Business Internship

Contents
Introduction of Organization..................................................................................................3
Muslim Commercial Bank (MCB) History............................................................................5
The history of MCB can be divided into three main Phases:.................................................6
Objective and Goals of Organization...................................................................................10
Administrative or Management style...................................................................................12
Organizational hirarchy........................................................................................................... 12
Organizational Chart............................................................................................................13
Situational Analysis..............................................................................................................18
Production Facilities..............................................................................................................26
Product and services.............................................................................................................27
MCB Retail Banking............................................................................................................28
Islamic Banking....................................................................................................................31
Requirements For Account Opening................................................................................ 33
Company Marketing Mix......................................................................................................34
3C’s Analysis....................................................................................................................... 35
Porters Five Forces Model................................................................................................... 36
Marketing Mix......................................................................................................................37
Human Resource Process.................................................................................................. 38
Financial Analysis.............................................................................................................. 46
Vertical analysis................................................................................................................... 51
Horizontal Analysis..............................................................................................................53
Conclusion...........................................................................................................................58
Internship Weekly Activities.................................................................................................60
Weekly Activities.................................................................................................................61
References...........................................................................................................................63
University of Punjab Jhelum Campus Page 1

Part -I: Introduction of
Organization

Introduction of Organization:
The word “Bank” is said to have been derived from the word Bencus or banque or bank. This
history of banking traced to as early as 200B.C. Banking in fact is primitive society, for ever
since man came to realize the importance of money as medium of exchange, the necessity of
controlling or regulating or institution was naturally felt. They persist in Greece used to keep
money and valuables of the people in temples. They persists thus act as financial agents. The
origin of banking traced to early goldsmiths. They used to keep strong safes for storing the
money and valuables of the people. The first stage in the development of modern banking
thus was the accepting of deposited of cash from those persons who had surplus money with
them. The goldsmith use to issue receipts for the money deposited with them. These receipts
began to pass from hand to hand in settlement of transaction because people had confidence
in the integrity and solvency of the goldsmith. When it was found that these receipts were
fully accepted in payment of debts; then the receipts were drawn in such a way that it entitled
any holder to claim specified amount of money from goldsmith. A depositor who is to
entitled make payment makes know get the money in cash from goldsmith or pay over the
receipt to creditor. These receipts were the earlier bank notes. The second stage in the
development of banking thus was the issue of bank notes. The goldsmiths soon discovered
that all the people who had deposited money with them do not come to withdraw their funds
in cash. They found that only few persons presented the receipts for encashment during a
given period of time .They also found that most of the money deposited with them lying idle.
At the same time, they found that they were being constantly requested for loan on good
security. They thought it profitable to lend at least some of the money deposited with them to
needy person. This proved a profitable business for the goldsmith’s. They instead of charging
safe keeping charges from the depositors began to give them interest on money deposited
with them. This was the third stage in the development of banking. At the time of
Independent, there were 631 offices of scheduled banks in Pakistan, of which 487 were
located in West Pakistan alone. As a new without resources it was very difficult for Pakistan
to run its own banking system immediately.Therefore,the expert committee recommended
th
that the Reserve Bank of India should continue to function in Pakistan until 30 September
1948,so that problems of time and demand liability, coinage currencies, exchange etcare
settled between Pakistan and India. The non-Muslims started transferring their funds accounts
to India. By the end of June 1948,the number of officers of scheduled banks in Pakistan
declined from 631 to 225.There were 19 foreign banks with the status of small branch offices
that were engaged solely in export of crop from Pakistan, while there were only two Pakistani

institutions, Habib Bank of Pakistan and the Australian Bank. The customer of bank is not
satisfied with the uncertain condition of banking. Similarly, the Reserve Bank of India was
not in the favor of Govt. of Pakistan. The Govt. of Pakistan decided to establish a full-fledge
central bank. Consequently, the Governor-general of Pakistan Quaid-e-Azam inaugurated the
State Bank of Pakistan on July 1, 1948. The banking structure in Pakistan comprises the
Following types:
• State Bank of Pakistan

• Commercial Bank of Pakistan
• Cooperative Banks
• Specialized credit institutions
Commercial banks have been the most effective mobilizes of savings and have been
providing short-term requirements of working capitals to trade, commerce and industry. Up
to December 31, 1973 there were 14 Pakistan commercial banks that functioned all over the
country and in some foreign countries through a network of branches. All these commercial
banks were nationalized in January 1, 1947 and were recognized and merged in to the
following five banks:
• National Bank of Pakistan

• Muslim Commercial Bank Limited
• Habib Bank Limited
• United Bank Limited
• Allied Bank of Pakistan
The State bank of Pakistan is the central Bank of Pakistan and was established on July 1,
1948.The separation of East Pakistan and its repercussion in the form of economic depression
has caused a lot of difficulties to the banking system in Pakistan. The network of bank
branches now covers a very large segment of national economy. The number of branches has
been increased appreciably and there is now on branch of bank for every 3000 heads of
population approximately. There is done reasonable growth in deposits from the
establishment of Pakistan. The Govt. of Pakistan in the late 90’s introducing the need for the
privatization of state owned banks and companies. The private sector has accepted the
challenge and most of banks are privatized today.

Muslim Commercial Bank (MCB)History:
MCB Bank Limited formerly known as Muslim Commercial Bank Limited was
incorporated by the Adamjee Group on July 9, 1947, under the Indian Companies Act, VII of
1913 as a limited company. The bank was established with a view to provide banking
facilities to the business community of the 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 Mr. AtifBajwa (previously with Citi Bank).Founded in 1948, Nishat Group is
one of the leading and most diversified business groups in Pakistan. The group has strong
presence in the most important business sectors of the country such as banking, textile,
cement and insurance.
• The early years:
The first hundred years are rough and the Bank encounters serious financial difficulties on
several occasions. In spite of various national financial crises, fierce competition over the
years from ten other commercial banks, two world wars and natural catastrophes, MCB
succeeds in expanding its activities, trebles its capital and opens its first branch in Cure pipe
in 1920.
• Building a network:
Cure pipe is the first step in the weaving of a nationwide network. MCB has become the first
bank to set up branches in rural locations: Mahébourg in 1955, Flacq in 1958, Triolet in 1959,
and Goodland’s in 1963.Today, the network consists of 40 strategically located branches and
helps assert the Bank's leadership in the retail market.
• Helping businesses grow:
MCB has always been dedicated to helping people with ideas become entrepreneurs and
businesses grow. The Group has been the lynchpin of the country's economic development.
Drawing on its intimate local knowledge and business relations, the Bank has supported
agriculture, trade and industry.
• A regional leader:

With a dominant market position on the local side, MCB is well inspired to expand beyond
the shores of Mauritius as early as 1991. MCB opened representative offices in Paris
(France), Johannesburg (South Africa) and Nairobi (Kenya). Moreover, the Group is actively
involved in project and trade financing in various countries of the sub-Saharan region, while
being engaged in other markets such as India.
• The Bank of Banks:
MCB is also actively pursuing its market development drive on the basis of its 'Bank of
Banks' strategy, positioning itself as a regional focal point for handling trade finance,
payments and cards operations outsourcing, amongst others.
Phases:
The history of MCB can be divided into three main Phases:
• Development Phase
• Nationalization Phase
• Privatization Phase
1-Development Phase:
MCB Bank Limited was incorporated by the Adamjee Group on July 9, 1947, under the
Indian Companies Act, VII of 1913 as a limited company. The bank was established with a
view to provide banking facilities to the business community of the South Asia. After the
partition of the Indo-Pak subcontinent, the bank moved to Dhaka (then the capital of former
East Pakistan) from where it commenced business in August 1948. In 1956, the bank
transferred its registered office to Karachi, Where the head office is presently located. Thus,
the bank inherits a 64 years legacy of trust of its customers and the citizens of Pakistan. It
started with a share capital of Rs 30 million which is divided into 3 million ordinary shares of
Rs10 each.
2-Nationalization Phase:
The 1960s decade is stated as the golden era in Pakistan’s economic and financial
development. The banking sector also registered noticeable growth during that period and
lent a strong helping hand to the government to achieve rapid economic growth of the
country. But in early 1970s this scenario changed altogether. The separation of East Pakistan

(now Bangladesh) and induction of the government led by Zulfiqar Ali Bhutto were the most
significant events of early 70s having far reaching effects on the banking system. In the wake
of rapidly changing conditions of the country, the government decided to nationalize all the
commercial banks so that the nation as a whole can benefit from a better use of resources.
Consequently, the Muslim Commercial Bank was nationalized under the Banks
(Nationalization) Act, 1974 promulgated on January 1, 1974.
3-Privatization Phase:
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. The banks after nationalization came
under political and bureaucratic control and deviated from normal banking practices some of
their senior executive sacrificed their personal integrity and interest of banking sector for
gaining promotion and accumulating personal wealth. That is how banking sector started
.The then PML government also became conscious of the falling standard of the banking
sector and decided to privatize all the commercial banks. Banks (Nationalization) (Second
Amendment) Ordinance 1991 was also promulgated to pave the way for privatization of
banks in Pakistan. In the wake of above amendments, 26% shares valuing Rs. 149.8 millions
of the Muslim Commercial Bank, held by the State Bank of Pakistan were sold and the
Bank’s management was transferred to the purchasers of these 26% shares...
Present Position of MCB/Current status:

MCB has significant contributions in building & strengthening both corporate and retail
banking sector in Pakistan. MCB Bank Ltd in 2009 delivered a profit before tax of Rs. 23.2
Billion registering a growth of 6% over last year. This growth is directly attributable to an
increase of 14% in deposits, 21% in revenues and a tight control on expense base enabling to
retain position as one of the most profitable banks in the country. In 2009, MCB delivered a
superior return on equity of 27.4% and assets crossed the Rs. 500 Billion mark. This
performance is all the more remarkable keeping in view the economic & political challenges
faced by the country during this past year and miscreant created issues that MCB specifically
grappled with for a large part of the year.
MCB Bank-Today:
MCB today, represent a bank that has grown with time and experience. A major financial
institution, in scope and size, it symbolizes a fully growing tree evergreen, strong and firmly
rooted.

Business Segment of MCB:
The four business segments of MCB bank are given below:
• Corporate finance
• Trading and sales
• Retail and consumer banking
• Commercial banking
Awards and Achievements:

2016 Euro money Awards Best Bank in Pakistan
2015 CFA 12th Excellence Awards Most stable bank of the year 2014
2015 Finance Asia Country Awards Best Bank in Pakistan
st
2015 ICAP and ICMAP 1 BCR Award 2014-Banking Sector
2015 SAFA Awards Winner of the best presented annual accounts 2014
2014 The Asset Triple A Best- bank Pakistan
2014 Asia money Awards Best of the best domestic bank
2014 The Asian Banker (USA) Strongest bank in Pakistan 2014
st
2014 SAFA Awards 1 Runner up best presented annual accounts 2013-
Banking Sector
2013 The Asset Triple a Best Domestic bank-Pakistan
2013 The Asset Triple a Best Islamic Deal
2012 The Asset Triple a Best Domestic Bank-Pakistan
2012 Euro money Best Bank in Pakistan
nd
2012 ICAP and ICMAP 2 Best Corporate Report Award 2011-Baning
Sector
2012 World Finance Best Commercial Bank -Pakistan

2012 Pakistan Centre for Philanthropy PCP Corporate Philanthropy Award
2011 Euro money Best Bank in Pakistan
st
2011 ICAP / ICMAP 1 -BCR Award 2010-Banking Sector
2010 The Asian Banker Strongest Bank in Pakistan
2010 The Asian Banker Leadership Achievement Award
2010 SAFA Awards Certificate of Merit Award 2009
MCB Maintains Edge Over Competitors:
Contrary to an existing trend of witnessing heavy loan losses in the domestic banking
industry, the MCB Bank reduced its volume of non-performing loans by Rs246 million to
Rs23.9 billion in the third quarter (July-September) of current calendar year from a reversal
of Rs1 billion on the provisioning of NPLs in second quarter (April-June) 2010. This was
caused by MCBs management prudential approach towards bringing down its infected loans
portfolio at appropriate level and an effective implementation of risk aversion system in the
bank. The gradual slowdown in the provisional expenses has been acting as main key driver
in earning growth since many quarters. Risk-free and quasi risk free assets now comprise 57
per cent of MCB lending book (loans + investments) while Govt. securities are 35 per cent of
total asset size - also low duration and extremely liquid asset book. This coupled with below
industry exposure to high risk sectors and limited involvement in consumer financing adds
credence to low risk profile of MCB, said Merrill Lynch Report issued recently. A superior
risk-return profile - and should not be ignored in a high interest rates and weak macro setting
in which MCB stands are the benefit most in relative terms; more from higher rates and less
from weak macros, it added. According to a banking sector analyst, the performance of MCB
has a superior Risk Management System in place since privatization, a less infected portfolio,
lowest NPL and above average recovery rate.MCB has so many competitors in industry.
Vision Statement:
“To be the leading financial services provider, partnering with our customers for a more
prosperous secure future”.

Mission Statement:
“We are a team of committed professionals, providing innovative and efficient financial
solutions to create and nurture long-term relationships with our customers. In doing so, we
ensure that our shareholders can invest with confidence in us”.
Objective and Goals of Organization:
Marketing Goals:
• Customer Oriented:
We treat each of our customer equality and as the most important person while we interact
with him/her. We must ensure that we do everything to meet and exceed the customer’s
expectations with prefer to times, accuracy and quality services.
• Quest For Quality:
We ensure that each moment of our time is spent on value adding activity. We always seek
ways for exceeding expectations of customers and colleagues. We also ensure that we do
things right, first time every time.
• Focus On Society:
We ensure that we contribute our due share to the Govt.We realized that we have a
responsibility in the society in which in we operate and we seek ways of playing a positive
role for the betterment of the community at large.
HR Goals:
• Employee motivation and respect:
We treat each of our employees with fairness which includes giving constructive feedback for
their development. We celebrate diversity and seek suggestions for all employees for
improvement. We ensure that responsibility and fairness in our entire decision making.
• Team Based Approach:
We work towards achievement of our vision and mission as a combine group. We encourage
inter and intra-departmental communications. We treat our colleges as our internal customers
and ensure that the requirements of internal customer focus are always met.

Financial Goals:
We always tried to earn profits by implementing on the plans which we have made
according to the goals and objectives. We are also in the guest of increasing the profits by
delivering better and good quality.
Strategic Objective:
• Delivering remarkable returns to stakeholder’s sustainable performance exceeding

market and shareholders expectations.
• Providing value added services through operational expansion,geography and up graded
system.
• Building a corporate culture of quality trust and team spirit as we remain dedicated to
being a socially responsible organization.

Part-II:
Administrative or
Management style
Situational Analysis

Administrative/Management Styles:
Head Quarter Karachi

sssa
Provisional Head
Punjab Lahore
Sindh Karachi
Balochistan Peshawar
Khyber Quetta
PakhtonKhawan
Circle Offices
Branch Offices

Organizational Hierarchy of MCB:
President
Senior Executive Vice
Executive Vice President
Senior Vice President
Vice President
Assistant Vice President
Officer Grade 1 2 3
Assistant
Cashier
Peon

Organizational Chart of MCB:
Board of Directors
Chairman
President
Commercial
Audit Wholesale Consumer
&RAR Banking Banking
Treasury
& Forex
Special Public Strategic Financial

Assets Relation Planning Control Complia
nce &
Control
Information Operations Human Project

Technology Resource Management
Business
Developm
ent
Risk Islamic Banking

Management
Management of Organization:
Board of Directors:
Mian Mohammad Mansha Chairman

S. M. Muneer Vice Chairman
Mr.Tariq Rafi Director
MR. ShahzadSaleem Director
Mr. Sarmad Amin Director
Dr. Muhammad Yaqub Director
Mohammed Hussein Director
MianRazaMansha Director
MianRazaMansha Director
MianUmerMansha Director
Mr. M. Ali Zeb Director
Ismail Shahudin Director
Key Management:
Audit Committee:
Tariq Rafi Chairman

Dr. Muhammad Yaqub Member
Mohammed Hussein Member
Aftab Ahmad Khan Member
Muhammad Ali Zeb Member
Malik Abdul Waheed Member
Human Resource Committee:

Dr. Muhammad Yaqub Member
MianRazaMansha Member
MR. ShahzadSaleem Member

Risk Management and Portfolio Review Committee:
MianUmerMansha Chairman
Mr. Tariq Rafi Member
Mr.Sarmad Amin Member
Mr.ShahzadSaleem Member
Business Strategy and Development Committee:

S. M. Muneer Member
MianUmerMansha Member
Dr.MohammadYaqub Member
Committee on Physical Planning, IT Systems and Contingency Arrangements:
Mr. Sarmad Amin Chairman

Mr. Tariq Rafi Member
S. M. Muneer Member
SBP Report Compliance Monitoring Committee:
Dr. Muhammad Yaqub Chairman

Mr.Aftab Ahmad Khan Member
Finance Related Committee:
Mr. Salman Zafar Siddiqi Chief Financial Officer

Secretary:
Mr. Abdus S. Sami Company Secretary

Auditors:
KPMG TaseerHadi& Co Chartered Accountants
Legal Advisors:
Khalid Anwer& Co. Advocates &Legal

Consultants
Hierarchy of Management:
Grades of Bank
SEVP
ESEVP
SVP
VP
AVP
Grade-1
Grade-2

Grade-3
Assistant
Clerical Non-Clerical Staff
Staff
Messenger
Cashier
Technical Staff Dispatch Rider
Situational Analysis
SWOT Analysis:
SWOT analysis is process of identifying a firms internal strengths and weaknesses and its
external opportunities and threats. SWOT analysis is based on the assumption that if
managers carefully review such strength, weaknesses, opportunities, and threats, a useful
strategy for ensuring organizational success will become evident. Strengths and weaknesses
typically relate to the internal environment of an organization, whereas opportunities and
threats are brought about by the external environment. In the following section both internal
and external analysis of MCB is outlined:
Strength:
• Size of the Balance Sheet:

First of all, a fundamental advantage that Muslim Commercial Bank has is the size of its
balance sheet. Each party exposure limit is set according to the size of the balance sheet. So
large balance sheet size allows Muslim Commercial Bank to lend Blue Chip clients and lend
them huge amounts, there by restricting its exposure to less creditworthy clients.
• Customer Loyalty:

Another advantage for Muslim Commercial Bank is that it has been around for some time; as
a result it has developed a loyal clientele. This is especially a major advantage in today’s
troubled and highly competitive market
• Largest ATM Network:
Muslim Commercial Bank also has the largest ATM network in the country. It is a leader
with 70 ATMs in five major cities of Pakistan.
• Huge Branch Network:

With these cut-throat competition among banks to attract deposits and other corporate and
Investment banking activities, the largest bank normally has a best chance of survival. The
larger the deposit base, the easier it is to attract more deposits, and the larger the equity base ,
the higher the per party exposure limit. MCB scores on both counts. A way of remaining
profitable is to cut costs. Costs as a % of deposits for MCB is 6.7%. MCB has a network of
more than 1200 branches, unmatched by any private or foreign bank, enabling it to raise
deposits at low costs. Around 60% of its deposits come from small towns and villages where
competition from other local and foreign banks is virtually nonexistent. As a result it raises
deposits at around 2-2.5% lower than other private banks.
• Liability Advantage:
On the liability side MCB has per branch deposits of 98million, compared to the other newly
privatized banks, RS686million for ABL and RS1287million per branch for FBL. So, MCB
has a lot of potential to increase its deposits without investing in network.
• Loan Recovery:
MCB has made a significant progress on the loan recovery. During 1997, it recovered RS1.77
billion of bad loans, exceeding its target of RS1.5 billion.
• Diverse Product Range:
MCB, at present, is offering a wide variety of financial products, which serve a diverse
customer base. It serves not only common households through schemes like Mahana
Khushali Scheme and Khanum Bachat Scheme to Blue-chip clients through MCB Saving
Instant and MCB Instant Financing. This gives MCB a competitive advantage over its
competitors.

Weakness:
• Over Staffing:
The problem of poor human resource management has been created during the
nationalization era when recruiting and placement decisions were mainly done on criteria
other than merit. Today, when MCB has to compete against 43 commercial banks and over
120 NBFIs, it should seriously analyze the inventory of its human resources. The consumers,
who come to MCB after experiencing services from any foreign or private commercial bank,
have felt that the service quality is very bad.
• Un-banked Areas:
MCB has over one hundred branches in areas where there is no other branch in a radius of 3
miles. These branches cannot be closed under SBP regulation. Most of these branches do not
generate sustainable profits and result in high operating expenses.
• High Administration Cost:
Even after privatization, the management has not been able to decrease its operating costs;
As a result, despite enjoying one of the highest spreads in the industry, MCB’s profitability
remained low. MCB has very low deposits per branch of 8million deposits per employee as
compared to Faysal Bank which has 21million and Askari has 18 million per employee.
• In-efficient Top Managers:
It’s an interesting fact that the reports of various financial and brokerage houses that we
consulted were almost unanimous in saying that a new president with more professional
approach must be inducted so as to increase the productivity of the bank.
• Lower Revenues to Assets:
MCB has lowest total revenue to assets ratio in the industry. Even after privatization, the
management has not been able to decrease its operating costs; As a result, despite enjoying
one of the highest spreads in the industry, MCB’s profitability remained low.
• Low Deposits Per Branch:

MCB has very low deposits per branch of 8million deposits per employee as compared to
Faysal Bank which has 21million and Askari has 18 million per employee.

Opportunities:
• Low Awareness:
The official savings rate has been between 13 to 15 percent. Low saving rates coupled with
high level of informal economy makes our economy an Un-banked economy compared to
other countries. This can be tipped as a great opportunity for banks to capitalize upon.
Banking industry can increase its efforts to create awareness among people about the
usefulness and the advantages of banking services can increase their customer base and find
ways to grow sustainably. In the current situation when, the deposit growth efforts of the
industry has seriously been hampered by the changes in the political environment, the banks
can change their focus to increasing the number of services and creating awareness about
them. For example, banks can make increased efforts to create awareness about credit cards
and Rupee Travellers Cheques, which have a great potential to grow.
• Long Term Relationships:
Having an old history, MCB has potential opportunities to exploit its long term relationships
with its customers that have been built during last fifty years.
• Potential in Foreign Operations:
MCB can also exploit its foreign operations by expanding them to Middle east and Central
Europe which not only have a big credit market but also a remittance market for Pakistan.
• Potential in Joint Ventures:

MCB can also count upon its joint ventures that it has started in various countries with
different financial institutions to increase its profitability.
• Rupee Fixed Deposit Schemes:
In the current state of the deposits market, with the FCAs being frozen, people are inclined
towards keeping their savings in Rupee fixed deposits. In this situation, MCB can, should,
and is introducing rupee fixed deposit schemes with high rates of interest.
Threats:
• Political Turbulence:
In a third world country like Pakistan, where it is the fourth elected government in the last ten
years (three of which could not complete their terms), it becomes difficult to operate
smoothly. Every time the government changes, the newer one revise immediately the policies
and reforms by the last government. There is no consistent fiscal policy of the government.

Political unrest, terrorism and riots are a matter of routine in most parts of the country. In
such a situation, keeping in view the slump in the economy, the banks being directly related
to the state of the economy face serious threats. The autonomy of the State Bank of Pakistan
has, however, eased up the situation a little.
• Narrowing Spreads :
Because of the high degree of competition in both the deposits and credit markets, the interest
spread is growing narrower and causing serious risks to the bank’s profitability.
• Bad Loans:
The bad debts of MCB as reported in the balance sheet for the year 1997 were Rs.
153,804,000 as compared with the total credit advancements of Rs. 64,365,285,000, out of
which, Rs. 709,975,000 have been defaulted. This amount shows a risk to the bank’s
profitability having a high potential being translated into a loss.
• Political Interference:
In Pakistan, where there is a high rate of corruption and a number of loans are sanctioned on
political pressures, which generally go bad. This political interference is a serious threat to
the operation of the bank and as well as a smooth flow of currency in the economy.
• Un-stable Government Policies:
As discussed earlier, there is a great deal of political instability in the country and there is no
consistency in the Government’s economic policies. This results in uncertainty in the
economy and the behaviour of the credit and deposits markets, which makes it difficult for
the bank to operate and to plan its investment portfolio in the optimum way.
• Low Discount Rates:
The low discount rates are also negatively influencing the advances rates which may affect
the banks. Profits from the other side’s for given banks operating in Pakistan all playing
significant role by incorporating new technologies and providing better quality services. Thus
create a threat to the local banks especially to MCB which tries to develop core competence
in electronic based products policies of privatization; foreign exchange reforms and structural
adjustments have increased the inflow of foreign resources through direct and portfolio
investment.

BCG Matrix:
High
Star Question Mark
(MCB)
Market
Growth
Low Cash Cow Dog
High Market share Low
Latest annual figures of MCB Bank Ltd show that market share & performance of the bank is
outstanding.
Market Share and Performance:
The consistent growth in profitability of the Bank indicated through interim results enabled
the Bank to capture a considerable share in the market. The local equity markets depicted
relative stability during 2010, resulting in a highest market Capitalization over the last two
years. The equity share of the Bank traded at approximately 2.5X book value throughout the
year and closed at Rs. 228.5 at December 31, 2010, 4% higher than the closing share price of
Rs. 219.7 recorded last year. As a result, the market capitalization of the Bank was reported
at Rs. 174B, being the second highest in the last six years (2007: Rs. 251B).
As a result of significant growth in profit numbers, the earning per share (EPS) of the Bank
was reported at Rs. 22.20 for the year end 2010 as compared to Rs.20.38 in 2009. This
combined with the improved share price led to a P/E (Price to Earnings) ratio of 10.30. The
book value of the Bank was reported at Rs. 91increasing from Rs. 80.3 as at December 31,

2009. The return on equity of the Bank was reported at 25.9% (2009: 27.3%), with ROA
reported at 3.13% (2009:3.25%).
Credit Rating:
The Pakistan Credit Rating Agency (PACRA) maintained the long term credit rating of AA+
[double A plus] and short term credit rating of A1+ [A one plus] of the Bank, through its
notification in June 2010 (2009: Long term: AA+ [double Aplus] and Short term: A1+ [A
one plus]).
Conclusion:
Concluding the analyses presented before you, it gives us great pleasure to state that the Bank
has cooped well with the challenges faced in the year 2010financially, and met stakeholders’
expectations while ensuring positive returns tithe shareholders on their investment in the
Bank, both in terms of wealth and trust.

Part-III:
Production Facilities

Product and services:
• MCB Corporate Finance:

MCB Corporate Financing provides access to diversified financing options, including
Working capital loans, term loans, trade finance services and investment banking.
• Working Capital Loans:
Based on the customer’s specific needs, the Corporate Bank offers a number of different
working capital financing facilities including Running Finance, Cash Finance, Export
Refinance, Pre-shipment and Post- shipment etc. Tailor- made solutions are developed
keeping in view the unique requirements of your business.
• Term Loans:
MCB offers Short to Medium Term Finance to meet capital expenditure and short term
working capital requirements of our customers. The loans are structured on the basis of
underlying project characteristics and cash flows of the business.
• Trade Finance Services:
Under Corporate Banking MCB offers trade finance services that include an entire range of
Import and export activities including issuing Letters of Credit (L/Cs), purchasing export
Documents providing guarantees and other support services.
• Cash Management:
Cash Management provides a wide range of value added services to large corporations
through its vast network of online branches. Our structured and customized products enable
Our customers to realize their sales proceeds swiftly from all over the country, supported by
Real-time MIS.
• Transaction Banking Division

Transaction Banking provides wide range of value added services to large corporations
through its vast network of real-time online branches network. Our structured and customized
Products enable our customers to realize their sales proceeds swiftly from all over the
country, supported by real-time MIS.
The basic products offered by Transaction Banking Division are as under:

• Collections
• Payments
• Channel Financing
• Local Rupee Drawing Arrangement
• Home Remittances
MCB Retail Banking
Deposits Accounts:
• Current Account:
MCB Bank offers a variety of current accounts to cater to the everyday transactional needs of
various customers. These accounts ensure ease and freedom to bank from any of the 1,100
branches across the country. The different accounts include: the basic account that has no
minimum balance; Business Account offering free online transactions, Demand Drafts, Pay
Orders and lots more to meet the day to day business requirements.
• Savings Account
It offers a wide array of savings products that suit short term growth & transactional needs.
Our savings accounts offer attractive profit rates as well as flexibility to transact. Savings
Xtra is targeted for customers having Rs. 5 million deposit, 365 Gold offers profit rate on
daily balance while PLS savings has a lower minimum balance requirement.
• Foreign Currency Account :
Enjoy the confidence of operating an international account, locally. MCB Foreign Currency
Account offers the option of earning attractive returns on your Foreign Currency Investment.
• Saving 365 Gold:
MCB Savings 365 Gold Account offers you a wide range of attractive profit rates. The MCB
Saving 365 calculates profits on a daily product basis and gives you the facility of unlimited
withdrawals.
• Smart Dollar Account:
MCB Smart Dollar Account is a sensible way to maintain or grow your US Dollar deposit
across USD Current, Savings or Term Deposits.
• Special Term Deposits:
With a wide range of choices and tenors, you can open one or more term deposit accounts
that best suit your current or long term needs MCB Term Deposits offer attractive short to
mid-term investment options with flexibility, convenience and security.

Business Accounts:
MCB Business Account lets you build your business through the accrued savings from
discounted transaction fees, and more
• Saving Xtra Account :
• Current Life Account:
• MahanaKhushaliBachat
MCB BANCASSURANCE:
Combining the best of banking and insurance solutions, MCB Banc-assurance has created a
one-stop shop for all your financial and insurance needs. Whether you want to save for your
child’s education or marriage, for the security of dignity after retirement or gaining maximum
return on savings, MCB Banc-assurance has a plan just for you.
• Flexi Life
• Life Partner
• Educe
• Dream Wedding
• Capital Sure
• Retire Easy
• Income ax
• Future Assure
• Protection Plan
MCB loan Products:

• Car4U
• Business Sarmaya
• PyaraGhar
• Easy Personal Loan
• Instant Finance
• MCB Travel Cheque
MCB Online Services:

• ATMs

• Call Center
• Mobile Banking
• Bill Payments
• Online Banking
MCB Cards:
• Smart Card
• Debit Card
MCB Investment Banking:

The basic services offered by investment banking are as under:
• Project & Structured Finance
• Syndicated Loans and Debt Capital Markets
• Quasi Equity/Hybrid Instruments
• Equity Capital Raising
• Advisory Services
• Facility Administration
• Commercial Banking
MCB Agricultural Products:

MCB has been providing finance to the agriculture sector since 1973. With the help of our
vast branch network, specialized staff posted in the branches, multiple and diversified product
range, we cater to the financing requirements of the farming community spread throughout
the country and facilitate in achieving increased productivity.
• Shadabi Plan
• Khushali Scheme
• Tractor Finance Scheme
• Aabiari Scheme
• Grower Finance
• Dairy & Meat Plan
• Murghbani Scheme
• Baghbani
• Mahigeri Scheme

Virtual Banking:
MCB provides the convenience of banking via internet, whether at home, office or on travel,
log on to www.mcb.com.pk and enjoy 24 hour access to all your accounts at MCB for great
number of services such as Funds Transfer, Utility Bill Payments, Mobile Top-ups and much
more.
• Detailed Account Summary of all listed accounts.
• Mini-statements of each of the listed accounts showing recent transaction history for
that account(s).
• Statement-by-Period of each of the listed accounts, based on the period specified.
• Immediate or Scheduled Transfer of Funds between your own accounts, as well as to
third-party accounts setup as beneficiaries, maintaining accounts with MCB.
• Scheduling of ‘One-Time’ as well as ‘Recurring’ Funds Transfers.
• Payment of utility bills for registered Utility Companies.
• Bulk Salary Transfer for Corporate Customers, to facilitate them in paying salary to
the corporate employees, who maintain accounts with MCB.
• Bulk Funds Transfer for Corporate Customers.
• Cheque Book Request for any of your listed accounts.
Islamic Banking:
With the help of Shariah specialists, lawyers and professional commercial bankers, MCB
Islamic Banking provides Riba Free and Shariah Compliant solutions to various customer
segments in a growing number of cities.
• Deposit Schemes
For customers who are looking for a deposit opportunity where they can pursue their funds
and reap halal returns on it, MCB offer the following products:
o Al-Makhraj Saving Account
o Al-MakhrajIanat Account
o Al-Makhraj Term Deposit
• Fund Based Facilities
MCB offers 3 broad Islamic fund based facilities:
o Ijarah
o Murabahah

o Diminishing Musharika Equipment
• Ijarah Products:
MCB’s Islamic Ijarah, analogous to the English term 'leasing’, is based on the
‘IjarahwaIqtina’ concept which means the sale of the asset to the lessee after the Ijarah has
matured. Under this scheme, MCB will be the owner of the asset, and the customer (lessee)
will be given the asset to use for a certain period of time in return for monthly rental
payments. MCB will give a separate unilateral undertaking that it will offer to sell the asset to
the customer (lessee) at the maturity of the Ijarah agreement at a price that may be equal to
the security deposit amount, hence the term ‘WaIqtina’
Types of Ijarah:
o Car Ijarah
o Equipment Ijarah
• Murabahah:
It is a contract between a buyer and a seller under which the later first purchases the goods at
the request of the former i.e., customer and then sells it to same customer after adding profit.
Murabah Sale Price = Cost + Expenses incurred + Agreed Profit
• Musharika Equipment:
It is a contract through which the bank and its client participate in the joint ownership of a
property. The share of the Bank is further divided into a number of units and it is agreed that
the client will purchase the bank’s share periodically, thus increasing his own share until all
the units of the bank are purchased by him so as to make the client the sole owner of the
property.
• Privilege Banking :
A first from a local bank, MCB Privilege through its dedicated, world class Privilege Centers
offers a higher level of personalized services, more rewarding in-branch experiences and a
wide array of deposit and investment products that are tailored to meet the financial
expectations for affluent clientele. As members of MCB Privilege, customers experience
unparalleled advantages that put them ahead of others. MCB’s dedicated Privilege Centers a
wait to welcome you in Karachi, Lahore, Islamabad and Multan, with plans to expand to
more locations.

Other Services:
• MCB MNET
• MCB Salary Club
• MCB Lockers
• MCB SMS Banking
• MCB Full Day Banking
Requirements For Account Opening:
• ID Card of applicant
• ID Card of father, mother, brother, sister, husband or wife
• Student card (if applicant is student)
• Two photos for illiterate person
• A/c opening form
• Specimen signature card
• Zakat form (for non-Muslims)
• Deposit slip
• Requisition form

Part-IV:
Company Marketing Mix

Company HR Process
Company
Accounting Process

3C’s Analysis:
3 C’s
Analysis
Company
Competitor Customers
• Customers:
MCB main focus on the customer satisfaction where the customer come in the bank the staff
serves the customers with great attention. Give the information about the bank products and
the information which customers want.
• Competitors:
There is a great competition in the banking sector. All the banks offer almost the same
products to the customer.MCB offer the product to the customer according to the market
competition. The advantage of MCB is MCB LITE which is not offer by any other bank.
• Company:
MCB also focus on internal environment of the organization and work with the great
attention to improve the environment.

Porters Five Forces Model:
Threat of entry
Bargaining Power Industry

Rivalry Bargaining power
of Suppliers
of buyers
Threat of substitutes
For future analysis Of MCB environment porter’s five force model analysis is also applied on
the bank. This analysis takes into consideration to the following factors.
• Availability of substitutes:
Substitution of one product with another one increase the rivalry within an industry although
perfect substitute of banks are not available in the market but people still have choices of
savings or investing their money. They can either save their money at homes or put their
money in the National Saving Centre (banking intermediaries) which gives protection to their
assets. Aside from saving one can invest money in stock market in form of shares/bonds or in
real estate. These kinds of substitutes increase rivalry among banking industry.
• Rivalry among existing firms:
There is enough competition among various banks as variety of public or government banks
already exist in the market offering products on competitiveness. If we look at Islamic
banking products then Mezan Bank, Habib Bank and many others are offering wide range of
products. The competition among these banks given rises in the challenges which the

competitive banks have to face. The competition among various banks increases the
switching of costumers from one bank to other banks.
• Threat of new entrance:
The banking sector of any country has always chances of growth and competition as many
new banks enter and leave the market. Mostly foreign banks step in the devolving countries
for expending their branches not only this mergers between foreign and local banks take
place on large scale but Pakistan’s present economic condition and government instability
has arise the feeling of awe and terror among most of the foreign banks to enter in the market.
In future, due to uncertainty and security problems in Pakistan investors will not be willing to
invest here. Due to our all financial problems in the whole world new banks will not be
emerging in to the banking industry.
• Bargaining power of Buyers:
Bargaining power of buyers is low where the product substitutes are not available and
customers are large in number. In case of banks, there are a lot of other banks and banking
intermediaries having wide range of products, so power of buyers in banking sector is high.
The banks cannot force any customer to buy the desired product because this effects its
requirements but can convince its customers by giving them special discount on rewards. If
we look at MCB we will find that the competitors are also offering products due to which
customer feel in power by saying that they can go to some other banks in case of
dissatisfaction.
• Bargaining power of suppliers:
As in the banking sector supplier does not exist so there is no bargaining power of suppliers.
Marketing Mix:
Price Product
Marketing
Place
Promotion

• Placing:
The location of the bank plays a vital role in making it profitable. If the bank is located in
some near its operational business center then it will be very easy for it to attract business
person as its customer. Therefore MCB has most of its branches set places where it can reach
its targets customer easily.
• Promotion:
MCB bank holds an approved ‘Corporate social responsibility’ by the board that shows
bank’s commitment to serve the community. The bank is always active in carrying out
community services under its different programs aimed at nurturing the various facets of life
and to foster the growth of communities in which it operates. It has so far accomplished
numerous projects and services in the areas of education, health, environment, sports, social
awareness, promotion of culture and welfare of charitable organization keeping in view the
greater interest of its employees, customers and beloved country as a whole. Corporate social
responsibility (CSR) at MCB bank has continuously geared up its capabilities in order to act
as adequate point of convergence for the design and implementation of specific.
• Product:
MCB has a wide range of Products for its customers.MCB try it best to meet it customer
demand in term of products and services.
• Pricing:
MCB bank charge fee and interest on the product which is provided to the customer. For
example on the issuance of cheque book bank charge 225 Rs. And on vdc which withdraw
limit of 10000 charges the fee 600 etc. Bank charge other charges on the products which is
mention in the bank circular
HRM Process in MCB:
• Human resources planning and forecasting

• Employees recruitment and selection
• Training and development
• Performs management
• Employee compensation and benefits

• Organizational career management.
Human Resource Planning and forecasting:
It includes the specific and interrelated activities that together constitute HRP system.
HRP process:
• Determining the objectives

• Defining skills to meet the objectives
• Define additional Hr requirements.
• Develop action to meet the Hr needs
HR Forecasting Requirements:
The purpose is to estimate labor requirements at some future time period Forecast have two
types:
• The external and internal supply of labor

• The aggregate external and internal supply of labor.
Employee selection and recruitment:
“People are at the heart of our success”.
Recruitment is discovering of potential applications for actual and anticipated organizational

vacancies.
Steps included in recruitment process:
• Planning
• Job analysis
• Sourcing
• Screening
• Selection
• Interviewing
• Hiring
• Reporting

Analysis of Positions:
MCB identifies its candidates by developing the criteria of job description and acting upon
these criteria .Job vacancies are spread through different medias like newspaper, internet.
Employees Selection Process:
Recruitment and selection has many processes and steps that must be follows:
• Decide what position to be filled through personal planning and forecasting.

• Build a pool of candidates for jobs
• Have candidates complete applications forms
• Use selection tools
• Decide what to make an offer to
Screening and short-listing:
Many candidates apply for job in response to vacancy ads by submitting their CVs and select
only those candidates which initially fulfill the criteria of selection board.
Test/Interview:
In this process short listed candidates are called for test and interviews according to nature of
their applied jobs.
• Selection interviews: it is conducted fir short listed candidates. It is designed to

predict future job performance.
Types of Selection interviews:
• Structured interview
• Un-Structured interview
Types of Question:
• Situational
• Job-Related
• Stressed Questions
• Puzzle Questions

Testing:
Organizational performance always depends in part on sub-ordinates having the right skills
and attributes. Keep in view this point MCB tries its level best to hire highly skilled and
suitable employee for each job. For judging these skills MCB conducted some tests of
employees on the basis of:
• Reliability
• Test Validity
MCB recruits candidates in three ways:
1. Entry point for fresh graduates

2. Management Trainees
3. Contractual appointments.
Final Selection:
After going through all the processes the best candidates according to MCB’s boards are
selected. The candidates who are selected are offered appointments as probationary offers,
after aligning the following bonds:
• Bank’s secrecy Bond

• Bank’s Security Bond
• Service Agreement Bond
Training and Development:
“Training is the organized procedure by which people learn knowledge and/or skills for a
definite purpose”.MCB has training methodologies for its employees.
Training Methods used by MCB:
• On-the-job training
• Off-the-job training
• Informal learning
• Effective lectures
Programs for training and development:

The bank has a latest state-of-the-art training facilities at its training and development
center.MCB use these training programs for tainting and development:
• Management trainee
• Cash officers
Employee Development:
Employee development is a joint on-going effort on the part of an employee the organization
for which he/she works to upgrade the employees knowledge ,skills, abilities. Successful
employee development requires a balance between an individual career needs and goals and
organization needs to get work done.
Employee Compensation and Benefits:
An organization reward system is a program or scheme which provides incentives for these
individuals or groups who perform well in the organization. This reward system is actually
motivates employees to perform well by attracting with well designed incentive packages.
Benefits:
• Life insurance
• Medical allowances
• Pension plans
• Bonuses
• Profit sharing
• sound working environment
• Training and development
• Sick leave-vacations
• Pick and drop facility
• Flex Hours
Company Accounting:
Finance and accounting operations:
The finance department of a bank takes responsibility for organizing the financial and
accounting affairs including the preparation and presentation of appropriate accounts, and the
provision of financial information for managers. The finance team manages the internal

finances of the firm. They are the banks internal management accountants. The main
operations covered by the financial department include:
▪ Anticipation of fund.
▪ Acquisition of fund, coordinating financing and fund raising activities.
▪ Allocation of fund.
▪ Assessment of fund.
▪ Assessment and appraisal of financial activities.
▪ Preparation of budgets and financial reports.
▪ Managing the general ledger.
▪ Developing strategies of capital budgeting, capital structure and Debt Financing.
▪ Decisions involving capital investment, equity, and debt, along with paying dividends
to shareholders.
▪ Monitor the collections of past-due accounts.
▪ Credit control.
▪ Monitoring expenditure and liquidity.
▪ Managing investment and taxation issues.
Finance department records values from financially relevant transactions of value adding
processes. It enables to maintain a consistent, reconciled, auditable set of books for statutory
reporting, and for consolidation and management support.
Accounting Statements:
Balance sheet:
Year 2017 2016 2015 2014 2013

Assets
Cash and balances with treasury banks 6120893 4675380 5994621 574202 531226
8 4 8 11 20
Balances with other banks 3681893 3015624 1594660 123673 235741
6
Lending to financial institution 5132480 1418181 1224638 155147 955087
2
Investments 5688025 5111371 4538083 405601 319005
08 92 45 313 983
Advances 3141249 3035594 2485217 239788 227573
39 80 92 511 618
Operating fix assets 3243265 3119258 2900593 241442 224184

0 8 1 42 50
Deferred fixed assets -------- ------ ---- ---- ----
Other assets 3124624 3755461 2717672 405400 308916
5 5 0 56 31
1016629 9346314 8212783 770282 656324
653 84 04 541 807
Liabilities
Bills payable 1197553 1662770 1013872 989628 946681
7 0 6 4 8
Borrowings 1184594 5954286 3866040 790643 391006
48 1 5 51 27
Deposits and other accounts 7080911 6883295 6323090 544988 491146
71 20 94 091 798
Sub coordinated loans ----- ----- ---- ---- ----
Liabilities against assets subject to finance ----- ----- ----- ----- ----
leases
Deferred tax liabilities-Net 1137658 1039710 4500293 938124 649709
9 0 2 7
Other liabilities 2892680 2963024 2020699 211974 184591
2 1 1 46 62
8788292 8045274 7058155 664517 564670
47 22 09 414 502
Net Assets 1378004 1301040 1154627 105755 916543

06 62 95 127 05
Represented By:
Share capital 1113030 1113030 1011846 919860 836236
7 7 1 1 5
Reserve capital 5130908 4883000 4700893 446209 424125
1 5 6 28 88
Un-appropriate Profit 5046415 4694786 4303809 368110 302594
5 3 4 72 49
1129035 1069081 1001654 906306 810344
43 75 91 01 02
Surplus on revaluation of Assets-net of tax 2489686 2319588 489671 911318 815268
3 7 57 99
1378004 1301048 1154627 105755 916543

06 062 65 157 05
Profit and loss account :

Year 2017 2016 2015 2014 2013
Mark up/Return/Interest earned 80532228 77268988 65186388 68443744 68215902
Net Mark up 31210389 33756685 27219433 27503496 23632615
43321839 43512303 37966955 4094024 44583287
Provision for diminution 831369 (847151) (6834) (3044) 778526
Provision against loans (288195) (1093906) (2828783) 480903 2846523

Bad Debts written off directly 67 20 --- 206 28565
543241 (1941037) (2835617) 478065 3653614
Net mark up 48778598 45453340 40802572 40462183 40929673
Non-Mark up/Interest Income

Fee,Commission,and brokage income 8382960 7225093 7204266 6384757 5412925
Dividend Income 1266530 1060729 714207 1060411 785549
Income from dealing in foreign 949687 1443180 920008 823838 924236
currencies
Gain on sale of securities 4432138 1650498 2165381 857405 761890
Unrealized loss on revaluation ----- ---- ---- --- ----
Classified as held for trading (4392) (2273) 21787 30285 16616
Other income 2087794 156647 450879 384459 340044
Total non-mark up 17114717 12943702 11476528 9541155 8241260
65893315 58397042 52279100 50003338 49170933
Non- Mark up/Interest Expense

Administrative expense 22476318 20611649 19099222 17410747 15860242
Other Provision 155240 76935 (52285) (187305) 514646
Other charges 928495 979011 928954 600054 1402756
Total non-mark up 23560053 21667595 19975891 17823496 17777644
Unusual items ----- ----- ---- 296645 (71507)
Share Profit of association 628861
42333262 36729447 32932070 32476487 31321782
Profit before Taxation
Taxation-Current Year 14447371 11920022 15220551 9646189 9739369

-Prior Year 1906156 ---- (2137) 126396 1038662
- Deferred 428745 484669 (4318658) 1432496 1312316
Share of tax association 82173 36171 (71048)
16782272 12404691 10981929 11241252 12019299
Profit after Taxation 25550990 24324756 21950141 21235235 19302483

Inappropriate profit 46947863 40552043 37530955 30259449 23458429
Transfer from surplus on revaluation 48875 47629 36045 36056 36182
of fixed assets
46996738 40599672 37567000 30295506 23494611
Profit available for appropriate 72547728 64924428 59442098 51448690 42768
Statement of Comprehensive income
Year 2017 2016 2015 2014 2013

Profit before Taxation 25550990 24324756 21950141 21235235 19302483
Other comprehensive income
Effect of transaction of net (76023) (203685) (211772) (1451649) (64973)
investment in foreign branches
Total comprehensive income 25593531 34544850 20540524 25747120 18778331

Financial Analysis:
Financial analysis is used to analyze whether an entity is stable, solvent, liquid or profitable
enough to warrant a monetary investment. When looking at a specific company, a financial
analyst conducts analysis by focusing on the income statement, balance sheet and cash flow
statement.
Ratios:
In order to analysis the financial performance of the bank, investors and management use the
ratio analysis in which following ratios are calculated:
1. Liquidity Ratios
2. Leverage Ratios
3. Profitability Ratios
4. Activity Ratios
• Liquidity Ratios:
Liquidity ratios measure a company's ability to pay debt obligations and its margin of safety
through the calculation of metrics including the current ratio, quick ratio. Bankruptcy analysts
and mortgage originators use liquidity ratios to evaluate going concern issues, as liquidity
measurement ratios indicate cash flow positioning.
Year 2017 2016 2015 2014 2013

Current 0.672933391 1.111297 0.77532979 6.7733415 9.4564589
Ratio
Working -283714799 86718859 -157564635 635980218 566807750
Capital
Ratio
Formulas:
• Current Ratio = Current Assets / Current liabilities
Current Assets = Cash and Balance with Treasury Banks + Balance with other Banks
+Lending to Financial Institution + Short Investment + Short Advances + Other Assets
Current Liabilities = Bill Payables + Short Borrowing + Short Deposit + Other Liabilities
• Working capital=Current asset –Current Liabilities

Explanation:
The MCB has current ratio in 2015 is 0.67 which is lower than the ratio in 2014 which is 1.11
and it is more than the ratio in previous years. Current ratio determines whether company is
in position to pay its short term debt through its short term assets.
The working capital ratio is the same as the current ratio. It is the relative proportion of an
entity's current assets to its current liabilities, and is intended to show the ability of a business
to pay for its current liabilities with its current assets. Working capital is reduces in 2015 as
compare to 2014 it is due to deduction in assets of MCB.
• Leverage Ratios:
These ratios show the capital structure of the firm. Through these ratios we find that how the
firm finance their activities. It is more important for the lender to assess that the firm can
repay the loan amount or not. Increasing debt increases the likelihood of bankruptcy of the
firm. Following ratios falls under this category,
• Time Interest Earned

• Debt Ratio
• Debt to Equity Ratio
• Total Capitalization Ratio
Year 2017 2016 2015 2014 2013

Time Interest 2.356383671 2.088064 2.20987348 2.1808131 2.3253625
Earned
Debt Ratio 0.853263187 0.849672 0.85941088 0.862784 0.8603522
Debt to 7.783894319 7.525406 7.01221373 7.0122137 1.1242217

Equity Ratio
Total 0.868914674 0.504524 0.86771277 0.8639593 0.0864174

Capitalization
Ratio
Formulas:
• Time Interest Earned = Profit before tax + Interest Expense (EBIT) / Interest
Expense
• Debt Ratio=Total debt/Total asset
(Total Debt= Bills Payable + Borrowings from financial institutions + Deposits &
other accounts + Subordinate Loans + Liabilities against assets subject
to finance lease + deferred tax liabilities+ Other liabilities

Total Assets = Given in the Balance Sheet)
• Debt to Equity Ratio = Total Debt / Total Equity
(Total Debt= Bills Payable + Borrowings from financial institutions + Deposits &
other accounts + Subordinate Loans + Liabilities against assets subject to finance
lease + deferred tax liabilities+ Other liabilities
Total Equity= Share Capital + Reserves + Un-appropriated Profit)
• Total capitalization Ratio=Long term debt/Long term debt Share holder’s equity
Explanation:
Debt ratio means portion of company that is financed by debt. This ratio is slightly increased
in 2015 as compared to 2014.
Times interest earned (TIE) or interest coverage ratio is a measure of a company's ability to
honor its debt payments. This ratio is increased in 2015 it have a positive impact on MCB it
means that the bank EBIT is enough to cover its interest expenses.
Debt ratio is measure of debt with the total assets. The debt ratio is consistently increasing
that indicates the dependence on debt is increasing and in 2015 it is at the higher level. From
2011 to 2015 it rapidly increased.
The total capitalization ratio compares the total debt with the sum of debt and equity. The
high capitalization ratio indicates the financial fitness of the firm. I can see that the ratio in
2015 is higher. In 2014, it was at the lowest level in selected years.
• Profitability Ratio:
Profitability ratios measure the earning ability of the firm. Following ratios are calculated:
• Net Profit Margin

• Return on Assets
• Operating Income Margin
• Return on operating Assets
• Return on Total Equity
Year 2017 2016 2015 2014 2013

Net Profit 0.317276581 0.314806 0.3367289 0.3102582 0.2829616
Margin
Return on 0.025133036 0.026026 0.0249666 0.0334256 0.0286113

Assets
Operating 0.913220121 0.912218 0.92276171 0.8763399 0.8055951

Income
Margin
Return on 0.11059684 0.095169 0.09729341 0.1022161 0.0100192

operating
Assets
Return on 0.226308133 0.227529 0.20470647 0.282526 0.2303329

Total Equity
Formulas:
• Net Profit Margin = Net Profit / Total Revenue

• ROA=Net income/Total assets
• Operating Income Margin = Earnings Before tax + interest expenses / Total
Revenue
• Return on Operating Assets = EBIT / Operating Assets
• ROE=Net income/Share holder’s equity
Explanation:
Net profit margin is highest in 2013 which is 33.67% as compare to other selected years.Net
profit margin is decline in 2015 as compare to 2014.
The return on assets (ROA) ratio illustrates how well management is employing the
company's total assets to make a profit. The higher the return, the more efficient management
is in utilizing its asset base.ROA is higher is 2012 as compare to other selected years.
In 2013 operating income margin is highest as compare to other selected years which is
92.27% and in 2011 it is lowest which 80.05%.
Return on operating asset mean how much company get as a return from operating assets.
This ratio is higher is 2015 as compare to other selected years.
ROE is higher in 2012 which is 28.25% and in 2013 it is in its lowest form which is
20.47%.ROE is usually mean how much company get from owners equity.
• Activity Ratios:
Activity ratios measure a firm’s ability to convert different accounts within their balance
sheets into cash or sales.
• Total Assets Turnover

• Fixed Assets Turnover
Year 2017 2016 2015 2014 2013

Total Assets 0.071361019 0.069465 0.04009855 0.0066791 0.0651643
Turnover

Fixed Assets 2.267706401 0.069465 1.13535711 2.1308886 1.9077558
Turnover
Formulas:
Total Assets Turnover Ratio = Net Income / Total Assets
Fixed Assets Turnover Ratio= Net Income/Fixed Assets
Explanation:
Total assets are higher in 2015 which is 7.13% and in 2012 it is in lowest form which is
0.66%.
Fixed asset mean how well company is using its fixed assets to generate sales it is in highest
form in 2015 as compare to other selected years.
Vertical Analysis of Balance Sheet:
Balance Sheet:
Year 2017 2016 2015 2014 2013

Assets
Cash and balances
with treasury
banks 0.0602077 0.0500238 0.07299136 0.0745443 0.0809395
Balances with
other banks 0.00362167 0.0032265 0.00194168 0.0016056 0.0003592
Lending to
financial
institution 0.55949825 0.0015174 0.00149114 0.0020142 0.0014552
Investments 0.55949825 0.5468863 0.55256342 0.5265617 0.4860489
Advances 0.3089866 0.3247906 0.30260363 0.3112994 0.3467393
Operating fix
assets 0.03190213 0.0333742 0.03531803 0.0313447 0.0341576
Deferred fixed
assets 0 0 0 0 0
Other assets 0.03073513 0.0401812 0.03309076 0.0526301 0.0470676
100 100 100 100
Liabilities
Bills payable 0 0.0177906 0.01234506 0.0128476 0.014424
Borrowings 0.11652173 0.0637073 0.04707345 0.1026433 0.0595751
Deposits and other
accounts 0.69650848 0.7364716 0.76990844 0.7075171 0.7483289
Subcoordinated
loans 0 0 0 0 0

Deferred tax
liabilities-Net 0.01119049 0.0111243 0.00547962 0.012179 0.0098992
Other liabilities 0.02845363 0.0317026 0.02460432 0.0275191 0.028125
0.86445368 0.8607964 0.85941088 0.8626931 0.8603522
Net Assets
Represented By:
Share capital 0.0127417
0.01094824 0.0138346 0.01232038 0.0119419
Reserve capital
0.05046979 0.0522452 0.05723874 0.0671479 0.0646213
Un-appropriate 0.04963868 0.0502314 0.05240379 0.0553952 0.0461044
Profit 0.11105671 0.1143854 0.12196291 0.1176589 0.1234669
Comments:
If compare to 2014 cash is increased by 6% but if we compare to 2011 cash is deceased by

2%.Cash balances with treasury banks increased in 2015 as compare to other selected years.
Lending to other financial institution increased in 2015 as compare to other years. MCB can
increase its investment by 55% in 2015 as compare to other selected years. Bank will provide
more advances in 2011 as compare to other years. Operating fix assets are more in 2013
which is 3.15% as compare to other years.MCB other assets are its higher form in 2012
.More bills was paid in 2012 as compare to other years. Borrow more money in 2012 as
compare to other years. Deposits and other accounts are more in 2011 which is
74%.Liabilities which are due was more in 2014 as compare to other years. Reserve capital is
more in 2012 as compare to other years. Inappropriate profit was more in 2013 which is
0.55%
Vertical analysis of Profit &Loss account:
Year 2017 2016 2015 2014 2013

Mark up/Return/Interest
earned 1.11005858 1.19013737 1.09663673 1.3303302 1595.022026
Net Mark up 0.43020491 0.519938119 0.457915079 0.5345811 552.5770436
0.59714949 0.670199251 0.638721651 0.0795749 1042.444982
Provision for diminution 0.01145961 -0.013048263 -0.00011497 -5.916 18.20346988
Provision against loans -0.0039725 -0.016848912 -0.04758888 0.0093472 66.5573092

Bad Debts written off
directly 9.2353 3.0805 0 4.00393 0.667905911
0.00748805 -0.029896867 -0.04770385 0.0092921 85.428685
Net mark up 0.67236562 0.700096118 0.686425503 0.786457 957.0162972
Non-Mark up/Interest
Income
Fee, Commission
0.11555097 0.111284662 0.121198044 0.1240995 126.5648382
Dividend Income 0.01745789 0.016337903 0.012015171 0.020611 18.36768144
Income from dealing in
foreign currencies 0.01309051 0.022228613 0.015477381 0.0160128 21.61045642
Gain on sale of securities 0.06109272 0.025421834 0.036428408 0.0166652 17.81448747
Unrealized loss on
revaluation 0 0 0 0 0
Classified as held for
trading 6.05395 -3.0095 0.000366525 0.0005886 0.388514777
Other income 0.02877821 0.002412759 0.00758518 0.0074727 7.950897868
Total non-mark up 0.23590976 0.199365669 0.193070709 0.1854499 192.6968762
0.90827538 0.899461787 0.879496212 0.9719069 1149.713173
Non- Mark up/Interest

Expense
Administrative expense 0.30981422 0.317471399 0.321308006 0.3384099 370.8436682
Other Provision -
0.00213983 0.001184993 -0.0008796 0.0036406 12.03343621
Other charges 0.0127984 0.01507924 0.01562788 0.0116632 32.79919566
Total non-mark up 0.32475246 0.333735632 0.336056291 0.3464325 415.6763
Unusual items 0 0 0 0.0057658 -1.67197437
Share Profit of
association 0.010579388
0.58352292 0.565726155 0.554019308 0.6312403 732.364899
Profit before Taxation
Taxation-Current Year 0.19914298 0.183598414 0.25605676 0.1874914 227.7256126

-Prior Year 0.02627451 0 3.9591 0.0024567 24.28596147
- Deferred 0.00590983 0.007465125 -0.07265319 0.0278432 30.68453049
Share of tax association 0.001382404 0.000703 -1.66124205
0.23132733 0.191063539 0.184750023 0.2184944 281.0348625
Profit after Taxation 0.35219559 0.374662615 0.369269285 0.4127459 451.3300365

Inappropriate profit 0.64713071 0.624603778 0.631386782 0.5881481 548.5042321

Transfer from surplus on
revaluation of fixed Profit available for appropriate
assets
Comments: 0.00067369 0.000733607 0.000606388 0.0007008 0.84600636
0.64780441 0.625337385 0.631993171 0.5888489 549.3502385
100 100 100 100 100
Bad debts are more in 2015 as compare to other selected years. Fee, commission and other
breakage charges decreased in 2015 which is 0.11%.Dividend income is more in 2011 which is
18% as compare to other years. Income from foreign currencies in 2011 is 21% n in 2015 it is
0.13%.Gain on sale of securities is 17% in 2011.Other income which a bank generate is more
in 2011 as compare to other years. Other expenses sometimes increased between year 2011-
2015 some time it decreased. Profit is more in 2011 which is 451.33 as compare to other years.
Horizontal Analysis of Balance sheet:
Year 2017-2016 2016-2015 2015-2014 2014-2013

Assets
Cash and balances
with treasury banks 6120893700 46753704 59946118 57420111
Balances with other
banks 368189200 3015524 1594560 1236636
Lending to financial
institution 513247900 -121045619 1224538 1551372
Investments -
56880250700 511137092 40106322955 405601213
Advances 31412493800 303559380 248521692 239788411
Operating fix assets 3243264900 31192488 29005831 24144142
Deferred fixed assets 0 0 0 0
Other assets 3124624400 37554515 27176620 40539956
1.0661 934631384 821278204 770282441
Liabilities
Bills payable --- 16627600 10138626 9896184
Borrowings 11845944700 59542761 38660305 79064251
Deposits and other
accounts 70809117000 688329420 632308994 544987991
Sub coordinated loans 0

Deferred tax liabilities-
Net 1137658800 10397000 4500193 9381142
Other liabilities 2892680100 29630141 20206891 21197346
87882924600 804527322 705815409 664517314
0
Net Assets 13780040500 130103962 115462695 0
0
Represented By: 0
Share capital 1113030600 11130207 10118361 9198501
Reserve capital 5130908000 4883000400 47008836 44620828
Un-appropriate Profit 5046415400 46947763 43037994 36810972
11290354200 106908075 100165391 90630501
Surplus on revaluation
of Assets-net of tax 2489686200 23195787 489571 91131757
0
13780040500 1301047962 115462665 105755057
Comments:
Cash balances with banks increased in 2015 as compare to other selected years. Balances
with other banks also increased in 2015.In 2014-2013 lending were decreased but it will
increased in 2015.Investments are increased in 2015 as compare to other years. Others assets
are more in 2015 as compare to other selected years. Company will borrow more money in
2015 as compare to other years. Deposits and other accounts increased in 2015 also. Other
liabilities are lower in 2015 as compare to other years. share holder’s equity also increased in
2015 as compare to other years.
Horizontal Analysis of Profit & Loss account:
Year 2017-2016 2016-2015 2015-2014

Markup/Return/Interest earned
Net Mark up
31210289 33756585 65186288
43321739 43512203 27219333
Provision for diminution 831269 -847251 37966855
Provision against loans
-288295 -1094006 -6934
Bad Debts written off directly
-33 0 -2828883
543141 -1941137 0
Net mark up
48778498 45453240 -2835717

0 0 40802472
Non-Markup/Interest
Income 0 0 0
Fee, Commission
8382860 7224993 0
Dividend Income
1266430 1060629 7204166
Income from dealing in foreign
currencies 949587 1443080 714107
Gain on sale of securities 4432038 1650398 919908
Unrealized loss on revaluation
0 0 2165281
Classified as held for trading
-4492 -2373 0
Other income
2087694 156547 21687
Total non-mark up
17114617 12943602 450779
65893215 58396942 11476428
0 0 52279000
Non-Markup/Interest
Expense 0 0 0
Administrative expense 22476218 20611549 0
Other Provision 155140 76835 19099122
Other charges 928395 978911 -52385
Total non-mark up 23559953 21667495 928854
Unusual items 0 0 19975791
Share Profit of association 0 -100 0
42333162 36729347 0
Profit before Taxation 0 0 32931970
0 0 0
Taxation-Current Year
14447271 11919922 0
-Prior Year 0 0 15220451
- Deferred 428645 484569 -2237
Share of tax association 0 -100 -4318758
16782172 12404591 82073
0 0 10981829
Profit after Taxation
25550890 24324656 0
Inappropriate profit 46947763 40551943 21950041
Transfer from surplus on
revaluation of fixed assets 48775 47529 37530855
46996638 40599572 35945

Profit available for
appropriate 72547628 64924328 37566900
Comments:
Net mark up is more in year between 2013-2012.Provision against loan increased in

2015.Fee,commission breakage charges also increased in 2015 as compare to other selected
years. Dividend income is more in year 2013-2012 as compare to other selected years.
Income from other resources also increased in 2015.Non mark up expenses sometimes
increased sometimes decreased it depend upon bank management how the managers control
these expenses in order to generate maximum profit. Profit after paying all these expenses
will be increased in 2015 as compare to other years.

Part-V: Conclusion
and Recommendations

Conclusion:
The banking system, as a whole, remains healthy despite the economy going through a period
of economic difficulty. The banking sector absorbed the build-up of non-performing loans in
the system while maintaining profitability and robust balance sheets. Much of the credit for
this must go to the SBP for the policies it has pursued over the last decade to ensure that
banks are adequately capitalized and adhere to prudent risk management. The objectives were
targeted towards customers, improved management policies, strong policy framework,
improved governance structure, strategic investment initiatives and implementation of cost
effective measure across bank. The group structure of the bank individually worked hard in
achieving the milestones under continuous monitoring and supervision of the senior
management and Board. The bank displayed extraordinary results in both financial and non-
financial terms. With the banking industry recovering at a steady pace since the 2007 crisis,
MCB ensured availing all possible positive opportunities and delivered substantial profits
ensuring sound asset growth Financial year 2009 MCB stood up to the challenges and
produced significant increases in major areas of its business while maintaining higher
profitability, stronger asset base with corresponding increase in equity. The sector also made
positive recoveries while heading towards its actual position prior to 2007 and 2008 financial
market crisis. The Bank's outstanding performance resulted in improved efficiency and
profitability ratios, stable market share, and attractive share price at the close of the year 2009
combined with a high Break-up Value (before surplus) of 88.37 per share. Consequent to the
average increase in balance sheet footing and equity of 12% and 16% respectively, return on
assets and return on equity were reported at 3.25% and 27.35% respectively.
Recommendation:
Following are some of the suggestions and recommendations that I want to give on the basis
of shortfalls / weaknesses found in the bank.
• The target rate of return on assets (ROA) of commercial banks reflects the effective
less and efficiency of the use of resources is the embodiment of its operating
efficiency y and management level of the important comprehensive index. Emphasis
on return on assets, and continuously improve the return on assets and achieve an
operating pr obit maximization should be the primary objective of Muslim
commercial bank.

• A strong ROE is a solid signal that management is doing a good job of generating
returns for shareholders' investments. Active capital management activities will
provide better ROEs. Bank that manages larger reserves due to recent or future
investment projects will stymie their ROEs. Another determinant of the ROE is the
operating profit margin of banks. Recently, this tends to converge towards noninterest
income as net interest margins tend to cause net interest income to be squeezed over
time due to rising competition. Muslim Commercial Bank should enable to raise their
operating profit margins can smoothly enhance their ROEs. Loans with higher returns
will produce better profit opportunities. Alternatively, may diversify earnings through
transaction and recurring non-interest income activities. MCB’s can expand more
differentiated products, such as wealth management and insurance to improve their
ROE position.
• The Bank's controlled budgeting and diligent monitoring on operating expenditure
block. Effective monitoring at management level ensured managed increase in
administrative charge within the approved budgetary limits.
• Efficient cost-control procedures may limit the growth of operating expenses leading
to higher operating profit margin. Banks poorly managed their operating expenses.
Further improvement may be necessary to enhance ROE development.
• MCB Islamic Banking needs a research, which should be engaged in evaluating and
interpreting the ways in which the bank can flourish more and more.
• In Agriculture loan Sector, MCB mainly serving in Punjab province. Agriculture
loans facility should be provided to all other provinces of Pakistan as well.
The bank should emphasis on the organization of effective training and development
programs for its new as well as existing employees so that these are gradually updated
regarding the recent developments in the field of banking.

Part-VI:
Internship Weekly Activities

Weekly Activities:
Week 1: Account Opening Department
• Introduction with all staff members and know of about banking activities.
• Filing of deposit slips for cash
• Filing slips for deposit cherub
• Filing of online transfer slip

• Repeat the activities
Week-2: Account Opening Department
• Account opening for understanding

• How to fill AOF and its particulars+Deposits Slips and online slip filling
• Understanding of daily activities of branch and repeat all work
• Real time deal with the customer who came for account opening purpose
• Help the account opening officer for account opening and other verification
Week-3: Clearing Department
• Started work in clearing department
• Learn basis of clearing department

• Revision of activities
• Observe and learn the process of outward clearing of cheques
• Learn about outstanding clearing
• Learns how to use the stamps in clearing process
Week-4: Clearing Department
• Particularly perform the clearing operations stamping of instruments
• Inward and outward return process

Week-5: Remittance Department
• Transaction process
• Give Customer guidelines about BANCA ASSURANCE facility of MCB
Week-6: Service Department
• Worked as customer service officer
• Attend calls, Attend customer inquiries
• Issuance procedure of ATM
• Issuance procedure of Cheque

References:
• www.mcbbank.com
• www.google.com
• www.google.com.pk/#q=mcb+financial+statements

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Contents

University of Punjab Jhelum Campus Page 1

University of Punjab Jhelum Campus Page 2

University of Punjab Jhelum Campus Page 3

• State Bank of Pakistan

• National Bank of Pakistan

University of Punjab Jhelum Campus Page 4

• The early years:

• Helping businesses grow:

University of Punjab Jhelum Campus Page 5

• The Bank of Banks:

The history of MCB can be divided into three main Phases:

University of Punjab Jhelum Campus Page 6

Present Position of MCB/Current status:

University of Punjab Jhelum Campus Page 7

Awards and Achievements:

2015 Finance Asia Country Awards Best Bank in Pakistan

2014 The Asset Triple A Best- bank Pakistan

2014 Asia money Awards Best of the best domestic bank

2014 The Asian Banker (USA) Strongest bank in Pakistan 2014

2013 The Asset Triple a Best Domestic bank-Pakistan

2013 The Asset Triple a Best Islamic Deal

2012 The Asset Triple a Best Domestic Bank-Pakistan

2012 Euro money Best Bank in Pakistan

2012 World Finance Best Commercial Bank -Pakistan

University of Punjab Jhelum Campus Page 8

2011 Euro money Best Bank in Pakistan

2010 The Asian Banker Strongest Bank in Pakistan

2010 The Asian Banker Leadership Achievement Award

2010 SAFA Awards Certificate of Merit Award 2009

MCB Maintains Edge Over Competitors:

University of Punjab Jhelum Campus Page 9

Objective and Goals of Organization:

• Quest For Quality:

• Employee motivation and respect:

• Team Based Approach:

University of Punjab Jhelum Campus Page 10

• Delivering remarkable returns to stakeholder’s sustainable performance exceeding

University of Punjab Jhelum Campus Page 11

University of Punjab Jhelum Campus Page 12

Head Quarter Karachi

University of Punjab Jhelum Campus Page 13

Senior Executive Vice

Executive Vice President

Senior Vice President

Assistant Vice President

University of Punjab Jhelum Campus Page 14

Special Public Strategic Financial

Information Operations Human Project

Risk Islamic Banking

Mian Mohammad Mansha Chairman

Tariq Rafi Chairman

Human Resource Committee:

Mian Mohammad Mansha Chairman

University of Punjab Jhelum Campus Page 16

Business Strategy and Development Committee:

Mian Mohammad Mansha Chairman

Committee on Physical Planning, IT Systems and Contingency Arrangements:

Mr. Sarmad Amin Chairman

SBP Report Compliance Monitoring Committee:

Dr. Muhammad Yaqub Chairman

Finance Related Committee:

Mr. Salman Zafar Siddiqi Chief Financial Officer