UBL Total Quality Management

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. With almost forty seven years of good standing to its valued clients, it has stood the test of time, producing assets of over Rs. 380 billion. It was established in November 7th, 1959 by Sahgal Group.

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.

They have following services:

Consumer BankingCommercial BankingCorporate BankingInvestmentTreasury

UBL, where you come first.

The Pakistani financial sector includes banking and non-banking financial institutes (NBFIs). Banking in Pakistan falls within 10 segments, which are as follows:

UBL has assets of over Rs. 300 billion and a solid track record of forty-seven years - in addition to the convenience of over 1000 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 its subsidiary companies include United Bank AG Zurich, Switzerland United National Bank Limited, UK (Joint venture with NBP) Ubl Fund Managers Limited.

It has representative offices in Tehran and it also has an associated company by the name of Oman United Exchange Company, which is located in Muscat.

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.

The majority shareholders of the bank comprise H.H Shaikh Nahayan Mabarak Al

Nahayan with other members of Abu Dhabi Group (UAE) and Bestway Group (UK),

each holding 25.5% of the bank’s shares as at December 2005. The bank was listed in

2005, following which the Government of Pakistan (GOP) has divested approximately

4.2% to the public and retains 44.8% of the bank’s shares. This level of government

Shareholding is quite substantial and has positive implications for the bank’s credit


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


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.

UBL have branches in:

· United States of America

· Qatar


· Bahrain

· Republic of Yemen

· Off Shore banking Unit

and subsidiaries in:

· United Kingdom

· Zurich


Public Sector companies and corporations

H.H Shaikh Nayan al Mubarak al Nayan chairman

Sir Muhammad Anwer Pervaiz OBE , HPK Deputy chairman

Mr Omar Al Z Al Askari director UBL

Mr Zameer Muhammad Chaudhry Director UBL

Following is the Statement of Compliance with the code of Corporate Governance for the year ended december 31, 2006 issued by UBL

This statement is being presented to comply with the Code of Corporate Governance (The Code) contained in the Regulation No. 37, XIII & 36 of Listing Regulations of Karachi, Lahore & Islamabad Stock Exchanges for the purpose of establishing a framework of good governance, whereby a listed company is managed in compliance with the best practices of corporate governance. The Board of Directors has adopted the Code of Corporate Governance and applied the principals contained in the Code in the following manner:

1. Except for the Chief Executive Officer, all other directors, including Chairman and Deputy

Chairman is a non-executive director.

2. The directors have confirmed that none of them is serving as a director in more than ten listed companies, including this Bank.

3. All the resident directors of the Bank are registered as taxpayers and none of them has

defaulted in payment of any loan to a banking company, a DFI or an NBFI or, being a member of a stock exchange, has been declared as a defaulter by that stock exchange.

4. During the year Mr. Javed Sadiq Malik stepped down as director and Dr. Ashfaque Hasan

Khan was nominated by the Government, other than that no casual vacancy occurred in the

Board during the year.

5. The Bank in year 2004 prepared “Statement of Ethics and Business Practices” for directors

and employees, it has been signed by the directors and employees. During the year the same

has been circulated as required by the code.

6. The Board has developed a vision / mission statement, overall corporate strategy and

significant policies of the Bank. A set of significant policies are maintained by the Bank.

7. All the powers of the Board have been duly exercised and decision on material transactions, including appointment and determination of remuneration and terms and conditions of employment of the Chief Executive Officer have been taken by the Board.

8. The meetings of the Board were presided over by the Chairman and, in his absence, by the

Deputy Chairman. The Board met at least once in every quarter. Written notices of the Board

meeting, along with agenda and working papers, were circulated at least seven days before the meetings. The minutes of the meeting were appropriately recorded and circulated. The

Company Secretary and Chief Financial Officer attend the meetings of the Board of Directors.

9. The appointment of Chief Financial Officer, Company Secretary and Head of Internal Audit including their remuneration and terms of employment have been approved by the Board.

10. The Board arranged orientation course for its director’s to appraise them of their duties and responsibilities.

11. The directors report for this year has been prepared in compliance with the requirements of the Code and fully describes the salient matters required to be disclosed.

12. The financial statements of the Bank were duly endorsed by the Chief Executive Officer and Chief Financial Officer before approval of the Board.

13. The directors, Chief Executive Officer and executives do not hold any interest in the shares of the Bank other than disclosed in pattern of shareholding.

14. The Bank has complied with all the corporate and financial reporting requirements.

15. The Board has formed an audit committee. It comprises of three members, all of whom are non-executive directors including the Chairman of the Committee.

16. The meetings of the audit committee are held at least once every quarter prior to approval of interim and final results of the Bank, as required by the Code. The terms of reference of the committee have been formulated and advised to the committee for compliance.

17. The Board has set up an effective internal audit function. Personnel of the Internal Audit

Department are suitably qualified and experienced for the purpose and are conversant with thepolicies and procedures of the Bank and they are involved in the internal audit function on a full time basis.

18. The statutory auditors of the Bank have confirmed that they have been given a satisfactory rating under the Quality Control Review Program of The Institute of Chartered Accountants of Pakistan, that they or any of the partners of the firm, their spouses and minor children do not hold shares of the Bank and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on Code of Ethics as adopted by theInstitute of Chartered Accountants of Pakistan.

19. The statutory auditors or the persons associated with them have not been appointed to provide services other than approved services and the auditors have confirmed that they have observed IFAC guidelines in this regard.

20. We confirm that all other material principles contained in the Code have been complied with For and on behalf of the Board of Directors

Consumer banking Division

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 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/- without any collateral.

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. CHIP based credit cards have proven to be the most secure way of conducting credit card transactions globally.

UBL Business line

UBL Business line… a complete solution to all your Business Financing needs. With UBL Business Financing facility, you can now take your business to greater and newer heights, and achieve the level of success that you truly deserve. UBL Business line is a running Finance facility that not only provides funds for growth but also enables you to capitalize on profitable opportunities. “It is a ‘Credit Line/ OD Facility’ against Residential Property. It is an evergreen credit line that the customer can use for his/her business expansion” . Now, UBL Businessline 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 Businessline offers you the facility of availing a financing of up to 70 % of your property value. Now that you can avail a higher amount against your assets, you can plan your growth and expansion exactly the way you want to. With UBL Business line, now you no more need to pay for the entire credit line that you own. Business line gives you the facility to pay mark up only on the amount that you utilize.

UBL Address

You have always dreamt of having a permanent address. Now you can turn your dreams into reality with UBL Address - the unique offering that makes you the owner of your home while remaining within your limited income..
UBL Address understands your home financing needs and offers you a variety of fixed, floating & adjustable rate options.

UBL Drive

UBL Drive is a unique auto-financing product which offers you features, options and flexibility unmatched by any other bank. Thorugh 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 ur car is being financed , it also offers numerous insurance options and the documentation is very easy and the loan is availabe to different segments of the society at very competitive rates

UBL Cashline

UBL Cashline is truly the most flexible loan that gives you the freedom to turn your dreams into reality today. Unlike ordinary personal loans, UBL Cashline has No Pre-payment Penalty. Unlike a normal personal installment loan UBL cashline allows you to pay markup only on the amount that you use from ur available credit limit which may vary from 50,000 to 500,000. It is a personal credit line available at very competitive rates to different segments of the society including bussinessman salaried individuals and other self employed professionals and cicvill servants along with personnel of the armed forces.


UBL is not ISO certified instead it has recently been certified by CMMI.

What is CMMI?

The CMMI Product Suite is at the forefront of process improvement because it provides the latest best practices for product and service development and maintenance. The CMMI models improve the best practices of previous models in many important ways. CMMI best practices enable organizations to do the following:

more explicitly link management and engineering activities to their business objectives expand the scope of and visibility into the product lifecycle and engineering activities to ensure that the product or service meets customer expectations incorporate lessons learned from additional areas of best practice (e.g., measurement, risk management, and supplier management) implement more robust high-maturity practices address additional organizational functions critical to their products and services more fully comply with relevant ISO standards

Business Objectives And Key Issues







Consumer/quality focusCompetencySpeed/action/simplicity/initiativeHonesty/trust/integrityEffective communicationCommitments/self discipline

Core Competencies:

GoodwillCredibility (backed by foreign group)Distribution Network (over 1000 branches world wide)

Strategic Intent:

UBL MONEY STRIVES TO CREATE A NICHE AND BE THE MARKET LEADER IN PERSONAL LOAN LIKE CITIBANK NA STANDS RIGHT NOW IN THE CREDIT CARD INDUSTRY. (Ubl want a niche in SEB and SEP and Citibank Na has a niche in the upscale market where it is considered to be a status symbol).

Goals And Objectives:

External Focus:

UBL money’s focus is decidedly external






Innovation is the main driving force in the whole company and it enables us to create new cutting edge

We know that our human resource and our customers make the real difference so we:Treat each other with uttermost respectSupport Each other’s efforts and work together at delivering superior results

UBL strives to achieve world-class results, based on ambitious targets and aim at the highest performance standards. This is achieved through:

Taking InitiativeBeing very DecisivePerseverance and by being Flexible

KEY ISSUES: Negative Perception of Branches and UBLCo-borrower option-giving higher loan limitsPoor Service and Quality standardsWeak Controls on Sales routed through thePoor system support for servicing customerSystem options limited-unable to offer installment

Holiday or PAYS/balloons option

Expansion into remaining citiesIncrease in competition due to high returnsOpportunity to cross sell to other asset/branch

as compared to other investment option.

Change in clean lending regulations by SBPTo expand through alliances and joint Shrinking Margins Due to New EntrantsHigher then expected NCL from risky segments

After conducting a survey from a sample of 20 people using UBL consumer banking products and products of the other banks we found out the following regarding customer complaints.

Rating Against Customer buying Criteria



Quality Management strives to implement the ‘You First’ Strategy proactively and is a continuous journey towards improving, streamlining and monitoring the existing functions and roles and simultaneously initiating new processes and tasks to achieve superior and consistent quality.     

· Quality is meeting reasonable customer requirements and delighting them in the process

· Quality should be aimed at the needs of customer, present and future    

· Quality is conformance to requirements


· Need to study a problem/issue to determine the root cause?

· Need to identify areas for data collection?

· Basic aim is to focus on the voice of the customer.


Pareto Chart

When does UBL Uses Pareto Chart?

· When Evaluating Customer Complaints.

· When trying to focus on the most significant problem or cause

· When relating cause and effect, by comparing a Pareto chart classified by causes with one classified by effects

· When evaluating improvement, by comparing before and after data

The figure below shows how many customer complaints were received
in each of five categories.



Benefits to Employees

Quality expert W. Edwards Deming identified some key areas where quality directly benefits an UBL’s employees.

Product quality leads to:

· Greater pride in products and services.

· Sense of satisfaction in a job well done.

Process quality leads to:

· Improvements in internal communication.

· Reduction in frustration caused by repetitive problems and rework.

· Streamlined work processes that make sense to the employees who use them.

Customer satisfaction leads to:

· Opportunity to serve real versus perceived customer needs.

· Happier customers who are more gratifying to serve.

· Strengthened relationships with repeat customers.

Profit leads to:

· More stable organizations.

· Greater job security.

· Potential for enhanced employee benefits (higher compensation, better health coverage, more competitive investment plans, etc.).

Logically, healthy profits are critical to any organization’s survival and must be factored into key business decisions, including the decision to implement quality. Though quality’s benefits extend beyond the financial realm, organizations should ultimately implement quality because it makes good business sense.


Customers of UBL:

The most important asset for any organization is its customers.

Within the context of quality, UBL encompasses two different groups: external customers and internal customers.

An external customer is the person or organization who receives and pays for a product, a service, or information. For example, the external customer of UBL is the one who buys UBL Credit Card, UBL Drive etc etc

An internal customer is an employee or department within an organization who receives an output in the form of a product, service, or information from another employee or department in that same organization.




Quality Function Deployment (QFD) requires a paradigm shift from conventional quality control methods. The conventional method examines the output of "planning" and "doing" to make sure that the results meet the standards. If it does not, then the procedure is corrected and the cycle repeats. This is "inspected-in" quality. The QFD concept is to design the quality into the service during the "planning" stage so that delivery is error-free. This is "designed-in" quality.

QFD does not replace the business planning process that establishes long and short-term goals. The standard planning process (using "plan-do-check-act" concepts) still occurs, but becomes part of a Total Quality Management (TQM) system. This is structured so that all personnel in all departments can use the components to maintain or improve quality, cost, procedures and systems. This ensures that the customer receives the highest quality service, within budget and on schedule.



Prevention Costs

Appraisal Costs

Internal Failure Costs

External Failure Costs

The company’s focus is on prevention costs. It includes marketing, product development, purchasing, and quality administration. The higher the prevention cost; the lesser the chance of a problem to occur.

There are two Quality Ratios that UBL uses:

External Failure Cost / Net Sales ---- due to customer complaints and customer goodwill. Returned goods / cancelled processed loans / shifting.Design Quality Cost / Design Cost ---- due to quality administration.

Customer perception of quality

1. reputation

2. price

3. performance

4. warranty

5. features

6. service

What is quality for a customer and How does UBL define quality?

Take for example, a biscuit – you are concerned with the taste and health related issues. That’s your definition of quality. We are concerned with the content of sugar or salt in it. We are concerned with the deeper and complex part, the complete process of converting it into a product.

Are there some unspoken but expected requirements of the customers that UBL is unable to meet?


In some products customers expect that they should be given reversal of lat charges. If something goes wrong we don’t give reversal of late charges e.g. when we send bills to our customers and due to their own reasons they are unable to pay their bills we charge them with late fees but if the bill does not reach the customers on time due to banks failure we try to compensate our customers.

Who creates a clear and visible Quality value for your bank?

Internal employees create value for UBL. It is the employees that provide good services to our customers if UBL faces a problem the team comes up with possible solutions. The employee’s try to come up with something that first wasn’t practiced in UBL.

How is the voice of the customer heard?

Again UBL has a Help line in which all calls are recorded and evaluated by the team leaders. Here they deal with two aspects:

1. The needs and complaints of the customers are heard.

2. Briefing of the Bankers are done in which they evaluate how the Bankers attended the customers and how did they solve their problems. The team makes reports and sends it to the Quality department.

Apart from the Help line service , the fishbone strategy is implemented.

The most important asset for UBL are the Human Resource because it is the human assets that provides good services to our customers due to which they are fully satisfied. For an organization it is very important to have dedicated and committed employees.

Are UBLs customers fully satisfied?

The customers are never 100% satisfied because if we give them a better service today they will ask for even better services in the future, but we try to satisfy our customers to the fullest.

UBL has a help line service, fax numbers, and recently we have come up with project in which feedback forms will be given to our customers in which they will be asked to share their experiences with UBL. UBL also uses the services of AC NEILSON, a leading market research company to get feedback from its customers.

Does UBL come up with new ideas and innovations in order to meet the unexpected requirement of the customers?

UBL has been trying to come with new things e.g. the introduction of Islamic banking known as AMEEN and an insurance division which has not been introduced in the market as yet.

Customer retention is difficult than satisfying and attracting a new customer.

80 – 20 rule does work and that’s why UBL has a very strong corporate banking group which focuses on the most profitable companies/individuals/firms.

How does UBL manage customer retention?

We have a separate department called the retention unit. There are some times when customers face a lot of problems from the sales person due to which they want to stop using our product. The retention unit calls up that customer and asks them the reason that why have they stopped using their product. When they get to know that it was due to the banks fault then this unit has the authority to give benefits to their customers like cancellation of late charges,

for example in the month of October, 400 units were returned to the bank due to miscommitment of the sales person, due to which the bank had to face bad publicity and a huge loss. As the disbursal charges along with loss due to the negative change in time value of money had to be borne by the bank.

Does your company have Quality Council. If yes how does it work, who are the people involved and what are their duties?

Yes we have a quality unit, which looks after the entire business. The duty of this unit is to measure the quality of our bank. UBL has set some quality standards, which the bank has to meet ad if our bank does not meet those standards then he quality unit finds out the reason of not meeting the standards and they try to increase the standard.

In the Quality unit there is Quality head who is working with a team of 7 to 8 people and these people are from different areas of the bank like consumer baking, corporate baking, etc. there are two teams involved in Quality unit:

Ø Process Improvement Team: this team looks at the processes of the bank. The team consists of high profile people and the problems encountered by them are very large. The tem encounters some issues and brings people involved in that issue, it sets a meeting, identifies weak areas and on agreed basis they come up with possible solutions. Theses problems are so large that it might take a year to solve these problems.

Ø Quality Circle: the Quality Circle operates on a small scale where there are groups of people and they try to improve the working environment of the bank. This team deals with small but important problems.

View the original article here