MCB BANK LIMITED

EXECUTIVE SUMMARY:

MCB Bank Limited

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.

Table of Contents 1. MCB in Brief

o History o The Mission o The Business

2. Principles of Performance
o o o o o Customer Focus Quest for Quality Employees Respect Team Based Approach Good Corporate Citizenship

3. Corporate Information
        Board of Directors Advisor Audit Committee Chief Financial Officer Company Secretary Auditors Legal Advisors Registered Office

4. Business Operations  Banking Sector Overview  MCBs Performance Overview

5. Products and Services

    MCB visa credit card MCB Car4U MCB smart card MCB ATMs

      

MCB online banking MCB mobile ATM MCB Lockers MCB salary club MCB Investment Services MCB Virtual banking Personal Banking

1. MCB in Brief 2.
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 Euro money 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 multinational 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.

3. Principles of Performance 4.
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 indepth 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.

Business Operations

1. Banking Sector Overview Pakistans banking and finance sector grew by over 21 percent from July 2004March 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. MCB s 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 Euro money Award 2005 for the Best Bank in Pakistan. MCB has become the only bank to receive the Euro money 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

 1. MCB visa credit card:  MCB offers a complete suite of classic, Gold and platinum visa card focusing on providing, superior service, travel privileges & shopping pleasure. It also offers comprehensive insurance & installment plans, reward points and SMS alerts that give a different feel to the world of credit cards. These unique features include i-revolve, which makes variable markup rate available to customers allowing them to repay at affordable rates. 2. MCB Car4U: MCB car4u not only gets you a car of your own choice but is also affordable with competitive mark-up flexible conditions, easy processing and above all, no hidden costs. 3.MCB smart card: MCB smart card is the key that enables access to convenient banking services. Smart card allows you to manage your account, withdraw cash, transfer fund, pay utility and mobile bills, recharge prepaid connections, register for mobile and internet banking services and much more.

4. MCB ATMs: MCB has one of the nation ATM networks with over 450 ATMs and still growing. MCB ATMs give you 24 hours convenience of cash withdrawal, mini-statement, utility bill payment, funds transfer services and much more. 5. MCB online banking: MCB has a fast growing network of over 1,100 online branches in the country providing customers real time online transaction facility. 6.MCB mobile ATM: With MCB Mobile ATM not only do we provide you with world class banking service but we also provide convenience. Our innovative mobile ATMs ensure that you are given service close to you. 7. MCB Lockers: MCB Lockers are the best protection for your valuables. Lockers of different capacities are available nationwide. 8. MCB salary club: Salary club provides the convenience of having an extensive range of financial services available to employees at their place of work. 9. MCB Investment Services: MCB investment services offer distribution of mutual funds managed by the leading fund manager of Pakistan. We can suggest the products most suited for your needs, or work with you to create a personalized solution completely focused on your expectations of the capital markets.

MCB Virtual banking: MCB provides the convenience of banking via internet, whether at home, office or on travel, log on at www.mcb.com.pk and enjoy 24 hours access to all your accounts at MCB for a great number of services such as funds transfer, utility bill payments, Mobile Top-ups and much more. 10. MCB instant Finance: With MCB instant Finance get loan instantly at any MCB branch against liquid collateral at competitive pricing.

Personal Banking


Deposit Accounts Khushali Bachat Account Khushali Bachat Account, a Rupee savings account is one of MCB Banks most popular products. Due to the low initial deposit, the account can be opened by people from all walks of life and still avail the facility of daily product profit calculation. Mahana Khushali Bachat MCB Monthly Khushali Scheme provides you with a steady income every month. Just purchase a Monthly Khushali Certificate and you will enjoy a steady income of your total deposit every month. Pak Rupee Savings Account MCBs Pak Rupee Savings Account offers you attractive returns on your Pak Rupee investment. In addition, you have access to a countrywide ATM network convenient cash accessibility 24 hours a day. The facility also provides you with unlimited daily transactions with a limit on maximum withdrawal amount through the ATM machines.

Pak Rupee Current Account MCBs Pak Rupee Current Account offers you the convenience of unlimited withdrawals i.e. access to your funds whenever you want without any notice. There is no limit on the number of transactions you make in a day plus you can avail finance facility up to 75% of the total deposit. In addition, you have access to a countrywide ATM network convenient cash accessibility 24 hours a day. The facility also provides you with unlimited daily transactions with a limit on maximum withdrawal amount through the ATM machines. Pak Rupee Term Deposit MCB Pak Rupee Term Deposit gives a higher rate of return. It gives you choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, 4 years and 5 year term deposits. Saving 365 The MCB Saving 365 calculates profits on a daily product basis and gives you the facility of unlimited withdrawals. Foreign Currency Savings Account MCBs Foreign Currency Savings Account offers you attractive returns on your Foreign Currency investment. You can invest in any of the four currencies i.e. US Dollar, UK Pound Sterling, Japanese Yen or Euro Your foreign currency account is exempted from Zakat and withholding tax Foreign Currency Current Account MCBs Foreign Currency Current Account offers you the convenience of unlimited withdrawals i.e. access to your funds whenever you want without any notice. There is no limit on the number of transactions you make in a day.

MCB Foreign Currency Term Deposit MCB Foreign Currency Term Deposit gives a higher rate of return. It gives the choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, 4 years and 5 year term deposits. Dollar Khushali Account The Dollar Khushali Account, a Dollar based account was introduced in 1993 at selected MCB Bank branches. Today, you can open a Dollar Khushali Account at over 200 branches in Pakistan.

 Loan Products

MCB Business Sarmaya MCB Business Sarmaya is the best Running Finance facility against your residential property which empowers you to manage your business dealings better. So act today and get MCB Business Sarmaya and thus improve your business, avail lucrative opportunities and expand your business, with absolute satisfaction of cash flows. MCB Car4u Life is like a chess board. You plan your career options. You analyze your business moves. But when you really want to improve your life, you make a power move. MCB CAR4U Auto Finance is the power move that assists you in more ways than you ever imagined. It is affordable, with lowest mark up, flexible conditions, easy processing and above all, no hidden costs.

MCB Pyara Ghar Some destinations require a long wait. Like waiting for a home of your own. But with MCB Pyara Ghar it is now easy to step into your home and start living a real life. MCB Pyara Ghar is an ideal Home Finance from your own bank that lets you Purchase, Renovate or Construct your home the way you have always wanted. Having your own home was never so easy Easy Personal Loan MCB Easy Personal Loan provides you with the financial advantage to do things you've always wanted to but never had the sufficient funds for. Take that much-needed holiday. Buy a car. Refurnish your house. Purchase a new TV. Finance a better education for your children. MCB Master Card Since the beginning of time, people have tried to find more convenient ways to pay, from gold to paper money and cheques. Today, money is moving away from distinct hard currencies and towards universal payment products that transcend national borders, time zones, and, with the Internet, even physical space. Plastic or "virtual" money, credit, debit, and electronic cash products, inevitably will replace cash and cheques as the money of the future. MCB Rupee Traveler's Cheques MCB Rupee Traveler's Cheques were first introduced in 1993 as safe cash for traveling and travel related purposes. The product has been extremely popular and is preferred over cash by customers while traveling and in all walks of life. MCB Rupee Traveler's Cheques- The safest way to Carry Cash

Corporate Banking

Cash Management Services MCBs network of over 900 branches in Pakistan enables it to collect and disburse payments efficiently with its cash management services. This also enables it to offer you a choice of paper based or electronic fund transfer solutions including collection amounts, cross branch on- line transactions etc. Working Capital Loans Based on the customers 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. Online Services MCB ATM Services With a solid foundation of over 50 years in Pakistan, with more than 750 automated branches, 269 online branches, over 222 MCB ATMs in 41 cities nationwide and a network of over 12 banks on the MNET ATM switch, MCB is positioned at the forefront of the banking industry in Pakistan. This success has been possible because of a never-ending drive to achieve higher levels of excellence, constantly striving to raise the level of performance

MCB Call Center Keeping up with banking services can be tedious but not with MCB Bank, where phone service is at your fingertips. Just dial our Call Centre from the comfort of your home or office or wherever you happen to be. It offers basic banking services for your convenience, eliminating the need for you to make unwanted trips to your branch. MCB Smart Card MCB now brings you MCB SmartCard -a secure and convenient instrument of payment with unmatched functionalities. It provides 24-hour direct access to your bank account. The convenience and flexibility of MCB SmartCard will help you live a smarter life. It not only helps you manage your expenses, but also eliminates undue interest on your day to day credit card transactions. Your balance is always within your reach and you spend accordingly. MCB Debit Card Now MCB brings a secure, convenient and quick payment facility that enables you to do purchasing by using your existing MCB ATM / MCB Smart Card as a DEBIT CARD.

Virtual Banking MCB Virtual Internet Banking offers you the convenience to manage and control your banking and finances when you want to, where you want to. MCBs Virtual Internet Banking facility is simple and secure. And its free of cost. With MCB Virtual Internet Banking you can access any of the banking services, 24 hours a day, 7 days a week and throughout the year. MCB Virtual Internet Banking offers a wide range of online services which makes your banking accessible anytime and from anywhere. 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. Immediate or Scheduled Bills Payment. Scheduling of OneTime as well as Recurring bill payments. Option for Full or Partial payment based on the payment conditions specified by a particular Utility Company. 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. Payment/Transfer Alerts for reminding, in advance, prior to the processing of specified payments and transfers. Personal Alerts for reminding of pre-specified events and occasions.

Islamic Banking

Deposit Schemes For customers who are looking for a deposit opportunity where they can purse their funds and reap halal returns on it, we offer the following products: Al-Makhraj Saving Account Al-Makhraj Ianat Account Al-Makhraj Term Deposit Fund Based Facilities Ijarah Products MCBs Islamic Ijarah, analogous to the English term 'leasing, is based on the Ijarah wa Iqtina 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 Wa Iqtina. Types of Ijarah o Car Ijarah o Equipment Ijarah MCBs Competitive Strategies To be competitive the Bank has further reinforced its position in the Consumer Banking arena by streamlining and re-launching the consumer financing products and introducing more convenience based solutions. With the re-launch of auto finance and house finance products, the Bank pushed the products with full thrust. The Bank has also launched a running finance facility against mortgage of property.

Technology continued to play an important role in improving and expanding product offerings. The Bank introduced more IT based products to cater to the changing lifestyles and needs of the customers. MCB Virtual-Internet Banking was launched with wide ranging banking solutions for the customers ranging from individual to corporate customers and it has become the most preferred Internet banking solution in the country. MCB also had the privilege of being the first Bank in Pakistan to launch the comprehensive bill payment facility through its alternate delivery channels which include Internet Banking, ATMs and MCB Call Centre, currently with six payment partners. Similarly, the Bank also took initiatives to increase the usage of debit facility. To provide timely and updated information, MCB has also provided a new look to its website which is user friendly and considerably easy to browse. The Islamic Banking initiative has been very successful in attracting new customer, both individuals and companies. Similarly, those relationships, which were confined only to current account facility, have grown into stronger business relationships. The branch network was expanded to Lahore and Multan during the last year and recently been extended to Hyderabad and Faisalabad. The Bank plans to further expand its Islamic Banking branch network to other metropolitan areas and also to introduce new sharia compliant banking solutions to a wider range of customers for satisfying their individual and business needs. Some wide-ranging new strategic initiatives were also taken up which will be important for the Bank in years to come. A private company has been formed in Hong Kong (fully owned subsidiary of MCB) in partnership with Standard Chartered Bank, handling trade transactions of select countries in the Asia-Pacific region. It is projected to earn US$ 1 million in its first year of operations. To increase its international presence, the Bank will be opening its representative office in Dubai and entering into major strategic alliances with banks in the UAE/ especially for marketing our consumer banking products to non-resident Pakistanis. Furthermore, feasibility is also being carried out for entering other international markets. 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.

Management of Human Resources has been one of our core focus areas. MCB is committed towards attracting, retaining and motivating outstanding people. Challenge for MCB is to provide an environment in which employees can better realize their potential. The Bank introduced 'reward for performance' where high potential officers were identified and rewarded accordingly. In view of the competitive environment, the Bank is focusing on performance and introducing a more robust performance management system. MCB is also strongly committed to training its staff at all levels. The Bank will also be implementing the full suite of the latest version of SYMBOLS Version 8. MCB Bank will run SYMBOLS eFinance modules to deliver personalized services to its customers over multiple delivery channels, while SYMBOLS Enterprise Operations Center will serve as its core banking transaction-processing engine. By implementing SYMBOLS, MCB Bank aims to raise the level of its customer service and its time to market in new product offerings for its three core banking businesses in Corporate, Commercial and Consumer Banking - retaining its market leadership as Pakistan's progressive BanK