Macro Environment Variables (Case Study of UBL Pakistan)

These are the variables which affect all the firms and all the industries and can occur all across the boundaries. These are the common issues but the individual firm or even the industry does not have capability to stop these factors from occurring.
Different authors used different terminologies to define these factors that are:
• PEST – Political Economic, Social and Technological
• PESTEL – Political, Economic, Social, Technological, Environmental and Legal
• SPENT – Social, Political, Economic, Natural and Technological
• STEEPLE – Social, Technological, Economical, Environmental, Political, Legal and Ethical
1. POLITICAL VARIABLES:
From the start when the Pakistan has taken part in the war against terror, the political, economical, and social environment is changed and all the industries and sectors in Pakistan have been negatively affected.
Many factors like fiscal policies on tax, exchange rates, inflation and government agencies regulating competition, are the major issues contributing to downturn of the UBL revenues.
The deposits with the UBL have been decreased from 25.1% to 19.9%, in last seven years. Looking in contrast, the total operating revenues diminished from 57.0% to 20.3% in recent years. And this is because the drastic changes in the political environment of the country.
2. ECONOMIC FACTORS:
As the economy of the Pakistan has shown downward trends in the recent years & the business activities became sluggish. UBL in this regard having the cash low from investment activities in the country declined from Rs.9,817(m) to Rs.6,530(m). From this it is quite easy to say that economics factors has seriously affected the growth and earning of the UBL. From the financial statement of UBL it is obvious that the operating cost increased from Rs.13,929(m) to Rs.11,664(m) in few years back.
Financial ratios analysis shows that in recent years the Net Profit Margin has been diminished from 31% to 21% and this is mainly because of economic down-turn in the country.
3. SOCIAL CONSTRAINTS:
UBL is also influenced by the social constraints in case of saving and investment habits of the people. Customers first need for investment is surety on safety of investment which the Pakistan’s economy is lacking, the potential investors are saving their money in foreign banks are also investing their capital outsides the country. But, besides to all this banks has fulfilled the social responsibility concept by donating to NGOs and NPOs in the field of education, health, etc.
4. TECHNOLOGICAL FORCES:
As the old technology is becoming obsolete and advanced technology is taking place. Parallel to this, customer’s needs are arising day by day, so to satisfy the customer’s need and remaining in competition UBL is also acquiring new technology. And this replacement leads to lots of money to acquire new technology, which has raised the operating cost of the bank.

Reference: www.ubl.com.pk