Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Submitted To
Mr. Azam Mehmood
(Course Instructor)
Submitted By
Spencer Pervaiz Karanjia
Aurish B.Patel
Syed Manzar Abbas
Moin uddin
Date Of Submission
May 2011
LIST OF CONTENTS
Acknowledgment I
Preface II
List of Acronyms III
Executive Summary
Chapter – 1
INTRODUCTION OF BANKING SYSTEM
1.1 Definition of bank
1.2 Banking History
1.3 Banking System in Pakistan
1.4 Role of Commercial Banks
Chapter – 2
INTRODUCTION OF UBL
2.1 Company mission & vision
2.2 Company introduction, description & history
2.3 Domestic & International Network
2.4 Ownership Structure
2.5 News Publication
2.6 Company set up
2.7 Board of Directors
2.8 Management & Senior Management
2.8 Location & Company profile
Chapter – 3
INVESTMENT PLANS BY UBL
3.1 Mahana Munafa Plan
3.2 Sarmaya Izafa Plan
3.3 Profit + Growth Plan
3.4 Mera kal UBL Children Saving Plan
3.5 UBL Principal Plan protection series
Chapter – 4
SERVICES OF UBL
4.1 Net banking
4.2 Hamrah
4.3 UBL Better Life Banc- assurance Investment banking
4.4 UBL Cash line
4.5 Investment banking
4.6 UBL Auto loans
4.7 Home & Business Loans
Chapter – 5
Financial Analysis of UBL
5.1 Balance Sheet Of UBL
5.2 Profit & Loss Account of UBL
5.3 Financial Analysis of UBL
5.4 Profit & Loss Account of UBL
Chapter – 6
Conclusion 92
Suggestions & Recommendations 93-94
Appendix -
We are thankful to Almighty Allah, who has given us the
power of knowledge and we are thankful to our parents, who
supported us in every field of life and enable us to reach
points. Our sincere gratitude to our course instructor Mr.
Azam Mehmood for help, support, encouragement and his
backup at every aspect that enabled us to successfully
complete this Report, Without his help we never been enable
to complete this report. His sincere advices had us towards
the success.
This Report presents the work. Its goals is to provide
knowledge of Financial Institution, We provide thorough and
complete coverage of this Report by using straight forward
current situation and backgrounds. It covers 11chapters:
1. Introduction of banking system
2. Introduction of United bank limited
3. Investments plans by UBL
4. Services of UBL
5. Financial analysis of UBL
We hope you will enjoy reading this report that is
the reader may be able to appreciate us, we hope you will
understand and appreciate how Financial Institution
Report can be strategically planned and managed.
Yours Truly,
Spencer Pervaiz Karanjia
Aurish B.Patel
Syed Manzar Abbas
Moin uddin
EXECUTIVE SUMMARY
To properly fulfill the requirements of the commercial banking and
exercise control over banking sector, State Bank of Pakistan was
established in 1948. After the introduction of State bank different
commercial banks came into progress amongst which one was
united bank limited so due to this we select UBL as a main
financial institution on which we work further so basically firstly
we plan to gather all the relevant data regarding to our financial
institution then we gather all data and do analysis.
We are applying different techniques which are BCG Matrix and
Ratio analysis. At the end of every report it needs conclusion and
gives suggestions and recommendations.
CHAPTER 1
INTRODUCTION OF BANKING
SYSTEM
Chapter# 1
Introduction of Banking System
Definition of Bank
Banking History
Major events in banking History
Oldest Private Banks
Oldest National Banks
Banking System in Pakistan
Role of Commercial Bank
“BANK”
Definition:
“A bank is a financial institution licensed by a
government. Its primary activities include borrowing and
lending money. Many other financial activities were
allowed over time. For example banks are important
players in financial markets and offer financial services
such as investment funds.”
“BANKING HISTORY”
Major events in banking history:
• Earliest Euro wide /Mideast banking 1100-1300.
• Banknotes — Introduction of paper money.
• 1602 - First joint-stock company, the Dutch East India Company
founded.
• 1720 - The South Sea Bubble which caused a European financial
crisis and forced many bankers out of business.
• 1781 - The Bank of North America was found by the Continental
Congress.
• 1800 - Rothschild family founds Euro wide banking.
• 1930-33 In the wake of the Wall Street Crash of 1929, 9,000 banks
close, wiping out a third of the money supply in the United States.
• 2008 - Washington Mutual collapses. It was the largest bank failure in
history (Financial Crises).
“BANKING SYSTEM IN
PAKISTAN”
The banking system is passing through a difficult phase mainly because of
excessive political interference in the working of the nationalized banks by
the different governments in the past. Hence the political interference in
nationalized banks did not allow them to carry out their business purely
on merit. It may be recalled that some twenty years back, the banking
system was working on such a solid ground that various developing and
under-developed countries used to take guidelines from Pakistani
banks.
A little earlier before the creation of country, the role of Muslims of the
areas which were later included in Pakistan was of no significance due to
their restricted participation in the banking sector. There was only a small
bank namely Australasia Bank having a few branches in Lahore and its
suburbs. In 1942, the Australasia bank was housed in a garage of a trader of
Lahore who used to trade at a small scale with Australia during that period.
However the only Bank was run by the Muslims of the sub-continent was
Habib Bank which was established in 1941. At that time Quaid-e-Azam
Mohammad Ali Jinnah expressed his desire that another Muslim bank
also be established in Calcutta which came into reality when Adamjee
with the assistance of Isphanis established Muslim Commercial Bank a
few months before the creation of Pakistan in Calcutta. When Pakistan
came in to being The Habib Bank shifted its Headquarters from India
to Karachi. A few of Habib Bank's branches were already in operation in
Pakistan. The Muslim Commercial Bank also moved its headquarters
from Calcutta to Dhaka and later on to Karachi. At the time of
independence, another small bank namely Bank of Bahawalpur also started
business from Bahawalpur from December 1947.
Before independence, the financial sector was in the hands of foreign banks
some of them were British by origin. The oldest bank operating from 1883
in this part of the world was the Chartered Bank while another bank namely
the Grind lays Bank which was also working simultaneously from 1883. In
order to expand its business operations, the Grind lays acquired other small
banks and merged them into the business of Grind lays. For example Allied
Bank, National Bank of India etc was merged into Grind lays Bank. Among
the contemporaries, Imperial bank of India was the largest Indian Bank
which had started its operations in 1919 which was discharging the role of a
commercial banks as well as the Central Bank for India until an independent
Central Bank i.e. Reserve Bank of India was established in 1935.
However, since the Imperial Bank had the largest network of its branches all
over India, it continued to play its role as a subsidiary of the Reserve Bank
of India. In the Muslim majority an area which was later on became the part
of Pakistan, small branches of Indian banks were operating and soon after
creation of Pakistan they shifted their branches and headquarters to India. At
the time of independence, two major banks including Punjab National Bank
at Lahore and Comila Banking Corporation were working in the then East
Pakistan. This trend was so obvious that the total number of bank offices
between June 30, 1918 and August 14, 1947 were reduced from 631 to 195
only. During the early part of 1949 the number of branches of Imperial Bank
of India in Pakistani areas was more than of Habib Bank. In the early days of
Pakistan, the government worked hard left no stone unturned to establish
and strengthen the banking system in Pakistan.
Company Mission
Company Vision
Company introduction
Company Description
History of the Company
Operational Structure
Domestic & International Network
Major Local Market Presence
House hold name
Full Service bank
International bank
Ownership Structure
Economic Review
Company Setup
Board of Directors
Management
Senior Management of UBL
Location
Company Profile
“MISSION STATEMENT”
Our mission is to:
Set the highest industry standard for quality across all areas of operation,
on a sustained basis;
Optimize people, processes and technology to deliver the best possible
Financial solutions to our customers;
Become the most sought after investment;
be recognized as the employer of choice.
“VISION STATEMENT”
Company Description:
UBL is a Banking Company, which is engaged in Commercial & Retail
Banking and related services domestically and overseas.
Operational Structure:
UBL operates 1375 domestic and a subsidiary viz. United Executors and
Trustees Company Ltd. as on 30.06.2000. It has 20 overseas branches
situated in the UK, USA, UAE, Yemen, Bahrain and Qatar. It also operates
one offshore branch in the Export Processing Zone, Karachi and it has
representative offices in Cairo-Egypt and Tehran-Iran. It also has a joint
venture – Oman United Exchange Co., Oman Muscat and a subsidiary –
United Bank A.G. Zurich, Switzerland set up in 1968. It has 21 ATMs with
8 in the UAE, 3 in Bahrain, 1 in Doha, 7 in Islamabad and 2 in Karachi.
News Publications
United Bank Limited - a brief introduction
In April, 1998:
UBL remained in the private sector for 15 years until it was nationalized on
January 1, 1974 with other Pakistani banks. The bank continued to grow
rapidly even after nationalization. Its resource base expanded, the number of
branches increased, and overseas operations grew. As an organization, UBL
has grown rapidly except in the last couple of years when it ran into some
problems.
The steps taken to shore up UBL have begun to take effect. The first signs of
recovery have become manifest. A key indicator is the level of recovery. In
1997, total debt settlements amounted to Rs.7 billion, well above the level in
the preceding year. In 1998, UBL's target for debt settlement is Rs.11.5
billion.
The Bank's Paid-up capital is Rs.1.48 billion. It is not enough to meet capital
adequacy ratio, but the package the State Bank of Pakistan has put together
to shore up UBL will provide Rs.21 billion to increase the capital base. This
huge infusion of capital would improve the Bank's liquidity and boost public
The Bank expects to make a profit this year after having been in the red for a
couple of years. Beside the increase in the Bank's capital base, there have
been other developments which would impact on growth and profitability. In
brief, they are (i) the reduction in the cost of financial intermediation from
5.1 per cent in 1996 to 4.6 per cent in 1987; (ii) the improvement in the
recovery of non-performing loans; (iii) the rationalization and improvement
of its overseas operations; and (iv) the beginning of new initiatives like
corporate banking. In corporate banking, UBL recently participated as a co-
manager in the securitization of Daewoo's receivables under a syndicated
arrangement.
UBL has always been an upbeat and growth-oriented institution, but this
does not mean that it has been oblivious to the social responsibilities of
business organizations. It always fulfilled the mandatory credit targets it was
given for loaning to the priority sectors. As part of the government's policy
to improve the technical skills of Pakistani workers, it has set up two
computer literacy centres at Sheikhupura and Muzaffarabad. On the level of
social services per se, the Bank has encouraged sports and built a first-rate
sports complex in Karachi. It is soon going to link up with Internet and
SWIFT to provide prompt, responsive service. It has major plans to train the
staff to provide customers the services they expect from first-rate banks.
Company Setup:
CHIEF
EXECUTIVE
BOARD OF
DIRECTORS
MANAGING
DIRECTOR
Mr. Aqeel Ahmed Nasir SEVP/Company Secretary & Chief Legal Counsel
Chairman
His Highness Shaikh Nahayan Mabarak Al Nahayan
Deputy Chairman
Sir Mohammed Anwar Pervez OBE
Branches
1112 Domestic, 17 Overseas Branches
Representative Offices
Iran
Kazakhstan
China
Subsidiary
United Bank AG Zurich, Switzerland
United National Bank Limited, UK (Joint venture with NBP)
UBL Fund Managers Limited
United Executors and Trustees Company Limited
Associated Company
Oman United Exchange Company, Muscat
UBL Insurers Limited
Registered Office
13 Floor, UBL Building,
Jinnah Avenue, Blue Area Islamabad, 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
CHAPTER 3
You can avail the free insurance coverage as per the details given below,
starting with a minimum investment of Rs. 500,000.
Insurance Coverage
Investment Amount Loss of Life Accident Accidental Medical
in Rs. Indemnity (Rs.) - Lump Expense Reimbursement
Sum (Rs.) - Annual Limit
500,000-1,000,000 500,000 100,000
1,000,001-2,000,000 750,000 150,000
2,000,001 and above 1,000,000 200,000
You can enjoy the most precious moments of your life even more when you
are free from financial worries. In order to help you plan for future
obligations ad the to give you the security and peace of mind you need to
take care of your loved ones.
SARMAYA IZAFA PLAN:
With the Sarmaya Izafa Savings Plan the profit realized on your
investment is automatically reinvested into your account along with the
principal investment. Thus growing your savings large enough to take care
of your future responsibilities with ease,
Individuals who want to invest and grow their hard earned savings to cover
for future expenses over a period of three to five years
Insurance Coverage
Investment Amount Loss of Life Accident Accidental Medical
in Rs. Indemnity (Rs.) - Lump Expense Reimbursement
Sum (Rs.) - Annual Limit
500,000-1,000,000 500,000 100,000
1,000,001-2,000,000 750,000 150,000
2,000,001 and above 1,000,000 200,000
Fill out the application form and submit it at your nearest Investment Center
or UBL Branch along with a copy of your CNIC and Affidavit (incase of
Zakat Exemption). Payment can be made in the form of a cheque, demand
draft, and pay order or through online transfer in favor of ‘CDC Trustee
UBL Funds’ and crossed ‘Account Payee’ only. Cash will not be accepted.
Like many people you may be faced with the challenge of maintaining a
balance between regular expenses, like monthly bills, house rent, etc. and
future plans for a new car, house renovation. To help you maintain your
current lifestyle and secure your tomorrow.
PROFIT + GROWTH PLAN:
With the Profit + Growth Savings Plan a portion of your savings will be
invested to provide you with regular profit allowing you to take care of your
daily household expenses while the remaining amount will be invested for
long term capital appreciation that will help meet future goals.
Individuals who want surplus income every month to pay for household
expenses while also growing their savings over a period of three to five
years
Insurance Coverage
Investment Amount Loss of Life Accident Accidental Medical
in Rs. Indemnity (Rs.) - Lump Expense Reimbursement
Sum (Rs.) - Annual Limit
500,000-1,000,000 500,000 100,000
1,000,001-2,000,000 750,000 150,000
2,000,001 and above 1,000,000 200,000
Fill out the application form and submit it at your nearest Investment Center
or UBL Branch along with a copy of your CNIC and Affidavit (incase of
Zakat Exemption). Payment can be made in the form of a cheque, demand
draft, and pay order or through online transfer in favor of ‘CDC Trustee
UBL Funds’ and crossed ‘Account Payee’ only. Cash will not be accepted.
As you become a parent, your responsibility is to ensure that your child has
a safe and bright future. Higher education, foreign degree, marriage and
financial security are some of the important things that you would want to
save for child. However given the increase in costs likely to occur with
every passing year, simple savings may not be enough.
MERA KAL – UBL CHILDREN SAVINGS PLAN:
This is a systematic investment plan designed exclusively for children aged
between 0 to 25 years that allows you to invest regular sums of money in
your account from time to time on a periodic basis, thus growing your
savings and enabling you to meet your child’s future needs without making
any compromises.
Why you should invest in the UBL Funds Mera Kal – Children
Savings Plan:
Fill out the application form and submit it at your nearest Investment Center
or UBL Branch along with a copy of your CNIC and Affidavit (incase of
Zakat Exemption). Payment can be made in the form of cheque, demand
draft and pay order or through online transfer in favor of ‘CDC Trustee UBL
Funds’ and crossed ‘Account Payee’ only. Cash will not be accepted.
UBL PRINCIPAL PLAN PROTECTION SERIES:
The UBL Principal Protected Plan Series offers investment plans that are
based on the world renowned investment methodology, Constant Proportion
Portfolio Insurance (CPPI) – introduced for the first time in Pakistan.
The first plan from the series is UPPP-I was launched in July 2008. Based
on the CPPI Methodology, UPPP-I offers investors exposure to equity
markets while protecting their capital at the end of the three year term of the
plan.
The second plan from the series, UBL Principal Protected Plan – II (UPPP-
II) started on April 27 and has been extended till May 16, 2009.
The plan invests in UBL Fund Managers’ flagship funds United Stock
Advantage Fund (USF) and United Growth & Income Fund (UGIF)
allocating the plan’s portfolio on a daily basis between these funds based on
the performance of the equity markets
CHAPTER 4
NET BANKING
HAMRAH
Investing Banking
UBL Cash line
UBL Better- life Banc assurance
UBL Auto Loans
Home loans
Business Loans
Origination System (LOS) has been implemented for Commercial loans and
Consumer products.
LOS implementation for the rest of the Bank will be completed by 2012.
UBL is already starting to see the technological benefits and the improved
service capability that these systems will bring to the Bank and its
customers.
Watan Card:
The Government of Pakistan (GOP) selected UBL to disburse Rs. 20,000
each to over one million families displaced by the flooding. For this effort
UBL issued debit cards, called “Watan cards”, to beneficiaries identified by
NADRA and GOP. Additional planned installments in 2011 will assure
beneficiaries have multiple opportunities to use (and get used to) the cards.
UBL’s ultimate goal is to retain the beneficiaries as Branchless Banking
customers by introducing them to the benefits of using additional services
such as savings, remittances, and bill payments that are accessible via their
Watan card Omni accounts.
The Bill & Melinda Gates Foundation will contribute US$1.5 million
through MEDA (Mennonite Economic Development Association) to support
UBL’s management and administrative costs of procuring and distributing
the cards as well as the cost of ongoing disbursements via Omni Agents. The
funding will also support MEDA in monitoring and documenting the UBL
Watan experience, in order to share learning’s with the wider microfinance
and financial sector communities globally.
UBL Omni:
UBL Omni commenced commercial operations in April 2010 and with it
achieved the honor of being the first commercial bank to launch branchless
banking operations in Pakistan. With Omni, UBL aims to attract the
unbanked population via its retail business agents called Omni Dukaans
which are located in over 350 towns and cities of Pakistan and currently
number more than 6,300.
Pakistan has nearly 65 million unique mobile phone subscribers whilst it has
less than 20 million individuals with bank accounts. This provides the Bank
with the unique platform of being able to include a large segment of the
country’s unbanked population and provide them financial services which
have previously remained inaccessible to them.
In recognition of UBL’s innovative product offering, strong management
credentials and admirable goals of financial inclusion, the Bill and Melinda
Gates Foundation has given UBL a grant of US$6.9 million through Shore
Bank International to promote UBL Omni and ensure its reach to the widest
possible community.
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.
HAMRAH
We Are Now Offering Denominations Up To Rs. 10,000 Only
UBL has always been at the forefront in identifying and meeting the
financial needs of its valued customers. UBL was the pioneer in introducing
Rupee Travelers Cheque facility in Pakistan, as early as 1971. In
continuation of the same tradition, UBL in the shape of "Hamrah" Rupee
Travelers Cheque enhances this facility for the convenience of its valued
customers by offering denominations up to Rs. 10,000
UBL "Hamrah" has been designed keeping in mind, both convenience and
security - be it business, property, trade or personal needs. "Hamrah"
Rupee Travelers Cheques are the ideal and safest way of carrying cash when
traveling anywhere in Pakistan.
Hamrah RTC' (Rupees Traveling Cheques)s are now accepted at more
than 2000 places such as hotels, shops, real estate agents, jewelers, car
dealers, etc and of course at all our UBL branches.
UBL has a 24-Hours customer help-line, providing its customers with round
the clock tele-verification of "HAMRAH" traveler’s cheques.
Available to all: Holding an account with UBL not mandatory for availing
this facility
Easily transferable and encashable: Just dial "Hamrah" Hotline UAN for
assistance 111-111-825 or contact nearest designated UBL Branch
Valid until encashed: Use them for a week, month or even years depending
on when there’s a need for encashment.
Product Offering
UBL Better Life plans are advanced insurance products specifically
designed to benefit the customers, providing the better and secured future to
your family and loved ones.
Unit Allocation
Unit Allocation
The proportion of contribution for investment in units varies by policy year
and is follows:
Flexible open ended savings product with life insurance protection to your
family and loved ones.
UBL Better Life Savings Plan is a high value savings and investment
vehicle. Funds accumulated during the savings term can be utilized for
children’s higher education, marriage, buying a house, generating retirement
income or for any other purpose. The plan is flexible enough to respond to
most individuals’ needs. It is a unit-linked plan which aims to deliver a
substantial sum of money at the end of the savings period. The additional
benefit of course comes in the form of life insurance cover.
Unit Allocation
Unit Allocation
Flexibility
No fixed monthly installment
Principal repayment at your convenience.
No prepayment penalty
Markup only on utilized amount
Worry free payment of bills, shopping, child’s education, short-term
business needs or just about any thing you can think of!
Empowerment:
For the first time in Pakistan, you can now control your markup. Enjoy
lower markup on higher utilization of funds
Markup calculated on daily outstanding balance
Continuous line of credit.
Convenience:
Instant access to cash through the entire UBL network. You will be given a
cheque book and an ATM/Debit Visa Card which you can use at 900,000
ATMs and 22 million outlets worldwide.
All UBL Cash line customers are automatically registered on UBL net
banking and can avail numerous net banking features such as
Bill Payment
Funds transfer
Account update
Statement of accounts
How can you get Cash line?
Cash line is offered in the following cities:
BAHAWALPUR OKARA
FAISALABAD PESHAWAR
GUJRANWALA QUETTA
GUJRAT RAHIM YAR KHAN
HYDERABAD RAWALPINDI
ISLAMABAD SAHIWAL
JHELUM SARGODHA
KARACHI SIALKOT
LAHORE WAZIRABAD
MULTAN WAH CANTT
LARKANA MIRPURKHAS
SUKKUR NAWABSHAH
KHARIAN
INVESTMENT BANKING
The Largest Investment Bank in Pakistan
IBG provides innovative and unique solutions to its clients enabling them to
meet the challenges of an ever- changing market.
Dedicated specialist team of 14 investment bankers. Supported by over 50
relationship managers in six different locations in Pakistan alone.
Well established execution experience.
Rich international and domestic investment banking product knowledge
Strong distribution capability.
• Loan Syndications
• Term Finance Certificates (TFC
• Listed TFC
• Privately Placed TFC
• Securitization
• Commercial Paper (CP)
Loan syndications:
Commercial Paper:
• An unsecured promissory note with a maturity period ranging from
thirty days to one year
• A money market instrument which can be issued by rated companies
to diversify their short term sources
of financing
• Transferable by endorsement and delivery
• Commercial Paper is issued at a discount calculated on the basis of the
mark-up which is determined by the Issuer
The Issuer to maintain a minimum current ratio of 1:1 and to maintain
a minimum Debt/Equity ratio of 60:40
UBL AUTO LOANS:
UBLDRIVE:
UBL Drive is a unique auto financing product which offers you features,
options and flexibility unmatched by any other bank, because at UBL, You
come first.
Pricing Plan
With UBL Drive you can buy your favorite used car (up to 5 years old) at
the most affordable rates.
Pricing Plan
Tenure 1 to 2 years 3 to 4 years 5 years
Rate 21.00% 21.50% 22.00%
The rate of installment is fixed it cannot be change year by year which can
be show by the figure
Processing Charge
A processing charge of Rs. 5,000 will apply.
HOME LOANS
Buying a Home:
Why rent when you can buy? Buying a home of your choice
has never been so easy. With a maximum financing limit of 70% you can
easily buy a house or apartment that best fits your requirements. So go ahead
and start the search for your dream home because with easy and affordable
installments you need not think of renting a house when you’ve got UBL
Address.
Building a Home:
Have you ever settled for anything less than perfect? There’s nothing like
building your perfect home, your way. With every detail in place like the
elegant French windows or the perfectly manicured lush green lawn, just the
way you’ve always imagined. By chalking out well planned fund branches at
each phase of the building process, UBL Address brings you your dream
house one step closer.
BUSINESS FINANCING
LOANS:
UBL Business line is a complete solution to all your Business Financing
needs.
With UBL Business Financing facility, you can now take your business to
greater and newer heights, and achieve the level of success that you truly
deserve.
UBL Business line is a running Finance facility that not only provides funds
for growth but also enables you to capitalize on profitable opportunities.
With UBL Business line, now you will surely say: “Ab Hui … Kamiyaabi
Meri Manzill”.
Features:
Utilize up to Rs.10 million:
Now UBL Business line credit line is here to solve all your cash flow
problems. You can utilize up to Rs.10 million with the help of which you
can now focus on your business expansion and growth.
Faster Processing:
After completion of your documentation requirements, UBL Business line
promises you a very smooth and fast processing, hence saving you time and
frustration.
Wide Accessibility:
UBL Business line’s availability in major cities like Karachi, Lahore,
Faisalabad, Islamabad & Rawalpindi, is complimented by UBL s
countrywide branch network enabling our customer to access his account,
and deposit or withdraw cash, no matter where he stands within the country.
Chapter# 5
Financial Analysis of United Bank
Limited
Rupees in (000)
Non markup/interest
expenses
Administrative expenses 17765056 1660856 15,519,634
1
Other provision/write offs 63233 642274 450,390
240391 64552 258,321
Other charges
Total Non markup/ interest 18482222 17712934 16,565,344
expenses
- - -
Extraordinary items
Profit before tax 17742218 14034501 13,874,424
Tax 6582288 4841814 5,541,304
The user of financial statements finds it helpful to calculate ratios when they
interpret company’s financial statements. A financial ratio is simply one
quantity divided by another.
Ratios focus on special relationship between two items of balance sheet,
income statement or one from each. Ratios make it easier to understand a
specific relationship between various items of financial statements then
looking simply at the raw numbers themselves. The number of financial
ratios that might be created is virtually limitless, but there are certain
basic ratios that are frequently used, these ratios can be placed into six
different classes.
Liquidity Ratio
Asset Turnover Ratio
Leverage Ratios
Coverage Ratios
Profitability Ratios
CURRENT RATIO:
UBL’s current ratio is increasing over the time. Higher the current ratio
higher the ability to meet the short-term obligations as they come due. The
UBL’s current ratio is increasing year by year. This in turn decreases the risk
of insolvency. The change is occurring due to increase in short term
investment and decrease in short term borrowings.
DEBT TO EQUITY:
This ratio measures how the company is leveraging its debt against the
capital employed by its shareholders. Analysis of debt to equity ratio
indicates that the current position for the debt to equity is that for every one
rupee in equity provided by the shareholders the bank has Rs. 14.4 as a debt.
This shows that the bank is heavily relying on debt financing. The reason
For huge difference stated in the table is because of losses occurred in 2008,
2009 and 2010.
COVERAGE RATIO:
This ratio shows the number of times a company can cover or meet its
financial charges or obligations. One of the most commonly used ratios is
the interest coverage ratio that measures the number of times the income is
available to pay interest charges. The UBL interest coverage ratio has shown
significant improvement in these three years. The ratio is increased from
0.15 to 3.34.
RETURN ON INVESTMENT:
This ratio measures the profitability per rupee of investment in assets.
UBL’s return on investment has shown an improvement more than 100%. In
2009 the ratio is 1.24% while in 2008 it was 0.76% and in 2010 it is 4.3.
Although the assets have increased but the operational recovery of the bank
is main cause of increasing this ratio.
RETURN ON EQUITY:
This ratio shows the profit as a proportion of the book value of the common
shareholders. The return on equity is also shown deal of positive change. In
2010 the ratio is 16.3% while in 2009 it was only 18% and in 2008 it was in
16.78.
INVESTS TO DEPOSIT:
This ratio shows the company’s investment employed per unit of deposit.
This ratio decreased in 2009 as compared to 2008 but in 2010 it again
increased. It is because of industrial development factors in the country by
which lending has been increased and investment is slightly decreased.
CHAPTER 6
Analysis Of United Bank limited
Strategic Analysis
Financial Analysis
Credit Ratings
Awards given to UBL
STRATEGIC ANALYSIS
BCG MATRIX OF UBL
High
UBL Omni
UBL Cash line UBL Better life banc assurance
Medium
Investment Banking
Net Banking
(Personal loans)
Comparison through STRATEGIC ANALYSIS:
When we took analysis of UBL so we come to that point UBL is
commercial bank it also has there own importance and capture
huge market share as well but we talk about BCG matrix then we
come to that point UBL has wide range of services which is on
peak position which can be show on BCG Matrix so according to
our judgment here UBL is stronger position in market then other
commercial banks.
According to Mr. Aftab Malik (Branch Manager of UBL)he said
that 4 services is in star position because they capture huge market
share and increases industry sales growth other Hamrah generate
cash but slightly omit from market where as UBL better life banc
assurance and UBL Omni is newly introduce which give good
response or in future more chances to generate huge profit if we
talk about UBL Money which is personal loans it is fail because
huge amount of capital is given to customers so due to this more
chances of bad debts in this current situation where people are in
trouble.
Comparison through FINANCIAL ANALYSIS:
CREDIT RATING:
CONCLUSION
• It should be necessary for the UBL that for the old employees training
session for well grooming, because even they don’t know that how to
deal with new technology.
• UBL should be appointing at least one HR officer at hub level for
dealing HR related work.
• As UBL have well in IT sections, we think they can develop their own
ATM network as M.net and 1 link.
• The ATM machine is some times in small cities remain disturb that’s
why customer become dissatisfied, if UBL have its own network
related ATM than this problem should solve.
List of Acronyms
AD Authorized Dealer.
ATM Automated Teller Machine
ATR Asset Turn Over
AVP Assistant Vice President
AOF Account Opening Form
BOG Board of Governor
BOD Board of Director
CA Credit approval
CP Credit Proposal
DAC Disbursement Authorization Certificate
DD Demand Draft
DP Note Demand Promissory Note
EBIT Earnings before Interest & Tax
ESVP Executive Senior Vice President
EVP Executive Vice President
FDD Foreign Demand Draft
FMT Foreign Mail Transfer
FTDR Foreign term Deposited Receipt
FTT Foreign Telegraph Transfer
GM General Manager
GOP Government of Pakistan
GPM Gross Profit Margin
HBL Habib Bank LTD
IMS Institute of Management Sciences
LC letter Of Credit
MCB Muslim Commercial Bank
MT Mail Transfer
NPM Net profit Margin
OG1 Officer Grade 1
PLS Profit & Loss Saving Account
PO Pay Order
RCAD Regional Credit Administration Department
RF Running Finance
RM Relationship Manager
ROI Return on Investment
RTC Rupee Traveler Cheque
STDR Special term Deposited Receipt
SVP Senior Vice President
SWOT Strength Weakness Opportunities Threats
TIE Time Interest Earned
TT Telegraphic Transfer
UBL United Bank LTD