PIMSAT 2011

A REPORT ON UNITED BANK LIMITED

Submitted ToMr. Azam Mehmood(Course Instructor)

Submitted BySpencer Pervaiz KaranjiaAurish B.PatelSyed Manzar AbbasMoin uddin

Date Of SubmissionMay 2011

LIST OF CONTENTS

S. No. Description Page No.

AcknowledgmentAcknowledgment IPrefacePreface II

List of AcronymsList of Acronyms IIIExecutive SummaryExecutive Summary

Chapter – 1Chapter – 1INTRODUCTION OF BANKING SYSTEMINTRODUCTION OF BANKING SYSTEM

1.1 Definition of bank1.2 Banking History1.3 Banking System in Pakistan1.4 Role of Commercial Banks

Chapter – 2INTRODUCTION OF UBL INTRODUCTION OF UBL

2.1 Company mission & vision 2.2 Company introduction, description & history2.3 Domestic & International Network2.4 Ownership Structure2.5 News Publication2.6 Company set up2.7 Board of Directors2.8 Management & Senior Management2.8 Location & Company profile

Chapter – 3INVESTMENT PLANS BY UBLINVESTMENT PLANS BY UBL

3.1 Mahana Munafa Plan 3.2 Sarmaya Izafa Plan 3.3 Profit + Growth Plan 3.4 Mera kal UBL Children Saving Plan

3.5 UBL Principal Plan protection series

Chapter – 4SERVICES OF UBLSERVICES OF UBL

4.1 Net banking4.2 Hamrah

4.3 UBL Better Life Banc- assurance Investment banking 4.4 UBL Cash line 4.5 Investment banking 4.6 UBL Auto loans

4.7 Home & Business Loans

Chapter – 5Financial Analysis of UBLFinancial Analysis of UBL

5.1 Balance Sheet Of UBL Balance Sheet Of UBL 5.2 Profit & Loss Account of UBL 5.3 Financial Analysis of UBL5.4 Profit & Loss Account of UBL

Chapter – 6

6.1 Strategic AnalysisStrategic Analysis6.2 Financial analysis

6.3 Credit Ratings 6.4 Awards given to UBLAwards given to UBL

ConclusionConclusion 92Suggestions & RecommendationsSuggestions & Recommendations 93-94

AppendixAppendix -

We are thankful to Almighty Allah, who has given us the power of knowledge and we are thankful to our parents, who supported us in every field of life and enable us to reach points. Our sincere gratitude to our course instructor Mr. Azam Mehmood for help, support, encouragement and his backup at every aspect that enabled us to successfully complete this Report, Without his help we never been enable to complete this report. His sincere advices had us towards the success.

This Report presents the work. Its goals is to provide knowledge of Financial Institution, We provide thorough and complete coverage of this Report by using straight forward current situation and backgrounds. It covers 11chapters:

1. Introduction of banking system2. Introduction of United bank limited3. Investments plans by UBL4. Services of UBL5. Financial analysis of UBL We hope you will enjoy reading this report that is the reader may be able to appreciate us, we hope you will understand and appreciate how Financial Institution Report can be strategically planned and managed.

Yours Truly, Spencer Pervaiz Karanjia

Aurish B.PatelSyed Manzar AbbasMoin uddin

EXECUTIVE SUMMARY

To properly fulfill the requirements of the commercial banking and

exercise control over banking sector, State Bank of Pakistan was

established in 1948. After the introduction of State bank different

commercial banks came into progress amongst which one was

united bank limited so due to this we select UBL as a main

financial institution on which we work further so basically firstly

we plan to gather all the relevant data regarding to our financial

institution then we gather all data and do analysis.

We are applying different techniques which are BCG Matrix and

Ratio analysis. At the end of every report it needs conclusion and

gives suggestions and recommendations.

CHAPTER 1

INTRODUCTION OF BANKING SYSTEM

Chapter# 1

Introduction of Banking System

Definition of BankBanking History Major events in banking HistoryOldest Private BanksOldest National BanksBanking System in PakistanRole of Commercial Bank

“ BANK” Definition: “A bank is a financial institution licensed by a government. Its primary activities include borrowing and lending money. Many other financial activities were allowed over time. For example banks are important players in financial markets and offer financial services such as investment funds.”

“BANKING HISTORY”Major events in banking history:

Earliest Euro wide /Mideast banking 1100-1300. Banknotes — Introduction of paper money. 1602 - First joint-stock company, the Dutch East India Company

founded.

1720 - The South Sea Bubble which caused a European financial crisis and forced many bankers out of business.

1781 - The Bank of North America was found by the Continental Congress.

1800 - Rothschild family founds Euro wide banking. 1930 -33 In the wake of the Wall Street Crash of 1929, 9,000 banks

close, wiping out a third of the money supply in the United States. 2008 - Washington Mutual collapses. It was the largest bank failure in

history (Financial Crises).

Oldest private banks: Monte dei Paschi di Siena 1472 - present, the oldest surviving bank in

the world. Founded in 1472 by the Magistrate of the city state of Siena, Italy.

C. Hoare & Co founded 1672 Barclays , which was founded by John Freame and Thomas Gould in

1690 and renamed to Barclays by Freame's son-in-law, James Barclay, in 1736

Rothschild family 1700 - present Wegelin & Co. Private Bankers 1741 - present, the oldest Swiss bank,

founded in 1741 in St. Gallen, third largest private bank in Switzerland

Hope & Co. , founded in 1762

Oldest national banks: Bank of Sweden — The rise of the national banks, began operations

in 1668 Bank of England — The evolution of modern central banking

policies, established in 1694 Bank of America — The invention of centralized check and payment

processing technology Swiss banking United States Banking The Pennsylvania Land Bank, founded in 1723 and receiving the

support of Benjamin Franklin who wrote "Modest Enquiry into the Nature and Necessity of a Paper Currency" in 1729 [1] .

Imperial Bank of Persia (Iran) Founded in 1888 and was merged in Tejarat Bank in 1979 — History of banking in the Middle-east.

In history of banking there was no concept of Pakistan because Pakistan came into being 14th August 1947 so we can take some knowledge on current scenario of Pakistani Banking.

“BANKING SYSTEM IN PAKISTAN”The banking system is passing through a difficult phase mainly because of excessive political interference in the working of the nationalized banks by the different governments in the past. Hence the political interference in nationalized banks did not allow them to carry out their business purely on merit. It may be recalled that some twenty years back, the banking system was working on such a solid ground that various developing and under-developed countries used to take guidelines from Pakistani banks.

A little earlier before the creation of country, the role of Muslims of the areas which were later included in Pakistan was of no significance due to their restricted participation in the banking sector. There was only a small bank namely Australasia Bank having a few branches in Lahore and its suburbs. In 1942, the Australasia bank was housed in a garage of a trader of Lahore who used to trade at a small scale with Australia during that period. However the only Bank was run by the Muslims of the sub-continent was Habib Bank which was established in 1941. At that time Quaid-e-Azam Mohammad Ali Jinnah expressed his desire that another Muslim bank also be established in Calcutta which came into reality when Adamjee with the assistance of Isphanis established Muslim Commercial Bank a few months before the creation of Pakistan in Calcutta. When Pakistan came in to being The Habib Bank shifted its Headquarters from India to Karachi. A few of Habib Bank's branches were already in operation in Pakistan. The Muslim Commercial Bank also moved its headquarters from Calcutta to Dhaka and later on to Karachi. At the time of independence, another small bank namely Bank of Bahawalpur also started business from Bahawalpur from December 1947.

Before independence, the financial sector was in the hands of foreign banks some of them were British by origin. The oldest bank operating from 1883 in this part of the world was the Chartered Bank while another bank namely the Grind lays Bank which was also working simultaneously from 1883. In order to expand its business operations, the Grind lays acquired other small banks and merged them into the business of Grind lays. For example Allied

Bank, National Bank of India etc was merged into Grind lays Bank. Among the contemporaries, Imperial bank of India was the largest Indian Bank which had started its operations in 1919 which was discharging the role of a commercial banks as well as the Central Bank for India until an independent Central Bank i.e. Reserve Bank of India was established in 1935. However, since the Imperial Bank had the largest network of its branches all over India, it continued to play its role as a subsidiary of the Reserve Bank of India. In the Muslim majority an area which was later on became the part of Pakistan, small branches of Indian banks were operating and soon after creation of Pakistan they shifted their branches and headquarters to India. At the time of independence, two major banks including Punjab National Bank at Lahore and Comila Banking Corporation were working in the then East Pakistan. This trend was so obvious that the total number of bank offices between June 30, 1918 and August 14, 1947 were reduced from 631 to 195 only. During the early part of 1949 the number of branches of Imperial Bank of India in Pakistani areas was more than of Habib Bank. In the early days of Pakistan, the government worked hard left no stone unturned to establish and strengthen the banking system in Pakistan.

These efforts resulted in the establishment of State Bank of Pakistan which was inaugurated by Quaid-e-Azam on July 1, 1948. Quaid-e-Azam flawed from Quetta to Karachi specially to grace the occasion. Originally the State Bank was scheduled to be established in September 1948. Zahid Hussein, who was the first Governor of the State Bank devoted all his time and energy to streamline the working of the State Bank. In normal situation, the Central Bank of a country is only established when the commercial banking start working on sound footings. But the circumstances forced the government to establish Central Bank and the task of stabilizing the commercial banking was also assigned to the State Bank, which it really did.

The establishment of the National Bank of Pakistan in 1950 on the pattern of Imperial Bank of India was yet another milestone in the banking history of Pakistan. In September 1949 the rupee value was reduced against the Pound sterling which was a major event in the banking circles. Consequently Indian government devalued its Rupee against Pound Sterling’s, however Pakistan decided not to devalue its currency against Pound Sterling which resulted in increase of Pakistani cotton and jute prices for India which affected our exports to India. Though Pakistan had to suffer economically due to decline of exports to India, it however gave

a sense of economic independence to Pakistan. Cut in imports from Pakistan proved as a blessing in disguise as Pakistan had to explore new exports markets for its products. However Indian banks operating in Pakistan refused to finance Pakistani exports.

“ROLE OF COMMERCIAL BANK”A commercial bank is a type of financial intermediary and a type of bank. Commercial banking is also known as business banking. It is a bank that provides checking accounts, savings accounts, and money market accounts and that accepts time deposits.

Commercial banks engage in the following activities:

processing of payments by way of telegraphic transfer, EFTPOS, internet banking, or other means

issuing bank drafts and bank cheques accepting money on term deposit lending money by overdraft, installment loan, or other means providing documentary and standby letter of credit, guarantees,

performance bonds, securities underwriting commitments and other forms of off balance sheet exposures

safekeeping of documents and other items in safe deposit boxes sale , distribution or brokerage, with or without advice, of insurance,

unit trusts and similar financial products as a “financial supermarket”

traditionally, large commercial banks also underwrite bonds, and make markets in currency, interest rates, and credit-related securities, but today large commercial banks usually have an investment bank arm that is involved in the mentioned activities.

CHAPTER 2

INTRODUCTION OF UNITED BANK LIMITED

Chapter# 2

Introduction of United Bank Limited

Company Mission Company VisionCompany introductionCompany DescriptionHistory of the CompanyOperational StructureDomestic & International Network Major Local Market Presence House hold name Full Service bank International bankOwnership StructureEconomic ReviewCompany SetupBoard of DirectorsManagementSenior Management of UBLLocationCompany Profile

“MISSION STATEMENT”Our mission is to:

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

“VISION STATEMENT”

“To be a world class bank dedicated to excellence, and to Surpass the highest expectations of our customers and all other stakeholders.”

Company Introduction:

UBL was set up in 1959 and is today one of Pakistan's major banks in terms of deposits and advances with a huge domestic and international network.

Company Description:

UBL is a Banking Company, which is engaged in Commercial & Retail Banking and related services domestically and overseas.

History of the Company:

UBL was established in 1959 and is one of the major commercial banks of Pakistan. The Bank is making every effort to meet the up-coming challenges through strategic planning and making the best use of the resources at its command. A professional team was appointed in mid 1997 to restructure the bank and to commence rightsizing. The management is also in the process of rationalizing the branch network and identifying and recovering its doubtful and classified portfolio. It has planned to institute major improvements in customer services and internal systems to improve efficiency. It also intends to launch innovative products. The bank is increasing resource mobilization through regular deposit campaigns and accelerating the process of recovery of outstanding advances and non-performing assets.

Operational Structure:

UBL operates 1375 domestic and a subsidiary viz. United Executors and Trustees Company Ltd. as on 30.06.2000. It has 20 overseas branches situated in the UK, USA, UAE, Yemen, Bahrain and Qatar. It also operates one offshore branch in the Export Processing Zone, Karachi and it has representative offices in Cairo-Egypt and Tehran-Iran. It also has a joint venture – Oman United Exchange Co., Oman Muscat and a subsidiary – United Bank A.G. Zurich, Switzerland set up in 1968. It has 21 ATMs with 8 in the UAE, 3 in Bahrain, 1 in Doha, 7 in Islamabad and 2 in Karachi.

Domestic and International Network:

Major Local Market Presence: UBL is one of the largest commercial banks in Pakistan representing approximately 09% of the deposits of the banking sector.

A House hold Name: UBL's brand name is well established. It has an extensive domestic network of 1,375 branches reaching virtually every segment of the Pakistani economy. 

A Full Service Bank: UBL provides its customers a complete range of banking products and services including retail banking, corporate and institutional banking, trade finance and consumer finance.

An Int ernational Bank: UBL has a presence globally through an extensive international branch network in the table below:

 Ownership Structure:

Share holders are contributed the percentages are given below:

Shareholder Percentage (%)State Bank of Pakistan 99.575880Islamic Republic of Pakistan 0.370316

LocationNo of Branches

UAE (Total Branches: 8)

Abu Dhabi 4Dubai 3Sharjah 1Bahrain (Total Branches: 3)Manama 1Babul Bahrain 1Moharrak 1

Qatar (Total Branches: 1)

Doha 1Yemen (Total Branches:2)Sana 1Hudiada 1UK (Total Branches: 4)London 1Bradford 1Manchester 1Birmingham 1

USA (Total Branches:1)

New York 1Export Processing Zone (Total Branches: 1)Karachi 1

State Life Insurance Corp. of Pakistan 0.013895Sui Southern Gas Company 0.013096Pakistan Insurance Corporation 0.000113Metropolitan Steel Corporation Ltd. 0.000430Investment Corporation of Pakistan Ltd. 0.007634National bank of Pakistan Trustee Department, H.O. 0.018445President of Pakistan through Privatization Commission 0.000190Outstanding Shares (146,388,000) 100

News Publications

United Bank Limited - a brief introductionIn April, 1998 :

UBL opened up for business on November 7, 1959 with authorized capital of Rs.20 million and Paid-up capital of Rs.10 million. In its very first year, it mobilized deposits of Rs.70 million and earned a profit of Rs.O.7 million. It continued to grow rapidly and soon became one of the largest banks in the country. The main reasons for its exemplary growth were the introduction, in many instances for the first time in Pakistan, of professional management, computers, economic and business research, latest managerial practices and customer orientation.

UBL remained in the private sector for 15 years until it was nationalized on January 1, 1974 with other Pakistani banks. The bank continued to grow rapidly even after nationalization. Its resource base expanded, the number of branches increased, and overseas operations grew. As an organization, UBL

has grown rapidly except in the last couple of years when it ran into some problems.

In 1996, its deposits totalled Rs.105.9 billion; advances amounted to Rs.68.6 billion; assets totalled Rs.177 billion and the number of branches was 1701, including 27 overseas branches. UBL has had its share of problems, most of which were the result of the conglomeration of some unpredictable factors.

More recently, the lacklustre growth of the economy has undermined the banking sector's profitability and competitiveness.

UBL's new management has developed a well-thought-out plan for its growth and profitability. In the main, it focuses on accelerated loan recovery, surplus asset disposal, improving credit systems, operational controls, reporting and monitoring. From a practical standpoint, the use of better technology, focusing on the appropriate market segment, and project and specialized finance will facilitate rapid and sustainable growth. The world's financial system or, to use the latest jargon, financial architecture, has changed greatly. New products have been introduced, the riskiness of financial systems has increased and the lines of demarcation between the various types of financial institutions have become blurred.

Improvement in consumer service and prompt attention to customer needs lie at the heart of UBL's promotional strategy. All planning is directed and geared to customer service and satisfying the client's diverse needs. The UBL of the past was renowned for its customer service and the management plans to put new life into it. To that end, training programmes have been accelerated and upgraded and the staff are encouraged to revamp their skills.

The steps taken to shore up UBL have begun to take effect. The first signs of recovery have become manifest. A key indicator is the level of recovery. In 1997, total debt settlements amounted to Rs.7 billion, well above the level in the preceding year. In 1998, UBL's target for debt settlement is Rs.11.5 billion.

The Bank's Paid-up capital is Rs.1.48 billion. It is not enough to meet capital adequacy ratio, but the package the State Bank of Pakistan has put together to shore up UBL will provide Rs.21 billion to increase the capital base. This huge infusion of capital would improve the Bank's liquidity and boost public

confidence. In turn, it would enable it to step up deposit mobilization, expand its activities, pay depositors a higher return, and upgrade technology. All of these would impact on profitability.

The Bank expects to make a profit this year after having been in the red for a couple of years. Beside the increase in the Bank's capital base, there have been other developments which would impact on growth and profitability. In brief, they are (i) the reduction in the cost of financial intermediation from 5.1 per cent in 1996 to 4.6 per cent in 1987; (ii) the improvement in the recovery of non-performing loans; (iii) the rationalization and improvement of its overseas operations; and (iv) the beginning of new initiatives like corporate banking. In corporate banking, UBL recently participated as a co-manager in the securitization of Daewoo's receivables under a syndicated arrangement.

UBL has always been an upbeat and growth-oriented institution, but this does not mean that it has been oblivious to the social responsibilities of business organizations. It always fulfilled the mandatory credit targets it was given for loaning to the priority sectors. As part of the government's policy to improve the technical skills of Pakistani workers, it has set up two computer literacy centres at Sheikhupura and Muzaffarabad. On the level of social services per se, the Bank has encouraged sports and built a first-rate sports complex in Karachi. It is soon going to link up with Internet and SWIFT to provide prompt, responsive service. It has major plans to train the staff to provide customers the services they expect from first-rate banks.

Company Setup:

BOARD OF DIRECTORS

MANAGING DIRECTOR

FINANCEDEPARTMENT

MANAGER

FINANCIALADVISOR

PRODUCTIONDEPARTMENT

MARKETING DEPARTMENT

SALESDEPARTMENT

MANAGER

PRODUCTION SUPERVISOR

MANAGER

ASSISTANT MANAGER

MANAGER

ASSISTANT MANAGER

CHIEF EXECUTIVE

Board of DirectorsNAMES DESIGNATIONS

His Highness Shaikh Nahayan Mabarak Al Nahayan

Chairman

Sir Mohammed Anwar Pervez, OBE, HPK Deputy Chairman

Mr. Atif R. Bokhari President & CEO

Mr. Omar Ziad Jaafar Al Askari Director

Mr. Zameer Mohammed Choudrey Director

Mr. Seerat Asghar Director

Mr. Muhammad Sami Saeed Director

Mr. Amin Uddin Director

Mr. Arshad Ahmad Mir Director

Mr. Aqeel Ahmed Nasir SEVP/Company Secretary & Chief Legal Counsel

Mr. Raymond Kotwal Chief Financial Officer

Location

WITH an integrated network of over 1000 branches in Pakistan as well as Overseas, UBL gives you direct access to a comprehensive range of better banking facilities to help you monitor your business locally as well as internationally.

Improving branch operations and outlook is another focus area within UBL’s future strategy. In addition to automation, branches will be renovated

to standard that reflects the communities and environment in which they operate.

Company Profile: “UNITED BANK LIMITED”

Date EstablishedNovember 7, 1959

 ChairmanHis Highness Shaikh Nahayan Mabarak Al Nahayan

 Deputy ChairmanSir Mohammed Anwar Pervez OBE

 

President & CEOMr. Atif R. Bokhari

 Branches 1112 Domestic, 17 Overseas Branches

 Representative OfficesIranKazakhstanChina

 SubsidiaryUnited Bank AG Zurich, Switzerland United National Bank Limited, UK (Joint venture with NBP) UBL Fund Managers Limited United Executors and Trustees Company Limited

 Associated CompanyOman United Exchange Company, MuscatUBL Insurers Limited

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

 Registered Office 13 Floor, UBL Building, Jinnah Avenue, Blue Area Islamabad, Pakistan

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

CHAPTER 3

INVESTMENT PLANS BY UNITED BANK LIMITED

Chapter# 3

Investment Plans by United Bank Limited

Mahana Munafa Plan Free Insurance coverage

Procedure for investing in the Mahana Munafa PlanSarmaya Izafa plan Free Insurance coverage Procedure for investing in the Sarmaya Izafa PlanProfit + Growth Plan Free Insurance coverage Procedure for investing in the Profit+ Growth PlanMera Kal - UBL Children savings Plan Investment Opportunities that maximizes the savings Procedure for investing in the Mera Kal - UBL Children savings PlanUBL Principal Plan Protection Series UBL Principal Protection Plan – I UBL Principal Protection Plan – IISalient Features of UPPP – II

INVESTMENTS PLANS BY UBL

With rising costs, managing your household expenses (like utility bills, children’s school fee, etc.) and budgeting for special occasions may seem like a challenge. In order to help you meet these expenses in time and to further improve your lifestyle, UBL Fund Managers presents:

MAHANA MUNAFA PLAN:

With the Mahana Munafa Savings Plan you will earn profit on a regular basis so that you can manage your household without cutting corners. And

while you enjoy a regular source of income, your initial investment will remain in safe hands.

The Mahana Munafa Plan is an ideal investment for:

Individuals like Housewives and Retirees, who do not have a regular source of income

Individuals and families who want extra money every month to supplement their regular income

The investment portfolio of the Mahana Munafa Plan comprises of 100% investment in the United Growth & Income Fund (UGIF) – open end fund managed by UBL Fund Managers.

Free Insurance Coverage:

Get Accidental Life and Medical Insurance Coverage of up to Rs. 1,000,000 absolutely free of charge when you invest in the Mahana Munafa Plan. The insurance coverage will protect you and your family against financial uncertainties that may result due to your accidental demise or illness.

You can avail the free insurance coverage as per the details given below, starting with a minimum investment of Rs. 500,000.

 Investment Amount in Rs.

Insurance Coverage

Loss of Life Accident Indemnity (Rs.) - Lump

Sum

Accidental Medical Expense Reimbursement

(Rs.) - Annual Limit

500,000-1,000,000 500,000 100,000

1,000,001-2,000,000 750,000 150,000

2,000,001 and above 1,000,000 200,000

PROCEDURE FOR INVESTING IN THE MAHANA MUNAFA PLAN:

Fill out the application form and submit it at your nearest Investment Center or UBL Branch along with a copy of your CNIC and Affidavit (incase of Zakat Exemption). Payment can be made in the form of a cheque, demand draft, and pay order or through online transfer in favor of ‘CDC Trustee UBL Funds’ and crossed ‘Account Payee’ only. Cash will not be accepted.

You can enjoy the most precious moments of your life even more when you are free from financial worries. In order to help you plan for future obligations ad the to give you the security and peace of mind you need to take care of your loved ones.

SARMAYA IZAFA PLAN:

With the Sarmaya Izafa Savings Plan the profit realized on your investment is automatically reinvested into your account along with the

principal investment. Thus growing your savings large enough to take care of your future responsibilities with ease,

The Sarmaya Izafa Plan is an ideal investment plan for:

Individuals who want to invest and grow their hard earned savings to cover for future expenses over a period of three to five years

Individuals who want to earn higher profits on their investment while having the flexibility to access their money as and when needed

The investment portfolio of the Sarmaya Izafa Plan comprises of 70% investment in the United Stock Advantage Fund (USF) and 30% investment in the United Growth & Income Fund (UGIF) – open end funds managed by UBL Fund Managers.

Free Insurance Coverage:

Get Accidental Life and Medical Insurance Coverage of up to Rs. 1,000,000 absolutely free of charge when you invest in the Sarmaya Izafa Plan. The insurance coverage will protect you and your family against financial uncertainties that may result due to your accidental demise or illness.

You can avail the free insurance coverage as per the details given below, starting with a minimum investment of Rs. 500,000.

 Investment Amount in Rs.

Insurance Coverage

Loss of Life Accident Indemnity (Rs.) - Lump

Accidental Medical Expense Reimbursement

Sum (Rs.) - Annual Limit

500,000-1,000,000 500,000 100,000

1,000,001-2,000,000 750,000 150,000

2,000,001 and above 1,000,000 200,000

 PROCEDURE FOR INVESTING IN THE SARMAYA IZAFA PLAN:

Fill out the application form and submit it at your nearest Investment Center or UBL Branch along with a copy of your CNIC and Affidavit (incase of Zakat Exemption). Payment can be made in the form of a cheque, demand draft, and pay order or through online transfer in favor of ‘CDC Trustee UBL Funds’ and crossed ‘Account Payee’ only. Cash will not be accepted.

Like many people you may be faced with the challenge of maintaining a balance between regular expenses, like monthly bills, house rent, etc. and future plans for a new car, house renovation. To help you maintain your current lifestyle and secure your tomorrow.

PROFIT + GROWTH PLAN:

With the Profit + Growth Savings Plan a portion of your savings will be invested to provide you with regular profit allowing you to take care of your daily household expenses while the remaining amount will be invested for long term capital appreciation that will help meet future goals.

The Profit + Growth Plan is an ideal investment plan for:

Individuals who want surplus income every month to pay for household expenses while also growing their savings over a period of three to five years

Individuals who are planning for their retirement

The investment portfolio of the Profit + Growth Plan comprises of 70% investment in the United Growth & Income Fund (UGIF) and 30% investment in the United Stock Advantage Fund (USF) – open end funds managed by UBL Fund Managers.

Free Insurance Coverage:

Get Accidental Life and Medical Insurance Coverage of up to Rs. 1,000,000 absolutely free of charge when you invest in the Profit + Growth Plan. The insurance coverage will protect you and your family against financial uncertainties that may result due to your accidental demise or illness.

You can avail the free insurance coverage as per the details given below, starting with a minimum investment of Rs. 500,000.

 Investment Amount in Rs.

Insurance Coverage

Loss of Life Accident Indemnity (Rs.) - Lump

Sum

Accidental Medical Expense Reimbursement

(Rs.) - Annual Limit

500,000-1,000,000 500,000 100,000

1,000,001-2,000,000 750,000 150,000

2,000,001 and above 1,000,000 200,000

 

 PROCEDURE FOR INVESTING IN THE PROFIT + GROWTH PLAN:

Fill out the application form and submit it at your nearest Investment Center or UBL Branch along with a copy of your CNIC and Affidavit (incase of Zakat Exemption). Payment can be made in the form of a cheque, demand draft, and pay order or through online transfer in favor of ‘CDC Trustee UBL Funds’ and crossed ‘Account Payee’ only. Cash will not be accepted.

As you become a parent, your responsibility is to ensure that your child has a safe and bright future. Higher education, foreign degree, marriage and financial security are some of the important things that you would want to save for child. However given the increase in costs likely to occur with every passing year, simple savings may not be enough.

MERA KAL – UBL CHILDREN SAVINGS PLAN:

This is a systematic investment plan designed exclusively for children aged between 0 to 25 years that allows you to invest regular sums of money in your account from time to time on a periodic basis, thus growing your savings and enabling you to meet your child’s future needs without making any compromises.

Why you should invest in the UBL Funds Mera Kal – Children Savings Plan:

An investment Opportunity that maximizes the savingsA plan provides an unmatched investment opportunity, maximizing your savings over time. The portfolio of the plan comprises of the United Growth & Income Fund (UGIF) and United Stock Advantage Fund (USF) - open end funds managed by UBL Fund Managers

PROCEDURE FOR INVESTING IN THE MERA KAL – UBL CHILDREN SAVINGS PLAN:

Fill out the application form and submit it at your nearest Investment Center or UBL Branch along with a copy of your CNIC and Affidavit (incase of Zakat Exemption). Payment can be made in the form of cheque, demand draft and pay order or through online transfer in favor of ‘CDC Trustee UBL Funds’ and crossed ‘Account Payee’ only. Cash will not be accepted.

 

UBL PRINCIPAL PLAN PROTECTION SERIES:

The UBL Principal Protected Plan Series offers investment plans that are based on the world renowned investment methodology, Constant Proportion Portfolio Insurance (CPPI) – introduced for the first time in Pakistan.

UBL Principal Protected Plan – I (UPPP-I):

The first plan from the series is UPPP-I was launched in July 2008. Based on the CPPI Methodology, UPPP-I offers investors exposure to equity markets while protecting their capital at the end of the three year term of the plan.

UBL Principal Protected Plan – II (UPPP- II)

The second plan from the series, UBL Principal Protected Plan – II (UPPP-II) started on April 27 and has been extended till May 16, 2009.

Salient features of UPPP-II:

The plan provides up to 100% exposure to the stock market with principal protection at end of the Term through the CPPI Methodology

The plan invests in UBL Fund Managers’ flagship funds United Stock Advantage Fund (USF) and United Growth & Income Fund (UGIF) allocating the plan’s portfolio on a daily basis between these funds based on the performance of the equity markets

In case of significant upside in the stock market, the profit lock-in mechanism allows potential unrealized profits on the equity portion (USF) to be realized  

Return on investment is tax free as per applicable tax law. Individual investors can benefit from a tax credit based on their applicable tax rate

Term of the plan: 18 months

Minimum Investment: For Individuals: Rs. 500,000   |   For Institutions: Rs. 1,000,000.

CHAPTER 4

SERVICES OF UNITED BANK LIMITED

Chapter# 4

Services of United Bank Limited Key developments during 2010 WATAN CARD OMNI UBL FIRST MINOR ACCOUNT UBL BUSINESS PARTNER PLUS UBL SIGNATURE PRIORITY BANKING UBL PREMIUM DEBIT CARD WIZ ACCA

NET BANKING HAMRAH Investing Banking UBL Cash line UBL Better- life Banc assuranceUBL Auto LoansHome loans Business Loans

Origination System (LOS) has been implemented for Commercial loans and Consumer products.LOS implementation for the rest of the Bank will be completed by 2012.UBL is already starting to see the technological benefits and the improved service capability that these systems will bring to the Bank and its customers.

Watan Card:The Government of Pakistan (GOP) selected UBL to disburse Rs. 20,000 each to over one million families displaced by the flooding. For this effort UBL issued debit cards, called “Watan cards”, to beneficiaries identified by NADRA and GOP. Additional planned installments in 2011 will assure beneficiaries have multiple opportunities to use (and get used to) the cards. UBL’s ultimate goal is to retain the beneficiaries as Branchless Banking customers by introducing them to the benefits of using additional services such as savings, remittances, and bill payments that are accessible via their Watan card Omni accounts.The Bill & Melinda Gates Foundation will contribute US$1.5 million through MEDA (Mennonite Economic Development Association) to support UBL’s management and administrative costs of procuring and distributing the cards as well as the cost of ongoing disbursements via Omni Agents. The funding will also support MEDA in monitoring and documenting the UBL Watan experience, in order to share learning’s with the wider microfinance and financial sector communities globally.

UBL Omni:UBL Omni commenced commercial operations in April 2010 and with it achieved the honor of being the first commercial bank to launch branchless banking operations in Pakistan. With Omni, UBL aims to attract the unbanked population via its retail business agents called Omni Dukaans which are located in over 350 towns and cities of Pakistan and currently number more than 6,300.

Pakistan has nearly 65 million unique mobile phone subscribers whilst it has less than 20 million individuals with bank accounts. This provides the Bank with the unique platform of being able to include a large segment of the country’s unbanked population and provide them financial services which have previously remained inaccessible to them.

In recognition of UBL’s innovative product offering, strong management credentials and admirable goals of financial inclusion, the Bill and Melinda Gates Foundation has given UBL a grant of US$6.9 million through Shore Bank International to promote UBL Omni and ensure its reach to the widest possible community.

UBL First Minor Account:The Bank launched ‘UBL First Minor PLS Savings Account’ in 2010, a savings account designed especially for children, with exciting benefits that are unmatched in the industry.By providing an avenue to parents for financial planning for their children, it should also increase the number of parents in the banking system, as well as develop a new generation of customers loyal to UBL. This product has already generated a high degree of interest amongst children via the Bank’s youth outreach and social media campaigns.

UBL Business Partner Plus:UBL launched ‘Business Partner Plus’ in 2010, the best current account offering in Pakistan.This is a specialized current checking account, with a full menu of services, aimed at providing the necessary tools for individuals, traders, businessmen and commercial customers to transact their entire bank related business activities nationwide through a single platform. This product has been a major success story in its first year of launch.

Signature Priority Banking:2010 was the first full year of operations for the UBL Priority Banking lounges launched in November 2009. These exclusive lounges cater to the Bank’s existing and potential high‐net worth customers, with relationship managers trained to offer a range of wealth management products to service customer needs. UBL has had a successful experience with this offering and plans to expand this business across Pakistan in the future.

Premium Debit Card:In 2010, UBL in collaboration with Master Card, announced the launch of Pakistan’s first Premium Debit Master Card, exclusively designed to cater to the needs of affluent consumers in Pakistan. Customers who fulfill the stipulated eligibility criteria are being offered this card, as part of UBL’s continuing commitment to offering the best products to its customers. In addition to the features and privileges inherent in the card program, UBL has

also teamed up with various partners to provide preferential benefits to its cardholders.

Wiz for ACCA:Wiz is a prepaid debit card which was launched in 2008, and UBL is the only bank in the country to have this offering. Customers can deposit up to a limit of Rs 200,000 in their debit card and use it all over the world. The card can be topped‐up for usage (just like a prepaid mobile phone connection) from any UBL online branch.UBL entered into a partnership with the Association of Chartered Certified Accountants, UK (ACCA), a global body of accounting professionals, which has thousands of registered students in Pakistan. In this connection, the Bank has launched a Wiz prepaid card specifically for ACCA students, which is especially convenient to them in making fee payments online. This is a key initiative that is expected to increase awareness and usage of the Wiz card.

UBL NETBANKING

UBL net banking is an Internet Banking portal offering a simple, convenient and secure method of accessing bank accounts on the Internet. It's never been so easy to access and manage your finances in a secure, real-time, online environment; Anywhere, Anytime.

Using UBL net banking, the customers have access to their bank accounts 24 hours a day, 7 days a week and can keep a close eye on their account balances, print account statements, pay bills, transfer funds, track purchases and schedule their recurring payments at the touch of a button and much more.

Features and benefits of net banking:Net banking is the first service in Pakistan to give you the power to send money to anyone in Pakistan; even if they do not have a bank account at UBL. You can either send money to another UBL customer through Account-To-Account transfer, or get a Tez Raftaar cheque delivered at payee’s doorstep just within 48 hours anywhere in Pakistan.

Real-Time Account Balance & SummaryNet banking offers easy, 24-hour access to the account information. The customers can see an overview of the listed accounts in a summarize form with the available account balance. Using net banking, the customer can also keep an eye on their cash flows, transactions and check their balances before paying their bills or scheduling a transfer.

Manage Multiple AccountsUsing net banking, the customers can manage more than one account. All accounts are linked, which enables them to perform fund transfers and set auto transfers between these accounts.

HAMRAH We Are Now Offering Denominations Up To Rs. 10,000 OnlyUBL has always been at the forefront in identifying and meeting the financial needs of its valued customers. UBL was the pioneer in introducing

Rupee Travelers Cheque facility in Pakistan, as early as 1971. In continuation of the same tradition, UBL in the shape of "Hamrah" Rupee Travelers Cheque enhances this facility for the convenience of its valued customers by offering denominations up to Rs. 10,000

UBL "Hamrah" has been designed keeping in mind, both convenience and security - be it business, property, trade or personal needs. "Hamrah" Rupee Travelers Cheques are the ideal and safest way of carrying cash when traveling anywhere in Pakistan.Hamrah RTC' (Rupees Traveling Cheques)s are now accepted at more than 2000 places such as hotels, shops, real estate agents, jewelers, car dealers, etc and of course at all our UBL branches.UBL has a 24-Hours customer help-line, providing its customers with round the clock tele-verification of "HAMRAH" traveler’s cheques.

Salient Features of HAMRAH: Absolutely FREE - No Bank Commission, No Excise Duty:Whatever the value of "Hamrah" purchased, no Bank Commission or Excise Duty will be charged

Denominations: Available in denominations of Rs. 10,000 and Rs. 5,000

Denominations: At any of the large network of designated UBL Branches, countrywide. Transferable/encashable through a single signature

Available to all: Holding an account with UBL not mandatory for availing this facility

Easily transferable and encashable: Just dial "Hamrah" Hotline UAN for assistance 111-111-825 or contact nearest designated UBL Branch

Special facility of refund: Indicate choice of designated UBL Branch for refund which will be within days only. Most convenient while in transit anywhere in Pakistan

Valid until encashed: Use them for a week, month or even years depending on when there’s a need for encashment.

Exclusive security: Secured with specially "Coded" printing and"RAIN BOW Effect" for added security.

UBL BETTER LIFE-BANC ASSURANCE:

What is Banc Assurance?

Banc assurance is the selling of insurance and banking products through the same channel, most commonly through bank branches.

Product Offering

UBL Better Life plans are advanced insurance products specifically designed to benefit the customers, providing the better and secured future to your family and loved ones.

Initially, we plan to offer the following product types:

UBL Better Life Child Education Plan

Accumulation of target funds for education of your children and ensuring that goal is achieved even if the parent dies earlier. UBL Better Life Child Education Plan provides a complete financial package for planning your children’s education by helping you create an endowment fund for this purpose in an organized and disciplined manner, over a predetermined period. To put your son or daughter through college or university, this Plan is spot on!

Eligibility Criteria 18 – 65 yearsMinimum Payment Rs. 15,000 per annumPartial Funds Withdrawals

Allowed

Product Features Insurance Protection, Capital Protection

Unit Allocation

The proportion of contribution for investment in units varies by policy year and is follows

Policy Year Allocation Percentage

1 25% - 35% depending on policy term

2 80%3 onwards 100%11 onwards 105%*

If basic plan contribution is Rs. 20,000 or more.

UBL Better Life Marriage Plan

Endowment funds for your children in an organized and disciplined manner for use in later life.UBL Better Life Marriage Plan provides a complete financial package for planning your son or daughter’s marriage, by allowing you to accumulate an endowment funds for this purpose in an organized and disciplined manner. Whether it is meant for your son or daughter’s marriage or to help them to start off a new life of their own, this plan is spot on!

Eligibility Criteria 18 – 65 yearsMinimum Payment Rs. 15,000 per annumPartial Funds Withdrawals

Allowed

Product Features Insurance Protection, Capital Protection

Unit AllocationThe proportion of contribution for investment in units varies by policy year and is follows:

Policy Year Allocation Percentage

1 25% - 35% depending on policy term

2 80%3 onwards11 onwards

100% 105%

If basic plan contribution is Rs 20,000 or more.

UBL Better Life Savings Plan

Flexible open ended savings product with life insurance protection to your family and loved ones.UBL Better Life Savings Plan is a high value savings and investment vehicle. Funds accumulated during the savings term can be utilized for children’s higher education, marriage, buying a house, generating retirement income or for any other purpose. The plan is flexible enough to respond to most individuals’ needs. It is a unit-linked plan which aims to deliver a substantial sum of money at the end of the savings period. The additional benefit of course comes in the form of life insurance cover.

Eligibility Criteria 18 – 65 yearsMinimum Payment Rs. 15,000 per annumProduct Features Insurance Protection, Capital Protection Partial Funds Withdrawals Allowed

Optional BenefitsAdditional Terms Assurance, Family Term BenefitsLife Care Benefit

Built in Benefits Waiver of Premium, Accidental Death Benefits, Maturity Benefit

Unit Allocation

The proportion of basic plan contribution allocated to investment is as follows

Policy Year Allocation Percentage

1 35%2 80%

3 onwards 100%6 to 10 103%*

11 onwards 105%*

If basic plan contribution is Rs. 20,000 or more.

UBL Better Life Retirement Plan

Accumulating retirement funds for your regular retirement income.

Planning one’s retirement is vital to ensure that a decent standard of living is maintained without being a burden on anyone. UBL Better Life Retirement Plan allows financial independence after retirement. Contributions to the plan are invested in accumulation units to build up substantial capital. At retirement, this capital generates attractive pension payments after the age of 60, as well as a range of protection benefits tailored to one’s needs.

Eligibility Criteria 18 – 65 yearsMinimum Payment Rs. 15,000 per annum

Product Features Insurance Protection, Funds Acceleration Premium, Capital Protection, Loyalty Bonus

Partial Withdrawals Allowed

Optional Benefits Additional Terms Assurance, Family Term Benefits, Life Care Benefit

Built in Benefits Waiver of Premium, Built in Accidental Death Cover,Guaranteed Loyalty Bonus

Unit Allocation

The proportion of basic plan regular contribution allocated to investment is as follows:

Policy Year Allocation Percentage

1 35%2 80%3 90%

4 to 10 100%

11 onwards100% plus Loyalty Bonus

allocation

UBL CASH LINE:

UBL Cash line is a flexible loan that provides you cash up to Rs.500, 000 without any security requirements. It empowers you to take control of your finances.UBL Cash line is aimed to make your life easier…ZINADGEE ASAAN. Whether you are a salaried individual or a businessman, UBL Cash line takes care of your cash requirements.

Cash line offers you:

FlexibilityNo fixed monthly installmentPrincipal repayment at your convenience.No prepayment penaltyMarkup only on utilized amount

Worry free payment of bills, shopping, child’s education, short-term business needs or just about any thing you can think of!

Empowerment:For the first time in Pakistan, you can now control your markup. Enjoy lower markup on higher utilization of fundsMarkup calculated on daily outstanding balanceContinuous line of credit.

Convenience:Instant access to cash through the entire UBL network. You will be given a cheque book and an ATM/Debit Visa Card which you can use at 900,000 ATMs and 22 million outlets worldwide.

Unsecured /clean lending, no collateral required

All UBL Cash line customers are automatically registered on UBL net banking and can avail numerous net banking features such as

Bill PaymentFunds transferAccount updateStatement of accounts

How can you get Cash line?Cash line is offered in the following cities:

BAHAWALPUR  OKARA FAISALABAD  PESHAWAR

 GUJRANWALA  QUETTA GUJRAT  RAHIM YAR KHAN HYDERABAD  RAWALPINDI ISLAMABAD  SAHIWAL JHELUM  SARGODHA KARACHI  SIALKOT LAHORE  WAZIRABAD MULTAN  WAH CANTT LARKANA  MIRPURKHAS SUKKUR  NAWABSHAH KHARIAN

INVESTMENT BANKINGThe Largest Investment Bank in Pakistan

IBG provides innovative and unique solutions to its clients enabling them to meet the challenges of an ever- changing market.

Dedicated specialist team of 14 investment bankers. Supported by over 50 relationship managers in six different locations in Pakistan alone.Well established execution experience.Rich international and domestic investment banking product knowledgeStrong distribution capability.

Three specialist business areas:Project & Structured FinanceSyndications & Debt Capital MarketEquity & Advisory

Awards Given To UBL as A Large Investment Bank Awarded the “Largest Investment Bank” award by The CFA Association of Pakistan for three consecutive years (2003-2005). Awarded the "Corporate Finance Transaction of the Year" by the CFA Association of Pakistan for FY 2005Current mandates add up to over PKR59 billion (US$967million). A healthy mixture of Debt, Equity & Advisory transactions.] Structured and executed debt and equity transactions totaling over PKR 45 billion (US$744 million) in 2006, PKR60 billion (US$1billion) in 2005, and PKR52 billion (US$866 million) in 2004.

DEBT AND CAPITAL MARKETS:

Loan Syndications Term Finance Certificates (TFC

Listed TFC Privately Placed TFC Securitization Commercial Paper (CP)

Loan syndications:

Raising term financing from financial institutions Can be used to raise large financing amount Results in the use of bank lines by the corporation Advantage of bilateral-type operation as primary interface is with the

Agent Bank only IBG acts as an Advisor, Arranger and/or Trustee of the loan facility

Term Finance Certificate (TFC)

Redeemable capital issued under section 120 of the Companies

Ordinance, 1984

Capital market alternative to traditional bank debt

Replicates the cash flows of a coupon-bearing bond

First TFC in Pakistan issued by Packages Limited in 1995. Two types of TFCs are:

Listed TFCs

Privately-Placed TFCs

Listed TFCListed TFCs are made available to the general public in addition to

institutional investors through listing on the stock exchange

Facilitate trading in the secondary market

Offered through both Private Placement (Pre-IPO) and Initial Public Offer

(IPO)

Listing creates liquidity through bid and offer quotes in the secondary

market

Increasingly growing with 14 companies offering TFCs worth PKR 16.8

billion at the Karachi Stock Exchange

alone in 2005. This trend also continued in the year 2006 and UBL IBG had

significant market share of listed

TFC issues in 2006

Privately Placed TFC:

Privately-Placed TFCs are not offered to the public

Offered to a single principal investor or to a group of institutional

Investors, allowed under Section 120 of the Companies Ordinance,

1984

Arranging a Privately-Placed TFC issue takes considerably less time. Can be achieved in a matter of 4-8 weeks

Approvals are not required from regulatory authorities (stock exchanges, SECP) and the credit-rating of the entity and instrument need not be obtained

Securitization:

Securitization designed to improve the risk profile of the facility for the Issue

IBG acts as Structuring Agent and Arranger Asset Backed Securitization (ABS) Bonds or notes backed by financial assets Pools of financial assets are sold to SPV SPV converts these pools to marketable securities in the form of Asset

Backed Securities

Commercial Paper: An unsecured promissory note with a maturity period ranging from

thirty days to one year A money market instrument which can be issued by rated companies

to diversify their short term sourcesof financing

Transferable by endorsement and delivery Commercial Paper is issued at a discount calculated on the basis of the

mark-up which is determined by the Issuer The Issuer to maintain a minimum current ratio of 1:1 and to maintain a minimum Debt/Equity ratio of 60:40

UBL AUTO LOANS:

UBLDRIVE:UBL Drive is a unique auto financing product which offers you features, options and flexibility unmatched by any other bank, because at UBL, You come first.

New Car Financing:

UBL Drive allows you to drive away in your own car by making a down payment of just 15% and to top that with low monthly installments.

Pricing Plan

Tenure  1 to 2 years     3 to 4 years        5 to 6 years           7 years Rate      20.00%           20.50%                  21.00%                21.50%

Used Car Financing:

With UBL Drive you can buy your favorite used car (up to 5 years old) at the most affordable rates.

Pricing Plan

Tenure                   1 to 2 years                    3 to 4 years                   5 years Rate                          21.00%                         21.50%                       22.00%

The rate of installment is fixed it cannot be change year by year which can be show by the figure

Car Replacement Plan:

Drive’s Car Replacement Plan is the slogan name for a premier auto financing product. Customers who intend to avail loan facility from UBL Drive under this variant can readily have their existing cars replaced after a year of financing.

Insurance Options:

UBL Drive offers you the following insurance options:

1. Comprehensive insurance2. Insurance financing for the first year3. Discounted rates with Tracker car security device installed at

customers' cost

Processing ChargeA processing charge of Rs. 5,000 will apply.

HOME LOANS

Buying a Home:

Why rent when you can buy? Buying a home of your choice has never been so easy.  With a maximum financing limit of 70% you can easily buy a house or apartment that best fits your requirements. So go ahead and start the search for your dream home because with easy and affordable installments you need not think of renting a house when you’ve got UBL Address.

Building a Home:

Have you ever settled for anything less than perfect? There’s nothing like building your perfect home, your way. With every detail in place like the elegant French windows or the perfectly manicured lush green lawn, just the way you’ve always imagined. By chalking out well planned fund branches at

each phase of the building process, UBL Address brings you your dream house one step closer.

Land plus Construction:

What do you do with an empty piece of land? Construct your dream house with all the aesthetic details you’ve ever wished for.  UBL Address helps you through every stage of construction by providing you with well planned out fund branches so that you can better manage your construction.

BUSINESS FINANCING LOANS:

UBL Business line is a complete solution to all your Business Financing needs.With UBL Business Financing facility, you can now take your business to

greater and newer heights, and achieve the level of success that you truly deserve.UBL Business line is a running Finance facility that not only provides funds for growth but also enables you to capitalize on profitable opportunities.With UBL Business line, now you will surely say: “Ab Hui … Kamiyaabi Meri Manzill”.

What is Business line?

“It is a ‘Credit Line/ Overdraft (OD) Facility’ against Residential Property. It is an evergreen credit line that the customer can use for his/her business expansion”

Features:

Utilize up to Rs.10 million: Now UBL Business line credit line is here to solve all your cash flow problems. You can utilize up to Rs.10 million with the help of which you can now focus on your business expansion and growth.

Mark up on utilized amount only:With UBL Business line, now you no more need to pay for the entire credit line that you own. Business line gives you the facility to pay mark up only on the amount that you utilize.

Faster Processing:After completion of your documentation requirements, UBL Business line promises you a very smooth and fast processing, hence saving you time and frustration.

Wide Accessibility:UBL Business line’s availability in major cities like Karachi, Lahore, Faisalabad, Islamabad & Rawalpindi, is complimented by UBL s

countrywide branch network enabling our customer to access his account, and deposit or withdraw cash, no matter where he stands within the country.

Eligibility Criterion: If you fall in the following criteria, then UBL Business line is just the right choice for you:Minimum monthly income: Rs. 50,000Age: 25 – 55Resident: Pakistani.Self Employed Professional / Self Employed Business

Chapter# 5

Financial Analysis of United Bank Limited

United bank Limited Balance Sheet Profit & Loss Account Ratios analysis

BALANCE SHEET AS AT DECEMBER 31, 2010

Rupees in (000)

2010 2009 2008ASSETS

Cash and bank balance 67461668 61470047 50,069,965Balance with other banks 18192142 5407470 7,497,174Lending to financial Institutions

12384778 23162130 22,805,341

Investments 224578556 136145524 116,328,288

Advances 333732172 354091713 371,139,675

Other assets 22424072 21925669 17,154,985Operating fixed assets 1298403 608876 18,021,445Taxation recoverable --------- --------- --------------Deferred tax asset-net 18713188 16905004 2,055,609 Total assets 68415065 60936723 43,862,759

TOTAL LIAB. & OWNER EQUITY

.

Bills payable 5045815 5147259 5,194,449Borrowing From Fin. Institutions

45104849 35144823 44,195,886

Deposits & other A/c's 50645767 492036103 483,560,062

Sub – ordinate loans 11985748 11989800 11,993,848

Other liabilities 17587735 14461725 16,265,478Deferred liabilities ----- ------ ---------Share capital 12241798 11128907 10,117,188Reserves 21688637 18959537 15,501,513Inappropriate profit 26250489 22187802 16,604,076Surplus on revaluation of asset

8234141 8660477 1,639,982

Total liabilities and owner equity

68415065 60936723 43,862,759

PROFIT & LOSS ACCOUNT AS AT DECEMBER 31, 2010

Rupees in (000)

2010 2009 2008Net markup/interest income after provision

34108508 32943238 28,135,659

Non markup/interest income

10120632 11419571 10,401,394

Total Income

44229140 44362809 38,537,053

Non markup/interest expensesAdministrative expenses 17765056

1660856115,519,634

Other provision/write offs 63233 642274 450,390

Other charges 240391

64552

258,321

Total Non markup/ interest expenses

18482222 17712934 16,565,344

Extraordinary items- - -

Profit before tax 17742218 14034501 13,874,424Tax 6582288 4841814 5,541,304

Profit-after Tax/net income

11159930 9192687 8,333,120

FINANCIAL ANALYSIS

  2008 2009 2010  Current Ratio 0.91 1.15     2.9  Asset Turnover 0.06 0.04    0.64  Debt to Asset 0.94 0.93   0.95    Debt to Equity 14.4 13.4  1  Coverage Ratio 1.15 3.34  3  Gross Profit Margin 52.5 79  40 %Net Profit Margin 12.69 30 25 %

Return On Investment 0.76 1.24  4.3 %Return On Equity 16.78 18  16.3 %Advances to Deposit 46.74 45  49 %Investment to Deposit 41.63 28  29 %Cash Ratio 9.23 28  29.8 %

FINANCIAL RATIO ANALYSIS

The user of financial statements finds it helpful to calculate ratios when they interpret company’s financial statements. A financial ratio is simply one quantity divided by another.Ratios focus on special relationship between two items of balance sheet, income statement or one from each. Ratios make it easier to understand a specific relationship between various items of financial statements then looking simply at the raw numbers themselves. The number of financial ratios that might be created is virtually limitless, but there are certainbasic ratios that are frequently used, these ratios can be placed into six different classes. Liquidity Ratio Asset Turnover Ratio Leverage Ratios Coverage Ratios Profitability Ratios

Market Value Ratios

The calculation and interpretation of these ratios of financial statements of UBL are as follows.

CURRENT RATIO:UBL’s current ratio is increasing over the time. Higher the current ratio higher the ability to meet the short-term obligations as they come due. The UBL’s current ratio is increasing year by year. This in turn decreases the risk of insolvency. The change is occurring due to increase in short term investment and decrease in short term borrowings.

ASSETS TURN OVER:

This shows revenue generated per rupee investment in total assets. UBL’s assets turnover ratio has shown a little decrease. This is because of increase in total assets with proportionate increase in revenue. Banks have relatively low ATR capital, as they are selective in advancing loans and generating smaller sales.

DEBT TO ASSET RATIO:The analysis of total debt to assets ratio, there has been decrease of one percent as compared to 2009. In 2007 every rupee one of assets was being financed by rupees 0.094 or debt and in 2009 it is 0.93 while in 2010 it is reduced to 0.95 worth of debt per rupee of asset. Although the decrease is not large enough but it is a good sign for bank’s creditors. The decrease may be attributed to the substantial decrease in borrowings from financial institutions but the affect was weakened by an increase in bills payable and other liabilities.

DEBT TO EQUITY:This ratio measures how the company is leveraging its debt against the capital employed by its shareholders. Analysis of debt to equity ratio indicates that the current position for the debt to equity is that for every one rupee in equity provided by the shareholders the bank has Rs. 14.4 as a debt. This shows that the bank is heavily relying on debt financing. The reasonFor huge difference stated in the table is because of losses occurred in 2008, 2009 and 2010.

COVERAGE RATIO:This ratio shows the number of times a company can cover or meet its financial charges or obligations. One of the most commonly used ratios is the interest coverage ratio that measures the number of times the income is available to pay interest charges. The UBL interest coverage ratio has shown significant improvement in these three years. The ratio is increased from 0.15 to 3.34.

GROSS PROFIT MARGIN:

Gross profit margin is the difference between the revenue and cost of goods sold. Gross profit is critical because it represents the amount of money remaining to pay operating expanses financing cost and taxes. UBL’s gross profit margin per rupee has shown rising trend in last three years. There is an increase of 27% in 2009 as compared to 2008. This shows efficiency of the bank to control the cost of sales.

NET PROFIT MARGIN:This ratio shows the profit that is available from each rupee of the sale. After all expanses have been paid. Net profit margin is also showing an increasing trend. UBL has improved net profit margin in the current years. The net profit margin has reached to 30% as compared to 2008 in which it was only 12.69%. While in 2007 it was in negative figure. It shows a good impact on the UBL’s Balance Sheet.

RETURN ON INVESTMENT:This ratio measures the profitability per rupee of investment in assets. UBL’s return on investment has shown an improvement more than 100%. In 2009 the ratio is 1.24% while in 2008 it was 0.76% and in 2010 it is 4.3. Although the assets have increased but the operational recovery of the bank is main cause of increasing this ratio.

RETURN ON EQUITY:This ratio shows the profit as a proportion of the book value of the common shareholders. The return on equity is also shown deal of positive change. In 2010 the ratio is 16.3% while in 2009 it was only 18% and in 2008 it was in 16.78.

ADVANCES TO DEPOSIT RATIO:This ratio shows the companies advances employed per unit of deposit. This ratio of UBL over the recent three years shows a increasing trend. In 2008 46.74 it was 45% while in 2009 it was 46% and in 2009 it is 45%.

INVESTS TO DEPOSIT:This ratio shows the company’s investment employed per unit of deposit. This ratio decreased in 2009 as compared to 2008 but in 2010 it again

increased. It is because of industrial development factors in the country by which lending has been increased and investment is slightly decreased.

CHAPTER 6

Analysis Of United Bank limited Strategic Analysis Financial Analysis Credit Ratings Awards given to UBL

STRATEGIC ANALYSIS

BCG MATRIX OF UBL

RELATIVE MARKET SHARE High Medium Low

? UBL Omni

UBL Cash line UBL Better life banc assurance Investment Banking Net Banking

Cash Cow Dog

Hamrah UBL Money or (Personal loans)

High

Medium

Low

Comparison through STRATEGIC ANALYSIS: When we took analysis of UBL so we come to that point UBL is commercial bank it also has there own importance and capture huge market share as well but we talk about BCG matrix then we come to that point UBL has wide range of services which is on peak position which can be show on BCG Matrix so according to our judgment here UBL is stronger position in market then other commercial banks.

According to Mr. Aftab Malik (Branch Manager of UBL)he said that 4 services is in star position because they capture huge market share and increases industry sales growth other Hamrah generate cash but slightly omit from market where as UBL better life banc assurance and UBL Omni is newly introduce which give good response or in future more chances to generate huge profit if we talk about UBL Money which is personal loans it is fail because huge amount of capital is given to customers so due to this more chances of bad debts in this current situation where people are in trouble.Comparison through FINANCIAL ANALYSIS:

When we do analysis of UBL through financial ratio so UBL is stronger than Pak Oman Investment Company if we talk about current ratio it shows that UBL meet their liabilities and try to pay off it. The total assets to total liabilities is 100% which means the assets is fully utilize and help to pay off the liabilities which shows very good condition of UBL there is huge decline in debt to equity ratio which is unfavorable for the company where as Debt to assets, Gross profit margin is slightly fluctuated and If we focused on all these three year and compare it with each other so we come to that point as compared to 2008 and 2010 the 2009 was more profitable and beneficial for the bank.

CREDIT RATING :

The credit rating company JCR‐VIS re‐affirmed the bank’s long‐term entity rating at AA+ and the ratings of its four subordinated debt instruments at AA. The short term ratings remain at A‐1+ which is the highest rating denoting the greatest certainty of timely

payments by a financial institution. All ratings for UBL have been assigned a Stable outlook.Capital Intelligence (CI), the international credit rating agency, has re‐affirmed UBL’s Foreign Currency long‐term rating at B‐, while it’s Foreign Currency short‐term rating has been upgraded from C to B in line with CI’s sovereign ratings action on Pakistan. In addition, the Bank’s Financial Strength rating has been re‐affirmed at BB+, with the Outlook upgraded from Negative to Stable based on the Bank’s strong performance in 2009 and the first half of 2010.

UNITED BANK LIMITED RECEIVE AWARD AS LARGEST INVESTMENT

BANK

“Largest Investment Bank” award by The CFA Association of Pakistan for

three consecutive years (2003-2005) to UNITED BANK LIMITED.

Awarded the "Corporate Finance Transaction of the Year" by the CFA

Association of Pakistan for FY 2005.

CONCLUSION

The UBL is well managed with organized structure and having

efficient employees. Due to its growth in online branch system, it

has bright future in Financial Organizations and contributing

towards the development of the country both economically and

socially.

SUGGESTIONS & RECOMMENDATIONS

At the end of every report, it needs suggestions and recommendations.

According to our judgment the following are the suggestions and

recommendations.

As UBL is expending with it network 1058 branches, it should be

beneficial for the bank to computerized all the branches and earn more

than before.

It should be necessary for the UBL that for the old employees training

session for well grooming, because even they don’t know that how to

deal with new technology.

UBL should be appointing at least one HR officer at hub level for

dealing HR related work.

As UBL have well in IT sections, we think they can develop their own

ATM network as M.net and 1 link.

The ATM machine is some times in small cities remain disturb that’s

why customer become dissatisfied, if UBL have its own network

related ATM than this problem should solve.

List of Acronyms

AD Authorized Dealer.ATM Automated Teller MachineATR Asset Turn OverAVP Assistant Vice PresidentAOF Account Opening FormBOG Board of Governor

BOD Board of Director CA Credit approval CP Credit ProposalDAC Disbursement Authorization CertificateDD Demand DraftDP Note Demand Promissory NoteEBIT Earnings before Interest & TaxESVP Executive Senior Vice PresidentEVP Executive Vice PresidentFDD Foreign Demand DraftFMT Foreign Mail TransferFTDR Foreign term Deposited ReceiptFTT Foreign Telegraph TransferGM General ManagerGOP Government of PakistanGPM Gross Profit MarginHBL Habib Bank LTDIMS Institute of Management SciencesLC letter Of CreditMCB Muslim Commercial BankMT Mail TransferNPM Net profit MarginOG1 Officer Grade 1PLS Profit & Loss Saving AccountPO Pay OrderRCAD Regional Credit Administration DepartmentRF Running FinanceRM Relationship ManagerROI Return on InvestmentRTC Rupee Traveler ChequeSTDR Special term Deposited ReceiptSVP Senior Vice PresidentSWOT Strength Weakness Opportunities ThreatsTIE Time Interest EarnedTT Telegraphic TransferUBL United Bank LTD