Research Analyst

June 02 - 08, 2008

The United Bank Limited has shown immense growth in terms of deposits and advances during the year operating with an impressive domestic and international network.

Actually, UBL carrying out its domestic operations 1095 branches besides 17 International branches. UBL is engaged in Commercial, Retail, Corporate banking and related services domestically as well as internationally. The Bank is making every effort to meet the challenges through the best use of the resources at its command. The management is also in the process of rationalizing the branch network in identifying and recovering its doubtful and classified portfolio. It has planned to institute a major improvement in customer services and internal systems to improve efficiency & launch innovative products. According to JCR- VIS Credit Rating Co. Ltd, the Bank's long term rating is AA+, which denotes good credit quality. Protection factors are strong and 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. The authorized capital remained unchanged at Rs 10,300m in FY07. Paid up capital has increased by 25% in FY07 over the previous year.





Total Assets


Liquid Assets


Earning Assets


Total Advances


Total Deposits






Amount written Off


Admin Exp


Profit after tax




The total Assets of United Bank Limited increased 25.45% from Rs 435,835m recorded in FY06 to Rs 546,796m in FY07. Currently the total Assets were recorded Rs 553,649m in 1QY08. UBL liquid Assets consists of cash, cash balances with others banks and lending against Repo and call money as it decreased at the rate of 4.72% to Rs 93,386m in FY07 as compared to the corresponding figure for FY06 recorded as Rs.98, 014m. Liquid Assets are Rs 90,094m in 1QY08. Earnings Assets Comprise of advances, investments, lending against Repo and call money. During FY06 it was Rs 349,978m as it has increased by 27.74% to Rs 447,079m in FY07. Earnings Assets are Rs 461,549m in 1QY08. Advances are the main earning assets for the banks. UBL advances in FY06 were worth of Rs 254,670m; they increased at rate of 21.04% to Rs 308,271m in FY07. The advances were recorded Rs 327,888m in 1QY08. Deposits have increased to Rs 412,138m in FY07 from Rs 343,805m in FY06 indicating an increase of 19.87%. The deposits were recorded Rs 416,786m in 1QY08. Borrowings remained high in FY07 at Rs 59,491m as compared to Rs 38,625m in FY06 with a high increase of 54%. Borrowings were recorded Rs 54,832m in 1QY08. UBL's investment classified by type and by segments totaled to Rs 65,735m in FY06, which increased at the rate of 73.46% to Rs 114,026m in FY07, and in 1QY08 the investments were 106,237m. Amount of written off decreased by 32.63% in FY07 over the last year. Administrative expense as on December, 31, 2006 were recorded as Rs 11,638m and has increased at the rate of 22.5% to Rs14, 257m in FY07. For the year ending Dec, 31, 2006 the profit earned by United Bank Limited amounted to Rs 9,666m as compared to Rs 9,237m earned in the corresponding period of FY07 indicating a decrease by 4.43%. In FY07 the EPS decreased by 5.77% from Rs 11.77 to Rs 11.09 in FY07.


During the five years from 2003 to 2007 the CAGR is calculated which has increased. This compound growth shows the increase the performance indicators of the united bank limited. In this graph the CAGR of Equity increased by 31%. The total assets were increased by 25% during FY03-07 because of the recovery of cash. The CAGR of deposits increased by21% & advances were increased by 33% due to good performance of the management by introducing new products of United bank limited. CAGR increased in the Number of staff by 2%, Trade volume by 28% & Number of branches by 0.4% because of the high competition in the market and policy of the bank.


The financial year of 2008 is very important & challenging year for the banking sector in Pakistan. The high inflationary pressures and tightened monetary policy of the state bank of Pakistan. It will affect the consumer financing of United bank limited. UBL has signed memorandum of understanding (MoU) for Sidat Hyder trade finance web based soft ware application to automate its Middle East region, including UAE, Qatar, Bahrain etc. Growth in overseas branches of UBL will help to growth in loans this year. Increase in assets and decrease in the amount of written off are the good sign for the recovery and collection in this year. UBL's management should try to control the administrative expense which had increased 22.5 % during last year. For the Islamic banking system, UBL fund manager introduced United Islamic fund (UIIF) because of this fund provides return to its investors by investing in Shariah compliant income & Riba free.