Download - Report Atif
-
7/28/2019 Report Atif
1/55
INTERNSHIP REPORT
ON
UNITED BANK LIMITED PAKISTSAN
ZIA SATTARM.COM
ROLL NO: 148Session 2009-2011
Bahauddin Zakariya University, Multan
-
7/28/2019 Report Atif
2/55
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.
-
7/28/2019 Report Atif
3/55
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)
-
7/28/2019 Report Atif
4/55
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
-
7/28/2019 Report Atif
5/55
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.
-
7/28/2019 Report Atif
6/55
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.
-
7/28/2019 Report Atif
7/55
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.
-
7/28/2019 Report Atif
8/55
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
-
7/28/2019 Report Atif
9/55
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:
-
7/28/2019 Report Atif
10/55
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.
-
7/28/2019 Report Atif
11/55
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
-
7/28/2019 Report Atif
12/55
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:
-
7/28/2019 Report Atif
13/55
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
-
7/28/2019 Report Atif
14/55
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.
-
7/28/2019 Report Atif
15/55
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.
-
7/28/2019 Report Atif
16/55
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.
-
7/28/2019 Report Atif
17/55
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%
-
7/28/2019 Report Atif
18/55
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:
-
7/28/2019 Report Atif
19/55
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
-
7/28/2019 Report Atif
20/55
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:
-
7/28/2019 Report Atif
21/55
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.
-
7/28/2019 Report Atif
22/55
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.
-
7/28/2019 Report Atif
23/55
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
-
7/28/2019 Report Atif
24/55
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.
-
7/28/2019 Report Atif
25/55
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
-
7/28/2019 Report Atif
26/55
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.
-
7/28/2019 Report Atif
27/55
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.
-
7/28/2019 Report Atif
28/55
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:
-
7/28/2019 Report Atif
29/55
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.
-
7/28/2019 Report Atif
30/55
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.
-
7/28/2019 Report Atif
31/55
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:
-
7/28/2019 Report Atif
32/55
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.
-
7/28/2019 Report Atif
33/55
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.
-
7/28/2019 Report Atif
34/55
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)
-
7/28/2019 Report Atif
35/55
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
-
7/28/2019 Report Atif
36/55
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.
-
7/28/2019 Report Atif
37/55
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
-
7/28/2019 Report Atif
38/55
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
-
7/28/2019 Report Atif
39/55
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
-
7/28/2019 Report Atif
40/55
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
-
7/28/2019 Report Atif
41/55
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
-
7/28/2019 Report Atif
42/55
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
-
7/28/2019 Report Atif
43/55
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
-
7/28/2019 Report Atif
44/55
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
-
7/28/2019 Report Atif
45/55
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
-
7/28/2019 Report Atif
46/55
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
-
7/28/2019 Report Atif
47/55
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
Fixed Asset Ratio / Equity Ratio for 2008= 0.44/0.07
= 6.23
Fixed Asset Ratio / Equity Ratio for 2009= 0.42/0.09
=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
-
7/28/2019 Report Atif
48/55
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%
-
7/28/2019 Report Atif
49/55
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%
-
7/28/2019 Report Atif
50/55
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%
-
7/28/2019 Report Atif
51/55
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
-
7/28/2019 Report Atif
52/55
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%
-
7/28/2019 Report Atif
53/55
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%
-
7/28/2019 Report Atif
54/55
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.
-
7/28/2019 Report Atif
55/55
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