University of Sargodha.

Preface
Banking sector owes a pivotal importance in the economy of any country through its variant functions. This basic motivator that stressed me to join any bank for Internship Training. Moreover, the experience and practice learned during this tenure also prove very helpful and facilitating in the forthcoming professional life. This report is the result of 6 week Internship in Muslim Commercial bank, Fatimah Jinnah Road Branch Sargodha. The motive behind selecting this bank is that it is one of the Top 10 Asia, Banks. The fact remains that Muslim Commercial bank, posses an excel/cut and historical importance being the most senior and leading in terms fluids and services to Pakistan at all ages of life. I had with the strongbelief that this report will guide and facilitate the readers to understand the functioning of banking system and more importantly have good knowledge about Muslim Commercial bank. My utmost efforts to elaborate this report wit, material read, listened and observed. Yet, I feel that this period was not long enough to learn andunderstand the complex and widespread functioning of banking sector. I am really thankful to the entire staff members of the aforesaid branch for the friendly and cooperative behavior during my internship.

Saad Zubair
M.COM (Finance) Roll No. 79(S.F)

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Dedication To
MY PARENTS &TEACHERS WHO LOVE, AFFECTION & PRAYERS HAVE BEEN A SOURCE OF INSPIRATION AND ENCOURAGEMENT FOR ME!

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Acknowledgement
First of all I would like to thanks to my ALMIGHTY ALLAH who always helped me in overcoming of all the difficulties which came across my way in completing my study career. I am very thankful to my Internship Supervisor and kind teacher, Mr. Muttee ur Rehman who guides me in very beautiful & nice way. The supervision of Sir Haroon has provided me a lot of experience to get the view of banking sector. In last, I am fully respectful for those friends and relatives who provide me encourage to complete this interpretation approach.

Saad Zubair
M.COM (Finance) Roll No. 79(S.F)

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TABLE OF CONTENTS
Title Page Approval page Dedication Preface Executive Summary Introduction History & background of United bank limited Mission Statement Organization Structure Organization Structure (Sargodha branch)

Types of Accounts Marketing Strategy Competitive Strategy Learning as Internee Duties Account Department Remittance Department Clearing Department New Knowledge Acquired Impact of Experience Financial Analysis SWOT Analysis Conclusion References Appendix

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EXECUTIVE SUMMARY

MCBBank Limited (Formerly Muslim Commercial Bank Limited) has a solid foundation in Pakistan, with a network of over 1081 branches, with 9397 permanent employees over 900 of which are Automated Branches, over 495 MCB ATMs in 55 cities nationwide and a network of over 12 banks on the MNET ATM Switch. This study contains the study of Aziz Bhatti town Branch of MCB Bank Ltd of Pakistan. Internship is an essential part of M.Com program. This report is a result of eight week performance in the form of internship at one of the branch of MCB Bank of Pakistan. Experience was full of knowledge regarding various facts of banking sector. It consists of practical experience, which I got during internship program. All the information in this report is based upon my observation and practical experience in different tasks during my internship at MCB. MCB's operations continued to be streamlined with focus on rationalization of expenses, re-alignment of back-end processing to increase productivity,

enhancement of customer service standards, process efficiency and controls. The Bank has taken the lead in introducing the innovative concept of centralizing Trade Services in the country by providing centralized foreign trade services to branches with a view to improve efficiency, expertise and reduce delivery cost. During the course of internship I learned about different functions performed by Remittances, Advances, Foreign Exchange and Customer Service Office department and bank as a whole. I also learned banks correspondence with their customers and within branches. I learned about documentation requirements and record keeping for different activities and processes, especially the documentation requirement for different kinds of financing facilities. During the course of internship I learned about different functions performed by Remittances, Advances and Customer Service Office department and bank as a whole. I also learned banks correspondence with their customers and within 5|Page

University of Sargodha. branches. I learned about documentation requirements and record keeping for different activities and processes, especially the documentation requirement for different kinds of financing facilities.I also learned that how work in tough situation which would help mw in long way. And it wouldnt be possible without the assistance of the team with whom I had spent 6 weeks. In the last, the SWOT analysis, critical analysis, final Recommendations & Suggestions are given to overcome problems that are being faced by MCB Bank of Pakistan.

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History of Banking Industry:

There are various views about the origin of the word bank. One view is that it is derived from an Italian word banque which means a bench. The other point of view is that it has originated from the German word, banc which means a joint stock firm. BANKING IN PAKISTAN: Banking started in Pakistan after the bold and emergent decision of formulation of SBP on July 30, 1948. Thereafter this sector has witnessed enormous growth. In 1974 bankswere nationalized, in the hope that new era of growth could be achieved through it. However the process is reverse since 1991, up till now MCB, UBL, and UBL have been privatized and HBL is in the process of its privatization.

Importance of banking:
Banks play very important role in the economic life of a nation. The growth of the economy is dependent upon the soundness of its banking system. Although banks so not create new wealth but borrow, exchange and consume. These make generation of wealth. In this way. They become most effective partners in the development of that country. To encourage the habit of saving and to mobilize these savings is its basic purpose. Banks deposit surplus from the public and then advances the surpluses in the form of loans to the industrialists, agriculturists, businessmen and unemployed people under different schemes so that they setup their own business. Thus banks help in capital formation if there are no banks, and then there would be concentration of wealth in few hands great portion of wealth of a country would be idle. In the fewer developing countries rate of saving is very low and due to this rate of investment and rate of growth is very low. We can take hank just like a heart in the economic structure and capital provided 7|Page

University of Sargodha by it is like blood in it. As long as the blood is in circulation, the organs will remain sound and healthy. If the blood is not provided to any organ then the organ would become useless. So if the finance is not provided toagriculture sector or to industrial sector, it wills he destroyed. Loan facility provided by bank works as an incentive to the producer to increase production. Banks provide transfer of payment facility, which is cheaper, quicker and safe. Many difficulties in the international payment have been overcome and volume of transactions has been increased. These facilities are very much helpful for the development of trade and commerce.

HISTORY OF BANKING IN PAKISTAN

At the time of independence, commercial banking facilities were provided fairly well here. There were 487 offices of schedule banks in the territories now constituting Pakistan. An Expert committee was appointed. The committee recommended that the reserves bank of India should continue their function in Pakistan until 30 September. 1948, and Pakistan would take over the management of public debt and exchange control from reserve bank of India on April 1948 and that Indian notes would continue to be legal tender in Pakistan until 30 September 1948. Moreover the banks including those having their registered office in Pakistan transferred them to India in order to bring a collapse of a new state. By 30 June 1948 the number of the offices of scheduled banks in Pakistan declined from 487 to only 195.In order to make necessary arrangement for the assumption of control and expert committee was appointed to recommend necessary steps, including the required legislation to establish a central bank for Pakistan. The governor-general of Pakistan Quaid-i-Azam Muhammad Ali Jinnah inaugurated the State Bank of Pakistan order was promulgated on May 12, 1948. The first Pakistani notes were issued in October 1948 in the State Bank of Pakistan withdrew the reserves Bank of India notes of the value of Rs. 125.02 crores with the help the Pakistan notes.

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University of Sargodha On 1st January, 1947 all Pakistani banks were nationalized through Nationalization Act 1974. Under this law all Pakistani Banks become a pubic property. All small banks were merged in bigger banks to create five major Pakistani banks. These banks were to control by Pakistani Banking Council. There are still controversies about this act of Govt. 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. Decrease in service level of bank officers. Decrease in profitability as well.

In 1990 the govt. decided to denationalize all the nationalized institutions. Same 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 two privatized banks are: MCB taken up by a private group in April, 1991 & ABL taken up by its own employees in September, 1991. After these changes a large number of private and foreign banks started their operation in Pakistan Now, Pakistan has a well-developed banking system, which consists of a wide variety of institutions ranging from a central bank to commercial banks and to specialized agencies to cater for special requirements of specific sectors. The country started without any worthwhile banking network in 1947 but witnessed phenomenal growth in the first two decades. By 1970, it had acquired a flourishing banking sector. Pakistan's banking sector has remained remarkably strong and resilient during the world financial crisis in 200910, a feature which has served to attract a substantial amount of FDI in the sector. Stress tests conducted on June 2010 data indicate that the large banks are relatively robust, with the medium and small-sized banks positioning themselves in

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University of Sargodha niche markets. Banking sector turned profitable in 2002. Their profits continued to rise for the next five years and peaked to Rs 84.1 ($1.1 billion) billion in 2007. During the fiscal year of 2009-2010, total assets of all the scheduled banks increased by Rs 574.7 billion. Total assets grew by 6.4 percent from Rs 8861 billion in June 2008 to Rs 9436 billion in June 2010. During the fiscal year of 2009-10, there was also an increase of Rs 248 billion in the net advances of the scheduled banks. Net advances grew by 8.67 percent from Rs 2873 billion in June 2009 to Rs 3128 billion in June 2010.

Types of Banks: Commercial Banks:

The banks in any country speeded over with an objective to get the excessive money Form the public in the form of deposits and providing finance to the investors. These Banks are in the ground for profit earning motive and in competition with each other. These banks are providing the basic services to the customers in the form of deposits, Advances, remittances and others.

Functions of Commercial Bank:

1. Borrowing money from the customer in the shape of Term deposits ( PLS saving current deposits and Notice deposits). 2. Lending of money to borrowers in shape of finances, short-term finances, and longterm finances under various names such as Demand Finance, Small Finance, and Cash Finance. 3. Agency services. 4. Remittance of money 5. Foreign exchange business, foreign currency deposits. LCS, Imports and exports etc. Pakistan has following Banks categories: Public Sector Commercial Banks: 10 | P a g e National Bank of Pakistan,

University of Sargodha First Women Bank Limited, The Bank of Khyber, The Bank of Punjab The Bank of Punjab

Local Private Banks: Askari Commercial Bank Limited, Bank Al-Falah Limited, Bank Al Habib Limited, Bolan Bank Limited, Faysal Bank Limited, PICIC Commercial Bank Limited, UBL (United Bank Ltd), MCB (Muslim Commercial Ltd), Allied Bank Limited,

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History OF ORGANIZATION: BRIEF HISTORY OF MCB:

MCB Bank Limited formerly known as Muslim Commercial Bank Limited was incorporated by the Adamjee Group on July 9, 1947 in Kolkata in Bengal, under the Indian Companies Act, VII of 1913 as a limited company. But due to changing scenario of the region, the certificate of incorporation was issued on 17 August, 1948 with a delay of almost 1 year; the certificate was issued at Chittagong. 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. The Bank transferred its registered/Head office from Dhaka to Karachi on August 23, 1956 through a special Resolution. NATIOINALIZATION: In January 1974, the government of Pakistan nationalized MCB following the banks (Nationalization) Act 1974, subsequently, in June 1974, Premier Bank limited merged with MCB. PRIVATIZATION: A wave of economic reforms swept Pakistan in the late 1990s introducing the need for privatization of state owned banks and companies in April 1991, MCB because Pakistans first privatized Bank, the government of Pakistan transferred the management of the Bank to Nishat Group group of leading industrialists of the country by selling 26% shares of the Bank. With a view to broaden equity holding the government sold 25% of the paid up capital to the general public. In terms of agreement between the government of Pakistan and the Nishat Group additional 24% shares have been purchased by the group making their holding 50%. As of June 2008, the Nishat Group owns a majority stake in the bank. 25% was retained by the government. Now it is fully privatized.

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University of Sargodha Mian Mohammad Mansha is the Chairman of the group (and also MCB) and has played instrumental role in its success. In recognition of Mr. Manshas contribution, the Government of Pakistan has conferred him with "Sitara-e-Imtiaz", one of the most prestigious civil awards of the country. MCB is Pakistans fourth largest bank by assets having an asset base of US$6.7 billion, and the largest by market capitalization having a market capitalization of US$4.1 billion. The Bank has a customer base of approximately 4 million and a nationwide distribution network of 1,026 branches, including 8 Islamic banking branches, and over 300 ATMs, in a market with a population of 160 million.

PRESENT STATUS
Over the years Muslim Commercial bank fostered strong bonds with its customers. MCB understands them; their needs. They feel comfortable with MCB; its their bank; it responds to them; listens to them; partners with them; grows with them. That is why it is one of the leading commercial banks of the country, providing a wide range of modem banking services. At present, the banking network consists of over 1000 branches along with controlling offices known as Area Head offices and Regional Head offices. These controlling offices are responsible for the smooth operation of the bank on National & international levels. The entire financial and operational objectives are achieved with the Human Resources strength over 12000 employees. The bank is known as the major credit provider, best place of working and paymaster in the financial (money market) of the country. Over the past few years, MCB's profits have been hit by the need to increase provisions coverage and restructuring costs associated with the downsizing of the workforce and branch network, whilst there is some need to boost provisions, these charges (necessary to bring the bank back into shape) are largely over. It has also slowly received permission from the SBP to shut down a number of unprofitable branches. In 1999 EURO MONEY recognized MCB as the best domestic bank in Pakistan. The banking sector has been worst hit by the external account crisis that engulfed the country following the nuclear tests. Due to the nature of banks as a medium for debt 13 | P a g e

University of Sargodha transactions the country's technical default and subsequent rating downgrade impacted them the most. Those core concerns are still not fully alleviated in the view of the investors. The closest that investors have come to positive expectations regarding external account sustainability and a possible re-rating was back in the fourth quarter of the year 1999, and this led to MCB climbing to Pakistani rupees 56 per share. Resumption of the IMF funding and a possible rescheduling of bilateral debt will positively impact the banking sector and especially MCB. State Bank of Pakistan continued the process of Banking Reforms, which included strengthen of Prudential Regulations and focus on recovery of defaulted loans. In 1999 return on Government Savings Scheme and Treasury Bills was reduced, which led to a lowering of lending rates, resulting in erosion of margins for banks but it is likely to give a boost to economic activity. MCB Rupee travelers Cheques continued to maintain their leadership position in the industry and sales registered a 45% growth over last year. MCB successfully introduced the Rs.100, 000 denomination cheque countrywide and introduced RTC dialup televerification facility from Lahore city as well.

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Mission Statement:
We are a team of committed professionals, providing innovative and efficient financial solutionsTo create and nurture long term relationship with our customers. In doing so, we ensure that our shareholders can invest with confidence in us.

Vision statement:
To be leading financial service provider, partnering with our customers for more prosperous and secure future.

Devotion
Devotion indicates the need for hard work, consistency, perseverance & a commitment towards the organization, its customers and all its stakeholders.

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

Respect:
We respect our customers values, beliefs, culture and history. We value the equality of gender and experience and education that our employees being with them. We create an environment where each individual is enabling to be succeeded.

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

Customer centricity:
Our customers are at the heart of everything we do. We thrive on the challenge of understanding their needs and aspirations, both realized and unrealized. We make every effort to exceed customer expectations through superior services and solutions.

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PRODUCTS AND SERVICES OFFERED BY MCB

Commercial Banking Current Account MCB Bank offers a variety of current accounts to cater to the everyday transactional needs of various customers. These accounts ensure ease and freedom to bank from any of the 1100+ branches across the country. The different accounts include: the Basic Banking Account that has no minimum balance; Business Account offering free online transactions, Demand Drafts, Pay Orders and lots more to meet the day to day business requirements; Current Life Account which offers the security of life insurance free of cost; and for all others, the conventional Current Account.

Savings Account MCB Bank offers a wide array of savings products that suit short term growth & transactional needs. Our savings accounts offer attractive profit rates as well as flexibility to transact. Savings Xtra is targeted for customers having Rs. 5 million + deposit, 365 Gold offers profit rate on daily balance while PLS savings has a lower minimum balance requirement. In addition, two unique products: Smart Savings and Savings Maximizer are special saving accounts run solely via debit cards and other remote banking channels, offering a very competitive rate to both high and low end savers.

Term Deposit MCB Term Deposit offer attractive short to mid-term investment options with flexibility, convenience and security. With various tenor options available, customers can choose one that suit their needs. This is combined with different profit payout options and the added facility of being able to avail credit facility against their deposits. 17 | P a g e

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Deposit Accounts: Basic Banking Account: A simple account to produce the habit of saving for beginners like students. The account can be opened with only Rs. 1000, no minimum balance required, no any monthly or annual charges applicable on this account, two deposits and two withdrawals can be made in a month. Also you can avail the facility of MCB ATM card and MCB smart card. Pak Rupee Current Account: MCBs Pak Rupee Current Account offers you the convenience of unlimited withdrawals i.e. access to your funds whenever you want without any notice. There is no limit on the number of transactions you make in a day plus you can avail finance facility up to 75% of the total deposit. In addition, you have access to a countrywide ATM network convenient cash accessibility 24 hours a day. The facility also provides you with unlimited daily transactions with a limit on maximum withdrawal amount through the ATM machines Pak Rupee Savings Account: MCBs Pak Rupee Savings Account offers you attractive returns on your Pak Rupee investment with a minimum balance of Rs. 10,000. In addition, you have access to a countrywide ATM network convenient cash accessibility 24 hours a day. The facility also provides you with unlimited daily transactions with a limit on maximum withdrawal amount through the ATM machines. You can also use MCB Smart card and Locker Facility at economical charges. Pak Rupee Term Deposit: MCB Pak Rupee Term Deposit gives a higher rate of return. It gives you choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, 4 years and 5 year term deposits. Saving 365 The MCB Saving 365 calculates profits on a daily product basis and gives you the facility of unlimited withdrawals.

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University of Sargodha Foreign Currency Savings Account: MCBs Foreign Currency Savings Account offers you attractive returns on your Foreign Currency investment. You can invest in any of the four currencies i.e. US Dollar, UK Pound Sterling, Japanor Euro Your foreign currency account is exempted from Zakat and withholding tax. Foreign Currency Current Account: MCBs Foreign Currency Current Account offers you the convenience of unlimited withdrawals i.e. access to your funds whenever you want without any notice. There is no limit on the number of transactions you make in a day. MCB Foreign Currency Term Deposit: MCB Foreign Currency Term Deposit gives a higher rate of return. It gives the choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, 4 years and 5 year term deposits. Smart Dollar Account: The Dollar Khushali Account, a Dollar based account was introduced in 1993 at selected MCB Bank branches. Today, you can open a Smart Dollar Account at over 200 branches in Pakistan with a minimum amount of USD 10,000. Business Account: With MCB Business Account you can avail higher number of free transactions with higher balance. The account can be opened with Rs. 50,000. You can make free Deposits and Withdrawals from all nation-wide branches.

LOAN PRODUCTS
MCB Business Sarmaya: MCB Business Sarmaya is the best Running Finance facility against your residential property which empowers you to manage your business dealings better. So act today and get MCB Business Sarmaya and thus improve your business, avail lucrative opportunities and expand your business, with absolute satisfaction of cash flows.

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MCB Car 4u:

Life is like a chess board. You plan your career options. You analyze your business moves. But when you really want to improve your life, you make a power move. MCB CAR4U Auto Finance is the power move that assists you in more ways than you ever imagined. It is affordable, with lowest mark up 16%, flexible conditions, easy processing and above all, no hidden costs.

MCB Pyara Ghar:

Some destinations require a long wait. Like waiting for a home of your own. But with MCB Pyara Ghar it is now easy to step into your home and start living a real life. MCB Pyara Ghar is an ideal Home Finance from your own bank that lets you Purchase, Renovate or Construct your home the way you have always wanted. Having your own home was never so easy. Easy Personal Loan: MCB Easy Personal Loan provides you with the financial advantage to do things you've always wanted to but never had the sufficient funds for. Take that much-needed holiday. Buy a car. Refurnish your house. Purchase a new TV. Finance a better education for your children. MCB Master Card: Since the beginning of time, people have tried to find more convenient ways to pay, from gold to paper money and 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 replace cash and checks as the money of the future.

MCB Rupee Traveler's Checks:

MCB Rupee Traveler's Checks were first introduced in 1993 as safe cash for traveling and travel related purposes. The product has been extremely popular and is

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University of Sargodha preferred over cash by customers while traveling and in all walks of life. MCB Rupee Traveler's Checks- The safest way to carry Cash.

ONLINE SERVICES
MCB ATM SERVICES With a solid foundation of over 50 years in Pakistan, with more than 750 automated branches, 269 online branches, over 222 MCB ATMs in 41 cities nationwide and a network of over 12 banks on the MNET ATM switch, MCB is positioned at the forefront of the banking industry in Pakistan. This success has been possible because of a never-ending drive to achieve higher levels of excellence, constantly striving to raise the level of performance. MCB Mobile Banking: At the forefront of technological excellence, MCB proudly introduces MCB MOBILE BANKING. The convenience of accessing your account balance information and mini statements whenever you want or wherever you may need them, with comfort and peace of mind. MCB Call Center: Keeping up with banking services can be tedious but not with MCB Bank, where phone service is at your fingertips. Just dial our Call Centre from the comfort of your home or office or wherever you happen to be. It offers basic banking services for your convenience, eliminating the need for you to make unwanted trips to your branch. MCB Smart Card: MCB now brings you MCB SmartCard -a secure and convenient instrument of payment with unmatched functionalities. It provides 24-hour direct access to your bank account. The convenience and flexibility of MCB SmartCard will help you live a smarter life. It not only helps you manage your expenses, but also eliminates undue interest on your day to day credit card transactions. Your balance is always within your reach and you spend accordingly. 21 | P a g e

University of Sargodha MCB Debit Card: Now MCB brings a secure, convenient and quick payment facility that enables you to do purchasing by using your existing MCB ATM / MCB Smart Card as a DEBIT CARD.

ISLAMIC BANKING
Deposit Schemes: For customers who are looking for a deposit opportunity where they can purse their funds and reap halal returns on it, we offer the following products: Al-Makhraj Saving Account Al-Makhraj Ianat Account Al-Makhraj Term Deposit Fund Based Facilities Ijarah Products MCBs Islamic Ijarah, analogous to the English term 'leasing, is based on the Ijarah wa Iqtina concept which means the sale of the asset to the lessee after the Ijarah has matured. Under this scheme, MCB will be the owner of the asset, and the customer (lessee) will be given the asset to use for a certain period of time in return for monthly rental payments. MCB will give a separate unilateral undertaking that it will offer to sell the asset to the customer (lessee) at the maturity of the Ijarah agreement at a price that may be equal to the security deposit amount, hence the term Wa Iqtina. Types of Ijarah: Car Ijarah Equipment Ijarah

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Competitors:
23 | P a g e First Women Bank Ltd. National Bank of Pakistan The Bank of Khyber The Bank of Punjab The Punjab Provincial Co-operative Bank SME Bank Limited Zarai Taraqiati Bank Limited Allied Bank Limited Askari Bank Limited Bank Al-Falah Limited Bank Al-Habib Limited My Bank Limited Crescent Commercial Bank Limited NIB Bank Limited Faysal Bank Limited Habib Bank Limited KASB Bank Limited Meezan Bank Limited Atlas Bank Limited Saudi Pak Commercial Bank Limited Soneri Bank Limited United Bank Limited Arif Habib Bank Limited Dubai Islamic Bank Pakistan Limited Bank Islami Pakistan Limited Royal Bank of Scotland Habib Metropolitan Bank Limited

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Organization Chart

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Branch Structure: Aziz Bhatti Town Sargodha

PRESIDENT

SENIOR EXECUTIVE VICE PRESIDENT

EXECUTIVE VICE PRESIDENT

SENIOR VICE PRESIDENT

VICE PRESIDENT

ASSISTANT VICE PRESIDENT

OFFICERS GRADE I II III CASHIER

H I E R A R C H Y

ASSISTANTS

PEON

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Corporate Information

Company Overview
Company Name: Muslim Commercial Bank Legal Status Public Limited Company Registered office MCB 15 Main Gulberg, Lahore Board of directors Mr. S. M. Muneer Mr. Tariq Rafi Mr. Shahzad Saleem Mr. Sarmad Amin Mr. Mian Raza Mansha Mr. MianUmerMansha Mr. Aftab Ahmad Khan Mr. ManzarMushtaq Mr. Ahmad AlmanAslam Dato' Seri Ismail Shahudin Mr. Abdul Farid Bin Alias Mr. M.U.A. Usmani Management Mr. Ali Munir Strategic Planning and Investment Vice Chairman Director Director Director Director Director Director Director Director Director Director President / CEO

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University of Sargodha Mr. Agha Saeed Khan Mr. RaheelEjaz Mr. Imran Maqbool Mr. LaqaSarwar Mr. MuhtashimAshai Mr. Muhammad NaumanChughtai Mr. Salman Zafar Siddiqi Mr. Ahmed Kareem Mr. Mohammad Ramzan Mr. Ali Kazmi Mr. Kamran Rasool Mr. Imtiaz Mahmood Mr. Syed Rashid Rahman Operations Compliance Commercial Branch Banking Group Special Assets Management Wholesale & Investment Banking Credit Risk Review Financial Control Group Human Resources Treasury & FX Consumer Banking Security & Corporate Social Responsibility Information Technology Islamic Banking

Audit Committee Mr. Tariq Rafi Mr. Aftab Ahmad Khan

Chairman Member

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University of Sargodha Mr. Ahmad AlmanAslam Dato' Seri Ismail Shahudin

Member

Member

Human Resources Committee Mian Mohammad Chairman Mansha Mr. Mian Raza Mansha Mr. Ahmad AlmanAslam President / CEO Member

Member Member

Risk Management & Portfolio Review Committee MianUmerMansha Chairman Mr. Sarmad Amin Mr. ManzarMushtaq President / CEO Member Member Member

Committee on Physical Planning, IT System & Contingency Arrangements Mr. Sarmad Amin Chairman Mr. S. M. Muneer Mr. Tariq Rafi Mr. Mian Umar Mansha President / CEO Member Member Member Member

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Business Strategy & Development Committee Mian Mohammad Mansha Chairman Mr. S. M. Muneer Mr. Mian Raza Mansha Mr. MianUmerMansha Mr. Ahmad AlmanAslam Mr. Abdul Farid Bin Alias President / CEO Member Member Member Member Member Member

SBP Report Compliance Monitoring Committee Mr. S.M. Muneer Chairman Mr. Sarmad Amin Mr. Ahmad AlmanAslam President / CEO Member Member Member

IT Committee Mian Raza Mansha Mr. Tariq Rafi Mr. Aftab Ahmad Khan President / CEO

Chairman Member Member Member

Write Off & Waiver Committee Mian Muhammad Mansha Chairman Mr. Tariq Rafi Mr. Aftab Ahmad Khan Member Member

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Chief Financial Officer Mr.Salman Zafar Siddiqi Company Secretary Mr. Abdus S. Sami Audit & RAR Group Mr.Kamran Zafar Muggo

Registrar's and Share Registration Office M/s. THK Associates (Pvt.) Limited State Life Building No.3, Dr. Ziauddin Ahmed Road, Karachi Associated Companies Adamjee insurance company First Women Bank Ltd Euronet Pakistan

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MAIN DEPARTMENTS AND THEIR JOBS

There are three main departments in any branch of MCB GENERAL BANKING FOREIGN EXCHANGE ADVANCES/CREDIT

GENERAL BANKING
General banking deals with following services: REMITTANCE It is transfer of funds. Funds can be transferred in shape of pay orders, demand draft, mail telegram and telegraph transfer. Payments of fees of different organizations, fulfillment of tenders, and collection of funds are the main functions of remittance. Maximum part of general banking depends on this department. Issuance of different kinds of remittance: PAY ORDER Pay order is the property of person/company that has to take the benefit of the amount being pay ordered by the concerned person. Pay orders are made for the payment of fees, tender or issued for the payments of dealings. These are required for the proof of payments made between the bank and the customer in the favor of beneficiary. These are noted in printed block letters and yearly serial numbers are issued from computerized system. DEMAND DRAFT Demand drafts are made for the beneficiary for payments, funds etc, these are made for outstation branches of the concerned banks. An advice is also made for the confirmation of the draft send. These are also approved and safe way of sending amount to the beneficiary. These are also noted by computerized system and a serial number is issued from the computer system.

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University of Sargodha MAIL TRANSFER Mail Transfer is made with in the city for transfer of amount. An advice is also made for the confirmation of the draft send. These are also approved and safe way of sending amount to the beneficiary. These are also noted by computerized system and a serial number is issued from the computer system. PAYMENT OF PAY-ORDER AND DEMAND DRAFT Pay-Order and Demand Draft both could be paid in shape of physical payment of cash and in case transfer of amounts; the amount could be transferred in the beneficiary account. In case of physical payment authorized signature of beneficiary are taken for the proof of amount being paid to him and in case of transferring of amount authorized signature of the beneficiary are checked and verified for reducing risks. CANCELLATION OF PAY-ORDER AND DEMAND FRAFT Any type of Pay-Order / Demand Draft is cancelled by the permission and instructions made by the beneficiary. The customer could only cancel the pay order/ demand draft as the verified signatures of beneficiary are present on the advice. VOUCHERS Vouchers are made for records and they should be completed in all respects, the amount, date, its head, particulars, amount in words, authorized signatures and contra advice or voucher should be present. Vouchers are advice either debit or credit slips. They are contra of each other. If any voucher of debit is passed its contra credit voucher should also be passed for the balancing of accounts, their respective sheets. INWARD CLEARING It depends on those checks that are cleared inter branch and with in the city. As the concerned branch receive any type of clearing check first of all physical checking is taken place. For clearing procedure there should be two days margin. These cheques have their vouchers and the amount of the cheque and voucher should be identical. Than these cheques are stamped and noted on receiving sheet as well as feed in to the computerized system.

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University of Sargodha OUTWARD CLEANING It depends on those cheques that are cleared out side the city. For outward clearing cheques are send because the home branch has there accounts but checks are of other banks. Contras of these cheques are vouchers that are recorded in the home branch. ISSUANCE OF CHEQUE BOOKS Any account holder that has opened the account he/she could credit his/her account and for this purpose there should be a cheque book, so he/she could be able to credit the needed amount whatever he/she wishes. For the issuance of the cheque book a person is advised to fill a requisite slip with his/her full names and the account number with two verified signatures. These signatures are checked and then another requisite slip prepared by the bank staff send to the NIFT, and it issues the printed cheque books after completion of the procedure in two or three days. Account holder can take it by singing on the issuance register or if the absence of the account holder another person could also take the cheque book only if he/she has authorized signature of the account holder. When the cheque books are issued they are feed in the computer system from the requisite slip so when the cheques are given for the credit/transfer of amount they could checked. In this way neither the cheques could be repeated nor could the invalid cheques be claimed. ISSUANCE OF ATM CARDS Head office issues ATM (Auto Teller Machine) cards with their PIN (Personal Identification Number) codes and when the customer claims for their ATM card they are checked from the list that is also issued from the head office, and the claim is checked from the list and if the name is found than the cards are issued by taking a signature and their PIN codes are given to them by taking signatures on their ATM card forms. The ATM card has been activated by the number provided at or with the specific card.

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FOREIGN EXCHANGE
LCS ESTABLISHMENT Any company can provide its documents containing e-form, bill of lading, short shipment notice in case of short shipment, packaging list etc. the information provided from the documents is recorded in the LC establishment portion or section in the computer. PAYMENT OR RETIREMENT When the transactions have been completed then approved documents from the concerned bank are sent to the home bank for the payment or retirement of the LC. These transactions have recorded in the payment or retirement section of the computer. FOREIGN CURRENCY DEPOSITS The Foreign Currency Deposit relates with the foreign currency accounts, cash deposit or credit and foreign remittances. FOREIGN REMITTANCES In this we received the messages through SWIFT for foreign remittances, which we record in their respective accounts, if these are relates with Pak rupees than it was transferred in Pak rupees with the latest rate and if this relates to the foreign currency than it is dealt with accordingly. The amount has been credited to the respective account and the head office has been debited against it. After crediting the amount to the respective account. All the subsequent entries have been made in the registers and also in the computer record as the system now have been upgraded on computers. As we are reporting daily to the head office, so an annexure has been maintained and faxed to the head office. ADVANCES / CREDIT This department deals with the approval of different kinds of loans to different business entities. The loans, which are being approved by the department, are kept with some securities such as bonds, properties and any other type of asset, which is equally valuable or more than this as a guarantee. Every branch has its own limit, if the amount of loans is with in the limit of 34 | P a g e

University of Sargodha the branch then it is being approved by the branch but if the amount of loan is exceeding the limit then it has to make it approved by the head office. In this case the branch stored all the required papers and sent them to the head office for necessary action. If the head office approved the loan then mostly the period contains a year. And if the party requires more loan than after a year the loan has been re-approved required that they should have the limit. In case if the head office do not approve the loans then the return letter came back with the reasons of not approval of loan and if the reasons have been made approved by the concerned party then it could be sent again for approval. This whole process is recorded in the back remain with the bank until the party has not refunded all the amount of loan and bank has the authority to liquidate those assets for preventing it from loss.

Types of Advances
MCB provides advances, which are of two types. These are as following: Fund Based Advances Non Fund Based Advances

1. Fund Based Advances

Funds are given to customer according to their requirement against securities. These loan are given specially to traders, business, small industrial units, including cottage industries, agriculturists, thus ensuring an equitable distribution of bank credit among various sectors of the countrys economy. There are following types of advances, which are given to customer on fund basis. 1) Industrial loan 2) Commercial loan 3) Agricultural loan

Industrial Loan
Loans are given to industrial units including cottage industries up to or less than RS. 20 million. Loans and advances shall not exceed amount specified by marginal restriction on the type of 35 | P a g e

University of Sargodha securities offered. Industrial loans are granted to the manufacturing section of the economy including finance for fixed investments and working capital requirements of small industries. Loan Period Loans are allowed for a maximum period of 5 years including a maximum grace period of 1 year. In special case up to 10 years also, depending upon the merit of the cas

Commercial Loan:
Total principal amount of loans to a single enterprise/borrower shall not exceed RS. 0.5 million. Maximum maturity is 3 years, depending upon the nature and type of advances, decided upon case to case basis. .Agricultural Loan Bank provides the agriculture advances in order to enhance and support the agriculture sector of the country. Banks Agriculture division deals with the agriculture advances. These advances are of following types: 1) Farm Credit 2) Non Farm Credit Farm Credit These are the credits provided by the MCB or purchases of inputs for development of agriculture sector. Following are two main Sub classes of Farm credit: Production Finance These are short term loans. These loans are provided to farmers for purchases of different types of input, for example seeds, fertilizer, and pesticides.

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WORK PERFORMED BY ME AS AN INTERNEE

I joined Muslim Commercial Bank, University Road Branch, Sargodha.15 July 2011. First day I reached there at 9O clock and reported to manager who introduced me about the functioning of the branch and its staff. During these six weeks I worked in different sections of the branch to learn the maximum practices of banking system. GENERAL BANKING First of all, I was asked to work in different sections of General Banking. Here I was attached Miss.Sadia who has good command on this section. Here we dealt with new customers who wanted to get information about the branch and will to deal with the branch. This is a very interesting department because here we met people of different types and deal with them accordingly. In this section, I observed the following functions: CHEQUE AT COUNTER.: A cheque is presented on the counter with the two signatures of the bearer on the back of the cheque. Operations manager verifies the following points: The cheque number Cheque Date The cheque signature with the signature specimen card position in the officer signature received at the time of opening the customers account in the presence of the officer Cheque amount in figure and words Branch stamp in the front of the cheque Check the nature of cheque, bearer cheque, cross cheque etc. CHEQUE PAYMENT PROCEDURE. Receiving and scrutinizing the cheque Fixing the stamp Scripting and receipt by the authorized officer ISSUANCE OF DEMAND DRAFT

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University of Sargodha A demand draft is provided to the client in whom he has to specify that on which bank it is drawn. The amount both in words and figures is written on the demand draft. DEPOSIT DEPARTMENT: Deposit department deals with current, saving fixed accounts for a long period. In current account the bank does not offer any interest you can deposit or withdraw any amount during banking hours. In PLS account we can only withdraw up to Rs. 25OOO/ without notice if you want to withdraw more than a notification must he given to the bank. In Fixed account people normally of old age are more interested because they get a lump sum amount every month as a markup or interest. These accounts are normally for two to five years. .CUSTOMER SATISFACTION OFFICER:

Here in customer satisfaction section,I provided information to the customers required by them about bank like, >filling of deposit slip >filling of online form >opening of new account >filling of requisition for new cheque book >issuance of cheque book >issuance of ATM card

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FINANCIAL ANALYSIS
Balance Sheet Of MCB 2007 Assets
Cash and balances with treasury banks Balances with other banks Lending to financial intuitions Investments Advances Operating fixed assets Deferred tax assets Other assets
32,465,976 6,577,017 21,081,800 63,486,316 198,239,155 9,054,156 172,373 11,031,450 342,108,243

(From 2007 to2011) (Rupee in 000)

2008
39,683,883 3,807,519 1,051,372 113,089,261 218,960,598 16,024,123 17,868,761 410,485,517 10,479,058 39,406,831 292,098,066 479,232 1,180,162 11,722,493 355,365,842 55,119,675 6,282,768 34,000,638 5,130,750 45,414,156 9,705,519

2009
39,631,172 4,043,100 4,100,079 96,631,874 262,135,470 17,263,733 19,810,476 443,615,904 10,551,468 22,663,840 330,181,624 437,137 21,345,781 385,179,850 58,436,054 6,282,768 36,768,765 9,193,332 52,244,865 6,191,189

2010
38,774,871 6,009,993 3,000,000

2011
45,407,183 1,478,569 4,401,781

167,134,465 213,060,882 253,249,407 254,551,589 18,014,896 20,947,540 _ 23,040,095 27,705,069 509,223,727 567,552,613
10,265,537 8,201,090 44,662,088 25,684,593 367,604,711 431,371,937

Liabilities
Bills payable Borrowings Deposits and Other accounts Sub-ordinate loans Liabilities against assets subject to finance lease Deferred tax liabilities Other liabilities
7,089,679 23,943,476 257,461,838 1,597,440 _ _ 11,171,496 301,263,929 40,844,314 5,463,276 24,662,426 5,530,973 35,656,675 5,187,639

_ _

Net assets Represented by:

Share capital Reserves Unappropriateed profit

4,934,018 3,196,743 15,819,082 16,092,319 439,483,714 488,348,404 69,740,013 79,204,209

6,911,045 38,385,760 15,779,127 61,075,932 21 8,664,081 69,740,013

7,602,150 40,162,906 21,414,955 69,180,011 10,024,198

Surplus on revaluation of assets

40,844,314

55,119,675

58,436,054

79,204,209

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Profit & Loss Account of MCB (From 2007-2011)

2007 Markup/ return/ interest earned Mark up/ return/ interest expense Net mark up/ interest income - Provision for dimininution in the value of investment - Provision against loans and advances - Bad debts written off directly 25,778,061 4,525,359 21,252,702 121,197 1,014,405 47,000 1,182,737 20,069,965

2008
31,786,595 7,865,533 23,921,062 105,269 2,959,583 199 3,065,051 20,856,011

2009
40,043,824 11,560,740 28,483,084 2,683,994 1,335,127 4,019,121 24,463,963

2010
51,616,007 15,841,463 35,774,544 1,484,218 5,796,527 41,576 7,322,321 28,452,223

2011 54,821,296 17,987,767 36,833,529 444,476 3,100,594 52,047 3,597,117 33,236,412

Net mark up/interest income after provisions Non mark up/interest income Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain on investment Unrealized loss on revaluation of investments classified as held for trading Other income Total non mark up interest income

2,311,235 811,801 692,010 605,865 _

2,634,610 632,300 693,408 1,500,865 (13,105)

2,953,394 617,554 727,564 740,429 (103,198)

3,331,856 459,741 341,402 773,768

4,129,540 543,906 632,346 411,834 _

57,0505 4,991,416

563,213 6,011,291

855,697 5,791,440

736,118 5,642,885

547,680 6,265,306

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Income after interest income Non mark up/interest expense - Administrative expenses - Other proposition/write off -Other charges Total non mark up/ interest expense Extra ordinary/unusual items Profit before taxation Taxation-Current year -Prior years -Defferd Profit after taxation Inappropriate profit brought forward Transfer from surplus on revaluation of fixed assets 2,506,138 26,867,302 30,255,403 34,095,108 39,501,718

6,482,592 11,411 66,708 6,560,711

5,022,416 (3,743) 540,594 5,559,267

7,546,878 23,135 817,824 8,387,837

10,107,189 142,824 690,150 10,940,163

12,173,942 88,261 986,440 13,248,643

_ 18,500,670 5,701,443 593,497 63,332 6,358,272 12.142,398

21,308,035 6,442,356 (1,294,473) 894,590 6,042,473 15,265,562 5,530,973

21,867,566 7,341,257 (864,824) 16,533 6,492,966 15,374,600 5,130,750

_ 23,154,945 26,253,075 7,703,305 8,027,433 (2,232,226) 2,188,569 1,352,467 7,659,648 9,379,900 15,495,297 16,873,175 9,193,332

11,855

21,319

22,324

5,542,828 Profit available for appropriation Basic/diluted earning per share 20,808,390 24.30

5,152,069 20,526,669 22.25

9,215,656 24,710,953 22.42

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COMMON SIZE ANALYSIS

Vertical Analysis of Balance Sheet(From 2007 to 2011)
Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Other assets
Total Assets

2011
8% 0% 0% 48% 35% 3% 5% 100% 0% 0% 0% 1% 6% 75% 1% 3% 86% 1% 6% 4% 2% 100%

2010
8% 0% 1% 38% 45% 4% 5% 100% 0% 0% 0% 2% 5% 76% 1% 3% 86% 1% 7% 4% 2% 100%

2009
8% 1% 1% 33% 50% 4% 5% 100% 0% 0% 0% 2% 9% 72% 1% 3% 86% 1% 8% 3% 2% 100%

2008
9% 1% 1% 22% 59% 4% 4% 100% 0% 0% 0% 2% 5% 74% 0% 5% 87% 1% 8% 2% 1% 100%

2007
10% 1% 0% 28% 53% 4% 4% 100% 0% 0% 0% 3% 10% 71% 0% 0% 3% 87% 2% 8% 1% 2% 100%

Liabilities and stockholders' equity

liabilities Customers' deposits Due to other banks Acceptances outstanding Pro t tax payable Accrued interest payable Other liabilities

Total Liabilities
stockholders' equity

Share capital Reserves Unappropriated profit Surplus on revaluation of assets - net of tax
Total Liabilities & stockholders' equity

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Vertical Analysis of Income Statement (From 2007 to 2011)

Particulars Mark-up Earned Mark-up expensed Net Mark Up Income provision & write off Net income after provision Non mark-up income Non mark-up expense profit before tax taxation profit after tax

2011
89% -31% 58% -5% 53% 11% -22% 41% -16% 25

2010
90% -29% 60% -6% 54% 10% -22% 43% -15% 28%

2009
90% -28% 62% -13% 49% 10% -19% 40% -13% 27

2008
87% -25% 62% -9% 53% 13% -18% 48% -14% 34%

2007
84% -21% 63% -8% 55% 17% -16% 56% -16% 40%

COMMENTS Vertical analysis of Balance Sheet:

Cash is Increasing from year 2006 to 2007 While it has a decreasing trend in cash; it shows that the liquidity position of the bank is going to be weak, so it is alarming sign for the bank. Therefore bank should take necessary steps according to the position. Increase in money at call and short notice, it means that customers of bank are very punctual in making payments. Therefore it is good sign for the bank. In the field of investment there is increasing trend with the passage of time. It is common term of finance more investment more return.

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University of Sargodha LIABILITIES

There is decreasing trend in deposit later on it increases in 2011 in deposits and other accounts. Borrowing isincreasing in2008 and decreasing in 2009 but there is increasing trend in the year 2010. Although it is seeing that banks borrowing is increasing with the passage of time which is not a good sign but there is a positive thing in this behalf, usually banks borrow money at that time when they would have to give it for earning more profit. Bills payable increase in 2008 it is negative sign while later it remain same.

Vertical Analysis of Income Statement: INCOME

Interest earned Increase which is a Positive sign. As we know that banks provide many facilities other than money lending and borrowing. Banks receive fee, commission etc. for these services. Therefore fee and commission income are increasing which is a favorable signs.

EXPENSES
Return on deposit increase which decreases the profit. Administration expenses are increased but no alarming rate.

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Horzontal Analysis of Balance Sheet (From 2007 to 2011)

Assets Cash and balances with treasury banks Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Other assets
Total Assets

2011
134% 60% 91% 280% 103% 137% 181% 159%

2010
114% 39% 419% 188% 116% 131% 155% 138%

2009
98% 158% 285% 148% 116% 112% 129% 124%

2008
100% 106% 390% 85% 120% 108% 111% 108%

2007
100% 100% 100% 100% 100% 100% 100% 100%

Liabilities and stockholders' equity

liabilities Customers' deposits Due to other banks Acceptances outstanding Pro t tax payable Accrued interest payable Other liabilities

90% 99% 168% 533% 157%

98% 65% 148% 418% 137%

78% 113% 126% 271% 135%

101% 58% 113% 37% 182%

100% 100% 100% 100% 100%

Total Liabilities
stockholders' equity

Share capital Reserves Unappropriated profit Surplus on revaluation of assets - net of tax
Total Liabilities & stockholders' equity

133% 124% 553% 102% 159%

121% 118% 417% 103% 138%

110% 113% 308% 89% 124%

100% 108% 179% 64% 108%

100% 100% 100% 100% 100%

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Horizontal Analysis of Income Statement(From 2007 to 2011)

2007
Markup/ return/ interest earned Mark up/ return/ interest expense Net mark up/ interest income Provision for bad debts Net mark up/ interest income after provision Total non mark up interest income Non mark up/interest expense Profit Before Taxation Taxation Profit after taxation 100% 100% 100% 100% 100% 104% 122% 142% 166%

2008
123% 173% 113%

2009
155% 255% 134%

2010
200% 350% 168%

2011
213% 397% 173%

100% 100% 100% 100% 100%

120% 85% 115% 95% 126%

116% 128% 118% 102% 127%

113% 167% 125% 120% 128%

126% 202% 142% 148% 139%

COMMENTS on HORIZONTAL ANALYSIS INCOME

Interest income increase with great proportion with is favorable. It means that interest

received by the bank is increasing with the passage of time. It is not good for a banking company. As we all know that banks provide many services for their customers and also act as a agent of the customer. The banks receive fee and commission after their services; it is a main source of bank to receive fee and commission from their customers. In case bank is taking more fees as compared to previous years. This is good for the bank. EXPENSE

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Return on deposit decreases which shows good sign and it is due to decrease in return
rate. Admin and diminution and provision against non performing loan increasing turned that is favorable.

Bad debts increased with huge amount not positive sign. Profit before taxation has increased but not with greater proportion. Tax increases
which are not bad because it is interrelated with profit, if profit increased, tax also increase

RATIOS ANALYSIS
Ratio analysis is an important and age-old technique of financial analysis. Ratios are important and helpful in the reference that: These simplify the comprehension of financial statement and tell the whole story of changes in the financial conditions of the business. These provide data for inter-firm comparison. The ratios highlight the factors associated with successful and unsuccessful firms, also reveal strong and weak firms. These help in planning and forecasting these can assist management in its basic functions of forecasting, planning, coordination and control. These help in investment decision in case of investor and lending decision in case of Bankers etc.

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Ratio Analysis
Particulars Non-interest income to total income Gross Yield on Average Earning Assets Return on average equity (ROE) Current Ratio Return on average assets (ROA) Return on Capital Employed (ROCE) Earnings per share (after tax)** Dividend Yield ratio (based on cash dividend) Dividend Payout ratio Market value per share Price to earning ratio Price to book value ratio (excl. intangible assets) Advance to deposit ratio operating profit ratio Cash Dividend Dividend cover ratio 2011
15.41% 12.81% 26.23% 1.2120368 3.18% 26.23% 23.23 8.92% 55.97% 134.6 5.79 1.43 23.85138 46.20% 120% 1.94

2010
14.54% 11.68% 25.91% 1.3864191 3.13% 25.91% 20.18 5.03% 56.32% 228.54 11.33 2.78 24.79564 47.89% 115% 1.75

2009
13.62% 12.52% 27.35% 0.985336 3.25% 27.35% 18.53 5.01% 53.52% 219.68 11.86 3.02 30.88026 44.86% 110% 1.68

2008
16.90% 11.07% 31.49% 1.228845 3.60% 31.49% 18.39 9.14% 51.08% 125.81 6.84 2.02 24.84456 54.61% 115% 1.6

2007
21.23% 10.00% 37.66% 1.037921 4.06% 37.22% 18.26 3.13% 51.45% 399.95 21.91 2.4 20.89522 67.03% 125% 1.46

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University of Sargodha Return on assets (R.O.A) It measures the overall effectiveness of management in generating profits with its available assets. The higher the Return on total assets better will be the performance. It is calculated as follows: Return on assets (ROA)= (net profit/ average assets )*100 Since the computed value of ROA is showing an increasing trend in from in Year 2007. Then it tends to decrease in From Year 2008 to 2010. The ROA of the firm is 3.18 % in 2011. It is higher than the previous year. It shows that firm generates Rs.3.18 for each Rs.100 of the investment which is very poor for the company progress. Return on Equity (R.O.E) Return on equity, defined also as return on net worth (RONW), reveals how much profit a company earned in comparison to the money a shareholder has invested. Return on equity, explained as a measure of how well a company uses investment dollars to generate profits, is more important to a shareholder than return on investment (ROI). It tells investors how effectively their capital is being reinvested. A company with high return on equity is more successful to generate cash internally. Investors are always looking for companies with high and growing returns on equity. However, not all high ROE companies make good investments. it is computed as follow: Return on equity= (Net income/total equity)*100 Since the computed value of return on equity show decreasing trend from From Year 2008 to 2010 but in 2011 it will increase up to some extant from last year. The overall trend in this ratio is declining due to increase in equity capital but the return is very low. The return is low due to the poor management of policies or application of strategies.

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University of Sargodha Earnings per Share (E.P.S) Earnings per share ratio (EPS Ratio) is a small variation of return on equity capital ratio and is calculated by dividing the net profit after taxes and preference dividend by the total number of equity shares. It is computed as: (EPS): (earning available for common stockholders / no. of share outstanding) Since the computed value of EPS is increasing from year 2007 to year 2011, due to increase in revenue as compared to expenses. In 2007 it is increasing due to increase in revenue as compare to expenses and shows the overall increasing trend which shows

The progress of the company and it maintains this ratio more than Rs.20 which is good for the investors. Advance to deposit ratio This ratio shows the relationship between the advances and the deposits and tells how much deposits are made with respect to advances. It can be computed as follow: Advance to deposit ratio = (advances / deposits) * 100 From the computed values for the period 2007 to 2011 data shows that the results will be positive trend and increasing up to 2009 but decreases in 2010 and 2011 this is due to the change in the economic conditions of the country because in that period the electricity crises is at its peak and investors are discouraged to take loans from banks and which shows the negative trends in these years. Return on capital employed A ratio that indicates the efficiency and profitability of a company's capital investments .
It is calculated as follow:

Return on capital employed (ROCE) = (E.B.I.T / Total assets Current liabilities) It should be higher than the companys borrowing rate, the higher the rate higher will be the earnings. From the above calculated ratio for the period 2007-2011. We will see that this rate will be continuously decreased from year to year which shows that the company is failed to efficiently utilized the borrowed funds so that profitability decreases. This shows a bad mark for MCB management. 50 | P a g e

University of Sargodha Dividend yield ratio A financial ratio that shows how much a company pays out in dividends each year relative to its share price. Dividend yield is calculated as follow: Dividend yield = annual dividend per share/ price per share It is a way to measure how much cash flow you are getting for each dollar invested in an equity position. From the above mentioned results for the period 2007-2011. It is higher In the 2008 about 9.14% and again decreases in 2009 to 5.01% this ratio was again increase in the period of 2010 and 2011. In 2009 decline in the ratio arise due to the low earnings for which directors considered to issue a little dividend or company want to increase its retained earnings so that they issue fewer dividends then the previous year. While in last year 2011 the company having 8.92% results which shows higher dividend yield and became a positive sign for investors and alsofor MCB. Dividend payout Ratio

The amount of earnings paid out in dividends to shareholders. The payout ratio is used to determine what companies are doing with their earnings and how much they pay in the form of dividend from their earnings. It can be computed as follows Payout Ratio: Dividend per share / Net Income The above results show that the company shows overall increasing trend from the period 2007-2011. But the payout ratio decreases in 2008 after which it will increases up to 2011. Such decrease arises due to the reason that in such time period the company focus on increasing their retained earnings and hence they issue few less dividend then the previous year. Price-Earnings ratio The P/E ratio is a measure of price paid for a share relative to annual earnings per share. This ratio is used by investors to compare the stock of one company with other. It is considered that the stock with the higher P/E ratio is better then others. It is computed as follows: Price Earnings ratio (P/E) = Market price per share / Annual earnings per share 51 | P a g e

University of Sargodha In MCB the P/E ratio is continuously decreasing from period 2008-2011. Which shows that the company has less earnings against the price of their shares, bonds etc. this happens due to the companys wrong choice of investment proposals or the portfolios due to which the actual results becomes low Price Book value ratio A ratio is used to compare the stocks market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarters book value per share. It is computed as: P/B ratio= stock price/(total assets intangible assets & liabilities) The P/B ratio of MCB is declining in 2008, 10, 11, which shows that in such years the share of MCB is undervalued and such undervaluation of stock is due to the improper projects, poor performance, low profitability etc. Current Ratio Current ratio may be defined as the relationship between current assets and current liabilities. This ratio is also known as "working capital ratio". It is a measure of general liquidity and is most widely used to make the analysis for short term financial position or liquidity of a firm. It is calculated by dividing the total of the current assets by total of the current liabilities. [Current Ratio = Current Assets / Current Liabilities] The MCB current ratio is continuously decreasing from 2008 to 2009. And now in current position company is not able to fulfill its current liabilities. Companys trade debts are also continuously increasing from 2007 to 2011. It means company is investing more on trade debtors and company current liabilities dramatically increases in 2011 which is also a cause of unfavorable current ratio.

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ANALYSIS
SWOT ANALYSIS

STRENGTHS
MCB is Successive and Market oriented. MCB investing huge sums on HR development and training. Customer default rate is lower as compared to other banks. MCB has the largest ATM network in the country. Meeting the challenges of latest Technology by introducing Smart card remit express, mobile banking etc. One of the major strengths of MCB is that it has very stable deposit base. MCB is largest private bank in Pakistan with around 1000 branches, which cover almost every part of Pakistan. The bank enjoys competitive advantage over other banks in Pakistan. The bank enjoys competitive profitability in the industry. MCB has captured majority of potential customers in Pakistan. MCB has the accounts of big organizations like OGDCL, PTCL, EFU, PTC etc.

WEAKNESSES:
Low motivational level; non-aggressive marketing. Employees dissatisfaction due to ill treatment and improper reward system.

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Interest rate is very meager. It is not having greater no. of branches abroad. Though ATM network is the largest in Pakistan, still some potential areas dont have the ATM. Some management positrons needed are not professional.

OPPORTUNITIES:
Leasing sector is growing in Pakistan for the last two to three years which provides opportunity to MCB to go ahead in this area as well. MCB is providing Consumer Finances at comparatively lower rates which paves a way to grab more customers Financing to small/medium cottage industries will definitely increase its advances and profitability as well. Islamic Trading Based Banking can enhance the business of the bank.

THREATS
Other private commercial bank with sound profitability is also a threat to MCB e.g. UBL, Alfalah, HBL etc. For the last of many years, Pakistan is facing economic and political instability which is a big threat. Afghan war and Iraq war has a deep effect on the economy of Pakistan, which may affect MCB. Foreign banks are flourishing in field of consumer financing. People dont prefer banking culture. They mostly prefer cash transactions

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CONCLUSION:
With Cooperation of all branch members, I have been able to learn and experience many new things related to the banking sector and the banks workings. I am able to handle the public with respect to many different workings on many different instances and also in account opening for customers and can handle many other tasks as well. Finally I concluded that MCB is a good organization for a person for his long term career workings. Overall working and environment of the bank is very comfortable and the staff is very helpful and respectful of each other and it still maintains a professional environment. Management of the bank is very strong.Employees of MCB Fatimah Jinnah Road branch, Sargodha work more than their working hours and all the workings take place in a very friendly atmosphere that does not induce pressure on the person working there. It also shows their loyalty and commitment to the organization. This branch of MCB relatively small and has climbed its way up very quickly and all that only because of the employees efforts and consideration for each other Understanding and the effective management of the human resources is the most difficult challenge faced not only by the bank but by all the organizations. Even though the people have been sacrificed in the new organizational developments, it is becoming clear that the true lasting competitive advantage comes through human resources and how they are managed. MCB seems to not focusing on this highly critical issue as the job satisfaction level of the employees working at MCB, was quite low. The attitude of the bankers with all of their customers is not the same, they pay more attention and good service to some of the customers and neglect a major portion of them. Some of the customers approach to the bank officials and get their work done before others; it is not a good practice

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

Promotion and Mass Media Publicity MCB Bank can improve its Marketing strategies to acquire more promotion and mass media publicity by the use of effective channels of promotions like TV, Newspaper Advertisements. It can also improve its magazine publication that it releases each month. Better Reward System Better reward system is one of the most important requirements in order to reduce the problem of Employee retention and improve Employee motivation. Continuous Training Of Employees There is lack of proper and continuous training of employees that needs to be solved. Creation of enhanced performance appraisal system. Proper use of stationary. Implementation of enhanced Marketing system. Salary Packages Improvement should be made in the salary package of the employees as it is comparatively less when compared to the other operating banks in Pakistan SYMBOL SYSTEM To make the SYMBOL system more efficient and make sure its connectivity all the time in order to provides more convenience to customers

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Limitation: Time constraints are the big limitation of this report because the time was not enough to detail explain the MCB analysis. Non availability of the proper information Non availability of the confidential documentation from MCB due to working as an internee. As an internee we just can see the Rosy picture of the organization not permitted to go the security and management areas.

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BIBLIOGRAPHY:
References: Branch Staff Annual Reports Mr. Khawaja Khurram Shahzad (Manager Distt.Council Branch) www.mcb.com.pk www.wikipedia.org www.scribd.com www.google.com

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