Report Atif

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INTERNSHIP REPORT

ON

UNITED BANK LIMITED PAKISTSAN

ZIA SATTARM.COM

ROLL NO: 148Session 2009-2011

Bahauddin Zakariya University, Multan


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PREFACE

In Masters of COMMERCE, Internship Program is an important part to give students an

opportunity to have experience of practical field. Unless and until the students experience

the novelty of practical work, their knowledge of what they study in theoretical courses

remains incomplete. The most important point in an Internship Program is that the

student should spend their time in a true manner and with the spirit to learn practical

orientation of theoretical study framework.

This internship report is on my six weeks practical training at United Bank Limited

ADDA KATTIANWALIBRANCH(1434). In this internship report I have tried to give

details about the United Band Limited, working and the functions of different

departments of the bank.


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ACKNOWLEDGEMENT

All praises to almighty Allah and our holy prophet Muhammad PBUH who gave

me the courage and patience for completion of this final report.

I wish to acknowledge my gratitude to my inspiring Teachers for their endless

their persistence, support and encouragement, and for providing me a lifetime

opportunity to work with UNITED BANK LIMITED.

I am also very thankful to UBL MANAGER and the operations Manager

Mr.Waqas who gave me opportunity to work with experienced persons in their

organization.

I am also thankful to my parents, family and friends that continually offered

encouraging support

ZIA SATTAR

M.COM (Accounting)


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HISTORY OF BANKING

Bank is a pipeline through which currency moves into and out of circulation.

Bank accepts deposits and repays cash to its customers on their demand. The Bank

borrows money at a lesser rate of interest and lends it to the borrowers at a higher rate. It

is thus a profit-lending concern. Bank cannot lend all the money that has been deposited

with it. It has to keep a certain portion of the total deposits in cash with them in order to

meet the cash requirements of the individuals and business concern.

BANKING HISTORY

Word Bank is said to be derived from the wordsBanc us orBanque orBank.The history

of banking is traced to as early as 2000 BC. The priests in Greece used to keep money

and valuables of the people in temples. These priests thus acted as financial agents. The

origin of banking is also traced to early goldsmiths. They used to keep strong safes for

storing the money and valuables of the people. The persons who had surplus money

found it safe and convenient to deposit their valuables with them. The FIRST STAGEin

the development of modern banking, thus, was the accepting of deposits of cash from

those persons who had surplus money with them.

The goldsmiths used to issue receipts for the money deposited with them. These receipts

began to pass from hand to hand in settlement of transactions because people had

confidence in the integrity and solvency of goldsmiths. When it was found that these

receipts were drawn in such a way that it entitles any holder to claim the specified

amount of money from goldsmiths. A depositor who is to make the payments may now

get the money in cash from goldsmiths or pay over the receipt to the creditor. These

receipts were the earlier bank notes. TheSECOND STAGEin development of banking

thus was the issue of bank notes.

The goldsmiths soon discovered that all the people who had deposited money with them

did not come to withdraw their funds in cash. They found that only a few persons

presented the receipt for encashment during a given period of time. They also found that

most of the money deposited with was lying idle. At the same time, they found that they

were being constantly requested for loan on good security. They thought it profitable to


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lend at least some of the money deposited with them too the needy persons. This proved

quite a profitable business for the goldsmiths. They instead of charging interest from the

depositors began to give them interest on the money deposited with them. This was

the THIRD STAGE, in the development of banking.

By experience the banks came to know that they could keep a small proportion of the

total deposits for meeting the demands of customers for cash and the rest they could

easily lend. They allowed the depositors to draw over and above the money actually

standing to their credit. In Economics terminology we can say that they allowed the

overdraft facilities to their depositors. This was the FOURTH STAGE, in development

of banking.

When every bank issues receipts and most of them allowed the overdraft facilities, there

was then too much confusion in the banking system. The banks in order to earn profits

could not keep adequate reserves for meeting the demands of the customers for cash. Thefailures on the part of the bankers to return money caused widespread distress among the

peoples.

In order to create confidence among the people, steps were taken to regulate the banking

organization. A conference was held in Nuremberg in 1548. It was decided that a bank

should be set up by the state, which should streamline the banking organization and

technique. The first central bank was formed inGeneva in 1578. Bank of England was

established in 1694. The responsibility of issuing of notes is now entrusted to a central

bank of each country.

COMMERCIAL BANKING INPAKISTAN:

At the time of partition total number of Banks were 38 only. Out of these Banks

the Pakistani Banks were only 2 , Indian Banks 29 & Exchange Banks were 7. The total

of deposits of Pakistani Banks was Rs.880 Million. & advances were Rs: 198 Million..

According to banking companies ordinance Banks are the companies, which transacts the

business of Banking in Pakistan.

Commercial Banks have constituted the most important [part of the intuitional credit in

the economy of Pakistan. Being the largest source of credits, BankingIndustry is a pivot

of whole the economic activities in Pakistan. Section 37(2A) ofState Bank of Pakistan

Act 1965 lays down that the Banks must have paid-up capital & reserve of not less then

Rs: 5 Lac & fulfilling certain other requirements for declaring as Scheduled Bank.


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At the time of independence Bank services was badly affected. But with the passage of

time these are improving. The government of Pakistan nationalized all Banks in early

1974. This act was done to minimize control of few hands over banking. But this step

was proved e futile for the

Banking in Pakistan. So the Govt. had to revise its decision in1990. Two Banks (Allied

Bank Of Pakistan Limited & Muslim commercial Bank Of PakistanLimited have been

denationalized. Since then Banks were working well. Now slogan of the Banks is to

serve their customers in the best possible manner.

Professor Berton:

Banks are the guardian & distributor of money .

Similarly we can say that it is a pipeline thorough which currency moves into & outside

the circle. Banks accept deposited of money and repay it on demand. Bank borrows

money at lesser rate of interest & lends it at higher rate of interest. In this way Banks earn

money. Bank do not lend all money they collect, they keep certain portion of it as reserve

to meet the uncertain demand of the custom

FUNCTIONS OF A COMMERCIAL BANK

In general terms the functions of a commercial bank can be classified under the following

main heads.

1. ACCEPTING DEPOSITS

Some people have an excess money and they want to deposits it to some honest man or

an institution which can give them some profit. So the first function of commercial bank

is to receive deposit there are three types of deposits.


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1.1 Demand Deposits or Current Deposits

Some people deposit their excess money in the current accounts and they can withdraw

their money deposited in this account at any time during the banking hours, so bank is not

ready to give interest on it

1.2 Fixed Deposits

These deposits are fixed for a particular period. Commercial banks also pay an interest on

these accounts. An important thing related to it is the varying interest rates for the

different period deposits. Interest rate increases with the increase in the fixed deposit

period.

1.3 SavingDeposits

To create the habit of savings, bank accepts the saving deposits and pays an interest on

these deposits. And this rate of interest is greater than the demand deposits.

2. ADVANCING LOANS

Bank also advances the loans to the merchants and charges the interest. It is the major

source of its income. It also issues the loan for short term, medium term and for long

term. And bank receives the higher interest from the borrower for the long term loans

offered.

3. DISCOUNTING OF BILL

Commercial banks also discount the bills and facilitate the business; for example one

businessman purchases anything from another person and promises to pay after one

month. The seller will write a bill to the buyer and there will be an order that after one

month the buyer will pay the amount to the seller. Buyer will sign on the bill. In other

words buyer will accept the responsibility of that amount. If seller is in need of money, he

will take it to the bank and will receive the money by discounting the bills. The

commercial bank also may rediscount it from the central bank.


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4. CHEAP MEDIUM OF EXCHANGE

By issuing cheques and drafts bank provides cheap, medium of exchange.

5. TRANSFER OF MONEY

The commercial bank is very helpful in transferring the money from one place to another

by issuing the drafts. This is very popular concept in the modern world and widely used

in the business community.

6. CUSTODIAN OF PRECIOUS ARTICLES

Banks also provide lockers for the safety of precious articles. So now everyone can

secure his precious metals like gold, silver, etc., and bank charges a very nominal charge

for this facility.

7. AGENCY SERVICES

Commercial Banks also perform the duty of an agent. It collects and pays on the behalf of

the customers.

8. INVESTMENT

On behalf of the customers all the banks also make an investment in different companies

and industries. And banks receive nominal charge from the customers.

9. CREATION OF CREDIT

It also creates and extends the volume of credit.

10. FACILITATING TRADE ACTIVITIES

It also provides the finance to the foreign trade. Letter of credits are issued by the

commercial banks for the foreign payments.

11. PURCHASE AND SALE OF SECURITIES


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The commercial bank purchases and sells the securities, for itself and sometimes on the

behalf of the costumes.

12. ACTING AS A TRUSTEE

If a client directs his bank to act as a trustee in the administration of a business, the bank

performs this responsibility.

ROLL OF COMMERCIAL BANK IN THE ECONOMY

DEVELOPMENT OF PAKISTAN:

Banks play an important role in the economic development of country. If our Banking

system is not in accordance to the economic requirement then how it can play a vital role

in our developments. The State Bank of Pakistan is at the apex and all the commercial

Banks have to follow the rules of State Bank of Pakistan. Role of the banking sector can

be judged by the following facts:

SAVING MOBILIZATION:

The commercial Banks namely United Bank Limited Pakistan, Habib Bank Ltd, Allied

Bank Of Pakistan Ltd. & National Bank has opened Branches in urban areas & ruralareas to mobilize savings of people.

FINACCING OF DEVELOPMENT PROJECTS:

Banks & other financial institutions like ADBP, IDBP, and PICIC etc. Advances short &

medium terms loans for financing of the development projects both in the private &public sectors .So they helping to accelerate the rate of progress (Economic) in the

country.

ENHANCING TRADE ACTIVITIES:


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The credit institutions collect the savings of people & make them available for facilitating

the trade activities both inside & outside the country.

CREATING CLIMATE FOR CAPITAL FORMATION:

A developed baking system stimulates the growth of economy by creating favorable

climate for capital formation in the Country.

HELP OF STATE BANK OF PAKISTAN IN ACHIEVING MONETARY

PUBLISHES:

Commercial Banks under the supervision & guidance of the S.B.P help in implementing

& achieving the objective of monetary policy, which vary from time to time.

ASSISST IN PLANNED DEVELOPMENT:

Commercial Banks are profit-seeking enterprises. In order to maximize profit they have

the incentive from S.B.P to maximize the limit of finance. An organized Banking system

keeps balance between the liquidity * profitability, thus assists in the planed development

of the Country.

PROFIT SHARING SCHEME:

Commercial Banks receive surplus balance of the households and business & pay interest

on the deposit of client. The depositors instead of having a fixed return on the deposit

will share in the profit & loss of the Bank. The profit & loss scheme arrangement is the

alternative to interest, under an Islamic economic system, which is since on the

experimental basis in Pakistan.


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INTRODUCTION OF

UNITED BANK LIMITED

United Bank Limited was established on 7 November 1959. The first president of

the UBL was Mr. I. I. Chundrigar. Most of the branches of Union Bank Ltd. were merged

into UBL to work as UBLs subsidiary .The head office was at Dhaka.

UBL is one of the largest nationalized banks in the country. With almost forty years of

good standing to its valued clients, it has stood the test of time, producing assets of over

Rs. 101billion. UBLs deposits, being guaranteed by the Government of Pakistan, are

100% secure.UBL has assets of over Rs. 140 billion, capital and reserves of over Rs. 3.2 billion and a

solid track record of 43 years, in addition to the convenience of over 1400 branches

serving throughout the country and also at several overseas locations. UBL, with an

integrated network of 1400 branches domestically, with 19 overseas locations, gives

direct access to a comprehensive range of better banking facilities to help its customers

monitor their business internationally.

Some Key Information about the UBL

Date Established November 7, 1959

President Mr. Amar Zafar Khan

Branches (as on Jun 2002) 1419: 1400 domestic, 19 overseas branches

Employees (as on Jun 2002) 14000 Employees


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REORGANIZATION OF DOMESTIC OPERATION

In 1986, the organizational structure of domestic operations of the bank was reformed

and decentralized on the basis of provinces. As a result provincial headquarters wereestablished at Karachi, Lahore, Peshawar and Quetta in order to meet the needs of

sanctioning loans and other facilities to the trade, industry and agriculture of each

province. Azad Kashmir was serrated from NWFP and made separate region.

The quantum of work immensely increased due to the growth of economic activities and

phase of industrialization and other change in Punjab and Sind. It was also considered

necessary to improve the quality of advances and to expedite the recovery process of the

loans and advances. Beside above the economic condition of the country also changed

due to privatization policy, establishment of a number of new private banks as well as

expansion for operations by the foreign trade and banks in major cities.

For above changes, high power committees constituted by the Govt., which

recommended structural, and other reforms, the details of which are received

from Pakistan banking council are follows:

FORMATION OF REGIONAL HEADQUARTERS

The provincial chiefs of Punjab, Sind, NWFP, and Baluchistan are ceased to function and

in their place nine regional chief executives started functioning in the nine major cities.

The new segmentation ofUBLs branches on the basis of regions can be looked from the

following:


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PROVINCE WISE REGION ALLOCATION

Province/Area Region Name

Sind Karachi

Do Hyderabad

Punjab Lahore

Do Faisalabad

Do Multan

Do Islamabad

NWFP PeshawarBaluchistan Quetta

Azad Kashmir MuzafarAbad

Domestic Network of Multan Region

Multan Region 225Branches

Head Office 1

Multan 48

Bahawalpur 38

Dera Ghazi Khan 36

Rahim Yar Khan 32

Sahiwal 38

Vehari 32


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COMMUNITY SERVICES

UBL is committed to the welfare of Pakistan. It lends to farmers for the purchase of

tractors, superior quality seed and fertilizers. UBL further fosters the individual welfare

and well being of the common man by lending house building finance and loans to set up

small businesses. UBL has played a leading role in the dissemination of ComputerTechnology in Pakistan and is dedicated to the promotion of sports.

Agricultural Loans

Small Business Scheme

UBL Computer Training Institute

Staff Colleges ofUBL

UBL Sports Complex

AGRICULTURAL LOANS

UBLs agricultural loans on easy terms and conditions to small-scale land owning

farmers boost the countrys economy and yield greener harvests. UBLenables farmers to

buy good quality seeds, fertilizers, pesticides and agricultural implements.

SMALL BUSINESS SCHEME

Under the Small Business Scheme, UBL is providing loans on easy terms to those who

wish to set up their own small-scale business. This scheme is aimed at spreading

prosperity in the country by reducing unemployment. As more and more people start

their own industrial units, the country will move steadily towards economic self-reliance.


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UBL COMPUTER TRAINING INSTITUTE

UBL is a pioneer in the computerization of banking in Pakistan, and now plays a leading

role in the dissemination of Computer Technology in Pakistan and is proud to be a part of

the Governments Computer Literacy Program aimed at preparing the younger generation

to meet the challenges of tomorrow.

UBL, the leading user of Computer Technology in the Banking Sector has set up most

modern facilities at Muzaffarabad, Azad Kashmir, and Sheikhupura for imparting

training to the educated youth under the Governments Computer Literacy Program.

These centers are equipped with state of the art hardware and audio-visual aids and are

manned by experienced professionals.

STAFF COLLEGES OF UBL

The UBL has three staff colleges, which are generating banking trained personnel. These

colleges are at Karachi, Lahore and Rawalpindi, established in 1964, 1978 and 1977

respectively. These staff colleges are providing facilities of training to the employees of

the bank so as to meeting the growing need of the banking field and coping with the

changing environment of the country.

UBL SPORTS COMPLEX

In addition to providing professional banking services, the bank continued to play an

important role in the promotion of sports in the country. Towards this end, the bank has

already constructed a big sports complex in Karachi, where all types of facilities for

sports like cricket, hockey and flood light courts for tennis and basketball have been

provided.


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CONSUMER BANKING

UTILITY BILL COLLECTION

UBL has over 1300 branches collecting electricity, gas, telephone and WASA, and other

utility bills like demand notice for telephone connection during business hours.

Almost all the branches have special utility bills collection counters with sun-shelters and

drinking water. 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. And now-a-

days UBL management is trying to launch on-line banking system in all over

the Pakistan. For this purpose some of the branches have been equipped with this on-line

facility.

For the customers convenience, UBL accepts cheques for payment of utility bills.

DISH, TV LICENSE FEE COLLECTION

UBL is one of the main collecting agents of PTV collection fee for issuance of

licenses/renewal of licenses at its authorized branches all over the country.

PLS - SAVING ACCOUNT

UBL offers PLS Savings Account that can be opened with an initial deposit of Rs.

10,000. The share of profit is credited half-yearly to the PLS Saving accounts and is

calculated on monthly balance. Depositors can withdraw their savings by presenting

cheques at the particular branch of UBL during banking hours. But under the new private

management each saving account holder can withdraw his amount in a week.


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PLS UNI-SAVER ACCOUNTS

PLS UNI - SAVERaccounts are Special PLS - saving account with several built-in

special features and benefits for the depositors. Profit is calculated on a daily product

basis:

PLS - TERM DEPOSITS

UBL offers the following most attractive and highly profitable deposit schemes to suit

the customers requirements. Deposits are fully secure and you earn high profits. Deposit

period along with Indicative profit rates are shown below:

Declaration of Rates of Profits on PLS Term

Rates in 2003 after Privatization

Period Profit Rate

3 months 2.90%

5 Years 3.90%


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PRODUCTS AND SERVICES

The bank provides its customer various products & services, to cater their need of

investments and other social or business requirements. These Product & Services offered

by the bank are as follows:

UNIZAR

Following type of UNIZER accounts are available:

CURRENT

SAVINGS

SPECIAL NOTICE

TERM DEPOSIT ACCOUNTS

Deposits can be maintained in US$, and other currencies like Yen.

Your UNIZAR account is:

- Freely convertible.

- Easily transferable.

- Free from all exchange control regulations.- Worldwide access with the flexibility to operate internationally with

real convenience.

- Take advantage of the appreciation of foreign currency.

- Withdrawal of funds without any restrictions.

- Free from all exchange control restrictions.

- The declared rates of profit on UNIZAR deposits for disbursement for the

half year 30-06-2000 is as follows:


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SMALL BUSINESS SCHEME

Under the Small Business Scheme, UBL is providing loans on easy terms to those who

wish to set up their own small-scale business. This scheme is aimed at spreading

prosperity in the country by reducing unemployment. As more and more people start their

own industrial units, the country will move steadily towards economic self-reliance.

The tax descriptions on the UNIZAR account:

Tax Type %

Income fax Nil

Wealth tax Nil

With-holding tax Nil

Zakat deduction Nil

The customers can open a UNIZAR account with foreign currency notes or a foreign

remittance in the form of:

Drafts,

Cheques,

Money orders,

Mail transfers,

Telegraphic Transfers, Travelers Cheques,

F.E.B.Cs.

D.B.Cs., subject to rules.

UNICARD

UNICARD is valid throughout Pakistan and is accepted by:

Airlines

prestigious hotels

Hospitals

large super markets

Petrol stations

prestigious stores


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Restaurants

Supermarkets

With UNICARD there is no hassle of paying bills and counting cash. Just sign the bills

and take your leave.

UBL is the pioneer in introducing Credit Card Culture in Pakistan.

The UNICARD is like passport to carefree enjoyment.

UNICARD saves money of the holder: the holder of the UNICARD have a record of all

the expenditures.

UNICASH

UBL offers you a self-service banking facility called UNICASH. You can obtain

UNICASH cards and use the Automated Teller Machines, which are installed, at

convenient locations called Cash points.

You can avail the following self-service banking facilities

Balance Inquiry

Mini Statement

Cash Withdrawal

Confidential Personal Identification Number (PIN) ensures that only the holder can use

your ATM Card.

The PIN protects against misuse in case of card is lost. Customers can change their PENT

anytime they want.

Customers can specify flexible weekly withdrawal limits.

Customer can withdraw your weekly limit in one go, or in multiple

installments. Customers can use UNICASH Cards at UBL Cash-points located in the

following cities:


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City Cash Points

Islamabad 7

Rawalpindi 2

Karachi 2

UAE 8

Bahrain3

RUPEE TRAVELLER CHEQUE

UBL offers the facility of the Rupees Traveler Cheque. UBL Rupee Travelers Cheques

are the ideal and safest way of carrying cash when traveling anywhere in Pakistan.

Used for conducting day- to-day business.

No commission is charged from the purchaser.

No excise duty on purchase.

Easy to obtain and encash from all designated 350 branches of UBL.

Acceptable all over Pakistan.

Good until used and have unlimited life.

Easily transferable like an order cheque.


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DEPOSIT DEPARTMENT

Deposits act as a backbone of bank. It is the lifeblood of every bank. These deposits are

source of generating incomes for the bank and for the general public to meet the financial

needs. The supply of money in circulation is also affected by the amount of loans and

advances issued by the bank. The primary economic function of the commercial bank is

to receive the surplus saving money from the general public, individuals, firm,

institutions, public houses and companies and to pay the cheques drawn upon the bank.

The bank accepts the deposits at a low rate of interest and lends it at higher rate of

interest, the difference between the lending and accepting rate is the Source of income for

the bank. Keeping in view the above factors UBL offers the following types of accounts:

1) Current Account

2) Saving Account

3) Fixed Account

The classification of the deposits in to current, saving and fixed accounts is mainly on thebasis of duration and purpose for which the account is maintained at a bank

CURRENT ACCOUNT

Current account is running account because, customer can withdraw deposited amount at

any time, whenever he feels need. The customer can withdraw without any prior notice to

the bank. The bank has to pay the cheque provided within the limits of the account

balance. The main thing is that bank does not pay any kind of interest on current account.

The bank cannot invest the deposited amount under current account heading, because of

the fear of withdrawal. Bank has to keep with it a higher reserve ratio to meet the needs

of the current account holders.


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SAVING ACCOUNT

Saving Account is an important source of funds for the bank. The purpose of this account

is to attract the small saving of the general public. Normally workers, schoolboys and

employees of the organizations use the saving account facility. UBL also provides this

facility to the general public against a certain rate of interest. The new name of this

account is now a day is PLS-Saving Account. If a customer wants to withdraw a large

sum of money (above 15000), he will have to give a notice of 7 to 14 days in writing to

the bank. Saving account deposits provide a chance to the bank to invest safely, because

customer can withdraw small amount of balance.

FIXED OR TERM DEPOSITS

Fixed or Time deposits accounts are the major source of the capital for investment for the

bank and cannot be withdrawn as in case of the current account. The amount deposited

can be received back after a certain specified period of time. The rate of interest paid on

fixed Deposits is normally higher than saving Deposits. The rate of interest also varies

due to time period. After the expiry of the period the customer presents the receipt to

bank and received the amount in cash or bank added in the customer accounts as agreed

between bank and customer.

OPENING OF THE NEW ACCOUNT

A customer can open the following three types of accounts:

1) PLS-Saving Account

2) Current Account

3) Fixed Account


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1) Opening of saving Account

Saving account is also divided into two types further,

I. Individual saving account

II. Joint Saving Account

I. Opening of Individual Saving Account

An individual person can open this type of account. UBL has defined the following

procedures for the opening of individual saving account:

Signature specimen card, the bank to get authorized signature of the customer as

specimen for avoiding any future discrepancy gives Customer.

Account opening form, when a customer comes to open the new account in the branch

he is given a printed form, to be filled by him. Account opening form consists of full

name, address, and date of birth, occupation, telephone number, and N.I.D. card number.

Guaranteed by the existing account holder, when the new account holder fulfills all the

requirements then he is asked to give some existing account holder guarantee, so that in

future the new account holder may not fraud with the bank.

II. Opening of Joint Saving Account:

Opening procedure for the joint saving is same as in case of individual saving account.Just the difference is in the account opening form.

Signature specimen card is also used for the same purpose as for the individual saving

account, to avoid future discrepancy.

Account opening form, joint saving opening from has same information more than one

time because more than one person fills this form to open the account. Briefly is that no

one/single person can open this account, as a result it is called joint saving account.Rules and Conditions for Saving Account:

The account opening person knows the rules and conditions.

This account can be opened only with initially Rs. 100 not less than this amount.

1) PLS- Saving account may be opened by/in the name of individual or jointly, or by

charitable institutions or provident funds or other funds, associations, societies and firms

or clubs.


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2) For opening of this account application has to submit on the prescribed form by the bank.

3) Customers can deposit money in his account by using pay-in-slip.

4) Customer must check the signature of two officer of the bank on the deposit slip.

5) Withdrawal, depositor cant withdraw more than his balance or one quarter. At least 7

days notice must be given to bank for withdrawal purposes.

6) Bank cant responsible for a cheque, which has been paid prior to receipt of written

instructions from the drawer countermanding payment.

7) The bank will take care to see that credit and debit entries are correctly adjusted, but if

any mistake is by the depositor/withdrawer than bank will not responsible for the loss.

8) If the account is closed the unused cheques must be returned to the bank for the

cancellation and the balance amount, if any must be withdrawn.

9) The profit or loss on the balance due at the time of death will be paid when bank will

declare its profit/loss for the half year.

10) Death of account holder, in absence of any instructions the credit balance outstanding in

any joint account in the name of two or more persons will be payable to the survivors.

11) The bank to the account holders will supply statement of account every quarter.

12) Amendments of rules, the bank have a right to amend, alter or add to any of these rules

with or without notice to the account holders.

2). Opening Of Current account

A person, businessman and organization can open the following types of current account.

I. Joint Current Account

II. Individual Current Accounts

III. Sole proprietorship Current Account

IV. Partnership Current Account


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I. Joint Current Account

More than one person can open joint current account. Minimum balance of this account is

Rs.l0, 000 approx. If a joint holder dies then bank holds the account and refers case to the

court.

Account opening form, this application form is divided into two sides and both sides

have same information which are details ofsignatory (A, B), name, occupation,

nationality, place and date of birth, national identity card number, business address,

employer no. Etc.

II. Individual Current Account

Only one person can open individual current account. Minimum balance in this case is

2500, if the balance in the account is less than this limit than bank sends a statement to

account holder to maintain the minimum balance. For withdrawal, checkbook is issued

and used no other instrument is used or accepted by the bank. Procedure for opening this

account is also same as in PLS-Saving account just the difference is in opening form

information, required by the bank.

III. Sole Proprietorship Current Account

In sole proprietorship organization a person invests his capital and devotes full time to his

business. Sole proprietor opens this account. Minimum balance that required in this

account is Rs. 1000. All the profit paid on balance will go to the sole proprietor only.

The account opening form of this account is different than others because this form is

filled in the name of the organization. The name of proprietor. Place and Date of birth,

Nationality, Passport number and National Identity Card number, have to mention on this

form.


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Documents Required

Following documents certified copies are required with the application:

a) Most recent set of Account

b) Current Municipal Licensee

c) Commercial Registration Certificate.

IV. Partnership Current Account

Partnership current account can be opened with the name of Partnership Company.

Before opening of partnership account shareholders has to decide that how many partners

have right to sign on cheque. The procedure is same for opening such account; the

difference is in the account opening form. Account opening form shows the name in full,

nature of business, principal place of business, address, location, and telephone number,

telex number. After that this form is divided into four sides with the name of A.B.C.D.

and showing the same information mentioned earlier

Rules and Conditions

1) Bank can close /down any account at any time upon 48 hours write notice, after the

opening of the account.

2) The account number should be mentioned on all correspondence with the bank when

deposits or withdrawals are made.

3) The account holder must maintain the minimum balance requirement that is Rs: 1000.

4) After six-month bank refuse the payment of the cheques (post dated cheques).

5) Bank will not make payment if cheque is made unauthorized.

6) Account holder who is unable to sign, he will affix his left-hand thumb.

7) The cheque amount should not exceed to balance of account.

8) Any person opening a current account is deemed to have read, understood and bound by

the bank rules and conditions of current account.


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ACCOUNTS DEPARTMENT

It is said that accounts department is the backbone of the bank. It plays a vital role in

performing different banking functions. The accounts department atUBL Hussain Agahi

branch is performing its function manually. Different books of accounts relating with

other departments are maintained here. With the help of these books of accounts,

accountant prepares monthly, quarterly, semi-annually and yearly financial statements.

The working in accounts department mainly depends upon voucher system. For each and

every transaction-taking place in the bank vouchers are prepared and through these

voucher contra entries are passed under different heads.

FUNCTIONS OF ACCOUNTS DEPARTMENT

The accounts department performs the following functions:(a) To prepare and maintain the vouchers.

(b) To maintain and update the ledgers for term deposits.

(c) To update general ledger.

(d) To prepare different periods statements.

Vouchers

Each and every transaction in the bank is made through vouchers; the final place is

accounts department for recording these vouchers. Officer in the accounts departments

arranges these vouchers according to heads of accounts. These vouchers are of two

types:

1. Debit Vouchers

2. Credit Vouchers

These two vouchers are again classified into three following types of vouchers:


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I. Cash Voucher

II. Clearing Voucher

III. Transfer Voucher

All the daily transaction in cash, transfer and clearing is done through these vouchers. A

sheet is prepared on which all the vouchers, passed during any one working day are

consolidated and summarized. This sheet is called supplementary sheet. It provides help

in preparing Cash Book.

There are two types of supplementary sheets:

Debit Supplementary Sheet:

In which all debit Cash Voucher, Clearing Voucher, Transfer Voucher are included.

Credit Supplementary Sheet:

In which all credit Cash Voucher, Clearing Voucher, Transfer Voucher are included.

Cash Book

It is maintained to keep the record of daily receipts and daily paid vouchers. Cashbook is

consisted on the opening balance and the closing balance of the day. For correct balance

of the cash book there is a need to arrange all the vouchers.

Ledger ForTerm Deposits

One of the functions of accounts department is to maintain and update the term deposit

ledgers and books manually. Term deposit receipt or TDR ledger is updated after every

month for estimation of profit on customer accounts. Accountant has to prepare different

ledger for all schemes of term deposit. With the help of TDR the accountant prepares

provisional ledger/Summary ledger and also statement of provisional expenses. The

profit after every six-month will be the expense of the branch.


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Updating General Ledger

When vouchers are recorded in cashbook then the balance of each head of account is

posted to its ledger account. There are two main heads of the general ledgers, Income

account & Expenditure account. All the accounts fall under one of these two main heads.

Separate ledger register is maintained for every head of account. In UBL all the daily

transactions in deposits, cash, clearing, transfer remittance, foreign exchange; advances

are performed through these daily ledgers. Accounts department Maintains and prepares

the following ledgers and books of accounts:

I. Daily General Ledger Expenses

II. Daily General Ledger Incomes/Receipts

III. Monthly General Ledger Assets

IV. Monthly General Ledger Liability

V. Daily General Ledger Zonal Expenses

VI. Daily General Ledger Inspection expenses.

VII. Daily General Ledger Regional Expenses

VIII. Daily General Ledger Audit Expenses

The format of the entire above ledger is approximately same. General ledger tells about

A/C No., description, previous Balance, Dr. Amount, Cr. amount and running balance.

Preparation ofDifferent Statements

Accounts department prepares these statements,a) Statement of Affairsb) Statement of provisional Incomec) Statement of provisional Expensesd) Statement of Head office A/Ce) Balance confirmation Book/Report

f) Transfer Book

Statement of affairs is prepared yearly, consisting on the details about assets and

liabilities of the branch. This statement provides assistance in budgeting about branch.


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Statement of provisional Income and expense is prepared monthly. Statement of account

and balance confirmation is sent to accounts holders.

LOCKERS

UBL is also providing lockers facilities to its customers. The account department also

maintains the record about lockers. The basic purpose of locker is to provide safe custody

to clients valuable ornaments, jewelry or documents. Almost in all branches, Lockers are

available in different sizes at different rates. For availing this opportunity, customer has

to open his account in the same branch/bank.

Locker Operating Procedure:

Bank provides an application form to the applicant who needs to operate a locker in the

branch. This application form contains all rules and regulation regarding to obtain a

locker. Specimen signature card is also filled in signed by the applicant. Bank assigns a

password to their customer for secrecy. Each locker has duplicate keys. One (master) key

is kept by the bank, and the other by the customer. In case of opening any locker, first of

all master key is applied and then the customer key. If the locker has been obtained

jointly then at the time of the opening, the person signed the application form, should be

presented there otherwise, the bank will not allow to operate the locker. Bank officer has

to maintain the following register for record keeping purposes of locker.

I. Locker Register

II. Operation Register

III. Key Deposit Register

Safe deposit locker fee is recovered in advance or at the start of the year, half-year or

quarterly.

Types of Locker

There are basically three types of locker at UBL that are as under:


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TYPES OF LOCKERS RATES OF LOCKERS

Per Annum

Small Rs. 1200

Medium Rs. 1800

Large Rs. 3000

The key deposit fee is Rs. 600. Per locker and it is refundable at the time of closing an

account the breaking charges are Rs. 500 per locker and it is also refundable at the time

of closing of account, provided there is no breaking

BILLING COLLECTIONThis department basically deals in bills, which come in bank for collection. The bills are

cheques, call deposit, drafts and pay order. These bills are from outstation branches

ofUBL or of other banks. This department provides services to customers at low charges

to get their amounts from the nearest branch.

HEADS OF BILLS

There are two main heads of the bills i.e.

Outward Bills For Collection (OBC)

Inward Bill For Collection (IBC)

Outward Bills for Collection

Bills department receives cheques or other kinds of bills from its clients. The condition

under Outward Bills for Collection is that the customer must have his account in the

branch. This branch forwards the cheque with schedule or covering letter to that branch

on which bill is drawn. The checking officer of bills department will cross the cheque

with special bank stamp before forwarding the cheque to the other branch.


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Outward bills for collection register

Outward bills for collection register is maintained in order to deep the records of all bills

for outward collections. This register is updated two times, first at time of receiving the

OBCs and secondly at the time when confirmation advice is received from the other

branch, either the cheque will be paid or not by the other bank branch. After confirmation

of the amount, confirmation advice is transferred to the sender branch. After confirmation

of the amount and bills, the account of the customer is credited against reasonable

charges, which is income for the bank.

Inwards Bill for Collection

These bills come to branch for payments so branch has to verify these cheques, pay

orders, drafts and call deposits etc. The party account must be opened in that branch

which sends it to paying branch .The responsibility under IBCs of the branch is to verify

all the bills within three days, and should send the bank advice to the originating branch.

Inward bills for collection register

Inward bills for collection register are maintained for future record purposes. Care is

made while posting the amount of bills in the register. Each bill is assigned a number

according to the register series. Every year the number starts from one and continues for

the whole year and next year again from one and so on.


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REMITTANCES DEPARTMENTTransfer of money or equivalent to money from one branch to another branch of the same

bank is called remittance. Now it has become an easier and safer method both for the

client and banker to transfer their money from one branch to another within the city

or Outside City.

PARTIES INVOLVED

In case of remittances normally two banks are involved, are as under:

Originating Bank Branch

It is the branch, which issued the instrument for remittance.

Responding Bank Branch

The branch that receives the instruments for remittances, also known as drawees branch:

TYPES OF REMITTANCE

Remittances are classified into the following two types:

1) Inland Remittance

2) Foreign Remittance

1) Inland remittances

It is a transfer of money from one branch to another branch of the same bank within the

same country. In this case both the parties will be of the same country and same bank.

MODE OF REMITTANCES

United bank limited, uses following types for transfers of money:

1) Demand Draft (DD)

2) Pay Order (PO)

3) Mail Transfer (MT)

4) Telegraphic Transfer (TT)


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MONEY GRAM

Money gram service is a person-to-person international money transfer service that

allows consumers to send/receive money around the world in minutes, with no bank

account required.

FEATURES OF MONEY GRAM

FAST

With money gram your money can be transferred from almost any country in the world

because it is a reliable and trusted way to send/receive money worldwide.

SAFE

The money gram service is used around the world because it is a reliable and trusted way

to send/receive money worldwide.

CONVENIENT

More than 50,000 MoneyGram agent locations in more than 150 countries; computer

networked to ensure that your money is transferred within minutes.

Easy: (How to Receive your transfer)

1- Sender abroad goes to nearest MoneyGram representative, fills out a form, hands in the

amount he wishes to send and the send (service) fee**, and shows an I.D.

2- Upon completing the transaction, sender will be given a transaction reference number.

3- Sender calls the receiver and informs him of the transaction reference number and the

amount of money sent.

4- Receiver can go to any MoneyGram representative, show an I.D, fills out a simple form

mentioning senders name and amount expected.

5- Receiving agent hands over the money to receiver.

Time is Money, so dont keep your family waiting


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NOTE: Currency exchange rate set by Money Gram or its

representatives will be applied

SWOT ANALYSIS

STRENGTH

UBL has got a well reputed on line system in most of its branches. Remittance

department is working very efficiently in transferring the funds to peoples due to this

system

The bank also has started ATM facility in most of the branches 24 hours banking is now

the trend in Pakistan.

Bank is providing quick credit services to all the customers at all branches. Because the

credit manager cooperates with the borrowers while making a loan request to the bank.

WEAKNESSES

The human resource department is not performing well in the organization. Selection

process is not done on the merit due to which many competent persons cant get job in

UBL.

Bank is not introducing new products these days, so bank should boost the product

development and increase the range of facilities offered for customers. And the rates of

interest on its various products have been reduced.

Privatization has adversely affected the morale of the employees because they will not be

able to get the expected fringe benefits, so it may lead to job stress.

OPPORTUNITIES

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.


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THREATS

UBL has many competitors who are continuously increasing their products and marketing

aggressively it may cause its customer to shift to its competitors.

a. Financial Analysis

1. Ratio Analysis

a) Liquidity Ratios

Liquidity ratios measure a firms ability to meet its current obligations.

These include:

Current Ratio = Current Assets / Current Liabilities

This ratio indicates the firms ability to pay its short term liabilities by those assets

expected to be converted to cash in the near future.

Current assets normally include cash, marketable securities, accounts receivables, prepaid

expenses and inventories. Current liabilities consist of accounts payable, short-term notes

payable, accrued taxes, and other accrued expenses.

(Rupees in 000)

Year 2007 2008 2009

Current Assets 308,271,290 378,293,973 362,079,596

Current Liabilities 483713620 554222342 558156110

Current ratio 0.64 0.68 0.06


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Ratio

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

2007 2008 2009

Ratio

Interpretation:

Standard ratio for current ratio is 2:1.

In all the year current ratio is unsatisfactory. It means that UBL has not made sufficient

investment in current assets. The reason behind that UBL business is based on large size

of deposits so its current liabilities has more than larger than current assets.

Acid Test Ratio

= Liquid or Quick assets /current liabilities

Liquid assets = cash and marketable securities

Ratio

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

2007 2008 2009

Ratio

Interpretation:

Standard ratio for Acid Test Ratio is 1:1.

All the years Acid Test Ratio is unsatisfactory and below standard or Normal ratio from

1:1.

Year 2007 2008 2009

Liquid assets 57,622,360 50,143,570 61,252,772

Current liabilities 483713620 554222342 558156110

Acid Test Ratio 0.12 0.09 0.11


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Sales to Working Capital:

Sales to Working Capital = Sales / Working Capital

Sales to working capital give an indication of the turnover in working capital per year. A

low working capital indicates an unprofitable use of working capital.

Ratio

-0.35

-0.3

-0.25

-0.2

-0.15

-0.1

-0.05

0

2007 2008 2009

Ratio

Interpretation:

Because of inappropriate use of working capital sales figure gives the negative ratio. In

recent year there is a net loss.

Working capital= Current assets Current Liabilities

Positive working capital means that the company is able to pay off its short-term

liabilities.

Working capital is also called net working capital.

Working Capital:

Working Capital = Current Assets Current Liabilities

It is the difference between current assets and current liabilities. It is used to measure

a company's efficiency and its short-term financial health. Working capital is also called net

working capital.

Year 2007 2008 2009

Sales 41,962,131 53,097,381 61,495,472

Working Capital -175442330 -175928329 -196076514

Sales to Working -0.24 -0.30 -0.31

Year 2007 2008 2009

Current Assets 308,271,290 378,293,973 362,079,596

Current Liabilities 483713620 554222342 558156110

Working Capital -175442330 -175928369 -196076514


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Ratio

-200000000

-195000000

-190000000

-185000000

-180000000

-175000000

-170000000

2007 2008 2009

Ratio

Interpretation:

In all consecutive years from 2007 to 2009, UBL has Negative working capital it means

that a company currently is unable to meet its short-term liabilities with its current assets.

b) Leverage Ratios:

Leverage means operating a business with borrowed money.

It is a combination of assets, debt, equity, and interest payments. These ratios are used to

understand a company's ability to meet it long term financial obligations.Leverage ratios

measure the degree of protection of suppliers of long term funds.

These include:

Time Interest Earned:

Time Interest Earned Ratio = EBIT / Interest Charges

EBIT stands for Earning before interest and tax.

The interest coverage ratiotells us how many times the company can cover its interest

charges from its EBIT.The ratio is designed to understand the amount of interest due as a

function of companys earnings before interest and taxes (EBIT). This ratio measures the

extent to which operating profit can decline before the firm is unable to meet its annual

interest cost/expense.

Year 2007 2008 2009

EBIT 1379 1405 -14392

Interest Charges Nil Nil Nil

EBIT ratio 1379 1405 -14392


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Ratio

-16000

-14000

-12000

-10000

-8000

-6000

-4000

-2000

0

2000

4000

2007 2008 2009

Ratio

Interpretation:

As the UBL uses no debt in its capital structure so the EBIT ratio is hundred percent for

the years 2007, 08 but in 2009 UBL has to face an impairment loss on revaluation of

assets.

Fixed Charge Coverage Ratio:

Fixed Charge Coverage Ratio:

= Net Operating Income / Total Debt

The ratio shows the capacity of a firm to meet its total debt (Short and long term debts)

by its operating income/profit.

Ratio

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

2007 2008 2009

Ratio

Interpretation:

Year 2007 2008 2009

Net Operating Income 13,796,269 14,052,051 14,392,181

Total debt 65487949 56743538 49158077Fixed Charge Coverage 0.21 0.25 0.29


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This ratio is a good sign for the bank. Because in incoming year from

2007 to 2009, it shows the strong capacity of a bank to meet its total debt (Short and long

term debts) by its operating income/profit.

Debt Ratio:

Debt Ratio = Total Debt / Total Assets

The ratio of total debt to total assets, generally called the debt ratio, measures the

percentage of funds provided by the creditors. The higher the ratio, the more leverage the

company is using and the more risk it is assuming.Low leverage means low risk for the

Bank.

Ratio

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

2007 2008 2009

Ratio

Interpretation:

After calculating debt ratio, it came to know that this company is low leveraged .Because

incoming years leverage is coming to fall.

Debt to Equity Ratio:

Debt to Equity Ratio = Long term debt / Total Equity

First of all I want to define the sources of capital which are two in numbers.

1. Equity

2. Debt

Year 2007 2008 2009

Total debt 65487949 56743538 49158077

Total Assets 546,795,871 620,240,530 640,449,529

Debt Ratio 0.12 0.09 0.08


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Generally this ratio describes the capital structures of the company. It

provides detail around the amount of leverage (liabilities assumed) that a company has in

relation to the money provided by shareholders. The debt to equity ratio gives the

proportion of company assets that are financed by debt versus equity.

A high debt to equity ratio implies that the company has been aggressively financing its

activities through debt and therefore must pay interest on this financing.

Ratio

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

2007 2008 2009

Ratio

Interpretation:

Total debt = Short term borrowing + Long term debt.

Total equity = Share capital +Reserve +Unappropriated profit.

In the year 2007 and 2008 total debts are exceeds than the total equity so it leads to high

leverage.

But in the year of 2009 UBL is not leveraged one.

Debt to Tangible Net worth Ratio:

Year 2007 2008 2009

Total debt 65487949 56743538 49158077

Total Equity 36,399,410 45,076,576 55,914,736

Debt To Equity Ratio 1.79 1.26 0.88

Year 2007 2008 2009

Total debt 65487949 56743538 49158077

Net worth 47890938 49395663 67318363

Debt To Net Worth

Ratio

1.79 1.26 0.88


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Ratio

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

2007 2008 2009

Ratio

Interpretation:

In the year of 2007 ratio is at maximum point whereas in the year of 2009 it is

satisfactory which is 0.88.

Current Worth / Net worth Ratio:

Current Worth to Net worth Ratio= Current Worth / Net worth Ratio

I calculate current worth and net worth by using this following formula:Current Worth = Total Current Assets Total Current Liabilities

Net Worth = Total Assets - Total Liabilities

Ratio

-4

-3.5

-3

-2.5

-2

-1.5

-1

-0.5

0

2007 2008 2009

Ratio

Interpretation:

The ratio gives negative values because its current assets are not sufficient to meet its

current liabilities. In recent year 2009 instead of improving the ratio is unsatisfactory

which a bad sign is.

Total Capitalization Ratio:

Total Capitalization Ratio = Long-term debt / long-term debt + shareholders' equity

Year 2007 2008 2009

Current Worth -175442330 -175928369 -196076514

Net Worth 47890938 49395663 67318363

Current to Net worth -3.66 -3.56 -2.91


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This ratio is used to measure the debt component of a company's

capital structure, or capitalization (i.e., the sum of long-term debt liabilities and

shareholders' equity) to support a company's operations and growth.

Ratio

0

1

2

3

4

5

6

7

8

9

2007 2008 2009

Ratio

Interpretation:

After calculating the ratio, it came to know that UBL uses little long term debt in its

capital structure.

Fixed Asset Ratio / Equity Ratio:

To calculate this ratio two ratios are required. One is Fixed Asset Ratio which iscalculated as the following formula:

(1) Fixed Assets Ratio= Net Fixed Assets/Long term funds

This ratio establishes the relationship between long term funds and fixed assets.Since

financial management advocates that fixed assets should be purchased out of long

term funds only.

Long term fund = Equity + Long term Debts

Year 2007 2008 2009Long Term debt 3261 1978 611

Long term debt + Equity 36402671 45078554 55915347

Capitalization Ratio 8 4 1

Year 2007 2008 2009

Net Fixed Assets 308,271,290 19,926,915 23,734,082

Long term funds 36402671 45078554 55915347

Fixed Assets Ratio 8.47 0.44 0.42


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Ratio

0

1

2

3

4

5

6

7

8

9

2007 2008 2009

Ratio

Interpretation:

After calculated the ratio it is clear that in the year of 2009, Long term funds are enough

to purchase the long term or fixed assets.

(2) Equity Ratio:

Equity Ratio = Equity/Total assets

Equity ratio is also called shareholders equity to total equity/net worth to total assets/

and also called Proprietors ratio.

Year 2007 2008 2009

Equity 36,399,410

45,076,576

55,914,736

Total assets 546,795,871 620,240,530 640,449,529

Equity Ratio 0.07 Times 0.07 Times 0.09 Times


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Ratio

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.1

2 007 200 8 2009

Ratio

Interpretation:

The amount which is calculated through this Ratio shows the equity of the Bank. It means

remaining funds have been supplied by the outsiders.

Now combining the ratios from 2007 to 2009.

Fixed Asset Ratio / Equity Ratio for 2007= 8.47/0.07

=121


= 6.23


=4.67

Long term Assets versus Long term Debt

Long term Assets versus Long term Debt= Long Term Assets/ Long Term Debts

Ratio

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

2007 2008 2009

Ratio

Interpretation:

Year 2007 2008 2009

Long Term Assets 308,271,290 19,926,915 23,734,082

Long term debt 3261 1978 611

L.T Assets /L.T Debts 94532 10074 38844


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Long term assts are in greater proportion than long term debts. Result

is that the assets are being financed by equity rather than long term debts. It is a good

sign for the Bank.

c) Profitability Ratios:

Profitability ratios measure the earning ability of a firm.

These ratios examine the profit made by the firm and compare these figures with the size

of the firm, the assets employed by the firm or its level of sales. The long-term

profitability of a company is vital for both the survivability of the company as well as the

benefit received by shareholders. These ratios are used to measure of corporate

profitability and financial performance. Now I want to analyze the profitability ratios

which are as follows:

Net Profit Margin:

Net Profit margin = Net Profit / Sales x 100

Actually Net Profit Margin gives the net profit that the business is earning per dollar of

sales.This margin indicates the profit after all the costs have been incurred it shows that

what percentage (%) of turnover is represented by the net profit. An increase in the ratios

indicates that a firm is producing higher net profit of sales than before. In fact, Net Profit

is Net Profit after Interest and Tax.

Ratio

0%

5%

10%

15%

20%

25%

2007 2008 2009

Ratio

Interpretation:

Year 2007 2008 2009

Net Profit 9,237,015 8,445,251 9,487,952

Sales 41,962,131 53,097,381 61,495,472

Net Profit Margin 22% 16% 15%


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Result is that the Net Profit Margin was 22% in the 2007, decrease to

16% in 2008 and then decrease to 15% in 2009.It is a not a good sign.Because it leads to

decrease continuously.

Return on Assets:

Return on Assets (ROA) = Profit after Taxation / Average Total Assets *100

Profit after taxation is generally called Net Profit/Income, which is calculated after

including interest and tax in Operating Profit. If ROA is above the rate that the company

borrows at then the project should be accepted, If ROA is below the rate that the

company borrows at then the project should be rejected.

Ratio

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

2007 2008 2009

Ratio

Interpretation:

Return on assets decreased in 2008 and 2009 and it is maximum in year of

2009. Return on asset has been gradually decreased so investment in fixed assets is not

appropriate in 2008 and 2009. In the year of 2009 it gives some increment than the year

of 2008.In the year of 2007 ROA gives maximum value.

DuPont Return on Assets:

DuPont Return on Assets = Profit after taxation/Total Assets x 100

Year 2007 2008 2009

Net Profit 9,237,015 8,445,251 9,487,952

Average total assets 273397935.5 310120265 320224764.5

ROA 3.38% 2.72% 2.96%


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Ratio

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

1.80%

2007 2008 2009

Ratio

Interpretation:

Calculated ratio is satisfactory in the year of 2007 but decreases in 2008 and also comes

down than the previous year in year of 2009.It is not a good sign for the bank.

Operating Income Margin:

Operating Income Margin = Operating Income / Net Sales*100

Operating income is called operating profit which is calculated after subtracting the

selling and administrative expenses from Gross profit/Income.

Year 2007 2008 2009

Net Profit 9,237,015 8,445,251 9,487,952

Total assets 546,795,871 620,240,530 640,449,529

Dupont ROA 1.69% 1.36% 1.48%

Year 2007 2008 2009

Operating Income 13,796,269 14,052,051 14,392,181

Net Sales41,962,131 53,097,381 61,495,472

Operating Income

Margin32.88% 26.46% 23.40%


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Ratio

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

2007 2008 2009

Ratio

Interpretation:

Operating income margin is decreased in three consecutive years, from 2007 to 2009.So

it is a bad sign for the Bank. Maximum value which is satisfactory is in the year of 2007,

but in incoming years it is going on decrease.

Operating Assets Turnover:

Operating Assets Turnover = Operating Assets/ Net Sales

Operating Assets are assets in which include, Cash and balances with treasury banks,

Balances with other banks & Operating fixed assets.

Ratio

0

0.5

1

1.5

2

2.5

2007 2008 2009

Ratio

Interpretation:

UBL has few sales than its competitors and made investment in fixed assets rather than

current assets. In the year of 2007 calculated value is satisfactory. But in incoming years

it will be on decreasing.

Return on Operating Assets:

Return on Operating Assets = Profit after Taxation/ Operating assets*100

Year 2007 2008 2009

Operating Assets 87644926 84610791 99036844

Net Sales 41,962,13

53,097,381 61,495,472

Operating Assets Turnover 2.08 1.59 1.61


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Ratio

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

2007 2008 2009

Ratio

Interpretation:

After calculating the Return on Operating Assets it is crystal clear that

value is decreasing in the years to come. In this scenario maximum value is in the year of

2007 but in incoming years it is on decreasing.

Sales to Fixed Assets:

Sales to Fixed Assets = Net Sales / Fixed Assets

This ratio indicates that how much sales are contributed by investment in fixed Assets.

Year2007 2008 2009

Net Profit 9,237,015 8,445,251 9,487,952

Operating assets 19,040,390

19,926,915 23,734,082

Return on Operating

Assets48.51% 42.38% 39.98%


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Ratio

0

0.5

1

1.5

2

2.5

3

2007 2008 2009

Ratio

Interpretation:

It is clear that Sales are increasing in comparison with investment in fixed assets in

2007.In the year of 2008 maximum value which is satisfactory for the Bank.

Return on Investment:

Return on Investment = Net profit before interest and tax/Capital employed*100

In the ratio capital employed is calculated with the help of following formula:

Capital employed = Fixed Assets+ (Current Assets Current Liabilities) Working

capital

Year 2007 2008 2009

Sales 41,962,131 53,097,381 61,495,472

Fixed Assets 19,040,390 19,926,915

Sales to Fixed Assets 2.20Times 2.66Times 2.59Times

Year 2007 2008 2009

Net profit before I &T 13,796,269 14,052,051 14,392,181

Capital employed -156401940 -156001414 -172342432

ROI -8.82% -9% -8.35%


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Ratio

-9.10%

-9.00%

-8.90%

-8.80%

-8.70%

-8.60%

-8.50%

-8.40%

-8.30%

2007 2008 2009

Ratio

Interpretation:

It is also called Overall Profitability Ratio. It indicates the percentage of return on the

total capital employed in the business.It is clear that in the consecutive three years return

on capital gives negative figure which is not a good sign.

Analysis, Suggestions & Recommendations

During my internship at the UBL I find out week areas that require improvements for

long-term benefit of the organization. These suggestions and recommendation are as

follows:

1. Computerization

IT has changed the old method of making business. So, compuretization in UBL is

become the basic need. Though UBL has the computer system yet the system has not

totally shifted on computer. Manual procedure is still there, Hence computer facility is

not fully availed and many branches are working without computer and computer system,

it should be fully availed and system should be fully computerized. Compuretization will

save to much timewhich is wasted due to manual procedures.

2.

E-Commerce

This world is now called a globle world becaused it is connected through computer

network. In todays networked world e-commerce is getting importance day by day. All

the leading banks of the world are adopting the concept of online banking and they are

providing better services to their customers through the Internet.


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3. Performance Appraisal & Compensation

Employee appraisal is an major part good and effective HRM. It consist of systematic

evaluation of an individual with respect to his personal traits and characteristics, his on

job performance and his potential for development. In Unite Bank Limited there is no

appraisal system exists. No relationship has so far been established between appraisal and

staff motivation. No weight is assigned to appraisal in making decisions on promotions,

postings, etc..

4. Product Marketing

This is age of competition and every organization is facing hard competition from not

only domestic organization but also from the international organizations due to

globalization. Due to this competition the marketing department plays a vital role in the

success of the organization.

UBL should have a strong marketing department like many other private banks have, for

the publicity of their products and make well inform the customers all the services

provided by the bank and to conduct detailed market researches to find out new

opportunities, needs of the customers and make comprehensive plans to capitalize those

opportunities.

5. Appearance

Physical appearance of the location and inside the building also matters. It helps a lot to

attract the customer. Some branches ofUBL are very attractive but all the branches

should be well dressed

6. Refresher Training Courses

There should be proper staff training refresher courses programs to train the employees

latest tool and techniques of the banking. They should be given be given computer

Report Atif

Documents

Transcript of Report Atif