THE LEADING ISLAMIC BANK

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Prepared by: IRFAN AHMAD & ALI NOUMAN
THE LEADING ISLAMIC BANK
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P R E F A C E


Today the world economic system that is based on interest has resulted in concentrating the
wealth in the hands of selected few In contrast Islam encourages circulation and equally
distribution of wealth. Economic justice requires a viable economic system supported by an
efficient banking system. On the other hand Islamic banking is efficient and ensures equitable
distribution of wealth thus laying foundation for an inflation free economy. Last few years
have witnessed a dramatic increase in Islamic banking the world over. At least two hundred
Islamic banks and financial institutions have been set up. On the Shariah side, there are a
number of scholars on Shariah boards of Islamic banks who have compiled Fatwas,
resolutions and articles on various issues of Islamic banking and finance. In Pakistan, we
have at least two very comprehensive reports on Islamic banking system produced by
Islamic Ideological Council 1980 and the Commission for Islamization of Economy in
1992.
There is a need to develop insight, educate and train the bankers in the Islamic economic and
banking system. Without having a deep understanding of the principles of Islamic banking, it
is difficult to offer its products and services that conform to the true spirit of Islamic shariah.









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Acknowledgment


I am much thankful to “Almighty Allah” the most beneficent, the most mercy full who has
given me strength to complete this task. I am also thankful to Mr. Khuram Bin Jaffar
Operation Manager Regional Office of Meezan Bank Limited, Nawa Sheher, Multan. Without
whose guidance and support it would not have been possible for me to accomplish this
assignment.
Furthermore, I am indebted to the Regional Manager of Meezan Bank Limited, Nawa
Sheher, Multan from whom I have gained much more information’s regarding operational &
Strategic work of Bank is concerned. He allowed us data with the request of Mr. Khuram
Bin Jaffar who insist for us directly through call.
The last but not the least I convey my credit and thankfulness to Mr. Rao Akmal, Lecturer of
Strategic Management, without whose well in time support and guidance it would be much
difficult for me to achieve this task successfully.










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Table of Content

1. Preface ……………………….……………………………………….03
2. Acknowledgement.……………………………………………………04
3. Executive Summery……………………………………………………05
4. Meezan Bank…………………………………………………………..06
5. History…………………………………………………………………06
6. Vision Statement ……………………………………………………..08
7. Mission Statement ……………………………………………………08
8. Meezan Bank Structure ……………………………………………….09
9. B.O.D …………………………………………………………………16
10. Products ……………………………………………………………….11
11. Departments …………………………………………………………..15
12. Corporate Social Responsibility …………………………….………..17
13. Ratios …………………………………………………………………18
14. Horizontal Analysis ………………………………………..……….…34
15. Vertical Analysis ……………………………………………..………36
16. SWOT Analysis ………………………………………………..….…..38
17. PEST Analysis ………………………………………………...….…..39
18. IFE Matrix ………………………………………………………..…...41
19. EFE Matrix …………………………………………………………....43
20. TWOS Matrix ………………………………………………………....45
21. Suggested Strategy Formulation ……………………………………....46
22. Recommendations …………………………………………………..…47

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Executive Summary

Meezan Bank Limited (MBL) (the holding company) was incorporated in Pakistan on January
27, 1997 as a public listed company under the company’s ordinance, 1984 and its share
quoted in Karachi stock exchange. MBL was registered as an ‘Investment financing company
on August 8, 1997 and carried on the business of investment banking as permitted under SRO
585(I)/87 dated July 13, 1987 in accordance and in conformity with the principle of Islamic
shariah. A certificate of commencement of business was issued to MBL on September 29,
1997.
MBL was granted a ‘Scheduled Islamic commercial bank’ license on January 31, 2002 are
formally commenced operations as a scheduled Islamic Commercial Bank With effect from
March 20, 2002 on receiving notification is this regard from State Bank of Pakistan (SBP)
under section 37 of the Statement Bank of Pakistan Act, 1956.
Meezan Bank Limited has 351 branches in 100 cities across Pakistan and it became the 11
th

largest Bank in Pakistan term of branch network.
In start detail about products which are providing by MBL are shown after this all
departments which are working here are defined. Next portion consist on ratios as for as
different ratios of Meezan Bank Limited, they all give a healthy sign regarding financial
position of the Bank as well as operation results of the different financial years. All ratios are
fully in accordance with the banking Industry’s standard and norm which is a yard stick to
measure the performance of any bank
Next portion consists on SWOT analysis, PEST then TWOS analysis which comprises of
internal and external factors of MBL.
Conclusion and Recommendations are an integral part of this report.







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Meezan Bank:
Meezan is the Arabic word whose means “Balance” has been taken from the Surah Al-
Rahman.
Meezan Bank has taken this name because they believe in maintaining the balance between
the needs of Shareholders, Customers, Staff and others Stakeholders.
 Meezan Bank has 769 thousand Customers.
 Meezan Bank has over 6 thousand employees.
 Meezan Bank has over RS. 330 billion assets.
 Meezan Bank has 351 branches over 103 cities.
 Meezan bank is 8
th
largest bank of Pakistan in term of branches.
 Meezan bank is 11
th
largest bank of Pakistan in term of deposits.
 Meezan Bank has Rs. 289 billion deposits. Deposit growth rate is 26%.
 Meezan Bank has profit growth rate is 13%.
History
The history MBL is given below from year to year.
1997
 Establishment of Al Meezan Investment Bank.
 Riba free certificate of Islamic Investment launched.
2002
 Awarded first Islamic commercial Banking license by SBP. Now full fledge Islamic
Bank and renamed as Meezan Bank.
 Deposit base stood at Rs. 5.08 billion.
 Pakistan first shariah compliant Auto finance product is launched.
 Islamic Export Refinance scheme is launched in coordination with SBP.
 SME operations start as an independent business unit.
2003
 Pakistan first shariah compliant Housing finance product is launched.
 Branches Network reaches 10 branches Nationwide.
 The deposit base grows to Rs. 7.7 billion.
2005
 Meezan bank wins best Islamic bank in Pakistan Award.
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 Branches Network reaches 28 branches Nationwide.
 The deposit base grows to Rs. 22 billion.
 Deposit account launched.
 Mudarbah and Musharkah launched.
2006
 Branches Network reaches 62 branches in 21 Cities.
 The deposit base grows to Rs. 34 billion.
 Internet banking launched(ebanking.meezanbank.com)
2009
 Branches Network reaches 201 branches 54 cities.
 The deposit base grows to Rs. 100 billion.
 Banks handles import/export business of Rs. 100 billion.
 Meezan visa debit card launched.
2011
 Branches Network reaches 275 branches 83 cities. The bank is now 9
th
largest bank in
Pakistan in branches wise.
 The deposit base grows to Rs. 200 billion.
 Launched Meezan laptop scheme.
 Home Remittances service at all branches.
2012
 Branches Network reaches 390 branches 90 cities.
 The deposit base grows to Rs. 230 billion.
2013
 Branches Network reaches 350 branches 100 cities. The bank is now 8
th
largest bank
in Pakistan in branches wise.
 The deposit base grows to Rs. 289 billion. The bank is now 11
th
largest bank In term of
deposit.
 Launch of SMS banking.



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Vision statement:

Establish Islamic banking as banking of first choice to facilitate the implementation of an
equitable economic system, providing a strong foundation for establishing a fair and just
society for mankind.
Mission Statement:

To be a premier Islamic bank, offering a one-stop shop for innovation value added products
and services to our customers within the bounds of Shariah, while optimizing the shareholder
value through an organizational culture based on learning, fairness, respect for individual
enterprise and performance.


















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Meezan Bank Structure Chart

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Board of Directors

H.E.Sheikh Ebrahim Bin Khalifa Al-Khalifa Chairman
Abdullateef A. Al-Asfour Vice chairman
Rana Ahmed Humayun
Riyadh S. A. A. Edrees
Mohammed Azzaroog Rajab
Alaa A. Al-Sarawi
Mohammad Abdul Aleem
Shaharyar Ahmad (resignation accepted on March 2, 2014)
Noorur Rehman Abid (inducted on January 21, 2014)
Irfan Siddiqui president& CEO
Ariful Islam Deputy CEO

Shariah Supervisory Board

Justice (Retd.) Muhammad Taqi Usmani Chairman
Dr. Abdul Sattar Abu Ghuddah
Sheikh Essam M. Ishaq
Dr. Muhammad Imran Usmani Shariah Advisor









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Credit Rating
2013 2012
Long Term AA AA-
Short Term A-1+ A-1+


Products
Product Information
1.Meezan Rupee Current Account
2. Meezan Rupee Savings Account
3. Meezan Bachat Account
4. Karobari Munafa Account
5. Meezan Business Plus Account
6. Meezan Kids Club Account
7. Meezan Teens Club Account
8. Meezan Kafalah
9. Meezan Labbaik Savings Aasaan
10. Foreign Currency Savings Account
11. Monthly Mudarabah Certificate
12. Certificates of Islamic Investment
13. Meezan Amdan Certificate
14. Dollar Mudarabah Certificate
15. Car Ijarah
16. Easy Home
17. Laptop Ease
18.Online Banking
19. Meezan VISA Debit Card
20. Internet Banking
View Account Statement
Utility Bill Payments
Mobile Prepaid and Postpaid Payments
Funds Transfer Facility
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Balance Inquiry of Multiple Accounts
Real Time Cheque Status and Stop Payment Request
Cheque Book and Pay Order Request
Logging and Tracking Status of Complaints
Account Activity Alerts
22. Meezan ATM Network
23. Meezan QuickPay
24. Meezan Premium Banking


Corporate Products
Meezan Bank offers a large variety of products to its Corporate, Commercial and SME Customers
based on their financial requirements. Following is a list of the products that are used to offer
financing solutions to the customers.

1. Murabaha
Meezan Bank offers a convenient and easy to use solution for financing raw material and inventory
requirements of its customers through the Islamic mode of Murabaha. Murabaha is a sale transaction
where the seller discloses the cost and profit to the buyer at the time of execution of Sale. Murabaha
is a short term financing facility for meeting asset based working capital requirement of customers
where instead of providing a loan, Meezan Bank sells the required asset to the customer on spot or
deferred basis.

2. Istisna
Meezan Bank offers an Istisna based solution to finance the working capital requirements of its
customers. Istisna is a type of sale transaction where the buyer places an order with the seller to
manufacture certain asset and the sale is completed upon delivery of the asset to the buyer. Under
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this facility Meezan Bank provides funds to customers for manufacturing certain assets for the Bank
and then upon delivery, sells the asset in the market.

3. Tijarah
Tijarah is a working capital solution especially for those customers who sell their inventory on credit
and require funds for business operations during the credit period. In Tijarah, the Bank purchases the
finished goods from the customer and after taking the delivery, sells the goods in the market.

4. Ijarah
In order to provide a flexible solution to long term financing requirements of the customers, Meezan
Bank offers Ijarah based solutions. Ijarah technically means to give something on rent. The Bank
uses this product for medium and long term financing purposes where the Bank acquires the assets
required by the customer and then leases those assets to the customer for a known period. This
product is used for financing of assets such as plant, machinery, generators, equipment etc.

5. Running Musharakah
Running Musharakah is a Shirkatul-aqd based financing facility offered to the customers where the
Bank participates in the business activities of the customer and shares profit and loss as per the actual
performance of the business.

6. Diminishing Musharakah
Diminishing Musharakah is a medium and long term financing product, where the Bank and the
customer jointly purchase an asset and create joint ownership in the asset. The Bank then leases its
share in the asset to the customer while the customer purchases units of ownership in the asset from
the Bank at periodic intervals. Ultimately, the customer becomes the owner of the asset. This mode is
used for financing of fixed assets such as land, factory, building etc.
Different variants of the above mentioned basic products are used at Meezan Bank for offering
complete solutions to all the financing needs of the customer.

7. Import Financing
Meezan Bank offers comprehensive solutions for all the import requirements of its customers. Some
of the major imports financing products are as follows:
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a) Letter of Credit Services
In order to facilitate imports of customers, Meezan Bank offers letter of credit establishment services
on Wakalah basis at competitive rates and unmatched service quality. Meezan Bank offers flexible
and convenient import financing facility on the basis of Murabaha.
b) Finance against Imported Merchandize
Meezan Bank also offers Finance against Imported Merchandize facilities to its customers on the
basis of Murabaha. Under this facility, the Bank appoints the customer as its agent to import the
goods and the customer establishes the LC as an agent of the Bank. Upon receiving possession of the
goods, the Bank sells the goods to the customer on deferred payment basis and then keeps the same
goods under its pledge for securing the payment obligations of the customer.
c) Hedging Facilities
In order to hedge the risk of foreign currency price fluctuations, Meezan Bank offers a Shariah-
compliant hedging facility on the basis of Wa'ad.

8. Export Financing
Meezan Bank also offers a full range product menu for exporters where all the requirements of the
exporters can be fulfilled under one roof in a convenient manner. Some of the major facilities for
exporters are as follows:
a) Salam & Murabaha as Alternative to Export Bill Discounting
In order to provide financing for the immediate financing needs of the exporters Meezan Bank offers
a Shariah-compliant alternative to export bill discounting where instead of providing a loan against
the export order, Meezan Bank keeps the export bill as security and extends a fresh Murabaha
financing facility to the customer or purchases FCY against Pak Rupees from the customer on Salam
basis at spot rates to cater to the financing requirements of the customer.

9. Guarantee Services
In order to facilitate trade, Meezan Bank offers Shariah-compliant Guarantee facility to its customers
where the Bank provides different types of payment and performance guarantees on behalf of the
customer.
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Introduction to All Departments

Meezan Bank Limited has been divided into following divisions:
 Assets Management
 Retail Banking Division
 Liability Division
 Common Assets Division
 Credit Administration Division
 Human Resources Division
 Finance Division
 Treasury and International Division
 Information Technology Division
 Corporate Banking Division
 Operation Division
 Credit Risk Management Division
 Control and Compliance Division
 Training, Research, Communication & Public Division
 Consumer Banking Division
 Credit Policy Division
 Audit & Inspection Division
 Law Division

Asset Management
The Bank invest funds on behalf of its customers (shariah compliant investment product) and gives
them access to a wide range of traditional and alternative product offerings. For example open end
funds, pension funds and closed end funds

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Retail Banking Division
In this division bank deals with customers and execute their transaction directly. Bank provide the
service of savings, checking of accounts, mortgages, personal loans, debit cards and ATM cards.
Credit Administration Division
In this division, banks deals with the credit, banks gives loans to individuals ans to the corporations.
Audit & inspection Division
This department of the bank conduct audit of all the branches and submit its reports to the top level
management to take corrective measures.
Human Resource Division
This division performs the duty of hiring the employees, training the employees as well as retaining
the employees and if necessary, firing the employees.
Finance Division
This division controls the overall activities relating to finance i.e. monitoring the investment
activities, financing activities, Debit and Credit of funds and reasons thereof with proofs.
Training, Research, Communication & Public Division
This division makes research about the new product, imparts training to newly hired employees as
well as old employees for innovation as per the rules and regulation of State Bank of Pakistan.
Operation Division
This division controls the whole operation of all the branches and controls the cash activities,
cheques, account opening and other things about operations.
Law Division
This division engages the lawyers and gives them the power of attorney to protect the bank to in
courts of law where cases have been filled by the bank against defaulters of loan as well as against
the bank by the general public.
Information Technology Division
This division provides the relevant systems for working in the bank and protects the data in
computers at central place and controls the overall online system on daily basis.
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Corporate Social Responsibility

 Shaukat Khanum Memorial Cancer Hospital
Support in collection of funds through placement of Donation Collection Boxes in branches
 Anti-Tobacco Campaign 2013
The Bank arranged for a seminar for its employees to spread awareness of tobacco-related
diseases on Anti -Tobacco Day.
 Friends of Adam
Meezan Bank supported 'Friends of Adam', a welfare association for disabled and
epileptic children, through a unique initiative of providing these disabled children a real-life
work experience, to develop a sense of accomplishment in them. Under this initiative, a group
of disabled
 Umair Sana Foundation
Meezan Bank joined hands with Omair Sana Foundation, a not-for-profit organization that
works for cure and prevention of Thalassemia in Pakistan without taking any charges. In
order to facilitate their efforts, Meezan Bank set up a blood donation camp at the premises of
Meezan House. Staff at the Head Office as well as of Karachi branches visited the camp and
donated blood for Thalassemic children. Donors received blood screening reports for the
following diseases - Hepatitis B, Hepatitis C, Malaria, AIDS, Syphilis etc.
Also supporting and working with
 Sindh Institute of Urology and Transplantion (SIUT)
 The Kidney Centre Post Graduate Training Institute
 Association of the Physically Handicapped Adults
 COMSATS Institute of Information Technology (CIIT)
 Initiatives for Creating Awareness and Understanding about Zakat




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Ratios
Profitability Ratios
Profitability ratios measure the earning ability of the firm. Following ratios are calculated:
 Net Profit Margin
 Return on Assets
 Dupont Return on Assets
 Operating Income Margin
 Return on operating Assets
 Return on Total Equity
 Gross Profit Margin
Net Profit Margin
Net Profit Margin = Net Profit / Total Revenue *100
Year 2012 Year 2013
3508116 / 21836972 * 100
=16.06%
3956776 / 23171018 * 100
= 17.07%

Net Profit = profit after taxation
Total Revenue = Profit/return earned on financings, investments and placements
Working
Year 2012
Net Profit = 3508116
Total Revenue = 21836972
Year 2013
Net Profit = 3956776
Total Revenue = 23171018



Prepared by: IRFAN AHMAD & ALI NOUMAN

Graphical Representation:
Interpretation:
Net Profit margi
trend as for as index analysis is concerned. Net Profit Margin is to a r
after payment of

Return on Assets





Prepared by: IRFAN AHMAD & ALI NOUMAN
Graphical Representation:
Interpretation:
Net Profit margi
trend as for as index analysis is concerned. Net Profit Margin is to a r
after payment of
Return on Assets
Return on Assets =Earning Before Tax(EBT) / Total Assets * 100
5230226 / 274436510 * 100
15.40%
15.60%
15.80%
16.00%
16.20%
16.40%
16.60%
16.80%
17.00%
17.20%
THE
Prepared by: IRFAN AHMAD & ALI NOUMAN
Graphical Representation:
Interpretation:
Net Profit margin in the Year 2012
trend as for as index analysis is concerned. Net Profit Margin is to a r
after payment of
Return on Assets
Return on Assets =Earning Before Tax(EBT) / Total Assets * 100
Year 2012
5230226 / 274436510 * 100
=1.90%
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Graphical Representation:
Interpretation:
n in the Year 2012
trend as for as index analysis is concerned. Net Profit Margin is to a r
after payment of tax.
Return on Assets
Return on Assets =Earning Before Tax(EBT) / Total Assets * 100
Year 2012
5230226 / 274436510 * 100
=1.90%
2012
LEADING ISLAMIC BANK
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Graphical Representation:
n in the Year 2012
trend as for as index analysis is concerned. Net Profit Margin is to a r
Return on Assets
Return on Assets =Earning Before Tax(EBT) / Total Assets * 100

5230226 / 274436510 * 100
LEADING ISLAMIC BANK
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Graphical Representation:
n in the Year 2012 and 2013
trend as for as index analysis is concerned. Net Profit Margin is to a r
Return on Assets =Earning Before Tax(EBT) / Total Assets * 100
5230226 / 274436510 * 100
2013
LEADING ISLAMIC BANK
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and 2013 is 16.06% and 17.07%
trend as for as index analysis is concerned. Net Profit Margin is to a r
Return on Assets =Earning Before Tax(EBT) / Total Assets * 100
5646664 / 329724631 * 100
2013
is 16.06% and 17.07%
trend as for as index analysis is concerned. Net Profit Margin is to a r
Return on Assets =Earning Before Tax(EBT) / Total Assets * 100
5646664 / 329724631 * 100
is 16.06% and 17.07%
trend as for as index analysis is concerned. Net Profit Margin is to a r
Return on Assets =Earning Before Tax(EBT) / Total Assets * 100
Year 2013
5646664 / 329724631 * 100
= 1.7%
is 16.06% and 17.07%
trend as for as index analysis is concerned. Net Profit Margin is to a r
Return on Assets =Earning Before Tax(EBT) / Total Assets * 100
Year 2013
5646664 / 329724631 * 100
= 1.7%
is 16.06% and 17.07% respectively
trend as for as index analysis is concerned. Net Profit Margin is to a reasonable extent i.e. return on sales
Return on Assets =Earning Before Tax(EBT) / Total Assets * 100
5646664 / 329724631 * 100

respectively which shows an increasing
easonable extent i.e. return on sales

which shows an increasing
easonable extent i.e. return on sales
which shows an increasing
easonable extent i.e. return on sales
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which shows an increasing
easonable extent i.e. return on sales
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which shows an increasing
easonable extent i.e. return on sales
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Working
Profit before tax =
Total Assets =
Profit before Tax
Total Assets =
Graphical Representation:
Interpretation:
As for as
depicts that return on total assets is much lesser as compare to banking industry’s standard.
assets is not

Prepared by: IRFAN AHMAD & ALI NOUMAN
Working
Profit before tax =
Total Assets =
Profit before Tax
Total Assets =
Graphical Representation:
Interpretation:
As for as
depicts that return on total assets is much lesser as compare to banking industry’s standard.
assets is not
1.60%
1.65%
1.70%
1.75%
1.80%
1.85%
1.90%
1.95%
THE
Prepared by: IRFAN AHMAD & ALI NOUMAN
Working
Profit before tax =
Total Assets = 274436510
Profit before Tax
Total Assets = 329724631
Graphical Representation:
Interpretation:
return on total Assets is con
depicts that return on total assets is much lesser as compare to banking industry’s standard.
assets is not worthwhile
2012
THE LEADING ISLAMIC BANK
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Profit before tax = 5230226
274436510
Profit before Tax = 5646664
329724631
Graphical Representation:
Interpretation:
on total Assets is con
depicts that return on total assets is much lesser as compare to banking industry’s standard.
worthwhile
2012
LEADING ISLAMIC BANK
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5230226
274436510
= 5646664
329724631
Graphical Representation:
on total Assets is con
depicts that return on total assets is much lesser as compare to banking industry’s standard.
which shows that assets of the bank are not being utilized properly.
LEADING ISLAMIC BANK
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Graphical Representation:
on total Assets is concerned, in the year 2012 is 1.90%, in
depicts that return on total assets is much lesser as compare to banking industry’s standard.
which shows that assets of the bank are not being utilized properly.
2013
LEADING ISLAMIC BANK
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cerned, in the year 2012 is 1.90%, in
depicts that return on total assets is much lesser as compare to banking industry’s standard.
which shows that assets of the bank are not being utilized properly.
Year 2012
Year 2013
cerned, in the year 2012 is 1.90%, in
depicts that return on total assets is much lesser as compare to banking industry’s standard.
which shows that assets of the bank are not being utilized properly.
Year 2012
Year 2013
cerned, in the year 2012 is 1.90%, in
depicts that return on total assets is much lesser as compare to banking industry’s standard.
which shows that assets of the bank are not being utilized properly.


cerned, in the year 2012 is 1.90%, in
depicts that return on total assets is much lesser as compare to banking industry’s standard.
which shows that assets of the bank are not being utilized properly.
cerned, in the year 2012 is 1.90%, in
depicts that return on total assets is much lesser as compare to banking industry’s standard.
which shows that assets of the bank are not being utilized properly.

cerned, in the year 2012 is 1.90%, in the year 2013 is 1.40%.
depicts that return on total assets is much lesser as compare to banking industry’s standard.
which shows that assets of the bank are not being utilized properly.

the year 2013 is 1.40%.
depicts that return on total assets is much lesser as compare to banking industry’s standard.
which shows that assets of the bank are not being utilized properly.
the year 2013 is 1.40%.
depicts that return on total assets is much lesser as compare to banking industry’s standard. Return on total
which shows that assets of the bank are not being utilized properly.
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the year 2013 is 1.40%. which
eturn on total
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which
eturn on total
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Operating Income Margin
Operating Income Margin
= Earning Before interest and tax (EBIT)(EBT) / Total Revenue

Year 2012 Year 2013
5230226 / 21836972
=0.20%
5646664 / 23171018
=0.24%

Note: Islamic banking is Riba-Free so I use EBT for operating income margin
Working
Year 2012
EBT = Earning Before tax = 5230226
Total Revenue = 21836972
Year 2013
EBT = Earning before tax = 5646664
Total Revenue = 23171018










Prepared by: IRFAN AHMAD & ALI NOUMAN

Graphical Representation:
Interpretation:
Operating income
the year 2012 is 0.20


Note:
Operating Assets =
institutions + financing + operating fixed assets
Prepared by: IRFAN AHMAD & ALI NOUMAN
Graphical Representation:
Interpretation:
Operating income
the year 2012 is 0.20
Note: Meezan Bank is Riba Free so I use Earning before Tax
Operating Assets =
institutions + financing + operating fixed assets
0.18%
0.19%
0.20%
0.21%
0.22%
0.23%
0.24%
0.25%
THE
Prepared by: IRFAN AHMAD & ALI NOUMAN
Graphical Representation:
Interpretation:
Operating income
the year 2012 is 0.20

5230226
Meezan Bank is Riba Free so I use Earning before Tax
Operating Assets =
institutions + financing + operating fixed assets
2012
THE LEADING ISLAMIC BANK
Prepared by: IRFAN AHMAD & ALI NOUMAN
Graphical Representation:
Interpretation:
Operating income means income from operation i.e. earning
the year 2012 is 0.20%, in
Earning before interest and tax (EBIT) (EBT) / Operating Assets
Year 2012
5230226/ 117052867
=0.04
Meezan Bank is Riba Free so I use Earning before Tax
Operating Assets = cash and balances with treasury banks +
institutions + financing + operating fixed assets
2012
LEADING ISLAMIC BANK
Prepared by: IRFAN AHMAD & ALI NOUMAN
Graphical Representation:
means income from operation i.e. earning
%, in the year 2013 is 0.24

ing before interest and tax (EBIT) (EBT) / Operating Assets
Year 2012
/ 117052867
=0.04%
Meezan Bank is Riba Free so I use Earning before Tax
cash and balances with treasury banks +
institutions + financing + operating fixed assets
LEADING ISLAMIC BANK
Prepared by: IRFAN AHMAD & ALI NOUMAN
Graphical Representation:
means income from operation i.e. earning
the year 2013 is 0.24
Return on Operating Assets
Return on Operating Assets =
ing before interest and tax (EBIT) (EBT) / Operating Assets
/ 117052867
Meezan Bank is Riba Free so I use Earning before Tax
cash and balances with treasury banks +
institutions + financing + operating fixed assets
2013
LEADING ISLAMIC BANK
Prepared by: IRFAN AHMAD & ALI NOUMAN

means income from operation i.e. earning
the year 2013 is 0.24
Return on Operating Assets
Return on Operating Assets =
ing before interest and tax (EBIT) (EBT) / Operating Assets
Meezan Bank is Riba Free so I use Earning before Tax
cash and balances with treasury banks +
institutions + financing + operating fixed assets
means income from operation i.e. earning
the year 2013 is 0.24% which
Return on Operating Assets
Return on Operating Assets =
ing before interest and tax (EBIT) (EBT) / Operating Assets
Meezan Bank is Riba Free so I use Earning before Tax
cash and balances with treasury banks +
institutions + financing + operating fixed assets
means income from operation i.e. earning
% which is to a re
Return on Operating Assets
Return on Operating Assets =
ing before interest and tax (EBIT) (EBT) / Operating Assets
Meezan Bank is Riba Free so I use Earning before Tax
cash and balances with treasury banks + Balance with other banks + due from financial
means income from operation i.e. earnings before Tax (EBT). Income
is to a reasonable extent in both
Return on Operating Assets
Return on Operating Assets =
ing before interest and tax (EBIT) (EBT) / Operating Assets
5646664
Meezan Bank is Riba Free so I use Earning before Tax
Balance with other banks + due from financial
before Tax (EBT). Income
asonable extent in both
Return on Operating Assets

ing before interest and tax (EBIT) (EBT) / Operating Assets
Year 2013
5646664 / 172797374
=0.03%
Balance with other banks + due from financial

before Tax (EBT). Income
asonable extent in both

ing before interest and tax (EBIT) (EBT) / Operating Assets
Year 2013
/ 172797374
%
Balance with other banks + due from financial

before Tax (EBT). Income
asonable extent in both years.
/ 172797374
Balance with other banks + due from financial
from operation in
years.
Balance with other banks + due from financial
Page |
from operation in
Balance with other banks + due from financial
Page | 22
from operation in
Balance with other banks + due from financial
Prepared by: IRFAN AHMAD & ALI NOUMAN

Working
EBT = Earning before tax =
Operating Assets =
Operation Assets = 117052867
EBT = Earning before tax =
Operating Assets =
Operating Asset
Graphical Representation:

Interpretation:
Return on operating assets
analysis is concerned, return on
below the standard of banking industry.
Prepared by: IRFAN AHMAD & ALI NOUMAN
Working
EBT = Earning before tax =
Operating Assets =
Operation Assets = 117052867
EBT = Earning before tax =
Operating Assets =
Operating Asset
Graphical Representation:
Interpretation:
Return on operating assets
analysis is concerned, return on
below the standard of banking industry.
0.00%
0.01%
0.01%
0.02%
0.02%
0.03%
0.03%
0.04%
0.04%
0.05%
THE
Prepared by: IRFAN AHMAD & ALI NOUMAN
Working
EBT = Earning before tax =
Operating Assets =
Operation Assets = 117052867
EBT = Earning before tax =
Operating Assets =
Operating Assets = 172797374
Graphical Representation:
Interpretation:
Return on operating assets
analysis is concerned, return on
below the standard of banking industry.
2012
THE LEADING ISLAMIC BANK
Prepared by: IRFAN AHMAD & ALI NOUMAN
EBT = Earning before tax =
Operating Assets = 19125401 + 3851150 + 500000 + 88678076 + 4898240
Operation Assets = 117052867
EBT = Earning before tax =
Operating Assets = 28582626
s = 172797374
Graphical Representation:
Interpretation:
Return on operating assets
analysis is concerned, return on
below the standard of banking industry.
2012
LEADING ISLAMIC BANK
Prepared by: IRFAN AHMAD & ALI NOUMAN
EBT = Earning before tax = 5230226
19125401 + 3851150 + 500000 + 88678076 + 4898240
Operation Assets = 117052867
EBT = Earning before tax = 5646664
28582626 + 3554234 + 7442732
s = 172797374
Graphical Representation:
Return on operating assets in the years 2012 and 2013 is 0.04%, and 0.03
analysis is concerned, return on
below the standard of banking industry.
LEADING ISLAMIC BANK
Prepared by: IRFAN AHMAD & ALI NOUMAN
5230226
19125401 + 3851150 + 500000 + 88678076 + 4898240

5646664
3554234 + 7442732

Graphical Representation:
in the years 2012 and 2013 is 0.04%, and 0.03
analysis is concerned, return on operating assets has been dec
below the standard of banking industry.
2013
LEADING ISLAMIC BANK
Prepared by: IRFAN AHMAD & ALI NOUMAN
19125401 + 3851150 + 500000 + 88678076 + 4898240
3554234 + 7442732

in the years 2012 and 2013 is 0.04%, and 0.03
operating assets has been dec
below the standard of banking industry.
Year 2012
19125401 + 3851150 + 500000 + 88678076 + 4898240
Year 20
3554234 + 7442732 +
in the years 2012 and 2013 is 0.04%, and 0.03
operating assets has been dec
Year 2012
19125401 + 3851150 + 500000 + 88678076 + 4898240
Year 2013
+ 127622868 + 5594914
in the years 2012 and 2013 is 0.04%, and 0.03
operating assets has been dec
19125401 + 3851150 + 500000 + 88678076 + 4898240
127622868 + 5594914
in the years 2012 and 2013 is 0.04%, and 0.03
operating assets has been decreasing trend from 2012 to 2013
19125401 + 3851150 + 500000 + 88678076 + 4898240
127622868 + 5594914
in the years 2012 and 2013 is 0.04%, and 0.03% respectively. As for as index
easing trend from 2012 to 2013
127622868 + 5594914

% respectively. As for as index
easing trend from 2012 to 2013

% respectively. As for as index
easing trend from 2012 to 2013
% respectively. As for as index
easing trend from 2012 to 2013 but it is much
Page |
% respectively. As for as index
but it is much
Page | 23
but it is much
THE LEADING ISLAMIC BANK
Page | 24
Prepared by: IRFAN AHMAD & ALI NOUMAN
Return on Total Equity
Return on total Equity = (Net Income / Total Equity )*100
Year 2012 Year 2013
(3508116 / 15493638)*100
=22.64%
(3956776 / 17908150)*100
= 22.09%

Total Equity = Share Capital + Reserves + un-appropriated profit
Working
Year 2012
Net income = Profit after Tax = 3508116
Total Equity = 9033675 + 2759942 + 370021 = 15493638
Year 2013
Net income = Profit after tax = 3956776
Total Equity = 10027379+3551297 + 4329474 = 17908150












Prepared by: IRFAN AHMAD & ALI NOUMAN

Graphical Representation:
Interpretation:
Return on
inc


Working
Gross profit =
Total revenue =
Prepared by: IRFAN AHMAD & ALI NOUMAN
Graphical Representation:
Interpretation:
Return on
increasing trend

(10452438
Working
Gross profit =
Total revenue =
21.80%
21.90%
22.00%
22.10%
22.20%
22.30%
22.40%
22.50%
22.60%
22.70%
THE
Prepared by: IRFAN AHMAD & ALI NOUMAN
Graphical Representation:
Interpretation:
Return on Owner’s Equity in the year 2012 is 22.64%, in the year 2013 is 22.09
reasing trend
Gross Profit Margin = (Gross profit / Total Revenue )*100
(10452438
Working
Gross profit = Net spread earned = 10452438
Total revenue = Return
THE LEADING ISLAMIC BANK
Prepared by: IRFAN AHMAD & ALI NOUMAN
Graphical Representation:
Interpretation:
Owner’s Equity in the year 2012 is 22.64%, in the year 2013 is 22.09
from year on year basis as well as it is also meeting the standard of banking industry.
Gross Profit Margin = (Gross profit / Total Revenue )*100
Year 2012
(10452438 / 21836972
=47.86%
Net spread earned = 10452438
Return/ profit
2012
LEADING ISLAMIC BANK
Prepared by: IRFAN AHMAD & ALI NOUMAN
Graphical Representation:
Owner’s Equity in the year 2012 is 22.64%, in the year 2013 is 22.09
from year on year basis as well as it is also meeting the standard of banking industry.
Gross Profit Margin = (Gross profit / Total Revenue )*100
Year 2012
/ 21836972
47.86%
Net spread earned = 10452438
/ profit earned on financings, inv
LEADING ISLAMIC BANK
Prepared by: IRFAN AHMAD & ALI NOUMAN
Graphical Representation:
Owner’s Equity in the year 2012 is 22.64%, in the year 2013 is 22.09
from year on year basis as well as it is also meeting the standard of banking industry.
Gross Profit Margin = (Gross profit / Total Revenue )*100
/ 21836972)*100
Net spread earned = 10452438
earned on financings, inv
2013
LEADING ISLAMIC BANK
Prepared by: IRFAN AHMAD & ALI NOUMAN

Owner’s Equity in the year 2012 is 22.64%, in the year 2013 is 22.09
from year on year basis as well as it is also meeting the standard of banking industry.
Gross Profit Margin
Gross Profit Margin = (Gross profit / Total Revenue )*100

Net spread earned = 10452438
earned on financings, inv
2013
Owner’s Equity in the year 2012 is 22.64%, in the year 2013 is 22.09
from year on year basis as well as it is also meeting the standard of banking industry.
Gross Profit Margin
Gross Profit Margin = (Gross profit / Total Revenue )*100
Year 2012

earned on financings, inv
Year 2013
Owner’s Equity in the year 2012 is 22.64%, in the year 2013 is 22.09
from year on year basis as well as it is also meeting the standard of banking industry.
Gross Profit Margin
Gross Profit Margin = (Gross profit / Total Revenue )*100
(10644849
Year 2012
earned on financings, investments, placements = 21836972
Year 2013
Owner’s Equity in the year 2012 is 22.64%, in the year 2013 is 22.09
from year on year basis as well as it is also meeting the standard of banking industry.
Gross Profit Margin
Gross Profit Margin = (Gross profit / Total Revenue )*100
Year 2013
(10644849
= 45.94%
estments, placements = 21836972
Owner’s Equity in the year 2012 is 22.64%, in the year 2013 is 22.09
from year on year basis as well as it is also meeting the standard of banking industry.
Gross Profit Margin
Gross Profit Margin = (Gross profit / Total Revenue )*100
Year 2013
(10644849 / 23171018
= 45.94%
estments, placements = 21836972

Owner’s Equity in the year 2012 is 22.64%, in the year 2013 is 22.09% which shows an
from year on year basis as well as it is also meeting the standard of banking industry.

Year 2013
/ 23171018)*100
= 45.94%
estments, placements = 21836972

% which shows an
from year on year basis as well as it is also meeting the standard of banking industry.
)*100
estments, placements = 21836972
% which shows an
from year on year basis as well as it is also meeting the standard of banking industry.

Page |
% which shows an little bit
from year on year basis as well as it is also meeting the standard of banking industry.
Page | 25
little bit
Prepared by: IRFAN AHMAD & ALI NOUMAN
Gross profit =
Total Revenue =
Graphical Representation:
Interpretation
Gross profit margin on year to year
cost
Activity ratios measure a
sales.
Total Assets Turnover


Prepared by: IRFAN AHMAD & ALI NOUMAN
Gross profit =
Total Revenue =
Graphical Representation:
Interpretation
Gross profit margin on year to year
cost of sales.
Activity ratios measure a
sales.
 Total Assets Turnover
 Fixed Assets Turnover
Total Assets Turnover

44.50%
45.00%
45.50%
46.00%
46.50%
47.00%
47.50%
48.00%
48.50%
THE
Prepared by: IRFAN AHMAD & ALI NOUMAN
Gross profit = Net spread earned = 10644849
Total Revenue = Return
Graphical Representation:
Interpretation
Gross profit margin on year to year
sales. It means
Activity ratios measure a
Total Assets Turnover
Fixed Assets Turnover
Total Assets Turnover
Total Assets Turnover = Total Revenue / Total Assets
21836972 / 274436510
= 0.079 Times
THE LEADING ISLAMIC BANK
Prepared by: IRFAN AHMAD & ALI NOUMAN
Net spread earned = 10644849
Return/profit
Graphical Representation:
Interpretation
Gross profit margin on year to year
It means their selling and administrative expenses are rising year to year.
Activity ratios measure a
Total Assets Turnover
Fixed Assets Turnover
Total Assets Turnover
Total Assets Turnover = Total Revenue / Total Assets
Year 2012
21836972 / 274436510
= 0.079 Times
2012
LEADING ISLAMIC BANK
Prepared by: IRFAN AHMAD & ALI NOUMAN
Net spread earned = 10644849
/profit earned financings, invest
Graphical Representation:
Gross profit margin on year to year
their selling and administrative expenses are rising year to year.
Activity ratios measure a firm’s ability to convert different accounts within their balance sheets into cash or
Total Assets Turnover
Fixed Assets Turnover
Total Assets Turnover
Total Assets Turnover = Total Revenue / Total Assets
2012
21836972 / 274436510
= 0.079 Times
LEADING ISLAMIC BANK
Prepared by: IRFAN AHMAD & ALI NOUMAN
Net spread earned = 10644849
earned financings, invest
Graphical Representation:
Gross profit margin on year to year basis is 47.8
their selling and administrative expenses are rising year to year.
firm’s ability to convert different accounts within their balance sheets into cash or

Total Assets Turnover
Total Assets Turnover = Total Revenue / Total Assets
21836972 / 274436510
2013
LEADING ISLAMIC BANK
Prepared by: IRFAN AHMAD & ALI NOUMAN
Net spread earned = 10644849
earned financings, invest

basis is 47.8
their selling and administrative expenses are rising year to year.
Activity Ratios
firm’s ability to convert different accounts within their balance sheets into cash or
Total Assets Turnover = Total Revenue / Total Assets
2013

earned financings, invest
basis is 47.86% and 45.94% which shows a
their selling and administrative expenses are rising year to year.
Activity Ratios
firm’s ability to convert different accounts within their balance sheets into cash or
Total Assets Turnover = Total Revenue / Total Assets

earned financings, investments and placements =23171018
6% and 45.94% which shows a
their selling and administrative expenses are rising year to year.
Activity Ratios
firm’s ability to convert different accounts within their balance sheets into cash or
Total Assets Turnover = Total Revenue / Total Assets
23171018
ments and placements =23171018
6% and 45.94% which shows a
their selling and administrative expenses are rising year to year.
Activity Ratios
firm’s ability to convert different accounts within their balance sheets into cash or
Total Assets Turnover = Total Revenue / Total Assets
Year 2013
23171018 / 329724631
= 0.0
ments and placements =23171018
6% and 45.94% which shows a
their selling and administrative expenses are rising year to year.
firm’s ability to convert different accounts within their balance sheets into cash or
Total Assets Turnover = Total Revenue / Total Assets
Year 2013
/ 329724631
070 Times
ments and placements =23171018

6% and 45.94% which shows a negative
their selling and administrative expenses are rising year to year.
firm’s ability to convert different accounts within their balance sheets into cash or
Year 2013
/ 329724631
70 Times
ments and placements =23171018

negative sign bec
their selling and administrative expenses are rising year to year.
firm’s ability to convert different accounts within their balance sheets into cash or

sign because of high
firm’s ability to convert different accounts within their balance sheets into cash or
Page |
ause of high
firm’s ability to convert different accounts within their balance sheets into cash or
Page | 26
ause of high
firm’s ability to convert different accounts within their balance sheets into cash or
THE LEADING ISLAMIC BANK
Page | 27
Prepared by: IRFAN AHMAD & ALI NOUMAN

Working
Year 2012
Total Revenue = profit / return earned on financings, investments and placements = 21836972
Total Assets = 274436510
Year 2013
Total Revenue = profit/return earned on financings, investments and placements = 231710183
Total Assets = 329724631
Graphical Representation:


Interpretation:
Turnover means how many times we make the sales during the year as compare to our total assets. It is in
the year 2012 is 0.079, in 2013 is 0.070. Sale turnover is much lower keeping in view the standard of banking
industry.
0.064
0.066
0.068
0.07
0.072
0.074
0.076
0.078
0.08
2012 2013
Total asset turnover ratio
THE LEADING ISLAMIC BANK
Page | 28
Prepared by: IRFAN AHMAD & ALI NOUMAN

Fixed Assets Turnover
Fixed Assets Turnover = Total Revenue / Fixed Assets
Year 2012 Year 2013
21836972 / 4898240
= 4.45 Times
23171018 / 5594914
= 4.14 Times

Working
Year 2012
Total Revenue = return on financings, investments and placements = 21836972
Fixed Assets = 4898240
Year 2013
Total Revenue = return on financings, investments and placements = 23171018
Fixed Assets = 5594914
Graphical Representation:


3.95
4
4.05
4.1
4.15
4.2
4.25
4.3
4.35
4.4
4.45
4.5
2012 2013
Total asset turnover ratio
THE LEADING ISLAMIC BANK
Page | 29
Prepared by: IRFAN AHMAD & ALI NOUMAN
Interpretation:
From year on year basis fixed assets turnover has been a decreasing trend in the year 2013. Keeping in view
the standard of the banking industry, it is much below the standard which does not shows a healthy sign.

Market Ratios
Market ratios are commonly used by the investors to access the performance of a business as an investment
and also the cost of issuing stock.
 Earnings per Share
 Price / Earnings Ratio
Earning Per Share
Earning Per Share = Net income after tax / No. of Shares Outstanding
Year 2012 Year 2013
Rs.3508116 / 1,002,737,895
=3.50
RS.3956776 / 1,002,737,895
= 3.95

Working
Year 2012
Net Income = profit after tax = Rs.3508116
No. of share outstanding = No. of Shares Outstanding are given in annual report 2013=1,002,737,895
Year 2013
Net Income = profit after tax = RS.3956776
No. of share outstanding = No. of Shares Outstanding are given in annual report 2013=1,002,737,895





THE LEADING ISLAMIC BANK
Page | 30
Prepared by: IRFAN AHMAD & ALI NOUMAN

Graphical Representation

Interpretation:
Earnings per Share in the year 2012 are 3.95. In the year 2013 is 3.50. On year to year basis earning per share
is increasing due to increase in profit of MBL but it is not up to the mark as for as industry standard is
concerned.

Price / Earning Ratio
Price Earning Ratio = Market price per share / Earning per share

Year 2012 Year 2013
30.05 / 3.50
=8.71
39.38 / 3.95
= 9.96

Note: Market value per share is given in annual report 2013.


3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
4
2012 2013
THE LEADING ISLAMIC BANK
Page | 31
Prepared by: IRFAN AHMAD & ALI NOUMAN
Graphical Representation:

Interpretation:
Price Earning ratios means how much the price of the share in the market as compare to earning per share.
P/E ratio in the year 2008 is 17.04, in 2009 is 10.22 and in 2010 is 7.16 which is decreasing on year to year
basis. Although P/E ratio is meeting the criterion of industry standard but has a decreasing trend on year to
year basis.

Loan to deposit


Loan to deposit ratio is used by banks to assess their liquidity. It is obtained by dividing the total amount in
loans by total deposits by a bank

Loan to deposit = Total loan/Total deposit

Year 2012 Year 2013
127622868 / 289810519
=0.44
88678076 / 230425989
= 0.38

8
8.2
8.4
8.6
8.8
9
9.2
9.4
9.6
9.8
10
10.2
2012 2013
THE LEADING ISLAMIC BANK
Page | 32
Prepared by: IRFAN AHMAD & ALI NOUMAN
Graphical Representation:

Interpretation:
A commonly used statistic for assessing a bank's liquidity by dividing the banks total loans by its total
deposits. This number, also known as the LTD ratio, is expressed as a percentage. If the ratio is too high, it
means that banks might not have enough liquidity to cover any unforeseen fund requirements; if the ratio is
too low, banks may not be earning as much as they could be. Year 2013 shows decreasing trend it means
MBL do not use their deposits for financing to other.
Earning to Asset Ratio
Earning to asset ratio = Earning assets / total Assets
Year 2012 Year 2013
156811005 / 274436510
=0.57
162610899 / 329724631
= 0.49




0.35
0.36
0.37
0.38
0.39
0.4
0.41
0.42
0.43
0.44
0.45
2012 2013
THE LEADING ISLAMIC BANK
Page | 33
Prepared by: IRFAN AHMAD & ALI NOUMAN
Graphical Representation:


Interpretation:
Earning assets includes loans, lease, investment securities and money market assets. It excludes cash and
nonearning deposits plus fixed assets to work. High performance banks have a high ratio. Year 2013 shows
decreasing trend it means there is no proper utilization of their assets to generate operations efficiently.
0.44
0.46
0.48
0.5
0.52
0.54
0.56
0.58
2012 2013
THE LEADING ISLAMIC BANK
Page | 34
Prepared by: IRFAN AHMAD & ALI NOUMAN



Six Years’ Horizontal Analysis
Statement of Financial Position / Profit & Loss Account
Statement of Financial Position



Assets 2013 13 Vs 12 2012 12 Vs 11
% %
Cash and balances with
treasury banks 28,583 49 19,125 15
Balances with other
banks 3,554 -8 3,851 64
Due from financial
institutions 7,443 1,389 500 - 88
Investments 151,614 -1 152,460 55
Islamic financings and
related assets 127,623 44 88,678 26
Operating fixed assets 5,595 14 4,898 23
Defered tax asset 131 -76 546 -32
Other assets 5,182 18 4,379 14
329,725 20 274,437 37
Liabilities
Bills payable 3,615 18 3,059 34
Due to financial
institutions 11,375 - 38 18,461 100
Deposits and other
accounts 289,811 26 230,426 36
Deferred tax liabilities - - - -
Other liabilities 6,011 1 5,928 14
310,812 21 257,874 38
Net Assets 18,913 14 16,563 20
Represented by:
Share capital 10,027 11 9,034 12
Reserves 3,551 29 2,760 34
Unappropriated profit 4,330 17 3,700 14
Surplus / (deficit) on
revaluation
of investments 1,005 - 6 1,069 133
18,913 14 16,563 20







THE LEADING ISLAMIC BANK
Page | 35
Prepared by: IRFAN AHMAD & ALI NOUMAN


Profit & Loss
Account
2013 13 Vs 12 2012 12 Vs 11
% %
Return on
financings/investments
and placements 23,171 6 21,837 21
Return on deposits and
other dues expensed (12,526) 10 (11,385) 31
Net spread earned 10,645 2 10,452 12
Provisions (93) - 79 (451) - 68
Net spread after
provision 10,552 6 10,001 25
Fee, commission,
forex and
other income 1,962 39 1,413 5
Dividend income and
capital gain 1,539 56 986 -15
Income before
operating expenses 14,053 13 12,400 18
Administrative and
operating expenses (8,406) 17 (7,170) 17
Profit before taxation 5,647 8 5,230 20
Taxation (1,690) - 2 (1,722) 78
Profit after taxation 3,957 13 3,508 3




















THE LEADING ISLAMIC BANK
Page | 36
Prepared by: IRFAN AHMAD & ALI NOUMAN



Six Years’ Vertical Analysis
Statement of Financial Position / Profit & Loss Account
Statement of Financial Position

Assets 2013 % 2012 %
Cash and balances with treasury
banks 28,583 9 19,125 7
Balances with other banks 3,554 1 3,851 1
Due from financial institutions 7,443 2 500 0
Investments 151,614 46 152,460 56
Islamic financings and related
assets 127,623 39 88,678 32
Operating fixed assets 5,595 2 4,898 2
Deferred tax asset 131 0 546 0
Other assets 5,182 1 4,378 2
329,725 100 274,437 100
Liabilities
Bills payable 3,615 1 3,059 1
Due to financial institutions 11,375 3 18,461 7
Deposits and other accounts 289,811 88 230,426 84
Deferred tax liabilities - - - -
Other liabilities 6,011 2 5,928 2
310,812 94 257,874 94
Net Assets 18,913 6 16,563 6
Represented by:
Share capital 10,027 3 9,034 3
Reserves 3,551 1 2,760 1
Inappropriate profit 4,330 2 3,700 2
Surplus / (deficit) on
revaluation
of investment 1005 0 1096 0

181913

16563











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Profit & Loss Account
2013 % 2012 %
Return on
financings/investments
and placements 23,171 87 21,837 90
Return to deposits and other
dues expensed (12,526) - 47 (11,385) - 47
Net Spread Earned 10,645 40 10,452 43
Provisions (93) 0 (451) -2
Net Spread after Provision 10,552 40 10,001 41
Fee, commission, forex and
other income 1,962 7 1,413 6
Dividend income and capital
gain 1,539 6 986 4
Income before operating
expenses 14,053 53 12,400 51
Administrative and operating
expenses (8,406) -32 (7,170) -30
Profit before taxation 5,647 21 5,230 21
Taxation
(1,690)
395 - 6 (1,722) - 7
Profit after taxation 3,957 15 3,508 14
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SWOT Analysis

Strengths
 Pakistan's largest full fledge Islamic bank
 Largest market share of Pakistan's Islamic Banking Sector.
 Comprehensive menu of truly shariah compliant product and services.
 MBL bank has strong online network system and provides absolutely free service to their
products all over the country.
 Dedicated department for development of Shariah-compliant products, research and Shariah
audit.
 Providing consumer finance according to Islamic Shariya counsel like Laptop ease, house
hold using products etc.
 Strengths is that Pakistan Credit Rating Agency Bank has been awarded an AA and A1+ (A
one plus) in the long and short term respectively.
 Strong security system
 Customer Satisfaction
 Up to date software T24

Weaknesses
 Limited availability of human resources with Islamic banking knowledge
 Limited opportunities for investment of surplus liquidity
 No providing of products which are provided by conventional banks
 Their profit rate is less to some extent as compare to traditional bank provides
 Low Branches Network as compared to Conventional Banks
 Still behind on branchless banking with cellular companies like UBL Omini.



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Opportunities
 Increasing awareness about Islamic financial services and demand for Shariah-compliant
products and services
 Growing local and international Banking Islamic market
 Significant potential for market penetration by introducing new products as compare to
conventional banks are providing.
 Malaysian government tries to establish their own accounting and auditing standard board.

Threats
 Macro-economic challenges
 Misconceptions and misunderstandings among the general public about Islamic banking.
 Mostly conventional Banks tries to enter in Islamic banking Market by opening Islamic
banking window operation.
 SBP issue license rapidly to foreign Islamic banks to start operations in Pakistan.

PEST ANALYSI S

POLI TI CAL

Pakistan despite all international and public perceptions, today is a functioning democracy and
gradually there is a change in complexion and composition of legislatures with more educated people
and women entering into politics Similarly it helps in designing best strategies to implement that
could support the revival of Islamic banking industry.

ECONOMI CAL

Although Islamic banking sector development is important at the early stage of economic growth,
general liberalization presuming a homogeneous bank role may not necessarily promote growth. The
estimated cost structure indicates that state-owned commercial banks are large enough, while
development financial institutions and private banks can expect to obtain cost-saving advantages
by expanding their operations. Since scope economies are significant,
portfolio diversification generally increases bank profits. In addition, privatized
banks are the most efficient, followed by foreign and private banks. Public banks
are the least efficient.

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SOCIAL

Pakistan is Islamic country that’s why public have more interest in Islamic banking system.Banks
always helped people in improvement of living condition of poor people in various forms like giving
loans to poor for starting business or directly providing them the instruments that could enhance
their living conditions.

TECHNOLOGY

The Banking sector in Pakistan has experienced a rapid transformation. Now MBL is using T24
system it is latest software prevailing in Pakistan. Then came the multi-national banks, but these
were confined to serving an elite few. One could regard the past as the 'medieval ages' in the banking
industry, wherein every branch of the same bank acted as an independent information silo and multi-
channel banking (ATMs, Net banking, Tele-banking, etc) was almost non-existent. Today banks
have to look much beyond just providing a multi-channel service platform for its customers.
There are other pressing issues that banks need to address in order to chalk-out a roadmap for the
future. Hereare the top three concerns in the mind of every bank's CEO. The customer isinterested in
how he/she can benefit from the bank and its products.
That's why it becomes necessary for a bank to differentiate its products from the others. Some of the
ways in which differentiation can be introduced are through specialization, new products, and
increasing the added value.













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Conclusion of SWOT Analysis
Since MBL has decent strengths and opportunities in the market, its market share is increasing and it
is expanding its branches rapidly. So we concluded that MBL is adopting and implementing on
Growth Strategy.
Internal factor evaluation (IFE) matrix
Strengths
Weight Rating Weighted
score
 MBL provides free online service all
over the country
o.10 4 0.40
 Loyal workforce and satisfied
Customers
o.09 1 0.09.
 Excellent Alternate Delivery Channel
(ADC) Services e.g. internet banking,
mobile banking, VISA debit card etc.

0.08 4 0.32
 Its branches spread all over the
country.

0.09 3 0.27
 Dedicated banking for SME sector
which can lead growth in this sector.

0.07 3 0.21
 Job rotation of employees makes
them knowledgeable and skillful to
increase exposure.

0.08 4 .32
 No charges on issuance of cheque
book, ATM card on Current account
0.10 4 0.4

Weaknesses Weight Rating Weighted
score
 Workforce is not trained as required for
Islamic banking
0.07 2 1.4
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 The main focus of MBL is only on major
cities of Pakistan. It is strongly needed to
extend its network and people should be
educated about the functioning of bank.

0.02 3 0.06
 Relative less scattered global network as
other banks are venturing in the global
network for mass production. Presence in
more places may result in difficulty to
compete with others.

0.03 2 0.06
 Products range as compare to conventional
bank provides

0.09 3 .27
 Defensive approach in lending 0.01 4 0.04
 Software for working or connect to head
office

0.04 4 .16
Total

1 4 3.16

External factor evaluation (EFE) matrix
Opportunities Weight Rating Weighted
score

 In the prevailing scenario, MBL
should penetrate further and capture
various corporate customer as well as
retail customer by expanding their
network.

0.02 3 0.06
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 It has earned a good name by
offering special products like
personal consumer finance. So the
penetration of these products could
enhance the market share.

o.09 4 .36

 Governor of SBP tries to boost up
new policies to promote Islamic
banking policies
0.06 4 .24

 Establishing foreign branch network
will definitely give Meezan bank
more insight into global markets thus
making it more responsive to latest
global trends.

0.08 4 .32

 SBL can enjoy handsome return its
funding base by investing in capital
markets in the foreign countries.
0.07 3 .21

 Capitalization on information
technology because of increasing
trend in I.T will provide definitely an
edge of quality services.
0.04 4 .16
 Extension of serving markets of bank
in more locations will give an
opportunity toward more responsive
0.05 3 .15
 Increasing the number of product
and services related to online
banking because of boom in I.T field.

0.07 4 .28

Threats Weight Rating Weighted
score
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 MBL has also threat with different
bank who are offering the same
product like home, car, self ,
education finance .

0.05 4 .20
 Uncertainty in political and
economical environment.
0.05 2 .10

 Entrance of new Islamic banks in
Pakistan

0.08 3 .24

 Decreasing profit rate on saving
products will make customers to
explore other ways for higher return
on savings.

0.010 4 .04
 Mergers and Acquisitions are other
threat to bank.


0.07 4 .28

 Unstable economic condition taking
into consideration that has make
market turmoil and shaken the
economy. There is need to be careful
and to be vigilant.

0.03 4 .12

 Strict focus on SME sector and
negligence in other might create
problem.

0.05 4 .20
Total

1.00 4 2.96




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TWOS MATRIX



Strength

 First full fledge Islamic banking in
Pakistan.
 Using T24 banking software currently
no one other Islamic banks use in
Pakistan.
 MBL bank has strong online network
system.
 Largest market share
 They work on profit and loss
sharing that’s why doing not
effected by economic
recessions as compare to
conventional effected.




Weakness

 Employees are not proper
trained for Islamic banking
operations.
 Product line is less wide as
compare to Traditional
banks.
 Do not target corporate
business sector.
 Providing limited
facilities for import and
export business.
Opportunity
 It has an opportunity to
develop more
branches to expand
the business.
 MBL has opportunity
to increase its product
line to meet its
customer’s needs.
 Bank has opportunity
to train its employees
according to Shariah
compliance to make
them more competent
by conducting training
sessions.



SO Strategies
 They should develop their
branch network in remote/
rural areas.( a combination of
strength 4 & opportunity 1)




 The bank can increase their
deposits & advances by
attracting customers through
wide range of banking products.
( a combination of strength
1,strength & opportunity 2)
WO Strategies
 The bank can rise in the
market by providing
training to employees,
then they will able to
make satisfy their
customers regarding
their Islamic
operations.( A
combination of
weakness 1, &
opportunity 4)

 The bank can increase
their credit rating by
giving credit to trust
worthy clients who are
able to fulfill their
promise of making
payment
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Threats
 SBP issues more
licensees to start
Islamic banks in
Pakistan.
 Schemes are not
properly advertised
so that the target
market does not
know about facilities
offered by it
 There is no training
program for
employees to equip
them and warm
from latest
information.


ST Strategies

 The bank should invest in those
type of investments which are
recoverable on time ( a
combination of strength 4 &
threat 2)
 The bank can increase their
market share by making more
advertising & training
employees.( a combination of
strength 3 & threat 3)
WT Strategies

 Training should be
given to the employees
to target corporate
business.( a
combination of
weakness 3 & threat 4)



Suggested Strategy Formulation:
In our group point of view Meezan bank should implement the
following strategies it can be vary from person to person thoughts and experience.

 Product development
MBL should introduce new products to fulfill customer demands and needs so that it can stand with
the commercial banks competition level like personal consumer finance. Promote those facilities
which help for foreign trade business like L.C & L.G.
 Market development
Are new markets, existing products. MBL should introduce its existing product to new markets and
cities. Now MBL is working in 103 Cities but it’s not enough it have to expand its branch network to
all cities and towns for strong network and increase customers.

 Opportunity to expand foreign operations
They have the greater opportunity to expand the foreign operations because Islamic Banking is
growing day by day all over the world especially after the conventional banking crisis. Now Islamic,
European Countries and even Britain State is introducing Islamic banks for their countries and
working in this field.
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 CUSTOMERS Queries
Introduce the new way to entertain the customer queries that can be possible if there
SQC (service quality department) is working properly and up to date.

 HR development
(a) MBL should hire the knowledge and skilled staff who have Islamic Banking
information so that they can work efficiently like MBA (Banking)
(b) Provide the proper training to remove the deficiencies it will help to attract
customers toward Islamic banking and remove misconception regarding their
Islamic Banking operations.
(c) Introduce the better packages for the employees so that can control the efficient
employee switches.

Recommendation

 New branches should be open in every corner of the country, for the purpose to serve
maximum number of customers.
 Time to time, print or electronic advertising must be given by leading networks of country
about the organization/about the new products/ services, to aware the customers.
 Training programs must be organized on head office level for the employees, not in branches;
because branch staff is busy in their work then how can they train new appointed employees
and also have less knowledge.
 Bonus must be given to employees, at least once a year Festival Allowance on Eid should be
given.