MCB Bank Ltd.

Stock Exchange Branch, Lahore.

Advisor: Mr. Khurram shahzad

(Lecturer)

Muhammad ajmal khan

F003-MBA-028 February 21, 2006

Dedication & Acknowledgements

I dedicate this internship report to my parents. Because of their prayers and encouragement I have been able to complete this report. Praise is to Allah, the most Gracious and Merciful, who blessed me with the knowledge and wisdom and enabled me to overcome this task. Heartiest gratitude to my parents without their continuous encouragement and love I could not have accomplished this task. I am very grateful to my advisor Mr. Khurram Shahzad and Mr. Fahad Hassan Incharge placement centre for their continuous help, support and time during the entire course of my internship. I am also very grateful to all the staff members at MCB Stock Exchange Branch, Lahore especially Mr. Zulfiqar Sani and Mr. Muhammad Jassem Butt for their guidance and encouragement.

Executive Summary
MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solid foundation of over 50 years in Pakistan, with a network of over 900 branches, over 750 of which are Automated Branches, over 222 MCB ATMs in 41 cities nationwide and a network of over 12 banks on the MNET ATM Switch. MCB's operations continued to be streamlined with focus on rationalization of expenses, re-alignment of back-end processing to increase productivity, enhancement of customer service standards, process efficiency and controls. The Bank has taken the lead in introducing the innovative concept of centralizing Trade Services in the country by providing centralized foreign trade services to branches with a view to improve efficiency, expertise and reduce delivery cost. During my internship in MCB I worked in Remittances, Advances, Foreign Exchange and Customer Service Office department and I successfully completed all the task/duties that were assigned to me. During the course of internship I learned about different functions performed by Remittances, Advances, Foreign Exchange and Customer Service Office department and bank as a whole. I also learned banks correspondence with their customers and within branches. I learned about documentation requirements and record keeping for different activities and processes, especially the documentation requirement for different kinds of financing facilities.

Table of Contents
Chapter 1 6

About the Organization 6

1. MCB in Brief 7 1.1. History 7 1.2. The Mission 8 1.3. The Business 8 2. Principles of Performance 9 2.1. Customer Focus 9 2.2. Quest for Quality 9 2.3. Employees Respect 9 2.4. Team Based Approach 9 2.5. Good Corporate Citizenship 10 3. Corporate Information 11 4. Management Committee 13 Chapter 2 14

Business Operations 14
1. Banking Sector Overview 15 2. MCBs Performance Overview 16 3. Products and Services 17 3.1. Personal Banking 17 3.2. Corporate Banking 21 3.3. Online Services 22 3.4. Virtual Banking 24 3.5. Islamic Banking 25

4. MCBs Competitive Strategies 26 Chapter 3 29

Learning As A Student 29
1. Duties & Accomplishments 30 Bibliography 39 Annexure 40

Chapter 1
About the Organization
1. MCB in Brief

1.1. History
MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solid foundation of over 50 years in Pakistan, with a network of over 900 branches, over 750 of which are Automated Branches, over 222 MCB ATMs in 41 cities nationwide and a network of over 12 banks on the MNET ATM Switch, which as a combination is considered to be the core competence of MCB. MCB has become the only bank to receive the Euromoney award for the fourth time in the last five years. MCB won the "Best Bank in Pakistan" in 2005, 2004, 2003, 2001, and in 2000 the "Best Domestic Bank in Pakistan" awards. In addition, MCB also has the distinction of winning the Asia Money 2005 & 2004 awards for being "The Best Domestic Commercial Bank in Pakistan". Ten years after privatization, MCB is now in a consolidation stage designed to lock in the gains made in recent years and prepare the groundwork for future growth. The bank has restructured its asset portfolio and rationalized the cost structure in order to remain a low cost producer. MCB now focuses on three core businesses namely Corporate, Commercial and Consumer Banking. Corporate clientele includes public sector companies as well as large local and multi national concerns. MCB is also catering to the growing middle class by providing new asset and liability products. MCB looks with confidence at year 2005 and beyond, making strides towards fulfillment of its mission, "to become the preferred provider of quality financial services in the country with profitability and responsibility and to be the best place to work".

1.2. The Mission

To become the preferred provider of quality financial services in the country with profitability and responsibility and to be the best place to work.

1.3. The Business

MCB is in its over 50 years of operation. It has a network of over 900 branches all over the country with business establishments in Sri Lanka and Bahrain. The branch break-up province wise is Punjab (57%), Sindh (21%), NWFP (19%) and Baluchistan (3%) respectively.

2. Principles of Performance 2.1. Customer Focus

Over the years MCB has developed strong relationships with its customers by understanding their needs and treating them with respect, dignity and importance. The driving force behind its commitment and services is its focus on customers, ensuring that it not only meets, but exceeds their expectations.

2.2. Quest for Quality

MCB strives to achieve excellence by ensuring that every moment of our time is spent in adding value, making sure that we do things right, first time, and every time. With this quest for quality, MCB has always taken initiatives in bringing banking into a new arena; from cash to the convenience of plastic; from branch banking to internet banking and from face-to-face customer interaction to online accessibility.

2.3. Employees Respect

MCB encourages diversity and treat each of our employees with fairness. MCB gives constructive feedback for their continuous development and seek suggestions from all employees for further improvement. The bank ensures that quality performance is acknowledged and rewarded and exercise utmost responsibility in decision-making with regards to our employees.

2.4. Team Based Approach

MCB believes in achieving its Mission and Vision by working together as a combined group. MCB treats its employees as its internal customers and ensure that the requirements of internal customer focus are always met. Equipped with in-depth product knowledge, and recognizing the strengths in each individual, the bank strives for optimum-results from our co-workers and bringing out peak performances by working towards common goals and objectives in today's dynamic banking environment.

2.5. Good Corporate Citizenship

MCB seeks to continuously improve the quality of life in our communities. The bank realizes that it has a responsibility to the society in which it operates and it seeks ways of playing a positive role for the betterment of the community at large for a progressive environment, better living and a brighter future.

3. Corporate Information
Board of Directors Mian Mohammad Mansha Chairman S.M.Muneer Vice Chairman Tariq Rafi Mohammad Arshad Shahzad Saleem Sarmad Amin Mian Umer Mansha Aftab Ahmad Khan Atif Yaseen Mohammad Aftab Manzoor President & Chief Executive Advisor Raza Mansha Audit Committee Mian Mohammad Mansha Chairman Mian Umer Mansha Member Aftab Ahmad Khan Member

Chief Financial Officer Ali Munir

Company Secretary Tahir Hassan Qureshi Auditors A.F.Ferguson & Co. Chartered Accountants Riaz Ahmed & Co. Chartered Accountants Legal Advisors Mandiwalla & Zafar Advocates & Legal Consultants Registered Office MCB Building, F-6 / G-6, Jinnah Avenue, Islamabad. Principal Office MCB Tower I.I. Chundrigar Road, Karachi. Registrar's and Share Registration Office THK Associated (Pvt.) Ltd. Shares Department, Ground Floor, Modern Motors House Beaumont Road, Karachi.

4.

Management Committee

from left to right M.U.Usmani Malik Abdul Waheed Salman Ahmed Usmani Ali Munir Mohammad Aftab Manzoor Shahid Sattar Aneeq Khawar Shoaib Qureshi Musaddiq Ijaz Zafar Abrar Naqvi Aamer Hassan Zaidi

Chapter 2
Business Operations
1. Banking Sector Overview
Pakistans banking and finance sector grew by over 21 percent from July 2004- March 2005 amid the eight percent expansion in the services sector in Pakistan. Financial sector in Pakistan is going through a fast-paced transition as new groups were buying out foreign banks operations in Pakistan. The number of listed banks is also increasing. While the income from core banking activity has increasing due to higher business volume, earnings are also expected to improve due to ventures into consumer finance, housing finance and enhanced lending to the agriculture sector. In just four years the banking industry has expanded tremendously and now there are more than two dozen commercial and investment banks operating in the country. Commercial banks in the private sector had performed well since their inception, registering overall growth in the deposit base and profits. The banks also managed to maintain a healthy credit portfolio. Foreign banks have a strong presence in all major cities and are targeting high net worth individuals and blue chip companies. Their strategy is quite successful as they account for about 34 percent of total sector profits, despite having only 15 percent of deposits and 16 percent of advances. During the first six months of the ongoing fiscal year, total assets of all the scheduled banks increased by Rs 239 billion. Total assets grew by 8.5

percent from Rs 2,800 billion in June 2004 to Rs 3,039 billion in Dec 2004. During the first six months of 2004-05, there was also an increase of Rs 277 billion in the net advances of the scheduled banks. Net advances grew by 19.3 percent from Rs 1,437 billion in June 2004 to Rs 1,714 billion in Dec 2004.

2. MCBs Performance Overview

The first half of 2005 was very promising for MCB, as the bank has achieved pre tax profits of Rs. 4.2 billion, compared with Rs. 2.2 billion for the same period in 2004. Profit after tax has more than doubled compared to the corresponding period for 2004 and exceeds Rs. 3 billion highest ever profit in the history of MCB. This translates into earning per shares of Rs. 7.43. Advance and deposit increased to Rs. 156 billion and Rs. 241 billion reflecting a growth of 14% and 10% respectively. Additionally the banks assets expanded by 16% during the half year ended 2005 and crossed Rs. 300 billion marks. Banks equity (capital and reserves) increased by 41% during the half year, which was due to the issue of right shares and retained earnings. Increase in equity would improve the lending limit and would provide the opportunity for significant growth of the banks balance sheet. This would also help to meet the capital requirement under Basel Accord II, which will be effective from 2007. Based on continuing growth and consistently outstanding performance, MCB has once again received the Euromoney Award 2005 for the Best Bank in Pakistan. MCB has become the only bank to receive the Euromoney Award for Excellence for the fifth time in last six years. In addition, Asia Money has also declared MCB as The Best Domestic Commercial Bank in Pakistan for the year 2005.

3. Products and Services 3.1. Personal Banking