Internship Report

(United Bank Limited)

BBA Program
Summer 2007

Submitted To
Mr. Siddiq Ahmad Khan

Submitted By
Executive Summary:

Interest spread of the Pakistan’s banking industry had been on the rise for the
last two years. The persistent increase in spread discourages savings and
investments besides this casts doubt on the effectiveness of bank lending
channel of monetary policy. Given the implications of raise in spread, this study
examines the determinants of interest spread. Inelasticity of deposit supply is the
main driving force behind the rising interest spread however industry
concentration does not exercise influence upon the spread. The on-going merger
wave in the banking industry will further limit the options for the savers.
UBL is one of Pakistan's three leading commercial banks, having a countrywide
and international branch network. UBL has full service license covering
commercial, retail banking, consumer and investment banking activities in
Pakistan and most of the other countries where it is present. The Government of
Pakistan, acting through the Privatization Commission ("PC"), is proceeding with
the privatization of United Bank Limited ("UBL"), by the intended sale of a
minimum stake of 26% of UBL's share capital to a strategic investor.
UBL's privatization represents an attractive investment opportunity for investors
interested in leveraging UBL's extensive presence and market share.
UBL has an extensive domestic network consisting of 1,370 branches with a
market share of 9%.
UBL operates a focused international network of 20 branches in UK, USA, UAE,
Yemen, Bahrain, Qatar and in the Export Processing Zone of Karachi.
It operates a joint venture - Oman United Exchange Co., Oman Muscat and a
subsidiary - United Bank A.G. Zurich, Switzerland.
UBL also has representative offices in Cairo Egypt and Tehran-Iran.
Banking Industry Profile:

Bank Industry History

The name bank derives from the Italian word banco "desk/bench", used during
the Renaissance by Florentines bankers, who used to make their transactions
above a desk covered by a green tablecloth.[1] However, there are traces of
banking activity even in ancient times. A banker or bank is a financial institution
that acts as a payment agent for customers, and borrows and lends money. In
some countries such as Germany and Japan banks are the primary owners of
industrial corporations while in other countries such as the United States banks
are prohibited from owning non-financial companies.
The definition of a bank varies from country to country.
Under English law, bank is defined as a person who carries on the business of
banking, which is:
• conducting current accounts for customers
• paying cheques drawn on a given person, and
• collecting cheques for their customers.
(United Dominions Trust Ltd v Kirkwood, 1966, English Court of Appeal, 2 QB
431).
However, in many cases the statutory definition closely mirrors the common law
one. Examples of statutory definitions:
• ' "banking business" means the business of receiving money on current or
deposit account, paying and collecting cheques drawn by or paid in by
customers, the making of advances to customers, and includes such other
business as the Authority may prescribe for the purposes of this Act;'
(Banking Act (Singapore), Section 2, Interpretation).
• "banking business" means the business of either or both of the following-
1. receiving from the general public money on current, deposit,
savings or other similar account repayable on demand or within
 less than [3 months] ... or with a period of call or notice of less than
that period;
2. paying or collecting cheques drawn by or paid in by customers;
(Banking Ordinance, Section 2, Interpretation, Hong Kong) Note
that in this case the definition is extended to include accepting any
deposits repayable in less than 3 months, companies that accept
deposits of greater than HK$100 000 for periods of greater than 3
months are regulated as deposit taking companies rather than as
banks in Hong Kong).
Banks act as payment agents by conducting current accounts for customers,
paying cheques drawn by customers on the bank, and collecting cheques
deposited to customers' current accounts. Banks also enable customer payments
via other payment methods such as telegraphic transfer, EFTPOS, and ATM.
Banking is one of the most sensitive businesses all over the world. Banks play
very important role in the economy of a country and Pakistan is no exemption.
Banks are custodian to the assets of the general masses. The banking sector
plays a significant role in a contemporary world of money and economy. It
influences and facilitates many different but integrated economic activities like
resources mobilization, poverty elimination, production and distribution of public
finance. It is purchase of car or building of a home banks are always there to
serve you better. It is play ground or any educational or healthy societal activity
the money of banks nurture them. It is an industrial project or agricultural
development of the country the sponsor-ship of banks is very much involved.
Banks play very positive and important role in the overall economic development
of the country.
Pakistan has a well-developed banking system, which consists of a wide variety
of institutions ranging from a central bank to commercial banks and to
specialized agencies to cater for special requirements of specific sectors. The
country started without any worthwhile banking network in 1947 but witnessed
phenomenal growth in the first two decades. By 1970, it had acquired a
flourishing banking sector.
Wider Commercial Role of Banks

However the commercial role of banks is wider than banking, and includes:
• issue of banknotes (promissory notes issued by a banker and payable to
bearer on demand)
• 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 way of overdraft, installment loan or otherwise
• providing documentary and standby letters 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
• currency exchange
• sale, distribution or brokerage, with or without advice, of insurance, unit
trusts and similar financial products as a 'financial supermarket'
Pakistan’s Banking Industry Profile

Pakistan banking industry growing very rapidly on the fast track. Every bank
going to be globalize to enhance its profitability. These are all done by the
introduction of new, innovative and attractive offers for customers, with all these
enhancements we can compare our banking industry with developed banking
industry in Asia like China and India. Establishment primarily engaged in
accepting time deposits, making loans (mortgage, real estate, commercial,
industrial and consumer), and investing in high-grade securities. Saving and loan
associations, saving banks and commercial banks are included in this industry.
Pakistani authorities even require all newly established commercial banks to
have at least one foreign investor. The paradigm shift in commercial banking,
resulting from freezing of foreign currency accounts (FCAs) in May 1998, has
affected the foreign banks operating in Pakistan significantly — to a large extent
adversely. The recovery process, through changed strategy, has started yielding
positive results. Foreign banks are expected to emerge stronger in the near
future as Pakistan moves towards Internet based banking. Still, the competition
with domestic banks is expected to remain ferocious.
Over the last many years, foreign banks have continued to command nearly
three-quarters of the overall profitability of the banking sector in Pakistan, in spite
of the tight manacles on their expansion. Foreign banks chiefly thrived on
business from top-tier multinational corporations and blue chip companies. The
business of foreign banks operating in Pakistan, in the past, also flourished due
to FCAs and swap dollar funds — which are no longer there.
During the post May 1998 scenario, domestic banks have emerged to be
ferocious competitors. Even the policies of central bank aimed at strengthening
commercial banks in general helped domestic banks more while supporting
foreign banks marginally. Some of these policies were: reduction in SLR,
recovery of non-performing loans, exemption of accrued income at the time of
calculating tax liability and rules governing provisions against doubtful loans. The
reduction in return on deposits and lending rates also improved the spread for
domestic banks.
Half of the foreign local banks virtually reversed the provisions made in the past
or made no provision for the year 1999. The amount on account of provisions
came down Rs 0.1 billion for foreign banks and by Rs 1.82 billion in the case of
domestic private banks for the year 1999.
But, lottery schemes of Habib Bank, United Bank and Muslim Commercial Bank
was a major reason for movement of deposits from foreign banks to these banks.
Some analysts say, "It may not be wrong to say that foreign banks were the
biggest opponents of such schemes and ultimately the central bank succumbed
to their pressure." However, some of the foreign banks which came out with
innovative financial products rather than complaining about the changed
scenario, witnessed slow but gradual increase in deposits. One of the areas
where foreign banks have been investing heavily is technology to overcome the
handicap of limited branch network. Almost all the foreign banks are working
actively on plans to introduce internet-based banking within the year 2000. They
have the advantage of global experience. However, despite their edge they will
face a tough competition from listed commercial banks.
Introduction of internet-based banking will largely depend on the policies of GoP.
However, the government cannot afford to delay its introduction in the country for
a long time. In the meantime foreign banks have consolidated their edge in
phone-banking, ATM network and on-line banking. Offer of these services has
become a norm at almost all the large-size foreign banks. While some of the
banks have installed their own ATMs, others have entered or are entering into
strategic alliance with other domestic and foreign banks.
Offering such facilities is capital intensive. However, helps in reducing human
resource cost, improving quality of services and above all bringing a bank outside
the four walls of conventional branch network. As foreign banks largely cater to
multinational companies and blue chip corporations they would be able to offer
better services and also cater to larger number of clients.
Another important development, over the years, is that small foreign banks have
developed their own niche market. The foreign banks of Middle East origin
concentrate more on handling remittance and international trade. Even the large-
size banks have added other services. Standard Chartered Bank, Citibank and
Deutsche Bank provide custodian service to foreign investors in capital markets.
Citibank and Standard Chartered Bank have started financing of cars and other
durable. Earlier, Citibank had established two separate entities, a housing
finance company and an investment bank. However, later on it sold its stake in
investment bank to Jahangir Siddiqui and Company. Citibank has also became a
little more selective in distributing credit cards.
The credit card experience in Pakistan was like a nightmare. Therefore, the new
strategy being worked out is to replace credit cards with charged cards. On the
one hand it will help in bringing default to almost zero level and, on the other
hand, improve the cash flow of banks. A cardholder would be allowed to
purchase to the extent of amount available in his/her account only. The banks will
be able to issue more cards, as they will be exposed to hardly any loss. It will
also be beneficial for the outlets because the transfer against purchases can be
almost instant.
According to some analysts foreign banks share about a quarter of deposits and
total advances within the banking system. Traditionally, the foreign banks have
focused on short-term trade finance, targeting mainly low risk blue chip
corporations and high net worth individuals. A couple of years back, these banks
began making foray into merchant banking, capital market operations and
consumer/retail banking. The resources and expertise of their global operations
proved a valuable asset in these areas and many of them were able to quickly
capture large share in the capital market operations and consumer/retail banking.
United Bank Ltd Profile

Background
Apr 97 asked by recently elected Prime Minister Nawaz Sharif to take over UBL,
help restructure & ultimately privatize the bank. Part of financial sector
restructuring program – two professionals already brought in to head the other
two big banks (together 60% of banking system). Several key laws already
amended to facilitate process
• Autonomy given to Boards of Government Banks
• Expediting recovery of bad debts
• Tightening labor laws

UBL Profile
United Bank Limited (UBL) is one of the largest commercial banks in Pakistan
having more than 1,000 branches inside the country and 15 branches outside the
country. Founded originally in 1959 by Agha Hasan Abedi, the bank was
nationalized by the government of Pakistan in 1971. In 2002, it was privatised by
the Government of Pakistan in an open auction to a consortium of Abu Dhabi
Group and Bestway Group. Since its privatisation the bank has been successfully
turned around and remains a robust and strong performer in all major segments
of its operations.
The Group's principal activities are to provide commercial banking and other
financial services. The Group offers personal banking, cash management, retail
loans and other financial services. These services include deposits,
savings/current bank account, vehicle loans, personal loans, retail trade finance,
global banking, lending to priority sector and small scale sector, foreign exchange
and export finance, corporate loans and equipment loans. The Group operates
through 1044 branches within Pakistan and 15 branches outside Pakistan.
UBL has assets of over Rs.300 billion and a solid track record of forty-six years -
in addition to the convenience of over 1000 branches serving you throughout the
country and also at several overseas locations.
Functions
Services

• Consumer Banking
• Commercial Banking
• Corporate Banking
• Investment
• Treasury
• UBL Ameen Islamic Banking

Branches

United Bank is very diverse with over 1056 Domestically in Pakistan as well as
15 Overseas Branches. Oversea branches include; United States of America,
Qatar, UAE, Bahrain, Republic of Yemen.

Overseas

UBL, with an integrated network of over 1000 branches globally, with 15

overseas locations, gives you direct access to a comprehensive range of better
banking facilities to help you monitor your business internationally.
We have branches in:
• Bahrain
• Qatar
• Other offices
• Off Shore Banking Unit
 • Republic of Yemen
• UAE
• United States of America
and subsidiaries in:
• United Kingdom
• Zurich

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.

Board of Directors
The management team comprises experienced banking professionals well
positioned to meet UBL’s business objectives. Senior bankers have been
inducted to head various divisions organized around core businesses, such as
foreign trade, credit, structured finance and treasury activates. The Bank has
also hired qualified middle and lower management personnel to create a team of
professionals at all levels. The Bank’s affairs are governed by a Board of
Directors, which currently consists of the President and Chief Executive Officer
and seven Directors. The President and Chief Executive Officer has an overall
responsibility for the strategic direction, government relations and to manage the
portfolio of business and its functions.

Name Designation
His Highness Shaikh NahayanMabarak Al
Chairman
Nahayan
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. Ahmad Waqar Director
Mr. Muhammad Javed Malik Director
Dr. Ashfaque Hasan Khan Director
Mr. Aqeel Ahmed Nasir Company Secretary & Chief Legal
Mr. Aameer Karachiwalla SEVP/Group Chief Financial Officer

Online banking

UBL’s state of the art online banking, customers were able to access their
account from more than 350 branches located in 71 cities across Pakistan.
Transactions such as Cash Deposit, Cheque Encashment, Stop Payment,
Account Statement, Funds Transfer were done online without the need to travel
to the local branch.
Subsidiaries

• United Bank AG Zurich, Switzerland

• United National Bank Limited, UK (Joint venture with NBP)
• UBL Fund Managers Limited

Associated company

• Oman United Exchange Company, Muscat.

Financial Highlights of UBL as on December 31, 1998, 1999 & 2000 (PKR & USD in
Millions)
1998 1998 1999 1999 2000 2000
(PKR) (USD) (PKR) (USD) (PKR) (USD)
Shareholders Equity 7,715 133 8,050 139 8,803 152
Total Assets 139,992 2,416 154,450 2,665 155,211 2,678
Deposits 117,718 2,031 127,133 2,194 128,679 2,220
Loans and Advances 48,468 836 61,714 1,065 74.156 1,280
Investments 47,955 827 44,954 776 33,102 571
Operating Profit /
78 1 760 13 2,013 35
(Loss)
Exchange Rate Dec.
31, 2000, PKR 57.9522/1USD

1998 1999 2000

Number of Staff 14,885 13,984 11,873
Number of Branches 1,494 1,417 1,390

Share Holding

UBL was a nationalized bank between 1974 through 2002. However, in 2002, the
Bank was privatized with 51% of its shares sold to the Abu Dhabi Group, UAE
and the Bestway group, U.K. (the “Consortium”). Furthermore, SBP holds
48.69% of the total share capital while the remaining 0.34% stake is divided
amongst the GoP, National Bank of Pakistan (“NBP”)- Trustee Department, State
Life Insurance Corporation of Pakistan (“SLIC”), Sui Southern Gas Company
Limited (“SSGC”), Investment Corporation of Pakistan (“ICP”), Metropolitan Steel
Corporation, PC, Pakistan Reinsurance Company Limited (“PRCL”) and the
SECP.

Shareholders Number of Shares

The State Bank of Pakistan 2,521,943,230
Bestway Holding Limited 660,425,000
Bestway Cement Limited 396,270,000
H.H. Shaikh Nahayan Mabarak Al Nahayan, HPk 264,180,000
Sir Mohammad Anwar Pervez, OBE, HPk 264,180,000
H.H. Shaikh Suroor Bin Mohammad Al Nahayan 264,180,000
H.E. Dr. Mana’a Saeed Al Otaiba 264,180,000
Mr. Omar Ziad Jaafar Al Askari 264,180,000
Mr. Abdullah Nasser Bin Huwaileel Al Mansouri 264,180,000
Government of Pakistan 14,194,470
National Bank of Pakistan, Trustee Department 707,020
State Life Insurance Corporation of Pakistan 532,620
Sui Southern Gas Company Limited 501,970
Investment Corporation of Pakistan 292,600
Mr. Zameer Mohammed Choudrey 25,000
Metropolitan Steel Corporation 16,460
Privatisation Commission 7,270
Pakistan Reinsurance Company Limited 4,350
Securities and Exchange Commission of Pakistan 10
TOTAL 5,180,000,000

The Sponsors
The Consortium comprises the Abu Dhabi Group and the Bestway Group holding
51% stake in the Bank while the State Bank of Pakistan holds 48.69% share in
the Bank.

Future Prospects
UBL expects its strong customer focus to drive the Bank’s future business
strategy. On the domestic front, the Bank has already launched its consumer
banking business. Increased investment is targeted in developing human
resources, infrastructure and internal systems to support the aggressive
consumer initiative and exploration of new avenues of revenue generation. The
first step under this initiative is the launch of the Bank’s ATM / Debit Card,
branded as UBL Wallet. Furthermore, UBL has introduced a full suite of
innovative consumer finance products designed to capture a significant share of
the local consumer financing market and tap into the current growth in demand
for such financing.

UBL Consumer Bank And Its Products

UBL Consumer Bank was established in 2004 with the ambitious aim of taking
consumer banking in Pakistan to the next level and introducing a full suite of
differentiated, flexible and attractive consumer finance products in the market.

a) UBL Credit Card

UBL is Pakistan’s 1st Smart Chip Credit card issuer and acquirer. It is also the
1st credit card in Pakistan to be launched simultaneously in the nine largest
urban centers of the country.
By launching a Chip based Credit Card, UBL aimed to enter the market with a
fresh differentiated product in line with the rest of its consumer bank product
offerings to create customer preference over other competing market
propositions. Chip based credit cards have proven to be the most secure way of
conducting credit card transactions globally.
The UBL Card proposition aims to enhance the quality of life of Pakistani
consumers by making Credit Cards the dominant payment and loan instrument
for any financial transaction and purchase in Pakistan. This will be achieved by
building market share through
• Innovation,
• Brand Dominance and
• Targeting untapped areas, users and uses
The beauty of UBL’s Credit Card proposition is that it offers superior value for the
customer. While the primary function of a Chip Credit Card is security, it has built
in it a special feature ‘UBL Chip Rewards’ to increase both value and excitement
for the customers.

b) UBL Cashline
UBL Cashline is a running finance facility that was launched in November 2004
with the commitment to provide full-scale banking solutions to multiple segments
in the market. This product is targeted towards both the salaried segment as well
as the self-employed businessmen/ persons with the specific goal to provide
them with their desired financial freedom for personal and business purposes.
Cashline aims to be a flexible, personal financing solution for the mass market.
This is an evergreen revolving facility, where the customer only pays the interest
accumulated on the daily outstanding balance at the end of each month.
Cashline’s innovative utilization based tiered pricing strategy re-enforced UBL’s
vision of launching consumer products with unique features. Another valuable
feature includes the Balance Transfer Facility (“BTF”) option, which allows
individuals to pay off their debts at an attractive, lower mark-up. Cashline also
offers net banking features with unlimited, unmatchable features to help manage
accounts. Its tiered pricing strategy was a pioneer in the market and proved to be
the distinguishing factor that has contributed to Cashline’s overwhelming
success.

c) Electronic Banking
UBL aims to provide customers with a world-class multi-channel experience by
leveraging UBL’s products, customer insight and technology. The objectives
behind the Bank’s efforts to introduce E-banking products include improved
customer service & customer retention, new revenue generation as well as cost
reduction. UBL offers it’s customers a wide variety of services including ATMs,
Online banking, Phone Banking, Internet Banking and electronic remittances. A
growing number of ATMs and partnership with 1-Link Network ensures that
customers have 24x7 access to cash. Extensive network of online branches is
empowering the customers by offering them remote access to their accounts
from any online branch. UBL’s website and phone banking services offer up-to-
date product information. Full service Internet Banking offers fund transfers,
check writing, bill payments, view of balance/statement and security &
informational alerts. In 2004, UBL also launched Click N Remit, a much needed,
highly successful and pioneering Internet-based homeward remittances product
for US Residents.

d) Mortgages
Presently UBL has two products in its mortgage portfolio, namely UBL Address
and UBL Businessline. These products offer innovative financing solutions aimed
at the emerging middle-income segments. The continuous product innovations
and process improvement has made UBL’s mortgage business a dominant force
in the consumer market.

e) UBL Drive
UBL Drive has emerged as a strong competitor in Auto Loan business since it
was first launched in May 2004. Innovations like Pay As You Select, Free Tracker
Option, Zero Pre-Payment Penalty played a key role in positioning the product as
a key player in Auto Finance. UBL Drive is the most flexible and innovative
product available in the Auto Loan market today, as can be seen by the many
product variants available and unique processes of UBL Drive. Today, UBL Drive
offers more options for its customers than any other competitive offering in the
Auto Financing market. Financing for both new and used vehicles together with
the Cash Your Car product is offered for auto loan customers.

f) Personal Loan
UBL is poised to launch its Personal Installment Loan (“PIL”) product in May
2005. It is a fixed installment loan starting from Rs.50,000/- to a maximum of
Rs.500,000/- based on a fixed tenor of 1-5 years. Its unique and exciting features
will include:
• Zero Prepayment option
• Tenor in the multiple of six months
• Complimentary credit insurance
Which are designed to offer the consumer tremendous flexibility and
differentiation. The launch of PIL will see the completion of UBL’s aim of offering
a complete suite of consumer finance products to its customers.
SWOT Analysis Of The Banking Industry

Strengths
• Large Market Size and attractive location for exports to South Asia,
Central Asia and Middle East.
• Per Capita Income of PPP $ 2000 and 40 years’ record of 6 percent GDP
growth annually
• Abundance of Water Resources, Natural Gas.
• Easy Sea Port, Airport Connections with Europe, Asia and Middle East.
• A large emerging middle class with growing demand for consumer
durables, autos, services
• English speaking educated and trainable manpower with aptitude for fast
learning
• Self-sufficiency in food production and a buoyant agriculture.
• A liberal foreign exchange regime, which allows un-restricted repatriation
of profits, dividends and remittances.
• Quantitative restrictions on imports have largely been removed and tariff
rates being brought down to maximum rate of 25% with average incidence
of 14-15%.
• Financial Sector is open to foreign investors is diversified and has been
strengthened in the last three years.
• Capital markets offer a range of instruments for raising domestic finance.
• A fibre optic backbone infrastructure up and running for Information
Technology enabled services.

Weaknesses
• Poor governance record in the nineties with serious adverse
consequences for efficiency and equitable distribution of growth.
 • Failed democratic regimes with frequent changes in government in the last
decade have nurtured political uncertainty, discontinuity and inconsistency
in policy implementation.
• Lingering dispute with the Hubco and freezing of foreign currency
accounts in May 1998 has shaken foreign investor confidence.
• Key economic institutions have been in a state of financial and
management disarray creating strains on public finances as well as
banking system.
• Bureaucratic procedures and enforcement of contracts are slow, time
consuming and cumbersome encouraging lobbying and rent-seeking
opportunities.
• Public service delivery of essential services is poor and inefficient and
under investment has led to congestion, shortages and access limited to
the privileged far.
• Non-governmental Organizations (NGOs) have not so far played a major
role in social development and Micro Credit allocation to the poor.

Opportunities
• Oil and Gas resources: To be further explored, developed and
distributed.
• Investment in Physical Infrastructure Development: Open to private
sector to meet the growing demand in the areas of power, highways,
ports, airports etc.
• Information Technology: Relatively low cost manpower available with
ample scope for investing in Information Technology Education.
• Agriculture: Productivity still behind production possibility frontier and
requires technical and financial inputs.
• Agro-based Processing and Industries: Highly Competitive and
oriented towards Exports but still in state of infancy and need to be
upscaled.
 • Value added exports in textile sector: Has plans to modernize its textile
industry for capturing world market share and positioning in post MFA
period through technology, marketing and design improvements and
investment in machinery.
• Financial Sector: Deepening to improve the mobilization and allocation of
financial resources.
• Exports in non-traditional commodities: Fisheries, Gems and jewellery,
Fruits and Vegetables, Information Technology, are still under utilized.
• Privatization: Public Sector assets worth $ 3-4 billion are available for
sale to strategic investors including foreign investors.
• Non-Resident Pakistanis: Offer a large and rich reservation of talent,
skills and capital for joint venture partnerships.

Threats
• External and Domestic Debt burden is quite high relative to the capacity to
service and need to be reduced to manageable levels.
• Tax-GDP ratio is one of the lowest among the developing countries and
resource mobilization effort has to be stepped up.
• Fiscal deficits have been traditionally high and need to be gradually
narrowed down.
• Public Sector Corporations riddled with excess manpower, poor
management and weak financial base have to be restructured and
strengthened.
• Incidence of poverty has risen during the last decade and poverty targeted
interventions need to be accelerated.
• Stagnation in Domestic and foreign investment during the last several
years has increased and given rise to educated unemployment
• High degree of centralization had eroded provincial autonomy and local
government capacity both of which need to be enhanced and
strengthened.
 SWOT Analysis Of United Bank Limited Pakistan

Strengths
• 2nd largest bank of Pakistan in term of deposits after state bank of
Pakistan
• UBL product positioning is very effective. UBL targets the segments like
salaried person, business people and self-employed person with the age
limit of 21-65. UBL product positioning affects the life style of people. UBL
products help to improve standards of living of people.
• UBL’s existing infrastructure and a wide network of branches throughout
the country give it a competitive edge over its market competitors.
• Most profitable bank in Pakistan.
• Largest number of corporate deals by any bank in Pakistan.
• Overseas branches.
• Employees are very happy in terms of salary and incentives.
• The Bank has hired qualified middle and lower management personnel to
create a team of professionals at all levels.
• UBL’s website and phone banking services offer up-to-date product
information.
• UBL offers it’s customers a wide variety of services including ATMs, Online
banking, Phone Banking, Internet Banking and electronic remittances.
• Extensive network of online branches is empowering the customers by
offering them remote access to their accounts from any online branch.
• Cooperative, effective and supportive working environment in bank.

Weaknesses
• There is no standardization in terms of branches.
• Being a governmental bank 3 years back the old network is used up till
now.
 • The service of UBL in some urban areas of Pakistan is not that effective.
• It is a step behind in introducing new and innovative technology in the
bank.
• Most of the employees are overloaded with the work.
• No separate training center to train new employees.

Opportunities
• Bank can extend its network in other cities of Pakistan.
• UBL had the history of more than 45 years, the new management tries to
change the inherent weak set up and automated the branch and
consumer banking system.
• New technology brings the new change and increases their profitability.
• It can remunerate its all branches that all branches would seem to be
same.

Threats
• With the privatization of Habib Bank Limited (“HBL”), restructuring of Allied
Bank of Pakistan Limited (“ABL”), emergence of strong private
commercial banks and increased competition in the banking industry due
to increased liquidity and limited investment opportunities, UBL is
expected to face intense competition.
• The investors face the possible risk of not being able to sell the shares in
the secondary market without adversely affecting the price.
• This risk is mitigated by the fact that the shares are proposed to be listed
on the three Stock Exchanges, which will provide a venue for granting
liquidity for the shares by facilitating secondary market trades.
• This risk arises from the fluctuation in the value of a financial instrument
consequent to the changes in market interest rates. The risks are inherent
in deposits, liabilities, loans/advances and investments of the Bank. Most
of the loans and advances comprise working capital which is repriced on a
 periodical basis, whereas the majority of deposits are repriced
retrospectively on a six monthly basis due to the profit and loss sharing
system for determining deposit rates.
• The shares of UBL will be listed on the KSE, the LSE and the ISE and the
shareholders of the Bank will be able to sell or buy shares only through
the Members of the KSE, the LSE, and the ISE subsequent to the Offer for
Sale. Price of shares will depend on the stock market behavior and
performance of the Bank. Hence, price may rise or fall and result in
increase or decrease in the value of shares to any extent. The investors
may like to consult their legal advisors, financial advisors or stockbrokers
to understand the nature of investment, if they desire so, before making
the investment.
• Changes in the regulatory framework may have an effect on the
profitability of UBL. Given UBL’s extensive investment in government
securities and cash holdings, it is unlikely that this will impact UBL’s
profitability.
Marketing Mix of United Bank Limited
Marketing is a societal process that is needed to discern consumers' wants;
focusing on a product/service to those wants, and to mould the consumers
towards the products/services. Marketing is fundamental to any businesses
growth. The marketing teams (Marketers) have the task to create the consumer
awareness of the products/services through marketing techniques; if a business
does not pay attention to their products/services and their consumers'
demographics, the business would not be able to endure longevity.
The marketing mix is generally accepted as the use and specification of the 4 Ps
describing the strategic position of a product in the marketplace. the marketing
mix is the primary responsibility of marketing. By offering the product with the
right combination of the four Ps marketers can improve their results and
marketing effectiveness. Making small changes in the marketing mix is typically
considered to be a tactical change. Making large changes in any of the four Ps
can be considered strategic.

United Bank Limited (UBL) is one of the largest commercial banks in Pakistan
having more than 1,000 branches inside the country and 15 branches outside the
country. The Group's principal activities are to provide commercial banking and
other financial services. The Group offers personal banking, cash management,
retail loans and other financial services. These services include deposits,
savings/current bank account, vehicle loans, personal loans, retail trade finance,
global banking, lending to priority sector and small scale sector, foreign exchange
and export finance, corporate loans and equipment loans. The Group operates
through 1044 branches within Pakistan and 15 branches outside Pakistan.

Product
Defines the characteristics of your product or service that meets the needs of
your customers.
A bank is an organization rather a financial institution that provides products such
as different types of deposits and services like d ifferent financing facilities to its
customers. United Bank offers a diversified line of products and services to its
customers. The products and services offered by United Bank are:

Product
s

Deposits Loans

UBL Profit UBL Address

Business Partner UBL Money
Term Deposit UBL Business Line
Special Notice Deposit UBL Cash Line
PLS Saving Account Credit Card Facility
FC Savings Agriculture
FC Term Deposit Small Business
Uni Saving

UBL products are classified under two main heads:

Deposits
Our mission is to serve all your corporate needs and ensure your full satisfaction
through product innovation, personalized banking, and top notch service.
The CBG department of UBL defines corporate banking in Pakistan. Amongst the
local banks UBL CBG is the pioneer in providing innovative solutions to its
diversified and satisfied customer base. UBL CBG is considered to be a major
player in the financial market of Pakistan.
The Corporate Banking Group focuses on attracting and servicing large portfolio
customers. Our forte is providing exemplary customer service using the "Single
Window" concept and product superiority. The Relationship Management team
manned by highly qualified individuals from the industry has steadily expanded
our customer base and continues to enhance our cordial relations with our
esteemed clients.
Despite the sluggish economic growth in recent years, UBL outperformed all the
other local banks in the corporate banking sector primarily due to CBG's
emphasis on establishing and enhancing relationships with foreign/local blue chip
and middle market customers thereby capturing significant market share.
UBL's appetite for large exposures coupled with dedicated Structured Finance
Unit, and an innovative team of professionals having extensive experience of
Corporate Banking gives it the right platform to succeed in today's competitive
and a demanding environment.
The success of CBG has been established from the fact that UBL received the
'No.1 Euromoney 2000' Best Local Bank award and recognized it to have out
performed all other banks. In year 2000, UBL was also voted as the best
Corporate Bank by the customers of a major foreign bank in a survey. Aggressive
marketing combined with professionalism has led to an increase in UBL's market
share with top corporate customers and in some cases replacing Foreign Banks.
Presently, its portfolio includes the quality names in the country, which were
initially confined to foreign banks only.
Loans
You as an individual can gain and benefit the most through UBL Consumer
Banking. In UBL you get friendly, efficient and attentive personalized banking
services - a unique banking relationship experienced by each UBL client. You can
utilize the following services
• UBL Address
• UBL Businessline
• UBL Cashline
• UBL Credit Card
• UBL Drive
• UBL Money

Price
Decide on a pricing strategy - do not let it just happen! Even if you decide not to
charge for a service (a loss leader), you must realize that this is a conscious
decision and forms part of the pricing strategy. It is the only marketing tool that
results into revenue. The bank offer advances to their clients by charging a
certain rate of mark up or interest. This mark up or interest charged is the price.
The customer makes a comparison between the prices offered by other financial
institutions and United Bank and then selects the most suited offer.
Promotion
This includes all the weapons in the marketing armory - advertising, selling, sales
promotions, Public Relations, etc.
United Bank activiely participate in promotion of its products and services
through advertisement and other promotional schemes. The strategy has been
changed and the bank is now targeting the middle market also. The product
offered is of diverse nature to cater the need of maximum number of people.
United Bank only advertises about the opening of its new branch is being made
to general public through newspaper.
Most of the promotional activities are done through:
Direct Marketing
Public Relation

Place (or route of distribution)

Some of the revolutions in marketing have come about by changing this P. Think
of telephone insurance and the Internet! A bit of lateral thinking here might reap
rewards for your business.
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.

BRANCHES ALL OVER PAKISTAN