Chapter no.

1 INTRODUCTION OF THE ORGANIZATION

United bank limited

1.1 BANK:
Consensus on the origination of word Bank is not yet reached at. Some authors opinion is that this word is derived from the words Bancus or Banque, which mean a bench and they further relate banking business inception to Jews in Lombardy. On November 9, 1959, UBL was notified and included as a private schedule bank with authorized capital of Rs. 20 million; issued and paid up capital of Rs. 10 million divided into 1 million shares of Rs. 10/ each. Currently BOD and president/ CEO Mr. Amar Zafar Khan being a member of this newly formed set up manage UBL. Chairman His Highness Sheikh Nahayan Mabarak Al Nahayan and Deputy Chairman Sir Mohammed Anwar Pervez are the two supreme controllers of the banks affairs. Another development is the appointment of director operation, Nauman Hussain by the newly privatized bank. UBL is a commercial bank. Commercial Banks have constituted the most important [part of the intuitional credit in the economy of Pakistan. Being the largest source of credits, Banking Industry is a pivot of whole the economic activities in Pakistan. UBL has a large network of branches, which extends to the remotest areas of the country. In December 1983, there were 1417 branches whereas in 1974 it had only 1238 branches and in December 1999 there were 1623 branches and in December 2003 there were 1821 branches. Presently there are 1056 domestic branches and 15 overseas branches.

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1.7 FUNCTIONS OF UBL: UBL is a commercial bank, which transacts the business of banking in accordance with the provisions of BCO, 1962. Section 7 of the Act authorizes banks to engage in the prescribed form of business. In the light of this section UBLs functions can be categorized as under: Agency services Providing specialized services to customers, and Hajj-related services. 1.8 ROLE OF UBL BANKING SECTOR: The impressive growth and development, which UBL achieve, present it undoubtedly the most dynamic and progressive. In a very shorter period of time it became one of the leading banks overtaking several other older and its competitor banks4. The major contributions5 the bank has made are enlisted below: Professional management Modern banking policy Small loans (or) micro credits Utility bills collection Diaries and calendars received prizes too Promotion of sports UBL is a commercial bank. Commercial Banks have constituted the most important [part of the intuitional credit in the economy of Pakistan. Being the largest source of credits, Banking Industry is a pivot of whole the economic activities in Pakistan

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Organizational structure
UBL also has a well defined formal organizational structure.UBL is a very vast organization. In the organization set up of UBL, the highest authority rests with Board of Directors which consists of Chairman, Deputy Chairman,President & CEO and the directors. In which four directors are from UBL, one from Pakistan Banking Council, one from Ministry of Finance and one who is also the secretary of the board. So the Board of Directors is an eight member team, and is responsible for policy formulation and making important strategic decisions.Hierarichal structure in (appendix 1)

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

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

Core Values

Honesty and integrity Commitment and dedication Fairness and meritocracy Teamwork and collaborative spirit

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Humility and mutual respect Caring and socially responsible

Objectives
Objectives mean the end towards which an activity is aimed. An organization without objective is like a person who is wandering with no purpose. All the activities of an organization are due to its objectives and goals. And for the attainment of those objectives, various types of financial products and plans are developed. UBL has also some objectives, which are as under. To ensure growth and development of the bank. To use resources of the bank efficiently. To get more deposits. To participate in development of the country. Paying special attention to the areas, which are under developed. To develop SMES. To increase industrialization in the country. To provide financial help to the farmers. To provide employment opportunities. To make people more of mind to have saving habits.

Products and Services offered by UBL:

Consumer Banking
United Bank limited aspires to be the leading provider of consumer banking services in the country besides the fact that UBL was the Last entrant in the consumer products of the new age but Not The Least. The banks operating strategy in this regard has been aligned with the core customer needs of highest value and expert services. The bankers in general are facing challenging time today as bankers; as they should be more than just custodians of clients funds. Rather they should devise safe and prudent methods of maximizing the returns on hard earned savings and investments of their customers. These corporate values are evident in United Banks diversified product portfolio which includes Current a/c, Pls saving, Business Partner a/c, Term Finance Certificate, UBL Profit certificate of deposit, Monthly income, Foreign currency a/c,

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Rupee travelers check, Money gram, Safe deposits, Car finance, Credit card, Personal loans, Housing finance, Business Loans and Running Finance. In the arena of consumer banking the bank has carved a niche in the market place, with products like car finance, rupee travelers checks homes and car loans for U.A.E based non-resident Pakistanis. It has set up strong internal control mechanisms to monitor and measure risks arising out of consumer banking products. The bank is developing electronic, automated and computerized environment to give impetus to their efforts in consumer banking area.

Corporate Banking
Systems and operations have to be aligned so that they support the performance of the Organizations product offering. Consequently, business process re-engineering and quality control are on the main maxims of corporate philosophy. United Bank Limited has the Corporate Banking Group (CBG) which enhanced the image of UBL in the corporate world and also increased the advances, revenues and profit of the bank to the new heights. United Banks product line-up fulfills and satisfies the banking requirements of not just the conventional consumer, but the demanding financial needs of the corporate sector as well. Corporate product includes current deposits, foreign deposits, over draft, term loans, project financing etc. The bank is continuously setting new standards of services in the industry and is becoming reliable financial ally of all the customers.

Automated Banking
Technology and automation play a pivotal role in the progressive development of any organization. It has become impossible to control the operations of a bank effectively in real time situation without the latest technology. The bank continues to invest heavily into the progressive automation and computerization of all banking activities. Its aim is to achieve total connectivity between branches. The objectives are to achieve efficiency in services and to control costs. UBL has recently installed the New-state-of-the-art ATM machines in UAE. United Bank Ltd provides: ATM/ UBL Wallet Debit Card Online Banking/ Uni Remote Telephone banking UBL Business Partner ( In 500 branches and 250 cities)

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Islamic Banking
UBL has played an important role in Islamic banking and successful operation of Non- interest based system of banking. The interest free banking system was introduced on January I, 1981. Since then, UBL has played an important role in the successful operation of this system. For this purpose, it has established a special division, The Islamic Banking Cell. The sincere efforts of UBL as making Islamic Banking successful is proved by the fact that it declared the highest rates of profit for PLS deposits for the first half year of 1983. This has been due to a sound planning of all its Islamic Banking efforts. The bank has provided capital to businessmen and industrialists on the basis of Mudaraba and Musharika. Additionally the bank has started interest- free hire purchase and lease schemes for financing purchase of buses, trucks and industrial machinery on installments. The bank also provides Qarz-e-Hasna to needy and deserving students.

AGRICULTURE
UBL has contributed in full measures to the development of agriculture. It has always exceeded, by a considerable margin, the targets given by the State Bank of Pakistan. UBL has also provided loans for a variety of agricultural activities including tractors, tube-wells, fertilizers, insecticides, poultry farming, bio-gas plants etc. The bank officers who are qualified agricultural graduates not only provide loans at the doorsteps of the farmers, but also render technical assistance to them. To maintain constant liaison with the farmers, the bank officers have been provided with motorcycles. Financing of Small Business to meet the goals of social justice, the bank has zealously participated in the small loans scheme. It has always tried to exceed the targets fixed by the state Bank. A full- fledged department catering to the needs of small businessmen is functioning. To improve its operations, the bank has made arrangements for overseas training of its staff. The bank is also participating in the dollars 30 million IDA credit, which will be provided to small industrialists. For training its staff, a staff collage was established at Karachi in 1994. Now there are three such colleges at Karachi, Lahore and Rawalpindi, where the officers and staff are provided extensive training. Furthermore for training senior officers, a UBL school of Banking has been set up at

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Karachi. Senior bankers and management experts provide training to the executives and senior officers of the bank.

RESEARCH DEPARTMENT
UBL was the first commercial bank in the private sector to establish a full- fledged Research Department. Prominent economists of the country have been acclaimed both at home and abroad. Not only does this research provides useful and cogent studies of economic development in Pakistan and abroad, it also assists in the managerial decision making process. The Research Department is publishing Economic Matters every month since 1967. It was recently upgraded to UBL Economic Journal. In addition, the department also brings out the UBL Home Journal.

COMPUTER SERVICES
UBL was the first bank to introduce computers. The Computer Division was established in 1968. Presently, UBL has Computer Department at Karachi, Lahore and Rawalpindi. Many branches have been fully equipped with computers. The Computer Division prepares weekly, monthly, quarterly, bi- annual and annual reports for top services to many Government, Semi Government and private institutions.

SERVICE TO HAJJIS
For providing prompt and efficient services to the intending Hajjis who come to UBL every year, the bank has introduced the most modern system of electronic banking which permits all formalities to be completed within a short time. This year 2005, UBL received the greatest number of applications from customers for Hajj, which shows the customers faith in UBL.

AUXILIARY BANKING SERVICE

Bank provides a number of auxiliary services such as credit cards, travelers checks and school banking.

COLLECTION OF UTILITY BILLS

UBL also collects electricity, gas, and telephone bills from the public on behalf of the respective organizations. The bank also introduced the bills collection facilities in selected branches in the evening hours for the convenience of general public. And now selected UBL branches are collecting the utility bills through online banking.

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ISSUANCE OF TV LICENSE
UBL also collects TV License fee on behalf of Pakistan Television Corporation and issues TV Licenses to the general public.

SPORTS
UBL was one of the first banks to patronize sports. Senior executives at the highest level supervise the sports activities. The bank has established a special department to organize its various sports activities. It has provided patronage to leading sportsmen. Many outstanding players and national players have been included in its teams. The bank has won United States of America trophies in hockey, cricket, badminton, table tennis, rifle shooting, etc.

Development of Data Base Management System (DBMS)

United bank is the only bank in Pakistan, which is making use of its own data base management system (DBMS) since 1971. The VIS was used in the three main branches of Karachi. After years of deducted efforts on its work, it succeeded in loping UNI Bank Plus.

1.3 Department Information: Accounts Department

This department deals with the internal accounts of the bank. The only Book maintained here is the cashbook. The summary book and main ledger are maintained. The function of cashbook is to balance the daily transactions. At the end of the day this department receives cash position from the cashier. This position shows opening and closing balance.

Types of Accounts
There are three types of accounts: Current Accounts Saving Accounts Fixed Accounts

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Remittances department
This dept is concerned with transfer of money from one place to another place. Remittance can take place in three different ways. a.

Mail Transfer
When a customer requests the bank to transfer his money from this bank to any other bank or the branch of the same bank in the city/ outside the city or outside the country, the first thing he has to do is to fill an application form in which he states that I want to transfer the money from this bank to another bank. If the customer is the account bolder of bank, then the bank will debit his account. The concerned office will fill the different forms to make the mail transfer complete. Three forms used for this purpose are listed below;

Debit voucher Credit voucher Mail transfer register If the customer is not the account holder of bank, then firstly he has to deposit the money and then the above said procedure will be adopted to transfer his money.

b.

Telegraphic Transfer
This type of transfer is simple. After filling the application form, the concerned officer fills the telegraphic form. This telegram is sent to the required bank. Which on receiving it immediately makes the payment to the customer and afterwards the vouchers are sent to the bank by ordinary mail.

Demand Draft
DD is just a check and is issued when the customer wants to take the draft personally. The idea behind it is that as the cash is not safe to be kept along and a check in the shape of a draft is safer and one can easily get cash by presenting it in the bank, on whose favor it has been made. Draft is only issued when the customer is known to the bank and the bank has the confidence that the customer will not do anything wrong with the draft. For the preparation of a draft, first of all customer has to fill an application form, then the concerned officer fills the following before delivering the draft to the customer. The forms filled for this purpose are as follows;

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Demand draft register Credit vouchers

Deposits department
The main economic function of the commercial bank is to receive surplus balances of individuals, firms, public institutions and to honor check drawn up to it. The funds deposited with the commercial banks are classified under four main heads. a.

Current or Demand Deposits

In this type of deposits, the depositor at any time by presenting a check can draw his money from the bank. People keep some of their deposits in current account in order to have ready command over money. No interest is given on current deposits, because it is subject to transfer or cashing by check at sight. The bank charges commission on the account, which is called bank charges.

b.

Saving Deposits
This deposit refers to the deposits, which are kept to meet the customer and unexpected outlay or to safeguard financial respectability. The bank undertakes to repay the money on demand up to a certain limit fixed by the rules of the bank. The bank pays interest to the customers on saving deposits. The customer has to give a notice to the bank about two weeks in advance for withdrawal of large amounts.

c.

Fixed Deposits
Fixed deposits are those, which are repayable only after the expiry of the stipulated period i.e. from three months up to sixty months. The rate of interest depends upon the length of the period. The rate of interest on fixed deposits is higher than saving account, because the bank can safely utilize these deposits for a certain period. Customer is allowed to borrow the required amount, which should not exceed his fixed deposit. The bank charges one or two percent higher rate of interest than the profit allowed to him at his fixed deposit. The bank issues a receipt against the fixed disposition stating the amount and the time of expiry to the customer. There is no paying book or passbook or checkbook issued to the depositor.

CALL DEPOSITS
It is a type of bank guarantee on behalf of the depositor given at call. In this case, Security Deposit Receipt (SDR) is issued by the bank at the instructions of the depositor, confirming that
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amount of the SDR is held by the bank, to be paid whenever called upon to do so by the beneficiary named in the SDR.

1.20.4 ADVANCES DEPARTMENT

It is the loan function, which produces the major portion of banks income, and as such it is one of the major areas of professional bankers concerns and attention. A bank generally deals in following areas; Agricultural finance Commercial finance Industrial finance Export finance Import finance

In addition to the above-mentioned broad areas, there are loans available to small size businessmen, construction companies etc.

In UBL, advances department is responsible to deal with following cases; 1. 2. 3. 4. 5. 6. Handle all the cases of short and long term loans. To process all the cases concerned. To forward the cases for approval and consideration to the higher authorities. To deal with the borrower directly. To implement the disbursement of the loan. To give feed back to higher authorities in advance. UBL advances loans in the following manners:

By Cash Credit
In this form of lending, the bank lends money to the borrower against a tangible security. The total amount of the loan, which is given, is not paid in one installment. The borrower has to pay interest on the amount borrowed. Cash credit is the favorite loan for large commercial and industrial concerns, on account that the customers need not to borrow at once the whole amount he is likely to require, but can draw such amount as and when required.

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a.

By Discounting Bills of Exchange

It is another method of advancing loans to borrowers. The holder of bills is paid an amount equal to the face value of the bill after deducting interest at the market rate for the period the bill has to mature. Interest in this type of loan can be charged as running finance and demand finance.

b.

By Over Drafting
This facility is given to regular, reliable and well- established customers. The bank charges interest on the extra money, which the borrower takes. When a customer requires temporary accommodation, he may be allowed to overdraw his current account usually against collateral security. From the customers point of view this agreement like cash credit is advantageous, as he is required to pay interest on the amount actually used by him.

Foreign exchange department In modern banking system, foreign exchange department plays very crucial and important role from every aspect. It is parallel banking with general banking with an additional function of import and export business controlled by State Bank of Pakistan. Rules and regulations are framed by state Bank of Pakistan in the form of manuals. Foreign exchange department under SBP regulations also carries out international banking of UBL. Foreign exchange is being controlled by SBP. No transaction can be affected without permission of SBP, under foreign exchange regulations Act 1947 and notification issued there under. Exchange control department of State Bank of Pakistan is responsible for day-to-day administration of exchange control. All the transactions shall be done at rate authorized by SBP. For this purpose, US dollar has been fixed by SBP and the rates of other currencies are calculated in accordance with the formula approved by SBP and as published daily by the Foreign Exchange Rate Committee in Karachi. Head office ensures that the branches receive the rates published by Foreign Exchange Rate Committee on the same day. The foreign exchange department provides the following services; 1.

Foreign Currency Accounts

Foreign currency in UBL can be opened in 4 major currencies of the world i.e. US dollar $, Japanese Yen, German Mark, DM and Pound Sterling. Only authorized branches of UBL can deal in foreign currency account.

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Pakistani citizens and foreigners both can open foreign currency account by introduction and following the procedure required for general accounts with one exception for foreigners that they will have to submit a copy of their passport. The account may be personal or joint. Amount deposited in foreign currency account must be in four currencies, which were mentioned earlier. When the customer will withdraw the money he will receive the amount in the same foreign currency. Profit will also be in the same currency. There are two types of foreign currency account; Current account Saving account

Current Account
On current account, no profit is given to the account holder. This account is exempted from zakat, income tax and wealth tax. Worldwide remittances (inside and outside) facility is given to customer. Cash travel checks, foreign exchange bearer certificate, and coming for customer can be deposited in his account. Similarly account holder can shift the amount or any part thereof to foreign countries through exchange remittances service. a.

Saving Account
On saving account, a handsome profit is paid to the account holder. On saving account, profit is paid to the customer in the same currency in which he had opened the account. This account is also exempted from zakat, income tax and wealth tax etc. Saving account can be opened with an amount of $ 100 equivalent in other three currencies. The facility of inward and outward remittance is also granted to the customer. Profit is paid on monthly product basis.

Sale and Purchase of Foreign Currency

UBL is an authorized dealer of State Bank of Pakistan. It can sell and purchase foreign currency. UBL usually involves sale and purchase of US dollars, Japanese yen, Pound Sterling, German Mark, Saudi Riyal, and UAE Durham. Daily exchange rate by SBP from ANZ Grind lays Bank Karachi is sent to all the branches authorized in foreign exchange. Daily sale and purchase of foreign currencies is done according to that rate sheet issued by SBP on daily basis. Sale and purchase rates of foreign currency are different.

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The purchase of coins is avoided, only notes are purchased. Only those foreign currencies are purchased for which resale to customer is possible. And only those persons, who have passport, can sell and purchase foreign currency to or from UBL. Foreigners can also sell foreign currencies by showing their passport. There are 5 rates of foreign currencies: For import Cash purchase Cash sale Travel check purchases Foreign currency It is the policy of UBL to involve only in the sale of hard currencies i.e. those, which are easily accepted. Head office of UBL has given certain limits to each authorized branch about the custody of foreign currency. If the amount exceeds this limit, the branch must transfer the cash to feeding branch or SBP. All the authorized branches of UBL must submit following reports about foreign exchange business; 1. 2. 3. Report to general manager office Monthly business report to SBP Monthly report to head office

Remittances in Foreign Exchange

As we know that the money of one country is not legal tender in other countries. The monetary device, which has been evolved, for all international payments is the foreign exchange from the exporter and others who have it for sale and sell foreign currency to importers and others who need it in their own countries. A transfer from a bank account in the debtors country to the creditors country affects the international payments. Two branches of the same bank or of different banks involve in foreign remittance. One is called remitting branch or bank and the other is called receiving branch or bank. In foreign currency, SBP has given general permission to authorized dealers in foreign exchange including UBL to affect remittances for specific purposes without referring it to (SBP) for approval i.e. remittance on account of education subscription, books and periodical of technical nature. Remittance can be done in following ways;

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Telegraphic Transfer (TT) Mail Transfer (MT) Foreign Demand Draft (FDD)

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Chapter no.2 COMPANY ANALYSIS

The critical analysis involves conducting the Internal and External analysis of the organization. Internal analysis refers to SWOT analysis and External analysis refers to PEST analysis.

2.1 SWOT Analysis

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

Strengths:
It is one of the largest private banks with a deposit base of Rs. 94883/- millions showing constant growth over the period. It has a well-knitted branch networking system that efficiently covers both the domestic and international markets. It is involved in both corporate and retail banking. Advances investment of the bank shows a constant growth pattern. The current years growth rate is 32%. The bank is owned by parties of financial repute and credit worthiness like, SBP with 48.69% interest, Best Way group and Abu Dubai group with 25.50% of interest each. Others are GOP, NBP Trustee Department, State Life Insurance Corporation etc.

Weaknesses:

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Accumulated losses pushed the bank to cut down its promotional activities in order to reduce expenses for last few years.

During the nationalization life span of the bank political lords used influence in bank business and selection of employee and thus adversely affected the banks efficiency and effectiveness.

Administrative expenses are 51% of the mark up revenue. Promotions are carried out on annual basis ignoring the importance of capabilities and performance outputs.

Opportunities:
Growing policies of the GOP on business and economic sectors provide UBL an opportunity to efficiently meet with the business people requirements of instant cash facilities e.g. the government intentions of developing housing and agriculture sectors. Government is taking very bold steps to promote IT in Pakistan UBL has an opportunity to improve in IT stock exchange is very volatile and takes immediate effect so in times of crises conservative investors turns to saving deposits. UBL is surrounded by many competitors it has an opportunity to aggressive marketing to increase its business. Increase the product range to meet the broader range of customers needs.

Threats:
Threats are also external factors in the environment, which are not in the favor of company, which can seriously hamper the companys ability to serve its customers.

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Expansion of new commercial banks like ASKARI bank, UNION bank and etc.. And their better performance may cause loss of market shares of UBL.

According to World Bank report the Pakistan has become over banked economy with cut throat competition for deposits in the industry the battle is on for the market shares. The customers have emerged as the main Beneficiaries of the competition. Now they are getting more personalized services and innovative product.

Along with the growth in size, the banks are now incorporating innovative approaches to their traditional commercial banking operations, keeping in the view the changing demand of the time. UBL face problem.

The political influences affect the performance of bank very badly. Most of the loans become bad dad debits due to political pressure

No stable government in Pakistan, Government policies change with the change of government. The concept of evening and Saturday banking, telephonic and online banking, ATMs and credit cards are direct result of the intensive competition. But UBL is behind the above-mentioned services.

Freezing of foreign currency account by the government of Pakistan is also a fear for the bank.

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2.2 PEST Analysis

It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning.

The organization's marketing environment is made up of:

1. The internal environment e.g. staff (or internal customers), office technology, wages and finance, etc.

2. The micro-environment e.g. our external customers, agents and distributors, suppliers, our competitors, etc.

3. The macro-environment e.g. Political (and legal) forces, Economic forces, Sociocultural forces, and Technological forces. These are known as PEST factors. (Appendix 3)

Political Factors.
The political arena has a huge influence upon the regulation of businesses, and the spending power of consumers and other businesses. You must consider issues such as:

How stable is the political environment? Will government policy influence laws that regulate or tax your business? What is the government's position on marketing ethics? What is the government's policy on the economy? Does the government have a view on culture and religion?

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Is the government involved in trading agreements such as EU, NAFTA, ASEAN, or others?

Economic Factors.
Marketers need to consider the state of a trading economy in the short and long-terms. This is especially true when planning for international marketing. You need to look at:

Interest rates. The level of inflation Employment level per capita. Long-term prospects for the economy Gross Domestic Product (GDP) per capita, and so on.

Sociocultural Factors.
The social and cultural influences on business vary from country to country. It is very important that such factors are considered. Factors include:

What is the dominant religion? What are attitudes to foreign products and services? Does language impact upon the diffusion of products onto markets? How much time do consumers have for leisure? What are the roles of men and women within society? How long are the population living? Are the older generations wealthy? Does the population have a strong/weak opinion on green issues?

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Technological Factors.
Technology is vital for competitive advantage, and is a major driver of globalization. Consider the following points:

Does technology allow for products and services to be made more cheaply and to a better standard of quality?

Do the technologies offer consumers and businesses more innovative products and services such as Internet banking, new generation mobile telephones, etc?

How is distribution changed by new technologies e.g. books via the Internet, flight tickets, auctions, etc?

Does technology offer companies a new way to communicate with consumers e.g. banners, Customer Relationship Management (CRM), etc

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Chapter no.3 FINANCIAL ANALYSIS

Financial analysis (also referred to as financial statement analysis or accounting analysis) refers to an assessment of the viability, stability and profitability of a business, sub-business or project. It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decisions.

Continue or discontinue its main operation or part of its business; Make or purchase certain materials in the manufacture of its product; Acquire or rent/lease certain machineries and equipment in the production of its goods; Issue stocks or negotiate for a bank loan to increase its working capital; Make decisions regarding investing or lending capital;

Financial analysts often assess the firm's: Profitability: Its ability to earn income and sustain growth in both short-term and long-term. A company's degree of profitability is usually based on the income statement, which reports on the company's results of operations; Solvency: Its ability to pay its obligation to creditors and other third parties in the long-term; Liquidity Its ability to maintain positive cash flow, while satisfying immediate obligations; Stability:

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Its ability to remain in business in the long run without sustaining significant losses in the conduct of its business. Assessing a company's stability requires the use of the income statement and the balance sheet, as well as other financial and non-financial indicators.

3.1. COMMON SIZE ANALYSIS

Vertical analysis also called component percentages indicate the relative size of each item included in a total. For example each item on a balance sheet could be expressed as a percentage of total assets. This shows quickly the relative importance of each type of assets as well as the relative amount of financing obtained from current creditors, long term creditors and stockholders. Another application of vertical analysis is to express all items in an income statement as a percentage of net sales. Such a statement is called a common size income statement. Similarly Horizontal analysis compares the trend in items of balance sheet and income statement over the years as a percentage of base year. The values in first year are termed as base values and those in rest of the years are divided by base values and then multiplied by 100 to get a percentage increase or decrease in the item. The goal of accounting is to provide economic decision makers with useful information. The financial statements generated through the accounting process are designed to assist users in identifying key relationships and trends. The changes in financial statement item from one year to following year are often expressed as trend percentages or horizontal analysis to show the extent and direction of change. The balance sheet and Income statement alone cannot provide enough information to compare the firms performance over the years or to compare it with other firms in the same industry. Therefore common size statements are helpful to serve the purpose of financial analysis. This concept is being widely used.

BALANCE SHEET UBL YEAR 2008 2010:

BALANCE SHEET

2008

2009 (US Dollars in '000)

2010

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Assets cash and balance with treasury bank balances with other bank lending to financial institutions investments Advances Performing non-performing-net of provision 633,938 183,825 288,316 1,454,605 6 1,470,047 5 ,407,470 23,162,130 1 36,145,524 3 42,663,339 1 1,428,374 3 54,091,713 2 1,925,669 6 08,876 1 6,905,004 6 19,716,433 6 7,461,668 1 8,192,142 1 2,384,778 2 24,578,556 3 18,673,884 1 5,058,288 3 33,732,172 2 2,424,072 1 ,298,403 1 8,713,188 6 98,784,979

4,651,922 130,647 4,782,568

operating fixed assets deferred tax assets-net other assets

251,925 27,360 218,831 7,841,369

Liabilities bill payables Borrowings deposits and other accounts subordinate loan liabilities against loan subject to finance deferred tax liability other liabilities

NET ASSETS represented by: share capital Reserves

5 ,147,259 3 565,746 5,144,823 4 6,223,480 92,036,103 1 151,632 1,989,800 25 0 1 210,125 4,461,725 5 7,216,886 58,779,710 6 624,483 0,936,723

65,878

5 ,045,815 4 5,104,849 5 50,645,767 1 1,985,748

1 7,587,735 6 30,369,914 6 8,415,065

127,906 218,159

1 1,128,907 1

1 2,241,798 2 1,688,637

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Unappropriate profit

223,814 569,879 25,849 595,728 28,755 624,483

8,959,537 2 2,187,802 5 2,276,246

2 6,250,489 6 0,180,924

minority interest surplus on revaluation of assets-net of deferred tax

8 ,660,477 6 0,936,723

8 ,234,141 6 8,415,065

INCOME STATEMENT UBL YEAR 2008 2010:

INCOME STATEMENT

2008

2009

2010

(Rupees in '000) 6 671,282 1,107,025 2 307,252 8,163,787 3 364,030 2,943,238 74,385 6,351 57,075 5 60,852 9 ,623,204

interest earned/mark up /return interest expense interest income provision against loan and advances-net/ additional provisioning arising on account of change in Prudential Regulations provision against loan and advances-total provision against lending to financial institutions

5 9,331,761 2 5,223,253 3 4,108,508 6 ,803,355 0 0

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provision against diminutions in value of investments-net bad debts written off directly

23,661 17,289 98,026

net return interest income fee commission and brokage income dividend income income from dealing in foreign currencies gain on sale of securities-net unrealized loss on revaluation of investments for trading other income total interest income

266,004

9 45,342 1 ,485,976 1 2,615,374 2 0,327,864

2 04,573 9 96,772 8 ,004,700 2 6,103,808

92,275 2,419 21,250 3,216 -199 19,041 138,068 404,071

5 ,925,082 6 06,347 1 ,213,881 6 29,418 -3,006 3 ,047,849 1 1,419,571 3 1,747,435

6 ,337,745 5 91,017 1 ,653,793 1 58,885 -38,365 1 ,417,557 1 0,120,632 3 6,224,440

interest expenses administrative expense other provisions-write offs workers welfare funds other charges total mark up/interest expenses share of (loss)/income of association profit before taxation Taxation Current prior years Deferred profit after taxation 210,876 5,917 4,305 3,696 224,795 -1,624 177,653 1 6,608,561 6 42,274 3 97,547 6 4,552 1 7,712,934 0 1 4,034,501 1 7,765,056 6 3,233 4 13,542 2 40,391 1 8,482,222 0 1 7,742,218 6 ,805,506 4 15,136 -638,354 6 ,582,288 11,159,930

77,770 6 ,930,585 5,500 7 6,328 -12,387 -2,165,099 70,884 4 ,841,814 106,769 9,192,687

attributed to:

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equity shareholders of the bank minority interest

105,637 1,131 106,769 (Rupees) (Rupees) 0.1 7.15 9 .12

earnings per share basic and diluted

Common size analysis in (appendix).

3.2. RATIO ANALYSIS

Ratio Analysis is an excellent method for determining the overall financial condition of company. It puts the information from a financial statement into perspective, helping to spot financial patterns that may threaten the health of the company. Ratios are also very useful for making comparisons between companies relevant to the same industry. The analysis of financial statements can provide reasonable insight into a firm's state of affairs. But the statements have inherent limitations, which require care and prudence in their uses. One of the most common ways of analyzing financial data is to calculate ratios from the data to compare against those of other companies or against the company's own historical performance. Ratio analysis of UBL from year 2008-2010: net profit margin gross spread ratio

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non intrest income to total income ratio spread ratio return on asset return on total equity debt ratio debt to equity ratio times interest earned ratio
Net Profit/Revenue*100

operation cash flow ratio

0 10 = 26103808/59331761*100=44%

dividend per share

2009=20077874/60857035*100=33% 2008=19760154/51919229*100=38%

earning per share price per earning ratio

The caculation and interpretation of these ratios of financial statements of UBL are as follows: net profit formula:

Net Profit/Revenue*100

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Chapter no.4 INTERNSHIP EXPERIENCE

4.1. Concerned Department Information

During my Internship in the UNITED BANK LIMITED, I really enjoyed working with the staff of civic Branch of UBL, ISLAMABAD from 17th July 2011 to 29th August2011. It was almost impossible to work in all the departments within that limited time. But on my request, the staff of the branch provided me the opportunity to work in the different departments for the sake of practical knowledge. I am really very thankful to Sir ARIF Branch Manager for his support and assistance.

4.2 Working Experience (Duties and Responsibilities)

I started my internship on. I have done work on almost every department and sections of UNITED BANK LIMITED. During my stay in UBL I tried my best to grasp as much practical experience and knowledge about the working of the banks as I can. I spent different duration of time in all these departments.

FIRST WEEK

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I started my first day of internship just with the introduction of the bank employees and the bank

departments. I reported to the Branch Manager, Mr.ARIF. SECOND WEEK:

During second week of my internship program, I was given an opportunity to work in remittance department. Remittances Department Remittance department performs following functions: Mail Transfer (MT): It is generated when a customer requests the bank to transfer his money from one branch to another branch or from one city to another city of the same bank or any other bank. Officer will undertake the following procedure to make the mail transfer complete. Branch Mail Transfer Form Receiving Branch Register Copy Issuing Branch Register Copy Beneficiary Advice Advice to Customer

In case where the customer is not account holder of the bank then the customer will have to deposit the amount which he wants to transfer under Mail. Then the above said procedure will be done. Telegraphic Transfer (TT): This type of transfer is simple. After filling the application form the concerning officer shall fill the telegraphic transfer form. Then it is sent to the required bank which on receiving it immediately makes the payment to the customer and afterwards the voucher is sent to that bank by ordinary mail.

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Demand Draft (DD): Demand Draft is just like cheque and issued when the customer does not want to take cash with him personally. The idea behind is to avoid the risk and burden of currency notes in huge quantity. Demand draft can easily be handled whatever amount it has and the money can easily be taken from the bank when it is presented. In fact, the bank persuades the customer to transfer money by drafts and avoid the risk of frauds involved in MT and T.T. Draft is only issued when the bank knows customer and bank has the confidence in him. In case of transfer of money by drafts, the customer has to fill an application form. Then the concerned officer fills the following forms: Customers advice Customers debit form Register copy Cover Advice

THIRD WEEK
During third week of my internship program, I was given an opportunity to work in Accounts Department.

Accounts Department: Account opening and closing is the function of Accounts

Departments. Banks customers may be individuals (Single or Joint), firms (partnership/proprietorship), Autonomous corporations, Limited Companies, Charitable

Institutions, Associations, Educational Institutions or Local Bodies. UBL normally opens following types of accounts. Current account Saving account

It performs the following functions Opening of Accounts

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Sir ARIF helped me to understand procedures and precautionary measures which are involved in these processes. Providing account opening form according to the customer's requirements and guiding them. Check the forms whether they are completed correctly or not and preparing checklist Stamping on the form and maintaining account opening register Pasting of forms in register after release from general banking in charge Issuance of cheque books and accounts maintenance certificate Closure of account Verification of signature in case of cheque presented before releasing of account opening from SS card is not yet scanned Procedure to Open an Account According to my practice in UBL, when a customer wants to open an account, the bank officer gives him an application form. All information, which is necessary to be known by the bank, are requirements of the application form. Form also requires the essential documents to be attached by the customer. Basically following information is required to open an account with UBL, Title of Account Full Name of Applicant along with occupation, address and contact details. Currency of account Nature of Business Introducers Name, Address and Signatures Special instruction regarding the account Initial Amount of the Deposit Signature of the applicant

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Minimum amount for opening and continued maintenance of various types of accounts is as follows: Saving Current Term Deposit Rs. 500 Rs. 500 Rs. 1000

The bank reserves the right to change the above mentioned minimum balance requirement at any time without any notice. Further I learned that if you wanted to open an account with UBL then you should attach the following documents with your application form which are different for different categories. FOURTH WEEK I was subjected to know about the different categories of account opening. a) Sole Proprietors Account In order to open an account with UBL Sole Proprietors have to submit their business registration certificate number.

b) Private / Joint Account For individual or private or joint accounts National Identity Card is required.

c) Joint Stock Company Before an account of a Public Limited Company is opened UBL must ask the person authorized to do so to submit the certified copies or the following documents: Certified true copy of the Memorandum and Articles of Association of the company. Certified true copy of the resolution of the board of directors / managing committee / governing body regarding conduct of the account Certified list containing names and signatures of the directors / office bearers.

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Certified true copy of the certificate of incorporation or registration. Certified true copy of the certificate of commencement of business (in case of public limited companies). Balance Sheet I.D. Card copy of each director Original is also enclosed for inspection and return List of persons authorized to operate the account. Power of Attorney in favor of the person opening account. d) Partnership Firm Account Information which is required to be submitted to UBL by a partnership firm in this case is as follows: Full Names Address Specimen of signatures of the partners Certified true copy of partnership deed Registration No. if the Partnership is registered e) Societies / Clubs and Associations Account Societies/Clubs and Associations, these are non-trading organizations, formed for the promotion of culture, science, education, recreational activities and charitable purposes etc. some of these institution are registered under the Societies Registration Act, 1866, and are issued a certificate of registration after they have been found fit for registration. UBL authorized to open the accounts. After opening the account bank I sent letter of thanks to A\C holder and introducer.

FIFTH WEEK

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During Fifth week of my internship program I learnt how to issue cheque books and make payment of a cheque.

Issuance of Cheque Book:

When a customer opens an account with the bank, he is provided with cheque book for withdrawals from account. A cheque book contains ten, twenty five, fifty or hundred leaves. Usually only one cheque book is issued at a time. The officer keeps and maintains the Cheque Book Register, Cheque Book Inventory. The account number for which the cheque book is issued and the number of leaves are also recorded in this register when the cheque book is issued an entry is passed in the cheque book issue register. In case of loss of cheque book or requisition slip on cheque book the customer has to fill the Form No. 216-B to obtain a new cheque book. Normally UBL issues 25 leaves cheque book. Payment of Cheque: The cheques are paid in one of the following ways:By cash payment over the counter By transfer (from one account to another) By collection/clearing LAST WEEK: The branch manager give me the lecture regarding my workings, skills that I should have to adopt to exists in the banking sector, He told me that how can I enhance my abilities that I am lacking, He motivates me on my punctuality and my working ability. Guides me on different aspects and on mistakes that I have made in my last 5weeks.give the lecture regarding Islamic and conventional banking. And give me the overview of what I have learned there.

4.3 Learning / Achievements

The Skills Which I Have Learned: I have learnt to adapt to a variety of tasks.

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I have gained persistence to complete tasks. I learned that how to deal with customers. I have gained ability to plan with and work cooperatively with others. In working environments, some coworkers always try for leg pulling. So in that case I have learned how to deal in stressful situations.

Learned the practical application of the theory we have studied. Social skills are developed. Enhanced my communication skills. More responsibility arises.

Significance in my specialization: As I have also worked in finance department and this is my major and before my internship I have just studied the theory regarding finance. But after my internship I feel so much courageous that now I have learned the practical knowledge related to finance functions that I have previously studied in books.

Three Strengths/ Achievements: 1. I can now apply my theoretical knowledge in practical experience also.

2. My confidence level has also been increased and now I can deal with customers in my practical life and also with other people.

3. My communication skills are very much improved and which is very important strength now-a-days according to my observation.

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Hurdles faced by me: During my internship I have learned a lot from my bank but there were also some hurdles, some challenges which I have faced. They are as follows; I did internship in a Sub-Branch of Askari Islamic Bank, where the staff was just little. So, the ratio of gaining knowledge from just few employees was very low.

Some of the officers had very strict behavior so it was difficult for me to work with them but still I had work.

The sub-branch which I have chosen was not the busy branch thats why the work load was quite less. Due to this I had facing a problem of observing less customers and less practical work. Mostly, officers gave me verbal lectures.

4.4 Skills Used: Following are the skills and capabilities I used at SAT: 1. Reading and Comprehension 2. Communication skills 3. Presentation skills 4. Computer skills (MS Word, MS PowerPoint) 4.4.1 Skills Acquired: Following are the skills and capabilities I acquired at SAT: 1. Computer skills (MS Excel) 2. Interacting with men 3. Dealing with professionals 4. Accounting skills 5. Behavior regulation 6. Theoretical analysis

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Chapter no.5 CONCLUSION AND RECOMMENDATIONS

5.1. Conclusions
One of the most important aims of the student life is to express him / her correctly and adequately. This was believed in my mind when I first decided to go to UBL to complete my internship program. The impressive growth and development, which UBL achieve, present it undoubtedly the most dynamic and progressive. In a very shorter period of time it became one of the leading banks overtaking several other older and its competitor banks. The staff of UBL is good, cooperative and well qualified. The entire employees are hard worker and perform their duties with in time period. A few employees showed rudeness and were not much cooperative with internees but I think it was due to the fact that they were heavily loaded with work and because of more work they seem to be less cooperative. Overall bank is going well and doing a good business but there are few problems for that I have tried to give few recommendations that might help company to improve. In the end I want to say that my internship experience at UBL have strengthened my career plans toward joining banking sector and I hope skills and knowledge which I gained their will help me in perusing my career plans.

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5.2. Recommendations:
To compete with other banks, UBL needs to set strategies for its new product by including the postings strategy, it will help in image building of the financial package to be launched. Once the bank has defined its potential market and has established marketing objectives, it must need to develop posting of its financial product. Position is the desired perception of the product within the market target of the bank for example, if the product is launched. Its position should be done in such a way, that customer is fully aware of its major characteristics the bank has stained to build the image of its products as highly profitable package. This positioning strategy is supported by the strategic consideration on various marketing mix tools e.g. advertisement, publicity etc.

REFERENCES:
Charles H. Gibson, (1987) financial statement analysis (Ed.7), New York, NY Block, Stanley. B. (1978), Foundations of financial management, (9th Ed), Irwin McGraw Hill. Gerald white, Sondhi, fried (1991) financial statement (Ed. 3), Wiley India Pvt Ltd. Horne, James C. (1998), Fundamentals of financial management, (10th Ed), Prentice-Hall Inc.
Annual report of UBL 2010.

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ANNEXURE: Hierarchal structure:

Board of Directors

Executive Committee

President/CEO

SEVP

EVP

SVP

VP

AVP

Office Grade 1

Non Clerical Staff

Page Clerical Staff 40

Officer Grade III

Officer Grade II

LOCATION MAP OF UBL:

Page 41

PESTL ANALYSIS

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Common size analysis of balance sheet and income statement for the year 2008 - 2010:
VERTICAL ANALYSIS BALANCE SHEET UBL YEAR 2008 2010: BALANCE SHEET 2008 Assets 2009 2010

cash and balance with treasury bank 9.5 balances with other bank 10.8 12.3

lending to financial institutions 3.8 investments 19.2 Advances 61.3 operating fixed assets 3 other assets 3.2 2.8 2.9 3.5 3.2 57.1 47.8 22 32.1 3.7 1.8

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Total Assets

100

100

100

Liabilities

bill payables 0.9 Borrowings 7.3 deposits and other accounts 79.9 subordinate loan 2 other liabilities 2.8 Total liabilities 92.8 90.2 90.2 2.3 2.5 1.9 1.7 79.4 78.8 5.7 6.5 0.8 0.7

VERTICAL ANALYSIS PROFIT & LOSS STATEMENT UBL YEAR 2008 2010
INCOME STATEMENT 2008 2009 2010

Interest / Return / Non Interest Income Earned

interest earned / return / mark up

82.9

84.3

85.4

fee commission and brokerage income

12.9

9.8

11.5

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dividend income

1.2

1.7

other income Total

3 100

4.2 100

2 100

Interest/ Return / Non Interest expenses mark up/interest expenses / return 38.4 38.8 36.3

operating expense

25.7

23.5

26.5

other provisions-write offs

13.7

18.3

11.6

Taxation

8.9

6.7

9.5

Total Expense

86.7

87.3

83.9

profit / Loss after taxation Total

13.3 100

12.7 100

16.1 100

HORIZONTAL ANALYSIS BALANCE SHEET UBL YEAR 2008 2010

BALANCE SHEET 2008 2009 2010

Assets cash and balance with treasury bank

123

142.9

183.1

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balances with other bank lending to financial institutions

127.6

129.6

69.3

investments

184.6

216

356.3

Advances

181.2

172.9

162.9

operating fixed assets

406

492.8

504

other assets 194.8 Total Assets 174.5 173.4 178.6 198.1 201.4

Liabilities bill payables 124.9 123.7 121.3

Borrowings

202.8

161.3

207

deposits and other accounts

167.2

170.1

190.4

subordinate loan

299.9

299.8

299.7

other liabilities

269.7

233.1

283.5

Total liabilities

172.6

171.7

193.7

NET ASSETS represented by: share capital

214.8

236.3

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195.3

Reserves

249

304.5

348.4

unappropriated profit 225.9 301.8 357.1

equity- tier 1

225.1

278.7

320.9

surplus on revaluation of assets

56.3

297.4

282.8

total equity

202.4

281.2

315.7

HORIZONTAL ANALYSIS PROFIT & LOSS STATEMENT UBL 2008 2010

INCOME STATEMENT 2008 2009 2010

interest / Return / Non Interest Income Earned

interest earned / return / mark up

257.6

303.1

294.3

fee commission and brokerage income

249.9

221.8

248.3

dividend income

131.7

211.1

121.8

other income

154.2

251.8

117.1

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Total

248.7

288.1

275.9

interest/ Return / Non Interest expenses

mark up/interest expenses / return

398

465.8

417.2

operating expense

204.5

216.6

233.7

other provisions-write offs

484.8

751.9

457.6

Taxation

156.9

137.1

186.3

Total Expense

282.3

329.5

303.2

profit / Loss after taxation

140.1

154.5

187.6

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