International Islamic University, Islamabad

Management Project Report:

United Bank Limited (UBL)

Submitted To:

Mr. Ali Asghar

Presented By:

Muhammad Imran Fayyaz

Muhammad Yousaf

Ikram Ullah

Inam UlHasan

Farhan Qayyum

Dated: 02.5.2014

INTRODUCTION

United Bank Limited (UBL) is one of the largest commercial bank in Pakistan having

more than 1,320 online branches inside the country. Its 15 branches outside the country are in the

United States of America, Qatar, UAE, Bahrain, and Republic of Yemen. It also has

representative offices in Beijing, China, Tehran, Iran, and Almaty, Kazakhstan. It owns

subsidiaries in the UK (United National Bank Limited), and in Zurich, Switzerland.

History of United Bank Limited:

UBL was established in Nov 1959.The Bank was sponsored by the Saigol Group of Companies, which

was the mainstay of the textile industry in Pakistan at that time. Within a short period of time the bank emerged as

the third largest bank in the country after HBL and NBP. The Bank was nationalized in 1974 .Later on

another bank, the Commerce Ltd. was emerged into UBL.

UBL was the third Bank to be offered for privatization. Initially, a Saudi based financial installation;

Basharahil Group came up with the highest bid for the Bank, and deposited the 1st tranche for its consideration.

However due to flaws in the transactions, the SBP cancelled the privatization and took over the bank in 1995.

The Bank’s total income including interest and non-interest income amounted to Rs. 4935 million in

1995, its deposits were Rs. 109 million and investment were Rs.25 b in 1995. UBL incurred a loss of Rs.724

million in 1995.

In 1996 the management of the Bank was changed and by mid in 1997 the financial and administrative

discipline was restored. The interference of the govt. was eliminated and the non-performing loans recovery was

increased and the liquidity position was brought up to the required level. About Rs.6.3 b was recovered out of

which about Rs.5 bn were domestic.

A right sizing program was initiated as well as an aggressive branch rationalization strategy by which by

which 203 loss making branches were shut down and profitable ones were opened in other areas. Surplus staff

was removed which amounted to 5416 employees. The entire audit system was revamped.

UBL Mission:

“To develop and deliver the most innovative products, manage customer experience,

deliver quality services that contribute to brand strength, establish a comparative advantage and

enhance profitability, providing value to stakeholders of bank”.

UBL Vision:

“To be the premier organization operating locally and internationally that provides the

complete range of financial services to all segments under one roof”.

ORGANIZATIONAL BREAK DOWN STRUCTURE

A well-developed and properly coordinate structure is an important requirement for the

success of any organization.

It provides the basic framework within which functions and procedures are performed.

Any organization needs a structure, which provides a framework for successful operations. The

operation of an organization involves a number of activities, which are related to decision

making, and communication of these decisions. These activities must be well coordinated so that

the goals of the organization are achieved successfully.

UBL Organizational Chart:

Area Manager:

Area Managers are too valuable to be thrown in at the deep end. They need the best initial

training possible. This is the ideal ‘covering the very basics’ workshop. The focus is on the Area

Manager function, the tasks required of the job and the qualities required to ‘lead’ rather than

just ‘manage’.

Area Operation Manager:

Manage daily operations of branch office to meet business goals.Supervise and guide a team of

professionals to maximize revenue. Develop safe and positive work environment for staffs.

Ensure customer satisfaction by delivering timely and quality services. Develop strong working

relationship with potential clients for new business opportunities within the assigned area.

Hub Branch Manager:

Responsible for all P&L activities.. To ensure all incoming customer enquiries are managed

efficiently and effectively. To ensure that bookings are taken in accordance with the Quality

Working Procedures. To ensure quotations for customers for network traffic are in accordance

with the company sales tariff and in accordance with the Quality Working Procedures. To follow

up quotations issued and monitor results. To promote all Company services to all customers and

to understand the service schedule and products on offer.. To maintain good relationships

between customers, branches and partners.

Branch Manager:

The major responsibility of the branch manager is to deals with all the operations that are

performed by the employees under the large organization. He works as the leader and serve all

the people that are coming under his guidance. He handles the team of the associates and teaches

them the basic methods of working. He has to ensure that all the employees are getting their

salaries on time and providing the best customer satisfaction.

Supervision Customer Service:

The Customer Service Supervisor could be expected to assist in the establishment of a customer

care policies and procedures. Being close to the customer, team members and management can

give the position a unique viewpoint from which the company can benefit when setting up

customer focused systems.

Board of Directors:

Highness Shaikh Nahayan Chairman

Sir Muhammad Anwar Perwaiz Deputy Chairman

Mr.Atif R.Bukhari President &CEO

Mr. Omer Zaid Jaafer Al Askari Director

Mr. Zameer Muhammad Chaudhary Director

Mr. Ahmad Waqar Director

Mr. Ashfaq Hassan Khan Director

Mr. Aqeel Ahmad Nasir Company Secretary

Mr. Abdul Rauf Malik Director

Mr. Ameer Karachi Wala Chief Financial Officer

Branch structure:

Financial Goals

.

For the quarter ending March 31, 2013, UBL has achieved a profit after tax of Rs 4.0 billion.

This is 19% lower than the corresponding period last year and translates into earnings per share

of Rs. 3.23 (March 2012: Rs. 3.97).

For the same period, UBL’s profit before tax is Rs 5.9 billion, 19% lower than the same period

last year. The decline in profitability is primarily attributable to the severe spread compression

witnessed in the banking industry. On a consolidated basis, UBL achieved a profit after tax of Rs

4.9 billion, an increase of 2% over the first quarter of 2012.

Marketing Goals/Strategies:

Strategies: UBL has formulated certain sets of strategies to enable it to achieve its

goals and objectives. These strategies are mentioned below: In order to achieve its goals of creating a sound base and presence

of efficient modern banking system, UBL has started operation of Automated Teller Machines in all the major areas like Karachi, Lahore, Islamabad and other cities of Pakistan•

UBL is committed to building long-lasting relationships through an assertion to service excellence and providing innovative products to meet the changing needs of our valued customers. Although still in its infancy, compared to

the exalted banking standards, UBL backed by a strong Abu Dhabi Group and inspired by the vision of its Board and Management, has built up a strong customer base. The Bank provides a full range of banking services to corporate clients, while applying leading technologies. Today the Bank is well-positioned to provide appropriate banking services to customers.

The main focus is building relationships and being known by the way they do business. Management recognizes that a banking relationship requires compatibility, communication, and cooperation and that each c u s t o m e r d e s e r v e s n o t h i n g l e s s t h a n f u l l a t t e n t i o n a n d a v a i l a b l e resources to meet their financial objectives.

Core value and corporate culture is based on the belief that superior personalized service is the most important product. Bank is in the process of getting to know customers by name and understand their business and personal financial needs. This one-on-one, personalized service quality has served as UBL's unique signature since inception and continues to separate it from other financial institutions.

The UBL team comprises of some of the most highly skilled and professional financial experts in banking industry. Managers, lenders and trust advisors offer the unique perspective of knowing and understanding in the local economy. The Management focuses its a t t e n t i o n o n m a k i n g i n f o r m e d a n d f e a s i b l e e c o n o m i c d e c i s i o n s , b r i n g i n g b e t t e r r e t u r n s a n d m o r e p r o f i t a b i l i t y f o r i n v e s t o r s a n d customers.

K e e p i n g i n v i e w t h e u n r e s t a m o n g t h e I s l a m i c C o m m u n i t y o n t h e I n t e r e s t B e a r i n g B a n k i n g t h e U B L i s i n t h e p r o c e s s o f t a r g e t m a r k e t i n g a n d g i v e s i t s f u l l a t t e n t i o n t o t h i s s e g m e n t o f a l a r g e population over the world.

T o a c q u i r e t h e r e p u t a t i o n a n d s t a t u s o f b a n k w h i c h o p e r a t e s o n international standard, UBL Bank was to get the credit rating of Pakistan Credit Rating Agency, which gave it the AA- and A1+ in the long term and short term respectively.

UBL Services:

UBL has expanded its service basket with the following services in the market.

1. UBL Mega Wallet VISA ATM/Debit Card

2. UBL Omni

3. Smart Savings

4. Speakto UBL Banner

5. UBL Tezraftaar

6. UBL Business Partner Plus

7. UBL Wiz Prepaid Credit Card

UBL’s Market Share:

UBL owns 8.6 % of the banking industry in Pakistan.

HR Management Goal

How staff is acquired/ recruited:

In order to determine the future staff needs UBL use Ratio Analysis techniques(a

forecasting technique for determining future staff needs by using ratios between ,for example

sales volume and number of employees needed) in which trend between two trends is determined

like volume deposits, revenue, new branches etc and number of employees needed to perform

tasks.

Job vacancies are advertised through print media, electronic media. Selection process of

UBL based on qualification, previous job experience, age and health of candidate.

For selection process the first step which candidates to be fulfilled is application form.

This shows about the candidate, s education, and performance prior to work, experience,

hobbies and health condition.

How staff is acquired/ recruited:

In order to determine the future staff needs UBL use Ratio Analysis techniques(a

forecasting technique for determining future staff

Written Test:

Written exam are usually obtained from one or several test construction firms available

for them. These tests are designed to determine level of technical, and/or analytical abilities

associated with a particular position for which candidate had applied. Test results are usually

sent by email, usually in 6 working days. If receive a passing score candidate will be invited to

continue examination process.

Selection:

Once list of a candidate who is capable enough, is established, it is sent to the department

that hiring to fill current vacancy. The department head is responsible for setting of up selection

interviews. The candidate who is selected, investigate his background and a probationary period

before attaining permanent employee status.

How staff is trained and motivated?

Training methods used by UBL are Soft- Skills training functions, On the Job

training and Class room lectures.

In Soft-Skills functional training UBL give training to improve personality, traits, social

grace, friendliness, personal habits and fluency of language.

In On the Job training UBL uses different methods like coaching or understudy method in

which supervisors act as a coach and teach the trainee to perform the task on the job and job

rotation method is used by UBL for those employees who need multi skills to perform the job.

How performance is measured:

Performance is measured on appraisal system. Employees are given the

required tasks .if they are able to fulfill the required condition, rewards are

distributed to them.

How rewards are distributed?

UBL provide compensation to its employees in shape of cost of medical

treatment, cancelled holidays fees, repairs of vehicle and injury while doing job tasks and

some other. Employees can claim their compensation if any above case occurs. Benefits

which provide by UBL are Paid time of retirement, Disability insurance, Education and

training Programme.

In Paid time off benefits the employee is paid for the time he don’t work due to

vacation, holiday pay and sick pay. Retirement Benefit in shape of pension, provident

fund .In disability insurance bank provide financial support when an employee become

injured or ill and is unable to do his job, and in education and training program bank

provide different education and training program to their employee furbish their skills.

How culture is maintained in the Organization?

Culture is the personality of the organization. Culture is comprised of assumptions,

values, norms and tangible signs of the Organization members and their behaviors.

The organization culture of UBL is that always provides profits to its stake holders and

never miss represent its financial reports and will never do any unethical act which harms it its

clients and competitors. Employees of UBL will always be helping and friendly with its

customers.

The organizational environment of UBL is very sophisticated. Environment is very

friendly due to group coordination. Employees can easily communicate horizontally and

vertically which help to achieve its goals and objectives. Employees have to follow formal code

of ethics of UBL.

Characteristic that we admired in the Organization:

During our visit, we identified that the organization was mainly focused on customers’

satisfaction. Organization’s slogan “Where You Come First” shows its priority for customer

oriented rather than product oriented approach.

Powerful Person in the organization:

We visited UBL, E-11/3 Markaz Branch in Islamabad. We had a meeting with Mr. Mir Azfar

Usman, the Branch Manager. First, he served us with cold drinks, after that briefed us about the

banking system. He shared his personal experiences with us. He told us about the scope of

Banking Career for students. He gave us the personal cell phone for any guidance any time.

Overall, it was very impressive and learning meeting for our group.

Leader ship Style of the Organization:

During our project, we found United Bank Limited a strong Organization. Its strength

relies upon a progressive leadership style. We can apply most of the leadership theories,

discussed in the class, prevailing at the Organization.

The Ohio State Theory:

This theory consists of two components, Initiating Structure and Consideration. We

found these characteristics in the UBL as employees were structured and well informed about

their positions and seemed satisfied with their jobs. It showed mutual respect and trust of

leadership with employees.

The Fiedler Contingency Model:

We found a controlled and disciplined environment in the bank as well which shows a

proper match between leadership style and subordinates.

The Hersey-Blanchard Theory:

Organization’s maturity shows employees maturity.

Path-Goal Theory:

Organizational progress shows that subordinates are satisfied with leadership style.

SWOT Analysis

A) Strengths:

3rd largest Bank of Pakistan in term of deposits.

2ndlargest Privatized Bank of Pakistan

UBL offering Customized Products and services aggressively better than its competitors.

Improved operational efficiency as to its past.

Courteous Customer service and fast delivery of online and offline services.

Marvelous Image and Reputation of the bank in the eyes of its customers.

Extensive Branch network.

UBL Product positioning is very effective.

UBL target the segment like salaried person, business people and self employed person.

UBL p roduc t pos i t i on ing a f f ec t s t he l i f e s t y l e o f t he peop le a s t hey

he lp i n improv i ng standard of living.

1056 Branches all over Pakistan.

Stands in the list of Profitable bank in stock exchange.

Largest number of corporate deals by any bank is Pakistan.

Overseas Branches.

Attractive Salaries and incentives for employees.

P er sonne l o f U BL a r e ve ry we l l t r a ine d . Ma j o r i t y o f e mp loye es have

many ye a r s o f   experience in banking sector and are an asset for the bank.

B) Weaknesses:

No standardization in terms of branches some of the branches are very attractive and

most of the branches are not very good like other branches.

In some regions, urban areas of Pakistan service of UBL are not good as

compared to other privatized banks.

The application time is also quite lengthy..

UBL is a step behind in using new technology as compared to other banks.

All branches need orientation for customer dealing.

Most of the employees are overload with the work and promotion is also not timely.

Most of employees are experienced and they are not able to deal customers well, adopt

new culture and above all they are unable to use of new technology like computers.

No separate training center to train their employees.

Employees are not well dressed.

Workforce is not diverse.

Security system in most of the branches is not up to the mark.

C) Opportunities:

 

Bank can extend its network in other cities of Pakistan like other 4 remote

cities, it would increase their sales.

Proper orientation of employees in all branches can help them to cope up with foreign

banks.

By b r ing ing ne w t echno l ogy and mode rn bus ine ss p roces s e s wi l l

b r ing the change a nd increase their profitability.

Call centre services should be improved to enhance their network 

D) Threats

Large and increasing competition.

High operating costs.

Lack of huge deposits

Findings

We found that the Organization was working well for customer satisfaction.

The organization was introducing its new packages according to potential trends in the

market.

The Organization was making its marketing strategies more advanced because of

increasing competition in banking sector in Pakistan.

The Organization has maintained a suitable market share, and is the third largest bank of

the country.

The Organization is trying to bring new technology and business processes to increase

the profitability.

Recommendations

In some regions, especially in remote areas, UBL’s branches are not easily accessible as

compared to main Branches. UBL, therefore, should create a more reachable and

consistent network.

The application processing procedures for various services are quite lengthy .UBL needs

to make it simple.

Sometimes Employees are overloaded with work and promotions are not made in timely

manner. So it is necessary to give timely incentives to motivate the employees.

Conclusion

On the basis of the above, we reached the conclusion that the bank was following a

proactive, future oriented strategy to sustain itself and grow in the market. There are multiple

factors which count for the consistency of an organization, the most important being the

customer satisfaction and the morale of its employees. UBL is doing fairly well on this count. It,

however, needs to improve its online services due to the growing wireless internet availability in

Pakistan. The Bank needs to reach out to the customers in the remote areas through simple and

user friendly deposit and cash transfer facilities also.