Magazine article Economic Review

UBL - Non-Performing Loans on the Decline

Magazine article Economic Review

UBL - Non-Performing Loans on the Decline

Article excerpt

Ameer Karachiwala, Chief of Staff United Bank Limited

Q. What is the stumbling block in way of UBL's Privatisation?

A. Privatisation of UBL is very much on the cards. We are trying to make the bank a financially viable and profitable entity in order to get its good price. For that purpose investor's confidence is the prerequisite and that depends on ground realities. On three previous occasions government tried to off-load the bank. But the attempts went futile due to bank's non-performing loans, which exceeded Rs.47 billion. Most of this loan were given on political grounds by the outgoing government. Now the non-performing loans substantially reduced and stood at Rs.33 billion because of recoveries, restructuring.

Q. What are your plans about downsizing?

A. There hadn't been any downsizing in UBL. Actually it was the manpower rightsizing that was done in October 1997 under mandatory scheme on the basis of last in first out. In a bid to cut cost and raise profitability the staff has been reduced to 14885 from 21270. Rightsizing was a very successful experiment which saved billions of rupees in ongoing cost. Those who were promoted from 1993 onwords were retrenched. As a result we lost 50 per cent of our office staff which included 67 per cent officers, but that was a target to meet. Victims were those who were not performing their duties upto the satisfaction.

Q. Was the network rationalization proved successful?

A. As are of our strategy the UBL network was rationalized. Around 203 branches and 11 zonal offices out of 56 were closed. It is in line to point out that due to our policy of rationalization intermediation cost came down to 3.7% to 5.1%.

Q. What are your other major achievements?

A. One of the major achievements of present UBL management is the strengthening of our balance sheet. Due to reshapement programme the bank recorded an operating profit of Rs. …

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