STRATEGIC MANAGEMENT REPORT ON “MEEZAN BANK LIMITED”

INTRODUCTION

The Bank commenced operations in 2002, on being issued the first-ever Islamic commercial
banking license by the State Bank of Pakistan. In 2012 Meezan Bank completed a milestone of
10 years of Islamic Banking in Pakistan
Meezan Bank offers a range of personal and corporate Islamic banking products and services
through a retail banking network of over 385 branches in 109 cities. Backed by a state-of-the art
T-24 core banking system, the branch network is supported by 24/7 banking services. 281
ATMs, Meezan VISA Debit Cards, Internet Banking, SMS alerts and a 24-hour Call Center.

PRODUCT SELECTED:

 Current Account:

Meezan Current Account is a Rupee-based current account that provides you the convenience
of putting your money in a Riba-free account

VISION:

Establish Islamic banking as banking of first choice to facilitate the implementation of an

equitable economic system, providing a strong foundation for establishing a fair and just society
for mankind.

MISSION:

To be a premier Islamic bank, offering a one-stop shop for innovative value-added products and
services to our customers within the bounds of Shariah, while optimizing the stakeholders value
through an organizational culture based on learning, fairness, respect for individual enterprise
and performance.

SERVICE MISSION:

To develop a committed service culture which ensures the consistent delivery of our products
and services within the highest quality service parameters, promoting Islamic values and
ensuring recognition and a quality banking experience to our customers.
 BUSINESS SCOPE

MARKET
 Since large population are practicing Muslims belonging increasingly aware of
prohibition of interest in Islam.
 Non-Muslims as well.
 Customers who believe in Interest free banking

CUSTOMERS
 Conventional current account holders.
 Uncatered customers

BOUNDARIES
 Within Shariah principles.

S.No. Region Customer Need Specifications Product /

1 Industrial Area Manufacturers / Local & Foreign Trade facilities, Cash
Exporters Management, Salary Disbursements,
2 Commercial Markets Whole
Sellers / Retailers
3 Residential Salaried Individuals/
Areas Self Employed
Persons/ Small cash
based business
owners.
4 Rural Areas Agriculture and
Dairy farms
CHANGES
 Mechanized Trade Facility for exporters and
importers
 Running finance and term finance
 Cash management facilities to customers
with high transaction
Technology
Online transaction
facility, Loan
Business Transactions including Facility, Loan Slabs*
online transfers, clearing &
remittances , Loan
Inter branch and interbank Online transaction
transactions through clearing and facility
remittance counters
Current deposit account for safe Online transaction
keeping of money, remittance, facility
clearing (occasional)
Current deposit account for Fund Online transaction
management and its Safety. facility Loan facility
EFFECTS
 Islamic mode of banking in foreign
transaction.
 Provide Riba free facility to customers
 Customer with large cash transactions will be
captured by mitigating there risk
 OBJECTIVES

1. Improve community awareness of the bank's services in different cities by increasing

branch marketing program + Awareness session by 20% the end of the year.

2. Increase EPS to Rs 4.5 per share.

3. Increase number of consumer deposit accounts by [35]% by the end of the

MARKET STRUCTURE
 End Users

Manufacturers / Exporters 50%

Whole Sellers / Retailers 20%
Salaried Individuals/ Self 25%
Employed Persons/ Small cash
based business owners.
Farmers 5%
  Representative Product

Current Account

 Channels
Branches
Designated Marketing

CHANGES
 Increase numbers of branches in
remote areas of Baluchistan, KPK and
other areas with strong business
activities
 Increase branch network in urban
areas
EFFECTS
 Normally remote areas are covered by few
banks including NBP, MCB and HBL with low
standard of services usually and only enjoying
that deposit base of customers and also that of
their counter parties due to coverage in those
remote areas which can also be captured.
 In urban areas customers prefer nearby
branches due to law and order situation, which
is also helpful in capturing those customers.

MARKET SEGMENT
(Historical growth of Industry)

PAST FOUR (4) YEARS

 INDUSTRY FUTURE GROWTH

COMPETITION AND MARKET MATRIX

FUTURE GROWTH
PROFITABILITY ANALYSIS

DRIVING FORCES
 MEASURING GAP & ACTION PLAN

S. No. Cost Heads

1 Average Cost of Deposit
2 Salaries & Perks
3 Rent
4 Repair & Maintenance
5 Communication &
Transportation
6 Advertisement publicity
Expenses
7 Subscription Charges
Average cost of capital is low as compare to industry and
competitors but same position cannot be maintained
only by capturing urban current deposit market and
expansion in rural areas is required
Appraisal and bonuses should be evaluated on
performance basis
Comparatively low
Centralized Administration should manage all related
issues to low down cost
Cost increased due to staff transportation service
Comparatively low
Include portfolio management fees of Al Meezan
Investment Management Limited.

STRATEGIC COST

 Research and development cost on human resource department

 Disaster Recovery Data Center or DRDC cost
 Implementation cost of Temenos T24
 Rural expansion of branch network
 Expansion cost required to approach international market

OPERATIONAL GROWTH INDICATORS

 Total deposits increased to Rs. 330 billion

 The Bank recorded 24% growth in its Profit-after-tax
 Substantial recovery efforts during the year on its non-performing financing portfolio
 The Bank's total revenues increased to Rs. 26.7 billion
 The income from core banking business grew to Rs. 14.1 billion

STRATEGIC PERFORMANCE INDICATORS

 The Bank has already met its minimum capital requirement of Rs. 10 billion
 Commercial Banking business targets the 'middle-market' segment of customers
  Commercial Banking business segment by 85% in 2013
 The Bank also entered the Agriculture sector and set up a dedicated Agriculture Unit.

SWOT ANALYSIS

STRENGTHS
 Interest free banking
 Pioneer in the industry of Islamic Banking, Market leader
 Authentic and Credible Shariah board with members consist of famous religious
scholars.
 High market coverage as compared to its competitors
 An acquisition of conventional Bank (HSBC) has increased its reputation and goodwill.

WEAKNESSES
 Numbers of branches are less in rural areas.
 Customer service needs improvement.
 No global coverage discourages big customers.
 Clearing time of foreign transactions is lengthy.
 No benchmarking available in the market using conventional banking benchmarks.
 Limited availability of human resources with Islamic banking knowledge

OPPORTUNITIES
 Convert conventional current account holders to MBL customers.
 Awareness to uncatered customers, as people are still fully not aware regarding Islamic
banking principles.
 Awareness to Islamic Institutions regarding their practices. • Currently, State bank is
targeting banks with lower equity (KASB), so MBLS’s high equity can be used as an
added advantage to attract new customers.
 Mergers with Telecom industry for mobile banking (easy paisa etc) can be done.
 Increase in the no. of branches in rural areas

THREATS
 Banks converting to Islamic banking from conventional banking, growing competition.
 Mobile banking technology is increasing in the world and can act as a threat to MBL.
 Misconceptions and misunderstandings among the general public about Islamic
banking.
 Government restrictions on Islamic banking.
 Non availability of conventional banking products (credit cards etc). S W TO SWOT
ANALYSIS
 RECOMMENDATIONS

 Aggressive marketing and advertising strategy.

 Establishment of new branches.
 Service improvement.
 Islamic banking introduction trainings in Universities/colleges.