Professional Documents
Culture Documents
Prepared for
MGT411 Project
Prepared by
Rizwan ul Haq
Student of MBA, Virtual University
User ID: mc070401171
January 2009
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Executive Summary
This report is a study on the operation and working of MCB Pakistan, one of the highest
ranking banks operating in Pakistan. Various aspects of the bank including its products,
services, financial Services, consumer Banking, corporate Banking and profitability have
been studied.
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Table of Content
Introduction
MCB Bank Ltd is one of the largest banks in Pakistan. It is one of the most creditable names
in the private banking and capital market sector of the country. Its headquarters are situated
in Karachi and Head Office at Lahore. Originally called Muslim Commercial Bank Limited,
it was established by the Adamjee Group just a month before the establishment of Pakistan in
July 1947 under the Indian Companies Act, VII of 1913 as a limited company. The mission
was to provide banking facilities to business community of the subcontinent. Nationalized in
1974 duing Zulfiqar Ali Bhutto’s regime, it was the first bank to be privatized back in 1991.
Nishat Group, a prestigious business group with a diversified portfolio, holds the majority of
stakes in the bank. Mian Mohammad Mansha, the winner of Sitar-e-Imitiaz, a prestigious
civil award, is the current Chairman of MCB.
Financial Statements for the 2007 places MCB amongst the largest bank in terms of market
capitalization (US$4.1 billion) and fourth largest bank, asset-wise (US$ 6.7 billion). It has a
customer base of 4 million served through 1026 country-wide branches which include 8
Islamic banking branches.
Vision Statement
Mission Statement
Bank History
The financial reports of MCB for th year 2007 reported a profit after tax of PKR16.4 billion
(US$270 million) and a return on average equity of 38% and a net interest margin of 8.08%.
The Bank’s asset quality is strong with a gross NPL ratio of 4.7% and provision coverage of
100%.
Last fifteen years have seen MCB concentrating 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.
Muslim Commercial Bank Limited was renamed in 2005 to MCB Bank Limited (MCB). The
objective was to explore international markets as they were facing resistance specially from
Western Countries to avail license. The head office of MCB was shifted to Lahore in 2008 in
a newly constructed building, namely MCB House, located at Sharea Ghous-ul-Azam
(formerly known as Jail Road) from Karachi.
MCB's headquarters are located at MCB Tower in Karachi which serves as the, and is also
the tallest building in Pakistan. MCB, advised by Merrill Lynch, became the fourth Pakistani
company (the other three being Hubco, PTCL and Chakwal Cement - they all have been
delisted) to list on the London Stock Exchange when it raised US$150 million global
depositary receipts.
In May 2008 Malaysian bank, Maybank and MCB sponsors Nishat Group signed an
agreement, whereby Maybank will acquire up to 20% of the ordinary shares in MCB from
Nishat Group. The acquisition is in-line with Maybank’s strategy, as Malaysia’s financial
services leader in the region, to build its presence in key growth markets across the region. It
also paves the way for MCB, one of Pakistan’s premier financial services groups, to engage
Maybank as its exclusive foreign commercial bank strategic partner.
Maybank initially acquired from Nishat Group 94,241,527 ordinary shares in MCB,
representing a 15% stake in the Bank, for a cash price of PKR470 per share. The total
consideration paid was approximately US$686 million. The purchase price represented a
11.4% premium to MCB’s closing share price of PKR 422 on May 2, 2008, and a premium
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of 12.9% to the average closing share price for MCB over the 30 trading days immediately
preceding the date of this announcement.
Based on MCB’s December 31, 2007 audited book value, the purchase price represents an
implied price to book value multiple of 5.13x, a price to 2007 earnings multiple of 18.0x and
a price to 2008 earnings multiple of 15.2x. In July 2008 Maybank exercised its right to
increase its stake to 20%.
The stake in MCB allows Maybank the right to appoint two Directors to represent its interest
on the Board of MCB. One of these Directors was to be appointed immediately and the
second Director will be appointed upon completion of the term of the existing Board,
scheduled to be on March 27, 2009.
As part of the transaction, Maybank and MCB are also expected to enter into a business
cooperation arrangement which will include, among others, Islamic banking, retail banking,
credit cards, asset management and SME banking. Leveraging Maybank’s leadership and
experience in these segments coupled with MCB’s brand and broad distribution network,
Maybank and MCB believe that significant revenue synergies can be attained. Both Maybank
and MCB are also expected to benefit from increased business ties and trade flows between
Pakistan and Malaysia.
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Board of Directors
Audit Committee
President Member
S. M. Muneer Member
President Member
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Ali Munir
Principal Office
Organizational Environment
MCB has an organizational culture conductive for growth and confidence. Following are the
guiding principals for its officers and crew members.
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
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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• MCB Visa is not just another card in your wallet. It not only provides the
conventional credit card services in a manner that is superior in comparison, but goes
an extra mile.
• Makes MCB Visa the most affordable credit card in your wallet.
• MCB VISA offers you a wide range of products that will cater to your diversified
taste perfectly.
• Intelligent Reward Monitoring and Redemption System.
• Buy now and pay off latter in easy and affordable monthly installments!
• Saving you from the hassel of making multiple payments on your various credit
cards.
• You need cash and want to pay back in installments. Just Dail for iit!
• Life is too precious to be spoitt by unforeseen events and misphas.
• How About a credit card that acts like hard cash
• Now Experience peace of mind of having a credit card free from fraud or misuse!
AFFORDABLE
EASE
Doorstep service and assistance from our dedicated sales staff to fill and submit application
along with documents.
AVAILABILITY
Available in all major cities i.e. Karachi, Lahore, Faisalabad, Rawalpindi and Islamabad
EXISTING CUSTOMERS
Get discounts, if you are already a customer of a similar facility at any other bank
Living in your own home was never this easy. So why wait? Apply for MCB Pyara Ghar
today!
For further details, please contact your nearest MCB branch, our call center 111-000-MCB
(622).Our sales staff will be available at your doorstep to assist you in getting the Car 4 You.
1. FLEXIBLE
2. AFFORDABLE
3. SPEED
4. SPECIAL BENEFITS
5. AVAILABILITY
6. EXISTING CUSTOMERS
Get 1% discount if you are already our customer for Personal Loan, ‘Pyara Ghar’ or
‘Business Sarmaya’. If you are our branch customer, you can avail this facility anywhere in
Pakistan.
• Fast and hassle free processing of application after completion of your documents.
• Doorstep service and assistance from our dedicated sales staff to fill and submit
application along with documents.
• Access your Business Sarmaya account through our vast ATM and branch network
anywhere in Pakistan.
• Available in all major cities i.e. Karachi, Lahore, Faisalabad, Rawalpindi and
Islamabad.
• Personal Loan
• Borrow up to Rs.1,000,000/-
• Optional insurance
• Doorstep service and assistance from our dedicated sales staff to fill and submit
application along with documents
• SPECIAL BENEFIT:
Cards
• 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
TRAVELER'S CHEQUES
RTC Features
MCB Bank has been at the forefront of providing it’s customers with new and innovative
products and financial instruments that are safe, secure and profitable.
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 travelling and in all walks of life.
• Gift CHEQUES
MCB Gift Cheques, eliminates guesswork in trying to find out the perfect Gift for any
occasion birthdays, wedding, graduation and religious festivals.
Gift Cheque is beautifully packed in a Gold / Silver envelope with a personalized Gift Card
designed to suit all occasions. They are safer than cash, because they can be replaced if lost
or stolen. They are also available at all TCS Express Centres round the clock.
Remittance
You can remit funds from any country to Pakistan through Swift System. Please provide the
following Swift Code to your bank in your country.
Online Services
• ATM Service
• Card Categories
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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.
• Mobile Banking
• At the forefront of technological excellence, MCB proudly introduces MCB
MOBILE BANKING. The convenience of accessing your account balance
information and mini statements whenever you want or wherever you may need them,
with comfort and peace of mind.
• Call Center
The state of the art MCB call center is the right choice to keep you in step with your ever
hectic schedule by providing you services relating to your account and Smart card at any
point in time.
• Bill Payment
• MCB easy bill pay offers unmatched convenience to pay your utility and mobile
phone bills or re-charge your prepaid mobile phone accounts anywhere, anytime with
security and peace of mind.
• MCB is the only bank that offers you 3 convenient options of making bill payments
to PTCL, SSGC, SNGPL, KESC, Instaphone, Mobilink, Paktel and Ufone. So, save
your precious time by avoiding long queues and pay your bills through MCB Easy
Bill Pay.
• MNET
• MNET enables all the member banks to share their electronic networks. Which means
customers of member banks can use MNET as well as 1-Link ATMs Nationwide.
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MNET member banks ATM machines accept cards issued by MCB Bank Ltd,
Citibank, Standard Chartered, HSBC, My Bank, Bank of Punjab, Prime Commercial
Bank, Saudi Pak Bank Limited, Habib Metropolitan Bank, KASB, JS Bank, Deutsche
Bank, SME Bank, Arif Habib Rupali Bank and First Women Bank. MNET customers
can use over 600,000 ATMs worldwide that carry the logo and shop at over 5 million
outlets that carry the logo.
• Virtual Banking
• MCB Virtual Internet Banking offers you the convenience to manage and control
your banking and finances – when you want to, where you want to. MCB’s Virtual
Internet Banking facility is
• Islamic Banking
Islamic Banking Division was formed with effect from 1st January 2003, which in a
short span of time, has developed sufficient expertise, necessary infrastructure,
information technology, and manpower to run Islamic Banking Operation and offer
Islamic Banking
•
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Type of Accounts
1) Basic Account
• Open a Basic Account with as little as Rs.1000/- only.
• Current Accoun
2) CURRENT ACCOUNT
• Low minimum balance requirements.
• MCB ACCESS:
3) SAVING ACCOUNT
Low monthly average balance requirements.
Profit paid into your account every six months.
Unlimited cash deposit and withdrawal facility at hundreds of branches nationwide.
Use your MCB SmartCard to shop at thousands of merchants across Pakistan.
Locker facility at economical rates.
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MCB’s financial statements as at September 30, 2008 are available at its website. The
study of the balance sheet shows the net assets balance of Rs. 59,160,064,000. As
compared to its previous balance sheet as on Dec 31, 2007, there is an increase in net
assets of Rs. 1,612,742,000. The amount coming from deposits and other accounts
increased. This shows the reliability of bank in the eyes of its old or new account
holders.
It is seen that the company’s cash flow from its operating activities is positive. This is a sign
of successful operation of the bank. Positive cash flow from investing activities indicates that
investment has been low this year. Rather, the bank has sold out some of its long-term assets
resulting in positive net cash flow. Financing activities has also been on the lower side. There
has been an outflow of cash in the area of financing which implies outflow of capital.
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MCB complies with all the rules and regulations set by Central Bank of Pakistan. Following
information depicts the bank’s adherence to the needful.
Chairman
Banking License No. BCD (1) 17-66 dated 8th December 1966.
Banking License No. BCD (1) 17-66 dated 8th December 1966.
COMMENTS
This brief study on the operational, investment, and financial activities as well as the
profitability of MCB throws a light on the overall position of the bank. It can be seen that the
bank is performing efficiently and effectively catering to the varying financial and
investment needs of classes of people ranging from ordinary consumers to the business
moguls. It may be included among the few Pakistani Banks with large range and variety of
products and financial instrumens. The recently won "Euromoney” Award for the best bank
in Asia indicates that it has acquired a prestige in the international banking community. The
financial statements also indicate prospects for even further growth.
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Bibliography
• MCB Website
• Wiki Encyclopedia
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Appendix