Executive summary

This report contains the financial analysis of financial institution, we chose “United Bank
Limited” in banking sector. UBL is the one of the largest bank in Pakistan, who provides
different type of services like Electronic banking (E-Banking), Internet Banking (I-Banking),
Chip Credit Card, and Automated Teller Machine (ATM) Card. it covers the people from all
aspects of life. They gave the facility according to their customer’s desires, which makes the
customers loyal with the bank. This report is based on the financial analysis of annual report of
2012-2013; it starts with a brief description of the bank, it history, its product offering and major
areas in which UBL is currently operating. Financial analysis starts with the horizontal and
vertical analysis, followed to ratio to interpret the financial position. After ratios to interpret the
effect of interest rate risk repricing model is used, and at end concludes the overall financial
performance.
Introduction:
United Bank Limited (UBL) is one of the largest commercial banks in Pakistan having more than
1200 branches inside the country and 15 branches outside the country. It was established in
November 7th, 1959. 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, and Funds Transfer were
done online without the need to travel to the local branch. The inauguration of UBL’s first
branch was at Chandigarh, they started their operations with a financial excellence with an
innovation culture which enabled the organization to grow with a rapid pace and they opened
their new branches in different cities right after 1960, they started their operations in Karachi,
Dacca, Lahore, Lyallpur, Chittagong and Narayanganj. Later with two years of experience UBL
was the first bank which opened a branch overseas on William Street in London, United
Kingdom. The first saving scheme for school going children was launched as early as 1960 or
the formation of Pakistan’s first Staff College of employees in 1964, UBL, through the
motivation of its staff and the trust of its customers, continued to grow at a spectacular pace. In
1967, UBL had hit the dawn on information in terms of technology, by introducing computer
banking to Pakistan and in 1971, UBL once again paved the way by launching 3 online branches
in Karachi. The newly formed state of Pakistan was witnessing the boom of industries and
commerce – cannoned by a bank that believed in the potential growth of Pakistan. Small wonder
then, by 1978, UBL had a pledged economic department, had acquired two international banks.
UBL also launched supervised credit and small loan schemes for small to medium sized firms as
well as agriculture and had made for itself, a strong international presence for we had branches in
4 continents. UBL has assets of over Rs. 300 billion and a solid track record of forty-seven years
- in addition to the convenience of over 1200 branches serving you throughout the country and
also at several overseas locations. IT was established on the 7th of November 1959, its head
office is in Karachi. United is one of most prestigious business groups in Pakistan United Bank
Limited is one of the largest Commercial Bank in Pakistan. The Bank's long term rating is AA,
which denotes good credit quality. Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions. The short-term rating is A-1+, which
denotes the highest certainty of timely payment. Short-term liquidity, including internal
operating factors and / or access to alternative sources of funds, is outstanding and safety is just
below risk free Government of Pakistan's short-term obligations. United Bank Limited (UBL) is
the third largest commercial bank in the domestic market in terms of deposit size that indicates
its strong market outreach and franchise.
Throughout its history, UBL has kept pace and often exceeded the changing needs of changing
times. Keeping the tradition of innovation alive, UBL introduced Pakistan’s first credit card, the
UNICARD in 1970’s and left its mark by launching the Pak Rupees traveler cheques in 1971. As
they were operating in a Muslim country so by staying true to its roots, UBL was also the first
bank to have an Islamic banking division and the first to introduce e-banking facilities at Hajj.
In the 1990’s the government of Pakistan decided to change the face of banking by creating a
blueprint to privatize UBL. At this point, financial experts were called on board to set the bank
back on course, and with implementation of relevant changes, the government privatized the
bank in the year 2002 – Best way and Al Ayaan collaborated, forming the cornerstone for the
UBL of tomorrow. Today, UBL opens its eyes to a new vision every day, a vision of resurgent
excellence and renewed commitment to our customers. 52 years into our glorious history UBL is
now part of one of the world’s largest financial services groups. It was incorporated in Pakistan
with the registered office in Karachi, and the principal office situated in Islamabad with an assets
of over Rs.1 trillion and a solid track record of over fifty years, in addition to these, the bank
operates 1281 branches all over Pakistan including 22 Islamic banking branches, and 1 branch in
Karachi export processing zone and 18 branches outside Pakistan.
The banks ordinary shares are listed on all three stock exchanges in Pakistan and its global
Depositary Receipts (GDRs) are on the list of the UK Listing Authority and the London Stock
Exchange Professional Securities Market. These GDRs are also eligible for trading on the
international Order Book System of the London Stock Exchange. United Bank Limited has
achieved a consolidated profit after tax of Rs. 19.7 billion in 2013, with a 22% return on equity, a
strong and consistent performance from 2012. Margins have been impacted in the last two years
by the consistent reduction in the level of interest rates, Coupled with the increase in the
minimum rate payable on savings accounts, as a result of which banking sector spreads are
currently at their lowest level since 2004. Despite monetary easing, growth within the private
sector has remained subdued. UBL’s diversified non-fund income streams and overseas
operations have helped to maintain the earnings profile. The expansion in both the conventional
and Islamic branch network in the last 3 years continues to pay off and has been part of a
strategy to build on our strong nationwide distribution. At the same time, they continued its
market leadership in the branchless banking space as our Omni network grew to over 13,000
shops, expanding the geographical footprint to more than 700 cities and towns.

VISION:
 “To become market niche leader among the self-employed businessman and self-employed
professionals segment”

MISSION STATEMENT:
 “To be the first to cater to the needs of our customers and provide them with uttermost
satisfaction by fulfilling their dire financial needs with minimum documentation, maximum ease
and in a friendly environment”

Corporate Social Responsibility (CSR) in UBL:

UBL considers it a responsibility to make a meaningful contribution to the welfare of society and
It strives to support deserving causes, particularly in education, health care and community
welfare and development. Projects supported by the Bank are those which benefit the society at
large and also where instant relief efforts are necessary. The Bank ensures that it gives back to
the society it operates in and does so in the most transparent manner. In 2013, UBL more than
doubled its CSR contribution to Rs. 77 million and remains committed to its role as an active and
responsible Corporate Citizen. The provision of quality health care for the Under privileged,
which is an area where the bank has continued giving attention. In the current year, over Rs. 21
million was disbursed to various deserving hospitals and NGOs, such as the Gulab Devi Chest
Hospital, Shalamar Hospital, Friends of Burns Center, Al-Mehrab Tibbi Imdaad and to
specialized health providers such as The Kidney Center, and the Shaukat Khanum Memorial
Trust. UBL also reached out to the remote area of Bagh Bani Passari in Azad Kashmir, where the
Bank donated to the Marie Adelaide Leprosy Center for their Triple Merger Center, which will
render health related services to nearly 500,000 people. They will continue to work towards
making this goal a reality in the coming years.

UBL as Retail Bank:

Retail Banking remains the cornerstone of this bank and it continues to grow and deepen a loyal
and well diversified deposit base offering customized solutions both for business and individual
banking customers. They have segmented their client base to focus on a core deposits portfolio
which fits our long term relationship based model. The Retail business continued to focus on
maximizing value throughout the expanded branch network. The expansions undertaken in 2011
and 2012 have now begun to deliver strong results with a near doubling of current and core
deposits within the new branches. Consequently, average core deposits grew by 17% over 2012,
while the overall cost of deposits reduced by 47 bps despite the impact of the regulatory increase
in the minimum rates payable on savings accounts. In order to improve the ambience of our
banking environment, 164 branches were renovated to UBL standards to provide a consistent
‘’look and feel” in branches across Pakistan. During the year, the Bank opened one new
“Signature” lounge in Sukkur which provides an unrivalled customer experience to its high net
worth clients in the area. The business also introduced two new investment products for its
priority customers, in partnership with UBL Fund Managers and Jubilee Life Insurance. They
also have presence in countries with significant overseas Pakistanis creates a captive channel for
home remittances. In 2013, UBL maintained its market leadership within the domestic home
remittances business with a 23% market share driven by its superior TezRaftar service and the
distribution of “Pardes” cards, a unique product allowing remittances to flow directly to
beneficiaries through their debit cards. They are also providing multiple channels for customers
to access banking services to suit their needs and convenience. Our 370 seat Contact Centre is
one of the largest banking call centers in Pakistan and serves as the most direct contact point for
customer queries and complaints. Efficient resolution of customer issues resulted in a 30%
decline in the number of complaints this year. A Contact Center was also established in UAE.
The ATM network was significantly expanded to 718 ATMs in branch and non-branch locations
to provide customers convenient 24x7 access to cash. Proactive monitoring succeeded in
improving ATM uptime to over 90% and IP phones providing hotline access to the Contact
Center were installed at 438 branches for speedy resolution of issues. The Consumer Assets
business continued to focus on quality acquisitions under the Relationship Model. Our unique
Silah Mila campaign, which rewards customers with good credit history, remained the primary
source of card customer acquisition, while spend and reward campaigns were launched for
customer retention. Alliances were also formed with car manufacturers, dealers and insurance
companies to provide quality leads for car financing.
UBL and Islamic Banking:

UBL Ameen in 2013 grew its branch network to 22 branches, while the deposits portfolio on
average grew by 24%. Islamic Banking deposits were migrated from Uni bank to Symbols this
year, enhancing operational synergies within the Bank. The business model aims at evolving
customized Shariah compliant products to suit the requirements of mid-tier clients within
different industries.

UBL as Investment Bank:

The Investment Banking Group remained a prominent player in the domestic investment banking
space and continued to build its Middle East business. The group was recognized by the industry
and received the CFA award for “Best Corporate Finance House of the Year 2012 runner-up’’.
Debt Capital Markets and Syndications closed sixteen transactions to further consolidate its
leadership position in the domestic market. Internationally, the business closed eight deals during
the year and made greater inroads by tapping the increasing opportunities on offer in regional
markets. The most notable transaction was a USD 100 million syndicated term finance facility
extended to the Government of Pakistan with UBL as the Agent Bank. The Project and
Structured Finance business concluded the first ever transaction for a road project under the
recently unveiled provincial Public Private Partnership framework with similar smaller ticket
transactions expected during 2014. Origination efforts initiated in 2013 are expected to lead to
some major transactions in renewable energy.

Division of UBL:
United bank limited has a product range, which caters to the different segment of the society.
The overall activities can be divided into the following banking divisions.
 Consumer banking division
 Commercial Banking division
 Corporate banking division
 Investment banking division
 Treasury banking division
 Overseas Banking Division

SERVICES PROVIDED BY UBL:

UBL provide the following services

UBL Money:

UBL Money, the Personal Installment Loan from UBL provides you with power, control,
convenience and the flexibility to manage your financial requirements and realize your dreams. 
UBL Money is a fixed installment loan. It gives you access to funds starting from Rs. 50,000/-
up to a maximum of Rs. 500,000/-
UBL Chip Credit Card:
Pakistan’s 1st Chip Credit Card that guarantees you both enjoyment and high value. It assures
you global acceptability in more than 22 million establishments worldwide in 130 countries and
in more than 12, 000 outlets within Pakistan. This unique high tech CHIP guarantees your
security while conducting transactions within Pakistan and around the world.

UBL Business line:

UBL Business line is here to solve all your cash flow problems. You can utilize up to Rs.20
million with the help of which you can now focus on your business expansion and growth. UBL
Business line offers you the facility of availing a financing of up to 70 % of your property value.

UBL Address:

Everyone wants their own house but it not possible due to low income but UBL is providing to
be owner of your own home by providing loan facility.

UBL Drive:
Through UBL drive you can get a new or used car financed and enjoy very exciting options for
instance pays up and pays down which means that you choose the amount that you want to pay
over a period of time during which your car is being financed.

UBL Cash line:

UBL Cash lines give the facility to pay markup in installments of loan. UBL is the first bank
who gave this facility.

First Mover Advantage of UBL:

UBL is first one to introduce the computer technology in banking sector in 1964. Later on UBL
introduce automated teller machine (ATM). As the time pass on world was entering in
technological era UBL has the honor of introducing (E-banking) in banking sector. UBL feels
proud to be a trend setter in banking sector.