: Payee’s name should be written, and endorsement should
be as per the beneficiary of the cheque.
 There should be no over writing in everything penned.

All the filtered cheques are then entered into the collection sheet in which

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following information is entered.

 Cheque No.
 Name of bank
 Name of Customer
 Amount
 Document No.

All the documented consumer cheques are then posted into the system. Which I can not
learn due to there security reasons.

3.2.3 Cleared Cheques:

Now the next day when clearing is confirmed by NIFT, respected accounts are debited.
We go into the banking option and in transfer, we debit all the respected accounts. Same is the
case with intercity and OBC cheques.

In documentation, debit and credit vouchers are made, which show total amount of
clearing as per day.

3.2.4 Returned Cheques:

All the cheques which are returned, due to any reason, are then reversed. They are
debited back in the clearing schedule. All the returned cheques are documented in the cheque
return registers and all the account holders of returned cheques are charged with service penalty.

*All the vouchers are signed by the designated officer and all the entries over 50,000 are
supervised.

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 3.2 Remittances Department:

After having experience in clearing department I moved to Remittances department where I

learned that how the transfer of money from one branch to another branch takes place. In this
department I perform following duties.

 Cashier’s Cheque
 Demand Draft
 Security deposits Receipts
 Telegraph Transfer
 Pay Order

Before going in details I want to explain one thing that comes in mind while performing
remittance activities that is

Suppose if a person has account in UBL Rawalpindi and that person is resident of Multan. How
he/she will deposit money in its account from UBL Multan Branch. I observed this thing and
found that what the procedure to deposit money in his account is. He/she will take online form,
fill it with care and submit in cash management division. Then it will be transfer by cashiers at
the end of the day.

I found it necessary to explain this problem, because I personally handled such type of issues in
branch. Some customers directly filled the deposit slips to deposit it directly in the account but it
is not possible to deposit money directly in another branch account of same bank. Another reason
of explaining it is that first of all I myself was not sure about that what we should do if such type
of transfer is takes place, and it belongs to remittance activities. Now, all other activities that was
learned and handled by me in remittance department are given with detail below.

3.2.1 Cashier’s Cheque (CC) /Corporate Bankers Cheque – CBC

Cashier’s Cheque is a negotiable instrument, which is drawn by one branch to another branch of
the same bank. In case of agency arrangements Cashier’s Cheque can also be issued by one
branch of the bank payable to other branch of the payee bank e.g. CC issued by UBL payable by
UBL.

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If a person wants to make payment from one city to another city then he/she can make payment
through Cashier’s Cheque. Bank charges a commission for performing this kind of service
according to bank rate schedule, which is revised after six months.

3.2.2 Demand Draft:

DDs are always a secure way of paying remittances in other cities. Both account holders
and walk in customers can avail the facility of DDs. Charges tend to differ for both customers but
the advantage tend to be same. DDs are made in the favor of beneficiary and remitter either
pays in cash or through cheque.

When DDs are issued, head office account is debited and remitters account is credited, on
presentation, head office account is credited and beneficiary’s account is debited

3.2.3 Security Deposit Receipts (SDR)

Security deposit Receipts are your safe way of making payments. Not only it’s free of cost for
A/C holders, it also offers you the best liquidity solution as the cash continues to be with you
until and unless your deal gets final and you pay off. In case of cancellation, it's also free of cost
for A/C holders and their amount is returned to their normal account balance.

3.2.4 Telegraph Transfer (TT)

It is just a shape of Cashier’s Cheque. The difference is that it is not drawn on the specified
branch. It can be drawn on any branch of the same bank. The paying bank has to verify the
signatures and after verification payment is made.

3.2.5 Pay order (PO)

Pay-to-order instruments are negotiable checks or drafts that are generally written as "pay to X or
order."Payment order is an international banking term that refers to a directive to a bank or other
financial institution from a bank account holder instructing the bank to make a payment or series
of payments to a third party. These are the Instructions to transfer funds sent via paper and/or
electronic means". A form is filled up for pay order when money move within the city the party
made pay order. Pay order is issued and played by the same branch

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 .

4. FINANCIAL STATEMENTS, VERTICAL AND TREND ANALYSIS

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Assets 2014 2013
% %
Cash and balances with treasury banks 6.72 8.76
Balances with other banks 1.15 2.56
Lending to financial institutions 1.96 2.85
Investments –gross 44.7 41.9
Advances-gross 39.0 38.7
Operating fixed assets 2.7 2.43
Other assets 3.60 2.70
Total assets – gross 100 100

Liabilities & Equity

Bills payable 0.85 1.64
Borrowings 4.77 4.01
Deposits & other Accounts 80.53 81.98
Subordinated Loans - 0.065
Liabilities against assets - -
Deferred tax liability 0.17 0.10
Other liabilities 2.36 2.18
Equity
Share capital 1.10 1.21
Reserves 3.07 3.33
Unappropriated profit 4.33 4.22
Surplus on revaluation of assets 2.78 1.22
Total liabilities & equity 100.0 100.0

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Assets 2014 2013
% %
Cash and balances with treasury banks 84.3 100
Balances with other banks 49.8 100
Lending to financial institutions 75.8 100
Investments- gross 117.3 100
Advances-gross 111.1 100
Operating fixed assets 123.1 100
Other assets 146.6 100
Total assets – gross 110.0 100.0

Liabilities & Equity

Bills payable 57.5 100
Borrowings 130.7 100
Deposits & other Accounts 108.1 100
Subordinated Loans - 100
Liabilities against assets - 100
Deferred tax liability 174.6 100
Other liabilities 119.2 100
Total Liabilities 105.5 100
Net Assets 124.3 100
Equity
Share capital 100 100
Reserves 101.3 100
Unappropriated profit 113.0 100
Surplus on revaluation of assets 106.8 100
Total liabilities & equity 100.0 100.0

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Profitability 2013 2012
% %
Markup/return/interest earned 80.09 81.10

Markup/return/interest expensed 48.25 48.04

Net Markup/Interest income 32 33

Fee, commision, brokerage and exchange 13.42 11.06

income
Capital gain & dividend income 5.33 3.45

Other income 1.17 4.39

Noninterest income 20 19

Gross income 52 52

Administrative expenses and other charges 36.93 33.41

Profit before provisions 15 19

Donations 0.11 0.05

Provisions 2.00 6.18

Profit before taxation 13 12

Taxtation 12.71 12.32

Profit after taxation 26 25

Total Income 100 100

Total Expense 100 100

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Profitability 2014 2013
% %
Markup/return/interest earned -0.9 4.3

Markup/return/interest expensed -0.1 12.6

Net Markup/Interest income -1.6 -2.2

Fee, commission, brokerage and exchange 21.7 11.1

income
Capital gain & dividend income 54.7 148.3

Other income -73.2 63.6

Noninterest income 5.7 34.7

Gross income 0.6 6.8

Administrative expenses and other charges 9.9 19.4

Profit before provisions -6.5 -1.3

Donations 120.0 -35.2

Provisions -67.8 -40.2

Profit before taxation 3.6 10.8

Taxation 2.6 2.7

Profit after taxation 4.0 15.4

Total Income 0.4 9.0

Total Expense -0.6 7.5

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 5. RATIO ANALYSIS
Ratio analysis is very helpful to the management of the organization as well as for the
investors and creditors. Investors keep an eye on the bank’s financial statement and make
decisions whether to invest funds in that bank or not. Similarly a creditor also analysis the
financial statements and makes decisions whether to grant loan or not.

5.1. Liquidity Ratios:

Liquidity ratios means to measure short term solvency of the company. Ability of the
company to pay off its short term debt. Following ratios are calculated in order to measure the
short term solvency of the company

5.1.1Current Ratio:
Current Assets: Cash and balances with treasury and other banks + lending to financial
institutions + Investment + Advances

Current Liabilities: Deposits & other Accounts + Borrowings from financial institutions
+ Sub-ordinate loans + Bills Payable

YEARS 2014 2013 2012 FORMULA

Current Ratio 1.12 1.13 1.14 Current Assets / Current Liabilities
Asset Turnover 0.04 0.03 0.04 Markup Revenue / Total Assets
Debt to Asset 1.13 1.12 1.01 Total Debt / Total Assets
Debt to Equity 11.2 9.99 10.2 Total Equity / Total Assets
Coverage Ratio 0.8 0.79 0.76 EBIT / Interest Expense
Gross Profit ratio 26.5% 25.5% 15.4% Gross Profit / Revenue * 100
Net Profit Margin 14.7% 6.0% 6.8% Net Profit / Revenue * 100
Return On Asset 2.1% 2.0% 2.1% Net Profit / Total Assets * 100
Return On Equity 23.9% 22.3% 23.8% Net Profit / Total Equity * 100
Advances to Deposit Ratio 48.5% 47% 40.2% Advances / Deposits * 100
Investment to Deposit 55% 51.% 45% Investment / Deposits * 100
Cash Ratio 9.1% 12.9% 13.9% Cash / Current Liabilities * 100
Calculations:
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Investment to deposits: Investment/deposits
In 2013 423777250/827847738*100=51%

In 2014 497334002/895083053*100=55%

Advances to deposits: Advances/deposits

In 2013 390813462/827847738*100=47%

In 2014 434264050/895083053*100=48.5%

Gross Profit ratio: Gross Profit / Revenue*100

1n 2013 18613955/72846281=25.5%

1n 2014 21929561/82735467=26.5%

5.2 Activity Ratio

Activity ratios measure a firm’s ability to convert different accounts within their balance sheets
into cash or sales -inflows or outflows.

 Total Assets Turnover

The total asset turnover indicates the efficiency with which the firm uses its assets to
generate revenues.
Interpretation:

Turnover means how many times we make the revenues during the year as compare to our
total assets. This trend of increasing ratio in 2014 means the more efficiently its assets have been
used.

5.3 Debt Ratio:

The debt ratio measures the proportion of total assets financed by the firm’s creditors.

Interpretation:

Debt to asset ratio means higher ratio in 2014 the greater the bank’s degree of indebtedness.

5.3.1 Coverage Ratio

The firm’s ability to make contractual interest payments. The higher the ratio , the better able the
firm is to fulfill its interest obligations.

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5.4 Profitability Ratio:

Profitability ratios measure the earning ability of the firm. Following ratios are calculated:

 Net Profit Margin

 Return on Assets
 Return on Total Equity
 Gross Profit Margin

 Total Revenue = Markup/Return/interest earned

5.4.1 Gross Profit Margin

Interpretation:

 Gross profit margin on year to year basis is increasing. It also shows that United Bank
also expending his business that’s why its gross income is increases.

5.4.2 Net profit Margin:

Interpretation:

 Net Profit margin in the Year 2013 is 25% and 2014 is 26.5% respectively which shows
increase in Net Profit margin in this year. Net Profit Margin is to a reasonable extent i.e.
return on sales after payment of tax.
Net Profit = profit after taxation

5.4.3 Return on total Assets

 Interpretation:

As for as Return on total Assets is concerned, in the year 2012 it is 2.0%, and in the year
2014 is 2.1% which depicts that return on total assets is much Higher as compare to last year.

5.4.5 Return on Total Equity:

Interpretation:

 Return on Equity mean’s how much earn on Equity in the year 2013 is 22.3%, and in the
year 2014 is 22.9% which shows an increasing trend this year.

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33
GRAPHICAL REPRESENTATIONS OF RATIOS:

2014 2013 2012

Debt to Assest Ratio

Asset Turnover Ratio

Current Ratio

0 0.2 0.4 0.6 0.8 1 1.2

Cash Ratio

Net profit Margin

Gross Profit

Debt to Equity

0 2 4 6 8 10 12 14 16 18 20

2014 2013 2012

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 Investment to Deposite

Advances To Deposite

0 10 20 30 40 50 60
2014 2013 2012

NOTE:

All the ratios are calculated on the basis of data published in United Bank annual reports 2012 to
2014. Balance sheet, profit & loss account (Income statement) are taken as it is as published in
annual reports. All the amounts of these statements are taken into Millions. Errors and omissions
can be omitted.

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 6. SWOT ANALYSIS:
SWOT is useful tool for providing a framework for analysis of an organization. SWOT
stands for Strengths, Weaknesses, Opportunities and Threats. It is a common approach to make
assessments in terms of internal and external environment of the organization, and to formulate
strategies analyzing its internal strengths and weaknesses, external opportunities and threats,
coming up is the SWOT analysis for the UBL.

6.1 STRENGTHS:

 It has a well-knitted and adequately equipped branch networking system that efficiently
covers both the domestic and international markets.
 It is involved in both corporate and retail banking.
 Advances investment of the bank shows a constant growth pattern.
 The bank is owned by parties of financial repute and credit worthiness like, SBP, Best
Way group and Abu Dubai group. Others are GOP, NBP Trustee Department, State Life
Insurance Corporation etc.
 UBL is actively participating in international markets and has recently introduced credit
cards in UAE, Bahrain, and Qatar, being backed up by 24 hours call center out of UAE.
 The bank is run by highly professional recruited from and trained by foreign banks like
City Bank.

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6.2 WEAKNESSES:
 Due to risks such as political, economic and legal etc the bank has suffered losses the
main reason was that of piling up of large amount of unrecoverable loans and debts which
have adversely affected the image of the UBL.
 Accumulated losses pushed the bank to cut down its promotional activities in order to
reduce expenses for last few years.
 During the nationalization life span of the bank political lords used influence in bank
business and selection of employee at each level and thus adversely affected the bank’s
efficiency and effectiveness.
 Promotions are carried out on annual basis ignoring the importance of capabilities and
performance outputs.
 The bank has large number of employees who are simple graduates with no banking
knowledge.
 Unsatisfactory working conditions.
 Employees don’t promotion for many years
 HRM is not much effective and active in the bank. Every branch must have one HR
counter

6.3 OPPORTUNITIES:
 Growing policies of the GOP on business and economic sectors provide UBL an
opportunity to efficiently meet with the business people requirements of instant cash
facilities e.g. the government intentions of developing housing and agriculture sectors.
 The efficiency of stock market and sound exchange reserve level is providing a good
opportunity for effective investment decisions.
 Foreign remittances are another area as present worldwide control systems over transfer
of currencies through illegal channels has facilitated the area for the banks.
 Reconstruction of Afghanistan is a golden opportunity where the bank can effectively
participate.

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  There is a large pool of unemployed MBAs who can be hired to achieve professionalism
on its organizational culture.
 Outsourcing of promotional companies or use of available excellent promotional
facilities.
 Entering new market segments.
 Increase the product range to meet the broader range of customers’ needs.

6.4 THREATS:
 Increase in competition due to increasing number of foreign and domestic private banks
offering highly specialized and attractive services.
 Growing global technological advancements and adaptation of modern style of
management in banking sectors.
 Extensive promotion campaigns run by competitors.
 Unemployment, lower level of income and prices like problems in the motherland
coupled with low rate of industrialization, geo political adverse conditions, religious
factor, lack of consistency in policies due to political instability are some of the other
major threats.

This SWOT analysis is a mirror image of the bank’s present conditions. Some efforts are
made and others are still required to be made in order to improve the situation. The
management can develop elaborate strategic plans for capitalizing the available
opportunities. The bank should maintain principal of professional management and adhere to
sound and sophisticated banking rules and regulations so that confidence and trust of the
public in the institutions could be re earned.

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 7. PEST ANALYSIS

7.1 POLITICAL
Pakistan despite all international and public perceptions, today is a functioning
democracy and gradually there is a change in complexion and composition of legislatures with
more educated people and women (27% of National Assembly and17% of Senate) entering into
politics Similarly it helps in designing best strategies to implement that could support the
revival of bank industry. Like in the era of nationalization banks had to suffer as other industries
that’s why that impact is still found in the performance of this industry.

7.2 ECONOMICAL
Although banking sector development is important at the early stage of economic growth,
general liberalization presuming a homogeneous bank role may not necessarily promote growth.
The estimated cost structure indicates that state-owned commercial banks are large enough, while
development financial institutions and private banks can expect to obtain cost-saving advantages
by expanding their operations. Since scope economies are significant, portfolio diversification
generally increases bank profits. In addition, privatized banks are the most efficient, followed by
foreign and private banks. Public banks are the least efficient.

7.3 SOCIAL
Banks always helped people in improvement of living condition of poor people in various
forms like giving loans to poor for starting business or directly providing them the instruments
that could enhance their living conditions. Similarly UBL always tried to provide the needy
people loans on soft terms and helped also to decrease unemployment by providing job
opportunities.

7.4 TECHNOLOGY
The Banking sector in Pakistan has experienced a rapid transformation. Just about a
decade back this sector was limited to the Sarkari (nationalized) and co-operative banks. Then

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came the multi-national banks, but these were confined to serving an elite few. One could regard
the past as the medieval ages in the banking industry, wherein every branch of the same bank
acted as an independent information and multi-channel banking (ATMs, Net banking, Tele-
banking, etc) was almost non-existent. Today banks have to look much beyond just providing a
multi-channel service platform for its customers.

8. RECOMMENDATIONS
Recommendations are considered to be the most important part of an internship report,
without which no report is considered complete and meaningful. This part of the report is based
on the previous sections i.e. review and analysis. Moreover, for bringing suggestions, discussions
have been conducted with the staff of UBL officers, who not only provided the basis for
recommendations but also pointed out some areas, where the change for the development is
utmost important. Realizing the importance of this section, efforts have been made to give
feasible recommendations, which are categorized under the following headings.

Adopt Pro-Active Approach

UBL management should adopt proactive to survive in this sector. What I have observed is that
UBL management is having reactive approach means that they react to the situation that their
competitors have created. UBL should try for new innovative ideas rather than moving on the
same track that their competitive are doing.

Basis for Promotion:

A sizeable portion of the officers of UBL, are promoted in without test and interviews to
officers.. The promotion policy must be too tight and transparent that no one may have the
chance to be promoted on criteria other than the required qualification, experience and
performance. As for the present excess staff, those not found up to the required criteria, may be
given GHS etc .

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Needs of change in Recruitment Policy:
It is important to say that the external level market is full of the required talent like MBA, M.
Com etc,. But on the country only graduation with simple subjects is still the requisite
qualification for officer’s cadre, which has already worked amply in the devastation of UBL.
Therefore the recruitment qualification to the officer’s framework should be enhanced for simple
graduation, to professionally qualify preferably Masters in their respective fields.

Customers Orientation:
Every entrepreneur if concerned about the success of his business has to understand,
recognize, carefully and appropriately that his customer is “The King” of the business system and
the original spring of the business revenue. UBL should recognize its customers as the
mainstream of the bank’s revenue. They need to be provided the deserved respect, quality and in
time service and to be politely dealt with.
Proper Documentation:

Loans become irrecoverable through court of law in case of default when the bank fails to
prove their claims against the delinquent borrower. If documents are obtained properly as per
terms of the loan it is not difficult for the counsel of the bank to get decree against the defaulter.
For proper and valid documentation the following aspects must be kept in mind.

I. The bank should confirm that standard loan documentation is in place for each credit
facility prior to disbursement. If the documents required are different from the bank’s
standard approved format, arrangement for vetting of the legal counsel.
II. Bank should ensure that the documentation are correct, complete and correspond with the
approved facilities. Also to ensure that blank spaces are filled, documents are dated,
signed and stamped, the signer is authorized to execute such documents and signatures
are verified.

III. Maintaining computerized record of documentation.

IV. Division of documentation on the basis of sector, to which loan is given.

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 10. REFERENCES

Annual Report of the United Bank, limited 2012.

Annual Report of the United Bank, limited 2013.

Annual Report of the United Bank, limited 2014.

James C. Van Horne, 2000. Financial Management.

www.ubl.com.pk

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