ACKNOWLEDGMENT

I would like to start this project with great pleasure & blessing of great ALLAH, who is always
with me & blessed me with courage and strength, who always fulfill me when i ask him & who
is the most Beneficent and the most Merciful. After that i pay my regard to my respected
teachers who assigned me such an interesting job to perform.

I am thankful to Mr. Sadat Ghori Branch Manager Meezan bank. Who helped me a lot during
the extensive work of this internship. In this report I have described that how to work in working
environment to achieve goals and targets. This report also reflects that how professional life
exists outside the university & how one tackles these circumstances during work in all the
departments inside the Bank. My supervisor helped me at every step. It was my ethical and
loyal responsibility that I brighten the name of my institute that was reflected through my
behavior, tasks, responsibility and adherence to my work. It will be easy to analyze the growth
of a single branch that is the one unit of Meezan bank.. My experience within all departments
was very learning and worthwhile for my whole life. Practical tasks were assigned to me that
was very helpful for me. While I was spending my week at this branch I observe and analyzed
the standards, quality, culture and environment of a banking system.

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Executive Summary

This is the detailed report about Meezan Bank Limited where I did my internship for six weeks
from joining date 03 February 2021 till 10 march 2021. Meezan Bank Limited a listed
company is the first and largest Islamic Bank in Pakistan and one of the fastest growing
banks in the history of the banking sector of the Country. It commenced operations in 2002
when State Bank of Pakistan issued first-ever license for Islamic commercial banking. The
Bank offers wide range of Shariah-compliant banking products and services to its customers
both retail and business. Besides traditional banking channels, the Bank offers various
Alternate Distribution Channels including Internet Banking, ATM Banking, Visa & MasterCard
debit card, SMS Banking, SMS Alerts, Mobile Banking Application and Utility Bills Payment
through ATM and Internet Banking .Having the largest branch network and product
range Meezan Bank bears the critical responsibility of leading the way forward in establishing
a stable and dynamic Islamic banking system replete with dynamic and cutting-edge products
and services. Meezan Bank aims to fulfill its prime objective of providing customers
accessibility and convenience within an atmosphere and culture f dedicated service and
recognition of their needs .Meezan Bank has developed an extraordinary research and
development capability by combining investment bankers, commercial bankers, Shariah
scholars and legal experts to develop innovative, viable and competitive value propositions
that not only meet the requirements of today’s complex financial world but do so with world-
class service excellence which our customers demand all within the bounds of Shariah. In
this report there is complete history of banking as well as bank Meezan Bank Limited.

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Table of Contents
ACKNOWLEDGMENT ................................................................................................................................ i
Executive Summary................................................................................................................................. ii
1. Introduction to Meezan Bank Limited ............................................................................................ 1
1.1 INTRODUCTION TO THE SECTOR....................................................................................................... 2
2.1 Product .............................................................................................................................................. 3
2.2 Price .................................................................................................................................................. 3
2.4 Promotion ......................................................................................................................................... 3
3. Mission and Vision statement Meezan bank .................................................................................. 4
3.1 Governance Structure ....................................................................................................................... 4
4. Financial Analysis ............................................................................................................................ 5
4.2 Five Years Horizontal Analysis........................................................................................................... 6
Statement of financial position............................................................................................................... 6
4.3 Vertical Analysis ................................................................................................................................ 7
4.4 Statement of Financial Position ........................................................................................................ 8
5. SWOT Analysis................................................................................................................................. 9
6. PEST /PESTEL Analysis ................................................................................................................... 11
6.1 Political ............................................................................................................................................ 11
6.2 Economic ......................................................................................................................................... 11
6.3 Social ............................................................................................................................................... 11
6.4 Technological .................................................................................................................................. 11
6.5 Legal ................................................................................................................................................ 11
6.6 Environmental ................................................................................................................................. 12
7. Recommendation /Suggestion...................................................................................................... 12

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 1. Introduction to Meezan Bank Limited

Meezan Bank Limited (MBL) (the holding company) was incorporated in Pakistan on January
27, 1997 as a public listed company under the companies‟ ordinance, 1984 and its share
quoted in Karachi stock exchange. MBL was registered as an „Investment financing company
on August 8, 1997 and carried on the business of investment banking as permitted under SRO
585(I)/87 dated July 13, 1987 in accordance and in conformity with the principle of Islamic
shariah . A certificate of commencement of business was issued to MBL on September 29,
1997. MBL was granted a „Scheduled Islamic commercial bank‟ license on January 31, 2002
and formally commenced operations as a scheduled Islamic Commercial Bank With effect
from March 20, 2002 on receiving notification in this regard from State Bank of Pakistan (SBP)
under section 37 of the Statement Bank of Pakistan Act, 1956. Meezan Bank Limited has 323
branches in 84 cities across Pakistan and it became the 8th largest Bank in Pakistan in terms
of branch network. Meezan Bank Limited being an Islamic Bank offering its products to its
customers strictly in accordance with the SHARIAH COMPLIANCE. It is doing business in
Corporate Banking, Commercial Banking, Consumer Banking, retail Banking, Investment
Banking keeping in view the all norms and standards of Islamic injunction. Meezan Bank
stands today at a noteworthy point along the evolution of Islamic Banking in Pakistan. The
banking sector is showing a significant paradigm shift away from traditional means of business
and is catering to an increasingly astute and demanding financial consumer who is also
becoming keenly aware of Islamic Banking. Meezan Bank bears the critical responsibility of
leading the way forward in establishing a stable and dynamic Islamic Banking system replete
with dynamic and cutting-edge products and services

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 1.1 INTRODUCTION TO THE SECTOR

Meezan Bank, Pakistan’s best bank and the first and largest Islamic bank, is a publicly listed
company with a paid-up capital of Rs. 14.1 billion. It is one of the fastest growing financial
institutions in the banking sector of the country. With its Vision of establishing ‘Islamic banking
as banking of first choice ...’ – the Bank commenced operations in 2002, after being issued
the first-ever Islamic commercial banking licence by the State Bank of Pakistan.

The Bank provides a comprehensive range of Islamic banking products and services through
a retail banking network of more than 800 branches in more than 240 cities of the country.
Backed by a state-of-the art T-24 core banking system, the branch network is supported by
24/7 banking services that include over 660 ATMs, VISA and MasterCard Debit cards, a Call
Centre, Internet Banking, Mobile Application and SMS Banking facility.

The Bank operates strictly under the principles of Islamic Shariah and is well-recognized for
its product development capability, Islamic banking research and advisory services. In order
to ensure strict Shariah-compliance in all its products and services, the Bank has established
a dedicated Product Development and Shariah Compliance department that operates under
the supervision of the Bank’s in-house Resident Shariah Board Member and a Shariah
Supervisory Board comprising of internationally renowned Shariah scholars.

Meezan Bank has been recognized as the ‘Best Bank in Pakistan’ by Pakistan Banking
Awards– the most prestigious awards in Pakistan’s Banking sector, which is a testimony of
the Bank’s commitment to excellence. The Bank has consistently been recognized as the
‘Best Islamic Bank in Pakistan’ by numerous local and international institutions. Other
awarding institutions include Islamic Finance News - Malaysia, Global Finance magazine -
New York, Asset AAA - Hong Kong, Asiamone Hong Kong, The Banker – United Kingdom,
South Asian Federation of Accountants, Islamic Finance Forum of South Asian Awards,
Pakistan Banking Awards – Dawn & IBP Pakistan, Employers Federation of Pakistan and CFA
Association – Pakistan

2. Describe Marketing Mix & Strategies

The traditional marketing mix consists of the 4 P’s of marketing: Price, Product, Promotion and
Place. They are considered the broad levels of a company’s marketing mix and serve as the
founding pillars on which a marketing strategy revolves around. But the 4p’s serve as a great
starting point to establish a company’s initial marketing strategy and planning for its product
and service offering. Once you have developed your core marketing strategy it’s important to
continually evaluate your business activities and make adjustments as your business changes

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2.1 Product

So far Islamic banks are using two products such as, leasing and cost plus for doing their
businesses. They should bring more innovative products in the market. As explained in the
first chapter, they have many products but are reluctant to use those products. Innovation is
the main thing which will distinguish them from the conventional banking

2.2 Price

As we have explained in the previous chapters that majority of people in Pakistan belong to
middle class and are very price sensitive. And as the competition is getting intense day by day
with more banks coming into the Islamic banking industry and bargaining power of people is
also very high, so people have now more choices and they choose the particular service on
the basis of price. Price of Islamic banking products/services should be lower than the
conventional banks or at least in line with the conventional banks

2.3 Place

Mostly banks are situated in the urban areas. We described earlier that there is a great potential
available for Islamic banks in the rural areas and small towns. Islamic banks have far less branches as
compared to conventional banks. However, only Meezan bank has 100 branches, all other Islamic
banks have branches less than 50. Islamic banks should increase their branches and they should pay
special attention to small towns and urban areas, as there lies much more potential in those
areas

2.4 Promotion

Promotion is very important aspect as far as Islamic banks are concerned. So far, main promotion of
Islamic banking is P10 based on the religion because 97% population of Pakistan is Muslim. But, during
our research we have found that only 10-15 percent people are customers of Islamic banks due to the
name of Islam. Their promotional strategies should be very aggressive and in line with those of
conventional banks as well as Shariah. They should create awareness about the Islamic banking
products, how these are different from conventional banks and how it is in line with the Shariah

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 3. Mission and Vision statement Meezan bank

Mission Vision

Establish Islamic banking as banking of first “To be a premier Islamic bank, offering a
choice to facilitate the implementation of an one-stop shop for innovative value added
equitable economic system, providing a products and services to our customers
strong foundation for establishing a fair and within the bounds of Shariah, while
just society for mankind. optimizing the stakeholders value

3.1 Governance Structure

Shariah
Supervisory
Board

Board of Audit
Diretor committee

President Busniess
&CEO Deputy CEO sugments

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 4. Financial Analysis

4.1 Financial ratios

Ratios 2020 2019 2018 2017 2016

Book Value (Rs) 49. 46. 35. 32. 28.1
Matte Value per Share 104. 95. 92. 67.
(Rs)

Pam to Book Value Ratio 2. 2. 3. 2. 2.

.Dash Dividend (%) 60 50 35 30 30

Stock Dividend (%) 10 10 10
Right Shares at par (%) 6 -

Prim Earning Ratio 7. 9. 133 12. 12.

Ewing per Share (Rs) 16. 11. 7 6. 6.
Net Spread to Gross 61. 49. 58. 57. 57.
Return (%)
Profit Before Tax to Gnes 32. 25. 26. 239 24.
Inoome (%)
Profit After Tax to Gross 19 15. 16 149 15.
Inoome (%)
Operating &Other 40. 46. 552 599 623
Expenses% Income before
provisions (%)
Arend % / Advances to 41. 53. 653 83 56.
Deposit Ratio-ADO (%)

Investment to Deposit 35. 24. 16. 18. 23.

Ratio - 1DR (%)
Capital Adequacy Ratio 18. 17. 15. 13. 13.
(%)

Return on Average Assets 2. 2. 1 0.9 0.9

(%)
Rehm on Average Equity 35. 31. 239 199 20.
(%)

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 4.2 Five Years Horizontal Analysis
Statement of financial position
Assets 2020 20 Vs 2019 19Vs18 2018 18Vs17 2017 17Vs16
19
Cash and balances 136,243 48 92,194 42 65,022 1 64,556 15
with treasury banks
Balances with other 19,446 27 15,372 86 8,255 69 4,896 (59)
banks
Due from financial 342,069 53 223,689 21 184,815 26 147,229 14
institutions
Investments 434,208 92 225,646 82 123,743 4 119,238 (8)
Islamic financing 512,532 4 493,775 (4) 512,564 22 420,029 35
and related assets
Fixed assets 23,568 1 23,285 77 13,129 16 11,364 34
Intangible assets 1,080 38 780 25 625 22 512 13
Deferred tax asset 390 100 (100) 983
Other assets 52,024 12 46,517 62 28,779 37 20,984 47
1,521560 36 1,121,258 20 937,915 19 7E8,808 19
Liabilities
Bills payable 26,494 54 17,187 (28) 23,751 38 17,175 25
Due to financial 94,501 125 42,047 15 36,408 (1) 36,813 15
institutions
Deposits and other 1,254,431 35 932,579 19 785,477 18 667,181 19
accounts
Sub-ordinated Sukuk 18,000 29 14,000 - 14,000 100 7,000 -
Deferred tax liabilities - (100) 2,830 - (100) 8 (99)
Other liabilities 58,979 10 53,600 41 37,946 48 25,554 42
16152,406 37 1,061,243 18 887,582 19 753,731 19

Net Assets 69,155 17 59,015 46 44323 15 35,077 15

Represented by:
Share capital 14,147 10 12,861 10 11,692 10 10,629 6
Reserves 20,424 12 18,207 20 15,161 13 13,369 38
Unappropriated profit 29,022 56 18,546 37 13,526 31 10,340 23
Surplus I (deficit) on
revaluation
of assets 5,562 (41) 9,401 204 times (46) (106) 739 (68)
69,155 17 59,015 46 40,333 15 35,077 15
Profit & Loss Account
Profit on financing, 2020 % 2019 % 2018 ok 2017 To
investments
and placements 106,589 91 94270 91 48,625 87 36,427 82
Profit on deposits (41,7411 (36) (47,731) (45) (20,457) (37) (15,684) (36)
and other dues
expensed

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Net spread earned 64,849 55 46,539 45 28,168 50 20,743 46
Fee, Commission, 8,765 8 9,396 9 6,:47 12 5,E22 13
forex and other
income
Gain / (loss) on 1,307 1 (76) - 575 1 2,002 5
securities - net and
dividend income
Total income 74,921 64 55,859 54 35,630 63 28,367 64
Operating and other (Am () (25,522) (25) (19,670) (35) (16,822) (38)
expenses
Profit before 45,146 39 30,337 29 15,960 28 11,535 26
Provisions
Provisions and write (8,21c, (7) (4,186) (4) (1,168) (2) (1,283) p
offs - net
Profit before taxation 36,936 32 26,151 25 14,792 26 10,252 23
Taxation (14,770) (13) (10,919) (10) (5,830) (10) (3,939) (9)
Profit after taxation 22,166 19 15,232 15 8,962 16 6,313 14

4.3 Vertical Analysis

Statement of Financial Position
Assets 2020 % 2019 % 2018 %
Cash and balances with treasury banks 136243 9 9Z194 8 65,022 7
Balances with other banks 19,446 1 15,372 2 8,255 1
Due from financial institutions 342,069 22 223,689 20 184,815 20
Investments 434208 29 225,646 20 123,743 13
Islamic financhg and related assets 512,532 34 493,775 44 512,564 55
Fixed assets 23,568 2 23,285 2 13,129 1
Intangible assets 1,080 780 625
Deferred tax asset 390 983
Ober assets 52,024 3 46,517 4 28,779 3
1 1,521,560

100 1,121,258 100 937,915 100

Liabilities
Bills payable 26,494 2 17,187 2 23,751 3
Due to financial institutions 94,501 6 42,047 4 36,408 4
Deposits and other accounts 1,254,431 82 932,579 83 785,477 84
Sub-ordinated Sukuk 18,000 1 14,000 1 14,000 1
Deferred tax liabilities 2,830
Other liabilities 58,979 4 53,600 5 37,946 4
1,452,405 95 1,062,243 95 897,582 96
Net Assets 69,155 5 59,015 5 40,333 4

Represented by:

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 Share capital 14,147 1 12,861 1 11,692 1
Reserves 20,424 2 18,207 2 15,161 2
Unappropriated profit 29,022 2 18,546 2 13,526 1
Surplus / (deficit) on revaluation of assets 5,562 9,401 (46) -
69,155 5 59,015 5 40,333 4
Profit & Loss Account
2020 % 2019 % 2018 To
Profit on financing, investments
and placements 106,589 91 94,270 91 48,625 87
Profit on deposits (41,740) (36) (47,731) (46) (20457) (37)
and other dues expensed
Net spread earned 64,849 55 46,539 45 28,168 50
Fee, Commission, forex and other income 8,765 8 9,396 9 6, 7 12
Gain / (loss) on securities - net and 1,307 1 (76) - 575 1
dividend income
Total income 74,921 64 55,859 54 35,630 63
Operating and other expenses (29,775) (25) (25,522) (25) (19,670) (35)
Profit before Provisions 45,146 39 30,337 29 15,960 28
Provisions and write offs - net (8,210) (7) (4,186) (4) (1,168) (2)
Profit before taxation 36,936 32 26,151 3 14,792 26
Taxation (14,770) (13) (10,919) (10) (5,830) (10)
Profit after taxation 22,166 19 15,232 15 8,962 16
I

4.4 Statement of Financial Position

Assets Total assets of the Bank grew to Rs 1.5 trillion in 2020 from Rs 536 billion in 2016 with
Compound Annual Growth Rate (CAGR) of 23%. Financing has grown at a CAGR of 20%
over last six years primarily due to overall slowdown in economy in last two years. During the
period, the Bank has kept its cautious lending approach with the strategy to maintain a high
quality diversified financing portfolio spread across all segments including Corporate,
SME/Commercial and Consumer Financing (primarily Car Ijarah and Easy Home). The
investment portfolio of the Bank has grown at a CAGR of 24% with substantial growth coming
in year 2020 where the investment portfolio of the Bank increased by 92% pursuant to regular
issue of GOP Ijarah Sukuk. The Bank’s sizable investment in Pakistan Energy Sukuk
(guaranteed by the Government of Pakistan) in 2019 and 2020 also contributed to this growth.
As of December 31, 2020 the Bank’s total investment in GOP Ijarah Sukuk, GOP Bai Muajjal
and Pakistan Energy Sukuk amounted to Rs 179 billion, Rs 107 billion and Rs 117 billion
respectively. The Bank’s investment to deposit ratio accordingly improved to 35% in 2020 as
compared to 31% in 2016. On liabilities front, this year, despite the overall economic
slowdown, deposits of the Bank grew by 35% from Rs 932 billion in 2019 to Rs 1.25 trillion in

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2020 taking the Bank to the league of big banks in Pakistan. The Bank’s deposits grew at a
CAGR of 22% which is significantly higher than the 14% annualized growth recorded in overall
banking industry in the same period. More importantly, the Bank’s current deposits grew at
CAGR of 28% during the period from Rs 149 billion in 2016 to Rs 505 billion in 2020 and now
comprise of 40% of total deposits of the Bank as compared to 32% in 2016. The Bank’s branch
expansion strategy and its commitment towards high standards of customer service has
played pivotal role in its deposit growth. The wide range of deposit products caters every
sphere of the country’s population. Post COVID-19 outbreak, in 2020 the SBP introduced
various subsidized refinancing schemes to support the businesses with liquidity problems.
These SBP measures were well supported by the Bank which led to 125% rise in amounts
due to financial institutions in 2020 and pushing the total to Rs 94.5 billion as compared to Rs
14 billion in 2016 Equity The Bank’s total equity has also grown by almost three times from Rs
26 billion in 2016 to Rs 69 billion in 2020 representing CAGR of 21% during the period. The
Bank’s Board and management is committed to maintaining a sound balance between
depositors' liability and shareholders' funds so that optimal capital / debt ratio is maintained..
Profit and Loss account The Bank’s Profit after Tax has grown from Rs 5.02 billion in 2016 to
Rs 22.2 billion in 2020 with an average ROE of more than 20% during the six years’ period
while maintaining an unbroken payout to its shareholders. In line with the growth in the Bank’s
assets, the net spread of the Bank grew at CAGR of 30% to Rs 65 billion as compared to Rs
17 billion in 2015. Based on the strong growth in the Bank’s current deposits, the Bank’s net
spread percentage improved from 54% in 2016 to 61% in 2020. The Bank’s fee, commission,
foreign exchange and other income grew significantly from Rs 3.6 billion in 2016 to Rs 8.8
billion in 2020, primarily due to the Bank’s growing Trade Business which reached to Rs 1.1
trillion as compared to Rs 461 billion in 2016

5. SWOT Analysis

The pandemic necessitated the critical need to revisit the organizational SWOT frame work
and review it in terms of the symptoms as well as the underlying causes of change. Meezan
Bank is Alhamdulillah poised to make most from strengths and capitalize on opportunities, and
in the same vein, overcome weaknesses to stave off threats.

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 STRENGTHS WEAKNESS
Largest Islamic Bank of Pakistan Shariah Human resources having specialized
credibility Dedicated Shariah Supervisory
knowledge related to Islamic banking
Board comprising of world-renowned
Shariah scholars The Highest-rated Mobile Surplus liquidity with limited investment
Banking Application in Pakistan
opportunities
Comprehensive services and product
portfolio

OPPORTUNITIES THREATS

Increased competition in Islamic banking

Demand for Islamic banking products Digital
from conventional banks Increased security
banking Growing local and international
concerns with respect to increase in demand
Islamic banking market
of digital transactions COVID-19-style
pandemic, debilitating the whole business
environment

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 6. PEST /PESTEL Analysis
6.1 Political

Specific governmental policies and the general political environment directly affect the banking
sector. The year 2020 saw many uncertainties as markets adjusted to business disruptions
and lockdowns. A global decline in demand, trade activity, exchange-rate fluctuations as well
as political unrest have unveiled greater government financial liabilities. During 2020, the Bank
focused on enhancing its policies and procedures while working closely with all regulators

6.2 Economic

Over the preceding year, policy rate witnessed major reduction which in return affected the
deposit rates. However, it did not result in reduction of deposits since Covid-19 customers did
not have many alternative means for investment and the banking industry largely, including
Meezan Bank, witnessed growth in deposits.

6.3 Social

2020 witnessed another upswing in the utilization and acceptability of technology solutions for
many inane banking and non-banking tasks. For banking customers too, 2020 made clear that
there is growing acceptance for digital banking, branchless banking, digital wallets and online
payment mechanism/platforms. Work from home and reduced timings was made part of
Meezan Bank’s readiness spectrum. The Bank continues to integrate social considerations
into its risk assessment to ensure that its operations have a net positive impact on its
stakeholders.

6.4 Technological

Meezan Bank acknowledges the rapid transformation of Pakistan’s digital landscape during
the pandemic. With the fast adoption of digital channels, the Bank increasingly focused on
investing resources to elevate its customer experience, increase overall agility, strengthen
data analytics as well as ensure application of comprehensive data governance strategies to
mitigate risks associated with digitalisation. This focus on the evolving customer expectations
helped the Bank create better experiences, a validation of which is the Bank’s highest rated
Mobile Banking Application.

6.5 Legal

In line with SBP regulations, Meezan Bank has taken steps to combat trade-based money
laundering and it is also working to increase its trade business while abiding laws of all
respective countries. The SBP has also ushered in a number of initiatives and plans to

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strengthen the fintech sector. The drive to ensure ease of business and financial inclusion has
resulted in a lot of activity

6.6 Environmental

With an increased awareness on climate change and in line with SBP regulations, Meezan
Bank initiated the Green Sustainability Drive focusing on green energy integration,
Occupational Health & Safety, reduction of adverse environmental impacts and employee
capacity building for HSE. Managing the Bank’s direct environmental footprint remains a key
priority for the Bank.

7. Recommendation /Suggestion

Recommendations

➢ Aggressive marketing and advertising strategy.

• Establishment of new branches.
• Service improvement.
• Islamic banking introduction trainings in Universities/college.
➢ Driving Forces Better and timely service.
➢ Increase of awareness regarding Islamic banking.
➢ Timely and satisfactory response to complaints and issues.
➢ Economic - political and law & order condition Foreign branches.

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Suggestions

• The bank should focus on ensuring reliable service delivery thought investing on and
implement right technology
• The bank must leverage the branch network and sale structure to mobilize low cost
current and saving deposit.
• For online banking English is necessary so everybody should have
basic khowledge regarding English
• The bank will have to think about how people adopt their technology
• The bank really should arrange programme to make people learn online banking so
that the customer do have to rush to bank which ultimately save their time also

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Reference

https://www.meezanbank.com/

https://www.meezanbank.com/about-us/

https://www.meezanbank.com/financial-information/

https://www.saleslovesmarketing.co/blog/marketing-mix

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