Executive Summery

Banks are the most important financial institution in modern economy. They are an integral part
of modern economic activities. In a developing country like Pakistan, banking has vital role play
in the process of economic development. JS Bank and MCB Bank Limited starts their journey at
and July 9, 1974. These reports mainly deal with financial statements analysis of JS Bank and
MCB Bank Limited. The horizontal analysis, vertical analysis and ratio analysis are essential
technique for financial statement analysis.But here we only focus on ratio analysis. Different
users such as investors, bankers, management and creditors use the financial statement analysis
of a company for make their decision purpose.

The objective of the study is to know the five years financial performances of JS and MCB
Banks by calculating and analyzing different types of Ratios and also know the current financial
position of these banks.

In this report, the financial statement of JS Bank and MCB Bank has been studied for five years
from 2014 to 2018 and also different types of financial ratios of these banks are calculated. The
clear concept of the study, theoretical aspects and different types of ratio analysis given in this
report. The liquidity,profitability,financial position and financial trend of JS Bank and MCB
Bank are main focus of this report which has been analyzed and used for comparing different
years. By analyzing the financial statements of these banks, it has been traced the financial
strength and weakness of these banks. Finally, some comments are shown regarding the charges
of those banks’ financial performance for the last five years.
 Table of Contents
Chapter 01: Introduction........................................................................................................................1
1.1 Background of the Study:..................................................................................................................1
1.2 Objective of the study:......................................................................................................................1
1.3 Scope of the study:............................................................................................................................2
1.4 Limitation of the study:.....................................................................................................................2
Chapter 02: Methodology of the study...................................................................................................3
2.1 Data/Information required:...............................................................................................................3
2.2 Collection of Data:.............................................................................................................................3
2.3 Data Analysis:....................................................................................................................................3
Chapter 03: Organizational Overview....................................................................................................4
3.1 Overview of JS Bank & MCB Bank Limited:........................................................................................4
Chapter 04: Theoretical Aspects.............................................................................................................5
CHAPTER 5 (Findings and Performance Analysis)Ratio Analysis.............................................................9
Chapter 6: Conclusion..........................................................................................................................21
 Chapter 01: Introduction

1.1 Background of the Study:

In these days our lives deeply entwined in the labyrinth of the banking system. The house we
live in may have been mortgaged to a bank, the car we drive or the taxi and the bus we ride to
our office may have been bought with money borrowed from yet another bank. The businesses
we see around have their links with banks; they might have borrowed money from a bank to
finance their working capital or fixed assets. If nothing else, they will have at least a current or a
savings account for deposit of the day’s sale proceeds. If we want to invest our money for profit
or simply to hide it from the prying eyes or nimble fingers of all the wrong people in the wrong
places we can step into the nearest branch of a bank. So it is clear that Bank and Banking
business is very much important for us in all aspects and steps of our life.

Financial statement analysis is the process of reviewing and analyzing a company’s financial
statements to make better economic decisions .These statements include the Income statement,
Balance sheet, Statements of cash flow and statements of retained earnings. Financial statement
analysis is required for evaluating risks, performance, financial health and future prospects of an
organizations. In this report, the financial statements of JS Bank and MCB Bank Limited are
analyzed.

1.2 Objective of the study:

General objectives:

 To analyze the financial statement of JS Bank & MCB Bank Limited with the key
focuses of those financial performance.

Specific objectives:

 To know the current financial position of these banks.

 To know the five years financial performances of JS and MCB Banks by calculating and
analyzing different types of Ratios.
 To know the implementation and application of Theoretical knowledge within banking
organization.
1.3 Scope of the study:

Knowledge and learning become perfect when it is associated with theory and practice.
Theoretical knowledge we gets from by reading books but by making this report we can practice
this elaborately.The study helps to compare the knowledge gathered from the text books and the
real world banking sector operation. we have come to know the financial aspects & positions of
banks operation by calculating various ratios. The contribution of banks in the overall economy
as financial intermediary. Huge of knowledge can be gathered from the study of banking sector
operation.

1.4 Limitation of the study: Due to the Banks policy of maintain secrecy we did not get the
opportunity to collect information accurately. So, it is quite difficult to get a clear picture about
the operations of banking business within a short period of time. So the study is simply able to
give an idea not the whole picture.

 Lack of adequate Information of banking institution for preparing this report, so this
report is based on only publicly available information.

 It was very difficult to get the actual information.

 Chapter 02: Methodology of the study

The research design is presented below-

 2.1 Data/Information required:

Data has been collected from secondary sources. Preparing a meaningful report of any
organization required information and data regarding the performance, background, functions,
and operations of the organization. So we tried to collect the maximum amount of information
for the report.

Source of Data:

Most of the data included in the report collected from two types of sources.

 Primary Sources

 Secondary Sources

Primary sources:

Primary sources means the sources of data which were never is used in anywhere and which data
are presented first time.

 Secondary sources:

Secondary sources mean the sources of data which were already existed and used. Many
journals, books and data from websites are used here as a source of secondary data.

2.2 Collection of Data:

The important amount of data we collected from those banks Annual Report which was given in
their websites. Except those we try to collect some information regarding banking and banking
industry from various books and websites.

2.3 Data Analysis:

Data has been computerized & processed by using MS Word, MS Excel. For the purpose of
analyzing the data we have presented in tabular form, percentage form with necessary chart and
graphs.
 Chapter 03: Organizational Overview

3.1 Overview of JS Bank & MCB Bank Limited:

Jahangir Siddiqui Bank or JS Bank is based in Karachi, Sindh, Pakistan. JS Bank is a

prominent, majority-owned subsidiary of Jahangir Siddiqui Group, with total revenue of around
562 million as of December 2018. JS Bank Limited currently owns 345 branches in 172 cities
across the country as well as an International branch in Manama, Bahrain. It was established in
2007 as a result of the merger of two big companies (Jahangir Siddiqui Investment Bank Limited
and American Express Bank Limited)- Pakistan operations.

Started with 281 employees in its establishment year 2007, the bank is now the employer of
more than 4000 people. With over 200 ATMs all over Pakistan and Azad Jammu and Kashmir,
the bank has been effectively facilitating its customer-base.

JS Bank comprises different business units, including Corporate Banking, Investment Banking,
Wealth Management, Treasury, and Retail Banking. For two consecutive years, in 2011 and
2012, the treasury department of the bank has been entitled as the No. 1 Primary Dealer (PD) of
Pakistan by SBP (State Bank of Pakistan). The bank has also participated in secondary trading in
T-Bills (Treasury Bills) and PIBs (Pakistan Investment Bonds) as the underwriters and market
makers.

MCB Bank Limited is a Pakistani commercial bank which is based in Lahore, Pakistan. The
majority of shares are owned by Pakistani conglomerate Nishat Group and Malaysian bank
Maybank.

It was incorporated by the Adamjee Group on July 9, 1947. The bank was established to provide
banking facilities to the business community of South Asia. The bank was nationalized in 1974
during the government of Zulfikar Ali Bhutto. This was the first bank to be privatized in 1991
and the bank was purchased by a consortium of Pakistani corporate groups led by Nishat Group.
As of June 2008, the Nishat Group owns a majority stake in the bank. The president of the bank
is Imran Maqbool.
 Chapter 04: Theoretical Aspects

1) Current Ratio

The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or

those due within one year. It tells investors and analysts how a company can maximize the  current assets
on its balance sheet to satisfy its current debt and other payables.

The concept behind this ratio is to ascertain whether a company's short-term assets (cash, cash

equivalents, marketable securities, receivables and inventory) are readily available to pay off its

short-term liabilities (notes payable, current portion of term debt, payables, accrued expenses and
taxes). In theory, the higher the current ratio, the better.

Current Ratio= Current Ratio / Current liabilities*100

2) Debt to total asset

The debt to total assets ratio is an indicator of a company's financial leverage. It tells you
the percentage of a company's total assets that were financed by creditors. In other words, it is
the total amount of a company's liabilities divided by the total amount of the company's assets. The
higher the ratio, the higher the degree of leverage, and consequently, financial risk. This is a
broad ratio that includes long-term and short-term debt (borrowings maturing within one year),
as well as all assets – tangible and intangible.
Debt to total asset= Short term debt +Long term debt/total asset.

3) Debt to Equity capital:

The debt-to-capital ratio gives analysts and investors a better idea of a company's financial
structure and whether or not the company is a suitable investment.

Debt/Equity Ratio is a debt ratio used to measure a company's financial leverage.

The D/E ratio indicates how much debt a company is using to finance its assets relative to the
amount of value represented in shareholders’ equity.

Debt to Equity capital Ratio = Total Liabilities / Shareholders' Equity.

 4) Gross Profit Margin:

Gross profit margin is a financial metric used to assess a firm's financial health by revealing the

proportion of money left over from revenues after accounting for the cost of goods sold. Gross

profit margin serves as the source for paying additional expenses and future savings.

Gross Profit Margin= Revenue – COGS /Revenue.

5) Net Operating Margin:

The operating margin measures how much profit a company makes on a dollar of sales, after
paying for variable costs of production.

Net Operating Margin= Total operating income – Expense / Total Asset.

6) Net Interest Margin:

Net interest margin (NIM) is a measure of the difference between the interest income generated

by banks or other financial institutions and the amount of interest paid out to their lenders.

Net Interest Margin =Net interest Margin /Total earning asset.

7) Net Non-Interest Margin:

No interest margin is a financial measurement that helps asses the usefulness of revenue
from non-interest items such as fees and service charges. Also referred as non-interest margin, it
is the difference between non-interest income and non-interest expenses divided by total earning
assets.

Net Non-Interest Margin= Net non-interest income / Total earning asset

 8) Net profit margin:

Net profit margin is the percentage of revenue left after all expenses have been deducted from
sales.

Net profit margin=Net profit/total operating revenue.

9) Time interest earn ratio:

The times interest earned (TIE) ratio is a measure of a company's ability to meet its debt

obligations based on its current income.

Time interest earn ratio= EBIT/Interest expense.

10) The degree of asset utilization:

The asset utilization ratio calculates the total revenue earned for every dollar of assets a company
owns.

11) Total asset turnover:

Total asset turnover ratio, measures the efficiency with which a company uses its assets to
produce sales.

Total asset turnover= Total sales/ Total Asset.

12) The equity multiplier:

The equity multiplier is a financial leverage ratio that measures the amount of a firm's assets that
are financed by its shareholders by comparing total assets with total shareholder's equity. It
shows the percentage of assets that are financed or owed by the shareholders.

The equity multiplier= Total asset/total equity capital.

 13) Tax management efficiency:

The tax management efficiency ratio of a fund measures what percentage of a fund's earnings are

lost to taxation.

Tax management efficiency= Net income/pretax net operating income.

14) Expense control efficiency:

Cost control is the practice of identifying and reducing business expenses to increase profits, and
it starts with the budgeting process.

Expense control efficiency= Pre-tax net operating income/ total operating revenue.

15) Asset management efficiency:

Asset management ratios are the key to analyzing how effectively and efficiently your small
business is managing its assets to produce sales. Asset management ratios are also called
turnover ratios or efficiency ratios.

Asset management efficiency= Total operating revenue /total asset.

16) Fund management efficiency:

Funds management is the overseeing and handling of a financial institution's cash flow.
The fund manager ensures that the maturity schedules of the deposits coincide with the demand
for loans. To do this, the manager looks at both the liabilities and the assets that influence the
bank's ability to issue credit.

Fund management efficiency= Total asset /total equity capital.

 17) Return on asset:

Return on assets is a profitability ratio that provides how much profit a company is able to
generate from its assets. In other words, return on assets (ROA) measures how efficient a
company's management is in generating earnings from their economic resources

ROA= Net income / total asset

18) Return on equity:

Return on equity (ROE) is a measure of profitability that calculates how many dollars of profit a
company generates with each dollar of shareholders' equity.

ROE = Net income / total equity

19) Earnings per share:

Earnings per share (EPS) is a figure describing a public company's

profit per outstanding share of stock, calculated on a quarterly or annual basis.

EPS= Net income/ Common share outstanding

20) Earning Spread:

 Difference between a cash inflow or income and cost. For depository institutions like
banks, spread income is the difference between its assets, loans, or securities and the cost of its
deposits and/or funds.

21) Price earning ratio:

The price-earnings ratio, also known as P/E ratio, P/E, or PER, is the ratio of a company's share
price to the company's earnings per share. The ratio is used for valuing companies and to find out
whether they are overvalued or undervalued.

P/E Ratio: Price per share / earnings per share.

 22) Cost income ratio:

The cost-to-income ratio (also called the cost/income ratio or C/I ratio) is the measure of the

costs of running a company in relation to its operating income.

23) Operating efficiency ratio:

The operating ratio shows the efficiency of a company's management by comparing the

total operating expense (OPEX) of a company to net sales. The operating ratio shows how
efficient a company's management is at keeping costs low while generating revenue or sales.

Operating efficiency ratio= Total operating expense / total operating revenue

24) Employee productivity ratio:

Productivity ratio - a fraction of output over input. Output - the amount produced by a person,
machine, business, or industry. Input - the labor, materials, etc.

Employee productivity ratio= Total operating income/ full time employee.

CHAPTER 5 (Findings and Performance Analysis)
Ratio Analysis
 1) Current Ratio:
MCB current
JS current ratio
ratio
19.83

1.14
1.13 1.13

Bank Name 2014 2015 2016 2017 2018

1.10 JS Bank
1.10

5.49
1.13% 1.14% 1.13% 1.10% 1.10%
4.35
MCB Bank 3.22% 3.70 3.22
3.70% 19.38 5.49% 4.35%
2018 2017 2016 2015 2014
2018 2017 2016 2015 2014

Interpretation: Here both bank current ratio is greater than 1, we know when current ratio is greater than
1, it indicates desirable situation. From both MCB bank has higher ratio rather than JS bank and which
mean it has better position.

mcb debt to total asset 2) Debt to total asset:

90.04%

Bank Name88.43% 2014 2015 2016 2017 2018

JS Bank 86.08% 92.60%
85.44%
92.69% 93.77% 95.74% 96.58%
MCB Bank 84.88%
85.44% 86.08% 84.88% 88.43% 90.04%
debt to total asset
2018 2017 2016 2015 2014

96.58%

95.74%

93.77%

92.69% 92.60%

2018 2017 2016 2015 2014

Interpretation: This ratio is indicator of financial leverage or debt. In those bank JS bank has
higher financial leverage rather than MCB. For these reason MCB has better position rather than
JS bank.

3) Debt to equity capital:

Bank Name 2014 2015 2016 2017 2018

JS Bank 92.60% 92.69% 93.77% 95.74% 96.58%
MCB Bank 85.52% 86.07% 86.54% 88.43% 90.04%
 JS debt to equity capital MCB debt to equity capital

90.04%
96.58%

95.74%
88.43%

86.54% 93.77%
86.07%
85.52%
92.69% 92.60%

2018 2017 2016 2015 2014 2018 2017 2016 2015 2014

Interpretation: IT means interest bearing all liabilities, from both every year JS bank has higher
liabilities rather than MCB bank, for these reason MCB has batter position.

4) Net Operating Margin:

Bank Name 2014 2015 2016 2017 2018

JS Bank 1.00% 1.52% 1042% 0.45% 0.20%
MCB Bank 3.63% 4.17% 3.86% 2.67% 1.91%
JSMCB Net operating
Net operating marginmargin

1.52% 4.17%
1.42%
3.63%
3.36%

1.00%
Interpretation: It explained how much profit can
makes from one dollar sale. From both MCB
2.67%

1.91%

0.45%
bank every year profit is higher than JS bank so it
0.20% indicates MCB has batter position.
2018
2018 2017
2017 2016 2016 2015 2015 2014 2014

MCB
JS net net interest
interest margin
margin 5) Net Interest Margin:
7.73% 7.68%

6.87%

Bank Name
5.12%
5.49%
2.39%
2014 2.88%
2015
2.44%
2016 2017 2018
JS Bank
2.18%

1.74%
2.44% 2.88% 2.39% 1.74% 2.18%
MCB Bank 7.68% 7.73% 6.87% 5.49% 5.12%

2018 2017 2016 2015 2014

2018 2017 2016 2015 2014
Interpretation: This ratio indicates how successful a firm investing its fund. From both
graphical analyses shows MCB bank use their fund successfully rather than JS bank.

MCB net non interest

JS net interest margin
margin 6) Net Non-Interest Margin:
1 2 3 4 5

Bank Name 2014 2015 2016 2017 2018

0.62%

JS Bank 0.62% 0.06%

0.06% -0.38% -1.19% -1.90%
MCB Bank
2018 2017
-1.55%
2016 2015
-1.09%
2014
-1.11%. -1.39% -1.75%
-0.83%
-1.11% -1.09%
Interpretation: It indicates revenue from
-1.19%
-1.39%
service charges, in here JS bank (2015,2014)
-1.75%
-1.90%
-1.55%
perform batter rather than MCB bank.

JS Net profit
MCB profitmargin
margin 7) Net Profit Margin:

Bank Name 24.36% 2014

26.19%
10.41%
26.12% 10.88%
2015
26.83%
2016 2017 2018
JS Bank
21.25%
7.74% 10.88% 7.74%
10.41% 3.98% 1.75%
MCB Bank 26.83% 26.12% 26.19% 24.36% 21.25%
3.98%

1.75%
Interpretation: It indicates how much net
income can make from total sales. From
2018
2018 20172017 2016 2016 2015 2015 2014 2014

both MCB bank make higher net income

from total sales rather than JS bank.

MCB time interest earned ratio 8) Time Interest Earned:

Bank Name 53.51%

2014 52.57%
201547.53%
2016 2017 2018
41.86%

JS Bank 22.15% 32.59% 36.24% 11.46% 4.27%

38.48%

JS Time interest earned ratio

MCB Bank 47.53% 52.57% 53.51% 41.86% 38.48%
36.24%
32.59%

2018 2017 2016 2015 2014

22.15%

11.46%

4.27%

2018 2017 2016 2015 2014

Interpretation: It indicates how well a company can cover its interest payments on a pretax
basis. From both MCB bank every year perform batter rather than JS bank.

MCB
JS Asset
Assetutilization
utilization 9) Asset Utilization:
8.52% 9.56% 9.63%

Bank Name
7.04%
7.46% 2014
7.79%
7.75%
2015 2016 2017 2018
JS Bank
6.71%
6.24%6.95% 7.75% 8.52% 7.46% 6.24% 7.04%
MCB Bank 9.63% 9.56% 7.79% 6.95% 6.71%

Interpretation: It indicates revenue earned

2018
2018 20172017 2016 2016 from every dollar of asset. In that graphical
2015 2015 2014 2014

analysis JS bank perform batter just one

(2018) year but another three-year MCB bank perform batter.

10) Total Asset Turnover:

Bank Name 2014 2015 2016 2017 2018

JS Bank 7.75% 8.52% 7.46% 6.24% 7.04%
MCB Bank 9.63% 9.56% 7.79% 6.95% 6.71%
MCB total asset trunover JS total asset trunover
9.56% 9.63%
8.52%
9.00%
7.79% 7.75%
7.46%
8.00% 7.04%
6.71% 6.95%
7.00% 6.24%

6.00%

5.00%

4.00%

3.00%

2.00%

1.00%

0.00%
2018 2017 2016 2015 2014 2018 2017 2016 2015 2014

Interpretation: It indicates efficiency of asset uses. From both JS bank performs better only one
year but MCB bank perform better another three years rather than JS bank.
 MCB JSmanagement
Taxtax
JSMCB equity multieffeciency
management
equity plier
multiplier effeciency

10.04 65.91%

8.64
72.41% 7.57
66.62% 7.18 63.82% 66.23%
60.68% 6.91 60.35%

62.15%
29.25 61.26%
23.49
60.05%
16.06
13.68 13.51
2018 2017 2016 2015 2014
2018 2017 2016 2015 2014
2018
2018
2017
2017
2016
2016
2015
2015
2014
2014

11) Equity Multiplier:

Bank Name 2014 2015 2016 2017 2018

JS Bank 13.51 13.68 16.06 23.49 13.51
MCB Bank 6.51 7.18 7.57 8.64 10.04

Interpretation: It indicates amount of company asset financed by stockholder equity. In that JS

bank has higher ratio of equity financing on asset for these reasons it has better position.

12) Tax Management Efficiency:

Bank Name 2014 2015 2016 2017 2018

JS Bank 65.91% 63.82% 61.26% 60.05% 62.15%
MCB Bank 66.23% 60.35% 60.68% 72.41% 66.62%

Interpretation: It measures fund earnings are lost to taxation, in here MCB bank lost less fund
during in taxation rather than JS bank, for these reason MCB perform better.

13) Expense Control Efficiency:

Bank Name 2014 2015 2016 2017 2018

JS Bank 11.74% 17.05% 17.00% 6.63% 2.82%
MCB Bank 40.51% 43.35% 43.16% 33.63% 31.90%
JS expense control effeciency
MCB expense control effeciency

43.16% 43.35%
40.51%

33.63%
31.90%

17.00% 17.05%

11.74%

6.63%

2.82%

2018 2017 2016 2015 2014

2018 2017 2016 2015 2014

Interpretation: When that ratio is higher of any

bank it increases net profit. From both MCB bank got higher ratio rather than JS bank, and that
 JSMCB asset
a sse t mmanagement
a n a g e m e n teffeciency
e ff e c i e n c y 14) Asset Management Efficiency:
9.56% 9.63%

Bank Name
6.71% 6.95%
7.79%
2014 2015 2016 2017 2018
JS Bank 7.75%
7.46%
8.52% 8.52%
7.75%
7.46% 6.24% 7.04%
7.04%
6.24%

MCB Bank 9.63% 9.56% 7.79% 6.95% 6.71%

2018
2018 2017
2 017 2016
2016 2015
20 15 2014
2014

Interpretation: It indicates how efficiently bank

uses his asset. From both JS bank performs better just one year but another three years MCB

MCB fund management effeciency 15) Fund Management Efficiency:

Bank Name
10.04 2014 2015 2016 2017 2018
JS Bank 8.64
13.5% 7.57
13.7% 16.1% 23.5% 29.2%
7.18
MCB Bank 6.91% 7.18% 6.91
7.57% 8.64% 10.04%

2018 2017 2016 2015 2014

operating effeciency ratio

97.18%
92.86%
87.09%
80.92% 82.20%

2018 2017 2016 2015 2014

Interpretation: In that ratio JS bank uses their fund efficiently rather than MCB bank.
 16) Return on Asset:

Bank Name 2014 2015 2016 2017 2018

JS Bank 0.60% 0.93% 0.78% 0.25% 0.12%
MCB Bank 2.58% 2.50% 2.04% 1.69% 1.43%
JS ROA
MCB
1.00%

0.90%
2.58%
2.50%
0.80%

0.70% 2.04%

0.60% 1.69%
0.50% 1.43%
0.93%
0.40% 0.78%
0.30% 0.60%

0.20%
0.25%
0.10%
0.12%
0.00%
2018 2018 2017 2017 2016 2016 2015 2015 2014 2014

Interpretation: IT indicates how a company effectively earn a return from its investment. From
both MCB bank effectively earn return rather than JS bank.

17) Return on Equity:

Bank Name 2014 2015 2016 2017 2018

JS Bank 8.10% 12.69% 12.47% 5.84% 3.60%
MCB Bank 17.84% 17.97% 15.46% 14.62% 14.31%
MCBJS
ROE
ROE

12.47% 12.69%

17.97% 17.85%
8.10%
15.46%
14.31% 14.62%
5.84%

3.60%

22018
018 2 0 1 72017 20 16 2016 20 15 2015 2 0 1 4 2014

Interpretation: It indicates how better a company

deploying shareholder capital, from both MCB bank perform better rather than JS bank.

18) Earnings Per Share:

 Bank Name 2014 2015 2016 2017 2018
JS Bank 0.71 1.35 1.38 0.65 0.37
MCB Bank 21.85 22.95 19.67 19.56 18.20

MCB EPS JS EPS

22.95
21.85
19.56 19.67
18.20

1.38 1.35

0.65 0.71

0.37

2018 2017 201 6 2015 201 4

2018 2017 2016 2015 2014

Interpretation: EPS shows how much money a company

makes for each share of its stock. In that MCB bank make higher return rather than JS bank.

JS Earning spread 19) Earning Spread:

80.00%

70.00%

60.00% Bank Name 2014 2015 2016 2017 2018

50.00%
JS Bank 69.00% 45.00% 8.06% 27.05% 37.06%
MCB Bank 23.99% 47.70% 33.41% 40.31% 53.64%
40.00%

30.00%

20.00%
MCB Earning spread

10.00%
53.64%
0.00% 47.70%
2018 2017 2016 2015 2014
40.31%

33.41%

23.99%

2018 2017 2016 2015 2014

Interpretation: Higher ratio indicates higher profit margin. IN here MCB bank perform better
first three years but in fourth year JS bank perform better
 JS P/E
MCB P/E ratio
ratio 20) P/E Ratio:
21.98%
27.03

Bank Name 2014 2015 2016 2017 2018

20.45% 20.34%
18.31%
17.43%

JS Bank 15.38
14.08% 7.41% 7.25% 15.38% 27.03%
MCB Bank 18.31% 17.43% 20.34% 20.45% 21.98%
14.08

7.25 7.41

2018
2018 2017
2017 2016 2016 2015 2015 2014 2014

Interpretation: IT indicates stocks price is high

relative to earnings and possibly overvalued. From both first year JS bank performs better and
last three years MCB bank perform better.

21) Cost Income Ratio:

Bank Name 2014 2015 2016 2017 2018

JS Bank 37.09% 32.20% 30.92% 92.86% 91.73%
MCB Bank 62.33% 56.39% 56.83% 61.59% 71.59%
MCB
JS cost income
c ost ratio rati o
inc ome

71.59%

61.59% 62.33%
56.83% 56.39%

92.86%
91.73%

87.09%

82.20%
80.92%

2018
2018 2017
2017 2016
2016 2015 2 0 1 5 2014 2014

Interpretation: It indicates, if ratio raises it means cost are raising gradually. From both MCB
bank performs better because of its lower ratio rather than JS bank.

22) Operating Efficiency Ratio:

Bank Name 2014 2015 2016 2017 2018

JS Bank 87.09% 82.20% 80.92% 92.86% 91.18%
MCB Bank 62.33% 56.39% 56.83% 61.59% 71.59%
 MCB operating effeciency ratio operating eff eciency ratio

71.59%

61.59% 62.33%
56.83% 56.39%

97.18% 92.86%
82.20% 87.09%
80.92%

2018 2017 2016 2015 2014

201 8 2017 2016 2015 2014

Interpretation: It indicates how efficient a company management keep their cost low. Here
MCB bank has lower cost or ratio mean they performs better.

MCB employee
JS employee productivity
productivity ratio
ratio 23) Employee Productivity Ratio:
6947.23
8137.25
Bank Name 2014 2015 2016 2017 2018
6319.62
7684.09
7179.79 5611.61
6662.49

JS Bank 4888.46
5611.61
6190.74
4790.36
6319.62 4790.36 4888.46 6947.23
MCB Bank 7684.09 8137.25 8190.74 6662.49 7179.78

Interpretation: It indicates output or return

2018 2017 2016 2015 2014
2018 2017 2016 2015 2014
from spending for an employee. From both
MCB bank has higher return rather than JS bank
for these reason MCB performs better.
 Chapter 6: Conclusion
Private commercial banks are paying a vital role in the development of our economy. But Govt.
and Pakistan bank play a crucial role to the private commercial banks through imposition of
deposit restriction, lending role or other operations. In recent years of banking business, MCB
bank has shown better performance comparing with JS banks. Both the MCB & JS bank always
tried its level best to perform financially well. In spite of trying to do well in some aspects both
banks faced some financial problems from time to time. These problems arouse time to time due
to economic slowdown, interest rate fluctuation, emerging capital market, inflation in the money
market and so on. Fighting with all these problems and competing with other banks every
moment the bank is trying to do better to best. If this thing continues, we hope that both banks
will develop even more in the future.