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MCB is one of the leading banks of Pakistan with a deposit f Rs.

368 in 2005,2004,2003,2001 and 200 the The Best Domestic Bank in Pakistan award in addition; MCB also has the distinction of winning the Billion and total asserts over Rs. 500 Billion. Incorporated in 1947, MCB soon earned reputation of solid and conservative financial institution managed by expatriate executives. In 1947, MCB was nationalized along with all other private sector banks. The Bank has a customer base of approximately 4 million, a nationwide distribution network of over 1,000 branches and over 450 ATMs in the market. 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 Asia Money 2005& 2004 awards for being The Best Domestic Commercial Bank in Pakistan

Following is the list of some bank that are the competitors of MCB Bank Limited  National bank of Pakistan (NBP)  United bank limited (UBL)  Habib bank limited (HBL)  Bank-al-Fallah limited (BAFL)  Khushali Bank limited  Allied Bank limited  First Woman Bank  Bank of Punjab  And some other foreign banks like Silk Bank, First Emirates banks, My Bank etc  These are all the competitors of the MCB bank in the financial sector because they are also covering the market ad there own interest. MCB should has the policy and procedure to overcome the competition in the market and to retain in the market with the moderns facilities to its loyal customers

During my internship I work and learn in different departments these are the followings departments Account opening Department Accounts Department Remittance Department General Banking Department Credit Department

The process of account opening is very simple and anybody who would like to open his account would open it easily

Types of Accounts
 CURRENT ACCOUNT  SAVING ACCOUNT  TERM DEPOSITS ACCOUNT

Application Form  Green color-coded Application Form is available for each type of account  Form is given to the customer to fill in for opening a related account.


Signature Specimen Card (SS) SIGNATURE SPECIMEN CARD is the card is compulsory for opening the account. Without getting the signature of the customers you cannot open the account These are the signatures that verify the cheque because these cheques are kept by the bank This card contains:
 four signatures of an applicant  applicant account number  account type

 Banker uses this card at the time when he receives the cheque; he

compares customers signature with the signature on the cheque for avoiding fraud  title of account


Account Opening Register The person who is opening the account of the persons records the necessary details into this register and allots an account number from this account opening register This register is maintained for each type of account and the account numbers are allotted serially Cheque Book Cheque book is issued to the customer when the bank accepts the account opening application form

 

Letter of Thanks Bank prepares two LETTER OF THANKS one for the new customer and the other for his introducer. This act promotes good will among the customer and the introducer.

 

  

Duties and learning in credit department I started my work and learning in credit department of the branch. Mr. Usman Gul (Forex Manager) told me about the terms and conditions of the commercial loan, types of commercial loan like industrial loan and loan for merchants, how to make proposal for commercial loan, document required to make a proposal, markup of commercial loan (18.5 % annually). He also gave me chance to view some old proposals and the proposal on which he was working. Mr. Iqbal (assistant for Mr. Usman Gul in Forex department) who is dealing consumer financing. He told me about different types of consumer financing. Flexi loan (personal loan) Auto finance Lifestyle loan

  

In Sargodha region at this point of time from MCB only personal loan is active while auto finance is about to start again in near future and lifestyle loan is inactive. I came to know about the terms and conditions of personal loan. Only the government servant who has his salary account at least six month old in MCB can apply. Different markup for different categories like 21%, 23% and 25%. 21% for existing users up to 3 year duration 23% for existing users for 4 or 5 years duration. 25% for new customers

         

In Remittance Department I had learned following things: Learned basic operations of remittance department (PO, DD) Learned how to make entries and vouchers of incoming TT Made vouchers and entries for Incoming TT Learned the difference between DD and PO Observed other operations e.g. PO (Pay Order), DD (Demand Draft) Learned bank charges for PO, DD, TT & MT (Mail Transfer) Learned how to make entries and vouchers for Outgoing TT (Telegraphic Transfer) Made few Outgoing TT Learned & Made Inter-Branch Credit Advices against the checks received from outer city branches IBIT - 31 -

a) b) c) d) e) f)

Liquidity Ratios Leverage Ratio Profitability Ratios Activity Ratios Market Ratios Statements of Cash Flow

MCB Bank limited Ratio Analysis Current Assets / Current Liabilities

Year 2009
Current Ratio
226,656,076 / 420467889 = 0.54

Year 2008
204,801,921 / 363396932 = 0.56

Year 2007
198,525,463 / 342463187 = 0.58

MCB Bank Limited Ratio Analysis Current Assets Investment / Current Liabilities

Year 2009
Quick Ratio 468,160,736 167,134,465 / 420,467,889 = 0.72

Year 2008
406,541,695 96,631,874 / 363,396,932 = 0.85

Year 207
376,592,633 113,089,261 / 342,463,187 = 0.77

0.85 0.8 Ratio 0.75 0.7 0.65 2009 2008 Year 2007

34,129,446

MCB Bank Limited Ratio Analysis Revenue earned / Working Capital

Year 2009
Sales to Working Capital 51,616,007 / 47,700,847 = 1.08

Year 2008
40,043,824 / 43,144,763 = 0.93

Year 207
31,786,595 / 34,129,446 = 0.93

MCB Bank Limited Ratio Analysis Current Asset Current Liabilities

Year 2009
Working Capital 47,700,847

Year 2008
43,144,763

Year 207
34,129,446

Leverage Ratio
MCB Bank Limited Ratio Analysis EBIT / FIXED INTERST CHARGES

Year 2009

Year 2008

Year 2007

Time Interest 38,519,581 / 32,764,741 / 28,769,732 / Earned Ratio 15,364,636 = 2.51 10,843,175 = 3.01 7,461,697 = 3.86

MCB Bank Limited Ratio Analysis TOTAL LIABILITIES / TOTAL ASSETS

Year 2009
Debt Ratio 439,483,714 / 509,223,727 = 0.86

Year 2008
385,179,850 / 443,615,904 = 0.87

Year 2007
355,365,842 / 410,485,517 = 0.87

MCB Bank Limited Ratio Analysis


TOTAL LIABILITIES/ SHAREHOLDERS EQUITY

Year 2009

Year 2008

Year 2007

Debt to 439,483,714 / 385,179,850 / 355,365,842 / Equity Ratio 61,075,932 = 52,244,865 = 45,414,156 = 7.20 7.37 7.83

MCB Bank Limited Ratio Analysis total liabilities / net worth net intangible assets

Year 2009
Debt to tangible net worth 439,483,714 / 69,740,013 = 6.30

Year 2008
385,179,850 / 58,436,054 = 6.59

Year 2007
355,365,842 / 55,119,675 = 6.45

MCB Bank Limited Ratio Analysis Long term debts / capital employed

Year 2009
Total 19,015,825 / Capitalization 80,091,757 = Ratio 0.24

Year 2008
21,782,918 / 74,027,783 = 0.29

Year 2007
12,902,655 / 46,704,422 = 0.28

MCB Bank Limited Ratio Analysis (Fixed asset/ total assets) / (shareholders equity / total assts)

Year 2009
Fixed Asset Ratio / Equity Ratio (282,567,651 / 509,223,727) / (61,075,932 / 509,223,727) = 0.55/ .12 = 4.6

Year 2008
(238,813,983 / 443,615,904) / (52,244,865 / 443,615,904) = 0.54 / 0.12 = 4.5

Year 2007
(211,960,054 / 410,485,517) /(454,141,456 / 410,485,517) = 0.52 /0.11 = 4.7

MCB Bank Limited Ratio Analysis Long term assets / long term debts

Year 2009
Long term 41,054,991 / assets versus 19,015,825 = long term 2.16 debts

Year 2008
37,074,209 / 21,782,918 = 1.70

Year 2007
33,892,884 / 12,902,655 = 2.63

Profitability Ratios
Ratio Analysis MCB Bank Limited Net Profit / Mark up Interest Earned * 100

Year 2009
Net Profit Margin 15,495,297 /51,616,007 * 100 = 30.02 %

Year 2008

Year 2007

15,374,600 / 15,265,562 / 40,043,824 * 100 31,786,595 * 100 = 38.39 % = 48.03 %

MCB Bank Limited Ratio Analysis NET INCOME/ TOTAL ASSETS

Year 2009
RETURN ON 15,495,297 / ASSETS 509,223,727 = 0.03

Year 2008
15,374,600 / 443,615,904 = 0.03

Year 2007
15,265,562 / 410,485,517 = 0.04

0.04 0.035 0.03 0.025 Ra tio 0.02 0.015 0.01 0.005 0 2009 2008 Ye a r 2007

Ratio Analysis

MCB Bank Limited Net income / Total Assets

Year 2009
DuPont Return on Assets 15,495,297 / 509,223,727 = 0.03

Year 2008
15,374,600 / 44,361,5904 = 0.03

Year 2007
15,265,562 / 4,104,855 = 0.04

0.04 0.035 0.03 0.025 Ratio 0.02 0.015 0.01 0.005 0 2009 2008 Year 2007

Ratio Analysis

MCB Bank Limited net mark up / operating assets

Year 2009
Operating Assets Turnover

Year 2008

Year 2007
31,786,595 / 392,616,756 = 0.08

51,616,007 / 40,043,824 / 1,926,183,632 = 423,805,428 = 0.03 0.09

0.09 0.08 0.07 0.06 0.05 Ratio 0.04 0.03 0.02 0.01 0 2009 2008 Year 2007

MCB Bank Limited Ratio Analysis Net income / operating assets

Year 2009
Return on Operating Assets

Year 2008

Year 2007

15,495,297 / 15,374,600 / 15,265,562 / 196,183,632 = 423,805,428 = 392,616,756 = 0.01 0.04 0.04

0.04 0.035 0.03 0.025 Ratio 0.02 0.015 0.01 0.005 0 2009 2008 Year 2007

Ratio Analysis

MCB Bank Limited Net income after Tax / Shareholder Equity Indicates how much return in %age is earned by investing amount equal to equity

Year 2009
Return on Total Equity 15,495,297 / 61,075,932 = 0.34

Year 2008
15,374,600 / 52,244,865 = 0.29

Year 2007
15,265,562 / 45,414,156 = 0.25

0.35 0.3 0.25 0.2 Ra tio 0.15 0.1 0.05 0 2009 2008 Ye a r 2007

Ratio Analysis

MCB Bank Limited Operating Income / Mark up interest earned * 100

Year 2009
Operating Income Margin

Year 2008

Year 2007

3,154,945 / 21,867,566 / 21,308,035 / 51,616,007 * 100 40,043,824 * 100 31,786,595 * 100 = 44.86 % = 54.61 % = 67.03 %

70.00% 60.00% 50.00% 40.00% Ra tio 30.00% 20.00% 10.00% 0.00% 2009 2008 Ye a r 2007

Ratio Analysis

MCB Bank Limited Net mark up / mark up interest earned * 100

Year 2009
Gross Profit Margin

Year 2008

Year 2007

35,774,544 / 28,483,084 / 23,921,062 / 51,616,007 * 100 40,043,824 * 100 31,786,595 * 100 = 69.31 % = 71.13 % = 75.25 %

76.00% 75.00% 74.00% 73.00% 72.00% Ratio 71.00% 70.00% 69.00% 68.00% 67.00% 66.00% 2009 2008 Year 2007

Ratio Analysis

MCB Bank Limited Net profit after tax/Total assets

Year 2009
Return on Investment 15,495,297 / 50,9223,727 = 0.03

Year 2008
15,374,600 / 443,615,904 = 0.03

Year 2007
15,265,562 / 410,485,517 = 0.04

0.04 0.035 0.03 0.025 Ratio 0.02 0.015 0.01 0.005 0 2009 2008 Year 2007

Ratio Analysis

MCB Bank Limited mark up interest earned / Total Assets

Year 2009
Asset turnover Ratio 51,616,007 / 509,223,727 = 0.10

Year 2008
40,043,824 / 443,615,904 = 0.09

Year 2007
31,786,595 / 410,485,517 = 0.08

0.1 0.09 0.08 0.07 0.06 Ratio 0.05 0.04 0.03 0.02 0.01 0 2009 2008 Year 2007

Activity Ratios
Ratio Analysis MCB Bank Limited markup interest earned / total assets

Year 2009
Total asset turnover 51,616,007 / 509,223,727 = 0.10

Year 2008
40,043,824 / 443,615,904 = 0.09

Year 2007
31,786,595 / 410,485,517 = 0.08

0.1 0.09 0.08 0.07 0.06 Ra tio 0.05 0.04 0.03 0.02 0.01 0 2009 2008 Ye a r 2007

MCB Bank Limited Ratio Analysis markup interest earned / fixed assets

Year 2009
Fixed asset 51,616,007 / Turnover 41,054,991 = 1.26

Year 2008
40,043,824 / 37,074,209 = 1.08

Year 2007
31,786,595 / 33,892,884 = 0.94

1.4 1.2 1 0.8 Ratio 0.6 0.4 0.2 0 2009 2008 Year 2007

MCB Bank Limited Ratio Analysis dividend / number of shares

Year 2009

Year 2008

Year 2007

Dividend per 6,735,510,000 / 9,834,175,000 / 4,728,496,000/ share 691,104,527 = 628,276,843 = 628,276,843 = 9.75 15.65 7.53

16 14 12 10 Ratio 8 6 4 2 0 2009 2008 Year 2007

Ratio Analysis

MCB Bank Limited net income / number of shares

Year 2009
Earning per share

Year 2008

Year 2007

15,495,297,000 / 15,374,600,000 / 15,265,562,000 / 691,104,527 = 628,276,843 = 628,276,843 = 22.42 24.47 24.30

24.5 24 23.5 23 Ratio 22.5 22 21.5 21 2009 2008 Year 2007

Ratio Analysis

MCB Bank Limited market value per share / earning per share

Year 2009
Price earning 244 / 22.42 ratio =10.88

Year 2008

Year 2007

494.8 / 24.47 = 434.6 / 24.30 = 20.22 17.88

25

20

15 Ratio 10

0 2009 2008 Year 2007

MCB Bank Limited Ratio Analysis Net income All dividend / Net Income

Year 2009
Percentage of earning retained (154952976735510)/ 15495297 = 8759787 / 15495297 = 0.57

Year 2008
(15374600 9834175) / 15374600 = 5540425 / 15374600 = 0.36

Year 2007
(15265562 4728496) / 15265562 = 10537066 / 15265562 = 0.67

0.7 0.6 0.5 0.4 Ra tio 0.3 0.2 0.1 0 2009 2008 Ye a r 2007

MCB Bank Limited Ratio Analysis dividend per share / earning per share * 100

Year 2009

Year 2008

Year 2007

Dividend 11.36 /22.42 * 13.20 / 24.47 * 13.67 / 24.30 * payout ratio 100 = 50.67 % 100 = 53.94 % 100 = 56.26 %

57.00% 56.00% 55.00% 54.00% 53.00% Ratio 52.00% 51.00% 50.00% 49.00% 48.00% 47.00% 2009 2008 Year 2007

MCB Bank Limited Ratio Analysis dividend per share / market price per share * 100

Year 2009
Dividend yield ratio 11.36 / 244 *100 = 4.66 %

Year 2008

Year 2007

13.20 / 494.80 * 13.67 /434.6 100 = 2.67 % *100 = 3.15 %

5.00% 4.50% 4.00% 3.50% 3.00% Ratio 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2009 2008 Year 2007

Ratio Analysis

MCB Bank Limited share holders equity / number of shares

Year 2009
Book value per share 61,075,932 / 619,104,527 = 0.04

Year 2008
52,244,865 / 628,276,843 = 0.08

Year 2007
45,414,156 / 628,276,843 = 0.07

0.08 0.07 0.06 0.05 R t 0.04 0.03 0.02 0.01 0 2009 2008 Y r 2007

Statements of Cash Flow


Ratio Analysis MCB Bank Limited operating cash flow / total debts

Year 2009
Operating cash flow to debt 78,148,082 / 4,394,83714 = 0.18

Year 2008
2,031,538/ 385,179,850 = 0.005

Year 2007
61,899,299 / 355,365,842 = 0.174

0.18 0.16 0.14 0.12 0.1 Ra tio 0.08 0.06 0.04 0.02 0 2009 2008 Ye a r 2007

Ratio Analysis

MCB Bank Limited operating cash flow / number of share issued

Year 2009
Operating cash flow to shares 78,148,082 /619,104,527 = 0.11

Year 2008
2,031,538 / 628,276,843 =0.003

Year 2007
61,899,299 / 628,276,843 = 0.10

0.12 0.1 0.08 Ratio 0.06 0.04 0.02 0 2009 2008 Year 2007

Ratio Analysis

MCB Bank Limited operating cash flow / cash dividend

Year 2009

Year 2008

Year 2007

Operating 78,148,082 / 2,031,538 / 61,899,299 / cash flow to 2,418,865,845 = 1,570,692,108 = 3,141,384,215 = cash dividend 0.032 0.001 0.02

0.035 0.03 0.025 0.02 R t 0.015 0.01 0.005 0 2009 2008 Y r 2007

Working of Current Assets


2009 Rs M Balance sheet Assets Cash and balance with treasury banks Balance with other banks Lending to financial institutions Investment Advances Operating fixed assets Deferred tax assets Other assets Total % Rs M 2008 % Rs M 2007 % 38,775 6,010 3,000 167,134 253,294 18,015 23,040 509,224 8% 1% 1% 33% 50% 4% 5% 100% 39631 4,043 4,100 96,632 262,135 17,264 19,810 443,616 9% 1% 1% 22% 59% 4% 4% 100% 39,684 3,808 1,051 113,089 218,961 16,024 17,869 410,486 10% 1% 0% 28% 53% 4% 4% 100%

Liabilities Bills payable Borrowings Deposits and other accounts Deferred tax liabilities Other liabilities Total
Net assets

8,201 44,662 367,605 15,819 439,484


69,740

2% 9% 72% 3% 86%
14%

10,551 22,664 330,182 21,346 385,180


58,436

2% 5% 74% 5% 87%
13%

10,479 39,407 292,098 479 11,722 355,366


55,120

3% 10% 71% 0% 3% 87%


13%

It is an evident while the analysis of the financial statement of the MCB that it is making progress leaps and bounds. The profit of the MCB is increasing and growing in last few years and that trend is to be shown in the future time period. So I have concluded that MCB has a very prosperous present and future, which is the assurance of the wealth maximization of the shareholder in the future. I also think that is that bank would be able to cover and control on the down mentioned recombination than it would be in such situations that will really lea it towards the road of prosperity, development and integrity. 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 with respect to many different workings on many different instances and also in account opening for customers and can handle many other tasks as well. 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 Liaqat Market 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 branch of MCB relatively small and has climbed its way up very quickly and all that only because of the employees 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 quite low.

Current ratio shows a firms ability to cover its current liabilities with its current assets. So MCB should maintain its current ratio in the good positions by increasing the current assets and decreasing the current liabilities Quick ratio shows a firms ability to meets it current liabilities with its current assets excluding inventories and prepaid expenses, which are least liquid portion of the current assets. So MCB should maintain its current ratio in the good positions by increasing the current assets and decreasing the current liabilities Inventories are considered as current assets so they are included in current ratio calculation. Inventories are less liquid. MCB should maintain its inventories at liquid level Higher cash ratio also shows the higher rate of satisfaction like other liquidity ratios. MCB have to maintain its cash level at high portion Financial leverage is the extent to which a firm is financed with debt. The amount of the debt a firm uses has both positive and negative effects. Financial leverage should have a positive affect on the both side MCB have to maintain its debt ratio in good position because the debt equity ratio is a simple rearranged of the debt ratio. Coverage ratio shows the number of the times a firm can recover or meet particular financial obligations. The interest coverage ratio, which is also called the time interest earned ratio, measure the coverage of the firm s interest expense. And the interest is also the income of the bank so it should be the best source to measure the position of the interest coverage. All the financial ratios affect the position of the bank in the market so the bank have to maintain it in proper positions

Thank You