Internship Report MCB Bank LTD

CHAPTER NO.
1.1 OBJECTIVE OF STUDYING THE ORGANIZATION
Following are the main objectives of selecting MCB Bank Limited for studying.
 To observe the finance system of the bank, to know how banks support the
economy of the country.
 To implement theoretical knowledge in practical field.
 To understand the management system of the bank which consists of
experienced professionals of the bank.
 Want to scrutinize newly and highly integrated computerized system for
doing banking transactions.
 To know banks activities i.e. its services and products.
 The bank is certainly one of the leading banks in Pakistan, the reason being I
selected it for Internship and learning purpose.
1.2 ABOUT MCB

MCB is one of the leading banks of Pakistan with a deposit base of about Rs. 280
billion and total assets of around Rs.300 billion. Incorporated in 1947, MCB soon
earned the reputation of a solid and conservative financial institution managed by
expatriate executives. In 1974, MCB was nationalized along with all other private
sector banks. This led to deterioration in the quality of the Bank’s loan portfolio and
service quality. Eventually, MCB was privatized in 1991.
During the last fifteen years, the Bank has concentrated on growth through
improving service quality, investment in technology and people, utilizing its
extensive branch network, developing a large and stable deposit base and managing
its non-performing loans via improved risk management processes.
1.3 BRIEF HISTORY

At the time of independence in 1947 the banks services were very badly affected and
by June 30, 1948, the number of offices of scheduled banks came down to only 81 in
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the territories comprising Pakistan; but by December 31, 1973 there were following
14 scheduled Pakistani commercial banks with 3323 offices all over the Pakistan
and 74 offices in foreign countries.
1. National Bank of Pakistan
2. Habib Bank Limited.

3. Habib bank (Overseas) Limited.
4. United Bank Limited.
5. Muslim Commercial Bank Limited.
6. Commerce bank limited.
7. Standard bank Limited.
8. Australasia bank limited.
9. Bank of Bahawalpur Limited.
10. Premier bank limited
11. Pak bank limited.
12. Sarhad Bank limited
13. Lahore commercial banks limited.
14. Punjab Provincial Cooperative bank limited.
MCB was founded by ISFHANI and ADAMJEE families in Calcutta on July 9,

1947. MCB is not an overnight success story rather good track of services are
responsible for the leaps and bounds progress. After the partition of the Indo-Pak
Subcontinent, the bank moved to Dhaka from where it commenced business in
August 1948.In 1956,the Bank transferred its registered office to Karachi, where the
Head Office is presently located. Thus, the bank inherits a 52 year legacy of trust in
its customers and the citizens of Pakistan.
MCB Bank Limited is one of the leading banks of Pakistan and continuously
awarded “Best Domestic Bank in Pakistan” from 2002-2006 and also ranked in AA
+ Rating. The Management of the Bank maintained its strategy of concentrating on
growth through improvement in quality services, investment in technology &
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people, utilizing its extensive branches network, large & stable deposit base and
managing its non-performing loans.
MCB Bank Limited is the only Bank in Pakistan who listed on London Stock
Exchange and issued Global Depository Receipts (GDRs) worth 150 Million
Dollars. MCB Bank is first ever in the history of the country to be listed on the
London Stock Exchange for trading on the Professional Securities Market which is
now being followed by NBP & Others. The Bank’s Registered Office is at MCB
Building, F-6/G-6 Jinnah Avenue, Islamabad and Principal Office at MCB Tower, I.
I. Chundrigar Road Karachi.
Subsidiaries:
The bank has two subsidiaries:
 Adamjee Insurance Company Ltd.
 First Women Bank Ltd
In the late 1990 after long period of time newly established Democratic Government
of Pakistan have decided to sell nationalized assets of country for better utilization.
In April 1991, MCB became Pakistan’s first privatized bank. The government of
Pakistan transferred the management of the Bank to National Group, a group of
leading industrialists of the country by selling 26% shares of the bank.
In terms of agreement between the Government of Pakistan and the National Group,
the group, making their holding 50% has purchased additional 24% shares. Now,
25% is purchased by the Government, which shall be sold in the near future.
The name of bank has been changed from MUSLIM COMMERCIAL BANK LTD
to MCB BANK LTD. The name to change was felt due to the reasons that bank was
mainly known and popular as a MCB BANK.
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1.4 NATURE OF THE ORGANIZATION
MCB is in it’s over 50 years of operation. It has a network of over 1026 branches all
over the country with business establishments in Sri Lanka and Bahrain. The branch
break-up province wise is
 Punjab (57%)
 Sindh (21%)
 NWFP (19%)
 Baluchistan (3%) respectively
Over 750 of which are automated branches, Over 197 MCB ATMs in 35 cities
nationwide and a network of Over 12 banks on the MNET ATM switch.
In 2005 the total No. of Employees are 9,377 and No. of Accounts are 4,248,399.
In (2005, 2004, 2003, and 2001) MCB has received the Euro money award for the
4th time in the last 5 years. MCB won the "Best Bank in Pakistan".
In 2000 and 2007 win the award of “Best Domestic Bank.” In 2004, 2005 also has
win Asia Money awards for being "The Best Domestic Commercial Bank in
Pakistan".
Vision Statement
“Challenging and Changing the Way you Bank”.
Mission Statement
“MCB Bank’s team of committed professionals is dedicated to maintaining long

term customer relationships through outstanding service and convenience”.
OUR VALUES
Trust
“We are the trustees of public funds and serve with integrity & commitment. Ethical
behavior is of critical importance to us. We adopt full compliance with internal and
external policies and procedures, operating within the legal framework”.
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Customer Focus
‘We continuously seek to exceed our customer’s expectations, forging and

maintaining long term relationships”
Innovation
“We strive to be the market leaders in innovative products and services offering
customized financial solutions with flawless execution”
Teamwork
“The diversity of our people is our strength. We inspire and challenge each other –
working together to achieve synergy”
Achievement
“Our people are our most valuable asset. We are committed to a result oriented
culture. Our goals are clear and merit is the only criterion for reward”
Social Responsibility
“As responsible citizens we contribute to the social welfare of the community we

live in.”
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1.5 Business volume of Muslim Commercial Bank:
Rupees in million 2003 2004 2005 2006 2007
Profits
Operating profit 6,656 6,746 13,830 20,069 20,856
Profit before taxation 3,612 4,057 13,018 18,500 21,308
Profit after taxation 2,230 2,431 8,922 12,142 15,266
Balance sheet
Shareholders fund 11,108 14,552 23,307 40,844 55,120
Deposits from customers 211,511 221,069 229,345 257,461 292,098
Investments 128,276 67,194 69,481 63,486 113,089
Advances to customers 97,200 137,317 180,322 198,239 229,732
Total assets 272,323 259,173 298,776 342,108 410,485
Information per ordinary shares

Earnings (Rs) 7.28 7.21 21.36 23.40 24.30
Cash dividend (Rs) 1.25 1.50 1.50 2.00 2.50
Dividend payout ratio (%) 37.80 34.65 19.22 32.61 51.45
Net asset value at the year end(Rs) 36.24 43.16 55.64 74.76 87.73
Market value at the year end (Rs) 51.40 58.70 167.80 246.10 399.95
Capital adequacy ratio (%) 0.00 9.64 12.54 18.65 17.88
Reference:
The abovementioned data is taken from Annual reports of MCB and
www.mcb.com.pk
Analysis of Business volume of MCB:

As we see last five years progress, the bank made substantial progress, recording
strong growth in revenues and earnings. The profit is increased year by year due to
vast business activities done by MCB i.e. deposits from customers, investments, as
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well as advances to customers and shareholders fund due to these funds the return is
increased year by year.
Due to increase in return share market value is also increased and earnings per share
are also increased. This means people are more interested in investing in MCB due
to high return. As we see year 2003, profit after tax was Rs. 2230/- but in 2007, this
profit increases up to Rs. 15266/- only because of high investments and advances to
customers.
On other hand due to increase of business volume the dividend payout ratio as well
as capital adequacy ratio also increases. So we can say the business volume of
Muslim Commercial Bank increases year after year due to its good establishment
and maintaining of adequate internal control and procedures for implementing
strategies and policies by its management.
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1.6 NUMBER OF EMPLOYEES
MCB bank since its incorporation has the more potential bank not only for its
customers but also for its employees. MCB bank offering great working
opportunities for all the people who are interested to do job in MCB bank and with
passage of time employees is increasing as its business volume is increasing because
MCB bank provide enhanced career opportunities with dynamic work employees
are motivated with higher salaries according to their education and experience level
currently round about 9946 employees are working in MCB bank including
contractual and permanent staff
Total numbers of employees = 9946
STAFF OF THE BRANCH CONSISTS OF 13 MEMBERS
DESIGNATION NO OF EMPLOYEES
Branch Manager 01 Grade I

Operation Manager 01 Grade I
Customer Service Officer 01
Credit Manager 01 Grade III
General Banking Officer 02 Grade III
Cashier 01 Grade III
Cash Officer 01
System Administrator 01
Gun Man 02
Peons 02
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1.7 PRODUCTS AND SERVICES
MCB ATM Services
(a) MCB ATM Card
MCB ATM Network is the largest and most advanced of its kind in the country, and
is part of MCB's continuing efforts to provide customers with convenience that suits
all requirements most. MCB ATM has operated globally.
Card Categories
MCB ATM Regular Card
The MCB ATM Regular Card allows withdrawal of up to Rs. 10,000 per day and a
maximum of 3 withdrawals per day per card.
MCB ATM Gold Card
The MCB ATM Gold Card allows withdrawal up to Rs. 25,000 per day and a
maximum of 6 withdrawals per day per card. The cardholder has to make at least
two transactions to withdraw the full amount of Rs. 25,000
BILL PAYMENTS:
MCB easy bill pay offers unmatched convenience to pay utility and mobile phone
bills or re-charge prepaid mobile phone accounts.
MCB is the only bank that offers coustomers, 3 convenient options of making bill
payments to PTCL, SSGC, KESC, Mobilink, and Ufone. MCB Smart Card or MCB
ATM Card Holder can easily pay their bills or re-charge their prepaid mobile phone
account.
ACCOUNTS
Saving Account
MCB’s Rupee Savings account is the most convenient way to manage savings. Its
basic features are:
 Low average balance required
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 Profit is paid on customers account on a half yearly basis
 Cash deposit and withdrawal facility at hundreds of MCB branches

across Pakistan (conditions apply)
 Withdraw cash through Pakistan’s largest ATM network.
 Customer can use an account to pay bills 24 hours a day, 7 days a week
through Virtual Banking
Current Account
MCB’s Rupee Savings account is the most convenient way to manage savings. Its
features are given as below:
 Low average balance is required. Unlimited free of cost transaction facility at

concern branch. Profit is paid on account on a half yearly basis.
Term Deposit
A MCB term deposit scheme is also valuable to suit customer’s requirement.

Customer can avail on choice of 01 month, 3 months, 1 year, 2 years, 3 years, 4
years, and 05 years term deposit. Its benefit includes half yearly profit payment.
Customer can avail credit facility up to 75% of total deposit.
Basic Banking Account
In compliance with the directives of State Bank of Pakistan via BDP Circular No.
30, issued on November 29, 2005, the Basic Banking Account has been launched
with effect from February 27, 2006. This product has been introduced to facilitate
the low income group as well as the existing account holders who wish to convert
their regular savings or current account into Basic Banking Account.
The Basic Banking Account is a current account and can be opened with a minimum
initial deposit of Rs. 1000/- only. Account holders will be allowed 2 deposit
transactions (either cash or through clearing) and 2 withdrawals (cash or clearing)
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each month. All customer-initiated transactions over and above this limit will be
charged a transaction fee.
Foreign Currency Accounts
This account offers very attractive returns on Foreign Currency investment.
Customer can open a foreign currency Savings account in any of the four currencies
i.e. US Dollar, UK Pound Sterling, and Euro. Its features are as below:
 Unlimited transaction facility.
 Low balance requirement .
 Profit credited to account on a half yearly basis.
 Account holder can avail a credit facility up to 75% of the total deposit
value.
A foreign currency account can be opened at any of MCB foreign exchange dealing
branches.
SMART CARD / DEBIT CARDS
By using of this product customer can manage expenses. MCB is the only bank to
introduce a debit card that gives the option to choose from domestic and
international cards for local and global usage respectively.
MCB VISA:
It provides the conventional credit card services in a manner that is superior in

comparison. MCB Visa is the most secure, affordable and rewarding credit card.
MCB Visa is accepted at all ATMs across Pakistan as well as at 27 million
acceptance locations worldwide.
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TRAVELER’S CHEQUES
MCB Rupee Traveler's Cheques were first introduced in 1993 as safe cash for
traveling and travel related purposes. The product has been extremely popular and is
preferred over cash by customers while traveling and in all walks of life.
LOANS
Term Loans:
An individual can gain and benefit the most through MCB Consumer Banking.
MCB provide friendly, efficient and attentive personalized banking services - a
unique banking relationship experienced by each MCB client.
Working Capital Loans:
Based on the customer’s specific needs, the Corporate Bank offers a number of
different working capital financing facilities including Running Finance, Cash
Finance, Export Refinance, Pre-shipment and Post- shipment etc. Tailor- made
solutions are developed keeping in view the unique requirements of your business.
FINANCING
Trade Finance
MCB corporate banking provides a finance services that include an entire range of
import and export activities including issuing Letters of Credit(L/Cs), purchasing
export documents, providing guarantees and other support services.
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INVESTMENT BANKING
MCB’s Investment Banking Team has emerged as a leading player in Pakistan's

Investment Banking arena. The Team handles advisory, corporate finance and
capital markets related transactions. Within these areas, the team has developed
expertise in:
 Private Placements
 Debt/Equity Underwriting
 Term Finance Certificates
 Loan Syndication
 Arrangement of Non- Fund Facilities
 Mergers and Acquisitions
 Corporate Advisory
MCB VIRTUAL BANKING
MCB Virtual Internet is to manage and control customer’s banking and finances –
when they want to, where they want to. MCB’s Virtual Internet Banking facility is
 Simple
 Secure
 Free of cost.
Individual Users/ Corporate Users
MCB Virtual Banking - is a safe and convenient way to manage and control banking
and finances. This service meets customer’s both (individual’s and corporate)
essential banking needs. MCB Virtual Internet Banking is a fully Internet-based
service, so customers are not required to download any additional software.
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CHAPETR No. 2
2.1 ORGANIZATIONAL STRUCTURE
MCB relies on strong, lasting relationship with its customers and on its reputation
for stability and security for its continued process. MCB extends its philosophy to its
technology strategy but not perusing technology for technology's sake. However,
MCB learns from the mistakes of others especially in "consumer banking". We let
others get in first, take the hit, and find out the flows. Said MCB officials - and has
installed efficient and effective system for processing and delivering information.
Some directors are the personnel of the MCB Bank and others are successful
business person and executives of other major organization. Nineteen members are
included in board of directors.
2.2 MAIN OFFICE DEPARTMENTS (HEAD OFFICE)
The head office is operationally in charge of central affairs including the delegation
of powers and authority to the regional head quarters throughout the country. All the
senior management team works in the Head office of MCB bank is situated in
Karachi. And it’s all branches, regional offices, corporate branches and overseas
branches and online branches and representative offices work according to rules and
regulation set by the head office.
Following are the departments that are working at head office:
 Administration
 Credit Management
 Investment Banking
 Human Resource
 Information Technology
 Corporate Planning & Budgeting
 Finance & Treasury
 International Division
 Inspection & Audit
 Law Division
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 Marketing & Development
 Trustee Division
Local Branch Network:
MCB Bank Limited has a vast network of 1026 branches within Pakistan. The
network of 1026 branches enables the Bank to generate a substantial and stable
deposit base, provide a wide range of banking products and other financial services
and diversify lending risks geographically, as well as on the basis of credit and
customer type. (Annexure-I attached)
BOARD OF DIRECTORS OF MCB:

An executive board comprises of 10 members in total Mr. Mian Muhammad Mansha
is the Chairman of the board while Mr. Atif Bajwa has been designated as the
President and the Chief Executive. The board supervises the affairs of the bank and
also provides future guideline for progress and prosperity.
Board of Directors
Mian Mohammad Mansha Chairman
S.M.Muneer Vice Chairman
Tariq Rafi Member
Shahzad Saleem Member
Sarmad Amin Member
Dr. Muhammad Yaqub Member
Mian Raza Mansha Member
Dato' Mohammad Hussein Member
Aftab Ahmad Khan Member
Atif Bajwa President / CEO
Audit Committee
Tariq Rafi Chairman

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Human resource Committee

Shahzad Saleemn Member
President Member
Risk Management & Portfolio Review Committee

Shahzad Saleem Chairman
Tariq Rafi Member
Sarmad Amin Member
Committee on Physical Planning, IT System & Contingency Arrangements

Sarmad Amin Chairman
S. M. Muneer Member
President Member
Business Strategy & Development Committee

S. M. Muneer Member
Shahzad Saleem Member
President Member
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Chief Financial Officer
Ali Munir
Auditor’s
Riaz Ahmed & Co
KPMG Taseer Hadi & Co
Principle Office
MCB 15 main Gulberg, Lahore
Registrar's and Share Registration Office

MCB 15 Main Gulberg, Lahore
M/s. THK Associates (Pvt.) Limited
State Life Building No.3,
Dr. Ziauddin Ahmed Road,
Karachi
2.3 ORGANIZATIONAL STRUCTURE OF MCB BRANCH AABPARA:
Mr. Abdul Basit is acting as a branch Manager in Aabpara Branch Islamabad.
Operational Manager Mr. Kaleem of the branch handled the 10 subordinates. This
team is also headed by Mr. Abdul Basit.For effective handling of branch; it has been
categorized into three segments with different people handling each category. These
categories are:
a) Foreign Trade Manager

b) Operations Manager
c) Credit Manager
A) FOREIGN TRADE MANAGER:

Foreign trade manager is to responsible for exports and imports of funds. He is to
responsible in front of branch Manager.
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B) OPERATIONAL MANAGER;
Operational Manager is to be responsible of :
 Accounts Department
 System
 Remittances
 Clearing
 General Services
C) CREDIT MANAGER:
Credit Manager is to look after all credit facilities like , Term Loans, Running
Finance facilities etc.
FIELDS OF ACTIVITIES OF MCB BRANCH AABPARA:
The purpose of banks is to provide some services to the general public. The main
functions and services which MCB Bank Limited Aabpara Branch provides to
different peoples are as follows.
1) Open Different accounts for different peoples

2) Accepting various types of deposits
3) Accepting various types of deposits
4) Granting loans & advances
5) Undertaking of agency services and also general utility functions, few of those are
as under:
a) Collecting cheques and bill of exchange for the customers.
b) Collecting interest due, dividend, pensions and other sum due to customers.
c) Transfer of money from place to place.
d) Acting an executor, trustee or attorney for the customers. ‘Providing safe custody
and facilities to keep jewellery, documents or securities.
e) Issuing of travelers cheques and letters of credit to give credit facilities to travel.
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f) Accepting bills of exchange on behalf of customers.
g) Purchasing shares for the customers.
h) Undertaking foreign exchange business.
i) Furnishing trade information and tendering advice to customers.
* Annexure III attached
2.4 DEPARTMENTS OF MCB BANK
Organizations cannot function without proper arrangements for its specific takes and
duties. “The process of grouping jobs according to some logical arrangements” is
called departmentalization. MCB Bank Ltd is divided into five departments.
Following are five types of the departments established in the said branch to
facilitate the customers.
 Deposits Department
 Remittances Department
 Clearing Department
 Advances Department
 Foreign Exchange Department
Deposits Department:
Deposit department is one of the most important and main department of the bank. It
performs the vital function in the bank because it deals with the supply of money to
the bank. Deposits are the inputs of a bank. Deposits department is just like a heat,
as it function other department also run, otherwise the whole system paralysis.
Each and every bank tries its best to increase their deposits. Deposits depict the
financial strength of a bank. Muslim Commercial Bank Limited is a unique and
crucial institution, which is able to increase credit in the country.
 Current account.
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 Saving account
 Fixed account
Remittances Department:
Remittance department performs the function of remitting funds i.e. to transfer funds
for customers from one location to another. The transfer of funds may be from one
branch to another or from one bank to another
Remittances mean “the transfer of money or fund from one place to another place
through bank”. It may be “inland remittance” or “Remittance”
 Within locality.
 Out side locality.
Within Locality:-
When a branch situated in Islamabad is required to send the draft to any other branch
situated in the same locality, the process will say to be within locality. I.e. MCB
corporate branch Islamabad, send any draft to MCB Aabpara branch, this is known
as within locality.
Pay Order
Pay order is used for payment within the cities; the main purpose of pay order is to
make payment in record this payment in the bank as evidence. Bank charge the
commission for its services. The purchaser fill an application form, which includes
the amount of payment or order, the name of the payee and complete address of
purchaser and payee application form is also singed by the purchaser.
Outside locality:-
Outside locality is an important type of inland remittances. Outside locality means

the transfer of money payable outside the city i.e. MCB corporate branch Islamabad,
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sent any draft to a branch situated in Peshawar city. It is commonly done through the
following three means.
(This report has been written on the experience and knowledge gained and applied
for the analysis of MCB Bank Branch Islamabad.)
 Telegraphic transfer.
 Demand draft
 Mail transfer
 Bank Draft
Telegraphic Transfer:
Telegraphic transfer is an important mode of remittance. It is the quickest mean of

transferring the funds from one place to another place by the use of telephone or
telegraphic.
Now a day, new technology is used for this purpose i.e. fax, e-mail. The big traders
and businessman use this method of remittance in this method of remittance the
purchaser is not responsible for the dispatch.
Demand Draft & Pay Order:
For safe, speedy, and reliable way to transfer money, Muslim commercial bank
Demand Drafts and pay orders are available for customers at very reasonable rates.
Any person whether an account holder of the bank or not, can purchase a Demand
Draft from a bank branch. A demand draft is an order drawn by a bank on its branch
or on another bank in a different place requiring the later to pay on demand the sum
of money specified in the draft. Pay order is just like demand draft except the pay
order is made for local transfer of money whereas demand draft is meant for
remittances of funds from one city y to another.
Mail Transfer:
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Mail transfer draft is one of the bank modes of remittance. Mail transfer is issued by
one branch of bank to another branch of the same bank by instructing to branch to
pay the other branch by issuing mail transfer receipts.
In M.T the purchaser is not responsible for dispatch, but the bank will be responsible
for dispatch.
Bank Draft:
Bank draft is the most important type of remittance. Draft is an instrument issued by
a bank. Draft is issued by one branch to another branch out of the city. The
difference branches of same bank can issue the bank draft to each other and it is also
called the banker cheques i.e. the main branch of MCB in Islamabad issued the draft
to the MCB Peshawar.
CLEARING DEPARTMENT:
It is an association of banks; usually setup in a given locality for the purpose of

inter-changing credit claims. Nearly, everywhere this function is performed the
Central Bank of country. In Pakistan, the areas where there is no Central Bank
branch the function of clearing house is performed by NBP.
In undertaking the process of interchanging credit the following procedure is adopt

in banking business, when a creditor ask for same payment, it is always the Cheque
through which the payment is asked for, but there arise two situation when the payee
asks for payment through Cheque. The payee may be account holder in the same
bank.
When the payee is an account holder in the same bank, then the Cheque is directly
transferred from one A/c to other, and the total assets and liabilities of the bank
remain the same. But in practice, it is often that the payee has A/c in some other
bank. Then in such cases the payee deposits Cheque in his bank drawn on some
other bank. The bank with which the Cheque is deposited becomes the creditor of
the drawer’s bank. The debtor bank will pay this amount of the Cheque by
transferring it from cash reserves if there is no offsetting transaction.
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The clearance house is the branch of Central Bank of Pakistan or NBP in case of
area where no Central Bank Branch is available. The messengers of the various
commercial banks gathered at the clearance house and transferring Cheque payable
by other banks while collecting drawn on their banks. A summary sheet is prepared
describing the number of Cheques received and delivered by a bank at the clearance
house. Total of these in and out Cheques are collected. Then the difference with a
given bank is paid or received from the account maintained at the Central Bank.
Normally, the banks maintain two books for clearing house.
 Inward clearing book

 Outward clearing book
FINANCES / ADVANCES DEPARTMENT:
Besides deposits the other major function of the bank is to advance money to the
client. This function of the bank contributes great deal to the revenues of the bank.
Due to its importance for the banker’s success, this area is given special importance
and attention.
The primary purpose of this department is to encourage small business to take loans
and help them in their business. The bank earns from the advancement of loan to the
people or organization and charges a certain percentage of interest on it and bank
earns profits. Besides deposits the other major function of the bank is to advance
money to the client. This function of the bank contributes great deal to the revenues
of the bank. Due to its importance for the banker’s success, this area is given special
importance and attention.
The bank also makes advances to small size businesses and construction companies
etc. Many MCB branches are having department for granting advances to the
borrowers.
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By Cash Credit:
Through this credit facility, the bankers advances loan to the borrower after having
tangible asset as a security. Main characteristics of this facility is that the total
amount is not given to the borrower at one rather it is given in installments, or
whenever required. The borrower has to pay the interest only on the amount
outstanding against him. This credit facility is very liked by large commercial and
industrial enterprises.
The cash credit facility is given through hypothecation or pledging of goods. Some
requirements in hypothecation:
 Custody of stock remains with the borrower.

 Banks lien on the stock.
 Stock hypothecated must be insured against ire etc.
 Customer must submit the stock report on monthly basis.
 Frequent stock verification to be done by MCB.
 Bank may sent officers or staff in order to supervise verification.
 Some characteristics of pledging assets against loan.
 Stocks are pledged with the bank under banks lock and key.
 Stock must be duly insured against fire and burglary.
 On monthly basis stock report has to be prepared by the borrower duly
incorporating delivery of goods, if any during the months.
 Delivery of Goods / stock is made against cash payments.
By Discounting Bills Of Exchange:
This credit is a very advanced form of advancing money / credit to the borrower. It
is also termed as factoring. In this facility the bank purchases the bills of exchange
from the borrower. The bank gives face value of the bill to the borrower after
deducting interest on the remaining period required for the bill to mature.
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FOREIGN EXCHANGE DEPARTMENT:
For international Business Transaction the banks utilize the services of its foreign
exchange department. This plays very crucial and important role in International
trade. The services which Foreign Exchange Department of the bank offer is the
parallel banking with general banking, an additional function of important and
export business controlled by State bank of Pakistan.
After the closing down of the London operations prior to privatization, MCB was
left with no foreign branches and operations. In 1994 as planned the bank opened up
its international operations by inaugurating its branches in Dhakha and Colombo.
More branches are operating in Pettah, Srilanka and Chittagang. Access to Middle
East and Africa is in progress.
In MCB its Foreign Exchange Department as per State Bank of Pakistan regulations
carries out the Intentional Banking. The State Bank of Pakistan exercise full control
over the Foreign Exchange Business. No transaction can be considered effective
without permission from the State Bank of Pakistan under Foreign Control Act,
1947. Foreign Exchange Regulations are issued through the Exchange control
Department of the State Bank of Pakistan.
Any transaction in the International Banking shall be carried out at rates determined
by the State Bank of Pakistan. For this purpose the State Bank of Pakistan fix the
rate of US dollar. This is done by formula approved by State Bank of Pakistan and
was published daily by Foreign Exchange Rate Committee in Karachi Head Offices.
It also makes sure that the rates approved are conveyed to the branches on the same
day.
25
2.5 STRUCTURE AND FUNCTION OF THE ACCOUNTS
DEPARTMENT:
* Annexure IV attached “Hierarchy of Accounts Department” .
Accounts department is responsible to keep the record of each and every transaction
and prepare reports about the amount of deposits and advances and sent to Head
office or State Bank of Pakistan on monthly, quarterly and yearly basis.
Functions of Accounts Department of MCB Branch :
The accounts department of MCB Branch Aabpara deals with various routine
activities for the bank. The main activities performed by it are:-
a) Budgeting
b) Reporting
c) Maintenance & depreciation of fixed assets
d) Miscellaneous functions
Budgeting
Accounts department of a MCB Branch Aabpara, for a year makes budget of

branch. Fiscal year of bank starts from January 01 and ends on December 31. The
accounts department starts preparing budget from October for the next year.
Reporting:
The accounts department, in the form of reports, clubs the details of various
departments together. Each and every minute detail is provided in weekly, monthly
and annual reports. The reports are submitted to head office, SBP and to the
government. The accounts department prepares many reports, of which the most
common are:-
26
 Statement Of Affairs
 Income & Expenditure
 Business Report
 SBP Report
 Outstand Receipt Report
 Currency Wise Deposits Report
Maintaining of Fixed Assets & their Depreciation:
Accounts department maintains the record of all the assets and charges depreciation
on them. The bank normally uses the straight-line method to compute the
depreciation.
It is calculated on monthly basis and charged yearly. Bank not only depreciates the
existing assets but also the assets but also the assets transferred in and transferred
out.
Miscellaneous Functions:
The accounts department also performs some other miscellaneous functions like
 Closing Entries
 Daily activity checking
 Report Generation
 Minor expense recording
Closing Entries:-
Accounts department also passes the closing entries on monthly, 6 monthly and
yearly bases to calculate the profit and analyze the overall performance for a certain
period.
27
ii. Daily Activity Checking:-
All the operations performed in various departments of MCB Bank Aabpara Branch
Islamabad are computerized. The functions are performed through the customized
software. In order to facilitate double-checking of all the transactions done, every
concerned official also passes vouchers and cheques manually. At the day end all the
vouchers passed by various officers working in different departments are given to
Accounts Department. Furthermore the I.T. department also prints a very bulky
report of all the transactions / entries which have been fed into the computer system
of the branch that day. When both of these things are at the desk of concerned
officer, he performs the job of tallying the daily activity report with all the
corresponding vouchers and cheques, in order to track down any discrepancy.
iii. Report Generation:-
The reports generated by the accounts department on a daily, weekly, monthly, bi-
yearly and yearly are written in a proper format. It is neither necessary nor possible
to get acquainted by all of these reports in a short period of time. Some of the
common reports are:-
 Daily Advance and Deposit Position:-

 Daily Exchange Position
 Daily Fund Management
 Closing Reports
 Monthly Assets & Liabilities
 Monthly Budget Review Report
 Monthly Monitory Statement
 Monthly Performance Review Report
 Monthly fixed investment
28
From these statements, five reports carry extreme importance. The five reports are:-
 Daily position of advances and deposits

 Statement of affairs
 Daily exchange position report
 Fixed assets statement
 Monthly review of performance.
Minor Expense Recording:-
The account department of MCB Bank Aabpara Branch has to record even the minor
expenses of the branch like tea for the staff, stationery for the branch.
29
C HA P T E R N O . 3
3.1 FINANCE AND ACCOUNTING OPERATIONS
General Banking:
It is backbone of banking. It is one of the major departments of MCB. It consists of

following departments:
 Accounts Department
 Current Department
 Remittance Department
 Clearing Department
 Cash Department
Accounts Department:
Every transaction which takes place recorded in the computer so all transactions in
different departments are forwarded to account department. Since all vouchers from
different departments are forwarded to current department. Following are different
functions performed by this department:
 Preparation of Financial Statements for different time span

 Maintain all accounts of different departments
 Calculation of profit on different schemes
 Calculation of markup on different advances
 Preparation Different types of reports for State Bank
 Daily position of cash & every accounts
 Matching daily summaries of all departments with ledger
30
Current Department:
This department maintains all formalities of the accounts and account holders like it
account name, account holder’s name, code number and full address. Different
cheques debit and credit voucher come form different departments like Token,
Clearing, Remittances, Cash, Foreign Exchange, Advances and posted against
different accounts. The fund deposited in the MCB bank can be classified under the
main heads:
 Current account
 Saving account
 Term /call deposits
Account Opening:
To open an account the customer have to meet the general banking manager with an
introducer (the person who is going go introduce that person in the bank) and get an
application form used for account opening. Different color-coded application forms
are available for each type of account. Along with the form a card for specimen
signature is also supplied to customer.
Accounts Types :
Though in theory there many types of accounts but commonly account operators can
be classified in one of the following categories, each have different documentation
requirements:
 Single
 Joint
 Partnership
 Private Limited
 Public Limited
31
Current Accounts:
Current deposits are those which are payable to bank whenever demanded by the
customer. Bank does not pay any profit on current deposits. There are of different
scheme of saving deposits, which are classified under different duration purpose and
rate of interest. Fixed deposits are those deposits which are by the bank under the
conditions that they will not be payable on demand but will be payable under fixed
or determinable future time date.
Activities Of The Organization Remittances:
The need of remittance is commonly felt in commercial life particularly and in every
day life general. By providing fund transfer service to the customer the bank earns a
lot of income in the form of service charges. This department deals with local
currency remittance i.e. remittance from one city to another without actually
carrying the currency.
Inland Remittances:
The term inland remittance means transfer of funds from one branch to another
within country through following instruments:
 (TTs) or-Demand Draft (DDs) or

 Telegraph/Telex Transfers
 Mail Transfer (MTs).
 Pay Order (PO)
Cash Department:
In cash department both deposits and withdrawals go side by side. This department
works under the accounts department and deals with cash deposits and payments.
This department maintains the following sheets, books, ledger of account:
32
 Cash received voucher sheet.
 Cash paid voucher sheet.
 Paying-in-slip
 Cheque Book
 Cash balance book
Cash department is performing its job completely through computers. Only two
peoples are working in cash department named Mr. Raheem OG-III and Basit Aftab.
The only instrument that can be used to withdraw an amount from an account is the
Cheque book. Cashier manually inspects the Cheque for following:
 Signature & date
 Cross cutting
 Drawee's a/c title
 Amounts in words & figures
 Two signatures at the back
The cheques should not be stated as post dated. If in the Cheque there May
discrepancy regarding any of the aspects described above the Cheque is returned to
the customer for rectification. On other hand if the Cheque is valid in all respects,
the cashier enters the necessary inputs in the computer and posts the entry so that
account balance is updated.
The cashier at the same time maintains the “Cash Voucher Received Record Sheet".
Then inspect the signature of the customer cancellation mark of checking officer and
stamp of “POSTED” is placed on Cheque before hand over the cash to customer.
Cash Received:
For depositing the cash into customer’s accounts, there is need to fill in the paying-
in-slip giving the related details of the transaction. This paying-in-slip contains the
date, a/c/no, a/c title, particulars, amount being deposited and details of the cash.
There are two portion of the paying-in-slip. The depositor signs the one part of the
paying-in-slip one is retained by the bank to show an acceptance of the entries made
33
in the slip. The paying-in-slip serves as a voucher to update to computerized
transaction ledger.
The cashier is responsible to receive both the paying-in-slip and cash from the
depositor. The cashier checks the necessary details provided in the paying-in-slip
and counts the cash before he/she tallies with the amount declared in the slip. If the
amount does not tally with the cash given, the deposit is not entertained until the
customer removes the discrepancy. On the other hand if the two amounts tally, the
cashier fills in the “Cash voucher received Record Sheet” and assigns a voucher no.
Accountant verifies all the entries in the two documents, if the entry in the two
documents tally with one another, the accountant authenticates the two by singing on
the two documents and posting stamps on the slip. One part of the slip is then
returned to the customer and other is given to the computer operator.
The 2 nd cashier posts the transaction entries in computer ledger. This ledger contains
the a/c no, a/c title, voucher no, voucher date, transaction code, transaction amount.
After posting these entries, computer display before posting balance and after
posting. On every transaction computer generates an output of transaction ledger. He
assigns the stamp “POSTED” on the voucher to show voucher transaction entries are
posted.
Cash Book Balance:
At the end of the working day cashier is responsible to maintain the cash balance
book. The cash book contain the date, opening balance, detail of cash payment and
received in figures, closing balance, denomination of government notes (Currency).
It s checked by manager. The consolidated figure of receipt and payment of cash is
entered in the cash book and the closing balance of cash is drawn from that i.e.
Opening Balance of Cash + Receipts - Payments = Balance
The closing balance of today will be the opening balance of tomorrow.
34
Clearing Department:
All the external functions of clearing are carried by NIFT (National Institute of
Facilitation Technology) while the internal operations are performed by clearing
department which would be discuss later. NIFT is providing tremendous facilitation
having error rate of 0.3%. It is just like any courier service which takes the cheques
of other banks and delivers the cheques of that branch to it.
Each bank has collected cheques as behalf of their customer but these cheques are
not drawn on their own bank so in the clearinghouse, they hand over these cheques
to respective banks on which these cheques are drawn. Similarly each bank receives
cheques from other banks if any.
The operation of clearing refers to the collection of cheques drawn on other banks.
These cheques may be drawn on UBL, HBL, NBP, or any other bank of Pakistan.
The respective clerk collects all cheques and enters them in clearing Register. Then
he affixes stamps on these cheques and sorts out cheques of different banks and
prepares schedule for them. These cheques are sent to clearing house. State Bank of
Pakistan has extended the service of Clearing House. MCB will receive all the
cheques drawn by other banks. Finally they exchange their cheques mutuality. MCB
representative will give cheques of UBL, HBL, ABL, NBP, and SBP to their
representatives, and get the cheques drawn on MCB from these representatives.
Outward Clearing:
Clearing cheques received during the day are meant to be presented for clearance in
the next days clearing. Clearing cheques must bear clearing stamp. Necessary
endorsement must be completed such as payee’s account credited etc. All the
cheques must be sorted out as of the same city and of the other cities.
Schedules showing the total number of instruments and amount must be mentioned.
Voucher and voucher sheets and retained one copy of schedules will be kept by the
accountant for overnight. The copy of the schedules retained must be preserved for a
period of 3 moths and then destroyed.
35
3.2 ROLE OF THE FINANCIAL MANAGER
Financial manager is concerned with acquisition financing and management of

assets with some overall goals in mind
The financial manager of MCB bank limited like all other financial manager has
responsibility to make decision about three major areas.
 Investment decision
 Financing decision
 Asset management decision
Investment decision:
The investment decision is the most important decision of the bank s three major
decisions. Ali Munir Chief financial officer of Muslim commercial bank limited
begins with determination of total amount of assets needed to be held by the bank. In
2007 total assets are 410,485,517,000 and the amount, which is invested in different
areas, is 113,089,261,000.
Financing:
The second major decision of any organization is financing decision. Financial

manager of MCB view dividend policy as an integral part of bank s financing
decision. Dividend payout ratio determines the amount of earning that can be
retained in the firm. Retained a greater amount of the current earnings in the firm
means that the fewer dollars will be available for current dividends payments. The
value of dividends paid to the shareholder must therefore be balanced against the
opportunity cost of retained earnings cost as means of equity financing. Financial
manager know the mechanics of short-term loans, entering into the long-term
arrangement or negotiating a sale of bond or stock.
36
Asset management decision:
The third important decision of any organization is assets management decision.

Once the assets have been acquired and appropriate financing provided these assets
must still be managed efficiently. The financial manager is charged with varying
degrees of operating responsibility requires that the financial manager be more
concerned with management of current assets then with that of fixed assets. A large
share of responsibilities for management of fixed assets would reside with operating
manager who employs these assets.
37
3.3 USE OF ELECTRONIC DATA IN DECISION-MAKING
Making crucial, timely, strategic decisions is a must to stay a head in today’s

competitive environment. Work continues on the banks date warehouse, which is
being equipped for providing the management with accurate, up to date information
enabling them to make timely and prudent decisions.
The bank remains focused on using technology for improving customer services
standard and expanding the range of products being offered and other technology
based solutions.
Banks strength in the area of information technology based services has always been
an edge in the competition and has been a source of considerable strength in the
expansion and the management of the customer base of the bank.tecnology support
provides an alternate service delivery channels higher customer satisfaction levels.
During 2004 various technology initiatives were successfully implemented. The 07
branches were open during the year. Most of branches were operational with on line
banking from day one of their respective operations. After the soft opening during
2004, MCB customer care center – e dedicated customer call center, was formally
inaugurated during 2004. Its primary objective is to provide one window service to
our valued customer in terms of their telephonic enquiries.
During 2005 MCB achieved a successful launch of mobile ATM solutions for banks
valued customers. Using wireless GPRS technology, these ATM on wheels can be
placed at strategic locations at peak times to server the customer needs.
38
3.4 SOURCES OF FUNDS
Deposits and Other Accounts
2003 2004 2005 2006 2007
(Rupees '000)
Customers
Fixed deposits 21,451,676 14,081,390 13,296,121 33,297,203 32,202,230
Saving deposits 127,413,624 133,538,585 137,067,311 136,872,384 151,555,718
Current accounts_non 58,583,576 69,722,193 74,331,042 81,658,304 95,966,877
remunerative
Marginal accounts 2,351,820 2,011,324 2,568,306 2,447,944 2,589,309
Others 75,439 121,994 41,396 4,336 4,288
209,876,135 219,475,486 227,304,176 254,280,171 282,318,422
Financial institutions
Remunerative 1,634,167 442,983 183,338 249,506 9,233,602
deposits
Non-remunerative 1,091 1,150,689 1,857,664 2,932,161 546,042
deposits
1,635,258 1,593,672 2,041,002 3,181,667 9,779,644
Total 211,511,393 221,069,158 229,345,178 257,461,838 292,098,066
Particulars of deposits
In local currency 200,435,978 209,328,090 217,017,086 213,494,049 278,068,722
In foreign currency 11,075,415 11,741,068 12,328,092 13,967,789 14,029,344
Total 211,511,393 221,069,158 229,345,178 227,461,838 292,098,066
Bills Payable
Bills payable 2003 2004 2005 2006 2007
In Pakistan 8,384,794 7,560,165 8,510,322 7,075,421 10,447,928
Outside Pakistan 11,526 6,519 26,352 14,258 31,130
8,396,320 7,566,684 8,536,674 7,089,679 10,479,058
Borrowings from financial Institutions
In Pakistan (local currency) 32,294,560 6,095,476 24,693,569 20,304,629 35,497,881
Outside Pakistan (foreign
333,391 1,495,388 2,683,933 3,638,847 3,908,950
currency)
32,627,951 7,590,864 27,377,502 23,943,476 39,406,831
Particulars of borrowings from financial institutions
Secured
Borrowing from State Bank of
3,639,631 4,493,473 4,980,519 9,040,700 8,066,539
Pakistan
Others - 1,782,900 1,970,562 2,932,817 2,932,600
3,639,631 6,276,373 6,951,081 11,973,517 10,999,139
Repurchase agreement
27,463,192 498,901 19,473,049 11,263,929 26,931,342
borrowings
Unsecured
Agent balances 327,690 685,202 494,007 - -
Others 591,737 617,027 976,350
Call borrowings 605,701 130,388 459,365 89,003 500,000
1,525,128 815,590 953,372 706,030 1,476,350
32,627,951 7,590,864 27,377,502 23,943,476 39,406,831
*Reference: Data obtained from Annual statements of MCB and www.mcb.com.pk.
39
3.5 GENERATION OF FUND
2003 2004 2005 2006 2007

(Rupees '000)
Markup/return/ interest
earned
On loan and advances to:
- Customers 4,599,015 4,927,838 12,086,305 19,144,743 21,952,387
- Financial Institutions 268,566 185,386 284,972 86,455 141,613
On Investments in: 4,867,581 5,113,224 12,371,277 19,231,198 22,094,000
- Available for sale securities 4,420,162 3,162,828 4,337,124 3,911,514 7,519,820
- Held to maturity securities 714,494 543,167 643,328 1,025,963 856,023
5,134,656 3,705,995 4,980,452 4,937,477 8,375,843
On deposits with financial
- - - 82,445 133,972
institutions
On securities purchased under
298,502 190,172 261,478 689,962 548,202
resale agreement
On money at call - - - 589,536 291,940
Others 69,255 74,472 143,025 247,443 342,638
10,369,994 9,083,863 17,756,232 25,778,061 31,786,595
Gain on sale of seurities
Federal Government Securities

- Market treasury bills - - 686 686 1,228
- Pakistan investment bonds - - 54,670 6,089 2,709
- Other Federal govt.
- - 811,539 2,350 -
securities
Shares/ certificates/ units
- Listed - - - 560,381 1,496,928
- Unlisted - - - 36,009 -
Term finance certificates - - - 350 -
2,041,260 804,419 866,895 605,865 1,500,865
Other Income
Rent on property/ lockers 40,511 41,751 42,886 53,435 51,999
Net profit on sale of property
41,914 39,324 - 24,903 13,032
and eqpt
Gain on sale of non-banking
- - 24,664
assets
Exchange income on import/
52,879 65,341 55,477 60,732 64,161
export bills purchased
Liability no longer required
- - -
written back
Bad debts recovered 667,454 60,053 54,906 51,872 28,135
Compensation for delayed
- - 495,234 44,802 -
income tax refunds
Others 540,841 369,538 411,409 334,761 405,886
1,343,599 576,007 1,084,576 570,505 563,213
40
3.6 ALLOCATION Of FUNDS
Deposits and Other Accounts

2003 2004 2005 2006 2007
(Rupees '000)
Customers
Fixed deposits 21,451,676 14,081,390 13,296,121 33,297,203 32,202,230
Saving deposits 127,413,624 133,538,585 137,067,311 136,872,384 151,555,718
Current accounts_non 58,583,576 69,722,193 74,331,042 81,658,304 95,966,877
remunerative
2,351,820 2,011,324 2,568,306 2,447,944 2,589,309
Marginal accounts
Others 75,439 121,994 41,396 4,336 4,288
209,876,135 219,475,486 227,304,176 254,280,171 282,318,422
Financial institutions
Remunerative 1,634,167 442,983 183,338 249,506 9,233,602
deposits
Non-remunerative 1,091 1,150,689 1,857,664 2,932,161 546,042
deposits
1,635,258 1,593,672 2,041,002 3,181,667 9,779,644
Total 211,511,393 221,069,158 229,345,178 257,461,838 292,098,066

Particulars of deposits
In local currency 200,435,978 209,328,090 217,017,086 213,494,049 278,068,722
In foreign currency 11,075,415 11,741,068 12,328,092 13,967,789 14,029,344
Total 211,511,393 221,069,158 229,345,178 227,461,838 292,098,066
Assets
2003 2004 2005 2006 2007

(Rupees '000)
Assets
Cash and balances with
24,053,669 23,833,253 23,665,549 32,465,976 39,683,883
treasury banks
Balances with other
1,302,592 5,708,323 1,469,333 6,577,017 3,807,519
banks
Lending to financial
10,430,450 10,965,297 9,998,828 21,081,800 1,051,372
instutions
Investments 128,276,842 67,194,971 69,481,487 63,486,316 113,089,261
Advances 97,200,179 137,317,773 180,322,753 198,239,155 218,960,598
Operating fixed assets 4,582,823 7,999,821 8,182,454 9,054,156 16,024,123
Deffered tax assets - - 191,967 172,373 -
Other assets 6,477,064 6,154,370 5,464,426 11,031,450 17,868,761
272,323,619 259,173,808 298,776,797 342,108,243 410,485,517
*Reference:
Data obtained from Annual statements of MCB and www.mcb.com.pk.
41
Investments
2003 2004 2005 2006 2007

(Rupees '000)
Held-for-trading securities
Shares in listed companies - - 66,056 - 230,752
Available-for-sale-securities
Market treasury bills 87,819,612 3,186,553 24,429,260 36,872,804 85,264,988
Federal Investment bonds 1,251,444 - - - -
Pakistan investment bonds 24,155,518 4,721,435 2,039,818 1,352,350 2,726,418
Federal Government securities - - - - -
Shares in listed companies 3,415,532 3,833,352 5,034,777 5,810,827 7,388,550
Units in open ended mutual funds - - - 118,595 1,662,063
Shares in unlisted companies 491,124 461,100 443,369 537,012 515,333
NIT units 453,938 9,557 83 5,253 5,253
Sukuk Bonds - - - - 400,000
Listed term finance certificates 748,455 608,862 1,173,320 1,450,659 1,136,821
118,335,623 12,820,859 33,120,627 46,147,500 99,099,426
Held-to-maturity securities
Market treasury bills - 39,388,049 22,570,514 - 216,881
Federal Investment bonds - 480,500 - - -
Pakistan investment bonds - 2,532,406 2,467,983 2,439,089 2,377,654
Federal Government securities 1,429,852 1,097,199 992,861 825,719 704,928
Provincial govt. securities 15,118 118 118 118 118
Government compensation bonds 870,771 870,771 870,771 870,771 870,771
Sukuk Bonds - - 759,767 1,573,478 1,785,475
Euro bonds 605,606 3,286,190 2,971,758 3,019,135 3,299,630
TFCs, debentures, bonds and
3,314,467 3,580,526 1,876,119 2,387,836 1,346,566
PTCs
Certificate of investment - 1,100,000 1,500,000 3,550,000 500,000
6,235,814 52,335,759 34,009,891 14,666,146 11,102,023
Subsidiaries
MNET Services (Pvt) Ltd 49,975 49,975 49,975 49,975 49,975
MCB Trade service Ltd - - 77 77 77
MCB asset Management Co. - - - 299,980 299,980
Muslim commercial financial
7,500 7,500 7,500 7,500 27,500
services (Pvt) Ltd
57,475 57,475 57,552 357,532 377,532
Associates
Adamjee Insurance Company
943,600 943,600 943,600 943,600 943,600
Limited
First Women bank limited 63,300 63,300 63,300 63,300 63,300
1,006,900 1,006,900 1,006,900 1,006,900 1,006,900
Investment at cost 125,635,812 66,220,993 68,194,970 62,178,078 111,816,633
Less: Provision for diminution in (868,852) (695,976) (547,424) (363,019) (468,288)
the value of investment
3,509,882 1,669,954 1,767,885 1,671,257 1,740,916
Add: Surplus/ deficit on revaluation
Investment at revalued amounts 128,276,842 67,194,971 69,481,487 63,486,316 113,089,261
*Reference: Data obtained from Annual statements of MCB and www.mcb.com.pk.
42
CHAPTER NO. 4
4.1 CRITICAL ANALYSIS OF MCB BANK IN THE LIGHT OF

PRACTICAL EXPERIENCE
Internship gives me the exposure to the world by meeting and dealing with the
different kind of people every day, which has given boost to my confidence and
experience. So first of you enter in to any organization for Internship/or for job most
important thing is your communication skill. So which thing helped me and boosts
my confidence was communication skill. As we have studied in our course about the
communication skills and presentations during MBA gave me the confidence to
speak with the employees and customers and communicate effectively and
efficiently with the customers.
Similarly as in marketing we told about the importance of the customer I observed it

in my internship. In my observation I have seen how the Manager and other
employees deal the customers. And as a student it was best opportunity for us to
study the behavior of the employees inside the organization, their dealing with the
customers and relationship between them and employees as all these things we only
studied in the Organization Behavior and Human Resource Management. We can
say that internship is basically the practical implementation of the entire theoretical
course which we have studied during our course of MBA.
43
4.2 FINANCIAL ANALYSIS:
BALANCE SHEET
Financial Statement
Muslim Commercial Bank Limited
Balance Sheet
As on 31st December
2003 2004 2005 2006 2007
(Rupees '000)
Assets
Cash and balances
24,053,669 23,833,253 23,665,549 32,465,976 39,683,883
with treasury banks
Balances with other
1,302,592 5,708,323 1,469,333 6,577,017 3,807,519
banks
10,430,450 10,965,297 9,998,828 21,081,800 1,051,372
intuitions
Investments 128,276,842 67,194,971 69,481,487 63,486,316 113,089,261
Advances 97,200,179 137,317,773 180,322,753 198,239,155 218,960,598
Operating fixed assets 4,582,823 7,999,821 8,182,454 9,054,156 16,024,123
Deferred tax assets - - 191,967 172,373 -
Other assets 6,477,064 6,154,370 5,464,426 11,031,450 17,868,761
272,323,619 259,173,808 298,776,797 342,108,243 410,485,517
Liabilities
Bills payable 8,396,320 7,566,684 8,536,674 7,089,679 10,479,058
Borrowings 32,627,951 7,590,864 27,377,502 23,943,476 39,406,831
Deposits and Other
211,511,393 221,069,158 229,345,178 257,461,838 292,098,066
accounts
Sub-ordinated loans 1,599,360 1,598,720 1,598,080 1,597,440 479,232
Liabilities against assets
- - - - -
subject to finance lease
Deffered tax
707,306 269,499 - - 1,180,162
liabilities
Other liabilities 6,372,596 6,525,999 8,611,600 11,171,496 11,722,493
261,214,926 244,620,924 275,469,034 301,263,929 355,365,842
Net assets 11,108,693 14,552,884 23,307,763 40,844,314 55,119,675

Represented by:
Share capital 3,065,273 3,371,800 4,265,327 5,463,276 6,282,768
Reserves 4,379,255 5,661,553 13,408,005 24,662,426 34,000,638
Unappropriateed
281,636 165,208 210,662 5,530,973 5,130,750
profit
7,726,164 9,198,561 17,883,994 35,656,675 45,414,156
Surplus on
3,382,529 5,354,323 5,423,769 5,187,639 9,705,519
revaluation of assets
11,108,693 14,552,884 23,307,763 40,844,314 55,119,675
*Reference:
Data obtained from Annual statements of MCB on MCB website.
44
PROFIT AND LOSS
Financial Statement
Profit and Loss Account
As on 31st December
2003 2004 2005 2006 2007
(Rupees '000)
Markup/ return/ interest earned 10,369,994 9,083,863 17,756,232 25,778,061 31,786,595
Mark up/ return/ interest expense 2,932,693 2,057,640 2,781,468 4,525,359 7,865,533
Net mark up/ interest income 7,437,301 7,026,223 14,974,764 21,252,702 23,921,062
- Provision for dimininution in
(150,000) (172,876) (98,982) 121,197 105,269
the value of investment
- Provision against loans and
705,787 442,595 1,242,153 1,014,540 2,959,583
advances
- Provision for potential lease
862 1,200 - - -
losses
- Bad debts written off directly 224,432 8,771 1,184 47,000 199
781,081 279,690 1,144,355 1,182,737 3,065,051
Net mark up/interest income after
6,656,220 6,746,533 13,830,409 20,069,965 20,856,011
provisions
Non mark up/interest income
Fee, commission and brokerage
1,042,437 1,992,356 2,448,950 2,311,235 2,634,610
income
Dividend income 372,821 378,908 480,344 811,801 632,300
Income from dealing in foreign
331,694 492,738 531,455 692,010 693,408
currencies
Gain on investment 2,041,260 804,419 866,895 605,865 1,500,865
Unrealized gain/ loss on
- (11,440) 851 - (13,105)
revaluation of investment
Other income 743,599 576,007 1,084,576 570,505 563,213
Total non mark up interest
4,531,811 4,232,988 5,413,071 4,991,416 6,011,291
income
11,188,031 10,979,521 19,243,480 25,061,381 26,867,302
Non mark up/interest expense
- Administrative expenses 6,587,369 7,244,200 6,459,490 6,482,592 5,022,416
- Restructuring expenses 878,704 - - - -
- Other proposition/write off 50,000 149,593 (72,740) 11,411 (3,743)
-Other charges 59,034 41,864 178,841 66,708 540,594
Total non mark up/ interest
7,575,107 7,435,657 6,565,591 6,560,711 5,559,267
expense
Extra ordinary/unusual items - 513,852 340,598 - -
Profit before taxation 3,612,924 4,057,716 13,018,487 18,500,670 21,308,035
Taxation-Current year 1,212,579 1,555,764 4,611,359 5,701,443 6,442,356

-Prior years - - (149,763) 593,497 (1,294,473)
-Defferd 170,200 70,420 (365,524) 63,332 894,590
1,382,779 1,626,184 4,096,072 6,358,272 6,042,473
Profit after taxation 2,230,145 2,431,532 8,922,415 12,142,398 15,265,562
Unappropriate profit brought
621,985 195,966 165,208 4,990,260 5,530,973
forward
Transfer from surplus on
25,012 25,839 83,749 32,166 11,855
revaluation of fixed assets
646,997 221,805 248,957 5,022,426 5,542,828
Profit available for
2,877,142 2,653,337 9,171,372 17,164,824 20,808,390
appropriation
Basic/diluted earning per share 7.28 7.21 21.36 23.40 24.30
45
RATIOS ANALYSIS:
Liquidity Ratios
Liquidity ratios measure the short-term solvency of a firm. Liquidity ratios present
the picture of the ability of the firm to pay its short-term obligations. The ratio holds
different meaning for creditors and owners of the firm. For owner, high liquidity
means inefficiency of the management and vice versa, while high liquidity of the
firm is considered favorable by the creditors as they see it as that the firm can pay
their obligations and vice versa. Following are most common type of liquidity ratios
used by analysts to determine the liquidity of the firm.
1. Current Ratio:
The current ratio measures the number of items of the firm s current assets cover its
current liabilities.
The current ratio should be part of your business' basic financial planning, meaning
it should be tracked monthly or quarterly. By keeping a close eye on this figure, you
will recognize if it begins to get out of line. This will allow you to take early action
to prevent your business from ending up in a difficult position.
Current assets divided by current liabilities
Current ratio=current asset/ current liabilities
2003
Current asset 261,263,732
Current liabilities 254,135,024
Current ratio 102.81%
2004
46
2005
2006
2007
Current Ratio
Years 2003 2004 2005 2006 2007
Percentage 102.81% 103.02% 106.80% 111.00% 110.00%
Chart of current ratios:
115
110
105
100
95
2003 2004 2005 2006 2007
47
Analysis of current ratios of MCB:
Current ratio shows a firm’s ability to cover its current liabilities with its current
assets. It is obtained by dividing current assets of the firm by its current liabilities.
Current ratio of 1 or higher means that the firm can pay all its current liabilities from
its current assets, while a value less than 1 means that the firm will be unable to pay
its current liabilities completely by its current assets. A lower value means
aggressive approach of the management toward business, but has opposite meaning
for creditors, who don’t like aggressive approaches of the management.
In MCB bank limited 2006s current ratio is strong than other four years. It shows
that this year’s liabilities could be recovered with its assets. After 2006, a bank has
maintained good current ratio in 2007 but 2003 and 2004 has weak current ratio
because the difference between assets and liabilities decreased in these years.
Current ratio does not show the true picture of the organization. Sometimes it shows
that organization has ability to pay its obligations but its profitability ratio tells that
it has not ability to pay its obligation. But still it is very useful for the analysts
especially for the creditors.
2. Quick ratios:
Quick ratio shows a firm’s ability to meets it current liabilities with its current assets
excluding inventories and prepaid expenses, which are least liquid portion of the
current assets. Since banks don’t have any sorts of inventories, therefore only
prepaid expenses are subtracted from the current assets of the bank.
This is an important planning tool, especially for businesses that can tie up a lot of
assets in inventory. By tracking it monthly, management can keep an eye out for
negative trends that could hamper their business' ability to meet its obligations.
Quick ration can also use to evaluate the financial health of potential customers,
since it also indicates whether a business can pay off its debts quickly. A firm with a
low quick ratio may be more likely to delay payments because its assets are tied up
elsewhere.
Current assets - inventories divided by current liabilities
48
Quick ratio= current assets-inventories/current liabilities
2003
Current assets 261,263732
Inventories 128,276,842
Quick ratios 52.33
2004
Current assets 245,019,617
Current liabilities 237,825426
Quick ratios 74.77
2005
Quick ratios 80.74
2006
Quick ratios 89.06
2007
Quick ratios 76.94
Quick ratio
Years 2003 2004 2005 2006 2007
Percentage 52.33% 74.77% 80.74% 89.06% 76.94
49
100
90
80
70
60
50
Quick ratio
40
30
20
10
0
2003 2004 2005 2006 2007
Analysis of the quick ratio:
Inventories are considered as current assets so they are included in current ratio
calculation. Inventories are less liquid. Normally it is not easily converted into cash
on short notice. In 2006 quick ratio is better than other years it show that bank can
easily recover its liabilities on short notice.
3. Working capital:
Working capital is the difference between current assets and current liabilities.
Working capital is often considered a measure of liquidity by it self. This ratio
shows the amount of liquidity.
Working capital is used to check liquidity of the organization.
Working capital=current asset-current liability

2003
Working capital 7,128,708
50
2004
2005
2006
2007
Working capital
Years 2003 2004 2005 2006 2007
Percentage 7,128,708 7,194,191 18,080,516 31,757,831 34,129,446
35,000,000
30,000,000
25,000,000
20,000,000
15,000,000 working capital
10,000,000
5,000,000
0
2003 2004 2005 2006 2007
51
Analysis of the working capital:
Working capital is better in 2007, which is 34,129,446 .it means that assets are
utilized more economically in 2007 as compared to 2003, 2004, 2005 and 2006.
4. Cash ratio:
Cash and cash equilent/total assets
Cash and equilent are the most liquid assets. The cash ratio shows the proportion of
the assets held in the most liquid possible form.
It is used to check the liquidity of the organization.
2003
Cash equivalent 25,356,261
Total assets 272,323,619
Cash Ratio 9.31
2004
Cash Ratio 11.40
2005
Cash Ratio 8.41
2006
52
Cash Ratio 11.41
2007
Cash Ratio 10.60
Cash ratio
Years 2003 2004 2005 2006 2007
Percentage 9.31% 11.40% 8.41% 11.41% 10.60%
15
13
11
9
7
cash ratio
5
3
1
-1
2003 2004 2005 2006 2007
Analysis of cash ratios of MCB:

Higher cash ratio also shows the higher rate of satisfaction like other liquidity
ratios. Cash ratio is more important liquidity ratio. In 2003 cash ratio was 9.31%, it
increased very quickly in 2004 by 11.40%, but in 2005 it declined by 2.99. 2006 was
the best year as it shows 11.41% ratio, In 2007, it declined by 10.60%.
In short working capital and cash ratio are more realistic and more important ratios,
which describe the true picture of any organization. In MCB 2006 is the year in
53
which the liquidity ratios are shown better than other years. So 2006 is mentioned a
good year of the Muslim Commercial Bank.
Leverage Ratios:
Leverage ratios of a firm show the extent to which a firm finances its operation from
the outside sources and money. The leverage can be determined from analysis of
owner equity in business, total liabilities, current and long-term liabilities, long-term
assets and total assets of the business. Following are the common leverage ratios to
show the degree of leverage the bank is using to finance its activities and assets by
liabilities.
5. Debt-To-Total-Assets Ratio
It shows that how much assets have been financed by liabilities and it also shows the
margin of protection available for the creditors.
Debt ratio
Debt ratio=Total debt/ Total assets
54
2003
Total debt 261,214,926
Debt Ratio 95.92
2004
Debt Ratio 94.38
2005
Debt Ratio 92.20
2006
Debt Ratio 88.06
2007
Debt Ratio 86.57
55
Debt ratio
Years 2003 2004 2005 2006 2007
Percentage 95.92% 94.38% 92.20% 88.06% 86.57%
96
94
92
90
88
leverage ratio
86
84
82
80
2003 2004 2005 2006 2007
Analysis of leverage ratio:
Financial leverage is the extent to which a firm is financed with debt. The amount
of the debt a firm uses has both positive and negative effects. The more debt the
more it is that the firm will have trouble meeting its obligations. Thus the more debts
higher profitability of the financial distress and even bankruptcy. Further more the
chance of the financial distress and debt obligation generally may create conflicts of
interest among the stakeholders. In Muslim Commercial bank, year 2003 was
heavily financed because debt was the major source of financing in 2003. Debt also
had lower transaction cost. But better year was 2007 because Muslim Commercial
Bank in this year was not heavily financed and had not trouble to pay its obligations.
56
6. Debt-To-Equity Ratio:
Debt-to-Equity ratio shows the extent to which debt financing is used relative to
equity financing. Debt equity is calculated by dividing total liabilities of the bank by
the total owner equity.
Total debt divided by shareholders equity

Debt to equity ratio=Total debt / shareholders equity or Debt ratio/1-Debt ratio
2003
Shares holder equity 3,065,273
Debt to equity Ratio 85.22
2004
2005
2006
2007
57
Debt to equityRatio 56.56
Debt to equity ratio

Years 2003 2004 2005 2006 2007
Percentage 85.22 72.55 64.58 55.14 56.56
90
80
70
60
50
Debt to equity
40 ratio
30
20
10
0
2003 2004 2005 2006 2007
Analysis of the Debt to equity ratio:

The debt equity ratio is a simple rearranged of the debt ratio. Debt equity ratio
shows how the firm’s stockholder bears the risk of the firm. Greater the debt greater
risk for the firm s shareholders .In 2006 risk for the share holders was very low as
compared to the other years decrease debt to equity ratio was very small on the
contrast risk was very high in 2003 because of heavy financing.
58
7. Equity multiplier:
Owner equity to fixed assets ratio:
“Owner equity to fixed assets ratio” shows that how much money does owner in
relation to fixed assets invest. If the owner equity exceeds the fixed assets, it means
that owner finances a part of current assets. When owner equity is less than fixed
assets it means that creditor’s obligations have been used to finance a part of fixed
assets.
Total owner equity divided by fixed assets

Equity multiplier=Total assets /shareholders equity
2003
Total Assets 272,323,619
Shares Holder equity 3,065,273
Equity Multiplier 88.84
2004
2005
2006
59
2007
Equity multiplier
Years 2003 2004 2005 2006 2007
Percentage 88.84 76.87 70.05 62.62 65.34
90
80
70
60
50
40 Equity multiplier
30
20
10
0
2003 2004 2005 2006 2007
Analysis of the equity multiplier:

Equity multiplier is yet another representation of the same information. It shows
how much total assets the firm has for each dollar of equity. In MCB it is better in
2003 it means that bank has about 88.84 in total assets of 100 of equity.
Coverage Analysis:
Coverage ratios analyze the ability of a firm to cover or service its financial
obligations. Most common coverage ratios are explained below.
60
8. Interest Coverage Ratio
Interest coverage ratio shows the ability of a firm to cover up its interest charges on
the income before interest and taxes. The ratio is obtained through dividing earning
before interest and taxes (EBIT) of the bank by its interest expenses.
EBIT divided by interest expense

Interest coverage ratio=EBIT/Interest expense
2003
EBIT 3,162,924
Interest expense 2,932,693
Interest coverage ratio 107.85
2004
EBIT 4,057,716
2005
EBIT 13,018,487
2006
EBIT 18,500,670
Intrest expense 4,525,359
Intrest coverage ratio 408.82
2007
EBIT 21,308,035
61
Interest coverage ratio
Years 2003 2004 2005 2006 2007
Percentage 107.85% 197.20% 468.04% 408.82% 270.90%
500
450
400
350
300
250 Interest
200 coverage ratio
150
100
50
0
2003 2004 2005 2006 2007
Analysis of the interest coverage ratio:

Coverage ratio shows the number of the times a firm can recover or meet particular
financial obligations. The interest coverage ratio, which is also called the time
interest earned ratio, measure the coverage of the firm s interest expense.2005 is the
best comparative better coverage of its interest and fixed charged obligations. After
2005, 2006 is better than other three but 2003 is worst than all.
Profitability Analysis:
Profitability ratios are of two types those showing profitability in relation to sales
and those showing profitability in relation to investment. Together, these ratios
indicate the bank’s overall effectiveness of operation. It creates a relationship
between income statement and balance sheet of the firm. Following are the some
typical profitability ratios used to analyze the profits of firms.
62
9. Cost To Sales Ratio:
Cost to sales ratio determines the cost incurred in generating the sales of the bank.
The net sales of banks are its interest/mark up earned while costs of sales are its
interest/mark up expense incurred. The ratio is obtained by dividing cost of sales by
net sales. The following table shows the cost of sales of MCB over five years of
operations.
Interest or mark up expensed divided by interest or mark up earned

2003
Interest earned 10,369,994
Cost to sales ratio 28.28
2004
2005
2006
2007
63
Cost to sales ratio
Years 2003 2004 2005 2006 2007
Percentage 28.28% 22.65% 15.66% 17.56% 24.74%
30
25
20
15 Cost to sales
ratio
10
0
2003 2004 2005 2006 2007
Analysis of the cost to sales ratio:

Cost to sales ratio shows the cost incurred in generating the sales of the bank. In
2003 the cost to generate the sales is higher with respect to other financial years.
After 2003, 2007 had also higher cost. Year 2005 is best one for MCB but 2003 is
worst than all.
10. Return On Investment:
Return on investment measure the ratio of profit generated in relation to the total
assets employed. Net profit after tax divided by total assets gives the return on
investment.
Return on investment is an indicator of how profitable a company is. By using this

ratio annually, we compare business' performance to industry's norms.
Net profit after tax divided by Total assets
Return on investment= Net profit after tax/Total assets
64
2003
Profit after tax 2,230,145
Return on Investment 0.82
2004
2005
2006
2007
Return on investment
Years 2003 2004 2005 2006 2007
Percentage 0.82% 0.94% 2.99% 3.55% 3.72%
65
4
3.5
3
2.5
2 Return on
Investment
1.5
1
0.5
0
2003 2004 2005 2006 2007
Analysis of the return on investment ratio

Profitability ratios focus on the profit generating performance of the firm. These
ratios measure how effectively the firm is generating its profit. They reflect its
performance, its risk ness and the effect of leverage. Muslim commercial bank was
heavily financed in 2007 that financing was used in investment that’s why return on
investment is high in 2005 as compare to the other years.
11. Return On Equity:
Return on equity is another summary measure of overall bank’s performance. It can

be calculated by dividing the net profit by the owner equity. This ratio tells us the
earning power on shareholder’s book value investment and is frequently used in
comparing two or more firms in any industry. A high return one quite often reflects
the firm’s acceptance of strong investment opportunities and effective expense
management.
66
2003
Sharesholders equity 3,065,273
Return on Equity 72.76
2004
2005
2006
2007
Return on Equity
Years 2003 2004 2005 2006 2007
Percentage 72.76% 72.11% 209.18% 222.25% 242.98%
67
300
250
200
150
price earning ratio
100
50
0
2003 2004 2005 2006 2007
Return on equity is an indicator of how profitable a company is. Use this ratio
annually to compare your business' performance to your industry's norms. In year
2007, MCB has a strong investment opportunities’ which reflects a high return, after
this 2006 and 2005 also depicts a high return, whereas, 2003 and 2004 are not
satisfied.
12. Market value ratios:
1-P/E ratio
Price earning ratio=Market price per share/ earning per share
68
2003
Market price per share 51.40
Earning per share 7.28
P/E ratio 706.04
2004
P/E ratio 814.15
2005
P/E ratio 785.58
2006
P/E ratio 1,051.71
2007
P/E ratio 1,645.88
69
Price earning ratio
Years 2003 2004 2005 2006 2007
Percentage 706.04% 814.15% 785.58% 1051.71% 1645.88%
1800
1600
1400
1200
1000
800 price earning ratio
600
400
200
0
2003 2004 2005 2006 2007
Analysis of the price-earning ratio:

Price earning ratio of MCB bank is high in 2007 as compared to the other years.
Because the market price per share is high in 2007. Because in this year MCB
generate an excellent profit. 2006 is also good but 2003 is worst all of them.
13 Earning yield:
Earning yield=Earning per share/Market price per share
2003
Earning Yeild 14.16
70
2004
Earning Yeild 12.28
2005
Earning Yeild 12.73
2006
Earning Yeild 9.51
2007
Earning Yield 6.08
Earning yield
Years 2003 2004 2005 2006 2007
Percentage 14.16% 12.28% 12.73% 9.51% 6.08%
71
16
14
12
10
8
Earning yeild
6
4
2
0
2003 2004 2005 2006 2007
Analysis of the earning yield:

Earning yield of MCB bank is high in 2003 as compared to the other years. Because
the market price per share and earning per share is low in 2003. Earning yield in
2004 and 2005 is also high. Earning yield is unsatisfied in 2007.
14 Earning Per Share:
This ratio determines the amount of income that has been earned on each share
outstanding. Net profit after tax divided by total numbers of shares outstanding gives
the amount earned on each share.
Net profit after tax divided by total number of shares outstanding

Earning per share=Net profit after tax/ Total no of shares
72
2003
Total number of shares 306,527
2004
2005
2006
2007
73
Earning per share
Years 2003 2004 2005 2006 2007
Percentage 7.28 7.21 21.00 22.23 24.30
25
20
15
Earning per share
10
0
2003 2004 2005 2006 2007
Analysis of the earning per share:
Earning per share mostly depends upon return on investment means ratio of profit
generated. Earning per share is better in 2007 because in this year return on
investment was also satisfied. 2003 and 2004 were unsatisfied as earning per share.
15 Gross spread ratio:
This ratio indicate the firms overall effectiveness of operation. Gross profit divided
by net sales.
2003
Net markup/ interest income 7,437,301
Gross spread ratio 71.72
2004
74
2005
2006
2007
Years 2003 2004 2005 2006 2007

Percentage 71.72% 77.35% 84.34% 82.44% 75.26%
75
86
84
82
80
78
76
Gross spread
74 ratio
72
70
68
66
64
2003 2004 2005 2006 2007
Analysis of gross spread ratio:

This ratio tells the profit of the firm relative to sales, after deduction of cost of
production. It is a measure of the efficiency of the firm’s operation. Gross spread
ratio of MCB bank is high in 2005 as compared to the other years. Only because of
low expenses during the year. After this 2006 is good but not satisfied as of 2005.
16 Income/ expense ratio:
2003
Total Income 14,901,805
Total expenses 11,288,881
Income/ expense ratio 1.32
2004
76
2005
2006
2007
Income /expense ratio:

Years 2003 2004 2005 2006 2007
Percentage 1.32 times 1.36 2.21 2.51 2.29
77
3
2.5
1.5 Income
expense ratio
1
0.5
0
2003 2004 2005 2006 2007
Analysis of Income/ expense ratio:

Income/ expense ratio of MCB bank is high in 2006 as compared to the other years.
Because in this year the expenses as compared to earnings are very low. After this
2005 and 2006 also depicts an excellent income/ expense ratio. But 2003 was the
worst one for Muslim Commercial Bank.
78
4.3 HORIZONTAL ANALYSIS:
Horizontal Analysis of Balance Sheet
Horizontal/ Index Analysis
Balance Sheet
As on 31st December
2003 2004 2005 2006 2007
Assets
Cash and balances with
100 99 98 135 167
treasury banks
Balances with other banks 100 438 113 505 292
100 105 96 202 10
instutions
Investments 100 52 54 49 88
Advances 100 141 186 204 225
Operating fixed assets 100 174 178 198 350
Deffered tax assets - - - - -
Other assets 100 95 84 171 276
95 110 126 151
Liabilities
Bills payable 100 90 102 84 125
Borrowings 100 23 84 73 121
Deposits and Othe accounts 100 105 108 122 138
Sub-ordinated loans 100 100 100 100 30
Liabilities against assets
- - - - -
subject to finance lease
Deffered tax liabilities 100 38 - - 167
Other liabilities 100 102 135 175 184
94 105 115 136
Net assets 100 131 210 368 496

Represented by:
Share capital 100 110 139 178 205
Reserves 100 129 306 563 776
Unappropriateed profit 100 59 75 1,964 1,822
100 298 520 462 588
Surplus on revaluation of
100 158 160 153 287
assets
100 131 210 368 496
Horizontal/Index size analysis:
Cash and balances with treasury banks:

Index size analysis is clearly showing that cash and balances with treasury banks
are increasing 2006 and 2007. The biggest reason behind this inclusion is
deposits are increasing in these years. Including foreign and local both types of
deposits.
79
Balances with other banks:
There is gradual increase in balances with other banks. MCB bank limited has
maintained two types of accounts, current and fixed within the Pakistan and
outside the Pakistan.
Lending to the financial institutions:

Lending to the financial institution decreased in 2005 because in this period
MCB Bank it self need of financing. There were again decrease in 2007.
Lending to the financial institution include call money landings, repurchase
agreement lending and purchase under resale agreement of listed equity security,
trade related deals.
Advances:
Index size/horizontal analysis is showing that advances are increasing every year
because of increase in deposits.
Other assets:
Other assets are increasing in year 2006 and 2007. Other assets include income
/mark up accrued in local currency, in foreign currency, advances, deposits,
advance taxation, suspense accounts, stationery and stamps, dividend receivable,
Operating fixed assets:

Operating fixed assets like others are also increasing because every year capital
work in progress increased. Property and equipment of MCB Bank are also
increasing every year.
Liabilities:
Bills payable:
Bills payable is increasing in 2005 and 2006 with in the Pakistan.
Deposits and other accounts:

Deposits include current deposits, fixed deposits, saving deposits, special exporter’s
accounts remunerative accounts, deposit in local currency and deposit in foreign
currency are increasing every year. Te reason behind this is MCB Bank is offering
higher deposit s rates to its customer every year.
80
Liabilities against asset subject to finance lease:
There was no liability against assets subject to finance lease.
Other liabilities:
Other liabilities consist of interest payable in local currency, interest payable in
foreign currencies unearned income commission, accrued expenses advance
payments, unclaimed dividend, proposed dividend, unrealized loss, branch
adjustment account, payable to defined contribution plan, payable against purchase
of listed shares, with holding taxes payable and other are increasing every year.
Share capital:
Share capital of MCB bank limited is increasing every year because profit is
increasing year by year.
Reserves:
Reserves for the contingencies have been created for risk assets comprising
advances and investment excluding government securities. The reserves have been
created as matter prudence, exclusive to provide sufficient cushion for any future
losses in the banks risk assets portfolio. Reserves of every five years are increasing.
81
Horizontal Analysis of Profit and Loss
Horizontal/ Index Analysis
As on 31st December
2003 2004 2005 2006 2007
Markup/ return/ interest earned 100 88 171 249 307
Mark up/ return/ interest expense 100 70 95 154 268
Net mark up/ interest income 94 201 286 322
Provision for dimininution in the value
100 115 66 (81) (70)
of investment
Provision against loans and advances 100 63 176 144 419
Provision for potential lease losses 100 139 - - -
Bad debts written off directly 100 4 1 21 -
100 36 147 151 392
Net mark up/interest income after
100 101 208 302 313
provisions
- Fee, commission and brokerage 100 191 235 222 253
- Dividend income 100 102 129 218 170
- Income from dealing in foreign
100 149 160 209 209
currencies
- Gain on investment 100 39 42 30 74
- Unrealized gain/ loss on
- - - - -
- Other income 100 77 146 77 76
Total non mark up interest income 100 93 119 110 133
100 98 172 224 240
Administrative expenses 100 110 98 98 76
Restructuring expenses 100 - - - -
Other proposition/write off 100 299 (145) 23 (7)
Other charges 100 71 303 113 916
Total non mark up/ interest expense 98 87 87 73
Share of profit from associated
- - - - -
undertaking
Extra ordinary/unusual items - - - - -
Profit before taxation 100 112 360 512 590
Taxation-Current year 100 128 380 470 531

-Prior years - - - - -
-Defferd 100 41 (215) 37 526
Share of tax of associated undertaking - - - - - -
100 118 296 460 437
Profit after taxation - 109 400 544 685
Unappropriate profit brought forward 100 32 27 802 889

Transfer from surplus on revaluation
100 103 335 129 47
of fixed assets
100 34 38 776 857
Profit available for appropriation
100 92 319 597 723
Basic/diluted earnings per share- 6.61 99 293 321 334
82
Horizontal/index analysis:
Mark up/return/Interest earned:

It remains the constant in 2003 and 2004 because MCB Bank earn same interest on
loans and advances to customers. But it increased in 2005, 2006 and 2007.
Mark up /return/Interest expense:

Mark up /return/Interest are low in 2004 because of the low rates of deposits. One of
the biggest things, which made these figure of 2004 low, is a subordinated loan.
Other income:
There is gradual increase in other income in year 2005. The reason is rent on
property, gain on sale of non banking assets and bad debts are recovered.
Administration expenses:
With the passage of time as the profit of the bank is increasing Administration
expenses are also increasing. Which include salaries, allowances, rent, taxes,
insurance, electricity, legal and professional charges, brokerage and commission,
repair and maintenance, Advertising and publicity.
Other charges:
In 2006 there heavy amount of other charges imposed. Other charges are penalties
imposed by state bank of Pakistan.
Taxation:
Taxation system is linked with the profit of the bank that s why taxes increase with
the ratio of profit.
83
4.4 VERTICAL ANALYSIS
Vertical Analysis Balance Sheet
Vertical/ common Size analysis
Balance Sheet
As on 31st December
2003 2004 2005 2006 2007
(Rupees '000)
Assets
Cash and balances with treasury
8.83 9.20 7.92 9.49 9.67
banks
Balances with other banks 0.48 2.20 0.49 1.92 0.93
Lending to financial instutions 3.83 4.23 3.35 6.16 0.26
Investments 47.10 25.93 23.26 18.56 27.55
Advances 35.69 52.98 60.35 57.95 53.34
Operating fixed assets 1.68 3.09 2.74 2.65 3.90
Deffered tax assets - - 0.06 0.05 -
Other assets 2.38 2.37 1.83 3.22 4.35
100 100 100 100 100
Liabilities
Bills payable 3.08 2.92 2.86 2.07 2.55
Borrowings 11.98 2.93 9.16 7.00 9.60
Deposits and Other accounts 77.67 85.30 76.76 75.26 71.16
Sub-ordinated loans 0.59 0.62 0.53 0.47 0.12
Liabilities against assets subject to
- - - - -
finance lease
Deffered tax liabilities 0.26 0.10 - - 0.29
Other liabilities 2.34 2.52 2.88 3.27 2.86
95.92 94.38 92.20 88.06 86.57
Net assets 4.08 5.62 7.80 11.94 13.43
Represented by:
Share capital 1.13 1.30 1.43 1.60 1.53
Reserves 1.61 2.18 4.49 7.21 8.28
Unappropriateed profit 0.10 0.06 0.07 1.62 1.25
2.84 3.55 5.99 10.42 11.06
Surplus on revaluation of assets 1.24 2.07 1.82 1.52 2.36
4.08 5.62 7.80 11.94 13.43
Vertical/common size analysis:
Cash and cash balances:

Cash and cash balances are increasing every year but in 2005 it decreases.
Balances with other banks:

Balances are increased in 2004 and 2006 and heavily decreases in 2005 and 2007. The
reason behind the decrease of balances with other banks is advances and investment.
84
These two years MCB Bank used these funds in investment and advances rather then
keeping balances with other banks.
Lending to the financial institutions:

MCB Bank lending to the financial institutions was 3.83% after one year in 2004
increased by 1% and in 2005 decreased very quickly by 3.35% because repurchase
agreement landings was low in this year. It increased in 2006 but decline in 2007 that
is 0.23%. Lending to the financial institution was in 2006 (21,081,800) in 2007 figure
was (1,051,372). Because in 2007 there were no repurchase agreement lending and
call money lending is very low.
Investment:
MCB Bank 2003 investment are satisfied rather than other 4 years that was 47% of
total assets. It decreases in 2004, which was 26% of the total assets. The reason is less
funds are used as investment in fully paid up ordinary shares of listed companies and
unlisted term finance certificates in 2004. At that time period there were no investment
in government of Pakistan sukuk bonds. Little bit increase in investment was in 2005.
But in 2007 it will again increased up to 28%.
Advances:
In MCB Bank there were increase in advances year by year.
Operating fixed assets:

Operating fixed asset are increasing year by year but are same with total assets of 2%
to 3% throughout the year.
Other assets:
Ratio of the other assets remains the same in 2003 with 2004. Other assets increased in
2006 and 2007 because receivable from pension fund as well as income/ markup
accrued on advances are increased in these years.
Liabilities:
Bills payable:
In MCB Bank five year comparison of the bills payable declare that all five years ratio
are lies between 2.5%and 3.00% there are change or increase in bills payable every
year but the ratio is the same because of the comparison with the total assets.
85
Deposits with other accounts:
Deposits with the other accounts decreased in 2004 but simultaneously it increased up
to 2007 with the comparison of the total assets.
Subordinated loans:
The subordinated loans are decreased year by year as I 2007 it remain up to 0.125 of
total assets.
Liabilities against assets subject to the finance lease:

There were no such liabilities.
Other liabilities:
Other liabilities remains the same throughout the five years. It does not mean that
other liabilities are not increasing year by year but are same with total assets of 3%
throughout the year.
Reserves:
Reserves of the MCB bank limited are increasing every year
Share capital:
In MCB bank limited share capital was same in 2003 and 2004. It increases gradually
in 2005, 2006, and 2007.
Surplus on revolution of assets:

Increased year by year.
86
Vertical Analysis of Profit and Loss
Vertical/ common Size analysis
As on 31st December
2003 2004 2005 2006 2007
(Rupees '000)
Markup/ return/ interest earned 69.6 68.2 76.6 83.8 84.1
Mark up/ return/ interest expense 19.7 15.5 12.0 14.7 20.8
Net mark up/ interest income 49.9 52.8 64.6 69.1 63.3
Provision for dimininution in the
(1.0) (1.3) (0.4) 0.4 0.3
value of investment
Provision against loans and
4.7 3.3 5.4 3.3 7.8
advances
Provision for potential lease
0.0 0.0 - - -
losses
Bad debts written off directly 1.5 0.1 0.0 0.2 0.0
5.2 2.1 4.9 3.8 8.1
Net mark up/interest income
44.7 50.7 59.7 65.2 55.2
after provisions
- Fee, commission and
7.0 15.0 10.6 7.5 7.0
brokerage income
- Dividend income 2.5 2.8 2.1 2.6 1.7
- Income from dealing in
2.2 3.7 2.3 2.2 1.8
foreign currencies
- Gain on investment 13.7 6.0 3.7 2.0 4.0
- Unrealized gain/ loss on
- (0.1) 0.0 - (0.0)
- Other income 5.0 4.3 4.7 1.9 1.5
Total non mark up interest
30.4 31.8 23.4 16.2 15.9
income
75.1 82.4 83.1 81.4 71.1
Administrative expenses 44.2 54.4 27.9 21.1 13.3
Restructuring expenses 5.9 - - - -
Other proposition/write off 0.3 1.1 (0.3) 0.0 (0.0)
Other charges 0.4 0.3 0.8 0.2 1.4
Total non mark up/ interest
50.8 55.8 28.3 21.3 14.7
expense
Extra ordinary/unusual items - 3.9 1.5 - -
Profit before taxation 24.2 30.5 56.2 60.1 56.4
Taxation-Current year 8.1 11.7 19.9 18.5 17.0
-Prior years - - (0.6) 1.9 (3.4)
-Defferd 1.1 0.5 (1.6) 0.2 2.4
9.3 12.2 17.7 20.7 16.0
Profit after taxation 15.0 18.3 38.5 39.5 40.4
Unappropriate profit brought
4.2 1.5 0.7 16.2 14.6
forward
Transfer from surplus on
0.2 0.2 0.4 0.1 0.0
revaluation of fixed assets
4.3 1.7 1.1 16.3 14.7
Profit available for
19.3 19.9 39.6 55.8 55.1
appropriation
87
Vertical analysis of the profit and loss account:
Mark up /return/interest expense:

There is decrease in 2004 2005 and 2006 in the mark up/return/interest expense
because return on deposits is very low due to the low rates on deposits. Return on
subordinated loans is satisfied that was the reason of the reason of decline in the return
on expense. Again increase in 2007 because rate on deposits increased in 2007.
Administration expense:
Administration expenses are decreasing every year as approved pension fund as well
as post retirement benefits are low. Moreover, there were no self retrenchment costs.
Other charges:
Other charges include penalties imposed by the state bank of Pakistan that increased
every year. Its vertical ratio is 0 because amounts of the penalties imposed by the bank
are very small as comparison to the Interest/ income earned but in 2007 it will reach
up to 3.54%.
Taxation:
Taxes are increasing every year except of 2007 taxes, their ratio are lowered than 2006
because of taxes for the prior year .
88
4.5 ORGANIZATIONAL ANALYSIS WITH REFERENCE TO THE
INDUSTRIES LISTED ON THE STOCK EXCHANGE:
DEPOSITS COMPARSION OF FIFTEEN BANK'S IN PAKISTAN
Rs. In Billion
DEPOSITS GROWTH
RANK BANK NAME 31-12-2006 31-12-2007 VOLUME %AGE
1 HABIB METROPOLITAN 56.71 102.49 45.78 80.73
2 BANK OF PUNJAB 88.47 137.73 49.26 55.68
3 MEEZAN BANK LIMITED 22.77 34.45 11.68 51.3
4 BOLAN BANK (MY BANK) 12.86 19.17 6.31 49.07
5 AL-BARAKA BANK 10.31 13.82 3.51 34.04
6 BANK AL-HABIB LIMITED 75.8 91.42 15.62 20.61
7 UBL BANK LIMITED 283.02 321.73 38.71 13.68
8 MCB BANK LIMITED 221 211 28.12 12.26
9 SOONRI BANK LIMITED 47.61 53 5.39 11.32
10 PICIC COMMERCIAL BANK 53.47 59.47 6 11.22
11 ASKARI BANK LIMITED 118.79 131.84 13.05 10.99
12 NATIONAL BANK LIMITED 463.43 501.87 38.44 8.29
13 BANK AL-FALAH LIMITED 222.35 239.51 17.16 7.72
14 HABIB BANK LIMITED 432.55 459.14 26.59 6.15
15 FIRST WOMAN BANK LTD 8.72 9.02 0.3 3.44
*Reference: Data obtained from Annual statements of abovementioned Banks on

net on their respective website.
A d va n c e s C o m p a r i s o n
ADVANCES COMPARSION OF FIFTEEN BANK'S IN PAKISTAN
Rs. In Billion
ADVANCES GROWTH
RANK BANK NAME 31-12-2006 31-12-2007 VOLUME %AGE
2 BANK OF PUNJAB 63.62 101.32 37.7 59.26
AL-BARAKA BANK
6 LIMITED 7.42 9.69 2.27 30.59
7 BANK AL-FALAH LIMITED 118.16 150 31.84 26.95
8 FIRST WOMAN BANK 2.46 3.02 0.56 22.76
9 UBL BANK LIMITED 200.6 238.32 37.72 18.8
13 SOONRI BANK LIMITED 32.05 35.41 3.36 10.48
14 MCB BANK LIMITED 198 218 17.92 9.94
15 PICIC COMMERCIAL 33.16 34.89 1.73 5.21
89
NetProfit after tax
NET PROFIT AFTER TAX COMPARSION OF FIFTEEN BANK'S IN PAKISTAN
Rs. In Billion
Net Profit GROWTH
RANK BANK NAME 2006 2007 VOLUME %AGE
1 BOLAN BANK (MY BANK 0.27 0.49 0.22
2 BANK OF PUNJAB 2.35 3.8 1.45 61.7
3 UBL BANK LIMITED 5.89 9.05 3.16 53.65
5 HABIB METROPOLITAn 1.51 2.1 0.59 39.07
6 MCB BANK LIMITED 12.14 15.26 3.22 36.1
11 FIRST WOMAN BANK 0.13 0.14 0.01 7.69
12 BANK AL-FALAH LIMITED 1.7 1.76 0.06 3.53
13 SOONRI BANK LIMITED 1.39 1.42 0.03 2.16
14 PICIC COMMERCIAL BANK 1.5 0.97 -0.53 -35.33
15 AL-BARAKA BANK LIMITED 0.35 0.14 -0.21 -60

Ea r n i n g p e r s h a r e
EARNING PER SHARE COMPARSION OF FIFTEEN BANK'S IN PAKISTAN
EPS GROWTH
RANKI 31-12- 31-12-
NG BANK NAME 2006 2007 VOLUME %AGE
1 UBL BANK LIMITED 6.84 13.68 6.84 100
2 BANK OF PUNJAB 8.13 13.14 5.01 61.62
5 MCB BANK LIMITED 23.4 24.3 5.97 34.25
11 FIRST WOMAN BANK LTD 4.71 4.88 0.17 3.61
12 BANK AL-FALAH LIMITED 3.92 3.86 -0.06 -1.53
13 PICIC COMMERCIAL BANK 5.5 3.54 -1.96 -35.64

90
4.6 Future Prospects Of The Organization
Vision:
Challenging and Changing the Way you Bank.
Mission Statement
“MCB Bank’s team of committed professionals is dedicated to maintaining long

term customer relationships through outstanding service and convenience”.
Objectives:
 To achieve sustained growth and profitability in all areas of business.
 To build and sustain a high performance culture, with a continuous
improvement focus.
 To develop a customer service oriented culture with special emphasis on
customer care and convenience.
 To effectively manage and mitigate all kinds of risks inherent in the banking
business.
 To maximize use of technology to ensure cost effective operations, efficient
management information system, enhanced delivery capability and high
service standards.
 To manage the bank portfolio of the business to achieve strong and
sustainable shareholders return and to continuously build shareholders value.
 To explore new avenue for growth and profitability.
Strategic planning:
 To comprehensive plan for future to ensure sustained growth and
profitability.
 To facilitate alignment of the vision, mission, corporate objective and with
the business goals.
 To provide strategic initiatives and solutions for projects, products, policies
and procedures.
91
 To provide strategic solutions to mitigate weak areas and to counter threats
to profits.
 To identify strategic initiatives and opportunities for profits.
 To create and leverage strategic assets and capabilities for competitive
advantage.
For developing a forward-looking perspective, strategic planning driven by quality
research is essential. Strategic planning helps to set short, medium and long term
business plans in order to achieve the banks longer term goals, objectives and vision.
Strategic planning division headed by an experienced economist has been
established. It is mandated to conduct economic research and present detailed sect
oral analysis of Pakistan economy. It will also make assessment of overall outlook
for the banking sector that should assist senior management in decision-making
process.
Future prospects of the Muslim Commercial bank are to increase market shares,
mobilize resources, developed retail, agriculture and Islamic banking, introduce
fresh initiatives for corporate and investment banking, capitalize on the new
business opportunities and implement various technology initiatives.
Muslim Commercial bank limited is continuously focused on building long-term
shareholders value, as primary objective. The strength of its brand name, supported
by strategic expansion and the depth of its customer relationship, gives a strong
foundation on which to build and continue growth in the times ahead.
Future prospectus is to improve risk management, which considered being one of the
essentials for sustainable success in the business. Based on the risk management
guidelines issued by state bank of Pakistan; a risk management strategy has been
developed for accessing and mitigating/controlling risk.
92
4.7 SHORTFALLS/ WEAKNESSES IN THE ORGANIZATION
Following are the shortfall/ weakness in the organization as per my opinion:
Manual Book-Keeping:
Although the bank has computerized accounting system but, still the bankers use to
make their entries in the accounting register.
Low Job Satisfaction:

Understanding and the effective management of the human resources is the most
difficult challenge faced not only by the bank but by all the organizations. Even
though the people have been sacrificed in the new organizational developments, it is
becoming clear that the true lasting competitive advantage comes through human
resources and how they are managed. MCB seems to not focusing on this highly
critical issue as the job satisfaction level of the employees working at MCB, was
quite low.
Lack Of Specialization:
This famous and useful concept given by Adam Smith in 1776 seems to be missing
in the bank. The employees are constantly rotated from one job to another job of
totally different characteristic in the view of giving them the know-how of the
working in all the departments. But I think this is not a very good tactics used by the
management. Otherwise the situation might be like this ‘Jack of all and master of
none.’
Centralization:
There is a high degree of centralization in the bank. Almost all the decision-making
is in the hands of the upper management. But centralization is effective up to a
certain level otherwise it becomes inefficient and at times costly too. I personally
93
observed that delay occurred in the operations of the employees only due to the fact
that they had not got any instructions from the head office.
Lack Of Training Facilities:

Presently there is no specific training program arranged for the new recruiters. They
have to learn based on their observations and also their mistakes. It takes a bit time
for the fresh one to learn the banking the result is huge amount of blunders, mistakes
etc. resulting in monetary and non-monetary losses for the bank. There is pressure
not only on the new learner but also on the person placed upon with this
responsibility.
High charges:
The schedules of charges indicate that the fees charged by the bank on the various
services it provides are extremely high. It may result in decrease in the number of its
exiting customers. Further more, this could be very alarming situation for the bank
in case some of the competitors grasped the opportunity and lowered its rates. The
result would be either the lost of market share or decrease in the charges resulting in
lowering the bank’s income.
Less attractive rate of return:

Commercial banks face considerable competition in attracting deposits from
individuals or small investors. In contrast, the Govt. of Pakistan national saving
scheme offers attractive rates of return (approx. 16 to 18 percent annually) on 10-15
year fixed accounts, which banks find difficult to match.
Stiff Competition:
MCB is currently facing strict competition from the foreign banks especially the
American who banks enjoy a good market position. Collectively U.S. banks hold
approximately 9 percent of all commercial banks' assets. At present, three American
banks are operating in Pakistan: American Express Bank; Bank of America and
Citibank.
94
Less Experienced Staff:
Owing to huge turnover of the employees, the no. of experienced and well trained
staff is very low. Majority of the staff working in the bank branches is quite young
and inexperienced. If the bank failed to bring down its high employees turnover,
then it would be lacking the most important resources of any organization i.e. the
experienced staff.
95
CONCLUSION
The emerging banks of the private sector of Pakistan like MCB have proven to be
helpful in improving the overall economy of Pakistan. MCB has been declared 07
times “Euromony award” and “Asia Money Award” for the last five years, which is
a very big achievement for Pakistan. Muslim Commercial Bank is heading towards
the right direction and it possesses the necessary potential to improve in all of its
sectors. Thus Muslim Commercial Bank Limited is one of the best banks of
Pakistan.
96
RECOMMENDATIONS
First of all, the management needs to overlook the major problems that the
organization is currently facing and then develop strategies to eradicate them.
Some of the suggestions that I would like to give at the end are:
 MCB Bank can improve its Marketing strategies to acquire more promotion
and mass media publicity by the use of effective channels of promotions like
TV, Newspaper Advertisements. It can also improve its magazine
publication that it releases each month.
 In order to compete in the ever-expanding market both nationally and
internationally, introducing new and efficient products is one of its major
requirements.
 Centralized Structure that enables employee involvement needs to be
formed.
 Better reward system is one of the most important requirements in order to
reduce the problem of Employee retention and improve Employee
motivation.
 There is lack of proper and continuous training of employees that needs to be
solved.
 Creation of enhanced performance appraisal system.
 Proper use of stationary.
 Implementation of enhanced Marketing system.
 Job rotation for employees.
 There should be more parking place outside the branch for the convenience
of clients.
 There should be cold drinking water facility separately available at each
section.
 Common room for working ladies is very much essential in each floor so that
they may offer prayers conveniently.
 Canteen facility needs to be improved.
97
RE F FRE NC ES
 www.mcb.com.pk
 Annual report of MCB bank
 Staff of MCB Aabpara branch Islamabad
 Business Record August 15,2008
98
ANNEXURE - I
BRANCHES NETWORK
99
ANNEXURE - IIi
100

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CHAPTER NO.

1.1 OBJECTIVE OF STUDYING THE ORGANIZATION

1.2 ABOUT MCB

1.3 BRIEF HISTORY

2. Habib Bank Limited.

MCB was founded by ISFHANI and ADAMJEE families in Calcutta on July 9,

“Challenging and Changing the Way you Bank”.

“MCB Bank’s team of committed professionals is dedicated to maintaining long

‘We continuously seek to exceed our customer’s expectations, forging and

“As responsible citizens we contribute to the social welfare of the community we

Information per ordinary shares

Capital adequacy ratio (%) 0.00 9.64 12.54 18.65 17.88

Analysis of Business volume of MCB:

Total numbers of employees = 9946

STAFF OF THE BRANCH CONSISTS OF 13 MEMBERS

Branch Manager 01 Grade I

MCB ATM Services

(a) MCB ATM Card

MCB ATM Regular Card

MCB ATM Gold Card

 Cash deposit and withdrawal facility at hundreds of MCB branches

 Withdraw cash through Pakistan’s largest ATM network.

 Low average balance is required. Unlimited free of cost transaction facility at

A MCB term deposit scheme is also valuable to suit customer’s requirement.

Basic Banking Account

Foreign Currency Accounts

This account offers very attractive returns on Foreign Currency investment.

 Unlimited transaction facility.

 Low balance requirement .

 Profit credited to account on a half yearly basis.

SMART CARD / DEBIT CARDS

It provides the conventional credit card services in a manner that is superior in

Working Capital Loans:

MCB’s Investment Banking Team has emerged as a leading player in Pakistan's

 Term Finance Certificates

 Arrangement of Non- Fund Facilities

 Mergers and Acquisitions

MCB VIRTUAL BANKING

Individual Users/ Corporate Users

2.1 ORGANIZATIONAL STRUCTURE

2.2 MAIN OFFICE DEPARTMENTS (HEAD OFFICE)

Local Branch Network:

BOARD OF DIRECTORS OF MCB:

Tariq Rafi Chairman

Human resource Committee

Mian Mohammad Mansha Chairman

Risk Management & Portfolio Review Committee

Committee on Physical Planning, IT System & Contingency Arrangements

Business Strategy & Development Committee

Registrar's and Share Registration Office

2.3 ORGANIZATIONAL STRUCTURE OF MCB BRANCH AABPARA:

Mr. Abdul Basit is acting as a branch Manager in Aabpara Branch Islamabad.

a) Foreign Trade Manager

A) FOREIGN TRADE MANAGER:

FIELDS OF ACTIVITIES OF MCB BRANCH AABPARA:

1) Open Different accounts for different peoples

* Annexure III attached

2.4 DEPARTMENTS OF MCB BANK

Outside locality is an important type of inland remittances. Outside locality means

Telegraphic transfer is an important mode of remittance. It is the quickest mean of

Demand Draft & Pay Order:

It is an association of banks; usually setup in a given locality for the purpose of

In undertaking the process of interchanging credit the following procedure is adopt