UBL-finance

where you come first

Banking System

Banking services are extremely important for both economy

developed and developing economy such as Pakistan. Banking

services serve two primary purposes.

First, by supplying customers with the basic mediums-of-

exchange (cash, current accounts, and credit cards), banks play a key

role in the way goods and services are purchased. Without these

familiar methods of payment, goods could only be exchanged by

barter (trading one good for another), which is extremely time-

consuming and inefficient.

Second, by accepting money deposits from savers and then

lending the money to borrowers, banks encourage the flow of money

to productive use and investments. This in turn allows the economy to

grow. Without this flow, savings would sit idle in someone’s safe or

pocket, money would not be available to borrow, people would not be

able to purchase cars or houses, and businesses would not be able to

build the new factories the economy needs to produce more goods and

grow. Enabling the flow of money from savers to investors is called

financial intermediation, and it is extremely important for the growth of

economy.

Comprehensive Report on UBL

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Benefits of banking for economy

The deposit and loan services provided by banks benefit an

economy in many ways.

First, Current account, because they act like cash, make it much

easier to buy goods and services and therefore help both consumers

and businesses, who would find it inconvenient to carry or send

through the mail huge amounts of cash.

Second, loans enable consumers to improve their standard of

living by borrowing money to purchase cars, houses, and other

expensive consumer goods that they otherwise could not afford.

Third, loans help businesses finance plant expansion and

production of new goods, and therefore increase employment and

economic growth.

Finally, since banks want loans repaid, banks choose borrowers

carefully and monitor performance of a company’s managers very

closely. This helps ensure that only the best projects get financed and

that companies are run efficiently. This creates a healthy, efficient

economy. In addition, since the owners (stockholders) of a company

receiving a loan want their company to be profitable and managed

efficiently, bankers act as surrogate monitors for stockholders who

cannot be present on a regular basis to watch the company’s

managers.


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BANKING INDUSTRY IN PAKISTAN

After the emerging of Pakistan our entire Banking System

collapsed because Hindus who migrated to India owned most of the

banks in Pakistan. Pakistan received only 631 branches of scheduled

Banks out of 3496. Immediately after the birth of Pakistan the numbers

reduced to 231 branches due to shut down of banks in Pakistan by the

Hindu owners. Realizing the necessity of Banks, attention was soon

given to this sector in Pakistan.

In 1947, in Pakistan there is only two Muslim Banks, namely,

Habib Bank Limited, Australasia.State Bank of Pakistan was set up in

1st July 1948.In 1948 another banks was made by the Government to

fulfill the needs of consumer banking. In 1957 PICIC was established. In

1959-60 four banks were established namely, United Bank, Commerce

Bank, Standard Bank, And Eastern Mercantile Bank. In late 1960’s

some foreign banks started financial services. In 1971 local private

banks were nationalized.

Till the end of 1980s, Pakistan’s banking sector was heavily

regulated in most of the areas of activities. The regulated and

nationalized banking system created an industry structure where

competition was unknown to management of the banks. Forced by the

structural reforms agenda and the desire to strengthen its financial


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system, Pakistan moved towards liberalization and financial sector

deregulation in 1990. It started with the privatisation of state-owned

commercial banks and induction of new ones from private sector to

establish a market-based banking system. The government seems to

be conscious about improving the efficiency of banking sector in

Pakistan. Few considerable efforts have been made in this regard

which include enhanced capital adequacy, strengthening asset quality,

improving management and increasing earnings.

Furthermore, interest rate deregulation, abolition of credit

controls and further developments in capital market have also led

towards a more competitive banking environment.

The market for banks is diverse in Pakistan comprising nationalized

commercial banks

(NCBs), Private banks and foreign banks. In 1993, there were 33

commercial banks in Pakistan 14 being local and 19 foreign. By the

end of 2001, the number of banks has increased to 43, 24 being local

and 19 as foreign2. The deregulated and increasingly competitive

environment poses a challenge in terms of efficiency, as the most

efficient banks would survive while the less efficient will be driven out

of the market

During early 1990’s government encouraged private sector to

enter in the banking sector. The Government including Muslim

Commercial Bank (MCB), Allied Bank Limited (ABL), United Bank

Limited (UBL), National Bank of Pakistan (NBP) and Habib Bank Limited

(HBL) has privatized all nationalized commercial banks.


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History Of United Bank Limited (UBL)

The history of UBL can be divided into four main Phases

1. Formulation

2. Nationalization

3. Privatization

4. Today

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 Chandrigar 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. It had posted a profit of 0.7 million in its first

year of operation with just eight branches at Karachi.


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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.

3. Privatization Of UBL

UBL was the largest privatisation 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 Bestway Group (BG), out of the UK

and Abu Dhabi Group (ADG) from the UAE 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.


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4. UBL today

Today they bank has take progressive step.

Change the loge

The United Bank Limited (UBL) management has launched its

new corporate identity and changed its 44 year-old-logo following its

privatization.

UBL online

Now access your account from 71 cities across Pakistan. Our

network is growing at an amazing pace and now you can avail services

like cash withdrawal, payments, deposit, stop payment, acquisition of

account statement and many more from more than 350 online

branches.

Business Partner

9-5 Non-Stop Banking

Banking at your own convenience has been made possible. UBL now

offers 9-5 Non-Stop Banking service at more than 450 branches across

Pakistan.

Countrywide Instant Cheque Clearance

Submit a cheque in Karachi and get it cleared in Peshawar within


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minutes. With online banking services, you can get your cheque

cleared instantly, without any hassle.

Instant funds transfer

Funds transfer was never this easy. Make payments or receive payments within minutes

using our online facility. With the introduction of Internet Banking now funds transfer is

even made easier and is just a click away.

Click n remit

This is one of the easiest ways to remit money from USA to

Pakistan

Money Direct

This remittance facility has been started to facilitate

transfer of money from UK to Pakistan.

Consumer Financing

You as an individual can gain and benefit the most through UBL

Consumer Banking. In UBL you get friendly, efficient and attentive

personalized banking services - a unique banking relationship

experienced by each UBL client. You can utilize the following

services.

UBL Drive

UBL Address


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Cash Line

Personal Loan (Coming Soon)

Credit Card (Coming soon)

Over view of UBL

UBL has assets of over Rs. 190 billion, Shareholder's Equity of over Rs. 12 billion and a solid track record of 43 years - in addition to the convenience of over 1000 branches serving you throughout the country and also at several overseas locations

Date EstablishedNovember 7, 1959

ChairmanHis Highness Shaikh Nahayan Mabarak Al Nahayan

Deputy ChairmanSir Mohammed Anwar Pervez OBE

President & CEOMr. Atif Bukahri

Deputy CEOMr. M.A.Mannan

Branches 1111: 1096 Domestic, 15 Overseas Branches


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Joint Venture with NBPUnited National Bank Limited, U.K

Representative OfficesTehran and Cairo

SubsidiaryUnited Bank A.G. Zurich, Switzerland

Associated CompanyOman United Exchange Company, Muscat

Offshore Banking UnitExport Processing Zone, EPZ Branch, Karachi, Pakistan

Employees 8,998 plus more than 500 contractual staff

Head OfficeState Life Insurance Corp. Building #1,I.I. Chundrigar Road, Karachi, PakistanP.O. Box No.: 4306Phone: (92-21) 111-825-111Gram: "UNITED"Fax: (92-21) 2413492

Branches by Region

Region Branches

Karachi 114Hyderabad 133Multan 170Lahore 90Faisalabad 165Quetta 45Peshawar 167Islamabad 161Azad Kashmir 81

1126

Branches by specific functions


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Function Number of branchesMoney Gram Branches 93Uni bank branches 165Hub Branches 87Rupee Traveler cheque Branches (RTC) 143


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BOARD OF DIRECTORS

ChairmanHis Highness Shaikh Nahayan Mabarak Al Nahayan

Deputy ChairmanSir Mohammed Anwar Pervez OBE

President & CEO Mr. Amar Zafar Khan

1. Director Mr. Omar Ziad Jaafar Al Askari

2. Director Mr. Zameer Mohammed Choudrey

3. Director Mr. Ahmad Waqar

4. Director Mr. Javed Sadiq Malik

5. Director Mr. M. Tahsin Khan Iqbal

6. Director Mr. Jeeva Shahid Haroun Barrister-at-law, Chief Legal Counsel & In-charge Company Secretariat


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SENIOR MANAGEMENT

Mr.Atif Bukhari President and C.E.O

Mr.M.A. Mannan

Deputy C.E.O

Mr. Nauman Hussain Director Operations & Utilities

Mrs. Rukhsana AsgharGlobal Head Human Resources

Mr. Aameer KarachiwallaChief Financial Officer / HCA

Mr. Muhammad EjazuddinAudit Chief

Mr. Mansoor M. KhanHead Corporate Banking Group

Mr.Ali SameerChief Special Assets Management

Risha MohyeddinGlobal Head, Treasury & Capital Markets

Tariq MoharGlobal Head, Establishment & Branch Operation


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Brief profile of management

Sir Mohammed Anwar Pervez, OBE, HPk

Deputy Chairman

Sir Mohammed Anwar Pervez, OBE, HPk first hit the headlines in

1992 when he became the proud recipient of the order of the British

Empire. He was also awarded a Knights Bachelor in the Queen's

Birthday Honours list for services to business and the world of charity

in the UK and internationally. The president of Pakistan conferred the

highest civil award ‘Hilal-e-Pakistan’ on him in March 2000.

Mr.M.A. Mannan

Deputy C.E.O

UBL has always adopted the policy to induct qualified people

from different source available from home or abroad. Mr.M.A. Mannan

was inducted by UBL from Citibank New York as the Dy. Chief

Executive officer UBL.

An MBA from IBA Karachi. Mannan started his career from

Citibank Pakistan in 1991 where for the first nine years he worked in

sales, distribution and marketing launching most of Citibank’s new

credit and depositor products during the nineties. He rose to become

the Director of Marketing, Sales and Distribution at Citibank Consumer

bank. He was then transfer to the U.S.A the most matured and

competitive consumer market in the world and was promoted to Senior

Vice President, Cross Self Division covering a comprehensive array of

customers and products.


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With his reputatation as a great team- builder and achiever,

UBL’s management firmly believes that Mannan will prove to a great

institutional and national asset.

MS. Rukhsana Asghar

Global Head Human Resources

Ms. Rukhsana Asghar holds a BA (Hons) Degree in International

Relation * a Bachelor of Law Degree from University of Karachi. She

further enriched herself professionally by attending many senior level

training courses seminars & conferences no Leadership, Strategic

Management, Career Counseling, Marketing of Financial Services &

Human Resource Development in the U.S.A, Europe, Middle East & the

Far East.

Till recently Director HR Citibank Pakistan, she was instrumental

in developing the talent base for Citibank, which led the institution to

emerge as a major player on the financial scene.

She served as a Vice President HR Citibank, Assistant manager

Personnel at Lever Brothers Pakistan Ltd.

Rated amongst the few HR specialists in the country the feather

in the cap is Rukhsana’s selection as one of the twelve members out of

101 countries to work on a global initiative relating to the paradigm

shift in the role of human resources. The result were applied and

implemented globally.


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Mr. Nauman Hussain Director Operations & Utilities

Mr. Nauman Hussain did his Master in Economics from the Punjab

University Lahore.

He possesses 24 years of International Banking (Retail &

Corporate) experience in the Middle East, Asia and the Far East. Prior

to joining UBL he served as Vice President & Head of Operations ar

Mashreqbank UAE, Senior Director & Chief Administrative Officer,

American Express Bank Ltd Karachi & Lahore included Assistant Vice

President& Manager Operation, Assistant Treasurer & Financial

Controller, Head Country Treasury/ Correspondent banking & relation

Manger.


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Organizational Structure

Provisional Headquarters

Head Office

Provisional Head Quarters

Zonal office

Hub branches

Branches


ProvincePunjab LahoreSindh KarachiN.W.F.P PeshawarBaloucihstan Quetta

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Structure Management

President and Chairman of Board of Director

Executive vice President

General manager of

Deptt 1 Deptt 2 Deptt 3 Deptt 4 Deptt5

Zonal incharge

Area Manager

Branch manager


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United bank limitedDOMESTIC NETWORK

AS ON DECEMBER 31 2002

Sr noHUB Name

Region Name No. of

Branches

Corporate Bkng

1 Gulberg market Lahore 1

2 Corporate Branch Karachi 1

Total 2

1 Napier Road Karachi Karachi 17

2 SITE Karachi 9

3 PECHS Karachi 16

4UBL Building North Naziamabad Karachi 15

5 City Branch Karachi 14

6 Airport Karachi 18

7 Clifton Karachi 14

Total Karachi 103

1Farid Chamber Karachi (S.A.M.) 1

2SAM Branch Lahore (S.A.M.) 1

Total (S.A.M.) 2

1 New Town Mirpur Khas Hyderabd 19

2 Masjid Road Nawab Shah 13

3Raxa Shah Kabir Road Larkana 14

4 Minara Road, Sukkur 18

5 Naushero Feroze 9


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6Civic Centre Branch Hyderabad 30

7 Lashi Gate Shikarpur 14

Total Hyderabd 117

Lahore Region REGION Branches

1 Bank Square Lahore Lahore 20

2 Depalpur Road ,Okara 12

3 S.D Vault Lahore 14

4 Model Town Lahore 18

5 Liberty Market Lahore 16

Total Lahore 80

1 Mujahid Road, Sialkot Sialkot 21

2 Hafizabad 8

3Chamber of Commerce Building Gujranwala 20

4 Narowal 9

5 Cirular Road Wazirabad 12

Total Sialkot 70

Faisalabad

1 Nankana Sahib Faisalabad 15

2 Jauharabad 9

3 people's Colony Faisalbad 14

4 Aziz Bhatti Road, Sheikhupura 11

5 Ballokhel, Mianwali 13

6 Toba Tek Singh 10

7 Ghalla Mandi Samundari 15

8 Bank Square Faisalbad 18

9 Main Bazar Balwal City 8

10 Railway Road Sargodha 24

11 Distt. Courts Jhang 14

total Faisalabad 151


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Islamabad Rgion

1 Chakwal. Main Branch Islamabad 17

2 Gujar khan 11

3 Cantt Branch, Rawalpindi 17

4 Wah Cantt 17

5 Mangla Road Dina 8

6 Civil Lines jhelum 11

7 Kallar Saidan 15

8 Kotla 8

9 Mandi Bahauddin 7

10 Kharian City 12

11 Jinnah Avenue,Islamabad 14

12 G.T Road Gujrat 11

total Islamabad 148

1 Hassan Agahi Multan Multan 14

2 Multan Cantt 10

3 Akber Bazar Kahnewal 18

4 Azmat Road Dera Ghazi Khan 11

5 Fari Gate Bahawalpur 14

6 Vehari 13

7 Grain Market Khanpur 11

8 Imam Bare Road, Burewala 9

9 Main Bazar Branch , Muzaffar Garh 17

10 Shahi Road Rahim Yar Khan 12

11 High Stree Sahiwal 13

12 Main Bazar Chishtian 9

total Multan 151


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Peshawar Region Region Branches

1 Cantt Branch Peshawar Peshawar 23

2 Cantt Branch Nowshera 14

3 Hangy Road Kohat 13

4 Bhatkehla 8

5 Bank Square Mingora 14

6 Cantt Branch Mardan 13

7 Parady Gate Bannu 6

8 Swabi 9

9 Main Bazar Branch Haripur 12

10 Timergara 11

11 Circular Road,D.I Khan 8

12 Hangu 9

13 Mansehra 8

14 UBL Building Lambi Dheri 8

Total Peshawar 156

1 UBL Complex Branch Quetta Quetta 13

2 Turbat 12

3 Virtual 17

Total Quetta 42

1 Dadyal Azad Kashmir 18

2 Kotli 14

3 Bhamber 8

4 Rahiyal 10

5 Commecial Centre Mirpur 15

6 Main Bazar Chattar 4

7 Rawlakot 10

total Azad Kashmir 79

Total Domestic Branches 1101

Total Hub 87


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United bank limitedOVERSEAS NETWORKAS ON DECEMBER 31 2002


Sr. No HUB Name RegionNo of

Branches

United Arab Emirate 8

Bahrain 3

Yeman 2

Qatar 1

United States of America 1

Export Processing Zone, Karachi 1

Total Branches 16

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OVERSEAS NETWORK

COUNTRIES

Name Of CountryBranches U.S.A"" Qatar"" U.A.E"" Bahrain"" Republic of Yeman"' Zurichrepresentative offices Iran"" EgyptAssociated companies Oman

BRANCHES IN USA UK AND OTHER REPRESENTAIVE & ASSOCIATED OFFIECES

New YorkNew York

Address:

30 Wall Street, 10th Floor

New York, NY 10005

United States of America

United Kingdom UKUnited National Bank

Branches:LONDONBIRMINGHAMBRADFORDGLASGOWMANCHESTER

Representative offices 1 Dokki, Cairo, Egypt

2 Tehran, Iran

Associated Companies1 Oman United Exchange Co. LLC,

Sultanate of OmanBranch Name : Ruwl

2 Oman United Exchange Co. LLC, Sultanate of OmanBranch Name : Salalah

NAME OF OVERSEASE COUNTRY WITH NAME OF BRANCH


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Name of countryserial

number Branch nameQatar 1 Doha Branch

U.A.E1 Zayed Road Branch, Abu Dhabi2 Muroor Branch , Abu Dhabi 3 Alain Branch, Alain4 Deira Branch, Dubai 5 Bur Dubai Branch6 Sharjah Branch7 Shaikh Hamdan Road Branch Abu Dhabi8 Dawar Al Mussala Branch

Total 8 Bannches

Bahrain1 Babal Bahrain2 Manama3 Muharraq

Zurich1 United Bank AG Zurich, Switzerland

address:Feldeggstrasse 55 , P.O Box 1176, 8034 Zurich, Switzerland

Republic of Yemen1 Sana'a

P.O.Box No. 1295, Sana'a2 Hodeidah

P.O.Box No.3927, Hodeidah

Off Shore banking unit Off Shore Banking Unit, EPZ BranchKarachi Export Processing Zone Landhi Industrial Area Karachi.Branch Manager

Malik Mumtaz Awan


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FunctionsIn modern time commercial bank play a very important role and

their functions are manifold. Primary functions of the banks are to take

deposit and lending. They take deposits from different persons and

lend to others. Beside this they undertake agency services and general

utility functions.

Some of the important functions are listed below.

1. Transfer money from one place to another.

2. Accepting bills of exchange on behalf of customers.

3. Purchasing shares for the customers.

4. Collecting cheques and bill of exchange for its customers.

5. Undertaking foreign exchange business

6. Acting and executor, trustees or attorneys for the customers.

7. Providing safe custody and facilities to keep jewellery,

documents or securities.

8. Furnishing trade information and tendering advice to customers

9. Issuing of Travellers cheques and letters of credit to give credit

facilities to travelers.

10. Collecting interests due, dividend pensions and other sums due

to customers.


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Departments of UBLThe following are the main department of UBL:

1. Deposit Department

2. Lending Department

3. Clearing Department

4. Cash Department

5. Remittance Department

6. Account Department

7. Bills Collection Department

8. Internal Audit Department (only in HUB Branches)

Types of BankingUBL perform almost all types of banking.

1. Consumer Banking

2. Commercial Banking

3. Corporate Banking

4. Investment Banking

5. Relationship Banking

6. Treasury


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Products and ServicesUBL offer wide range of products and services to all types of

customers such as individual/ Consumer, Commercial ,Corporate etc.

Following are some of important products and services that UBL

now offers to its Customers.

Deposit

Deposit are called the life blood of Banks. To generate more

deposit the UBL has offered the following attractive deposit Schemes.

1. Current Account

2. PLS Saving

3. PLS term Deposit (TDR)

4. Notice Deposit

5. Unisaver (daily Profit)

6. Unizar (foreign Currency Deposit)

Lending

1. Cash Credit

2. overdratt

3. Loans (both short Term and long Term)

4. Agricultural Loans

5. Commercial Loan

6. Corporate Financing

7. Import Export Financing

Remittances

1. Tez Raftar

2. Money Gram

3. Click n Remit (sending money from USA)

4. UBL Money Direct (Sending money from UK)


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Rupee Traveller Cheque

1. UBL Humrah Rupee Traveller Cheque

Lockers Facilities

Utility Bills Collection

TV/VCR Dish fee Collection

Hajj and Umrah Services

Uni remote

(All the above products and facilities will be analyze in the next

Sections)

Services of UBL

After the privatization of UBL, the bank has taken progressive

steps and introduces many new products and services for its valuable

customers. The following are some of the important services:

1. Cheque Encashment Facility

2. UniCash

3. Lockers Facility

4. Hajj and Umrah Services

5. Uni Remote

6. Utility Bills Collection

7. Dish TV fee collection


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1.Cheque Encashment Facility

UBL has now provided facility to its customer to encash cheque

at any designated branch in addition to the branch where the customer

has maintained the account. For example your account is in the UBL

Aziz Bhatti Road branch Sheikhupura and you visit Karachi. In Karachi

you need money and you have not possess traveler cheque but you

possess Cheque book issued by UBL branch Sheikhupura.

Features

this facility is available for UBL valued customers

maintaining their Rupee PLS Saving or Rupee Current

accounts at any of the designated branch of UBL .

personal UBL account cheques, whether favouring

yourself or a third party can be encashed at any of

the designated branch of UBL.

the maximum amount per cheque can be Rs.

25,000 (at present)

This facility is FREE OF COST if the balance in the

customer's Rupee PLS Saving or Rupee Current

account stays constantly at Rs. 100,000 or above

and the cheque is encashed by the customer

personally. In other cases the following charges will

be applicable;


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i. Rs 50 for a cheque presented for payment in

different branch of the same city, where the

customer holds his/her account

ii. Rs 150 for a cheque presented for payment in a

branch of a different city.

2.UniCash

Like other banks UBL has also ATM card which has given the

name of UNICASH CARD. Now the customer can withdraw money from

any ATM machine installed by UBL at different cash point.

You can avail the following self-service banking facilities

Balance Inquiry

Mini Statement

Cash Withdrawal

Features

1.Personal Identification Number (PIN) ensures that only you can

use your ATM C ard.

2.The PIN protects you against misuse in case your card is lost.

3.You can change your PIN anytime you want.

4.You can specify flexible weekly withdrawal limits.

5.You can withdraw your weekly limit in one go, or in multiple

installments.


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You can use UNICASH Cards at UBL Cash Point located in the

following cities

City Cashpoints

Islamabad 5

Rawalpindi 2

Karachi 1

UAE 8

Bahrain 3

Doha, Qatar 1

ATM Branches

For instant cash at any time of the day or night, without

the hassle of queues and tokens, use one UBL ATMs in Pakistan

or Overseas.

In the UAE UBL have connected all its Automatic Teller

Machines (ATMs) to the UAE ATM Switch, giving access to over

550 third party ATMs throughout the region to all our customers.

UBL has signed with 1 Link ATM Switch Network, which

comprises of 11 leading banks of the country. The signing

ceremony was held on April 25, 2003 at ABN AMRO’s Head Office

in Karachi. UBL’s customers can use 165 ATMs on the Switch.

The bank is also in the process of installing its own ATMs to

facilitate its valuable customers.


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Following is the detail of existing ATM locations:

Islamabad

UBL Civic Centre Branch: G/6, Islamabad

UBL School Road Branch: F/6, Islamabad

UBL Jinnah Avenue Branch: Islamabad

UBL Markaz Branch: F/7, Islamabad

UBL Markaz Branch: F/8, Islamabad

Rawalpindi UBL Cantt Branch: Rawalpindi

UBL Chandni Chowk Branch: Rawalpindi

Karachi UBL Head Office, Karachi

Bahrain

UBL Bab-ul-Bahrain Branch

UBL Manama Branch

UBL Muharraq Branch

Doha,

Qatar UBL Doha Branch

UAE

UBL Sharjah Branch

UBL Abu Dhabi Branch

UBL Dubai Branch

UBL Al Ain Branch, Abu Dhabi

UBL Airport Road Branch, Abu Dhabi

UBL Shiekh Hamdan Road, Abu Dhabi

UBL Deira Branch, Dubai

UBL Dawar Al Musallah Branch, Dubai

Lockers Facility

UBL also provide its valuable customer lockers facility for

keeping their valuables in safe custody at very reasonable rate.


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Hajj and Umrah Service

UBL is also performing hajj and Umrah services. Every year a

special counter is opened to facilitate hajjis. In this counter hajj form is

filled and other information relating to Hajj is provided.

Hajj schemes

The following hajj schemes has been started by Government this

year (2003)

Regular Hajj Scheme.

According to Policy for Hajj 1424 Hijri (2004 A.D.) Sponsorship Scheme

has been merged into the Regular Scheme. Intending Hajjis in this

Scheme can opt for government accommodation or for private

accommodation. All the pilgrims under Regular Scheme will deposit full

amount of Hajj dues in Pak Rupees along with the Hajj Applications

Forms. This year 120,000 pilgrims will be allowed to perform Hajj under

Regular Hajj Scheme.

Open Hajj Scheme

This year the Ministry of Religious Affairs has decided to provide Hajj

passport to those intending to perform Hajj under Open Hajj scheme

also. There will be no need of an International Passport. 10,000

pilgrims will be allowed for Hajj under Open Hajj Scheme this year.

Balloting

In case the number of applicants exceeds the prescribed quota,

balloting will be held to determine successful applicant.

ELIGIBILITY

Only Pakistani NATIONALS are eligible to apply for Hajj.

THE FOLLOWING ARE NOT ELIGIBLE

Ladies in an advanced stage of pregnancy.


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Medically unfit & handicapped people without a helper or assistant

Those infected by contagious diseases

Ladies without Mehram (other than Ahle Tashee)

6.Utility bills collection

Features

UBL has over 1000 branches collecting electricity, gas, telephone

and other utility bills during business hours.

Special bills collection counter in every bank

Separate booths for utility bill collection are available at all major

cities for the convenience of the public.

Branches in all major cities have electronic bill collection

machines.

For your convenience, UBL accepts cheques for payment of

utility bills.

Drop box facility

7.Dish/T.V Fee collection

UBL is one of the main collecting agents of Pakistan Television

(PTV) collection against issuance of licenses/renewal of licenses at its

authorized branches all over the country.

Uni-Remote


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UBL is the pioneer of use of computer network system in the

country with the help of which almost all the branches are

interconnected with each other. This system is known as Unibank.

UniRemote System is designed to perform transactions

between any two UBL Branches over WAN (Wide Area network)

with the assurance that the information will be secured by taking

security measures. UniRemote is not in direct access of the

customer but it is the system between branches where they can

make online transactions with each other on behalf of UBL

customer. All UBL online branches on WAN will handle the

UniRemote Operations. Customers can make transaction from

any of the selected online branch in any city.

Today we have 73 online Hubs running UniRemote all over

the country.

. Transactions / facilities presently permitted in UniRemote

are as follows:

Cash Deposit

Cheque Encashment

Stop Payment

Account Statement

Funds Transfer (Account to account / IBCA)

Following are the main reports to be generated from the

UniRemote system.


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1. Non UniRemote Customer list

2. Inward Transactions

3. Outward transactions

4. Inward stop payment

5. Outward stop Payment

6. UniRemote Customer Advices

Activities of the bank

1.Receiving Deposit

Deposit department has the responsibility to create deposit as

much as possible. The officer of that department has given the target

to take deposit, and then the officers induce the person to open the

account with the bank.

Deposit is also important because more the deposit of the bank

the more the bank can lend and make money in the form of mark up.

All the deposit which UBL maintain can be covered under the

following types of deposit. The main difference is the period and

customer convenience to withdraw the deposit. General role is that

the greater the period of deposit more the return and greater the

customent convenience to withdraw deposit lesser the return.

Because of this golden rule bank pay no interest on Current account,

customer can withdraw money at any time.

So the following are the main types of Deposits

Current Deposits:


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Current deposit account can be opened with the

minimum amount of Rs.5000. In this type of account the client is

allowed to deposits or withdraw money as and when hi likes. Usually

the businessmen open this type of account. No interest is allowed by

the bank and no service charger is deducted by the bank on current

deposits account.

profit and loss Account

Under such types of accounts the bank allows no

interest to the customers. Profit of loss is declare every by the

executive Board of the Bank.

Profit and loss account has two types

1. Profit and loss Sharing Tern Deposit Account

2. Profit and loss Sharing Saving Account

1. Profit and loss sharing Term Deposit Account

PLS Term Deposit is that type of deposit that is

maintained for a fixed period of time. Minimum period is 3 months and

maximum is 5 years.

The salient features of PLS sharing term Deposits are given as

under:

The PLS Tem Deposit receipt can be made in a sum or Rs 1000 or

its multiple e.g. RS 2000 Rs 3000 etc.

If a customer maintain an account with bank can convert it into

PLS term deposit account without any charge

The deposits for longer period will earn little more profit than

these for shorter period deposits.

Profit and loss Sharing Saving Account

PLS Saving Account can be opened with the minimum

amount of RS 200. Minimum amount of Rs 10000 must be

maintains in order to earn profit. No profit will be allowed below Rs


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10000 and bank will charge Rs 200 service charges below Rs.

10000.

Fixed Deposits

In this type of account a certain amount is deposited for a certain

period such as six month. Two years or longer. It is also called time

liabilities of a banker. They are called so because the money is

payable on expiry of a fixed period of time only. The terms and

condition of this deposit are regulated by central bank for this

purpose.

Fixed deposits are two types

1. Notice Deposit Receipt

2. Term Deposit Receipt

Foreign Currency Account

The UBL also maintain Foreign Currency account. But it

can only opened in specific currency such as Dollar, pound

sterling etc. In case of dollar the foreign currency account can

be opened with 1000 US$ and in case of Pound Sterling 750

pounds.

2. lending

The bank is an intermediate party between the borrower and the

lender. It borrows from one party and lends to another. The difference

between the rate of interest it borrows and lends is called the spread,

and is the income of the bank. Lending is the main source of income.

Bank don’t lends to every one who applies for loan but before

giving advances the bank follow certain principles which are as follows:


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Principles of Lending

The following are the principles, which the bank follows while

advancing loans.

1. Safety

2. Liquidity

3. Dispersal

4. Remuneration

5. Suitability

1.Safety

Safety of the amount is very compulsory because the real owner

of the deposit is not the bank all these deposits belongs to account

holders of the bank. The bank shall be very careful to extend the loans

in the safe hand and without risk of loss.

Following points must be kept in mind to ensure” Safety of the

Amount”.

Character

Capacity

Capital

Cash flow

Competition

Collateral

Country Risk

Currency Risk

Character


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The borrower character will indicate the attitude to

repay the amount. His honesty and integrity is important

Capacity

This refers to the managerial ability, knowledge and

technical skill. He may lack in the financial resources but he must

possess experience and deep insight ability in management of the

business

Capital

First the bank must evaluate or calculate the

investment made by the owner in his business then the bank should

disbursed the loan

Cash flow

This refers to source of income of borrower and strength

of expenses.

Competition refers to the feasibility of the project in the

prevailing competitive market

Collateral

This refers to the amount or strength of security, which

the borrower offers to the bank to get loan.

Country risk and Currency risk

Bank should observe the economical and political situation

of country it must also look neighboring country interference.

Currency risk is directly connected with county risk. If the political and

economical condition are suitable then exchange rate favorable

2.Liquidity

It refers to the ability of the borrower to repay the loan. It

is the evaluation to repay the amount in lump sum at short notice.

3.Dispersal

Spreading of the total quantity of credit to all the sectors of

the economy, which include industry, commerce, farming, agriculture,

traders, housing etc. The main advantage of spreading is that if the


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bank loan only to a specific sector then there is greater chances to

become loan bad debts in case of financial crisis in this sector.

4. Remuneration

This refer to the amount recovered by the banker in the

form of the interest. This is the earning source by which the bank is

going to meet its expenses.

Interest payable to the depositor

Salaries and fringe benefits payable to staff

Overhead expenses and depreciation

Provision of reserves for unforeseen expenditure

Payment of dividend to the shareholders

5.Suitability

Advances must be made to selective suitable borrowers keeping

in mind national development plans workout by the central

government. It must also conform with the national credit policy of the

central bank.

UBL advances the following types of advances:

1. Running Finance (Overdraft)

2. Cash Finance (Cash Credit)

3. Demand Finance (Loan)

4. Discounting the bills of Exchange

1.Running Finance (overdraft)

Running finance (old name overdraft) are advances, which

are generally given to meet temporary requirement of the

customers. The following are the characteristics of this type of

finance:

Temporary form of accommodation


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Allow the customers to withdraw over and above their credit

balance.

Interest is charged on outstanding balance only.

Types of Running finance

1. Secured

2. Unsecured

1.Secured

Under this type of overdraft the bank allow customers to

withdraw more than their deposit after giving security

2.Unsecured

Under this type bank allow this facility against personal

security of the customer.

2.Cash finance (Cash Credit)

Under this type of advance limit is established which can be avail

at one time or as and when required. This is the most common form of

borrowing against pledge or hypothecation. Borrower prefer this facility

because interest is charged on the amount utilized and not on the total

limit sanctioned.

For example limit sanctioned 5000,000,000 but avail only

3000,000,000 so interest will be charged on 3000,000,000 only and

not on the total limit.

Sometimes bank impose restriction to pay markup or service

charges on at least one half or one fourth of limit.

Security accepted for cash credit may be:

Local manufactured goods

Rice and paddy

Pledge

Trust receipt

Other commodities


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3.Demand Finance (Loan)

“When the borrower borrow a fix amount repayable in lump sum

or periodically installment after expiry of a fixed period it is called

loan.”

Total amount is credited or put to the disposal of customer and

interest is charged on the full amount.

There are two types of demand finance

1. Short term (less than one year)

2. Long term (more than one year)

UBL provides the following types of loans:

Demand finance (packing credit)

This facility is provided to exporter to facilitate export

under the direction of SBP. This facility is granted to exporter at

concessional rate for the export of surgical instruments carpet etc

Industrial loan

Given to industrial sector for purchase of machinery and

other capital nature goods.

Demand finance for student (Qarzae Hasna)

Qarzae Hasna scheme allowed to student and teachers to

obtain loan without interest or markup with recommendation of MPA or

MNA.

Demand finance Staff

This facility is given to staff for the following purposes:

House building loan against mortgage

Loan for purchase of vehicle

Loan against three months salary


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3. bills collection

This activity is conducted in the Bills Collection

Department. Bills collection Department collects both types of

bills for collection i.e. inward bills for collection and outward bills

for collection.

4 Remittances

UBL provide both types of remittances i.e remittances

within Pakistan and Home remittance i.e remittances from

abroad.

To Remit money UBL has the following Product

Within Pakistan

Demand Draft

Tele Graphic Transfer

Mail Transfer

From Abroad

Tez Raftar

Money Gram

Click n Remit

Money Direct

Activity 5 Operation of Clearing Department


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Clearing house is a place where representative of all the bank of the

city get together and settle the receipt and payment of cheques drawn

on each other”.

Types of clearing

There are two types of clearing

1. Inward Clearing

2. Outward Clearing

1.Inward Clearing

“All these cheques of different branches drawn on one

branch of any bank when received through the channel of clearing

house it is called inward clearing”.

2.Outward Clearing

“ All those cheques which has been drawn on other banks

and have been deposited for collection through the channel of clearing

house is called outward clearing”.

Types of cheques collected by the clearing Department.

1. Transfer cheques

2. Transfer Delivery cheques

3. Clearing Cheques

When the payee or endorsee (who deposit he cheques for

collection) and drawer of cheques maintain account with different

banks, the collecting bank can receive the amount of cheque from the

paying banker by debiting his account or by sending representative to

paying bank.

Procedure

1. The clerks concerned collect all the cheques and enter them

in the clearing register.

2. Then he affixes stamps on these cheques and sorts out

cheques of different banks and prepares schedule for them.

3. These cheques are sent to clearing house. State Bank of

Pakistan has extended the services of clearing house. Where


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branch of state bank is not situated the National Bank of

Pakistan act as the representative of the State Bank Of

Pakistan.

4. In the clearing house representatives of all banks are

gathered. Representatives of UBL will receive all the cheques

drawn of by other bank.

5. Finally they exchange their cheques mutually and settle their

accounts.

6. State Bank of Pakistan representatives will work out the

balance and will settle it.

The amounts of cheques are credited in the account of the

depositor on the third day. If the cheques are not returned. It is

understood that all the cheques are hounered but if the cheques

are received on third day then entry is reversed.

Activity 6 foreign Exchange Department

The main functions of the foreign exchange department are as follows:

1. To open the letter of credit to facilitate import and export.

2. Dealing with foreign currency

Importance of letter of Credit

The bulk of import trade now a day is mostly financed

through letter of credits. The method of payment through letter of

credit has greatly facilitated commercial relations between the

importer and exporter. They can safely rely on the credit of the bank

rather than on the credit standing of the importer. The importer too

will pay for the goods only when they are shipped and the documents

are received by the buyer’s bank.

Definition

“Letter of credit is written undertaking by an bank given to

the seller, at the request and on the instruction of the buyer to pay at

sight or at a determinable future date up to a stated amount within a

prescribed time limit and against stipulated document”


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Parties of letter of credit

The following parties involved in the letter of credit:

1. Buyer (Applicant)

2. Seller (Beneficiary)

3. Issuing bank

Procedure of opening letter of credit

The letter of credit is opened by filling an application with

the bank and following information’s should be provided to the

bank.

1. Name of Beneficiary (seller)

2. Complete address of beneficiary

3. Types of letter of Credit whether

Revocable

Irrevocable

4. Mode and tine of payment

5. Description of goods

6. Payment of freight (paid or not)

7. Replacement or dispatch of goods

8. Detail of documents such as bill of lading, shipment

certificate, clearance of goods certificate.

9. Place of shipment

10. Whether the trans-shipment is allowed or not

11. Whether the partial- shipment is allowed or not

12. The date of shipment

13. The date and expiry of credit

14. Whether the credit is transferable or not

15. How the credit is to be advised by mail cable or telex

etc.

7.Activity of Account Department


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Generally there are two types of system for maintaining an

account

1. Journal System

2. Voucher System

Generally journal system is adopted by some commercial

industrial institutions. In journal system entries are reported on Journal

Book and then posted to main ledger.

In banking voucher system is used for every transaction voucher

has to be prepared.

There are two types of vouchers:

Debit vouchers

Credit vouchers

Debit voucher is used for expenses and credit voucher is used for

credit. They are of red and green colour respectively.

8.Activity of Cash Department

The following books are maintained in the Cash Department

1. Receiving Cashier Book

2. Paying Cashier Book

3. Token Book

4. Scroll Book

5. Cash balance Book

When cash is received in counter. It is entered in the Scroll Book

and Receiving Cashier Book. At the close of the day, these are

balanced with each other.

When the cheque or any negotiable instrument is presented at

counter for payment. It is entered in the token book and token is

issued to the customer. The token and the Cashier make entry in the

paying book and payment is made to payee. At the close of day, the

Token Book and paying Cashier Book is balanced.


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The consolidated figure of receipt and payment of cash is

entered in the cash balance book and drawn closing balance of cash.

Opening balance of Cash + Receipts – payments Closing Balance.

This is very important department. An officer check all the books

maintained in this department.

Cash department prepares the utility bills sheets, which are sent

by the bank to WAPDA, Sui Gas Department, and PTCL etc for their

respective bills.


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At my first day in UBL CENTRAL branch KUTCHERY ROAD Mandi

Baha Ud Din the Area operation manager, Mr.Manzoor Ghori has

introduce me with different officers and departments of the bank.

After that I visited every department one by one and observe what is

happening there. They all provide me the basic information which I

needed .They are all very cooperative .

They also provide me various information about bank affairs,

which I have not known previously.

Some of my observation and experience are discused below.

General information about banking affairs

At first day at bank the manager inquire about what you know

about bank already the bank manager has made some conversation

with me and ask some question.

After that he provides me the following information:

1.Banker’s customer relationship

Every day different person coming through bank front door to do

business with the bank however not all of those individuals will be

making transactions on their own behalf. They may represent their

employer, societies, club etc.

Definition of banker

According to banking companies ordinance 1962 Banking has

been defined as accepting for the purpose of lending or investment of

deposits of money form the public, repayable on demand or otherwise

and withdrawals by cheque, draft, order or otherwise.


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52


Meaning of Customer

The person who maintains account with the bank is called the

customer.And the person who does not have any account with the

bank is not considered the customer.it is an important difference

because a bank only collects cheques for its own customer and not

other persons.

Relationship between banker and customer

The following types of relationship exist between banker and

customer.

1. Debtor and Creditor

2. Principal and Agent

3. Bailer and Bailee

4. Mortgager and Mortgagee

5. Banker as a Trustee

6. Executor, Attorney, Guarantor

1.Debtor and Creditor

The general relationship between banker and customer is Debtor

and Creditor. When the customer deposit amount in the bank, the

customer is called the “Creditor” and the Banker is Called the “Debtor”

When the Bank lends money to the customer the Bank is the

“Creditor” and the Customer become “Debtor”

2.Principal and AgENT

Bank receives documents from the customer like deposit cheque,

drafts, dividend warrant etc for collection as a “Principal” and the

bank performs various agency services such as purchasing security,

making contractual payment etc.


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3.Bailor and Bailee

It is a contract where one one person delivers goods to another

person for some specific purpose. Bank provide lockers facility to its

customers in which customer keep jewelry, bonds and other valuables.

So when bank accept valuables for safe custody, the customer is

called the “Bailer” and the band is called the”Bailee”.

4.Mortgagor and Mortgagee

When the customer pledges a things like property, shop and

things which can not move from one place to another specific with the

bank as security for advance, the customer becomes the” mortgager”

and the banker is the “Mortgagee”.

5.Trustee

Banker keeps very important documents ,securities in the

custody of bank with out knowing about them thus the bank is acting

as trustee .

6.Executor, Attorney, Guarantor

Bank also act as Executor of a will of the diseased person. They

also provide guarantee to other person on behalf of the customer then

they act as a “Guarantor”.


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Termination of Relationship

By Customer

The customer can terminate the relationship due to the following

reasons:

Change in the place

Not satisfied with bank Services

Death of the Customer

By Banker

Presenting cheques after banking hours

Intimation of the death of the customer

Insanity of Customer, not honor the cheques

In case of bankcorruptacy

After assigning all the balance to the third party

On receiving the Garnishee Order

Constitutional change in the business of the firm


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Customer rights and Duties

Rights

Draw cheques upto Credit balance

Receive Statement of Account

Sue wrongful dishonour of Cheque

Sue and demand compensation if the bank fail to maintain

Secrecy

Duties

Present instrument within banking hours

Within due time from their issue (stale postdated cheques)

Keep cheque book in safe custody and in case of theft

immediately report to the bank

In case of finding any forgery in the cheque issued by him

immediately report to the bank.

Rights and duties of the banker

Duties

Honour customer cheques properly drawn

Abides by the standing instruction of the customer relating to

the contractual and periodical payments.

Maintaining the Secrecy

Reasonable care of valuables depoit in the lockers.


56


Stop operation of account after receiving the Garnishee order

(Court order

Rights

Right to setoff credit balance against a debt due.

Implied right to charge commission and interest on the services

performed and loan advanced by the bank.

Bank has general Lien on cash, bill of exchange and securities

of customer for adjusting any money due to him.


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Cheques

What is a cheque

As a customer you keep money in the bank ,you are supposed to

withdraw money when ever you want. But when you want to make

some payment and you have shortage of time you can draw the

cheque on the bank The bank is supposed to make payment to the

payee .In this way the bank saves the time of his customer.

Banks give you an option. You can order them to pay someone,

on your behalf. You can do this by giving a cheque to the payee. A

cheque is like an order to the bank.

When the payee shows it to your bank, the bank will pay the

money. This is called honoring a cheque.

Definition

Negotiable instrument Act 1881

“Cheque is a bill of exchange drawn on a specified banker

and not expressed to be payable otherwise than on demand”.

In other words

“a written order of a depositor upon a bank to pay to or

to the order of a designated party or to baearer, a specified sum of

money on demand”.

Parties of Cheque

There are the three parties of the Cheque

1. Drawer

2. Drawee

3. Payee


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Drawer

This is the man who has an account with the bank . he has the

right to issue a cheque on the bank .This is called the drawer.

Drawee

The person directed to pay is called the Drawee. In case of the

cheque Drawee is the bank where the person (Drawer) maintain

account.

Payee

Payee is the person to whom the payment is to be made the

name of the payee is mentioned in the cheque .

Types of Cheques

There are two types of Cheques

Open Chequesp

Cross Cheques

1.Open Cheques

Open cheques are those which are payable at the counter

of the bank.

There are two types of open Cheques:

Bearer Cheques

According to instruction the payment is made to the man who

holds the cheque Drawer order the bank to make payment to the

person who hold the cheque

Order Cheques Drawer orders the bank to make payment to a

specified person whose name is mentioned in the cheque. The bank

pays only when it satisfied about the identity of payee.

2.Cross Cheque


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A cheque with two small parallel lines is a crossed cheque.

You cannot encash such a cheque across the counter. It will only be

credited to a bank account. Such a cheque has to go through clearing.


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Kinds of Crossing

There are two types of Crossing

I. General Crossing

II. Special Crossing

General Crossing

The drawing up of two simple parallel transverse lines on the

face of the cheque at the top left hand corner with or without the

words &co, Not negotiable or Account Payee only in know as general

crossing.

Special Crossing

A cheque deems to be crossed especially when it bears

across its face the name of the banker either with or without the words

not negotiable. In case of special crossing the payment can only be

made to the bank named therein the cheque.

Objective of Crossing

It prevent the payment of the cheque to a wrongful

holder

It ensures safe payment to the concerned party

It is a guard against any cheating or theft.


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Endorsement

"The writing of a person’s name either on the back

or the face of instrument followed by one’s signature for

the purpose of negotiation is called endorsement”.

Suppose you receive a crossed personal cheque. You can deposit

this cheque into your bank and receive payment in 2-3 days. What if

you needed the money urgently?

If the cheque is simply crossed, you can endorse the cheque to a

friend. The friend can give you cash against the cheque. He / she will

then deposit the cheque into their account.

The bearer cheque merely endorsed by delivery to another person

Working under deposit department

The first department in which I have worked was the deposit

department. Hare I met with an experienced banker Gulshan

Amin ,incharge

Deposit department. He has provide me much information about

deposit department such as how an account is opened , what types of

account , what type of bankers customers and what documents are

required to open account for different persons


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Account opening

The following types of accounts are opened by the bank:

1. Current Account

These account are opened with a minimum

amount of 3000 thousand rupees There is no profit no loss . The funds

are available on demand ,customer is not supposed to give any

advance call The bank normally open current account for the business

need of the funds. Under this category following types of accounts are

opened:

Proprietorship

This type of account are opened for business concern

laying an individual as theirs sole proprietor

Partnership

In this account all the concerned partners are

involved .there is a deed between all the partners who is held

responsible for the operation of account and for deposits. Specific

instructions are also there

A letter of partnership is also obtained from all the

partners so as to make them severally or jointly responsible for any

liability of the concern to Bank.

Joint Stock Company

This type of account is opened for private or public limited

company. The following documents are invariably obtained for

opening the accounts.

I. Memorandum and Article of Association

II. Certificate of incorporation

III. Resolution from the Board of Directors for opening the

account.

IV. List of Board of Directors.

V. Certificates of Commencement of business.


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Socities/Club/Association

This type of account is opened for clubs, societies and

association. For opening such account it is necessary to obtain

copy of Bye-laws.

Profit/Loss Saving Account

I. Individual Account

II. Joint Stock Account

III. Checking Account

IV. Non-Checking Account

V. PLS term Deposit

This type of account is opened for a nominal rate of return .In

this accounts advanced call is required ,normally 7 days notice

before the encashment of money

In the first category 7 days notice is required for

withdrawal of investment.

In the second category advance notice of 30 days is

required for withdrawal and the percentage of profit for the

above mention types of account. If that as may be announced

by Government Annually.

Necessary modifications have been made in the existing

rule and procedure governing the above accidents that these

confirm to requirement of PLS based operation. A separate

counter shall be opened in each branch for accepting deposits on

profit & loss sharing basis.


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Account Closing

1. There is a request for closing of an account

2. There is variation in the signature

3. Ledger keeper with his initials writes the outstanding

balance in the account on the letter.

The letter is forwarded to the Manager for his approval.

4. The Manager makes an approval to recovered the amount

Rs 5 in C.D and Rs 2 PLS Account.

5. The unused cheques leaves are destroyed, serial number

of which is already mentioned on the letter.

6. The S.S Card is taken out and is cancelled by affixing

account closed stamp.

7. The entry is made in account opened and closed register in

red ink.

DORMATN.IN-OPERATIVE & UNCLAIMED DEPOSITS ACCONTS

Dormant Accounts:

Current accounts not operated for 6 months and saving

account not operated for three years, shall be classified and in-

operative accounts.

Unclaimed Deposits Accounts

Bank Drafts, T.Ts, Payment Orders and M.T outstanding for

3 years should be transferred to unclaimed deposit accounts to be

opened in current ledger for this purpose.


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Procedure for opening and account

The opening of an account is the basic step to build relationship

between customer and banker .Opening of an account increases the

business of the bank . The account opening form is a prime document

which gives the detailed information about the customer .

When a customer wants to open an account, he comes to the bank; the

bank officer gives him an account opening form. The customer fills the

account opening form.

Only the one form is used to open all the above mentioned

accounts . ALL ACCOUNTS are metionedin the form .The contents

of the account opening forms are as under:

Account Number and Date.

Name of the Branch.

Type of Account.

Nature of Account.

Currency.

Particulars of Deposit.

Particulars of Account.

Operational Instructions.

Special Instructions.

Zakat Deduction.

Details of other Bank Accounts.

Personal Information. ( phone number, email, mobile number

etc)

Initial amount he want to deposit

Name of other person to whom bank can contact when the

person will not available

Introducer.


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Authorized Signature.

Before providing the AOF the banker make a preliminary

introduction of the customer and know the reason for opening the

account. After that banker gets Copy of ID card and also check the

original ID card. If the customer can make signature then there is no

need to obtain the Pictures of the Customer but if the customer is

Illiterate or there is no flow in the signature then the banker obtain two

photo copies one is pasted over the Account opening form and other is

pasted over the Specimen signature card. After that the person is

asked to verify the signature of introducer, a bank official make

verification and put his initial over the AOF. After that new Account

number is allotted and registered in the Account opening register,

The customer fills the pay in slip and deposit the amount in his

account. Now pass book issued to customer due to introduction of

Computer in the UBL branches.

One official then send letter of acknowledgment (letter of thanks

to customer. It is a mode of verification the customer address.

Chequebook only issue when the customer brings this letter.

When the customer brings the letter, he fills the chequebook

requisition slip and the chequebook is issued to him.

The customer can know the status of its account position

whenever he wants.


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Advance Department

The next department where I have made training is the

advance department. Here I got new information such principles of

lending, types of security, types of advances, procedure of making loan

etc

Principles of Lending

The following are the principles, which the bank follows while

advancing loans.

Safety

Liquidity

Dispersal

Remuneration

Suitability

Type of Advances

UBL advances the following types of advances:

1. Running Finance (Overdraft)

2. Cash Finance (Cash Credit)

3. Demand Finance (Loan)

4. Discounting the bills of Exchange


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Types of Securities

The following are the types of securities are generally accepter

for advances.

Banker’ Lien

It is a right used by the bank to retain the possession of the property

of the customer . This right is used only when the dues are not cleare

Lien gives a person only a right to retain the possession of the goods

and not the power to sell.

Guarantee

The bank use this right when it receives an application

for granting loan but it never receives any tangible securities against its

amount . Then the bank has a right to demand a personal guarantee from the

applicant his right

Mortgage

In this procedure a bank is trying to save his amount by

securing the immovable property .The person in whose favour property is

transferred is known as mortgage. The man who transfers the rights is

known as mortgager.

Hypothecation

Hypothecation is defined as” a legal transaction

whereby goods may be made available as security for a debt without

transferring property or the possession to the lender”. Hypothecation is

very risky on two main grounds. One, as the goods are in the

possession of the owner, the borrower may take out the goods without


69


informing the bank. Secondly, the bank does not have a legal claim as

it does not have a valid charge over the goods.

Pledge

It is a security against the given amount of the lender

These may be tangible things .In this case the goods of the party are

under the supervision of the bank For example the keys of the

godowns are with the bank. The delivery of documents of title of the

good is also a valid pledge . the person delivering the goods as

security is called pledger and the person to whom the the goods is

delivered is called pledgee

PROMISERY NOTES

Sometimes the promissory note is also accepted as a

security. A promissory note is an instrument n writing containing an

unconditional undertaking signed by the maker, to pay on demand or

at a fixed or determined future time a certain sum of money only, to or

to the order of certain persons or the to the bearer of the instrument.

Procedure of making an Advance

When a client applies for the grant of loans the

concerned branch of the bank considers his request by examining its

feasibility the 3C’s reputation of the client, the audited annual

accounts and then gives its own opinion and suggestion finally the

bank branch recommends the case to Zonal office. The Zonal office

process the case and forwards the G.M. office and then it is forwarded

to head office. Actually the case is sanctioned at Head Office and then

is returned to the initiating branch for disbursement.

The initiating bank branch takes the security

necessary for the loan and makes disbursement according to

disbursement schedule.


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Work under Remittance Department

Remittance department performs the following functions:

1.Mail Transfer (MT)

2.Telegraphic Transfer (TT)

3.Denmand Draft (DD)

1.Mail Transfer (MT)

When a customer requests the bank to transfer his

money from one branch of bank to another branch of the

same bank or from city to another city to the same bank or

any other bank the customer fills the form given by bank.

2.Telegraphic Transfer

This type of transfer is simple. After filling in the

application form the concerned officer shall fill the TT form.

Then it is sent to the required bank, which on receiving it

immediately makes the payment to the customer and

afterwards the vouchers are sent to that bank by ordinary

mail.

3. Demand Draft (DD)

The Demand Draft is just like a cheque and issued when

the customer wants to take cash from the branch on which issued at

the place of destination. The idea behind it is to avoid the risk and

burden of currency notes in huge quantity. The Demand Draft can

easily be handled whatever amount it has and the money can easily be

taken from the bank when it is presented.

Cash department

Here I observe the following

CHECKING AND PAYMENT OF CHEQUES:

Before making payment on cheques, a banker should take into

consideration the following points


71


Name of the Bank & Branch.

Amount in figure and words.

Date.

Signature of Drawer (verification).

Balance checking

Stop Payment

The instructions received by the bank in writing signed by the

account holder requesting there into stop the payment of a cheque

isseued by him due to certain reasons are cllled as stop payment

instructions. The following points are to be observed.

a) Such instructions must be in writing and signed by the

account holder.

b) If an intimation regarding the stop payment instructions

is received on the telephone or telegram, note to that

effect is made on the relevant ledger folio with red

pencil.

c) During the time till the stop payment instructions are

not received in writing and the Cheque for which the

intimation about stop payment to be made is presented

for payment, the same is to be returned with the

objection “Payment Pending requires drawer’s

confirmation”.


72


On receipt of the letter the date and time is noted down, the

signatures of the account holder is verified and the letter is delivered

to the ledger keeper, who checks the accounts if the said cheques has

not already been paid. Thje stop payment stamp is affixed on the

ledger folio and the particulars of the cheques are entered.

Customer service department

Customer service is very important to attract new customers and

retain existence customers. Only those banks will survive which give

importance to their customers.

In customer service department I have guide the strange

customer and people I.e. where they want to go. I have also filled

cheques, pay in slip and other such instrument which the illiterate and

other persons can’t fill.

Utility bills collection

I have also spend my few days of training in the collection of

utility bills such as LESCO (WAPDA) PTCL and Sui Gas bills

Others department

Almost I have observed all the department of the bank. In audit

department I have observed that the account, which I have filled, are

rechecked to analyze any deficiency. Even if there is no flow in the

signature of the customer then customer is again asked to provide his

photo or to make signature again.


73



74


UNITED BANK LIMITED

PROFIT AND LOSS ACCOUNT HORIZANTAL ANALYISS

(Rupees in Thousands)

2002 2001 Decrease %Percentage

Mark-up/return/interest earned 11,527,524 11,468,051 59,473 0.52Mark-up/return/interest expensed (5,475,559) (6,347,215) 871,656 (13.73)

Net Mark-up/return/interest income 6,051,965 5,120,836 931,129 18.18Total Provision (746,323) (1,262,908) 516,585 (40.90)

Net Mark-up/return/interest income after provisions 5,305,642 3,857,928 1,447,714 37.53NON-MARK-UP/RETURN/INTEREST INCOME

Total non-mark-up/return/interest income 3,380,701 2,914,679 466,022 15.99

Total Income (funded non funded) 8,686,343 6,772,607 1,913,736 28.26

Total non-mark-up/return/interest expenses (5,930,632) (5,300,789) (629,843) 11.88

PROFIT BEFORE EXTRA-ORDINARY ITEMS 2,755,711 1,471,818 1,283,893 87.23Extra-ordinary item 25,738 (7,200,000) 7,225,738 (100.36)

PROFIT/(LOSS) BEFORE TAXATION 2,781,449 (5,728,182) 8,509,631 (148.56)Total Taxation (1,318,796) (1,738,509) 419,713 (24.14)

PROFIT/(LOSS) AFTER TAXATION 1,462,653 (7,466,691) 8,929,344 (119.59)Share of minority interest (10,612) (6,455) (4,157) 64.40

PROFIT/(LOSS) AFTER TAXATION 1,452,041 (7,460,236) 8,912,277 (119.46)Accumulated loss brought forward (27,282,709) (19,820,684) (7,462,025) 37.65

Accumulated loss adjusted against share capital 25,201,680 0 25,201,680

(628,988) (27,280,920) 26,651,932 (97.69)Total Surplus on revaluation of fixed assets 238,273 0 238,273

Profit available for appropriation (390,715) (27,280,920) 26,890,205 (98.57)Transfers 0

Transfer to Statutory reserve (331,672) (1,789) (329,883) 18,439.52Capital reserve 0 0 0

Revenue reserve 0 0 0Proposed cash dividend 0 0 0

Accumulated loss carried forward (722,387) (27,282,709) 26,560,322 (97.35)Basic earnings/(loss) per share 0.62 (3.32) 4 (118.67)


75


UNITED BANK LIMITED PROFIT AND LOSS ACCOUNT

HORIZANTAL ANALYSIS

2,002 2,001

Mark-up/return/interest earned 11,527,524 11,468,051

Mark-up/return/interest expensed (5,475,559) (6,347,215)

Net Mark-up/return/interest income 6,051,965 5,120,836

Provision against non-performing advances (858,708) (1,489,577)

Provision for diminution in the value of investments 160,289 242,400

Bad debts written off directly (47,904) (15,731)

Total Provision (746,323) (1,262,908)

Net Mark-up/return/interest income after provisions 5,305,642

NON-MARK-UP/RETURN/INTEREST INCOMEFees, commission and brokerage income 1,797,892 1,097,148

Dividend income/gain on sale of investments 285,900 67,879

Income from dealing in foreign currencies 1,086,152 1,584,894

Other income 210,757 164,758

Total non-mark-up/return/interest income 3,380,701 2,914,679

Total Income(funded non funded) 8,686,343 6,772,607


76


Administrative expenses (5,879,027) (4,668,553)

Other provisions/write offs (27,353) (521,367)

Other charges (24,252) (110,869)

Total non-mark-up/return/interest expenses (5,930,632) (5,300,789)PROFIT BEFORE EXTRA-ORDINARY ITEMS 2,755,711 1,471,818

Extra-ordinary item 25,738 (7,200,000)

PROFIT/(LOSS) BEFORE TAXATION 2,781,449 (5,728,182)

Taxation – Current (197,675) (253,654)

Prior years (18,701) (1,484,855)

Deferred (1,102,420) 0

Total Taxation (1,318,796) (1,738,509)

PROFIT/(LOSS) AFTER TAXATION 1,462,653 (7,466,691)

Share of minority interest (10,612) (6,455)

PROFIT/(LOSS) AFTER TAXATION 1,452,041 (7,460,236)

Accumulated loss brought forward (27,282,709) (19,820,684)

Accumulated loss adjusted against share capital 25,201,680 0

Net Profit Available for Provisions and Transfers (628,988) (27,280,920)Transfer from:Surplus on revaluation of fixed assetsPrior years 183,313 0

Current year 54,960 0

Total Surplus on revaluation of fixed assets 238,273 0

Transfer to:Statutory reserve (331,672) (1,789)

Capital reserve 0 0

Revenue reserve 0 0

Proposed cash dividend 0 0

Total Transfers (331,672) (1,789)

Accumulated loss carried forward (722,387) (27,282,709)

Basic earnings/(loss) per share 0.62 (3.32)


77


UNITED BANK LIMITEDVERTICAL ANALAYSIS

ASSETS

2,002 2,001 2002 2,001

ASSETS Percentage Percentage

Cash and balances with treasury banks

15,642,055 15,095,2348.15 8.95

Balances with other banks 18,750,563 20,995,855 9.78 12.45

Lending to financial institutions

3,627,557 4,370,0061.89 2.59

Investments 67,506,369 28,578,561 35.19 16.95

Total Advances 75,795,024 79,780,718 39.51 47.31

Total other assets 2,641,471 8,641,263 1.38 5.12

Operating fixed assets 2,831,534 2,864,018 1.48 1.70

Deferred tax assets 5,026,459 8,297,500 2.62 4.92

Total Assets 191,821,032 168,623,155 100.00 100.00

vertical anlysis

IncreaseDecrase

2002 2001 2002-2001ASSETSCash and balances with treasury banks 8.15 8.95 (0.80)Balances with other banks 9.78 12.45 (2.68)Lending to financial institutions 1.89 2.59 (0.70)Investments 35.19 16.95 18.24Total Advances 39.51 47.31 (7.80)Total other assets 1.38 5.12 (3.75)Operating fixed assets 1.48 1.70 (0.22)

Deferred tax assets 2.62 4.92 (2.30)

Total Assets 100.00 100.00


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LIABILITIES

Percentage Percentage2,002 2,001 % %

LIABILITIES 2002 2,001 Bills payable 1,847,025 1,540,592 1.030 0.927Borrowings from financial institutions 5,347,349 12,875,351 2.981 7.748Deposits and other accounts 162,166,385 141,316,174 90.400 85.042Sub-ordinated loan 0 1,539,800 0.000 0.927Liabilities against assets subject to finance lease 81,548 92,386 0.045 0.056Other liabilities 0.000 0.000 Deferred 861,935 923,273 0.480 0.556 Others 9,083,064 7,884,140 5.063 4.745Deferred tax liabilities 0 0 0.000 0.000

Total 179,387,306 166,171,716 100.000 100.00

vertical increaseAnalysis Decrease

LIABILITIES 2002 2,001 2002-2001Bills payable 1.030 0.927 0.10 Borrowings from financial institutions 2.981 7.748 (4.77)Deposits and other accounts 90.400 85.042 5.36 Sub-ordinated loan 0.000 0.927 (0.93)Liabilities against assets subject to finance lease 0.045 0.056 (0.01)Other liabilities 0.000 0.000 0.00 Deferred 0.480 0.556 (0.08) Others 5.063 4.745 0.32 Deferred tax liabilities 0.000 0.000 0.00

Total 100.000 100.00 increase


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CAPITAL

Vertical Analysis2002 2001 2002 2,001

% %Share capital 5,180,000 22,481,680 41.66 917.08Reserves 4,258,947 3,960,453 34.25 161.56Accumulated losses (722,387) (27,282,709) (5.81) (1,112.93)Minority interest 1,271,700 1,168,264 10.23 47.66Surplus/(deficit) on revaluation of assets 2,445,466 2,123,751 19.67 86.63Total net assets 12,433,726 2,451,439 100.00 100.00

Increase Increase 2002 2,001. (Derease)

% % 2002-2001Share capital 41.66 917.08 (875.42)Reserves 34.25 161.56 (127.30)Accumulated losses (5.81) (1,112.93) 1,107.12 Minority interest 10.23 47.66 (37.43)Surplus/(deficit) on revaluation of assets 19.67 86.63 (66.96)total net assets 100.00 100.00


80


UNITED BANK LIMITEDHORIZANTAL ANALYSIS

BALANCE SHEET

Increase Percentage2002 2001 (Derease) %

ASSETS 2002-2001 2002-2001Cash and balances with treasury banks

15,642,055 15,095,234546,821 3.62

Balances with other banks 18,750,563 20,995,855 (2,245,292) (10.69)Lending to financial institutions 3,627,557 4,370,006 (742,449) (16.99)Investments 67,506,369 28,578,561 38,927,808 136.21Total Advances 75,795,024 79,780,718 (3,985,694) (5.00)Total other assets 2,641,471 8,641,263 (5,999,792) (69.43)Operating fixed assets 2,831,534 2,864,018 (32,484) (1.13)Deferred tax assets 5,026,459 8,297,500 (3,271,041) (39.42)

Total Assets 191,821,032 168,623,155 23,197,877 13.76LIABILITIESBills payable 1,847,025 1,540,592 306,433 19.89Borrowings from financial institutions 5,347,349 12,875,351 (7,528,002) (58.47)Deposits and other accounts 162,166,385 141,316,174 20,850,211 14.75Sub-ordinated loan 0 1,539,800 (1,539,800) (100.00)Liabilities against assets subject to finance lease 81,548 92,386 (10,838) (11.73)Other liabilities Deferred 861,935 923,273 (61,338) (6.64) Others 9,083,064 7,884,140 1,198,924 15.21Deferred tax liabilities 0 0 0

Total Liabilities 179,387,306 166,171,716 13,215,590 7.95

Net Assets 12,433,726 2,451,439 9,982,287 407.20REPRESENTED BYShare capital 5,180,000 22,481,680 (17,301,680) (76.96)Reserves 4,258,947 3,960,453 298,494 7.54Accumulated losses (722,387) (27,282,709) 26,560,322 (97.35)Minority interest 1,271,700 1,168,264 103,436 8.85Surplus/(deficit) on revaluation of assets 2,445,466 2,123,751 321,715 15.15

total net assets 12,433,726 2,451,439 9,982,287 407.20


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UNITED BANK LIMITEDEVALUATION BALANCE SHEET

ASSETS SIDE2002-2001

Increase Percentage

ASSETS Dcrease %

2002-2001 2002-2001 EVALUATION

Cash and balances with treasury banks 546,821 3.62 Improved

Balances with other banks (2,245,292) (10.69) Deteriorated

Lending to financial institutions (742,449) (16.99) Deteriorated

Investments 38,927,808 136.21 Improved

Advances Performing 2,088,363 3.07 Improved

Non-Performing net of provision (6,074,057) (51.41) Improved

Total (3,985,694) (5.00) Deteriorated

Other assets Taxes recoverable (5,031,264) (94.11) Improved

Others (968,528) (29.39) Improved

Total (5,999,792) (69.43) Improved

Operating fixed assets (32,484) (1.13) Deteriorated

Deferred tax assets (3,271,041) (39.42) Deteriorated

TOTAL ASSETS 23,197,877 13.76 Improved


82


UNITED BANK LIMITEDEVALUATION BALANCE SHEET

LIABILITIES ANDCAPITAL SIDE

2002-2001

LIABILITIESBills payable 306,433 19.89 Deteriorated

Borrowings from financial institutions (7,528,002) (58.47) Improved

Deposits and other accounts 20,850,211 14.75 Improved

Sub-ordinated loan (1,539,800) (100.00) Improved

Liabilities against assets subject to finance lease (10,838) (11.73) Improved

Other liabilities Deferred (61,338) (6.64) Improved

Others 1,198,924 15.21 Deteriorated

total 1,137,586 12.92 Deteriorated

Deferred tax liabilities 0 Constant

Total Net AssetsREPRESENTED BY:Share capital (17,301,680) (76.96) Deteriorated

Reserves 298,494 7.54 Improved

Accumulated losses 26,560,322 (97.35) Improved

Equity 9,557,136 (1,136.97) Improved

Minority interest 103,436 8.85 Improved

Surplus/(deficit) on revaluation of assets 321,715 15.15 Improved

Net Assets 9,982,287 407.20 Improved


83


UNITED BANK LIMITED

PROFIT AND LOSS ACCOUNT

EVALUATION2002-2001

(Rupees in Thousands)

Increase Percentage EVALUATIONDecrease %

Mark-up/return/interest earned 59,473 0.52 ImprovedMark-up/return/interest expensed 871,656 (13.73) ImprovedNet Mark-up/return/interest income 931,129 18.18 ImprovedTotal Provision 516,585 (40.90) ImprovedNet Mark-up/return/interest income after provisions 1,447,714 37.53 Total non-mark-up/return/interest income 466,022 15.99 Improved

Total Income (funded non funded) 1,913,736 28.26 Improved

Total non-mark-up/return/interest expenses (629,843) 11.88 DeterioratedPROFIT BEFORE EXTRA-ORDINARY ITEMS 1,283,893 87.23 ImprovedExtra-ordinary item 7,225,738 (100.36) ImprovedPROFIT/(LOSS) BEFORE TAXATION 8,509,631 (148.56) ImprovedTotal Taxation 419,713 (24.14) ImprovedPROFIT/(LOSS) AFTER TAXATION 8,929,344 (119.59) ImprovedShare of minority interest (4,157) 64.40 ImprovedPROFIT/(LOSS) AFTER TAXATION 8,912,277 (119.46) ImprovedAccumulated loss brought forward (7,462,025) 37.65 Accumulated loss adjusted against share capital 25,201,680 Improved

26,651,932 (97.69)Total Surplus on revaluation of fixed assets 238,273 ImprovedProfit available for appropriation 26,890,205 (98.57) ImprovedTransfers 0 transfer to Statutory reserve (329,883) 18,439.52 ImprovedCapital reserve 0Revenue reserve 0Proposed cash dividend 0Accumulated loss carried forward 26,560,322 (97.35) ImprovedBasic earnings/(loss) per share 4 (118.67) Improved


84


Ratio analysis

Introduction

There are many different ways in which we can determine the

financial standing aan position of any concern, however the most efficient

and widely used method for this is the ratio analysis. This analysis can be

derived either from the balance sheet or from income statemnt

The importance and significance of this analysis varies

according to the type of the analysis done. The nature of the business in

respect of the particular group to whose needs the analysis taken into

consideration. For example the creditors of the company have special

interest in profitability of the company to pay current obligation and thus

requiring information concerning the ration of current assets to current

liabilities. Stockholder both present and future are concerned with the

dividends that the company declares and the period after which is does so

and earnings per share that will form the basis for the declaration and

payment of dividend.

On the other hand the management is concerned with the

liquidity of the company and also about the future of the business.


85


The following are the parties interested in ratio analysis

1. Shareholders

2. Creditors

3. Management

4. Present and prospective shareholders

5. Government

Types of ratio analysis

Ratio analysis is not merely the application of a formula to

financial data to calculate a given ratio. More important is the

interpretation of ratio then calculation of value.

Two types of ratio comparison can be made

1. Cross sectional analysis

2. Time-Series Analysis

Cross Sectional analysis

Under this ratio entity financial ratio are compared with the ratio

of other entity at the same point in time. For example if we calculate

ratio of UBL then we compare it other banks financial ratios then it is

called Cross Sectional Analysis.


86


Time Series Analysis

When we compare current financial year ratios with the past

yarer it is called Time-Series analysis. Here we want to know that

either this year ratio has been improved or decreased.

There are two types of Time-Series analysis

1. Horizontal analysis

2. Vertical analysis

Combined analysis

Under this ratio analysis both Cross sectional and Time

series analysis is conducted and then compared with industry average.

RATIO ANALYSIS

To analyze the performance of UBL, the ratios have been

divided into the following Category:

1. Liquidity ratios

2. Profitability ratios

3. Long term solvency ratio

4. Bank affairs (activity) ratios

5. Analysis of advances

Liquidity Ratios (Solvency Ratios)

These are the ratios, which measures the short-term

solvency or financial position of a company.

Ratio

1. Current Ratio

2. Working Capital


87


Current Ratio

Formula:

Current Assets

Current liabilities

2002 2001

Current Assets 34,392,618 36,091,089

Current liabilities 7,194,374 14,415,943

Ratio 4.78 2.502002 2001

4.78:1 2.50:1

Contents

Current assets

current assets 2,002 2,001

Cash and balances with treasury banks 15,642,055 15,095,234

Balances with other banks 18,750,563 20,995,855

Total 34,392,618 36,091,089

Current liabilities

current liabilities 2002 2001

Bills payable 1,847,025 1,540,592

Borrowings from financial institutions 5,347,349 12,875,351

Total 7,194,374 14,415,943

Comments

Current ratio tells the company ability to meets its current

obligation with its current assets

Despite of huge losses in the past UBL has satisfactory current ratio

4.78 in 2002 and 2.5 in 2001. The standard current ratio is considered

2:1, UBL current ratio is above then standard.


88


Working Capital

Formula

Current assets - Current liabilities

Calculation

2002 2001

Current Assets 34,392,618 36,091,089

Less Current Liabilities 7,194,374 14,415,943

Working Capital 27,198,244 21,675,146Comments

The bank working capital ratio is also favorable. It has increase

in the current year

Net working Capital is the safety cushion to creditors. Higher the

net working capital greater the company creditors satisfied.

2.Profitability Ratios

An indication of good financial health and how effectively the

firm is being managed is the company ‘s ability to earn a satisfactory

profit and return on investment.

Ratios

Return on total Assets

Formula

Net profit (Loss) after Tax

Average total assets

Calculation:

2002 2001

Net Profit( Loss)After Tax 1,462,653 (7,466,691)

Divided by Average Total Assets 180,222,094 168,623,155

Ratio (Percentage) 0.81 -4.43


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Contents:

1.Net profit after tax

2.Average total assets

Average total assets

2002 2001

Assets 191,821,032 168,623,155

Average assets 180,222,094 168,623,155

Comments:

Return on assets which is usually called return on

investment (ROI) that measure the overall effectiveness of

management in generating profit with its available assets. The

higher return on total assets is considered best.

UBL return on total assets has improved in the year 2002 due to

increase in profit but there was a loss in the previous year. In this year

both profit and assets has been increased which is a favourable sign.

Earning per Share

Formula:

Net profit after tax

Number of Ordinary Shares

Calculation:


90


2002 2001

Net Profit (Loss) After Tax 1,462,653 (7,466,691)

Weighted average number of ordinary shares 2,339,810,449 2,248,168,000

Contents

1.Net profit after tax

2.number of ordinary Shares

Comments:

The Bank’s earning per share (EPS) is generally of interest

to present or perspective shareholders and management. It

represents the amount earned on behalf of each outstanding

share of common stock.

The Earning per share of UBL has improved slightly. This

ratio is very low because of heavy losses . in the year 2002

profit has increase but Shares outstanding has also increase .

Book Value or Break Value of Share

Formula:

Net Assets

Number of share outstanding

Calculation

2002 2001

Net Assets 12,433,726 2,451,439


Earning Per Share 0.63 (3.32)

91


Number of ordinary shares 2,339,810,449 2,248,168,000

Book value per Share

CommentsBook value per share represent the net assets available to

shareholders after paying all liabilities current or fixed.

Book value per share also improve greatly in year 2002.

the main reason is that there wase much increase in net assets

so when net assets increase book value of share also improve.

Solvency is a company ability to meet its long term

obligation as the become due. It is also called leverage ratios.

Further solvency is dependent upon profitability since in the long

run a firm will not be able to meet its debts unless it is profitable.

When debt is excessive additional financing should be

obtained primarily from equity resources.

Management might also consider lengthening the maturity

of debt and staging the debt repayment dates.

The important solvency ratio are as follows

Debt RatioFormula

Total liabilities less subordinated loans

Total Assets

Calculation

2,002 2,001

Liabilities less subordinated loan 179,387,306 164,631,916


5.31 1.09

Long term Solvency Ratios

92


Total Assets 191,821,032 168,623,155

Debt Equity Ratio 93.52 98

Sub ordinate loan represent loan from directors and other

internal loans

ContentsTotal liabilities less subordinated loan

Total assets

Total liabilities less subordinated loan

2002 2001

Liabilities 179,387,306 166,171,716

Less Subordinated Loans 0 1,539,800

179,387,306 164,631,916

Comments:

Debt ratio measure the proportion of total assets financed by the

creditors The higher the ratio , the greater the amount of others

money used in an attempt to generate profit.

Hare in the year 2002 debt equity ratio has increase which mean

that equity has increase. The main reason for improvement in

this ratio is no subordinated loan in 2002 and increase in assets

so both the assets base and equity base increase.


93


Assets Turnover Ratio

Formula Profit Before Extra ordinary items

Total AssetsCalculation

2002 2001Increase (Decrease)

Profit Before Extra Ordinary items 2,755,711 1,471,818 1,283,893

Total Assets 191,821,032 168,623,155 23,197,877

Assets Turnover Ratio % 1.436605241 0.872844539 0.564

CommentsThis ratio measures the company efficiency to utilize its

total assets to earn profit

In the year 2000 UBL assets turnover ratio has slightly

improve . Both profit and assets has been increased but the table

shows that increase in assets more than the increase in profit

therefore ratio has improve but very little.

Bank Affairs(activity ratio)

There are two main activities of the bank receiving deposits and lending . Bank is an intermediate party between lenders and depositor. It borrow from one party and lend to others. It borrows at less rate and lends at higher rate the difference between the two rate is known as spread.


94


There are basically two types of deposits

1.Current Deposit

2.Fixed Deposit

There are also two types of Advances

1.Short term

2.Long Term

When bank advance it keep in mind the principle of lending, saetey liquidity, dispersal, Collateral, Remuneration.

But in spite of great effort there are still some loan become non-

performing which means that either interest or principal is due

but not paid.

Here some important activity ratios are discussed:

Average advance to average depositFormula: Average Advances

Average DepositsCalculation:

2002 2001

RS in millions Rs in millions

Average Advances 78,856.50 77,839.50

Average Deposits 152,400 135,656

Percentage % 51.74 57.38

ContentsAverage Advances

A advances

2002 2001 2000

Rupees in Millions

UBL 72,426 85,287 70,392


95


Average Deposits RS in millions

2002 2001 2000

162,166 142,633 128,679

Comments:This ratio tells how much bank has given advances from its

deposits. This ratio during the tear 2002 has reduced by 6%

which is quite satisfactory because bank deposits increase much

but in the current year non performing advances reduced and

performing advances increase. Therefore the ratio reduced little.

Note:

For calculating average advances, Advances under Export

refinance scheme of SBP has Excluded.

Foreign currency deposit to total deposit

Formula:

Foreign currency deposit

Total deposits

Calculation:

2002 2001 (Rs in Thousands)

Foreign Currency Deposit 38,527,922 37,778,096

Total Deposit 162,166,385 141,316,174

Ratio % 23.76 26.73

Comments


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The purpose of this ratio is how much percentage of

foreign currency deposit in the total deposit.

In the year 2002 both foreign currcy deposit and total

deposit has increased but foreign currency deposit has increased

less than total deposits. The main reason for decreasing Foreign

currency deposit is reduction in the rate of interest on these

deposits. Rate of interest on these deposit are determined by

SBP. So when interest decrease deposit also decrease. But the

total deposit has increased due to progressive step taken by the

bank for introducing new deposit schemes.

Non-performing Advances to total advances

Formula: Non-performing Advances(Gross)

Total Advances

Calculation:

2,002 2,001

Rs in Thousands

Non performing Advances gross 24,134,955 32,179,380

Advances 75,795,024 79,780,718

Ratio % 31.84 40.33

ContentsNon-performing advances gross

2002 2001

Rupees in Thousands

Non-performing net of provision 5,739,798 11,813,855


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Provision against non-performing advances 18,395,157 20,365,525

Non performing advances gross 24,134,955 32,179,380

Comments:The purpose to calculate this ratio is to analyze whether

non-performing advances has increased or decreased.

The above table shows that non-performing and total

advances have been decreased. But non-performing advances

reduced 8 millions while total advances reduced 4 millions

therefore this ratio decrease which shows the efficiency of bank’s

management.

Performing advances to total advancesFormula:

Performing advances

Total Advances

Calculation:

2002 2001

RS in Thosands

Performing Advances 70,055,226 67,966,863

Advances 75,795,024 79,780,718

Ratio 92.43 85.19

Comments:This ratio indicates percentage of performing advances to

total advances. The above table shows that this ratio improved

in the year 2002 by 7%. Reason is that performing advances


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increase and total advances reduced. Total advances reduced

due to decrease non- performing advances.

Category of non-performing advances:

2002 %

RS in Thhousands Percentage

Other Assets Especially Mentioned (OAEM) 1,137,774 3.97

Substandard 405,305 1.42

Doubtful 316,389 1.10

Loss 26,776,246 93.51

Total (only holding Company) 28,635,714 100.00

Comments:The above table shows that almost 93% of non-performing

advances have been categorized as loss. The main reason for

this is Yellow cab scheme and other past schemes of

Government. Therefore UBL take much care while advancing

loans. The efficiency of management reveals in year 2002 i.e.

reduction in non- performing advances.

Analysis of Advances

Advances are the one of the main activity of the bank and

most important source of bank income. Almost 50% revenue

generate by this activity.

But bank has dispersed its debts to all the sectors of

economy and not only to single sector. Because if the bank gives

all or major advance only to a single sector then there are more

chances to become this debt doubtful and loss.

Therefore the bank has to give advance to all sector of

economy.


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At this point we will analyze the advances provided by UBL

to some specific sectors of the economy.

Textile sector advances to total advances

2,002

Rs in Thousands

Advance to Textile Sector 27,009,493

Total Advances 75,795,024

Percentage % 35.63

Chemical and pharma Ceutical advances

share of advance in Chemical and pharma ceutical 2002

Sector RS in thousands

Advance to chemical Sector 2,557,619

Total advance 75,795,024

Percentage % 3.37

Credit exposure in Government /Public Sector

2002

RS in Thousands

Advance to Public/Government 19,320,749

Total advances 75,795,024

Percentage % 25.49

The above analysis indicate that 35% of the total advances

is given to textile sector. The main reason is that textile industry

is export oriented industry and it demand huge finance which is

provided by the bank


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Advances and Deposits by Sector

ADVANCES DEPOSITS

Amount % Amount %

Sector RS in Thousands RS in Thousands

Chemical and Pharmaceuticals 2,557,619 2.6 2,110,713 1.3

Agribusiness 8,845,012 8.9 11,913,252 7.4

Textile 27,009,493 27.2 1,207,000 0.7

Cement 444,116 0.4 491,504 0.3

Sugar 538,805 0.5 426,281 0.3

Shoes and leather garments 1,695,714 1.7 1,231,557 0.8

Automobile and transportation 5,755,482 5.8 3,041,198 1.9

Financial 2,761,727 2.8 8,015,250 4.9

Insurance 0 0 2,444,089 1.5

Electronics and electrical appliances 2,835,290 2.9 1,143,700 0.7

Energy production and transmission 4,061,263 4.1 10,941,433 6.7

Individuals 12,768,294 12.9 105,471,753 65

Others 29,943,507 30.2 13,728,655 8.5

Less: Provision for bad debts -18,395,157 0

Less: Interest suspense account -5,026,141 0

Total advances 75,795,024 100 162,166,385 100


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UNITED BANK LIMITEDEvaluation of ratios

2002-2001

Increase2002 2001 (Decrease) Evaluation

2002-2001 2002-2001

Liquidity RatiosCurrent ratio 4.78 2.5 2.28 ImprovedWorking Capital 27,198,244 21,675,146 5,523,098.00 Improved

Profitability ratiosReutn on total assets 0.81 -4.43 5.24 ImprovedEarning per Share (EPS) 0.63 -3.32 3.95 ImprovedBook value (Break up Value) 5.31 1.09 4.22 Improved

Long term solvencyDebt equity ratio 93.52 98 (4.48) ImprovedAssets Turnover 1.437 0.873 0.56 Improved

Bank Affairs or Activity RatiosAverage Advances to average deposits 51.74 57.38 (5.64) DeterioratedForeign currency deoisit to total deposit 23.76 26.73 (2.97) Deterioratednon performing advances to total advances 31.84 40.33 (8.49) Improvedperforming advances to total advances 92.43 85.19 7.24 Improved

Analysis of AdvancesTextile sector advance to total advances 35.63%Chemical and pharma ceutical 3.37%Credit exposure in Government Sector 25.49%


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During my two internship in United Bank Limited. I get some

knowledge about banking system. Here, I deeply observed the

functioning of the branch. In the light of these observations, I suggest

the following recommendations for further progress of the Aziz Bhatti

road branch, sheikhuipura.These suggestions are:

1) Branch Premises

Branch working environment should be improve and renovated

with latest furniture and interior decoration. External look of the

branch is not seemed to be attractive so it should be clean and

well designed. Sufficient seating arrangements for customer is

not available here, so sufficient service area and seating

arrangements must be provided for customers.

2) Staff Behavior

Staff behavior in term of customer dealing should be uniform for

all customers, without any favoritism and nepotism that

discourage the other client.

3) Lengthy Procedure

The book keeping system and filling system of the bank is so

lengthy and time taking. So staff’s document processing time,

should be reduced to improve working efficiency through proper

training.

4) Proper Check


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During two months of my training, I feel that their cheques

payment service and other bills receiving service is very slow, in

this way they deliberately waste the time of their customer.

Therefore, their should be a proper check of manager on them so

that then can recognize and understand their responsibilities.

5) To Be Conscientious

It is usually observed that staff members waste lot of valuable

time while performing their duties. During my training period, I

feel that all staff members make a lot of unnecessary telephone

calls to their relatives while dealing with their customers. In this

way they not only waste a very precious time of their customers,

but also waste the wealth of the country. So I feel that staff

members are very irresponsible in performing their duties. So,

staff member should be conscientious.

6) No Proper Security System

During my training, I feel that security system to safeguard the

cash deposits of bank is not book. The gunman of the bank is

often busy in doing some irrelevant job. So bank should take

steps to improve its security system.

Other Suggestions

New blood should be injected and young professionals should be

recruited on merit to induce enthusiasm in the bank. Customers

should be focus of all activities to boost up the business.

New marketing strategies should be developed to attract new

customers.

Maximum automated machines should be used.

Security should be strengthening to minimize the chances of

“decaties”.


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The workers should be given a sense of teamwork and the

manager should be trained to manage the team as good leader.

There should be a proper check on staff member so that they

become punctual and conscientious.

Business promotional activities should be increased to

enhance the business.


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UBL-finance

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