INTERNSHIP REPORT

ON
MCB

SUBMITTED TO:

The Director of (IBA PU)

PROF. DR. MUHAMMAD EHSAN MALIK

SUBMITTED BY:

ROLL NO:

SESSION:

Areeba Haider
59-A
BBA (HONS.)2010-2014

INSTITUTE OF BUSINESS ADMINISTRATION

UNIVERSITY OF THE PUNJAB
LAHORE

DEDICATION

First of all, thanks to my ALLAh Subhana WaTala and His beloved Prophet
Hazrat Muhammad S.A.W.W. This report is dedicated to my whole family.
Because of their prayers I have completed this internship program by the grace
of ALLAH Almighty Subhana WaTala. Without their support I was unable to
complete my internship program.

ACKNOWLEDGEMENT

Person is not a perfect in all the contexts of his life; He has a limited mind and
mind thinking approaches. It is the guidance from Almighty Allah that shows
the man light in the darkness and the person find his way in the light. Without
this helping light, person is nothing but a helpless creation.
The teachings of the Holy Prophet Muhammad (PBUH) were also the
continuous source of guidance for me especially his order of getting knowledge
and fulfilling once duty honestly was key motivation force for me.
With prayers of my parents and support of my teachers it became possible
formulate this report. I pay high regards to them.
I am also thankful to all my friends and class fellows who helped me and
provided me support to complete this hard task.

ABSTRACT
This report is based on the study and observation of Human Resource group of
one of the leading bank of Pakistan. Internship experience is very useful and
important part for a job seeking person after the completion of his/her studies.
During the course of internship I learned about different functions performed
by HRMG. I also learned about documentation requirements and record
keeping for different activities and processes. Internship teaches me the routine
wise daily repetitive tasking of the organization at the smallest level.

I have described the overview and organizational structure of MCB in first part
of report. Then I have mentioned the details of Human Resource and described
the task which I performed in MCB. Afterwards SWOT analysis and finally the
report ends with the conclusion and suggestion from my side, as I consider it
my responsibility to add up my input and learning from the valuable internship
program which is necessary to mention

Contents
DEDICATION.................................................................................................................................3
ACKNOWLEDGEMENT...............................................................................................................4
ABSTRACT....................................................................................................................................5
INTRODUCTION...........................................................................................................................9
DEFINITION OF BANK..............................................................................................................10
According to Crowther,.........................................................................................................10
According to G.W. Gilbert,....................................................................................................10
According To Banking Companies Ordinance......................................................................11

HISTORY OF BANKING IN PAKISTAN....................................................................................11

Pre Nationalization Era..............................................................................................................11
Banking Sector in Pakistan In 1973...........................................................................................13
Nationalization Era:...................................................................................................................13
C) POST NATIONALIZATION ERA......................................................................................14
SCHEDULED BANKS.........................................................................................................14
PAKISTAN BANKING SECTOR.............................................................................................15
Nationalized Schedule Banks................................................................................................15
De-Nationalized Schedule Banks..........................................................................................15
Specialized Banks..................................................................................................................16
Private Schedule Banks.........................................................................................................16
Foreign Banks........................................................................................................................16
Investment Banks...................................................................................................................18
HISTORY OF MCB LIMITED.....................................................................................................20
PRIVATIZATION..................................................................................................................21
AFTER PRIVATIZATION....................................................................................................21
MCB BANK TODAY....................................................................................................................22
FOREIGN TRADE................................................................................................................22
YEAR 2006 COMPLIANCE................................................................................................22
SOCIAL SECTOR.................................................................................................................23
THE BUSINESS....................................................................................................................23
New Asset and Liability Products..........................................................................................23
Market Standing of MCB..............................................................................................................25
VISION STATEMENT..................................................................................................................28
CHALLENGING AND CHANGING THE WAY YOU BANK...............................................28
MISSION STATEMENT...............................................................................................................29
Compliance status......................................................................................................................30
STRAGETIC OBJECTIVES.........................................................................................................32
Core Values....................................................................................................................................32
Innovation..............................................................................................................................32
Excellence..............................................................................................................................33
Customer Focus.....................................................................................................................33
Employee Respect & Dignity................................................................................................33
Team Based Approach...........................................................................................................33

Quest For Quality..................................................................................................................33

GOOD CORPORATE CITIZENSHIP..................................................................................34
MANAGEMENT COMMITTEE..................................................................................................34
Board of Directors.....................................................................................................................35
ORGANIZATIONAL HIERARCHY OF MCB............................................................................39
ORGANIZATIONAL SETUP OF MCB...................................................................................41
ORGANIZATIONAL STRUCTURE OF MCB............................................................................43
HUMAN RESOURCE MANAGEMENT GROUP......................................................................48
DESIGNATIONS AND NUMBER OF EMPLOYEES................................................................49
HUMAN RESOURCE PROCESS........................................................................................49
HRM PLANNING PROCESS..............................................................................................50
HRM FORECASTING..............................................................................................................50
HRMG WORKING...................................................................................................................50
RECRUITMENT & TALENT ACQUISITION........................................................................50
BATCH HIRING.......................................................................................................................51
PREREQUISITES FOR PROBATIONARY OFFICERS.....................................................52
PROCEDURE:......................................................................................................................53
OUTSOURCING...................................................................................................................53
PROCEDURE........................................................................................................................54
SELECTION..........................................................................................................................55
JOINING................................................................................................................................56
EMPLOYEES TRAINING AND DEVELOPMENT PROGRAM...........................................56
PRE-SERVICE TRAINING..................................................................................................57
IN- SERVICE TRAINING:...................................................................................................57
ON THE JOB TRAINING....................................................................................................58
Purpose of on job training......................................................................................................58
Organizational Development and Talent Management..........................................................58
PROMOTION........................................................................................................................59
PERFORMANCE & Compensation..........................................................................................60
PERFORMANCE APPRAISAL...........................................................................................60
COMPENSATION........................................................................................................................61
FRINGE BENEFITS:............................................................................................................62
HR FINANCIAL SERVICES DEPARTMENT.........................................................................62
PAYROLL..............................................................................................................................63

STAFF LOAN........................................................................................................................63
FINAL SETTLEMENT.........................................................................................................63
LOAN TAKE OVER.............................................................................................................64
NON REFUNDABLE LOAN:..............................................................................................64
PAY SLIP...............................................................................................................................64
DISBURSEMENT.................................................................................................................64
TYPES OF LOAN.................................................................................................................65
HR Relationship Unit................................................................................................................65
LEAVE POLICY:...................................................................................................................65
TERMINATION....................................................................................................................65
RETIREMENTS........................................................................................................................66
1.

Horizontal Analysis...........................................................................................................119

2.

Vertical Analysis...............................................................................................................119

INTRODUCTION

The word 'Bank' is said to have been derived from the words Bancus or Banque
or Bank. This history of banking is traced to as early as 2000 B.C. The priests
in Greece used to keep money and valuables of the people in temples. These
priests thus acted as financial agents. The origin of banking is also traced to
early goldsmiths. They used to keep strong safes for storing the money and
valuables of the people. The persons who had surplus money found it safe and
convenient of deposit their valuables with them. The first stage in the
development of modern banking, thus, was the accepting of deposits of cash
from those persons who had surplus money with them.
The goldsmiths used to issue receipts for the money deposited with them.
These receipts began to pass from hand to hand in settlement of transactions
because people had confidence in the integrity and solvency of goldsmiths.
When it was found that these receipts were fully accepted in payment of debts;
then the receipts were drawn in such a way that it entitled any holder to claim
the specified amount of money from goldsmiths. A depositor who is to make the
payments may now get the money in cash from goldsmiths or pay over the
receipt to the creditor. These receipts were the earlier bank notes. The second
stage in the development of banking thus was the issue of bank notes.
The goldsmiths soon discovered that all the people who had deposited money
with them do not come to withdraw their funds in cash. They found that only a
few persons presented the receipts for encashment during a given period of
time. They also found that most of the money deposited with them was lying
idle. At the same time; they found that they were being constantly requested for
loan on good security. They thought it profitable to lend at least some of the
money deposited with them to the needy persons. This proved quite a profitable

business for the_ goldsmiths. They instead of charging safe keeping charges
from the depositors began to give them interest on the money deposited with
them. This was the third stage in the development of banking.

DEFINITION OF BANK
The term 'bank' is being used for a long time, yet it has no precise definition.
The basic reason is that the commercial banks perform not just one but many
types of functions. The term bank has been defined differently by different
authors. Some are as follows:

According to Crowther,
"Bank is a dealer in debtshis own and of other people."

According to G.W. Gilbert,

"A banker is a dealer in capital or more properly a dealer in money. He is an
intermediate party between the borrower and the lender. He borrows from one
party and lends to another."

According To Banking Companies Ordinance

U/s3 (B) of Banking Companies Ordinance 1962

"Banker means person

transacting the business of accepting for the purpose of lending or investment,

of deposits of money from the public, repayable on demand or otherwise and
withdraw able by cheque, draft, order or otherwise and includes any Post Office
Savings Bank."

HISTORY OF BANKING IN
PAKISTAN

The interesting point which I observed during the span of mine internship was
the historical background of Banking & Financial sector which is the one in
which great improvement and growth is observed since the formation of
Pakistan.
For studying the growth of this sector we can divide it into three stages, which
are as follows

a)

Pre-Nationalization Era

b)

Nationalization Era

c)

Post Nationalization Era

Pre Nationalization Era

There were only two Muslim banks in Indo Pak before partition, they were;

Habib Bank Ltd. (estd. in 1941 at Bombay)

Australia Bank Ltd (estd.In1944 at Lahore). Hindus or Foreigners either

owned all other banks, at that time.

At the time of partition there were 631 bank branches in area, which came
under Pakistani control. But due to bloodshed and violence at large scale,
mostly branches were closed and the disparity can be accessed from the fact
that on July 1948 there were 195 branches with deposits of Rs.88 crore (880
million) only. Also a factor lagging in Pakistani industry was a central bank of
its own, by that time Reserve Bank of India was acting as central bank for both
countries and same currency notes were used in both territories. But Reserve
Bank of India was biased and Set down Pakistan on many occasions such as
the issue of funds transfer etc.
In this period drastic steps were taken in government sector for the
improvement of overall position. The private sector also responded to these
changes and some very positive changes were observed. Some of the steps
taken by the government in this regard were as under:
i.
ii.

Inauguration of State Bank of Pakistan (SBP) on 1st July, 1948.

Setting up of National Bank of Pakistan in November, 1949 to control the
'jute' export in East Pakistan and to act as agent of SBP.

iii.

Larger powers were given to SBP through SBP Act (1956) for controlling
purposes.

iv.

Banking Companies Ordinance 1962 for protection and guidance to

banks.

v.

Establishment of specialized banks, such as ADBP (1952);

a) HBFC (Nov, 1952);
b) P1CIC (Oct, 1957)
c) IDBP (Aug. 1961);
d) NDFC (Jan, 1973).

These were the steps, which built a strong banking sector in Pakistan. This is
also obvious from the facts that by 1973 there were almost 10 foreign banks
were working in Pakistan and all over deposit position was around Rs.2300
crore (23,000 million). A bird eye view of 5 top banks was as given below:

Banking Sector in Pakistan In 1973

BANK

NO.OF BRANCHES

Habib Bank Ltd.

667

National bank Ltd

579

United Bank Ltd

497

MCB Bank Ltd.

700

Allied Bank Ltd.

145

Nationalization Era:
On January 01, 1974 all Pakistani banks were nationalized through
Nationalization Act 1974. Under this law all Pakistani banks became a public
property. All small banks were merged in bigger banks to create 5 major
Pakistani banks Pakistani banks. These banks were to control by Pakistan
Banking Council. There are still controversies about this act of government as
whether it contributed in success of failure of banks. However the major
changes after nationalization were as follows:

Working of banks was extended to under developed areas.

Market expansion for credit and deposits.
Bank were encouraged to extend cooperation to neglected areas
Decrease in service level of bank officers.
Decrease in profitability as well.

C) POST NATIONALIZATION ERA

In 1990 the government decided to denationalize all the nationalized institutes.
Some was also suggested in banking sector. For this purpose, amendments
were made to Nationalization Act 1974 and two nationalized banks were
privatized. Along with this a permission to open banks in private sector was
also granted. The rules regarding establishment of new banks and for incoming
foreign banks were also relaxed.
The-three privatized banks are;

a) MCB taken up by a private group in April, 1991

b) ABL taken up by its own employees in September 1991.
c) UBL taken up by UAE party in 2002.
After these changes a large number of private and foreign banks started their
operations in Pakistan and the present status can be seen from the following
figures:

SCHEDULED BANKS
Category
Nationalized Commercial Banks
Private / Privatized Commerce Banks
Public Sector Specialized Banks
Foreign Banks
Total Schedule Banks

No. Of Banks
3
18
4
19
44

In addition to above mentioned scheduled banks there are 11 Development

Financial Institutes (DFIs), 16 Investment Banks and 21 leasing and Modarbah
Companies.

PAKISTAN BANKING SECTOR

Nationalized Commercial Banks

Privatized Banks

Specialized banks

Private banks

Foreign banks

Other financial Institutions

Nationalized Schedule Banks

First Women Bank Ltd.

National Bank of Pakistan

Habib Bank Ltd.

De-Nationalized Schedule Banks

Allied Bank of Pakistan Limited

MCB Bank Limited

United Bank Ltd.

Specialized Banks

Zarai Taraqiti Bank of Pakistan (ADBP)

Industrial Development Bank of Pakistan(IDBP)

Punjab Provincial Cooperative Bank

Federal bank for Cooperatives

Private Schedule Banks

Askari Commercial Bank Ltd.

Bank Alfalah Ltd.

Bank Al-Habib Ltd.

Bolan Bank Ltd.

Faysal Bank Ltd.

Habib Credit & Exchange Bank

Indus Bank Ltd.

Metropolitan Bank Ltd.

Platinum Bank Ltd.

Prime Commercial Bank Ltd.

Prudential Bank Ltd.

Soneri Bank Ltd.

The Bank of Khyber

The Bank of Punjab

Union Bank Ltd.

Foreign Banks

ABN AMRO Bank N.V.

Albaraka Islamic Bank BSC (EC)

American Express Bank Ltd.

ANZ Grindlays Bank Ltd.

Bank of America (NT & SA)

Bank of Tokyo Mitsubishi Ltd.

Bank of Ceylon

Banque Indosuez

Citibank N.A.

Credit Agricole A.G.

Deutche Bank A.G.

Doha Bank Ltd.

Emirates bank International Ltd. P.J.S.C.

Habib Bank A.G. Zurich

Hong Kong and Shangai Banking Crop. Ltd.

International Finance Investment and Commerce Bank Ltd.

Mashreq Bank PSC

Oman International Bank SOAG

Rupali Bank Ltd.

SocieteGenerale, the French Int. Bank Ltd.

Standard Chartered Bank

Investment Corp of Pakistan

National Development Finance Corp.

Pakistan Industrial Credit and Investment Corp.

Pak Kuwait Investment Company

Pak Libya Holding Company

Regional Development Finance Corp.

Saudi Pak Industrial & Agricultural Investment Corporation

Small Business Finance Corporation

House Building Finance Corporation

National Investment Trust

Investment Banks

Crescent Investment Bank

First International Investment Bank

Atlas BOT Investment Bank

Security Investment Bank

Fidelity Investment Bank

Prudential Investment bank

Islamic Investment Bank

Asset Investment Bank

Al-Towfeek Investment Bank

Al-Faysal Investment Bank

City Corporation Investment Bank (Pak) Ltd.

Franklin Investment Bank Ltd.

Orix Investment Bank (Pak) Ltd.

Trust Investment Bank Ltd.

HISTORY OF MCB LIMITED

Before separation of Indo Pak, the need for more Muslim banks was felt. And
Muslims having strong financial capacity were thinking to invest in this sector
as well. This was the idea which paved the way for setting up MCB Bank Ltd
known as MCB. This was the third Muslim bank in the subcontinent.
This bank was incorporated under companies act 1913 on 9 th July, 1947 (just
before partition) at Calcutta. But due to changing scenario of the region, the
certificate of incorporation was issued on 17 th August, 1948 with a delay of
almost 1 year; the certificate was issued at Chitagong. The first Head office of
the company was established at Dacca and Mr. G.M. Adamjee was appointed
its first chairman. It was incorporated with an authorized capital of Rs. 15
million.
After some time the registered office of the company was shifted to Karachi on
August 23rd, 1956 through a special resolution, now recently the Head office of
MCB has been transferred to Islamabad in July, 1999 and now Head office is
termed as Principle Office.
This institute was nationalized with other on January 1st, 1974. At that time it
had 506 branches and deposits amounting to Rs. 1,640 million. Although.
MCB has a reputation of a conservative bank but nationalization also left its
effects on this institute as well and by end of year 1991 in which it was

privatized the total number of branches were 1.287 and deposits amounting to
as high as Rs. 35,029 million

PRIVATIZATION

When privatization policy was announced in 1990, MCB was the first to be
privatized upon recommendations of World Bank and IMF. The reason for this
choice was the better profitability condition of the organization and less risky
credit portfolio which made'' it a good choice for investors. On April 8th, 1991,
the management control was handed over to National Group (the highest
bidders). Initially only 26% of shares were sold to private sector at Rs. 56 per
share.

AFTER PRIVATIZATION
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.
After privatization, the growth in every department of the bank has been
observed. Following are some key developments:

Launching of different deposit schemes to increase saving level.

Increased participation on foreign trade.

Betterment of branches and staff service level.

MCB BANK TODAY

MCB today, represents a bank that has grown with time, experience and
Pakistan. A major financial institution, in scope and size, it symbolizes a fully
growing tree evergreen, strong, and firmly rooted.

FOREIGN TRADE
The bank conducted import business during the year amounting to RS. 54.0
billion. As compare to RS. 56.4 Billion In 2005. The export business slightly
improves to RS. 36.9 Billion From RS. 35.1 Billion. In 2006. Home remittances
decline to RS. 16.7 Billion From 30.7 Billion the decline in home remittances
business was due to freezing of Foreign Currency Accounts, which has affected
the confidence of Pakistanis working overseas.

YEAR 2006 COMPLIANCE

MCBs strength lies in providing a technological base at the gross root level of
the society with a challenge to educate and assimilate such systems across vast
cultural and economic backgrounds. With over 768 automated branches, 263
online branches, over 151 MCB ATMs in 27 cities nationwide and a network of
over 16 banks on the MNET ATM switch, MCB continuously produces new
products and services that harness technology for the customers benefits.

SOCIAL SECTOR
The bank is participating in the Prime Minister self-employment Scheme. The
application received from various applicants is being processed on merit and
disposed off as quickly as possible.

THE BUSINESS
MCB is in its over 50 years of operation. It has a network of over 1,000
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.
MCB has an edge over other local banks, as it was the first privatized bank.
The State Bank of Pakistan has restricted the number of branches that can be
opened by foreign banks, an advantage that MCB capitalizes because of its
extensive branch network.
Fourteen 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

New Asset and Liability Products

The Bank provides 24 hour banking convenience with the largest ATM network
in Pakistan covering 27 cities with over 151 ATM locations. The Banks Rupee
Travelers Cheques have been market leaders for the past six years and have
recently launched their Gift Cheque Scheme.
MCB looks with confidence at year 2007 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".
A major achievement of MCB is that the state bank of Pakistan has issued a
license to MCB to start Islamic banking. Now MCB is setting up a 1 st Islamic
banking branch at 1st floor Shaheen complex, Karachi. This complex starts
working from September 1, 2003.

Market Standing
of MCB

Deposits
1996

1997

1998

1999

2000

2001

HBL

8,211

16,423

27,958

54,966

75,011

105,243

UBL

6,392

14,305

21,075

41,503

53,937

63,517

NBP

7,071

14,209

21,384

40,611

57,462

79,823

MCB

2,505

5,417

9,887

15,705

21,590

25,325

ABL

1,460

2,665

4,365

6,875

10,058

16,637

Total

25,639

53,019

84,669

159,660

218,058

290,545

1996

1997

1998

1999

2000

2001

HBL

5,864

10,115

16,216

31,636

48,003

41,767

UBL

4,463

8,522

13,952

24,991

35,061

37,967

NBP

5,231

8,481

11,803

18,990

31,264

40,534

MCB

2,102

3,811

6,448

10,898

13,803

15,548

ABL

1,079

1,922

3,187

5,108

5,572

8,088

Total

18,739

32,851

51,606

91,623

133,703

143,904

1996

1997

1998

1999

2000

2001

HBL

1,814

5,218

8,959

18,121

20,334

28,393

UBL

1,365

2,797

1,855

7,063

12,334

19,290

NBP

1,414

2,937

2,281

9,063

12,971

28,553

MCB

634

1,382

2,322

3,825

6,151

10,991

Advances
Advances

Investments

ABL

262

739

1,374

1,851

3,102

6,425

Total

5,489

13,073

16,791

39,923

54,892

93,652

Equity

HBL
UBL
NBP
MCB
ABL

1996
250
119
130
056
019

1997
382
184
222
071
33

1998
576
288
279
116
054

1999
1,898
961
954
462
183

2000
3,155
1,691
1,530
788
212

2001
6,121
3,061
2,987
1,521
397

Total

574

892

1,313

4,458

7,376

14,087

Profit
1996

1997

1998

1999

2000

2001

HBL

211

318

362

750

843

956

UBL

065

125

093

184

239

260

NBP

073

118

109

183

282

346

MCB

028

033

080

130

143

249

ABL

010

021

023

027

037

053

Total

387

615

667

1,274

1,544

1,864

VISION STATEMENT
A vision should be created for the future that is widely understood and
imprinted throughout the organization. Adhering to this vision statement, MCB
clarifies its initial goals and strategies supported by acceptable ways to capture
or gain market share, and has long way to go to become supreme.

CHALLENGING AND CHANGING THE WAY YOU BANK

MISSION
STATEMENT

The mission is essential in providing a general overview of where the

organization wants to be and how shall it get there. The mission statement is
like a path for the employees and the organization to follow to achieve its goals.
An ideal mission statement should give information about the companys goals,
its culture, and the set of plans it follows apart from this it should give an idea
about the products it offers and the target market it aims to capture. The
mission statement of MCB is as follows:

To become the preferred provider of quality financial services in our

country with the profitability and responsibility and to be best place
to work

Compliance status

Name & Address

MCB Bank Limited

MCB 15 Main Gulberg, Lahore

Legal Form

Name of External

Public Limited Company. Listed on Karachi, Lahore & Islamabad

Stock Exchanges in Pakistan.
KPMG TaseerHadi& Co.(Chartered Accountants).

Auditors
Name of Regulatory
Body

Main Banking

State Bank of Pakistan (Central Bank).

Commercial, Consumer, Corporate, Correspondent and Islamic

Banking.
Categories of shareholders - as of December31-12-2009
Pattern of Share
Holdings

Description

Shareholding Percentage

Directors, CEO and children

52,190,877

Associated Companies

57,009,034

NIT & ICP

Banks, DFI & NBFI
Insurance Companies
Modarabas& Mutual Funds

5,835
2,239,307
46,052,057
7,208,703

Public Sector Cos. & Corp.

131,749,731

General Public (Local)

101,843,819

General Public (Foreign)

Others

2,400,126
44,237,663

Foreign Companies

246,167,375

Company Total

691,104,527

STRAGETIC OBJECTIVES
Delivering returns to shareholders, sustainable performance exceeding
market and shareholder expectations.
Providing value added services through operational expansion, geography
and upgraded systems.
Building a corporate culture of equality, trust and team spirit as we
remain dedicated to be a socially responsible organization.

Core Values
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 Focus
We treat each of our customer equality & as the most important person while
we interact with him/her. We must ensure that we do everything to meet and
exceed the customers expectations with perfect to times, accuracy & quality
services.

Employee Respect & Dignity

We treat each of our employees with fairness, which includes giving
constructive feedback for their development. We celebrate diversity and seek
suggestions from all employees for improvement. We ensure that responsibility
& fairness in all our decision-making.

Team Based Approach

We work towards achievement of our vision & mission as a combines group. We
encourage

inter

&

intra-departmental

communications.

We

treat

our

colleagues as our internal customers & ensure that the requirements of

internal customer focus are always met.

Quest For Quality

We ensure that each moment of our time is spent on value adding activity. We
always seek ways for exceeding expectations of customers & colleagues. We also
ensure that we do things right, first time every time.

GOOD CORPORATE CITIZENSHIP

We ensure that we contribute our due share to the Govt. we realize that we
have a responsibility to the society in which we operate & we seek ways of
playing a positive role for the betterment of the community at large

MANAGEMENT COMMITTEE

Board of Directors
Mian Mohammad Mansha

S.M. Muneer

Chairman

Vice Chairman

Mohammad Aftab Manzoor President & Chief

Executive

Tariq Raf

Sheikh Mukhtar Ahmed

Director

Director

Mohammad Arshad

ShahzadSaleem

Mian Umer Mansha

Director

Director

Director

Sarmad Amin

Director

Audit Committee
Mian Mohammad Mansha

Chairman

ShaikhMukhtar Ahmed

Member

ShahzadSaleem

Member

Chief Financial Officer

Ali Amin

Company Secretary
Tameez-ul-haque

Auditor
A.F.Ferguson& co
Chartered accountants

M.YousufAdilSaleem& co
Chartered accountants

Legal Advisor

Chartered accountants mandiwalla&zafar

Advocates & legal consultants

Shariah Advisor
Dr. Muhammad ZubairUsmani

Registered Office
MCB building, F-6/G-6
Jinnah Avenue, Islamabad

Principle Office
Adamjee house 2nd floor
I.I chudrigar road Karachi

Registrar and Share Registration Office

THK associates (pvt) Ltd. Shares department, ground floor sheikh sultan
trust building no 2, Beaumont road Karach

ORGANIZATIONAL
HIERARCHY OF
MCB

PRESIDENT

SENIOR EXECUTIVE
VICE PRESIDENT

EXECUTIVE VICE
PRESIDENT

SENIOR VICE
PRESIDENT

VICE PRESIDENT

ASSISTANT VICE
PRESIDENT

OFFICERS GRADE
I II III

ASSISTANTS

CASHIER

GUARDS

PEONS

ORGANIZATIONAL SETUP OF MCB

HEAD QUARTER

PROVINCIAL HEAD QUARTERS

SINDH

BALOCHISTAN

NWFP & AZAD

CIRCLE OFFICES

BRANCH OFFICES

MANAGEMENT LEVEL

The organization chart within a department and in different offices is as

follows:
Divisional Heads .. Head Office
Regional Head (EVP)

.. Regional Office

Zonal Head (VP)

.. Zonal Office

Branch Manager .. Branch

ORGANIZATIONAL STRUCTURE
OF MCB

As MCB is a banking company listed in stock exchange therefore it follows all

the legalities which are imposed by concerned statutes Mr. Muhammad
Mansha is chairman & chief executive of the company with a team of 10
directors and 1 vice chairman to help in the business control and strategy
making for the company.
Operational Management of the bank is being handled by a team of 10
professionals. This team is also headed by Mr. Muhammad Mansha. The
different operational departments are Consumer Banking & IT div; Financial &
Inter branch div; Banking operations div; HR & Legal div; financial control &
Audit div; Credit management div; Commercial Banking div; Corporate
Banking div; Treasury management & FX Group and lastly Special Assets
Management (SAM) Group.
For effective handling of branches, it has been categorized into three segments
with different people handling each category. These categories are:

a)

Corporate Banking

b)

Commercial Banking

c)

Consumer Banking

Corporate Banking
These are branches which have an exposure of over Rs. 100 million. Usually
includes multinational & public sector companies.

Commercial Banking
The branches which has a credit exposure of less than Rs. 100 million but
having a credit portfolio of more than Rs. 20 million (excluding staff
loans).Usually branches in large markets and commercial areas come under
this category.

Consumer Banking
These are the branches which have exposure up to Rs. 20 million and these
include all the branches which are neither corporate nor commercial branches.
Recently the organizational structure was re-designed as follows: Province wise
branches

REGION

CIRCLE OFFICE

BUSINESS
OFFICE

GROUP

HEAD OFFICE

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Groups

Number of employees

Human Resource Management Group

Retail Banking Group(RBG)
SAMG
IT
Audit
Security
SPIG
Islamic Banking group
TFG
Operations Group
Legal Affairs Group
FCG
Wholesale banking
Compliance and control

80
9000
60
170
225
1000+
10
250
150
700
Less than 100
250
Less than 150
Less than 100

Retail banking group

Designations
TSO
TSS
GBO
BOM
BM
RH
GM
BH
HEAD RBG

Number of employees
2000
1000
3330
1110
1110
45
19
4
2

HUMAN RESOURCE
MANAGEMENT GROUP
Human resource management is responsible for the people dimension of the
organization. It is responsible for getting competent people, training them to
perform at high effort levels, and providing mechanism to ensure that these
employees maintain their productive affiliation with the organization. The MCB
believes in investing in its people. On this account they have very
comprehensive and effective Human Resource Development system. "Human
resource department is concerned with the staffing, training, development,
motivation and maintenance of the employees This department is also called
staff administration and is of much greater importance. It coordinated the
various activities performed by different workers. It facilitates the smooth
running of an organization. Its main objectives are as follow:
The attraction of employees
The retention of employees
The development of their personalities and minds

DESIGNATIONS AND NUMBER

OF EMPLOYEES

Designations
HR Associate
Senior Associate
HR Managers
Unit heads
Divisional Head
Unit Head
Group Head

Number of employees
25
20
10
10
8
3
1

HUMAN RESOURCE PROCESS

Human capital is the vital factor who works to boost up the business. HRM is
needed in making suitable policies. It presents, these policies before committee
for discussion and approval. It deals with following personnel matter:
Selection & Recruitment Policy.
Employee training and development program.

GROUP
Performance appraisal of employment

HRM PLANNING PROCESS

Following are the steps for Human Resource planning

Determine the Organization Mission

Scan the Organizational Environment
Set Strategic goals
Formulate a strategic plan

HRM FORECASTING

Experts meeting is being called upon

Group Discussion Facilities, Exchange of ideas
Possible Subjectivity, Group pressure
Independent working

HRMG WORKING
MCB places great importance on human resource management and for this
purpose Human Resource Development Division had been established. The
major functions performed by the HRMG are as follows:

Recruitment & Talent Acquisition

Disciplinary Action
Operations
Learning and Development
Relations
Financial Control
Organizational development
Performance & compensation

RECRUITMENT & TALENT ACQUISITION

Recruitment is the process of discovering potential candidates for actual or
anticipated organizational vacancies or from another perspective, it is linking
activity, bringing together those with jobs to fill & those seeking jobs.
MCB owns a big employee pool and to keep it filled the Recruitment & Selection
Unit works on hiring prospective employees to suite the requirement of the
respective jobs. MCB is committed to employing the best qualified candidates
for approved Position in Compliance with all applicable employment laws. It is
MCB policy to provide equal opportunity to all candidates.
All recruitment request are received by HR recruitment is compare with the
Budgeted head count forecasted at the beginning of the year and HR then
initial search process for all budgeted/approved hiring request HR Coordinate
for new hiring or replacement of suitable candidate through the sources of
candidate. We see two following concepts use as the sources for the
recruitment:
Internal
External

BATCH HIRING
The name clearly enlightens the definition that in this type of hiring, the
employees are being hired through batch process. Following are the types of
Batch Hiring.

Teller service officer (TSO)

Training business officer (TBO)
Branch Operation Officer (BOO)
Management Training Officer (MTO)

There is no compromise on registration criteria in batch processing. Candidates

can apply online to enter in the ongoing batch, there is predefined criteria to
get registered in which the applicant should be cleared with 1st division
matriculation and intermediate and he/she should be graduated. Aspirants for
TSO (who are commonly known as Cashier as well) and TBO after getting
registered gets the entrance Slip which is a token to take the seat for the Entry
test in the pre-defined Center. The entry test is based on NTS pattern, there is
a standard procedure for NTS papers which is being judged on the basis of four
measures, i.e.

Verbal Reasoning
Analytical Reasoning
Quantitative Reasoning
Subject Knowledge

The invigilators are HR officers themselves to ensure the integrity of the Test.
When the exam is over, papers are being checked by experts assigned by NTS.
Sooner the results finalizes sooner it is sent to HRMG. And further process is
continues from Talent Acquisition unit. Where the Documents are being
verified. In batch hiring candidates are shortlisted on merit bases those who
falls on merits proceeds to the next level of interview session. And finally, letter
of employment is being issued to the selected ones.
All the processes goes in a proper system way and MS Excel is a commonly
used software to keep the record of recent hired employees, the approval is
being taken and then the letters are being issued to the concerned person.

PREREQUISITES FOR PROBATIONARY OFFICERS

The candidate fills out specific application form

titled

Job

Request

Form. After screening the applications only selected candidates are called for

test, which is design to test the analytical, comprehension, and general

knowledge abilities of the candidates.
After passing the test, the candidate undergoes an interview. Those who pass
the interview are referred to a medical board for physical examination. The
candidates, who are finally selected, are offered appointments as probationary
officers, after signing the following bonds
Banks Secrecy Bond
Banks Security Bond
Service Agreement Bond

PROCEDURE:
There are certain steps involved in the procedure in recruiting to MCB House.
They are:
Applications are invited from candidates on prescribed forms against the
vacant posts advertised in the newspapers.
Application forms received are scrutinized and eligible candidates are
called for written test. Test is conducted in four subjects, i.e. English,
Computer, General Knowledge and Mathematics.
Candidates who qualify the written test are called for interview.
Interviews are held at GM office.
After that the candidates have to undergo a medical checkup by the
prescribed doctor.
Appointment letters are sent to the selected candidates, who have to
present themselves before the Head Office for signing the following

documents.
Bank Secrecy. Bond
Security Bond
Service Agreement Bond.
Appointed candidates are kept on probation for 9 months.
They are sent for a 9-months pre-service training by the Staff College.

 On the successful completion of the training programmed they are

appointed as officers grade- III.

OUTSOURCING
Outsourcing of recruitment to an external provider may be the solution for
some small businesses and at the other extreme very large organizations. An
external recruitment provider may suit small organizations without the
facilities to recruit. In typically the largest organizations a formal contract for
services has been negotiated with a specialist recruitment consultancy. These
are known in the industry as Recruitment Process Outsourcing. Recruitment
process outsourcing may involve strategic consulting for talent acquisition,
sourcing for select departments or skills, or total outsourcing of the recruiting
function.
In MCB HRMG, there are three numbers of officers at Outsource unit, there
responsibility is to proceed the hiring requisites comes from other departments.
On job request, HR outsource officer further continues to work on the case.
The hiring goes through a complete process of documentation.

PROCEDURE
There are five outsourcing firm who are providing services to MCB. When hiring
case arrives at any of these firms, they first complete the documentation and
then forward the case to outsource unit to further proceed it.
Before replacing any position we need to confirms the employee status i.e. who
was the previous one on the respected position? The officer works on his
employment history to check the status including; joining and resignation date,
employee code, salary and Designation.

Next step demands candidates ECIB, for which we need his updated NIC
number. The reason to demand ECIB is to check out the loan status. If the
candidate has taken loan and his debit burden is above 50%, then we decline
the case. If its below 50%, then the case proceeds further we demands his
credentials.
Outsource have a separate Headcount budget, where there is forecasted
headcount and actual headcount and the headcount we have during month. If
we have enough headcount to hire him, then the cost sheet is being made
which tells the total expenditure will be served on the candidate including his
service charges.
DBR is another step in this process to make the deductions of loans from
salary. This will explains about how the loans deduction should be made from
the employee salary. Now we check the completion of documents from the
checklist to check CNIC, Resume, Credentials, headcount, DBI and other
documents needed for the employee record. After the completion of the hiring
process, the case is sent to the higher authorities; Group head, Department
head and unit head for the approval of the respective case. Employees in
outsource are usually hired on Contractual basis.

SELECTION
It has some basic requirements:

Having minimum bachelor degree.

Having an age not exceeding 25 years.
Be self-motivated and able to work independently
Excellent presentation skill

The caliber of the work force of an organization largely determines its strengths
and its success as an enterprise. The employment policies of many

organizations are not formalized. They have just evolved as practices over the
course of many years. The MCB has very orderly and impartial procedure for
selecting people. In fact, it is the only bank in private sector with such an
extensive and irrefutable selection process.
Human Resource Department has Combined many selection techniques i.e. job
application form, employment test, interview, and physical examination. MCB
recruits candidates in three cadres
Probationary Officers
Management Trainees
Contractual Appointments
Most of the recruitments are made through Probationary Officers. Management
Trainees are selected amongst the graduates from foreign universities, or
prestigious national universities i.e. Institute of Business Administration
Karachi (IBA), Lahore University of Management Sciences Lahore
s(LUMS), and Quaid-e-Azam University Islamabad. Contractual
Arrangements are made with persons possessing technical knowledge and
expertise related to specific departments like Treasury Department, Foreign
Exchange, and Information Technology etc. The persons hired through these
contractual arrangements are usually appointed at higher posts. Now the Bank
also awards contracts to the people for clerical jobs like cashiers, date entry
operators etc.

JOINING
There are some formalities that are supposed to be made before joining. Firstly,
newly hired ones gets a specific joining period they are to join their workplace.
However, the duration is minimum three days but it can be extended on
request.

Before joining the candidate is required Acceptance of employment offer

within 15 days. It is required to:
Undergo for medical examination from doctor on panel of bank.
Completion of all documents duly witnessed and attested on joining the
bank as per list of joining documents provided by HR relationship
manager.
References provided by the candidates are checked by within a letter
referee in accordance with the regulation SBP.
Employee is confirmed after six months of probation period.

EMPLOYEES TRAINING AND DEVELOPMENT

PROGRAM
Training & development specialist are responsible for counseling employees
helping them to make better choices about their caress and finding ways to
achieve the desired goals.
Training plays an important role in an administration is to improve the
performance and level of efficiency of employees to enhance the knowledge.
Management trainee is for period of six weeks. At branches supervising
manager of trainee officer critically review the employee interest in job training
and his performance, normally after six months, probationary officer are
confirmed on their satisfied performance. However management feel that
employee needs further training probationary period may also extended.
The training program of MCB is as follows:
Pre-service training
In-service training

PRE-SERVICE TRAINING
Immediately after the selection of employees this type of training is given.
Duration of pre-services training period is of six months. In such a training
operational practice and banking operational disciplinary courses are brought.

IN- SERVICE TRAINING:

The in-service training period time duration to the employees during the
service is of three months. This sort of training helps in introducing them to
the latest teaching and methods of business.
Our education systemic primarily generalized, designed to provide guidelines to
students for their overall career advancement. It is not designed to teach
specific job skills for positions in particular companies or organizations. To
overcome this deficiency of our educational system, many organizations have to
setup their own training centers and programs.
ON The Job Training
Off The Job Training
The new probationary officers and management trainees selected this year will
be given 3 months off the job training along with 3 months on the job training.
Previously the duration of total training was 1 year. Off the job training is given
at one of the three training institutes of MCB at Karachi, Lahore, and
Islamabad. Professionalism is the core objective at these training institutes.
The common methods used for training includes:

Lectures and classroom discussions

Conceptual exercise and problem solving
Tutorial and syndicate discussion
Analytical report and group presentation Penal discussion

ON THE JOB TRAINING

The total of 6 months of training include 3 months on the job training at
different branches in order to be conversant with all operations of retail
banking, credit and marketing, foreign exchange etc. the trainee is rotated at
different branches, so that he learns to adapt himself/herself quickly to
different working conditions and branch cultures. Usually on the Job and Off
the Training are provided to trainees simultaneously. After the training the
trainee is kept at probation for another six months. The successful completion
of probationary period entitles the trainees to permanent appointments
ranking.

Purpose of on job training

Increase productivity
Reduced employee turnover
Increased efficiency resulting in financial gains
Decreased need for supervision

Organizational Development and Talent Management

In this unit, the HR officer basically determines the Headcount which is the
primary and important factor for recruitment. HR heads initially designs the
forecasted headcount for the year according to the budget. As said by the
recruitment HR officer there is not a signal day when I have seen recruitment
got stopped? Here, in MCB it is an ongoing process.

The OD& TM officer determines the existing headcount? And how many could
be hired? Every time there comes a new hiring first the recruitment officer
confirms the available headcount and gets the approval to further proceed with
the hiring.

PROMOTION

Promotion refers to a change or movement of an employee in vertical direction

involving greater responsibility and authority and also an increase in salary,
better service conditions, and position and rank 23. The purpose behind a
promotion policy is to attract and retain qualified people, promote job
satisfaction, recognize better performance and motivate the employees.
The promotion policy of MCB is solely based on seniority. Officers are promoted
to higher grades after having fulfilled the minimum experience required for the
grade. Minimum experience required for promotion to various grades is as
under:

Promotion Minimum Experience

OG-III to OG-II
OG-II to OG-I
OG-I to AVP.

5Years
4Years
3 years in the grade and minimum 8 years banking

AVP to VP

experience
3 years in the grade and minimum 10 years
banking experience

VP to SVP

3 years in the grade and minimum 13 years

SVP to EVP

banking experience
3 years in the grade and minimum 16 years

EVP to SEVP

banking experience.
3 years in the grade and minimum 19 years
banking experience.

PERFORMANCE & Compensation

PERFORMANCE APPRAISAL
It is the description of job-relevant strengths and weaknesses of an individual
or a group. Performance appraisal in MCB involves making ACRs of the
subordinates. That is, a branch manager writes the ACRs of employees in his
branch, a Regional Manager writes the ACRs for the various Branch Managers
working under him and so on. ACRs are sent to the GM Office from where they
are forwarded to the Human Resource Division. For the evaluation of the
performance of the employees, the bank takes the following steps.
Audit Report
Inspection
Sanction

AUDIT REPORT:
This report is prepared by the auditors of the bank every year & it emphasis on
management business transaction functions. This audit report indicates the
yearly performance of every worker.

INSPECTION
A team is selected by headquarter. Then teams inspect the performance of the
branch. The member of these teams also contracts the clients, of the bank and
inquires about the performance of the bank.

SANCTION
In this, a case punishment is awarded to the employee of misconduct or bad
performance. Stopping promotion and business like actions are taken.

COMPENSATION
Any remuneration to an employee for services performed, including wages,
salaries, fringe benefits Etcetera.
MCB awards their employees a lucrative compensation in return of their tough
mental labor. Apart from basic salaries they are offered many other benefits
like utility allowance, medical allowance, overtime allowance, education
allowance, house rent allowance, bonuses etc. They are also offered noninterest loans from the bank.

REWARD
The rewards are given in a monetary form; it is all on merit basis. The Institute
of Bankers Pakistan (IBP) is Pakistans only recognized Institute dedicated to
providing technical training services for the banking industry in the country.

The Institutes mission is to train and develop a sound human resource base
for the financial sector and to work for continuous learning and professional
development of bankers. MCB has set three stages and 3 type of criteria for
the applicants of IBP exams. Employees appears in exams on clearance of 1 st
exam they receive cash rewards and then they proceeds to next stage and give
exams on more professional courses, same on its clears they receive above 60K,
and then the last stage come when they give the final exam in which employees
specializes in the desired courses.
FRINGE BENEFITS:
Fringe benefits are given to the employees in addition to their regular salaries,
these include all expenditure designed to benefit employees over and above
regular basic pay and direct compensation related to output.
Employees of MCB shall be eligible to:

Residential Facility
Medical Facility
House Building
Motor Car
Motor Cycle

Besides, the Bank offers attractive increments for higher qualification in the
following way:

BA
MA
IBP-I
IBP-II

Two Increments
Three Increments
Two Increments or cash prizes
Three Increments or cash prizes.

HR FINANCIAL SERVICES DEPARTMENT

The HR FSD unit is most confidential unit of all dealing with the sensitive
employee records including wages, loans. In other words, when it comes to

money the case always gets sensitive. Umer Naeem Khan is the Head of this
unit. Following are the units of FSB

Payroll
Staff Loan
Financial Settlement
Provident Fund
Sap System Support

PAYROLL

Payroll is about gathering employee data through time, attendance and

calculating deductions & taxes and generating payable taxes & generating pay
Cheque as well as employee report.
After resignation there is a three month procedure of until the employee gets
the resignation letter.

STAFF LOAN

Basically, there are some parameters defined in policies for loan issue. On that
basis, the staff loan officer processes the loan request. Every employee and
worker is eligible to ask for load except for the outsourced employees.

FINAL SETTLEMENT
The final settlement process comes when the employee apply for the resignation
Or at the time of retirement or in any case of leaving the job including
Termination.
There are two types of retirement
Pre-Mature
Super Annotation

PRE-MATURE
In this case employee can plan their future, by getting retired before 60.

PENSION
Employees do get the monthly pension 6000-6.5K. In case of death their first
family relation Husband/Wife may get the Pension.

LOAN TAKE OVER

If the employee is under debit then and he wants to proceed his employment in
any other bank then the respective bank will pay the loan to MCB on the behalf
of employee in order to clear his record according to their policy. And then the
employee proceeds to pay the remaining debit amount to the next bank.

NON REFUNDABLE LOAN:

Employees above 50 ages can withdraw 60% amount from their funds.

PROVIDENT FUND
It is a fund for which employer and the employee both pay money regularly, so
that when the employee retires or leaves the company, he or she receives a sum
of money.
In MCB there is a 16% markup amount from funds. And there is 33%
contribution on the behalf of the bank. This contribution is made on the basic
salary.

TERMINATION/ DISMISAL
In case of violation employees can be fired. And in this only own contribution
will be given from provident fund. Bank wont liable to pay its contribution.

PAY SLIP
It is a salary slip on which the monthly salary is mentioned along with the
rewards and allowances.

DISBURSEMENT
Amount paid for goods and services that may be currently tax deductible. The
bank requires the credit approval on debt burden.

TYPES OF LOAN

House Building Finance (mortgage)

Car Loan
Motor Load
Provident Fund
Computer Finance
Family Finance

HR Relationship Unit
LEAVE POLICY:
According to the leave policy of the Bank following types of leaves may be
granted to employees:
Leave on full pay:

The maximum period of leave on full pay, that may be granted at one time, be
as follows:
Without medical Certificate
With medical Certificate

120 days
180 days.

Leave on half pay:

There is no limit on the grant of leave on half pay.

TERMINATION

The employees of MCB can be terminated in the following three ways:

An employee shall retire from service if:
She/he has completed 30 years of service in the Bank, or
She/he has attained the age of 58 years.
An employee may offer his/her resignation by giving written notice. This notice
must be given three months before in case of officers and one month before
incase of clerical and non-clerical staff.
An employee may be dismissed from service if charges against him/her proved
after conduct of enquiry.

RETIREMENTS
Employees at all levels in MCB get retirement after completion of 30 years in
services or reaching an age of 60 years. The bank operates the following staff
retirement benefit schemes for its employees

For employees who did not opt for the new scheme, the bank
operates approved contributory provident fund.

Approved gratuity scheme for new employees and for those who opted for
the new scheme introduced in 1975 for clerical staff and in 1977 for
officers, the bank operates the following:

An approved funded pension scheme for which monthlycontributions are

made on the basis of actuarial recommendations.
An approved non-contributory provident fund introduced in lieu of the
contributory provident funds), for AVPs and above cadre and employees
in officers cadre joining after January 1, 2000.

Meetings
There is no proper time period of holding a meeting in the organization. There
are different rules and policies in different departments. Meetings are held as
per requirement.
Training program
Inquiry of employee fles

During my internship, I was assigned a special project of checking employees

files and to check

their qualification and their degrees and report it to the concerned officers to
check it from the concerned board or university. The purpose of this task was
to check the authenticity and validity of the degrees.
During this project, I checked all the employees files assigned to me and
checked their relevant documents and reported to the concerned officer.
Documentation

I was handed over the duty of documentation of pre-employment and

employment letters of all employees working there and to arrange them in
sequential order after checking the letters and documents. These documents
included the following:

Joining report

Employment data

Old age benefits

Blood group report

Code of conduct

References

Medical certificate

Letter of employment

Approval

Educational certificates and degrees

Filing of documents
I was also assigned a task to put all the sequenced documents in the file to be
easily available whenever required. A separate file has to be maintained for
each employee working there so that his/her employment record and personal
data be easily available all the time when required.
Every employee is assigned a number for identification in the organization that
has to be mentioned in documents and also in the top of file.
I had to mention the following information in the file:

Number of employee assigned by the organization

Name of employee working in the organization
Date of joining of the employee
Grade of employee
CNIC
Date of birth
Documents that are filed

MARKETING MIX OF MCB BANK LIMITED

Marketing is the task of creating, promoting and delivering goods and services
to consumers and businesses. Organizations identify and profile distinct group
of buyers who might prefer or require varying products and marketing mixes.
The customer seeks for value and satisfaction. The organizations can increase
the value of the customer offering in several ways e.g. raising benefits, reducing
costs etc. marketing mix is a set of marketing tools that the firm uses to pursue
its marketing objectives in the target market. These marketing tools are known
as 4 Ps of marketing. These four marketing tools are viewed as 4cs by the
consumers.

4 Ps
Product/ Service
Price
Place
Promotion

4 Cs
Customer Solution
Customer Cost
Convenience
Communication

To identify the customer needs and fulfilling hem is the basic objective of an
organization. Marketing is not just satisfying your customers, you have to
delight them and this can be done by acting upon this phrase.
Under Promise and Over Deliver
MCB Bank provides a winning combination of products and services to its
prime customers. It is one of the countrys leading commercial banks, which
ensures complete security, and reliability in all-financial transactions.

PRODUCT MIX & PRICES OF MCB BANK

MCB Rupee Traveler Cheque

MCB Rupee Travelers Cheques are as good as

cash, in fact better. Better because with Rupee
Travelers

Cheques

you

have

the

power

to

purchase and a feeling of security that should you lose them, you will get a
refund.
MCB Rupee Travelers Cheques are accepted at major shops, travel agents,
hotels, business establishments and MCB branches all over Pakistan. You don't
have to be an MCB account holder to buy the Rupee Traveler Cheques.
Anybody can purchase them. It's a safe and convenient way to conduct
everyday business. At a time when thefts and robberies are on the increase,
you are better off carrying Travelers Cheques rather than money.

1. Mahnama Khushali Scheme

A 5- year fixed Deposit Scheme, targeted to persons with small savings who
would desire a regular monthly return on their investment.

Salient Features

Minimum amount of investment shall be Rs.0.010m and the maximum

amount of investment would be Rs. 1.000m.

Khushali Certificates can be purchased by individuals (singly or jointly)

or by the Proprietorship/Partnership concerns or Companies, etc. in
their name

The Khushali Certificate will be of five years maturity.

The interim rate of profit offered will be minimum 1% per month. If the
profit declared by the bank is higher, additional profit will be paid.

Zakat will be deducted wherever applicable on yearly basis whether you

will be receiving your profit or encashing your certificates.

As per Government Directions, tax on the profit / return is to be

deducted by MCB branches at the time of payment.

2. MCB KhushaliBachat Account

Salient Features

8% rate of return per annum.

Returns calculated on daily.

Average balance and paid half yearly.

Introduced first time in Pakistan.

The facility of helping account holders pays utility bills (electricity,

telephone and gas) through their account. No queues. No delays.

3. Prime Currency Account Scheme

It is launched to attract deposits in foreign
currencies, Us Dollars, Pound, Sterling, Euro
and Japanese Yen.

Salient Features

Owing foreign currency account under the Prime Currency Scheme

allows you to earn attractive rates of interest in foreign currency.

You have a choice between opening this account in your personal name
and opening it under joint names.

Whether you are a resident or a non-resident Pakistan, MCB Prime

Currency Scheme invites all to operate a foreign currency account.

Foreign nationals and foreign companies can also open a foreign

currency account under the Prime Currency Scheme.

Your foreign currency account can be opened in four global currencies:

The United States Dollar, the Pound Sterling, the Japanese Yen and the
Euro.

Travelers Cheques and Foreign Currency Notes can also be issued to

holders of personal and Joint accounts.

Rupee Loan facility will also available against this account.

You can draw any amount of foreign exchange from your foreign currency
account and transfer or remit the amount freely to any part of the world
without any restrictions.

The restrictions imposed by the State of Pakistan for the opening of

foreign currency accounts in case of passport; Work-permit and resident
Visa have been withdrawn. Your account will be restriction free.

The Prime Currency Scheme is exempt from all forms of taxes including
Income Tax, Wealth Tax and Zakat deductions.

MCB Prime Currency Scheme is a world in itself.

4. Hajj Mubarak Scheme

A saving scheme, of 2/3 years duration, for the convenience of persons, with a
limited income, who desire to perform Hajj was introduced.
Under the 2 years scheme, a monthly deposit of Rs.1800 is required, whereas
under the 3 years scheme, the required monthly deposit is only Rs.1200

5. Capital Growth Certifcate Scheme

For long term depositors under which the amount deposited almost doubles at
the end of 5 years. For the scheme, the minimum amount of deposits is Rs.
10000 while there is no maximum limit. In case of premature encashment of
the certificate, the depositor will profit at the same rates as that of PL Saving
Account.

Fund Management Scheme

This scheme is offered to corporate and customers and is aimed at providing
better rate of return up to 15% per annum. One of the objectives of the scheme
is to develop secondary market for Government Securities.

6. Consultancy Services
In the process of privatization of public sector units, prospective buyers need
professional assistance and MCB, with its expertise, offers to them specialized
service for valuation of the market value of the industrial unit, preparing bid
documents and arranging finance for the purchase of the unit.

7. Self Supporting Scheme

For the benefits of genuine worker/borrowers who are poor and needy and for
small entrepreneur the bank as evolved a self supporting scheme: maximum

amount of loan Rs.25000 and minimum Rs.5000 per individual. Loan will be
totally free of mark-up.
8. Fax Press
This product was first of its kind introduced by
using modem technology of The Fax Machine. It
facilitates
speedy transfer of funds within Pakistan. The
service guarantees transfer of from one city to
another, within an hour.
9. Night Banking Service
For the convenience of the account holder, service has, especially, been
introduced at busy commercial centers. Traders and other clients can now
make deposit, with case, at such centers up to 8.00PM.

10.

Utility Bill Collection

With the aim of extending this service to

wider range of customers, the number of
MCB branches collecting Utility Bills more
than 900.

11.

MCB Mobile Banking

At the forefront of technological excellence, MCB proudly introduces MCB

MOBILE BANKING*. The convenience of accessing account balance information
and mini statements whenever want or wherever may need them, with comfort

and peace of mind. MCB Mobile Banking service is available to all MCB ATM
cardholders, 24 hours - 365 days.

MOBILE BANKING AT A GLANCE

MCB Mobile Banking gives easy and quick access to account(s) at a time
find convenient, including all holidays.

WITH MCB MOBILE BANKING

Check balance

View the last 4 transactions of your MCB account(s).

A FREE SERVICE

MCB Mobile Banking is a free service for MCB account holders who have an
ATM card of an SMS message if charged by the service provider.

BANKING AT FINGERTIPS

Dial in anytime to get information regarding balance and mini statements.

12.

MCB Islamic Banking Services

Islamic banking services through exclusive units/branches offering a range of

liability and asset based Sharia compliant products like Musharika, Murabaha,
Ijara and Istasana.

13.

MCB Car Cash

Car financing and leasing at competitive rates with flexible options Car cash
finances both semi-commercial and non-commercial vehicles for personal and
business use.
14.

MCB Locker

The best protection for your valuables. Lockers of different capacities are
available nationwide
15.

MCB Master Card

THE FUTURE OF MONEY

Since the beginning of time, people have tried to find more convenient ways to
pay, from gold to paper money and checks. 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 displace cash and checks as the money of the future.
MasterCard International has expanded globally in more locations in the world
than any other card. The card was introduced by MCB Bank Limited in 1995
and now offers card members over 15 million outlets in 232 countries.

Photo security- The first bank in Pakistan to introduce the enhanced

feature of photograph on the card limiting fraud in case of card loss.

Welcomed at over 3, 000 outlets in Pakistan.

Provides up-to 45 days Free Credit.

Joining and Annual Fees to suit you.

24 Hour Customer Services- Call 111-700-700 and you can get

information from our customer services representatives on new card
application or have your queries resolved anytime of the day.

Cash Advance Facilities

Available in Pakistan and worldwide with a network of over 1,000 branches

and a team of dedicated professionals, MCB is Pakistans largest private
sector commercial bank.
Our Consumer Banking provides customers with innovative saving schemes,
products and services. Our ATM network is the largest in Pakistan and our Pak
Rupee Travelers Cheques are market leaders. We were the first to introduce the
photo card with the introduction of the MasterCard.
Our Corporate Banking ensures assistance from a dedicated team of
professional financial advisors for underwriting, project finance or corporate
advisory services.

When it comes to banking practices, you can depend on us. Weve been around
for over fifty years.
16.

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 live a smarter life.
It not only helps you manage your expenses, but also avoids undue interest on
your day to day credit card transactions.
Your balance is always within your reach and you spend accordingly.
MCB is the only bank to introduce a debit card that gives the option to choose
from domestic and international card for local and global usage respectively
17.

Remit Express

Fastest to Pakistan Anywhere in Pakistan.The fastest way of getting your

money across to Pakistan. Remit Express offers
low cost remittance from U.A.E. and Saudi
Arabia.

Your

relatives,

friends

or

business

associates receive drafts within 72 hours.MCB

Remit Express has been specifically designed to meet the needs of the
expatriate Pakistani community residing in the Gulf countries.

18.

Easy Personal Loan

Helping You Do More

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.
Salient Features

MCB will lend you any amount, from Rs 30,000 to Rs 490,000,

depending upon your net monthly income

You can choose tenure of 1 to 3 years for the repayment of the loan

Bank to Bank Balance transfer

Credit Card balance transfer

Loan Protector Shield- insurance coverage of balance loan amount in

case of death or permanent and total disability

Availability of early repayment option

Repayment Arrangements

Repayment of principal and mark-up is monthly and can repaid using

either one of the following modes:

Direct Salary Transfers

Payroll Deduction

Eligibility Criteria

Minimum net monthly income Rs 10,000

25 to 55 years of age

Pakistani national

At least 2 years of employment with current employer.

Processing fee of 1% of the principal loan amount to be charged at the

time of loan disbursement.
19.

MCB PyaraGhar

MCB gives dream home at the lowest and best

possible mark-up rates. You can choose either
one of our two mark-up rate options- fixed or
variable.
Early repayment option tailor-made to allow making partial prepayments at
dates that suit.
Who Can Apply
Anyone who fulfills the following criteria is eligible to apply:

Pakistani national residing in the city and area where the product is
launched.

25 years old or above when you apply and under 60 at the time of
maturity of the applied financing period.

Salaried person, self-employed professional or a businessman with a

verifiable monthly income stream.

Net take -Home income not less than Rs. 25,000 per month.

Have 5 years or more of business or professional experience.

Employed with the present employer for 2 years with a total employment
history of 5 years.

Home

Purchase

Home

Renovation

Home

Construction

Tenure 3 years to 15 years 2 years to 5 years 3

years to 15 years
20.

MCB Virtual

MCB Virtual provides the continence of banking on internet. Whether at

office or home or traveling. Log on at www.mcb.com.pk and enjoy 24 hours
access of all your accounts for the largest array of service.
21.

MCB Business Sarmaya

MCB Business Sarmaya is a running finance against your

residential property. It offers running finance up to 20
millions with low markup.
22.

MCB Car 4 U

MCB car 4 u auto finance is a power move that gets you not only a car of your
own choice but leads you best in life. It is affordable with competitive markup,
flexible conditioning and easy processing and above all no hidden

PLACING STRATEGIES OF MCB BANK

The
of
plays
in
its

the
a

Punjab

700

Sindh

300

NWFP

123

Blochistan

34

Azad Kashmir

19

Domestic

1176

Overseas

Total

location
bank
vital role
making

1180

operations profitable. If the bank is located in some business center then it will
be very easy for it to attract business people as its customers. Therefore MCB
has most of its branches at places where it can reach its targets customer
easily. The branch network of MCB is given as follows:

PROMOTION STRATEGIES OF MCB BANK

MCB Bank is actively participating in promotion of its products and services

through advertisement and other promotional schemes.

Initially, the bank focused on the upper class customers only and offered
products for a limited class of people. But now the strategy has been changed
and the bank is now targeting the middle market also. The products offered are
of diverse nature to cater the needs of maximum number of people.

Customer Oriented Attitude

MCB Bank values its customers. Customers complaints are encouraged

because it gives an opportunity to know the needs of the customer and build
more confidence in them.
Most of the promotional efforts are done through

Direct marketing

Public relations

MCB bank sometimes gets suggestions and recommendations from its good
customers.

Branch layout is being designed in such a way that more and more customers
are attracted. Some of the branches of MCB Bank have a very good entrance
and outlook but many still need to be improved.

FIELDS OF ACTIVITIES

The purpose of banks is to provide some services to the general public. And for
this purpose different banks provide different services to the people in different
forms. The MCB Bank is a commercial bank, in modern time commercial
banks play a very important role and their functions are manifold. The main
functions and services which MCB Bank Limited provides to different people
are as follows.

1) Open Different accounts for different peoples

2) Accepting various types of deposits
3) Accepting various types of deposits
4) Granting loans & advances
5) Undertaking of agency services and also general utility functions, few of
those are as follows:

Collecting cheques and bill of exchange for the customers.

Collecting interest due, dividend, pensions and other sum due to

customers.

Transfer of money from place to place.

Acting an executor, trustee or attorney for the customers. Providing

safe custody and facilities to keep jewellery, documents or securities.

Issuing of travelers cheques and letters of credit to give credit

facilities to travel.

Accepting bills of exchange on behalf of customers.

Purchasing shares for the customers.

Undertaking foreign exchange business.

Furnishing trade information and tendering advice to customers.

For proper functioning of branches and the overall bank has been divided in
different departments. These departments handle different jobs so that division
of work is there for improvement of functions and also it is easy to control the
situation. The general division in a branch is as follows:

1. Cash department
2. Deposit department
3. Advances & credit department
4. Remittance department
5. Foreign exchange department
6. Technology department (new addition in order to cope with the
growing needs of day to day technology requirements)

TECHNOLOGY DEPARTMENT

Technological advancements are also affecting the banking industry. The

foreign banks have a competitive edge over all local banks in their technologies'
advancements and automated systems. Local banks have also realized the
gravity oil this situation and are striving to add computerized systems to their
branches.MCB is ahead of all other local banks in this field and now it is in a

position to even compete with foreign banks. There are more than 1045
branches of MCB all over Pakistan and out of these more than 300 branches
are fully computerized Almost all .the branches of big cities are computerized;
therefore, the need for a technology department at each branch is growing. Now
a day, a computer division is working in each city to provide service to add the
branches of that area.MCB has also introduced the now concept of online
banking. There are now more than 250 branches linked through this system
and they can transact with each other directly using computer systems at their
own branches. Now customers do not have to wait long for their transactions
and can operate their account through all the online branches.

ATM NETWORK
ATM stands for Automatic Teller Machine. This machine is used to transact in
one's account without intervention of humans. These machines are basically
used for taking cash, confirming balances and requesting statements /
chequebooks.MCB has the largest ATM network in the country at the moment
with almost one ATM at each online branch and also ATM terminals at
International Airports. This network covers more than the 27 cities of Pakistan
including the provincial capitals and large commercial cities of the country.
ATMs are operated through a card issued to the valued customers and by
application of Personal Identification Number (PIN number). A person can
withdraw from any machine across Pakistan with having an account in only
one branch of MCB. This was only possible with the help of online system. In
this system all the machines are linked to central banking host at IRM division
Karachi through either satellite or telephone controller. This system identifies
the card holder and his PIN Number.

Now MCB has also entered into a contract with Cirrus which is a subsidiary of
MasterCard. This contract will enable an ATM card holder to use his account
even when he is out of country at all the ATMs where Cirrus logo is displayed.
Green Cards are ordinary cards with a maximum withdrawal facility of
Rs. 10,000/- in a day. The annual fee for this card is Rs. 300/- only.
Gold Cards are special cars with maximum withdrawal limit of Rs.
25000/- in a day. These cards are issued to the persons having more than Rs.
500000/- as their average balance. International Cards are issued in
collaboration with Cirrus and are useable all over the world with maximum
withdrawal facility according to the standards of Cirrus.

Financial analysis of
MCB

BALANCE SHEET

2013
2012
(Rupees in thousands)
ASSETS
Cash
Balance with other banks
Lending to financial
institutions
Investments_ net
Advances net
Operating fixed assets
Deferred tax assets_net
Other assets_net
LIABILITIES
Deposits and other accounts
Borrowings from financial
inst.
Bills payable
Other liabilities
Deferred tax liabilities
Sub ordinated loans
Liabilities against assets
NET ASSETS
REPRESENTED BY
Share capital
Reserve
Unappropriated profit
Surplus on revaluation of

38774871
6009993
3000000

396311 72
4043100
4100079

167134465
253249407
18014896

23040095
509,223,727

96631874
262135470
17263733

19810476
443,615,904

367604711
44662088

330181624
22663840

8201090
15819082
3196743
------------------439,483,714
69,740,013

10551468
21345781
437137
----------------------385,179,850
58,436,054

6911045
38385760
15779127
61,075,932
8664081

6282768
36768765
9193332
52,244,865
6191189

69,740,013

58,436,054

assets

PROFIT & LOSS ACCOUNT

2013
Mark-up/return/interest earned
Mark-up/return/interest expensed
Net mark-up/interest income
Provision against non-performing loans

2012
(Rupees in 000)
51616007
40043824
15841463
11560740
35,774,544
28,483,084
5796527
1335127

and advances
Provision for diminution in the value of

1484218

2683994

investments
Bad debts written off directly

41576

---------

7,322,321
Net mark-up/interest income after

28,452,223

provisions
NON MARK-UP/INTEREST INCOME
Fee commission and brokerage income
Dividend income
Income from dealing in foreign currencies

3331856
459741
341402

4019121
24,463,963

2953394
617554
727564

Other income
Gain on Investments
Gain / Loss on trading in government

736118
773768
--------

securities
Total non-mark-up/interest income

5,642885

NON MARK-UP/INTEREST EXPENSES

Administrative expenses
(Reversal) / Other provisions
Other charges
Total non-mark-up/interest expenses
PROFIT BEFORE TAXATION
Taxation current year
Prior years
Deferred

10107189
142824
690150
10,940,163
23,154945
7703305
(2232226)
2188569

855697
740429
(103198)
5,791,440

7546878
23135
817824
8,387,837
21,867,566
7341257
(864824)
16533

7,659,648

6,492966

PROFIT AFTER TAXATION

15,495,297

15,374,600

Unappropriated profit brought forward

9193332

Transferred from surplus on revaluation

22324

5130750
21319

of fixed Assets
9,215,656
Profit available for appropriation

24,710,953

5,152,069
20,526,669

Unappropriated proft carried forward

Basic and diluted earning per share

22.42

22.25

after tax

CASH FLOW STATEMENT

2013
CASH FLOW FROM OPERATING
ACTIVITIES

2012
(Rupee in 000)

Proft/(Loss) before taxation

Less: Dividend income

23154945
(459741)
22,695,204

21867566
(617554)
21,250012

909471
153397
5796527
1484218

815205
142005
1335127
2683994

investment
Provision for diminution in the value of

142824

10120

other assets
Bad debts written off directly
Operating fixed banking assets written off
Gain on disposal of fixed asset-net
Deficit on revaluation of held for trading

41576
17477
(30614)
--------

----------(39777)
103198

8,514,876
31,210,080

5,052,872
26,302,884

1100079
94176
3047960
(3416086)
8,26,129
(2350378)
21998248
37423087
(6641481)
50,429,476

(3048707)
20273
(44884999)
(1898841)
(49,812,274)
72410
(16742991)
38176089
11914367
33,419,875

82,465,685
(4317603)
78,148,082

9910485
(7878947)
2,031,538

(72317445)

15058126

Adjustments for non-cash charges

Depreciation
Amortization intangible assets
Provision against non-performing advances
Provision for diminution in the value of

securities
(Increase)/Decrease in operating assets
Lendings to financial institutions
Lendings to f.institutions
Advances
Others assets
(Increase)/Decrease in operating assets
Bills Payable
Borrowings from financial institutions
Deposits
Other liabilities

Income tax paid

Net cash flow operating activities
CASH FLOW FROM INVESTING
ACTIVITIES
Net investments in available-for-sale

securities
Net investments in held-to-maturity

3303107

(5550843)

securities
Investment in subsidiary and associated

(394)

---------

companies
Dividend received
Investments in operating fixed assets
Sale proceeds of fixed assets disposed of

446181
(1893986)
93092

621763
(2153151)
258177

-70,369,445

8,234,072

ACTIVITIES
Redemption of subordinated loans
Dividend paid

----------(6735510)

(479232)
(9834175)

Net cash flow from fnancing activities

Ex. difference in cash transactions in

(6,735,510)
67465

(10313407)
230667

foreign branches
Increase/(Decrease) in cash and cash

1,110,592

1,82,870

equivalents
Cash and cash equivalent at beginning of

44,315,965

45,407,542

(641693)
43,674,272
44,784,864

(1916140)
43,491,402
43,674,272

Net cash flow from investing activities

CASH FLOW FROM FINANCING

the year
Effects of exchange rate changes
Cash and cash equivalents at end of the
year

FINANCIAL ANALYSIS

"Financial statement analysis is the process of identifying of financial strengths

and weaknesses of the firm by properly establishing relationship between the
items of the balance sheet and the profit &loss account," and it is done through
ratio analysis.

RATIO ANALYSIS

Ratio means one number expressed in term of another a ratio is statistical

yardstick by mean of which relationship between two or various figures can be
compared or measured. Here we are going to explain the ratio analysis of MCB.

Financial ratios can be divided into the following six parts.

A. Liquidity ratios

B. Activity ratios
C. Leverage ratios
D. Profitability ratios
E. Investor ratios
F. Bank special ratios

A. Liquidity ratios
Current ratios
Quick ratios
Absolute Liquid ratio

B.

Activity ratios
Inventory turnover ratio
Average collection period
Average payment period
Total assets turnover ratio

C. Leverage ratios
Proprietary ratio
Debt ratio
Debt to Equity ratio
Debt to Tangible net worth ratio
External-Internal Equity ratio

D.

Proftability ratio
Return on total assets
Return on-equity
Return on investment
Return on fixed assets
Average profit per branch
Net profit Margin
Interest income to total income
Interest expense to total expense
Return on advances

E. Investor Ratios
Earning per share
P/E ratio
Dividend per share
Dividend yield ratio
Dividend payout ratio
Break up value/Book value per share
M/B ratio

F. Bank special Ratios

Earning assets to total assets
Return on earning assets
Equity to total assets
Deposit time equity
Loan to deposit ratio

Because here we are discussing ratio analysis of bank, therefore we will not
discuss A & B category of ratios.

LEVERAGE/SOLVENCY ANALYSIS

Solvency analysis of a firm indicates the amount of the other peoples money
being used to generate profit. In general, these analyses are more concerned
with long term debts, because these commit the firm to a stream of payments
over the long run. Solvency analysis includes:

Proprietary ratio
Debt ratio
Debt to Equity ratio
Debt to Tangible net worth ratio
External-Internal Equity ratio

1. PROPRIETARY RATIO

Total equity
Total Assets

Year

2013 (000)

2012 (000)

Total Equity

69740013

58436054

Total Assets

509223727

443615904

0.314

0.13

Total Debts

2013 (000)
439483714

2012 (000)
385179850

Total Assets

509223727

443615904

0.86

0.87

2013 (000)
439483714

2012 (000)
385179850

Equity

69740013

58436054

Ratio

6.36

6.59

Ratio
2. DEBT RATIO/ SOLVENCY RATIO

Total equity

Total Assets

Year

Ratio

3. DEBT

TO

EQUITY RATIO

Year
Total Debts

Total Debt
Equity

4. DEBT

TO

TANGIBLE NET

WORTH

Total Debt

Equity

Year

2013 (000)
439483714

2012 (000)
385173850

17766654

17072535

7.85

20

External Equity

2013 (000)
439483714

2012 (000)
385179850

Internal Equity

69740013

58436054

6.36

6.59

Total Debts
Tangible net worth
Ratio
TNW=OFA-ITFA

1. EXTERNAL INTERNAL EQUITY RATIO

External Equity

Internal Equity

Year

Ratio

INTERPRETATION

The overall leverage position is showing better trend as compare to previous

year. The contribution of equity in total assets is increasing, while the debt
contribution is decreasing which is better for business. Equity ratio is
increased which shows the better condition of the bank. Solvency Ratio is in
good condition. So we can say that overall Solvency condition of the MCB is
better with the comparison to the previous year.

PROFITABILITY ANALYSIS

Profitability analysis of a firm indicates the overall efficiently of the

management. Without profit a company can not attract the outside capital.
Profitability analysis includes:
Return on total assets
Return on-equity
Return on investment
Return on fixed assets
Average profit per branch
Net profit Margin
Interest income to total income
Interest expense to total expense
Return on advances
1. RETURN

ON

ASSETS
Net Profit after Tax

= 100

Total Assets

Year
Net Proft after Tax

2013 (000)
15495297

2012 (000)
15374600

Total Assets

509223727

443615904

3.04

3.46

2013 (000)
15495297

2012 (000)
15374600

69740013

58436054

22.22%

26.3%

2013 (000)
15495297

2012 (000)
15374600

Return

2. RETURN

ON

EQUITY
Net Profit after Tax

= 100

Equity

Year
Net Proft after Tax
Equity
Return

3. RETURN

ON INVESTMENT

Net Profit after Tax

= 100

Investment

Year
Net Proft after Tax

Investment

167134465

96631874

9%

16%

2013 (000)
15495297

2012 (000)
15374600

18014896

17263733

86.01%

89.05%

return

4. RETURN

ON

FIXED ASSETS
Net Profit after Tax

= 100

Fixed Assets

Year
Net Proft after Tax
Fixed Assets
return

5. AVERAGE PROFIT PER BRANCH

Net Profit after Tax

No. of branches

Year
Net Proft after Tax

2013
15495297000

2012
15374600000

No. of branches

1089

1089

Average Proft

14228

14118

2013 (000)
15495297

2012 (000)
15374600

51616007

40043824

30%

38%

Total Income

2013(000)
51616007

2012 (000)
40043824

Interest Income

15562762

15605267

3.31%

2.56%

6. NET PROFIT MARGIN

Net Profit after Tax

= 100

Interest Income

Year
Net Proft after Tax
Interest Income
Return

7. INTEREST INCOME

TO

TOTAL INCOME

Interest Income

= 100

Total Income

Year

Return

8. INTEREST EXPENSE

TO

TOTAL EXPENSE

Interest Expense

= 100

Total Expense

Year

2013 (000)
26781626

2012 (000)
19948577

15841463

11560740

59%

57%

Interest Income

2013(000)
51616007

2012 (000)
400443824

Total Advances/ Loans

253249407

262135470

20%

15%

Total Expense
Interest Expense
return

9. RETURN

ON

ADVANCES
Interest Income

= 100

Total Loans

Year

return

INTERPRETATION

Profitability analysis shows the entire performance of a business and if we study

the profitability trend of bank then it will clear to us that it showing a positive
trend. Net profit after tax is very slightly increased as compare to previous year,
due to it return on assets, equity and investment is decreasing. Only overall
profit is increased and where average profit of all the branches is increased. This
year bank total deposits are also increased and thats why interest expenses are
showing up ward trend.

INVESTOR ANALYSIS

Investor analysis or market analysis are related to firm market valve, as

measure by its current share price to certain accounting values. Investor
analysis includes:

Earning per share

P/E ratio
Dividend per share

 Dividend yield ratio

Dividend payout ratio
Break up value/Book value per share
M/B ratio

1. EARNING PER SHARE

Net Profit after Tax

No. of Shares

Year
Net Proft after Tax
No. of Shares
Earning

2013
15495297000

2012
15374600000

691104527

628276843

2.24

2.44

2. P/E RATIO
MP Per Share

EPS

Market price per share is Rs.189.06 on 24th Aug.2010

Year

2013
189.06

2012
190

EPS

22.42

22.25

ratio

8.43

8.53

MP Per Share

3. DIVIDEND PER SHARE

Total Dividend

No, of Shares

Year

2013
8293297000

2012
7853462000

691104527

628276843

12

12.5

2013
12

2012
12.5

MV Per Share

189.06

190

Ratio

0.063

0.065

Total Dividend
No. of Shares
DPS

4. DIVIDEND YIELD RATIO

DPS

MV Per Share

Year
DPS

5. DIVIDEND PAYOUT RATIO

= 100

DPS
EPS

Year
DPS

2013
12

2012
12.5

EPS

22.42

22.25

Ratio

0.53

0.56

2013
69740013000

2012
58436054000

691104527

628276843000

100.91

93.01

6. BOOK VALUE PER SHARE

Equity

No. of Shares

Year
Equity
No. of Shares
Ratio

7. M/B RATIO

MV Per Share

BV Per Share

Year
BV Per Share

2013
100.91

2012
93.01

MV Per Share

189.06

190

0.53

0.48

Ratio

INTERPRETATION

Earning of MCB has been decreased this year due not having increased in
profit as compared to last year 212.MCB has also has good investment
opportunities for the investors. This bank has more attraction for investors as
compare to previous year. Earning per share is increased due to increase in
profit. Book value and market valve of one share in also increased as compare
to 2004. Only dividend yield and payout ratio is decreased because bank
declared fewer dividends as compare to last year but it is also in favor of

investors because it will increase wealth of shareholders and ultimate benefit to

investors.

BANK SPECIAL ANALYSIS

Bank ratio analysis is little bit different from other organizations and if we want
to see the real picture of a bank we have to focus on given special ratios.

Earning assets to total assets

Return on earning assets
Equity to total assets
Deposit time equity
Loan to deposit ratio

1. EARNING ASSETS

TO

TOTAL ASSETS

Earning Assets
Total Assets

Year
Earning Assets

2013(000)
301034271

2012 (000)
309909821

Total Assets

509223727

443615904

0.60

0.69

Ratio

Earning Asset of Bank MCB

Cash & Balances with treasuries
Balances with others banks
Lendings to Financial Institutions
Advances

INTERPRETATION
The efficiency of the banking firm is measured by its ability to utilize its assets in
a manner that they could be profitable for the firm. Bank earning assets are
decreasing as compare to last year but it is just a little bit increase. Advances of
bank are decreasing but investment as compare to 2012 is increased. Lending to
financial institutions is also not very well. Balance with other banks is also not
desirable but overall earning assets showing satisfactory position in 2013.

2. RETURN

ON

EARNING ASSETS

NP before Tax

= 100

Earning Assets

Year
Earning Assets

2013 (000)
23154945

2012 (000)
21867566

Net Proft before tax

301034271

309909821

7.69%

7.0%

Return

INTERPRETATION

Return on earning assets is increased as compare to previous year because

there is increased in net profit in 2013 as compare to 2012. The increasing
trend in this ratio is beneficial for business and investors because this ratio
shows real profitability position of business.

3. EQUITY

TO

TOTAL ASSETS

Equity
Total Assets

Year
Total Equity

2013(000)
69740013

2012 (000)
58436054

Total Assets

509223727

443615904

0.13

0.1317

Ratio

INTERPRETATION
This ratio shows the position of equity in total assets of business. In both years
this ratio is almost same. But the bank should increase its equity by increasing
the wealth of shareholders.

4. DEPOSIT TIME EQUITY

Debt

Equity

Year

2013 (000)
439483714

2012 (000)
385179850

Equity

69740013

58436054

Ratio

6.30

6.59

Total Debts

INTERPRETATION
This ratio is also known as debt to equity ratio. This shows how much
outsiders share in business total equity. Lesser ratio is better for a business
and this year bank ratio is decreasing which showing better trend as compare
to previous years

5. LOAN TO DEPOSIT
Loan

= 100

Year

Deposit

2013 (000)

2012 (000)

Loan

253249407

262135470

Deposit

367604711

330181624

Ratio

68%

79%

INTERPRETATION
LOANS=ADVACES-NET PROVISIONS FOR LOANS

Loans or advances are the major assets of a bank while deposits are major
liabilities of a bank. Higher ratio shows the better solvency of bank. This ratio
is decreased instead of previous years because advances of the bank are
decreased as previous years although deposits are also increased little bit this
years but its ratio is less.

In trend analysis we done two types of analysis, these are

1. Horizontal Analysis
It is conducted by setting consecutive balance sheet, income statement or
statement of cash flow side-by-side and reviewing changes in individual
categories on a year-to-year or multiyear basis.
A comparison of statements over several years reveals direction, speed and
extent of a trend(s). The horizontal financial statements analysis is done by
restating amount of each item or group of items as a percentage.
2. Vertical Analysis
Like horizontal analysis this can also done for balance sheet and income
statement. Here we assign 100% value to any key item of balance sheet or
income statement and then see portion of other items in this percentage.

Financial Review

Financial year 13 remains challenging for the banking sector.MCB stood on the
challenges to the and produces significant increases in business areas of
profitability and asset base. While MCB does not make so much profit after tax
as compared to year 12

SWOT Analysis

STRENGTH
MCB is the first Pakistani privatized bank and because of its quality
management, marketing, innovation in products and services. Owing to all
such

factors they have established a good reputation in the banking market. The
name of MCB makes you recall the highly cooperative and professional
individuals ready to serve you with maximum zeal and zest.
MCB have faster banking services that are making it more prominent in the
banking industry especially in operations and Foreign exchange.

The customer prefers this bank not only because of its faster speedy service
rather due to reasonable service charges.
MCB in Pakistan is the also in the list of highly automated banks like Emirates
because of its modern style of banking through fully computerized control and
twenty four hour banking.
The joining of experienced people, advanced management, advance setup and
facilities gave MCB an edge over its competitors.

WEAKNESSES
The majority of people are not well aware about the products of MCB. Therefore
it should advertise extensively especially RTC and Master Cards.
A behavior has been noted that bank tries to feel at ease with good looking,
rich and educated people and the poor looking customers feel some bit strange
in the environment of the bank. The bank employees should try to
accommodate behaviorally all type of customers.

In MCB there is lack of specialized skill because of job rotation policy of human
resource department. The bank should concentrate upon increasing its
abilities on individual service basis. Mismanagement of time is another big
mistake in MCB branches, the bank official time of closing is 5:30pm but due
mismanaging of time allocation and work the staff is normally on their seats till
7:00 or 8:00 clock.

OPPORTUNITIES
As on 31 Aug, 2010, sixty-eight scheduled banks with 14000 branches are
operating in Pakistan. As on this date, total population of Pakistan is 18 core.
Total number of personal accounts with all scheduled banks as on Aug
31,2013, are 5 billion. If we consider the population statistics of working age
group as on Aug 31, 2013, it stands to the figure of 96.64 million. Thus we can
say those 28% of working age people of Pakistan are having accounts with
banks while 72% are unbanked.

The need of privatization has made people to switch to banks to satisfy their
needs of lending and borrowing. This not only increases the deposits but also
the credit business.

THREATS

Changes in government policies have affected the banking business. Still banks
have to wait to get permission of state bank. The freezing of foreign currency
accounts is a vital example of letting people not to trust on banks.
The Competition has become severe by the entrants of so many banks, So

to

exist one will have to prove himself in its services through excellent
management and will have to satisfy its shareholders. Otherwise he will be out
the market.
The decrease purchasing power of consumer in the current economic situation
of the country affecting the business activity speed too much and the result is
the low investment from the investors in new projects can create problem for
the bank because it is working a lot in trade.

In comparative study of financial statements, we compare the given year

statements with different years or compare with competitors in industry. For
this we conduct two types of analysis.

Liquidity ratios
Time Series Analysis
Cross Sectional Analysis

Time Series Analysis

Ratios

2013

2012

Comments

Leverage Ratios
Proprietary Ratio

0.13

0.314

Good

Debt Ratio

0.87

0.86

Good

Debt to Equity

6.59

6.36

Good

Debt to Tangible Net worth

20

Good

External Internal Equity

6.59

6.36

Good

Proftability Ratios
Return on Assets

3.46

3.04

Less Good

Return on Equity

26.3%

22.3%

Less Good

Return on Investment

16%

9%

Bad

Return on fixed Assets

86%

89%

Less Good

Average profit Per Branch

14228

14228

Good

Investors Ratios
EPS

22.24

22.42

Good

P/E Ratio

8.43

8.53

Less Good

Dividend Yield Ratio

0.01

0.012

Good

Dividend Payout Ratio

0.63%

.065%

Bad

Book valve per Share

100.91

93.01

Good

Bank Special Ratios

Earning assets to Total assets

0.60

0.58

Good

Return on earning assets

7.69%

7.69%

Good

Net margin to Earning assets

3.17%

5.73%

Good

Loan loss coverage Ratio

9.97 times

11.47 times

Good

Equity to Total assets

0.1369

0.1317

Good

Deposit time Equity

6.30

6.59

Good

Loan to Deposit

68%

79%

Bad

INTERPRETATIPN
Leverage Ratios
Proprietary Ratio, Debt to Equity is all in good position in this year.

Proftability Ratios
ROE, ROI, ROE does not showing positive trend this year.

Investor Ratios
Price Earnings Ratio is not good; Market/Book Ratio is in good condition. Only
dividend yield and payout is decreasing due to lesser declaration of dividend in
this year.

Bank Special Ratios

These ratios shows real picture of a bank. All these ratios showing better
position as compare to 2008 so overall bank showing better position except one.

Cross Sectional Analysis

Ratios

Bank Al-

MCB

Comments

Falah
Leverage Ratios
Proprietary Ratio

0.04

0.31

Good

Debt Ratio

0.85

0.86

Good

Debt to Equity

3.6

6.36

Good

Debt to Tangible Net worth

4.62

7.94

Good

Debt to Funds Ratio

0.52

0.63

Bad

External Internal Equity

3.66

6.59

Good

Profitability Ratios
Return on Assets

0.685%

3.04%

Good

Return on Equity
Return on Investment

25.26%
3.62%

22.28%
9%

Bad
Good

Return on fixed Assets

30.22%

86%

Good

Investors Ratios
EPS

5.75

22.42

Good

P/E Ratio

15.65

8.43

Bad

Dividend Yield Ratio

Dividend Payout Ratio

0.02
24.14%

0.053
0.065%

Ok
Bad

Book value per Share

38.54

100.91

Good

Bank Special Ratios

Earning assets to Total assets
Return on earning assets

0.95
5.83%

0.60
7.63%

Good
Good

Equity to Total assets

0.09

0.013

Good

Deposit time Equity

33.6

6.30

Good

Loan to Deposit

62.11%

68.62%

Good

INTERPRETATION

MCB Limited is not only showing better trend in this year but also showing
better position in industry. The major competitor of MCB is bank Alfalah and it
is necessary to depict the real scenario of MCB financial ratios, we compare
these with bank Alfalah ratios, so for this purpose we have done cross sectional
analysis of MCB with bank Alfalah.

In this analysis, overall leverage position of MCB is good as compare to bank

Alfalah. Profitability analysis is also better as compare to bank Alfalah. In
investor analysis, P/E ratio is bad but overall market value of MCB is good as
compare to bank Alfalah. Bank special ratios of MCB are also good as compare
to bank Alfalah.

RECOMMENDATIONS

From the Quantum of the profit and its financial data it can be easily judged
that after privatization, MCB is performing well. Its deposits are growing day by
day and so its p
rofitability. The controlling body is responsible for the productive performance
of the Bank.
Following are my observation and suggestion to improve the efficiency for the
development of the bank.

There is a criticism on the banking management that the salaries of the

employees are decreasing in every succeeding year. And I think this will
shake the confidence and working habit of the employees.

There is another recommendation about the bank that there is no proper

timing of the bank and there is made an unnecessary delay in the
banking transactions, which might not be a good sign for the bank from
future prosperity point of view.

Staff turnover particularly of trained staff result in financial and other

losses. The amount spent by the bank on employment, induction and
training of outgoing officers constitutes to beat till another officer should
ready prove this work. The exodus of bank officer in the past has

worsened the situation.

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

Refresher Courses for the staff are most important in any international
organization. Alt the employees should have these courses according to
their requirement. Foreign experts can also be called for this purpose.

Every year some of the employees should be sent for training to other
countries and employees from other branches should be brought here.
Some more reading material should be provided. The purpose should be
to educate the employees with the advance studies in their field. The
employee should be provided the opportunities to attend and participate
in seminars and lectures on banking.

Bank should give some more incentive to its employees in order to

remove the conflict between lower and higher officers and should try to
improve the working condition of the bank.

Such system should be designed that every employee who has some
problems with his officers can communicate it to the higher management
and some steps must be taken to improve that.

Recruitments should be strictly on merit basis and induction should be

after proper and extensive training.

Old and lazy staff should be replaced by young, qualified and energetic
staff.

Foreign branches should be opened in order to capture the international

market and to earn international repute for the bank.

Working environment, equipment, furniture and staff dressing should be

according to the modern banking style.

Proper attention should be paid to upgrade customer services.

Bank should adopt the global organizational banking structure to meet

the international standards of banking sector.

CONCLUSION

It is evident from this report and the financial statements of MCB that it is
making progress by leaps and bounds. The profits of MCB have grown
considerably during the last few years and this trend is expected to continue
into the future. Therefore, we conclude that MCB has a very prosperous
present and future, which assures the shareholders of wealth maximization.
Side by side of it I think that if bank would be able to cover and control on the
above mentioned recommendations then it would be in such a situation that
will really lead it towards the road of prosperity, development and integrity. And
with the above mentioned sentences I think there is too fault of the customers
and in order to make the proper working of the bank the customers should also
cooperate with the bank which will be really a good, ambitious and diligent
condition for the bank. And then bank will be really in such a situation and
position to compete its competitors in the country as well as on international
level.