UNCONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2011

Note ASSETS Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Performing Non-performing - net of provision 6 7 8 9

2011

2010

Rupees 000
86,409,551 16,546,311 9,536,211 294,410,661 314,181,110 11,166,098 325,347,208 67,461,668 18,642,142 11,934,778 224,578,556 318,673,884 15,058,288 333,732,172 22,424,072 1,298,403 19,746,096 699,817,887

10 10

Operating fixed assets Deferred tax asset - net Other assets LIABILITIES Bills payable Borrowings Deposits and other accounts Subordinated loans Deferred tax liability - net Other liabilities

11 12 13

22,981,878 1,991,185 20,836,736 778,059,741

15 16 17 18

5,879,043 49,953,251 612,980,139 11,317,080 18,777,320

5,045,815 45,104,849 550,645,767 11,985,748 18,620,643

19

698,906,833 NET ASSETS 79,152,908

631,402,822 68,415,065

REPRESENTED BY: Share capital Reserves Unappropriated profit 33,534,116 70,622,933 Surplus on revaluation of assets - net of deferred tax 8,529,975 79,152,908 8,234,141 68,415,065 26,250,489 60,180,924 20 12,241,798 24,847,019 12,241,798 21,688,637

UNCONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31, 2011

Note Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income Provision against loans and advances - net Provision against lendings to financial institutions Provision for diminution in value of investments - net Bad debts written off directly 10.4 8.5 9.3 10.5 24 25

2011 70,450,475 31,025,869 39,424,606 6,194,551 345,858 410,085 340,416 7,290,910

2010 59,277,362 24,997,188 34,280,174 6,803,355 204,573 996,772 8,004,700 26,275,474

Net mark-up / return / interest income after provisions Non Mark-up / Interest Income Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale of securities - net Unrealized loss on revaluation of investments classified as held for trading Other income Total non mark-up / return / interest income 26 9.4 27

32,133,696

6,949,191 786,496 2,078,260 518,710 (43,750) 2,429,346 12,718,253 44,851,949

6,337,745 591,017 1,653,793 158,885 (38,365) 1,387,087 10,090,162 36,365,636 17,906,252 63,233 413,542 240,391 18,623,418 17,742,218 6,805,506 415,136 (638,354) 6,582,288 11,159,930

Non Mark-up / Interest Expenses Administrative expenses Other provisions / write offs - net Workers' Welfare Fund Other charges Total non mark-up / interest expenses Profit before taxation Taxation - Current - Prior years - Deferred

28 29 30 31

19,784,894 226,204 513,121 104,939 20,629,158 24,222,791

32 32 32

8,946,039 679,290 (902,201) 8,723,128

Profit after taxation

15,499,663

Earnings per share - basic and diluted

33

12.66

9.12

UNCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2011

2011

2010

Profit after taxation Other comprehensive income: Exchange differences on translation of net investment in foreign branches Net gain on cash flow hedges

15,499,663

11,159,930

1,541,259

419,851

103,319 Related deferred tax liability on cash flow hedges (36,162) 67,157 1,608,416 Comprehensive income transferred to equity - net of tax 17,108,079

118,866 (41,603) 77,263 497,114 11,657,044

UNCONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2012

CASH FLOW FROM OPERATING ACTIVITIES Profit before taxation Less: Dividend income Adjustments: Depreciation Amortization Workers' Welfare Fund Provision for retirement benefits Provision against loans and advances Provision against lendings to financial institutions Provision for diminution in value of investments Reversal of provision in respect of investments disposed off during the year Provision against off balance sheet items Gain on sale of fixed assets Bad debts written-off directly Net gain on cash flow hedges Unrealized loss on revaluation of investments classified as held for trading (Reversal) / provision against other assets 1,234,055 300,667 513,121 422,027 6,194,551 345,858 410,085 (350,995) 4,144 (39,679) 340,416 103,319 43,750 89,935 33,047,549 9,611,254 Decrease / (increase) in operating assets Lendings to financial institutions Held for trading securities Advances Other assets (excluding advance taxation) (Decrease) / increase in operating liabilities Bills payable Borrowings Deposits and other accounts Other liabilities (excluding current taxation) 2,052,709 15,167,282 1,849,997 (1,716,492) 17,353,496 833,228 4,848,402 62,334,372 (591,477) 117,825,570 67,424,525 (223,725) 108,571,682 (9,030,163) 1,492,922 221,047 413,542 16,638 6,803,355 204,573 (337,899) (16,248) 996,772 118,866 38,365 63,233 27,166,367 10,015,166 11,227,352 (12,484,294) 12,559,414 (1,185,766) 10,116,706 (101,444) 9,960,026 58,609,664 2,697,443 108,448,762 71,165,689 977,691 100,520,348 (8,906,105) 24,222,791 786,496 23,436.295 17,742,218 591,017 17,151,201

Staff retirement benefits (paid) / received Income taxes paid Net cash inflow from operating activities

Net investment in securities CASH FLOW FROM INVESTING ACTIVITIES Dividend income received Investment in operating fixed assets Sale proceeds from disposal of operating fixed assets Net cash outflow from investing activities

(84,544,558) 737,762 (2,165,297) 112,861 (85,859,232)

(76,127,684) 591,017 (2,263,630) 96,850 (77,703,447)

Repayments of subordinated loansACTIVITIES CASH FLOW FROM FINANCING Dividends paid Net cash used in financing activities Exchange differences on translation of net investment in foreign branches Increase in cash and cash equivalents Cash and cash equivalents at beginning of the year

(668,668) (6,732,989) (7,401,657) 16,852,052 1,541,259

(4,052) (4,006,407) (4,010,459) 19,226,293 419,851

86,103,810 Cash and cash equivalents at end of the year 34 102,955,862

66,877,517

86,103,810

Shareholders Bestway Group Abu Dhabi Group (ADG) State Bank of Pakistan Government of Pakistan Privatization Commission of Pakistan General Public & Others NIT Bank, DFIs & NBFIs Insurance Companies Modarabas & Mutual Funds Securities & Exchange Commission of Pakistan International GDRs (non-voting shares) * TOTAL OUTSTANDING SHARES The aggregate shares/GDRs held by the following are:

No. of Shares 625,191,261 67,329,867 238,567,381 3,354,550 1,714 167,658,271 1,753,417 21,424,868 7,723,207 12,823,316 1 78,351,834 1,224,179,687

% of Ordinary Shares 51.07 5.50 19.49 0.27 0.00 13.70 0.14 1.75 0.63 1.05 0.00 6.40 100.00

No. of shares a) Associated companies, undertakings & related parties - Bestway (Holdings) Limited - Bestway Cement Limited - ADG holding in the form of GDRs ** NIT - National Bank of Pakistan Trustee Department NI(U)T Fund - National Investment Trust Limited Public sector companies and corporations Banks, DFIs, NBFIs, Insurance Companies, Modaraba & Mutual Funds Directors & CEO - His Highness Sheikh Nahayan Mabarak Al Nahayan - Sir Mohammed Anwar Pervez, OBE, HPk - Zameer Mohammed Choudrey - Amin Uddin - Arshad Ahmad Mir - Atif R. Bokhari - Executives *
*The figure for Executives includes 2,335 shares held by their spouses and minor children.

467,611,120 93,649,744 14,708,099 1,748,755 4,662 410,522 41,971,391 67,329,867 62,433,163 1,497,234 2,750 2,500 1,047,644 3,235,978

b)

c) d) e)

f)

** Number of GDRs (one GDR represents four ordinary shares

RATIO ANALYSIS
The Relationship of one item to another expressed in simple mathematical form is known as ratio. A single ratio in itself is meaning less because it does not furnish a complete picture. A ratio becomes meaning full when compared with other standard. So I have taken ratios and percentages of the UBL based on its record of the financial and operating performance.

PURPOSE
The purpose of ratio analysis depends upon the event for which the analysis is made. The following paragraph briefly explains the purpose of ratio analysis: Management would like to know the operational efficiency and would think of such ratios as return on investment, turnover of fixed assets, and net profit to sales etc.
While Creditors would like to know the ability of the company to meet it current obligations and, therefore, would think of current and liquid ratios, turnover of receivables, coverage of interest by the level of earnings, etc. and on the other side, Investors will be interested in such ratios as earnings per share, book value per share and dividends per share etc.

LIQUIDITY RATIO
Ratio Formula Applied For 2007 2008 2009 2010 2011

Calculation CURREN RATIO Current Assets Current Liabilities Networking Capital Currant AssetsCurrent Liability 1169677022 116987257 13297846 144000864 188237323 / 17.29% 21.70% 18.01% 26.44% 23.49%

LIQUIDITY RATIO 30.00% 20.00% 10.00% 0.00% 2007 2008 2009 2010 2011 Years 26.44% 23.49% 21.70% 18.01% 17.29%
LIQUIDITY RATIO

Current Ratio
The current ratio is the ratio of total current assets and total current liabilities. The current ratio of a firm measures its short-term solvency, i.e. its ability to meet short-term obligations. The higher the current ratio, the large the amount of rupees available per rupee of current liability, the more the firms ability to meet current obligations and the greater the safety of funds of short term creditors. Thus, current ratio, in way, is a measure of margin of safety to the creditors.

Description
After the privatization of UBL in 2008 the current ratio is increasing which is a sing of UBL good achievement. Total liabilities to total asset of UBL are moderate and with passage they are covering their condition. It is also decreasing with the passage of time.Liabilities in 2007 were 17.29% ,21.70%, 18.01%, 26.44%, 23.49% In 2008, 2009, 2010 and 2011 respectively. The bank condition is better than previous years and their liabilities going down this is show better effectiveness. The management is thinking seriously in this matter and try to control the situation.

Debt Ratio
Debit ratio is calculated to check the total asset financed by the firm creditors. Debt ratio is calculated by dividing the firm total liabilities over firm total assets.

The debt ratio shows the relationship between the long-term funds provides by the creditor and the owner of the firms. In the year 2007 it is second highest. In2008 very high then it is constant in the next three years it is in the benefit of because the greater this ratio, the greater the amount of other peoples money being used to generate profits.

Solvency Ratios

Ratio

Formula Applied Calculation For

2007

2008

2009

2010

2011

Debt Ratio

Total Liabilities / Total Assets

94.55 % 99.23% 93.95% 93.06% 93.63%

Debt Equity Ratio

Total Equity/Total Deposits

5.22 % .65% 5.57 % 6.07 % 6.24 %

Time interest earned ratio

EBIT/interest
14.32% (50.32)% 24.48% 48.37% 52.95%

REGULATORY RATIOS
Ratio Formula Calculation Advances to Deposits Advances / Deposits Ratio 57.62% 57.59% 47.84% 51.98% 63.51% Applied For 2007 2008 2009 2010 2011

Cash to Deposits Ratio

Cash / Deposits

6.29%

11.05%

10.05%

9.33%

10.36%

ADVANCES TO TOTAL DEPOSITS

70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%

63.51% 57.62% 57.59% 47.84% 51.98%

Series1

2007

2008

2009 Years

2010

2011

COMMENTS This ratio shows that the portion of loan in total deposits was 57.62% in 2007 which decreased to 47.28% in 2009 was a good sign for the management but it again increased, UBL is a commercial bank and the policy of management is to advance more and more loans. It was 51.98% in 2010 which increased to 63.51% in 2011 the management also consider the security of loans because most of the loans becomes to bad debts. Management should do investment in profitable projects like the other commercial banks present in the market are doing. The other competitive banks like MCB, BOP, ABL, HBL and NBP showing more interest in investment in profitable projects.

CASH TO DEPOSITS RATIO

Cash to Deposits Ratio 11.05% 6.29%

Cash to Deposits Ratio

12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00%

10.05% 9.33% 10.36%

2007

2008

2009 Year

2010

2011

COMMENTS. Cash to deposits ratio of united bank limited is high; it is enough to meet day-to-day requirements of the bank. In 2007 it was the lowest 6% while in 2008it was the highest 11%. And in 2011 its near to high condition.

PROFITABILITY RATIO
RATIO Net Margin G.P Margin FORMULA 2007 2008 (53.12)% 2009 10.20% 2010 20.46% 2011 29..34%

Profit Profit after Tax / 4.70% total income Gross Profit / total 52.55% Revenue

55.00%

61.88%

85.34%

86.31%

Operating Profit Operating Margin

Profit/ 2.87%

10.01%

18.26%

28.92%

30.96%

total Revenue Profit After

0.41% -(4.65)% 0.77% 1.21% 1.36%

Return on total Net Assets

Tex/Total Assets

Return on Equity

Net Profit / Equity

9.9%

842%

16.39%

23.44%

25.75%

Net Profit Margin

This ratio is also known as net margin. This measures the relationship between net profits and sales/revenue of a firm. This ratio is calculated after deducting non-operating expenses, such as loss on sale of fixed assets etc., from operating profit and adding non-operating income like interest or dividends on investment, profit on sale of investments or fixed assets, etc., to such profit.

NET PROFIT MARGIN 40.00% 20.00% 0.00% -20.00% -40.00% -60.00% 2007 -53.12% 2008 2009 2010 2011
NET PROFIT MARGIN

20.46% 4.70% 10.20% 0

Comments

Net Profit before tax to total income is the ratio of net profit margin.Net profit margin of UBL in 2007 was 4.70% which decrease to 53.12% in 2008. But it did not show long term effect and again continuously increased to 10.20%, 20.46% and 29.34% in 2009, 2010 and 2011 respectively

Gross Profit Margin Ratio

The gross profit margin indicates the percentage of each sales remaining after the firm has paid for its goods. Higher the ratio, the better it is, and the lower the relative cost of merchandise sold. A low ratio indicates unfavorable trends in the form of reduction in selling prices or increase in cost of production.

G.P Margin 100.00% 85.34% 86.31% 52.55% 55.00%

80.00%
60.00% 40.00% 20.00% 0.00%

61.88%

G.P Margin

2007

2008

2009 Year

2010

2011

COMMENTS Gross profit margin of the UBL in 2007 was 52.55 which was very good with the previous year situation. But after the appointment of new management the bank became able to increase the gross profit margin 55.00% in 2008. In coming year it increased to 61.88%, 85.34% and 86.31% in 2009, 2010 and 2011 respectively

Return To Total Assets

ReturnToTotal Assets
0.02 0.01 0 -0.01 -0.02 -0.03 -0.04 -0.05 0 0 0.41% 1.21%1.36% 0.77%

Return on total Assets

-0.0465 2007 2008 2009 2010 2011

Return To Total Assets

Net profit to total asset is only 0.41% in 2009, which shows that bank earn remarkable profit in 2009, but again in 2010 it is in negative. Because of emerging new technology the bank have to compete with this technology, which caused to increase the expenditure. This is very critical point for management. After that bank continually increase their profit .

NET PROFIT TO EQUITY Net profit to total equity seems satisfactory.

CAPITAL ADEQUACY RATIO

Ratio

Formula Calculation

Applied

For 2007

2008

2009

2010

2011

Equity to Asset

Total Equity / Total Assets

4.16%

0.55%

4.71%

5.18

5.27

Equity to Deposits

Total Equity / Deposits

5.23%

(0.65)%

5.57%

6.07%

6.24%

TOTAL EQUITY TO TOTAL ASSETS

Captal Adequacy Ratio

600.00% 500.00% 400.00% 300.00% 200.00% 100.00% 0.00% 2007 2008 2009 4.16% 0.55% 4.71%

5.18

5.27

Captal Adequacy Ratio

2010

2011

COMMENTS The hold of the owners of the company was 0.56% in 2008 which increased to 4.7% in 2009 4.71% , 2010 5.18%, 2011 5.27%, total equity is increasing every year it shows bank is going to better progress and equity is growing every year.

TOTAL EQUITY TO DEPOSITS

2011 2010 Years 2009 2008 -0.65% 2007 -2.00% 0.00% 2.00% 4.00% 5.23%

6.24% 6.07% 5.57%

Series1

6.00%

8.00%

COMMENTS The portion of total equity as compared to total deposits is very high. It was -0.65% in 2008.the share was decreased but in 2009 the share increase 5.57% due to new share capital it was improved previous year and after that it is continuously improving and shows better condition of the bank