Project Report of MCB Bank Limited Pakistan

Submitted By:

M. Sharoon khan

Registration No: 2021-GCUF-0688910

Associate Degree Program

The Faculty of Management Science Government Collage University Faisalabad

2023
 ACKNOWLEDGEMENT

I Aspect and thank Mr. Arshad Javed, for providing me an opportunity to do the project
work in Superior College and giving us all support and guidance which made me
complete the project duly. I am extremely thankful to him for providing such a nice
support and guidance, although he had busy schedule managing the corporate affairs.

I owe my deep gratitude to our project guide sister, who took keen interest on our project
work and guided us all along, till the completion of our project work by providing all the
necessary information for developing a good system.

I would not forget to remember Ahmed and Usamaof MCB Bank for their encouragement
and more over for their timely support and guidance till the completion of our project
work.

I am thankful to and fortunate enough to get constant encouragement, support and

guidance from all Teaching staffs of Management sciences department which helped us in
successfully completing our project work. Also, I would like to extend our sincere esteems
to all staff in laboratory for their timely support.

M. Sharoon khan
 DEDICATION

This project is dedicated to my father, who taught me that the best kind of knowledge to
have is that which is learned for its own sake. It is also dedicated to my mother, who
taught me that even the largest task can be accomplished if it is done one step at a time.

I dedicate my work to all my friends and colleagues who really helped me to perform this
work.

May Allah bless all of them.

Ameen
 Chapter no.1

1: Introduction:

“Bank is a financial institute which takes money from those persons who have excess
money & lend to those person who have less money or those who have not resources to
fulfill their basic needs.”

Internship is a necessary course which must offer to the students of business. Internship
helps to students to learn their practical field so when they enter in market after their
completion of study they have the experience of market so they adjust in market very well.

MCB bank is a famous & the oldest commercial bank in Pakistan. It is provide a large
number of product & services to their customers. My work is based on the observations &
experiences during my internship & data is collected for this report by many sources in
which my own written work, discussion with staff, literature on banking etc. In internship
report I tried our best to explain all the work which I learned during my internship & also
give some suggestions for the betterment of MCB bank LTD. This report is an upshot of my
internship in MCB bank CHANDNI CHOWK BRANCH; my internship report is based on
different parts.

The 1st part is based on the introduction of the MCB bank which is consist of the over view
of the organization & the structure of the organization. The 2 nd part is the my own work in
MCB bank in which I briefly explain my experience with different department like general
banking, cash, clearing & remittances where I learned the interaction with customers, their
attitude, dealing with customers, handling different issue in banking, professional abilities,
values, cultural diversification etc. after my internship work I give summary of learning in
which I provide answer the different kind of question e.g. which skills & qualification
learned during internship, which responsibilities I perform in bank, influence on my career
plan & knowledge which I learned correlated with our university class room knowledge.
 In the last I give the conclusion about my internship in MCB bank & some effective
recommendation/ suggestion. This report will provide a complete & clear image about the
MCB bank LTD.

Objectives of Study:

Following are the objectives of my internship:

To get the experience of practical field.
To increase their interpersonal abilities.
To Integrate my knowledge & skills.
To Apply my personal abilities in field.
To work with well known organization.
To Enhance their skills & abilities.
To Understand how manage the stress/ burden of work in bank.

1.2 Purpose:
The basic purpose of my internship is to relate my area of interest of my study with
organization while it is a perfect field for me to doing a job with banking sector or not.

1.3 Scope of Study:

I internship with MCB bank & tried my best to work well with all departments. It is very
helpful for me because when I complete my study I preliminary know the work of banking
sector so it is a broad scope for me working with any bank not only with MCB bank.

1.4 Organization Selection:

Selection of the organization is one of the most difficult tasks. However the specialization of
the student in finance has made commercial banks a better option for doing internship. Since
banking is related to financial transaction, it would be easy to understand the financial
transaction in the organization. Bank would be good choice to understand various
dimensions related to services like responsiveness, reliability, assurance and empathy of a
service organization. Besides this, one should have strong reference to get enrollment in the
organization. So MCB bank, Faizabad branch has been selected for internship on 11 Sep
2019.
 Chapter no. 2

Overview of the Organization:

MCB bank LTD is a profitable financial institution in Pakistan. It is a very famous & oldest
commercial bank in Pakistan having a biggest network within the country and outside the
country.

2: History:

MCB Bank formerly Muslim Commercial bank is the one of the leading bank in Pakistan
which have an experience of more than 60 years. It was established on 9 July 1947 in
Calcutta under Indian Companies Act, VII of 1913 as a Limited company. After the partition
of Indo Pak the Head office of the bank was moved to Dhaka from where it commences
Business in August 1948. Later in 1956 the bank transferred its head office to Karachi where
it is presently located. The bank was started with the share of 30 Millions which is divided
into 3 million ordinary shares of Rs 10 for each.

The 1960’s is stated as the golden era in the economic and financial development of the
Pakistan.

But in 1970 the scenario changed and separation of East Pakistan has also affected the
overall economy. After 16 years of experiencing nationalization it was realized that
nationalization is actually proved Disaster to the banking industry rather than productive. In
1991 Government changed its stance and announced a policy of denationalization of
nationalized ban

MCB was the first bank which was privatized in 1991.The bank was purchased by the
consortium of a Pakistani corporate group led by Nishat Group. In June 2008 the Nishat
Group owns majority of stake in the bank.

2.1 Corporate values:

Our specialized corporate finance teams offer credit solution tailored to meet working
capital and team loan requriements for corporates. We are commited to undarstand financing
needs of our customers and to deliver cost effetive and pratical soloution to your banking
needs in the shortest time possible.

We provide a wide array of financing solutions including but not limited to the following;

Working Capital Finance:

Based on customer requirements we offer tailored working capital facilities in addition to

tradional financing solution for pre/post shipment export import and receivables
financing.our customized trade finance products are structure given your specific
requirements which may be used to improve liquidity,cost efficiency.transfer risk or to meet
other requirement of either party depending on risk evaluation.

Team loans:

MCB Bank offers medium &long term loan facilities to finance capital expenditure related
to your core business. These include but are not limited to term loans to meet your BMR
financing requirements and project finance.

Bank Guarantees/Letters of Credit:

MCB Bank offers LG/SBLC facilities on behalf of our valued corporate clients. Due to our
exceptional ratings, our gurantee are accepted and used in business/ transactions without
limitation.

2.1.1 Vision Statement:

“To be the leading financial services provider, partnering with our customers for a more
prosperous and secure future.”

2.1.2 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.
 2.1.3 Core values:
The standards and principles which determine our behavior and how we interact with our
customers and each other. Core values of MCB are:

Integrity
Innovation
Excellence
Customers centricity
Respect
Integrity:

We are the trustees of puplic funds and serve our community with integrity. We believe in
being the best at always doing the right thing. We deliver on our responsibilities and
commitments to our customers as well as our colleagues.
Innovation:

We encourage and reward people who challenge the status quo and think beyond the
boundaries of the conventional. Our teams work together for the smooth and efficient
implementation of ideas and initiatives.

Excellence:

We take personal responsibility for our role as leaders in the pursuit of excellence. We are a
performance driven, result oriented organization where merit is the only criterion for
reward.

Customer Centricity:

Our customers are at the heart of everything we do. We thrive on the challenge of
understanding their needs and aspirations, both realized and unrealized. We make every
effort to exceed customer expectations through superior services and solutions.
Respect:
 We respect our customers’ values, beliefs, culture and history. We value the equality of
gender and diversity of experience and education that our employees bring with them. We
create an environment where each individual is enabled to succeed.

2.2:Board of Directors:

Mian Mohammad Mansha S. M. Muneer

Tariq Rafi Mian Umer Mansha

 Iqraa Hassan Mansha Muhammad Ali Zeb

Mohd Suhail Amar Suresh Shariffuddin Khalid

Awards & Accolades:
Year 2020:
Asset Triple A Islamic Finance Awards Best Islmaic Loan Advisor, Pakistan
Asset Triple A Infrastructure Awards Project Finance House of the Year, Pakistan
Asset Triple A Infrastructure Awards Renewable Energy Deal of the year-Solar, Pakistan to
MCB Bank limited, MCB Bahrain, MCB Dubai
Asset Triple A Infrastructure Awards Oil and Gas Deal of the Year, Paksitan
Asset Triple A Infrastructure Awards Telecom Deal of the Year, Paksitan
Asiamoney Best Bank Awards Best Domestic Bank
FinananceAsia Country Awards for Achievement Best Bank in Pakistan
ICAP and ICMAP Best Corporate Report Award 2019– Winner
Year 2019:
Euro money Awards Best Investment Bank in Pakistan 2019
ICAP and ICMAP 1st - BCR Award 2018 - Banking Sector
Assets AAA Islamic Finance Awards Best Project Finance House in Pakistan
Assets AAA Infrastructure Awards Project Finance House of the year in Pakistan
Assets AAA Infrastructure Awards Renewable Energy deal of the year
Assets AAA Infrastructure Awards Transport deal of the year
Asia money Silk Road Finance Awards Best Regional Bank in South Asia for Belt & Road
Initiative (BRI)
Asia money Silk Road Finance Awards Best Bank in South Asia for Belt & Road Initiative
(BRI)
Asian Banker Awards Strongest Bank in Pakistan
Finance Asia Achievement Awards Best Pakistan Deal, IPO of Pakistan Stock Exchange
Assets AA Country Awards Best Equity Pakistan IPO of Pakistan Stock Exchange
CFA 14th Excellence Awards Runner Up - Corporate Finance House of the year
SAFA Awards Certificate of Merit Best Presented Annual Accounts 2018-Banking Sector
SAFA Awards Certificate of Merit SAARC Anniversary Awards for Corporate Governance

Year 2018:
Euro money Awards Best Bank in Pakistan 2018
1st Pakistan Banking Awards Best Bank for Corporate Finance & Capital Market
Development
Finance Asia Country Awards Best Bank in Pakistan 2018
ICAP and ICMAP 1st - BCR Award 2017 - Banking Sector
Asia money Awards Best of the Best Domestic Bank
First Global Awards Most Innovative Investment Bank for Islamic Finance
Assets AAA Country Awards Best Micro Finance Deal for National Rural Support
Programme

Year 2017:
CFA 12th Excellence Awards Most Stable Bank of the year 2016
Finance Asia Country Awards Best Bank in Pakistan 2017
ICAP and ICMAP 1st - BCR Award 2016 - Banking Sector
SAFA Awards Winner of Best Presented Annual Accounts 2016 - Banking Sector

Year 2016:
The Asset Triple A Best Bank - Pakistan
The Asset Triple A Best Domestic Bank - Pakistan
CFA 11th Excellence Awards Best Bank of the year 2013 – Large Bank
CFA 11th Excellence Awards Most Stable Bank of the year 2013
Asia money Awards Best of the Best Domestic Bank
The Asian Banker (USA) Strongest Bank in Pakistan 2016
ICAP and ICMAP 1st - BCR Award 2013 - Banking Sector
SAFA1st Runner up - BCR 2013 in Banking Sector Category

Year 2013:
The Asset Triple A Best Domestic Bank - Pakistan
The Asset Triple A Best Islamic Deal
ICAP and ICMAP 1st - BCR Award 2012 - Banking Sector
LK Domain Registry Sri Lanka Best Website Award
Lanka Clear Pvt. Limited T+1 Cheque Clearing Award

Year 2012:
The Asset Triple A Best Domestic Bank - Pakistan
Euro money Best Bank in Pakistan
NFEH CSR Business Excellence Award “Best Media Coverage”
ICAP and ICMAP 2nd Best Corporate Report Award 2011- Banking Sector
World Finance Best Commercial Bank - Pakistan
Pakistan Centre for Philanthropy PCP Corporate Philanthropy Award

Year 2011:
CFA Association Pakistan Most Stable Bank of the Year
CFA Association Pakistan Best Bank of the Year
Euro money Best Bank in Pakistan
ICAP / ICMAP 1st - BCR Award 2010 - Banking Sector
SAFA Joint 2nd Runner-up for BCR 2010

Year 2010:
The Asian Banker Strongest Bank in Pakistan
The Asian Banker Leadership Achievement Award
MMT Best Bank Led MMT Service
ICAP / ICMAP 1st - BCR Award 2009 - Banking Sector
SAFA Certificate of Merit Award for BCR 2009

Year 2009:
AsiamoneyBest Domestic Bank in Pakistan
The Asset Best Domestic Bank in Pakistan

Year 2008:
Euro money Best Bank in Asia
Euro money Best Bank in Pakistan
Asia money Best Domestic Bank in Pakistan

Year 2006:
Euro money Best Bank in Pakistan
Year 2005
Euro money Best Bank in Pakistan
Asia Money Best Domestic Commercial Bank in Pakistan

Year 2004:
Euro money Best Bank in Pakistan
Asia Money Best Domestic Commercial Bank in Pakistan

Year 2003:
Euro money Best Bank in Pakistan

Year 2001:
Euro money Best Bank in Pakistan

Year 2000:
Euro money Best Domestic Bank in Pakistan.
 Chapter no.3

3: PEST Analysis:

Political and Legal:

Political & legal system of a country affected the economy of any

country, the political system & rules & regulation (legal system) is produce by their
government & agency working in his country. The frequent change in political & legal
system of a country makes opportunity for the organization working in country & it is also
become a way to create threats for that organization.

There is a political instability in Pakistan, a frequent change in law & order condition that
may be in favor or in against sometimes for the banking sector.

Banking sector of Pakistan affect through different ways due to political & legal changes,

Employment practices change in this changing in political & legal system.

Political interference regarding policies is estimated to increase as current government is in race

of power gain.

Policies changes on daily basis in Pakistan so banking system not stable for long time.

Sometimes bank make contract in the favor of country but there is a changing in the rules &
regulation so that’s why banks are forced to cancel the contracts so that’s why the economy
of a country not goes to in better condition.

Economic:
Our economy also facing a lot of problems of different kinds like:

Employment
Inflation

Illiteracy

Which effect & slow down the overall business growth.

For the stability of banking business there is two things which are very important;

Better consumer markets

Higher borrowing powers

The main problem with over economy system is continuously changing in the value of the
currency of country, our currency devalues gradually which directly impact on the reserve of
foreign exchange, and our foreign exchange balance reduces speedily which is a not a good
sign for economy of our country.

Interest rates

Labor policies

Government spending

In Pakistan,

Inflation rate is very high in Pakistan so that’s why the purchasing powers of people are very
low because they have no savings.

Inflation also increases the operating cost.

Due to inflation, banks also increase the rates/ interest of loan so that’s why the ratio of taking
loan reduces & money not utilize.

Due to the devaluation of rupee the economy pressurized day by day.

Banks also deal in the foreign exchange which is a big asset of any country, due to the huge
expense in a country our foreign exchanges also reduce & business activities in a country
also decrease.
 Social:
Society is shaped by norms, values and believes. Social factors often look at the
cultural aspects and include health consciousness, population growth rate, age distribution,
changes in tastes and buying patterns.. So understanding changes in this area can be vital.

Banking sector is very important for the well being of the society such as the bank
activity participating in the Prime Minister self employment Scheme.

Social culture of Pakistan affects the banking sector as,

There is a lack of management skills & expertise in our country so for this reason innovative
activities are slow and conventional methods are adopted.

People in a Pakistan is not saving society but a spending society which not manage their finance
in a right way, there expenses are higher than their income so our society is not supportive
for the banking sector .

There is no saving in the society so that’s why there is no investment in a country.

Ethics & value on the duties are very low because there is poverty in a country & no training of
people.

Inadequate Accountability, lack of good governance and lack of good infrastructure are the
ways which help to creditors to cheat so that’s why the ratio of bad debts increases day by
day. Same situation is hoped to prevail.

Technological:

The adoption of new technology is a key success factor of any department in a

country so it’s also become a success part of banking sector, in touch with a newly
technology is a key factor of country, all department should the worldly introduce
technology in a right time. MCB introduce many new technologies in banking.

So we can say that PEST Analysis is a perfect tool for the managers and policy makers that
help them,
in analyzing the forces that are driving their industry and
How these factors will influence their banks and the whole industry in general.
MCB is now using technological features in its operation,

Almost all the branches of MCB in a country are computerized which put a good impact on
customers & their dealings.
Now almost in the entire world, computerized banking is used, MCB should to enhance their
computerized banking technology so that the fake transactions not occur by ATM.
Electricity short fall is a big problem for bank,
MCB should to train their employees related to technology, hired fully trained & new ideas
person.
Technology feature help the bank management to provide the customer services according
to their standard. In this way, bank fulfills the need & demands of the customer.
 Chapter no.4

SWOT:
SWOT analysis gives a very good analysis of what the firm is, what it wants and what can it
do to get better than it is at the same time indicating the factors that could lead to a havoc.

SWOT is an observation for;

Strength
Weaknesses
Opportunities
Threats

1: Strength:
Only the one bank that is register in the London stock exchange.
A large number of MCB branches in the country
Capture a huge market in the banking sector & strong presence in the market.
Provide a lot of product & services to the customers.
MCB also established their business abroad which help to generate the foreign exchange.
MCB use the modern technology in the banking field.
Provide a twenty four hour services to the customers.
MCB win the “ CSR Business Exclusive Award” in 2012
MCB is only the bank who wins 8 Euro Money Awards & 5 Asia Money Award. MCB also
become the strongest bank of Pakistan in 2010.
MCB have a skilled & experience management & staff.
MCB provide efficient IT environment & online banking to customers.
MCB is in the Top 3 commercial banks in Pakistan.
MCB performance increase day by day.
MCB provide the social culture to the customers in all branches.
MCB focus on the customer services & tried to provide new products & services to customers.
MCB create/ develop a strong relationship with customers.
MCB utilize his resources in an effective way.
MCB has a largest ATM system in all over Pakistan.

2: Weakness:
Satisfaction level of MCB employees not according to his own wish.
Favoritism/ Biasness happen at different stages in bank
Advertisement not effective so that customers not known MCB products.
There is no equal importance among the employees.
There is a difference between the good worth customer & lower worth customers in shape of
account.
Centralization structure used in MCB so that’s why many decision is not goes in the favor of
organization.
The employees not loyal & honest with organization because management not fulfills the basic
demands of employees.
The employees not promoted on upper level on the base of performance but on the base of
seniority.
Behavior of the higher management is not pleasant with lower level of employees.
MCB not involve the competent staff in the audit of the firm.

3: Opportunity:
MCB should to expand his system with in the country & outside the country as well.
MCB should provide the espousers to the customers which other banks not provide.
Bank should establish the Islamic banking at possible levels.
Increase the number of branches of general banking as well as Islamic banking.
MCB cover many areas outside the country, should expand their foreign banking at maximum
level.
MCB introduce a lot of new products for the customers like car financing & many other things.
It helps to increase the market share.
MCB should control the internal environment in the organization which increases the
profitability of the bank.
MCB should provide a dynamic environment to the employees which help to increase the
growth.
Although MCB provide a lot of products & effective services to the existing customers. MCB
should plan to facilitate the new customers which become the cause of growth for MCB.
As MCB earn a lot as compare to previous years. MCB should provide facilities to the
employees so in this way they become so loyal about bank & productivity of the bank
increase.
MCB have a skill & experience staff. MCB should to train according to the international
standard so the risk of fraud to be eliminated completely.
MCB should open the branches in the rural area so the people of rural area aware from bank &
efficiency & productivity of the bank increase.
The bank earns a lot of profit by given the loan to the industrialist & agriculturist.
MCB has prospect to commence new schemes for deposits because the trend of saving in
Pakistan increase.

4: Threat:
Economy of the Pakistan is not strong so it is a great threat for banking sector as well as MCB.
In Pakistan, the political condition is not well. It is unstable political environment in the country
which affects the MCB working at any stage.
There is a perfect competition in the banks in Pakistan.
Inflation rate high in Pakistan which affects the overall rates of bank.
 Chapter no.5

5: Ratio Analysis
It the ratio includes capital assets, often the largest investment for most businesses. Ratio
Analysis Formula: The return-on-assets ratio is calculated by dividing the net income by
the average total assets (the total assets at the start and at the end of the year divided by two.

SixYears’Performance2017-2022

FinancialPerformance/FinancialRatios

ProfitandLossAccount

2022 2021 2020 2019 2017

Mark-up/returnearned Rs.Mln 200,763 123,334 136,076 138,292 83,319 74,091
Mark-up/returnexpensed "" 113,607 59,347 64,741 78,676 37,305 31,429
Fundbasedincome "" 87,156 63,987 71,334 59,616 46,014 42,662
Fee,Commission,brokerage "" 23,664 17,011 13,594 14,469 14,625 11,435
&FXincome
Dividendandcapitalgains "" 949 3,062 4,542 2,210 2,573 6,682
Totalincome "" 111,769 84,061 89,470 76,295 63,212 60,780
Operatingexpenses "" 43,186 36,894 33,908 33,709 32,902 28,721
 Operatingprofitbeforetaxan "" 68,583 47,167 55,562 42,586 30,310 32,059
dprovision
Provisions/(Reversals) "" (2,782) (4,823) 7,313 2,484 (1,753) 1,045
Profitbeforetax "" 71,365 51,989 48,249 40,102 32,064 31,014
Profitaftertax "" 32,741 30,811 29,037 23,977 21,360 22,459
CashDividends "" 23,701 22,516 23,701 20,146 18,961 18,673

StatementofFinancialPosition
Authorisedcapital "" 15,000 15,000 15,000 15,000 15,000 15,000

Paidupcapital "" 11,851 11,851 11,851 11,851 11,851 11,851

Reserves "" 88,578 84,602 80,696 77,591 74,148 70,866

UnappropriatedProfit "" 70,425 63,683 69,835 55,777 53,532 53,776

Shareholder'sequity "" 170,854 160,136 162,382 145,219 139,531 136,493

Surplusonrevaluationofassets- "" 18,641 14,272 27,720 23,695 9,747 17,073

netoftax
ShareholderFunds "" 189,495 174,407 190,102 168,915 149,278 153,566

TotalAssets "" 2,085,355 1,970,468 1,757,462 1,515,152 1,498,130 1,343,238

EarningAssets "" 1,870,527 1,732,055 1,544,536 1,294,096 1,343,378 1,175,352

GrossAdvances "" 797,572 635,574 513,550 540,037 546,792 515,058

Advances-netofprovisions "" 753,400 589,711 462,942 496,679 503,581 469,356

Non-PerformingLoans(NPLs) "" 51,260 50,491 51,189 49,424 48,956 48,753

Investments "" 978,731 1,035,585 1,015,869 748,765 749,369 656,964

TotalLiabilities "" 1,895,861 1,796,061 1,567,361 1,346,237 1,348,852 1,189,672

Deposits&otheraccounts "" 1,378,717 1,411,852 1,289,502 1,144,763 1,049,038 968,483

Current&SavingDeposits(CASA "" 1,322,549 1,312,059 1,198,785 1,035,063 954,813 899,364

)
Borrowings "" 340,237 269,526 164,002 89,506 216,019 133,070

InterestbearingLiabilities "" 1,038,842 1,118,182 964,119 809,717 867,048 728,361

 ContingenciesandCommitments "" 619,187 619,187 714,038 851,147 584,434 448,135

ProfitabilityRatios:
Profitbeforetaxratio % 35.55% 42.15% 35.46% 29.00% 8.48% 41.86%
GrossYieldonAverageEarningAssets 11.15% 7.53% 9.59% 10.49% 6.41% 7.10%
GrossYieldonAvg.EarningAssets(incl 11.20% 7.72% 9.91% 10.65% 6.61% 7.74%
.dividend&capitalgains)
GrossSpread 43.41% 51.88% 52.42% 43.11% 55.23% 57.58%
Costtoincomeratio 37.13% 42.09% 36.49% 42.82% 50.77% 46.00%
Returnonaverageequity(ROE) 19.78% 19.11% 18.88% 16.84% 15.48% 17.65%
Returnonaverageassets(ROA) 1.61% 1.65% 1.77% 1.59% 1.50% 1.86%
ReturnonCapitalEmployed(ROCE) 19.78% 19.11% 18.88% 16.84% 15.48% 17.65%
ShareholderFundstoTotalAssets 9.09% 8.85% 10.82% 11.15% 9.96% 11.43%
ReturnonShareholderFunds 17.99% 16.91% 16.18% 15.07% 14.11% 15.22%
Noninterestincometototalincome 22.02% 23.88% 20.27% 21.86% 27.21% 29.81%
AdminExptoProfitbeforeTax 58.14% 68.05% 67.66% 81.47% 100.08 90.15%
%

InvestmentRatios\MarketRatios:
Earningspershare(aftertax)Rs. 27.63 26.00 24.50 20.23 18.02 19.56
Earningspershare(beforetax)"" 60.22 43.87 40.71 33.84 27.06 27.02
Breakupvaluepershare
withoutsurplusonrevaluationoffixedas "" 144.17 135.13 137.02 122.54 117.74 115.18
sets&investments
- "" 128.49 131.49 144.45 126.47 115.68 119.17
withoutsurplusonrevaluationoffixedas
sets
- "" 159.90 147.17 160.42 142.54 125.97 129.59
withsurplusonrevaluationoffixedassets
&investments*
"-
 withsurplusonrevaluationoffixedassets "" 161.42 149.82 162.80 144.89 128.41 132.90
&investments&
investmentinrelatedpartyatfair/
marketvalue"
CashDividend 200% 190% 200% 170% 160% 160%

%
DividendYieldratio(basedoncashdivid "" 17.22% 12.39% 10.79% 8.30% 8.27% 7.54%
end)
DividendPayoutratio "" 72.39% 73.08% 81.62% 84.02% 88.77% 81.86
%
Pricetobookvalueratio Times 0.81 1.13 1.35 1.67 1.64 1.84
Pricetoearningratio "" 4.20 5.90 7.56 10.13 10.74 10.85
Dividendcoverratio "" 1.38 1.37 1.23 1.19 1.13 1.18

*NetAssetsperShare

2022 2021 2020

2019 2018
2017

ShareInformation:
Marketvaluepershare-Dec31 Rs. 116.16 153.35 185.28 204.94 193.57 212.32
High-duringtheyear "" 166.20 202.40 224.53 216.20 236.56 262.10
Low-duringtheyear "" 108.95 146.00 132.89 154.04 177.16 190.43
MarketCapitalisation Rs.Mln 137,657 181,729 219,568 242,866 229,392 251,612

AssetQualityandLiquidityratios:
GrossAdvancestodepositsratio ““ 8557% 45.02% 39.83% 47.17% 52.12%

%
NetAdvancestodepositsratio ““ 54.64% 41.77% 35.90% 43.39% 48.00%
Investmentstodepositsratio ““ 70.99% 73.35% 78.78% 65.41% 71.43%
WeightedAverageCostofDeposits ““ 6.23% 3.42% 4.50% 5.96% 3.18%
CASAtototaldeposits ““ 95.93% 92.93% 92.96% 90.42% 91.02%
NPLstoGrossadvancesratio ““ 6.43% 7.94% 9.97% 9.15% 8.95%
NPLstoShareholdersEquity ```` 30.00% 31.53% 31.52% 34.03% 35.09%
CoverageRatio(specificprovision/NPLs) ““ 81.83% 87.45% 88.19% 88.19% 88.19%
CoverageRatio(totalprovision/NPLs) ““ 86.17% 90.83% 98.87% 98.87% 98.87%
Earningassetstototalassetsratio ““ 89.70% 87.90% 87.88% 87.88% 87.88%
Investmentstototalassetsratio ““ 46.93% 52.56% 57.80% 57.80% 57.80%
Cash&CashEquvilantstoTotalAssets ““ 5.77% 9.23% 8.30% 8.30% 8.30%
CashtoCurrentLiabilities ““ 4.92% 4.52% 6.34% 6.34% 6.34%
CostofFunds ““ 5.96% 3.40% 4.31% 4.31% 4.31%
Cashflowcoverageratio ““ -20.00% 41.08% 174.27% 174.27% 174.27
%
EfficiencyRatio ““ 60.51% 70.96% 70.28% 70.28% 70.28%
CashReserveRatio ““ 5.91% 5.09% 5.02% 5.02% 5.02%
LiquidAssetstoTotalAssets ““ 38.42% 54.10% 50.99% 50.99% 50.99%
GrossNonPerformingAssetstoGrossAdvances ““ 2.93% 3.05% 3.38% 3.38% 3.38%
&Investments
EarningassetstointerestbearingLiabilities Times 1.80 1.55 1.60 1.60 1.60
Depositstoshareholderequity ““ 8.07 8.82 7.94 7.94 7.94
AssetstoEquity ““ 12.21 12.30 10.82 10.82 10.82
Current/QuickRatio ““ 1.39 1.53 2.38 2.38 2.38

RiskAdequacy:
 TierICapital Rs.Mln 160,614 150,354 152,90 136,257 128,99 129,13
1 9 0
TotalEligibleCapital ““ 185,384 169,604 188,40 163,611 145,98 147,22
9 7 7
RiskWeightedAssets(RWA) ““ 984,079 997,279 897,93 867,478 805,17 895,41
8 7 5
TierItoRWA % 16.32% 15.08% 17.03 15.71% 16.02 14.42
% % %
RWAtototalassets ““ 47.19% 50.61% 51.09 57.25% 53.75 66.66
% % %
CapitalAdequacyRatio ““ 18.84% 17.01% 20.98 18.86% 18.13 16.44
% % %
StatutoryLiquidityReserve(Ratio) ““ 56.68% 72.92% 68.66 60.08% 63.97 51.15
% % %
NetReturnonAverageRWA ““ 3.30% 3.25% 3.29% 2.87% 2.51% 2.87%

DuPontAnalysis:
NetOperatingMargin 29.29% 36.65% 32.45% 31.43% 33.79% 36.95%
AssetUtilization 5.51% 4.51% 5.47% 5.06% 4.45% 5.03%
LeverageRatio/EquityMultiplier 12.2 11.56 10.64 10.58 10.29 9.49
5

IndustryShare:
Deposits* % 5.87% 6.41% 6.91% 7.45% 7.57% 7.59%
Advances* "" 6.46% 5.98% 5.69% 6.21% 6.57% 7.46%
MarketCapitalisation "" 13.40% 13.03% 16.08% 16.87% 17.17% 17.85%
*basedoneconomicdatareleasedbyStateBankofPakistan

Consolidated:
TotalAssets Rs.Mln 2,274,333 2,122,121 1,891,276 1,612,215 1,585,210 1,389,492
Shareholders'Equity "" 174,287 161,592 163,409 145,854 140,196 138,100
NetAssets "" 194,478 177,569 192,991 171,347 151,323 156,543
ProfitBeforeTax "" 75,340 53,275 49,318 40,154 30,806 30,614
ReturnonAverageAssets % 1.57% 1.56% 1.69% 1.50% 1.37% 1.77%
ReturnonAverageEquity "" 20.42% 19.19% 19.02% 16.66% 14.60% 16.98%
EarningsPerShare Rs. 29.00 26.31 24.82 20.14 17.17 19.13
BreakupValueperShare "" 164.11 149.84 162.85 144.59 127.69 132.10
CapitalAdequacyRatio % 17.98% 15.99% 19.69% 17.84% 17.02% 16.34%

PerBranch:
GrossAdvances Rs.Mln 550.81 442.29 359.38 383.01 394.23 356.69
Deposits "" 952.15 982.50 902.38 811.89 756.34 670.69
CASA "" 913.36 913.05 838.90 734.09 688.40 622.83
PBT "" 49.29 36.18 33.76 28.44 23.12 21.48

Statement of FinancialPosition:

ConsolidatedStatementofFinancialPosition
AsatDecember31,2022

2022 2021
Note

(Rupeesin'000)

ASSETS
Cashandbalanceswithtreasurybanks 7 110,275,163 175,922,469
Balanceswith other banks 8 26,162,849 22,554,329
Lendingst ofinancialinstitutions 9 56,585,768 40,617,110
Investments 10 1,040,889,059 1,062,568,511
Advances 11 844,985,763 686,388,652
Fixedassets 12 85,021,165 62,351,545
Intangibleassets 13 1,682,671 1,838,136
Deferredtaxassets 14 5,439,278 –
Otherassets 15 103,291,437 69,880,727
2,274,333,153 2,122,121,479
LIABILITIES

Billspayable 17 42,874,366 26,486,445

Borrowings 18 356,016,610 282,898,882
Depositsandotheraccounts 19 1,532,695,961 1,534,586,671
Liabilitiesagainstassetssubjecttofinancelease – –
Subordinateddebt – –
Deferredtaxliabilities 14 – 1,578,782
Otherliabilities 20 148,268,469 99,002,039
2,079,855,406 1,944,552,819
NETASSETS 194,477,747
177,568,660

REPRESENTEDBY
Sharecapital 21 11,850,600 11,850,600
Reserves 22 89,640,476 85,043,592
Surplusonrevaluationofassets-net 23 19,458,482 15,225,689
Unappropriatedprofit 72,795,700 64,697,360

193,745,258
176,817,241
Non-controllinginterest 732,489 751,419

194,477,747
177,568,660
CONTINGENCIESAND COMMITMENTS 24
Theannexednotes1to48andannexureIformsanintegralpartoftheseconsolidatedfinancialstatem
ents.

ShoaibMumtaz

President/ChiefExecutive
 5.3: Profit and Loss Account:

ConsolidatedProfitandLossAccount
FortheyearendedDecember31,2022

2022 2021
Note (Rupeesin'000)

Mark-up/return/interestearned 26 219,422,758 132,609,303

Mark-up/return/interestexpensed 27 123,454,752 64,231,302

Netmark-up/interestincome 95,968,006
68,378,001

NON MARK-UP/INTERESTINCOME

Feeandcommissionincome 28 15,573,910 13,691,432

Dividendincome 2,130,363 1,955,213
Foreignexchangeincome 9,588,551 3,847,755
Incomefromderivatives 33,148 14,035
(Loss)/gainonsecurities 29 (1,708,860) 262,835
Otherincome 30 295,837 883,253

Totalnon-markup/interestincome 25,912,949 20,654,523

Total income 121,880,955

89,032,524

NONMARK-UP/INTERESTEXPENSES

Operatingexpenses 31 48,075,386 40,589,732

Workerswelfarefund 1,509,781 1,058,419
Othercharges 32 267,536 525,339
Totalnon-markup/interestexpenses 49,852,703 42,173,490

Shareofprofitofassociates 671,231 943,587

Profitbeforeprovisions 72,699,483
47,802,621
(Reversals)/provisionsandwriteoffs- 33 (2,641,001) (5,472,779)
net
Extraordinary/unusualitems – –

PROFITBEFORETAXATION 75,340,484
53,275,400
Taxation 34 40,889,320 21,947,646
PROFITAFTERTAXATION 34,451,164
31,327,754
Attributableto:
EquityshareholdersoftheBank 34,365,061 31,179,708
Non-controllinginterest 86,103 148,046

34,451,164
31,327,754

Basicanddilutedearningspershareattributable
toordinaryshareholders 35
(Rupees)
26.31

Theannexednotes1to48andannexureIformsanintegralpartoftheseconsolidatedfinancialstate
ments.

VerticalAnalysis
VerticalAnalysis
 2022 2021 2020 2019 2018 2017

Rs.Mln %Rs.Mln %Rs.Mln %Rs.Mln %Rs.Mln %Rs.Mln %

StatementofFinancialPosition
Assets
Cashandbalanceswithtreasurybanks 96,369 5% 164,613 8% 122,181 7% 132,705 9% 103,175 7% 106,072 8%
Balanceswithotherbanks 24,872 1% 18,830 1% 24,030 1% 12,542 1% 11,879 1% 4,579 0%
Lendingstofinancialinstitutions 50,416 2% 42,467 2% 17,139 1% 1,090 0% 35,106 2% 4,398 0%
Investments 978,731 47%1,035,585 53% 1,015,869 58% 748,765 49% 749,369 50% 656,964 49%
Advances 753,400 36% 589,711 30% 462,942 26% 496,679 33% 503,581 34% 469,356 35%
Fixedassets 79,918 4% 57,328 3% 58,028 3% 58,271 4% 40,812 3% 39,170 3%
Intangibleassets 801 0% 979 0% 938 0% 958 0% 630 0% 404 0%
Deferredtaxassets 7,547 0% – – – – – – – – – –
Otherassets 93,301 4% 60,955 3% 56,334 3% 64,143 4% 53,578 4% 62,295 5%

2,085,355 100%1,970,468 100% 1,757,462 100%1,515,152 100%1,498,130 100%1,343,238 100%

Liabilities
Billspayable 39,137 2% 24,590 1% 23,981 1% 11,822 1% 15,699 1% 22,681 2%
Borrowings 340,237 16% 269,526 14% 164,002 9% 89,506 6% 216,019 14% 133,070 10%
Deposits 1,378,717 66%1,411,852 72% 1,289,502 73%1,144,763 76%1,049,038 70% 968,483 72%
Sub-ordinatedloan – – – – – – – – 3,891 0% 3,893 0%
Deferredtaxliabilities – – 729 0% 6,975 0% 5,851 0% 1,532 0% 4,625 0%
Otherliabilities 137,769 7% 89,365 5% 82,901 5% 94,296 6% 62,673 4% 56,921 4%

1,895,860 91%1,796,061 91% 1,567,361 89%1,346,237 89%1,348,852 90%1,189,672 89%

NetAssets 189,495 9% 174,407 9% 190,102 11% 168,915 11% 149,278 10% 153,566 11%

Representedby
Sharecapital 11,851 1% 11,851 1% 11,851 1% 11,851 1% 11,851 1% 11,851 1%
Reserves 88,578 4% 84,602 4% 80,696 5% 77,591 5% 74,148 5% 70,866 5%
Surplusonrevaluationofassets- 18,641 1% 14,272 1% 27,720 2% 23,695 2% 9,747 1% 17,073 1%
netoftax
Unappropriatedprofit 70,425 3% 63,683 3% 69,835 4% 55,777 4% 53,532 4% 53,776 4%

189,495 9% 174,407 9% 190,102 11% 168,915 11% 149,278 10% 153,566 11%
Profit&LossAccount

Mark-upearned 200,763 89%

123,334 86% 136,076 88%138,292 89% 83,319 83% 74,091 80%
Mark-upexpensed (113,607) -50%
(59,347) -41% (64,741) -42%
(78,676) -51%
(37,305) -37%(31,429)-34%
Netmark-upincome 87,156 39%63,987 45% 71,334 46% 59,616 38% 46,014 46% 42,662 46%
Non-mark-upincome 24,613 11%20,074 14% 18,136 12% 16,679 11% 17,198 17% 18,118 20%
Totalincome 111,769 50%84,061 59% 89,470 58% 76,295 49% 63,212 63% 60,780 66%
Non-mark-upexpenses (43,186) -19%
(36,894) -26% (33,908) -22%
(33,709) -22%
(32,902) -33%(28,721)-31%
Profitbeforeprovisions 68,583 30%47,167 33% 55,562 36% 42,586 27% 30,310 30% 32,059 35%
Provisions&writeoff 2,782 1% 4,823 3% (7,313) -5%(2,484) -2% 1,753 2%(1,045) -1%
Profitbeforetaxation 71,365 32%51,989 36% 48,249 31% 40,102 26% 32,064 32% 31,014 34%
Taxation (38,624) -17%
(21,178) -15% (19,212) -12%
(16,125) -10%
(10,704) -11%(8,555) -9%

Profitaftertaxation 32,741 15%30,811 21% 29,037 19% 23,977 15% 21,360 21% 22,459 24%
 Five Years’ HorizontalAnalysis:
Statement of FinancialPosition

StatementofFinancialPositi
on

Assets
Cashandbalanceswithtreas96,369 -41%
164,613 35%
122,181 -8%
132,705 29%
103,175 -3%
106,072 43%
urybanks
Balanceswithotherbanks 24,872 32%18,830 -22%24,030 92%12,542 6%11,879159%4,579 5%
Lendingstofinancialinstitut50,416 19%42,467148%17,1391472% 1,090 -97%35,106698%4,398 57%
ions
Investments 978,731 -5%
1,035,5 2%
1,015,8 36%
748,765 0%
749,369 14%
656,964 18%
85 69
Advances 753,400 28%
589,711 27%
462,942 -7%
496,679 -1%
503,581 7%
469,356 35%
Operatingfixedassets 79,918 39%57,328 -1%58,028 0%58,271 43%40,812 4%39,170 21%
Intangibleassets 801 -18% 979 4% 938 -2% 958 52% 630 56% 404 18%
Deferredtaxassets 7,547100% – – – – – – – – – –
Otherassets 93,301 53%60,955 8%56,334 -12%64,143 20%53,578 -14%62,295 15%

2,085,3 6%
1,970,4 12%
1,757,4 16%
1,515,1 1%
1,498,1 12%
1,343,2 25%
55 68 62 52 30 38

Liabilities
Billspayable 39,137 59%24,590 3%23,981103%11,822 -25%15,699 -31%22,681 77%
Borrowings 340,237 26%
269,526 64%
164,002 83%89,506 -59%
216,019 62%
133,070 79%
Deposits 1,378,7 -2%
1,411,8 9%
1,289,5 13%
1,144,7 9%
1,049,0 8%
968,483 24%
 17 52 02 63 38
Sub-ordinatedloan – – – – – – –-100% 3,891 0%3,893100%
Deferredtaxliabilities –-100% 729 -90% 6,975 19% 5,851282% 1,532 -67%4,625-59%
Otherliabilities 137,769 54%89,365 8%82,901 -12%94,296 50%62,673 10%56,921 12%

1,895,8 6%
1,796,0 15%
1,567,3 16%
1,346,2 0%
1,348,8 13%
1,189,6 28%
60 61 61 37 52 72

NetAssets 189,495 9%
174,407 -8%
190,102 13%
168,915 13%
149,278 -3%
153,566 8%

Representedby
Sharecapital 11,851 0%11,851 0%11,851 0%11,851 0%11,851 0%11,851 6%
Reserves 88,578 5%84,602 5%80,696 4%77,591 5%74,148 5%70,866 33%
Surplusonrevaluationofass18,641 31%14,272 -49%27,720 17%23,695143% 9,747 -43%17,073-28%
ets-netoftax
Unappropriatedprofit 70,425 11%63,683 -9%69,835 25%55,777 4%53,532 0%53,776 1%

189,495 9%
174,407 -8%
190,102 13%
168,915 13%
149,278 -3%
153,566 8%

Profit&LossAccount
Mark-upearned 200,763 63%
123,334 -9%
136,076 -2%
138,292 66%83,319 12%74,091 10%
Mark-upexpensed (113,60 91%
(59,347 -8%
(64,741 -18%
(78,676 111%
(37,305 19%
(31,429 33%
7) ) ) ) ) )
Netmark-upincome 87,156 36%63,987 -10%71,334 20%59,616 30%46,014 8%42,662 -3%
Non-mark-upincome 24,613 23%20,074 11%18,136 9%16,679 -3%17,198 -5%18,118 12%
Totalincome 111,769 33%84,061 -6%89,470 17%76,295 21%63,212 4%60,780 1%
Non-mark-upexpenses (43,186 17%
(36,894 9%
(33,908 1%
(33,709 2%
(32,902 15%
(28,721 25%
) ) ) ) ) )
Profitbeforeprovisions 68,583 45%47,167 -15%55,562 30%42,586 40%30,310 -5%32,059-13%
Provisions&writeoff 2,782 -42% 4,823-166%(7,313)194%(2,484)-242% 1,753-268%
(1,045) 13%
Profitbeforetaxation 71,365 37%51,989 8%48,249 20%40,102 25%32,064 3%31,014-14%
Taxation (38,624 82%
(21,178) 10%
(19,212) 19%
(16,125) 51%
(10,704) 25%
(8,555)-40%
 )

Profitaftertaxation 32,741 6%30,811 6%29,037 21%23,977 12%21,360 -5%22,459 3%

5.4:Commentary on Horizontal and Vertical Analysis:

Vertical Analysis:
Vertical analysis highlight over the last six years signifies higher concentration levels of
investments and advances in the asset base of the Bank. The advances base of the Bank has
posted moderate growth over the last few years due to the lack of credit opportunities and
intense competition impacting earning potential. Resultantly, the significant increase in
deposit base has been invested in T-Bills and PIBs over years with a substantial increase in
the concentration levels from 22% in 2013 to 55% in2020.
Corresponding to the infrastructural and operational growth registered by the Bank, the
deposit base has increased considerably over the period of six years. Improved quality
service levels and tailored products has earned the loyalty of our customers. The fact can be
substantiated with the fact that the CASA base of the bank has been above 80% over the last
many years.
Markup income growth has been steady over the last 6 years. On an average, the
contribution from markup income approximates 88% of the total revenue. Markup expense
has increased over the last 6 years, based on regulatory revisions enacted over the period
and growth registered in the deposit base. Non markup income has a steady concentration of
almost 12% of gross revenue.
Horizontal Analysis:
Asset base of the bank has increased considerably over the past 6 years; highest increase
was observed in 2019 where assets have increased by 17%, mainly contributed by
investments in terms of volume. On an annualized basis, the asset base has recorded an
increase of 13% over the last six years with major contributions coming from investments.
Highest increase in investments was posted in 2016 summing up to 73%, followed by 49%
increase reported for 2018.The deposit base of the Bank has increased considerably over the
years growing from Rs. 330 billion in 2008 to Rs. 632 billion in 2020 translating into an
annual growth of 14% over past 6 years. Equity of the bank has also posted healthy increase
due to higher profitability in past 6 years, translating into 14% average growth over 6
yearperiod.

Chapter no.6
 6 Conclusion:
With Cooperation of all branch members, I have been able to learn and experience many
new things related to the banking sector and the banks workings. I am able to handle the
public as my project is to Dormant Account Activation Project.

Finally I concluded that MCB is a good organization for a person for his long term career
workings. Overall working and environment of the bank is very comfortable and the staff is
very helpful and respectful of each other and it still maintains a professional environment.
Management of the bank is very strong.

Employees of MCB Dubai chowk branch work more than their working hours and all the
workings take place in a very friendly atmosphere that does not induce pressure on the
person working there. It also shows their loyalty and commitment to the organization. This
is a regional branch of MCB which climbed its way up very quickly and all that only
because of the employee’s efforts and consideration for each other.

Understanding and the effective management of the human resources is the most difficult
challenge faced not only by the bank but by all the organizations. Even though the people
have been sacrificed in the new organizational developments, it is becoming clear that the
true lasting competitive advantage comes through human resources and how they are
managed. MCB seems to not focusing on this highly critical issue as the job satisfaction
level of the employees working at MCB, was quitelow.

Recommendations

After doing a deep study and witnessing everything that goes on in a branch, I would then
like to make the recommendationsthat;
First of all, the management needs to overlook the major problems that the organization is
currently facing and then develop strategies to eradicate them. Some of the suggestions that
I would like to give at the end are:

Promotion And Mass MediaPublicity:

 MCB Bank can improve its Marketing strategies to acquire more promotion and mass media
publicity by the use of effective channels of promotions like TV, Newspaper Advertisements
in conjunction with direct mail, window displays, leaflet in branches and in appropriate
other locations (such as hotels, shops, etc.) and including leaflets in statement of accounts
sent to existing customers in the hope that they will tell potential customers about the
services provided by our bank. It can also improve its magazine publication that it releases
each month.

Need Introduce Friendly Products:

In order to compete in the ever-expanding market both nationally and internationally,

introducing new and efficient products is one of its major requirements. One way to retain
the customers is to offer a wide range of services such as tax advice, free life insurance
equivalent to amount deposited, shares portfolio management, fund management facility,
etc., complimentary to the core services. Banks must have a slightly different mix of
services and mean of providing these such that customers can choose the mix that suits
thembest.

Centralized Structure:

Centralized Structure that enables employee involvement needs to be formed.

Better RewardSystem:

Better reward system is one of the most important requirements in order to reduce the
problem of employee.

Continuous Training Of Employees:

Creation of enhanced performance appraisalsystem

Implementation of enhanced Marketingsystem

Continuous lecture on better communication of staff withcustomers

Management Of Time:
There should be a good management of time for the sake of employees i.e. offering them
free break hours instead of making them work in this time as well
Atm MachinesMaintained:

ATM machine must be maintained properly to make it more convenient for the customers
and to decrease the load of work to the employees of the bank especially in the salarydays.

StaffMember:

I have observe during working that there need of more staff due to pressure of work MCB
should hire more employees for better performance even any employee when take leaves
Manager has no choice to his work to other employee so this situation built high pressure.

SYMBOLSYSTEM:

To make the SYMBOL system more efficient and make sure its connectivity all the time in
order to provides more convenience to customers.

Job Rotation And Promotions:

Most of the bank employees, are sticking to one seat only with the result that they
become master of one particular job and loose their grip on other banking operation. In my
opinion all the employees should have regular job experience all out-look towards banking.
 References:

http://www.sbp.com.pk

http://www.MCB.com.pk/

http://www.MCB.com.pk/MCB/about_MCB.asp

http://www.MCB.com.pk/MCB/corporate_information.asp

www.wikipedia.com

http://www.MCB.com.pk/psc/accounts/basic_account.asp

Annual Report 2021-2016 / MCB Bank

www.answers.com

www.jungnews.com