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Project

Of MCB Bank Limited

Submitted By:
Alisha Waheed
Mubeen Arshad
Submitted To:
Prof. Mam Farwa

SUPERIOR UNIVERSITY LAHORE


Strategic Management:

Muslim Commercial Bank Page 1

Serial no. Table of Contents Page no.

1. Executive Summary 3
2. Inroduction 4
3. Planning Function 5
4. Vision&Mission 5
5. MCB’s over All Strategy 6
6. Swot Analysis 8
7. MCB organizing Function 10
8. Organogram 11
9. Work Specialization of MCB 13
10. Leading Function of MCB 14
11. Training &Development 17
12. Financial and Non-financial benefit 18
13. Conclusion

Muslim Commercial Bank Page 3


Executive Summary:
In this report we are observing that how Muslim Commercial
Bank works in Pakistan. And focus on their Planning, Mission
statement, goals, their chain of command, HRM department,
SWOT analysis and their Organogram. Formal and informal
planning, which strategy used to achieve their goal. Criteria of
job analysis, the rewards which are given to employees for
motivation etc. In strategic management employees can give
their suggestions mean centralized method is use in MCB. All
component of mission statement use in MCB for achieving their
stated goal. Spot award like, certificates, trophies and cash is
given to employees. Indoor tanning is use; High valued
customers are awarded by Colanders and diaries. We also
discussed their competitive strategies; in SWOT analysis discuss
the strength and weaknesses of MCB. Discuss their Board of
director and other managers which are working in MCB.
In this project, we have almost discussed each part of the MCB’s
quality management
with Its customers. We discussed that how MCB made it easier
for their customer to use their ATM machines and also the cards
which are easily specified with the customers perceived
decisions whether they will have the transactions
directly or indirectly and these ATM machineswhich are almost
available in every corner in the main cities and as well as the
rural areas ofPakistan.
This project tells that how MCB bank uses
its values to improve the quality of itsmanagement and these are
innovation, integrity, excellence and customer centricity
thesevalues are noted and judged by the customer focus on the
MCB qualities.At last therefore, this is the summary of what we
have done in this project and an
overall view of the MCB’s quality management, which has been
properly dis
cussed in thissummary as well.
Introduction:
Before separation of Indo Pak, the need for Muslim Banks was
felt. And Muslims havingstrong financial capacity were thinking
to invest in this sector as well. This was the idea whichprovided
the way for setting up MUSLIM COMMERCIAL BANK Ltd
known as MCB.This was thethird Muslim Bank in the
subcontinent.
This bank was
incorporated under companies’ act 1913
on 9
th
July, 1947 (just beforepartition) at Calcutta.
MCB soon earned the reputation of a solid and conservative
financial institutionmanaged 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 portfo
lio and servicequality, Then MCB became a private bank in
1991. During the last fifteen years, the Bank hasconcentrated on
growth through improving service quality, investment in
technology andpeople, utilizing its extensive branch network,
developing a large and stable deposit base andmanaging its non-
performing loans via improved risk management
processes.MCB is one of the leading banks of Pakistan with a
deposit base of about Rs. 280 billion.Total assets of around
Rs.300 billion. The Bank has a customer base of approximately
4 million.Nationwide distribution network of over 1,000
branches .Over 450 ATMs in the market.

Planning Function of MCB:


MCB enjoys the unique position of being the Bank for Life
because of its commitment toexcellence and its constant
endeavor to make banking convenient for everybody. MCB
sharesthe element of convenience with water because not only is
water the basis of life but also takeson the form and shape of the
vessel it is kept in. MCB too quenches the thirst for
convenienceby taking on different forms according to the needs
and requirements of the consumer.MCB is the formal
organization. Its planning are Written, specific, and long-term
focus, involvesshared goals.

MCB VISION & MISSION Statement:

Vision Statement:
To be the leading financial services provider, partnering with our
customers for a moreprosperous and secure future.

Mission Statement:
We are a team of committed professionals, providing innovative
and efficient financialsolutions to create and nurture long-term
relationships with our customers. In doing so, weensure that our
shareholders can invest with confidence in us.
“All component of mission statement use in MCB”

MCB’s
Overall Strategy:
MCB are idea generators for better business and management
solutions to the widecustomer range in the country and abroad.
They do not just wait for opportunities to appear;they act on
creating new ones. Customer centric strategy helps them in
improving themselvesyear to year. Retaining their customers
enables them to materialize their targets into returnsthat bring
mutual benefits to all stakeholders and MCB. They are
emphasizing on the rightmarketing strategies and mix of
products & services to compete. While continuing to meet
andexceed market expectations, MCB Bank Limited is
committed on meticulous compliance withregulations and
building stronger layers of ethics and sustainability.

Business Strategy:
MCB Bank structures its products / services in line with .The
financial requirements of itscustomers and MCB product
development teams are constantly tapping the unbanked
segmentof the population for their induction in the banking
arena. Diversification in banking services iscrucial for proper
identification and generation of relevant need-based solutions.
This strategyhas helped them to serve their clientele without
break for decades. Technology now goes handin hand in serving
the massive 4.9 million customers of MCB Bank.
Financial Strategy:
In times where recovery is slow and dynamics of the economy
continue to play volatilerole, MCB Bank Limited has positioned
itself to gain from every possible opportunity,translating them in
revenue streams. The strength depicted by the asset base is
reflection ofthe prudent and risk management strategies that
would enable the Bank to achieve sustainablefinancial growth.

Competitive Strategy:

After making the mix structure of basic elements of marketing


the banks focus ongrowth strategies.Growth strategy is further
divided in to four strategies:

 Market Penetration Strategy

 Market Development Strategy

 Product Development Strategy

 Diversification Strategy

1. Market Penetration Strategy


With the help of this strategy the bank management first
consider either it couldgain more market share or not with its
current products in their current markets.
2.Market Development Strategy:
In this it considers whether it can find or develop new markets
for its currentproducts.
3.Product Development Strategy:
Then, it considers whether it can develop new products of
impending interest to itscurrent markets

SWOT Analysis of MCB


 Strengths:
Internal Analysis

MCB is the first Pakistani privatized bank because of its quality


management, marketing,innovation in product and services is
performing well in financial market.

 It has created a good reputation in the banking sector.3.

 It has 1200+ branches on different places in Pakistan.4.

 It has one of the nation’s largest ATM network with


more than 500 ATMs covering 110
 cities across the country and it is still growing.5.

 It provides MCB mobile ATM for convenient world


class banking services.
 Weaknesses:
 Mismanagement of time is the biggest mistake in MCB
branches that the official time of bank closing is
5:30pm but the staffs is normally on their seats till
7:00pm to 9:00pm.

 Due to the lack of advertisement majority of the people


are not well aware about the products of MCB.3.

 Most of the staff and employees are dissatisfied due to


low salaries as compared to same position in other
banks.

 MCB has numbers of employees of the period when the


MCB was nationalized bank theycannot perform their
duty as like employees in other banks. They always
show rudeattitude that is not much motivating for new
customer.5.

 There is lack of skills and training of employees. MCB


have to give attention to improvethe skills and abilities
of the employees according to modern banking
requirements

External Analysis:

Opportunities:
1. MCB bank can capture big portion of the market by
expanding their branches and ATMnetwork to other
countries.
2. MCB has to launch some new product or services like tale
bank and internet banking etc.
3. Media is powerful tool of communication. MCB have to
use it for advertisement of newproduct and severs provided
by MCB bank. By adverting MCB can create more
newcustomers.
4. MCB bank has to start some kind of Social services or for
culture benefit. By doing this itcan motivate its customer
that you are contributing in this services by parching
andusing MCB services.
5. Now the concept of Islamic banking is increasing in
Pakistan. There is opportunities thatby creating Islamic
branches all over the country and fallow Islamic structure
in thosebranches. It should also create Islamic product for
customers
Threats:

1. In Pakistan the banking sector is growing rapidly and it has


attracts the business men to enterin banking sector. Some
foreign banks have started their business in Pakistan. Now
MCB bank has to compete with great effort by giving
superior services.
From few years Pakistan is facing a lot of problems like energy
crisis, rising prices
of product. Govt. of Pakistan is borrowing money from State Ba
nk of Pakistan and fromcommercial banks also and due to lack
of money to give to depositor many banks can cause to
bankrupt.Foreign banks are increasing in Pakistan.

Organogram of MCB
Board of Directors
Mian Mohammad Mansha
(Non-Executive Director)
Chairman

S.M.Muneer
(Non-Executive Director)
Vice Chairman
Tariq Rafi (Non-Executive Director)Shahzad Saleem (Non-
Executive Director)
Sarmad Amin (Non-Executive Director)
Mian Raza Mansha
(Non-Executive Director)
Mian Umer Mansha
(Non-Executive Director)
Aftab Ahmad Khan
(Non-Executive Director)
Manzar Mushtaq
(Non-Executive Director)
Ahmad Alman Aslam
(Non-Executive Director)
Dato’
Seri Ismail Shahudin
(Non-Executive Director)
Datuk Abdul Farid Bin Alias
(NonExecutive Director)
Imran Maqbool (Executive Director)President / CEO
Audit Committee
Tariq Rafi (Non-Executive n Director)
Chairman
Aftab Ahmad Khan (Non-Executive Director)
Dato’
Seri Ismail Shahudin
(Non-Executive Director)
Ahmad Alman Aslam (Non-Executive Director)
Work Specialization of MCB

Number of employees:
MCB bank since its incorporation has the more potential bank
not only forits customer but also for its employee. MCB bank
offering great workingopportunities for all the people who are
interested to do job in MCB.an d withpassage of time employee
is increases and its business volume is increase becauseMCB
provide enhance career opportunities with dynamic work
according to theireducation and experience level currently
.Employee are working in MCB includingcontractual and
permanent staff.

Dato’
Seri Ismail Shahudin (Non-Executive Director)Ahmad Alman
Aslam (Non-Executive Director)
Work Specialization of MCB
Number of employees:
MCB bank since its incorporation has the more potential bank
not only forits customer but also for its employee. MCB bank
offering great workingopportunities for all the people who are
interested to do job in MCB.an d withpassage of time employee
is increases and its business volume is increase becauseMCB
provide enhance career opportunities with dynamic work
according to theireducation and experience level currently
.Employee are working in MCB includingcontractual and
permanent staff.

Total Numbers of employee = 9946

Staff of branch consists of 13 Members

Designation NO. of Employee


Branch Manager 01 Grade i
Operational Manager 01 Grade i
Customer Service Officer 01
Credit Manager 01 Grade iii
General Banking Officer 01 Grade iii
Cashier 01 Grade iii
Cash Officer 01
System Administration 01
Gun Man 02
Peons 02

Leading Function of MCB


HUMAN RESOURSE MANAGEMENT

PROCESS IN THE MUSLIM COMMERCIAL BANK.

 Human resource planning and forecasting


 Employee Recruitment and Selection
 Training And Development
 Performance Management
 Employee Compensation And Benefits
 Organizational Career Management
Human resource planning and forecasting
 Determining the Objectives.
 Defining skills required to meet the objectives.
 Determine additional human resource requirements
 Develop actions to meet the anticipated HR needs

Employee Selection and Recruitment


Human Resource Department has combined many selection
techniques i.e. jobapplication form , employment test, interview,
and physical examination.

The step to step Recruitment process followed by


organization is:
 Planning
 Job Analysis
 Sourcing
 Screening
 Slection
 Interviewing
 Hiring
 Reporting
Identify Candidates:
MCB identifies its candidates by developing the criteria of job
description and jobspecification and acting upon these
criteria job vacancy ads are spread through differentMedias like
newspapers and internet

External Sources

Press Advertisement Educational Institutes


Placement Agencies Employment Exchanges
Unsolicited Applicants Employee Referrals/
Recommendations

Employment Selection Process:

 Recruitment and selection in MCB has


many processes and steps that must be followed.
 Decide what positions to fill, through personal
planning and forecasting
 Build a pool of candidates for these jobs, by
Recruiting internal or externalcandidates.
 Have candidates complete application form and
perhaps undergo initial screeningInterviews.
 Use selection tools like tests, background
investigations, and physical exams to identifyviable
candidates.
 Decide who to make an offer to, by having the
supervisor and perhaps others interview the
candidates
 Screening and Short Listing:
Many candidates apply for job in response to vacancy ads
by submittingtheir CVs. Selection board goes through those
CVs and selects those candidates which initiallyfulfill
criteria of selection board. After prescreening selection
board short lists the candidateswho are considered most
suitable for job at initial level on the basis of their resume
Test / Interview:
In this process short listed candidates are called for test and
interview according tonature of their applied jobs

Selection Interview:
Selection interview is conducted for short listed candidates. A
selection interview is the proceduredesigned to predict future
job performance on the basis of ap
plicant’s oral responses to oral
inquiries.

Formats Used In Selection Interview:


•Structured/Directed
•Unstructured/Non directed

Modes Of Interview :

Penal interview:
An interview in which a group of interviewers questions the
applicant.
Structured sequential interview:

An interview in which the applicant is interviewed sequentially


by several persons ; each rates theapplicant on a standard form.
Training And Development
Training is the organized procedure by which people
learn knowledge and/or skills for a definite
purpose”.
MCB has a mix of training methodologies for its employees.
We can broadlycategorize these methods into five groups:
•On-the-job Training
•Off-the-job Training
•Apprenticeship Training
•Informal learning

•Effective lectures

EMPLOYEE DEVELOPMENT

Employee development is a joint, on-going effort on the part of


an employee and the
organizationfor which he or she works to upgrade the employee'
s knowledge, skills, and abilities. Successful employee
development requires a balance between an individual's career
needs and goals and the organization's need to get work done.
Employee development programs make positive contributions to
organizational performance. A more highly-skilled workforce
can accomplish more and a supervisor's group can accomplish
more as employees gain in experience and knowledge
Performance Appraisal
MCB Pakistan’s performance appraisal system is based on
a combination
of
'MBO‘ and 'Enabling
Traits' approaches, under which:60% weight age is given to
performance goals discussed and laid out in the beginning of the
year.

Another 40% weight age is assigned to enabling personality


factors, which are clarified to all employees by their supervising
officers at the start of each year.
Financial Benefits

 Life Insurance
 Disability Insurance
 Medical Allowances
 Pension Plans
 Severance Pay
 Conveyance Allowance
 Bonuses
 Profit Sharing
Non-Financial Benefits
 Sound Working Environment
 Training And Development
 Job Security
 Pick And Drop Facility
 Sick Leave/ Vacations
 Flexible Work Arrangement
 Flex Hours

Compensation And Benefits In MCB


MCB awards their employees a lucrative
(attractive) compensation in return of their tough mental labor.
Apart from basic salaries they are offered many other benefits
like:
•Utility Allowance
•Medical Allowance
•Overtime Allowance
Education Allowance
•House Rent Allowance
•Bonuses
Muslim commercial bank is a financial institution should provide
security to their customer confidential information and provide clear
and accurate documentation. The bank should focus to improve the
quality of the service and should bring innovation. The bank should
have to increase its number of ATM service so that can increase its
customer .Should involve in social work and should gain the trust of the
customer. All the policy of the bank should be clear to the customer
because if customer is unaware by any policy it may become the cause
to lost the customer, the employee of the bank should to be friendly
with the customer. The bank should solve the problems of their
customer quickly and should provide helpline service. The procedure of
the bank service should have to be simple and the organization should
advertise their services in TV channel in newspaper so the customer
may become aware. The bank has to display all its new services in its
website.
Hierarchy Chart:
Board of Directors:
Board of Directors:
Audit Committee: Mr. Yahya Saleem Mian Umer Mansha Mr. Muhammad Ali Zeb
Mr. Nor Hizam Bin Hashim
Chairman Member Chairman Chief Financial Officer: (Officiating) Mr. Hammad
Khalid Company
Secretary Mr. Fida Ali Mirza
Auditors: M/s. KPMG Taseer Hadi & Co.
Chartered Accountants Legal Advisors: M/s. Khalid Anwer & Co. Advocates &
Legal Consultants Registered
Principal Office: MCB House, 15-Main Gulberg Jail Road, Lahore Pakistan
Registrar’s and Share Registration Office (s):
Head Office: M/s. THK Associates (Pvt.) Limited st 1 Floor, 40-C, Block 6,
P.E.C.H.S.,
Karachi Pakistan Branch Office: M/s. THK Associates (Pvt.) Limited st 1 Floor,
DYL Motorcycles Limited Office, 147- Q Block, Behind Emporium Mall, Johar
Town, Lahore Pakistan Mian Mohammad Mansha Half yearly Report 2018 3 Mr.
S.M. Muneer Mr. Muhammad Tariq Rafi Mian Umer Mansha Mrs. Iqraa Hassan
Mansha Mr. Muhammad Ali Zeb Mr. Mohd Suhail Amar Suresh bin Abdullah Mr.
Nor Hizam Bin Hashim Mr. Yahya Saleem Mr. Imran Maqbool Vice-Chairman
Director President & CEO.
Financial Statement
2014:
It is a broadly described annual report of MCB Bank Limited in the year of
2014. During the financial year, The Bank’s Total Assets stood at Rs. 934,631
million. Total income of the Bank was Rs. 56,947 million. Operating profit
before tax and provision was Rs. 35,357 million. Profit before tax was Rs. 36,729
million. Profit after tax for the year was Rs. 24,325 million. The paid-up capital
of MCB for the year ended 31st December 2014 stands at Rs. 11,130 Billion.
Earnings per share (after tax) were Rs. 21.85.
The Board of Directors of the Bank has recommended a final cash dividend
@40% for the year ended 31st December 2014. This is in addition to 100%
interim cash dividends announced during the year.
2015:
It is a broadly described annual report of MCB Bank Limited in the year of
2015. During the financial year, The Bank’s Total Assets stood at Rs. 1,016,630
billion. The Bank’s deposits increased by 3% to Rs. 708.091 billion as on
31st December 2015. Total income of the Bank was Rs. 66,437 million. Operating
profit before tax and provision was Rs. 43,032 million. MCB Bank reported
Profit before Tax (PBT) of Rs. 42.333 billion and Profit after Tax (PAT) of Rs.
25.551 billion with an increase of 15% and 5% over 2014, respectively. The
paid-up capital of MCB for the year ended 31st December 2015 stands at Rs.
11,130 Billion. Earnings per share (after tax) were Rs. 22.96.
The Board of Directors of the Bank has recommended a final cash dividend
@40% for the year ended 31st December 2015. This is in addition to 120%
interim cash dividends paid during the year.
2016:
It is a broadly described annual report of MCB Bank Limited in the year of
2016. During the financial year, The Bank’s Total Assets stood at Rs. 1,051.81
billion presenting an increase of 4.72% over 2015. Deposits have posted Rs. 84
billion during 2016 showing increase of 12% over December 2015. Total income
of the Bank was Rs. 59,989 billion. Operating profit before tax and provision was
Rs. 36,999 billion. MCB Bank reported Profit after tax of the Bank closed at Rs.
21.9 billion registering a decrease of 14% over last year while Profit before tax
has decreased to Rs. 36.1 billion decreased by 15% as compared to profit
reported in 2016. The paid-up capital of MCB for the year ended 31st December
2016 stands at Rs. 11,130 Billion. Earnings per share (after tax) were Rs. 19.67.
The Board of Directors of the Bank has recommended a final cash dividend of
Rs. 4.0/- per share for the year ended 31st December 2016 which is in addition to
Rs. 12.0/- per share interim dividends already paid to shareholders, taking the
dividend payout ratio to 81.34%.
2017:
It is a broadly described annual report of MCB Bank Limited in the year of
2017. During the financial year, The Bank’s Total Assets stood at Rs. 1.33 trillion
reflecting a healthy increase of 26.19% over December 2016. The deposit base of
the Bank registered a splendid increase of Rs. 187.05 billion (+23.94%) over
31st December 2016. Total income of the Bank was Rs. 60,367 billion. Operating
profit before tax and provision was Rs. 32,250 billion. MCB Bank reported Profit
after tax of the Bank was reported at Rs. 22.5 billion registering an increase of
3% over last year whereas Profit before tax was reported at Rs. 31.0 billion,
down 14% Y-o-Y. Earnings per share (EPS) for the year were Rs. 19.56 as
compared to Rs. 19.67 for 2016. Return on Assets and Return on Equity were
reported at 1.89% and 17.65% respectively, whereas book value per share stood
at Rs. 115.18.
The Board of Directors of the Bank has recommended a final cash dividend of Rs. /-
per share for the year ended 31st December 2017, which is in addition to Rs. 12.0/-
per share interim dividends already paid to shareholders, taking the dividend payout
ratio to 83.14%.