INTERNSHIP REPORT

MCB BANK LTD

Submitted By : Rida Fatima

Roll no : ( F19-BSBF-1011)

Program : BS Banking & Finance

Section : 2019-23 ( Morning )

Supervisor Name Dr. Zeshan Anwar

DEPARTMENT OF COMMERCE
UNIVERSITY OF OKARA

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INTERNSHIP REPORT
MCB BANK LTD

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 DEDICATION

I dedicate all my education or efforts to my parents who supported me till reach here and
always have my back. In addition I would like to dedicate my all work efforts to my respectable
teachers also who were there for me helping me and providing me guidance at every step and
support me developing my personality.

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 ACKNOWLEDGEMENT

In the name of ALLAH, the most Kind and most Merciful. First of all, I’m
grateful to ALLAH ALMIGHTY, who bestowed me with health, abilities and
guidance to complete the project in a successful manner, and without HIS help I
was unable to perform this task. More than anybody else. He is our light to
guidance and knows us more than ourselves. He always support in the difficulties
and the problems.

I would like to acknowledge my esteemed professor, Dr. Zeeshan who helped me

and supervised me making my internship report with him never-ending support and
untiring efforts. He was always there to guide me whenever I halted in my track to
progress and his encouragement always worked as morale booster for me. I have
found him very helpful while discussing the tricky issues in this dissertation work

Specially thanks to the MCB Finance department who give me a chance to work
there and give me good treatment and time. I would also like to thank Mr Aqeel
Abdulah (Operational Manager MCB Bank) and Mr Mohsin (Branch Manager) for
providing me the opportunity to have an excellent learning experience during my
internship.

I also pay my gratitude and thanks to my siblings for their gentle encouragement
and support.

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 UNIVERSITY OF OKARA
Department of Commerce

LETTER OF UNDERTAKING
This internship report was submitted by RIDA FATIMA (F19-BSBF-1011) for
the partial fulfillment of the requirements of the degree of;

BS Banking & Finance

Session 2019-2023
(Specialization in Finance)
And is hereby accepted by the evaluation committee.

Internship Supervisor __________________

HOD / Coordinator __________________

External Examiner __________________

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 EXECUTIVE SUMMARAY
Pakistan after getting its independence, did not inherit a strong banking industry and since then
saw several events in the industry, like the nationalization of banks in the 1970’s. However
today, the banking industry of Pakistan has been growing over the past few years, mainly
because of the consistent policies implemented by the Government of Pakistan, including the
privatization of banks in Pakistan. Also, the State Bank of Pakistan’s, monetary policy has been
very friendly toward the banking industry.

There are number of different banks established in Pakistan, including local incorporated
commercial banks, foreign incorporated commercial banks, development financial institutions,
investment banks, discount & guarantee houses, housing finance companies, venture capital
companies, micro finance banks and Islamic banks.

MCB Bank Limited is a Pakistani multinational commercial bank which is based in

Lahore, Punjab, Pakistan. The majority of shares are owned by Pakistani conglomerate
Nishat Group and Malaysian bank Maybank. The bank has a network of 1,600 branches in
Pakistan.

It was incorporated by the Adamjee Group on July 9, 1947. The bank was established to
provide banking facilities to the business community of South Asia. The bank was
nationalized in 1974 during the government of Zulfikar Ali Bhutto. This was the first bank
to be privatized in 1991 and the bank was purchased by a consortium of Pakistani corporate
groups led by Nishat Group. As of June 2008, the Nishat Group owns a majority stake in
the bank. The current President/CEO of the bank is Shoaib Mumtaz.

The group has a presence in the business sectors of the country such as banking, textile,
cement, and insurance. Mian Muhammad Mansha is chairman of both the group and MCB.
The bank has established an Islamic Banking unit to offer Shariah-compliant products and
services, with dedicated Islamic banking branches in six cities

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 Table of Contents
1.History and Background of Organization:.................................................................................9
1.1.Objective of studing organization ........................................................................................ 10
1.2 Vision Statement: ................................................................................................................ 10
1.3 Mission Statement: .............................................................................................................. 10
1.4 Core Values:........................................................................................................................ 10
2. Objective of MCB ................................................................................................................. 11
3. Branch Network: ................................................................................................................... 12
4. Organizational structure of MCB: ........................................................................................ 113
4.1 Product line ......................................................................................................................... 14
4.2 Other Services: .................................................................................................................. 115
5.General Profile of MCB Bank: ............................................................................................... 15
5.1. Shariah supervisory board : ................................................................................................ 15
5.2. Business Segments: ............................................................................................................ 16
6. Departments/Sections of MCB Bank Limited: ....................................................................... 16
6.1. Cash department: ................................................................................................................ 16
6.2 Deposit Department:............................................................................................................ 16
6.3 Advance & credit department : ............................................................................................ 17
6.4 Clearing Department : ......................................................................................................... 17
6.5 Remittance department: ....................................................................................................... 17
7 .Copurate banking : ................................................................................................................ 18
7.1 Agriculture finance .............................................................................................................. 18
8. Correspondent banking:......................................................................................................... 19
8.1 Asset managment : .............................................................................................................. 19
9. Financial Statement Analysis: ............................................................................................... 20
9.1 Horizental analysis : ............................................................................................................ 22
9.2 Vertical analysis : ................................................................................................................ 24
9.3. Ratio analysis: .................................................................................................................... 27
10. SWOT Analyis of MCB: ..................................................................................................... 33
10.1 Strenght :........................................................................................................................... 34
10.2 Weakness .......................................................................................................................... 34

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10.3 Opportunities:.................................................................................................................... 35
10.4 Threats: ............................................................................................................................. 35
11. First Two Weeks: ................................................................................................................ 36
11.1 Account Opening:............................................................................................................. 36
11.2 .Account opening Form: .................................................................................................... 37
11.3 Types of accounts: ............................................................................................................. 37
12. Third Week: ........................................................................................................................ 38
12.1 Dormancy removal file: ..................................................................................................... 39
12.2 File for Notice of closing of account: ................................................................................. 39
12.3 File of link account: ........................................................................................................... 40
12.4 Phone banking file: ............................................................................................................ 40
12.5 File of on demand bank statement: .................................................................................... 40
12.6 Change of address: ............................................................................................................ 40
12.7 Leave record:..................................................................................................................... 40
13. Fourth Week: ...................................................................................................................... 40
14. Fifth Week: ......................................................................................................................... 40
15. Sixth Week:......................................................................................................................... 41
16. Recommendations: .............................................................................................................. 42
17. Conclusion ......................................................................................................................... 43
18. References .......................................................................................................................... 44

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1. History and Background of Organization:
In 2005, the name of the bank was changed from "Muslim Commercial Bank Limited" to
"MCB Bank Limited". This need was felt because the bank was already known and popular as
"MCB" among its clients and the public, and most people MCB today, represents a bank that has
grown with time and experience. A major financial institution, in scope and size, it symbolizes a
fully growing tree evergreen, strong, and firmly rooted. MCB is one of the leading banks of
Pakistan with a deposit base of about Rs. 280 billion and total assets of around Rs.300 billion.

The Bank has a customer base of approximately 4 million, a nationwide distribution network of
over 1,000 branches and over 450 ATMs in the market.

During the last fifteen years, the Bank has concentrated on growth through improving service
quality, investment in technology and people, utilizing its extensive branch network, developing
a large and stable deposit base.

The bank activity 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.would prefer it too as MCB instead of its full name.

In 2008, Maybank (Malaysia) announced the acquisition of 20% of the stake in MCB Bank
Limited's equity by purchasing a little more than 94 million ordinary shares from the Nishat
Group. This transaction amounted to MYR 2.17 billion (US$686 million) in value. The price
paid by the Maybank was Pak. Rupees 470 per ordinary share of MCB. As per Maybank, “The
acquisition is in line with Maybank's strategy, as Malaysia's financial services leader in the
region, to build its presence in key growth markets across the region.”

In 2000, the bank established its Islamic Banking Business Group and opened its first branch in
2003, by 2014 the Islamic Banking network had grown to 34 branches. This was in addition to
and separate from bank's 1,100 conventional banking branches. In 2015, given the potential of
Islamic Banking business, the bank proceeded to establish an independent but wholly owned
subsidiary bank named "MCB Islamic Bank Limited", referred to as "MIB "in short. MCB Bank
Ltd appointed Raza Mansha as its first chairman of the board of directors and Ali Muhammad

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Mahoon as the first President of the MIB. Nationalization, In January 1974, the Government of
Pakistan nationalized MCB following the Banks(Nationalization) Act 1974. MCB was the only
bank which was nationalized solely asneither it nor any other bank being merged with it due to
its consistent and firm policiesand its sound position. Privatization, A wave of economic reforms
swept Pakistan in the lattes introducing the Need for privatization of state owned banks and
companies. This was the first bank to be privatizedin 1991 and the bank was purchased by a
consortium of Pakistani corporate groups led by Nishat Group. Nishat Group is one of the
leading and most diversified business groups inPakistan. The group has strong presence in the
most important business sectors of thecountry such as banking, textile, cement and insurance.

1.1 Objectives of studying organization :

Strategic Objectives :
 Delivering remarkable returns to stakeholders, sustainable performance, exceeding
market and shareholder expectations
 Providing value added services through operational expansion, geography and
upgraded system
 Building a corporate culture of equality, trust and team spirit as we remain dedicated
to being a socially responsible organization

1.2 Vision Statement:

To be the leading financial services provider partnering with our customers for avmore
prosperous and secure future.

1.3 Mission Statement:

We are a team of committed professionals, providing innovative and efficient financial
solutions to create and nurture long-term relationships with our customers. In doing so, we
ensure that our shareholders can invest with confidence in us.

1.4 Core Values:

1.4 .1 Integrity :

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

1.4.2 Respect :

We respect our customers’ values, beliefs, culture and history. We value the equality of gender
and diversity of experience and education that our employees bring with them. We create an
environment where each individual is enabled to succeed.

1.4.3 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.

1.4.4 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.

1.4.5 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.

2. Objective of MCB :

2.1 Creating and Managing values :

The first objective of MCB Bank limited is to create and manage the values, which is one of
the back bones of the objective of any well organized and managed organization.

2.2 Human capital :

The second objective of MCB Bank is to take care of the Human capital, which is a necessary
thing for the development and prosperity of any well established organization.

2.3 Best place to work :

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 The third objective of MCB Bank Limited is to make it a place, which is much feasible and
comfortable for employees of the bank. The MCB is always conscious in developing such place
where employees of the bank feel easiness.

2.4 Technology :

The forth objective of MCB Bank Limited is to bring new and latest technology in the
operations of the bank. AT MCB, technology has a direct relation with your needs; it is a mean
for creating value and convenience for the customer. Over the last few years MCB has invested
heavily into strengthening its technology backbone.

3. Branch Network:

Table # 1

MCB BRANCHES

Area head south 180 branches

Area head center 360 branches

Area head north 370 branches

Commercial sector

Area head karachi 40 branches

Area head south 45 branches

Area head central

punjab 78 branches

Area head north 58 branches

Corporate sector

south karachi 9 branches

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North Islamabad 3 branches

Main karachi 1 branch

Central Lahore 7 braches

3.1 Organization structure :

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 Figure # 1

4. Products/Services:

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  Current Account

 Business Account

 Basic Banking Account

 Current Life Account

 MCB Asaan Account

 Fun Club - Banking For Kids

 Foreign Currency Current Account

 MCB One Account

 MCB Smart Business Account

 MCB Ladies Current Account

 MCB Pensioners Current Account

 MCB Senior Citizen Current Account

 MCB Asaan Remittance Account

 MCB Burqraftaar Remittance Account

4.1 Other Services:

 Term deposits.
 Meeezan Andan certificate.
 Home remittemces
 Bill payments

5.General Profile of MCB Bank:

MCB Bank stands amongst the top Islamic Banks globally. Islamic Finance News – Malaysia
has awarded the Bank with two global awards for the year 2015 - ‘Best Islamic Retail Bank’ and
a third position in the Overall Islamic Bank’s category. The Bank has also been rated as the ‘Best
Islamic Bank of the Region’ per South Asian Disclosure Index.

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5.1 Sharia Supervisory Board:

The letter and transmittal of Islamic banking rest upon absolute adherence to the Shariah. The
foundations of strong sharia underpinning at MCB bank were laid from the beginning. A world-
renowned sharia supervisory board and a highly qualified in house Shariah advisor are
fundamental factors of bank core USP.The primary role of this board is to maintain and further
strengthen this commitment and to ensure strict sharia compliance in all bank operations. The
members of sharia supervisory board of MCB bank are renowned internationally scholars,
serving on the board of many Islamic banks operating in different countries.

5.1.1 The members of Board are:

 Justice (Retd.) Muhammad Taqi Usmani (Chairman)

 Dr. Abdul Sattar Abu Ghuddah
 Sheikh Essam M. Ishaq
 Dr. Muhammad Imran Ashraf Usmani (Advisor)
5.1.2 Board of Directors:
The board of directors of MCB bank are:
 H. E. Sheikh E brahim Bin Khalifa Al- Khalifa (Chairman)
( M i n i s t e r o f Housing, Ministry of Housing, Kingdom of Bahrain)
 Mr. Naser Abdul Mohsen Al-Marri (Vice Chairman)
 Mr. Jassar Dakheel Al-Jassar
 Mr. Rana Ahmed Humayun
 Mr. Mohammed Azzaroog Rajab

5.2 Business Segments:

The business segment of MCB bank are:

 Retail Banking, SME, Commercial and Agriculture (Ijaz Farooq)
 Treasury and Financial institutions (Muhammad Abdullah Ahmad)

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  Corporate and Investment Banking (Syed Amir)
 Consumer Finance (Arshad Majeed)

6. Departments/Sections of MCB Bank Limited:

For proper functioning of branches and the over all 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:

 Cash department
 Deposit department
 Advances & credit department
 Remittance department
 Foreign exchange department

6.1 Cash Department :

The following books are maintained in the Cash Department:
 Rceiving Cash Book
 Paying Cash Book
 Token Book
 Scroll Book
 Cash Balance Book

6.2 Deposite department :

Bank deals in money and they are merely mobilizing funds within the economy. They borrow
from one person and lend to another, the difference between the rate of borrowing lending forms
their spread or gross profit. Therefore we can rightly state that deposits are the blood of the bank
which causes the body of an institution to get to work. These deposits are liability of the bank so
from point of view of bank we can refer to them as liabilities.

The total deposits of MCB are growing since its inauguration but after privatization there is a
sharp incline in over all deposits of the bank. The increase in deposits is also a cause of increase
on total number of accounts; bank has progressed in both aspects.

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6.2.1 Types of deposit :

 Time deposits / liabilities

 Demand deposits / liabilities

6.3 Clearing department :

Every banker acts both as a paying as well as a collecting banker, It is however an important
function of crossed Cheques. A large part of this work is carried out through the bankers clearing
house. A clearing house is a place where representative of all banks of the city get together and
settle the receipts and payment of Cheques drawn on each other. As the collecting banker runs
certain risks in receipt of their ownership the law has provided certain protections to the banks.

6.4 Advances Department :

Advances are the most important source of earning for the banks. MCB is also giving full
attention towards this aspect and it is also obvious from the growing portfolio of advances and
from very low delinquency rate. The credit portfolio of this institution is in a very much better
shape than other financial institutions of Pakistan and the credit goes to the management and the
staff who are concerned about the quantity and quality as well.

6.5 Remitance Department :

 Loans
 Cash Credits
 Overdraft
 Remittance department performs following functions:
 Mail Transfer (MT)
 Telegraphic Transfer (TT)
 Demand Drafts (DD)

7. Corporate Banking:
We provide a comprehensive range of financial services to large number of corporate clients
including multinationals and public sector entities, by partnering with them to build long-term
relationships. By drawing on the expertise of in-house product specialists and Shariah scholars
working under the guidance of our Shariah Supervisory Board, we, at MCB Bank can provide
Shariah-compliant financing solutions to meet the working capital finance, import finance,

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export re-finance, long-term finance, documentary credit requirements and project financing
needs of our customers.
Our Corporate Banking relationship teams work closely with Treasury, Cash Management,
Investment Banking, Commercial Banking and Consumer Banking departments to develop and
deliver value added banking products that fulfill the diverse business needs of our corporate
clients.

7.1 Islamic Advisory Services:

In line with our vision of establishing Islamic Banking as banking of first choice, MCB Bank
believes in working for the larger benefit of the society. MCB Bank has the unique combination
of experts in areas like Islamic law & Jurisprudence, Accounting, Auditing, Capital Markets,
Corporate Finance and Islamic Finance. Our expertise, accumulated over the years, enables us to
provide world class service and unmatched Shariah-compliant solutions to most sophisticated
problems in a timely manner.
We’re working to expand the market, not merely our market share. The continuous interaction
with the academia has enabled us to produce a stream of expert practitioners-cum-trainers. Our
trainings are not only backed by solid theoretical foundations, they are continuously updated
based on real life experiences. Our case studies help learners gain hands-on experience of
various aspects of Islamic finance.

7.2 Agricultural Finance:

MCB Bank is recognized as the leader and trendsetter in Islamic Banking in Pakistan by it
being the first to provide a myriad of Shariah-compliant financial products for both domestic and
corporate customers. Continuing this tradition, MCB Bank has also launched Islamic
Agricultural Finance to enable the farming sector to avail Shariah-compliant financing for their
needs.
In addition to other permissible modes of financing, the Bank offers the following specific
agricultural products finance.
It provides following services:
 MCB Tractor Asaan
 MCB Agri Asaan
 MCB Fasal Asaan

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 8. Correspondent Banking:
Financial Institutions, a part of the Treasury and F.I. Group, primarily focuses on building and
maintaining relationships within the Financial sector. Relations range from authenticated
communication links by way of SWIFT RMA to Trade, Treasury and account maintenance in
different currencies worldwide.
With over 360 banks in 86 countries, our 600 globally located correspondents provide all trade
services, seeking to add value and service to our branches and functional units. Services include
advising, confirmation, discounting of letter of credits, reimbursement undertakings and standby
LCs and guarantees. Further, the ever-increasing SWIFT RMA relationships with financial
institutions serve to route all kinds of transactions.

8.1 Asset Management:

Al MCB is the largest fund manager in private sector in Pakistan and the Only Shariah
compliant Asset Management Company in Pakistan. Al MCB has successfully completed 20
years of its existence in 2015. This is one of the longest track records in private sector in
investment management in Pakistan and has emerged as one of Pakistan’s leading investment
solutions provider in a Shariah compliant manner. The Shariah Advisor of MCB Bank Limited,
also the Shariah Advisor of Al MCB, supervises the operations to ensure Shariah compliance of
the funds.
Following services are provided by this department:
 Developing, floating and managing Islamic Mutual Funds.
 Structuring and managing Discretionary and Non-Discretionary.
 Providing Investment Advisory Services

9.Financial analysis :
9.1 Balance sheet (in rupees):
Table#9.1
2022 2021 2020 2019 2018

Assets
Cash and balances with treasury 22,565,188 19,385,843 16,029,635 13,356,055 14,879,23
0

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banks Balances with other banks 3,784,862 8,364,261 3,954,814 3,497,054 7,333,002
Lendings to financial institutions 9,172,186 4,614,059 4,479,754 14,444,143 8,392,950
Investments 102,259,757 67,046,033 35,677,755 39,431,005 28,625,915

Advances 152,784,137 135,034,499 128,818,242 100,780,162 99,179,372

Operating fixed assets 9,987,963 9,261,609 8,266,458 5,128,428 3,810,331

Deferred tax assets - - - - -
Other assets 14,190,459 10,621,142 8,964,480 5,535,038 3,812,788
314,744,552 254,327,446 206,191,138 182,171,885 166,033,588

Total asset
3,089,984 2,945,640 2,584,828 2,627,051 1,839,077

Liabilities
Bills payable

Borrowings 25,554,777 19,300,163 15,190,148 17,553,525 14,964,084

Deposits and other accounts 255,936,503 205,970,227 167,676,572 143,036,707 131,839,283

Sub-ordinated loans 5,992,500 5,994,900 2,996,100 2,997,300 2,998,500

Liabilities against assets subject _ _ _ _ __

to finance lease

Deferred tax liabilities 85,507 333,925 12,987 471,519 736,298

Other liabilities 8,081,139 4,833,489 4,759,140 3,219,796 2,603,113
Total liabilities 298,740,410 239,378,374 193,219,775 169,905,898 154,980,358

Net assets 16,004,142 14,949,072 12,971,363 12,265,987 11,053,230

Represented By

Share capital 6,427,440 5,073,467 4,058,774 3,006,499 2,004,333

7,691,319 7,182,987 7,667,141 6,948,336 5,814,754

Reserves

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 701,819 886,234 308,980 2,144,810 1,799,979
Unappropriated profit

Surplus on revaluation of assets- 14,820,578 13,142,688 12,034,895 12,099,645 9,619,066

net of tax 1,183,564 1,806,384 936,468 166,342 1,434,164

16,004,142 14,949,072 12,971,363 12,265,987 11,053,23

0

9.2 Horizontal analysis balance sheet :

Table # 9.2
2018 2019 2020 2021 2022

Assets
Cash and balances with 26% -10% 20% 21% 16%
treasury banks
Balance with other banks 32% -52% 13% 111% -55%
Lending to other financial -17% 72% -69% 3% 99%
institutions
investments 11% 38% -10% 88% 53%
advances 15% 2% 28% 5% 13%
Operating fix assets 19% 35% 61% 12% 8%
Deferred tax assets
Other assets 40% 45% 62% 18% 34%
Total assets 14% 10% 13% 23% 24%
Liabilities
Bills payable 40% 43% -2% 14% 5%
Borrowings 42 17% -13% 27% 32%

Deposits and other accounts 11% 8% 17% 23% 24%

Subordinate loans - - - 100% -

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 Liabilities against assets - - - - -
subjects to finance lease
Deferred tax liabilities 30% -36% -97% 2471% -74%
Other liabilities 27% 24% 48% 2% 67%
Total liabilities 14% 10% 14% 24% 25%
Net assets 25% 11% 6% 15% 7%
Share capital 33% 50% -33% 153% 27%
Reserves 30% 19% -16% 24% 6%
inappropriate profit 11% 19% -16% -54% -16%
Total 27% 26% -21% 37% 13%
Surplus on revaluation of 18% -88% 762% 26% -34%
assets net of tax
Total capital 25% 11% -10% 35% 7%
Total liabilities and capital 8% 10% 13% 23% 24%

Interpretation:

From the analysis above we have seen that total assets of MCB (Pakistan) Limited has been
increased from 2018-2022. The main reason for this increase is that bank investment increase in
2009 with a large amount i-e 88%. Another reason for increase in assets of bank is the large
amount of balances of other banks. When we make a look on liabilities section of bank we have
analyzed that the banks liabilities have been increased in 2022 as compared to 2019 and 2020
which means that a large amount of debts have been taken by a bank in this year. Now move to
equity section from the analysis of bank’s capital we came to know that the total capital of bank
has been increased in 2022 than in previous years which is a favorable point for bank.

Hence the overall trend of the bank’s financial position that we have analyzed from horizontal
analysis is that. Bank’s total assets have been increased with a minimum amount from 2018-
2022 Bank’s investment shows a large amount of increase the main reason for this change is its
less lending to financial institutions and large amount of balances of other banks. The total
liabilities of bank also decreased which is not a favorable point but it may be due to change in

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 governmental policies or government regulations, country’s economic position and many other
factors. The capital of bank also shows a good point of bank’s financial position.

9.3 Vertical analysis of balance sheet:

Table # 9.3

2018 2019 2020 2021 2022

Assets
Cash and balances with treasury 9% 7% 8% 8% 7%
banks
Balance with other banks 5% 2% 2% 3% 1%
Lending to other financial 5% 8% 2% 2% 3%
institutions
investments 17% 22% 17% 26% 32%
advances 60% 55% 63% 53% 49%
Operating fix assets 2% 3% 4% 4% 3%
Deferred tax assets

Other assets 2% 3% 4% 4% 5%
Total assets 100% 100% 100% 100% 100%
Liabilities
Bills payable 1% 2% 1% 1% 1%
Borrowings 9% 10% 8% 8% 8%
Deposits and other accounts 79% 84% 87% 86% 86%
Subordinate loans 2% 2% 2% 3% 2%
Liabilities against assets subjects - - - - -
to finance lease
Deferred tax liabilities

Other liabilities 2% 2% 2% 2% 3%

Total liabilities 93% 100% 100% 100% 100%

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 Net assets 7% 7% 6% 6% 5%
Share capital 1% 25% 18% 34% 40%
Reserves 4$ 57% 53% 48% 48%
inappropriate profit 1% 17% 16% 6% 5%
Total 6% 99% 87% 88% 93%
Surplus on revaluation of assets 1% 1% 13% 12% 7%
net of tax
Total capital 7% 100% 100% 100% 100%

Interpretation:

From the analysis of balance sheet, we have concluded that the total assets grew by 24.0%
contributed by 42% increase in cash balances, 52.5% increase in investments and 14.1% in
advances. The investments in 'held for trading' rose by 68.6% which was added to the
investments growth while nominal increases were observed in investments in 'held to maturity'
and 'available for sale'.

9.4 Income Statement:

Table # 9.4

2022 2021 2020 2019 2018

Mark–up / return / 27,952,162 22,586,736 18,393,313 15,143,241 12,596,921

interest earned
Mark–up / return / 17,936,616 13,554,078 10,650,719 8,685,624 6,977,313
interest expensed
Net mark–up / interest 10,015,546 9,032,658 7,742,594 6,457,617 5,619,608
income
Provision against non– 2,319,280 2,324,377 3,824,778 3,920,240 1,128,137
performing
loans and advances
Impairment loss on 382,764 431,058 __ __ __
investment

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 Provision for 296,530 76,784 508 1,501 376
impairment in the
value of investments
Bad debts written off __ __ 247,311 __ __
directly
Net mark-up / interest 3,064,382 2,914,893 4,072,597 3,921,741 1,128,513
income after provisions

6,951,164 6,117,765 3,669,997 2,535,876 4,491,095

Non mark-up / interest
income

Fee, commission and 1,271,467 1,307,699 1,257,584 1,072,868 1,013,660

brokerage income

Dividend income 209,922 162,537 173,621 137,079 109,326

Income from dealing in 13,011 528,159 873,512 655,761 584,344

foreign currencies
Gain on sale of 212,527 143,717 36,743 2,361,251 112,474
securities - net

Unrealized loss on
revaluation of
investments (354) (1,918) 22,384 1,728 (2,308)
classified as held for
trading - net
Other income 470,470 404,221 343,156 336,809 321,758

Total non-markup / 2,177,043 2,544,415 2,707,000 4,565,496 2,139,254

interest income
9,128,207 8,662,180 6,376,997 7,101,372 6,630,349

Non mark-up / interest

expenses

26
Administrative expenses 7,812,618 6,995,857 5,904,169 4,789,536 3,277,355

Other provisions / write __ __ 459 __ __

offs
Other charges 42,453 34,368 10,987 12,501 6,141

Total non-markup / 7,855,071 7,030,225 5,915,615 4,801,587 3,283,494

interest expenses
Extra ordinary / unusual 1,273,136 1,631,955 461,382 2,299,785 3,346,855
items
__ __ __ __ __
Profit before taxation

1,273,136 1,631,955 461,382 2,299,785 3,346,855

329,617 562,099 17,363 98,535 983,875

Taxation – current __ 119,827 (50,000) (233,950) __

– prior years’ 342 (147,478) 107,794 (245,812) 113,006

329,959 534,448 75,157 (381,227) 1,096,881

–deferred
Profit after taxation 943,177 1,097,507 386,225 2,681,012 2,249,974

Unappropriated profit 833,511 308,980 2,144,810 1,799,979 1,617,597

brought forward
Profit available for 1,776,688 1,406,487 2,531,035 4,480,991 3,867,571
appropriation
Basic / diluted earnings 1.48 1.79 .76 8.92 7.48
per share - Rupees

9.5 Horizontal analysis of income statement :

Table # 9.5
2018 2019 2020 2021 2022

27
 Mark–up / return / interest 43% 20% 21% 23% 24%
earned
Mark–up / return / interest 63% 24% 23% 27% 32%
expensed
Net mark–up / interest income 100% 15% 20% 17% 11%

Provision against non– 77% 248% -2% -39% -

performing
loans and advances
Impairment loss on AFS - - - - -
investment
Provision for impairment in -103% - -66% 15015% 286%
the
value of investments
Bad debts written off directly - - - - 100%
88% 247% 4% -28% 5%

Net mark–up /interest income 15% -44% 45% 67% 14%

after provisions
Non mark–up/interest
income:
Fee, commission and 21% 6% 17% 4% -3%
brokerage income
Dividend income 114% 26% 27% -6% 29%
Income from dealing in 64% 12% 33% -40% -98%
foreign currencies
Gain on sale of investments – 12% 2008% -98% 291% 48%
net
Unrealized gain on -100% 200% 1195% 109% -82%
revaluation of investments
classified as held for trading –
net
Other income 56% 5% 2% 18% 16%
Total non–markup / interest 38% 113% -41% -6% -14%
income
22% 7% -10% 36% 5%

28
 Non mark–up/interest
expenses
Administrative expenses 26% 46% 23% 18% 12%

Other charges 200% 100% -9% 213% 24%

Total non–markup / interest 27% 46% 23% 19% 12%
expenses
Profit before taxation 17% -31% -80% 254% -22%

Taxation – 19% -90% -82% 3138% -41%

current
100% -100% -79% -100% 100%
prior years’
-43% -318% -144% -237% 100%
deferred 31% -135% -120% 611% 38%
Profit after taxation 11% 19% -86% 184% -14%

Basic / diluted earnings per 11% 19% -88% 135% -17%

share – Rupees

Interpretation:

Net income of MCB has been increased with a large amount in 2022 as compared to 2017,
2018, 2019 and 2021 .The main reason for this increase is:

 Net mark up interest income is increased in 2021 because of loans and advances taken by
a bank in 2021 decreases with large amount.
 Another reason for this increase is increases in net mark up interest earned by a bank.
 Total non mark up interest income has been decreases in 2021.It were a large amount in
20017-2018 which was not a favorable point. Hence the horizontal analysis of askari
bank shows that company’s financial position was much better in 2021 as compared to
previous years.

9.5 Vertical analysis of income statement:

Table # 9.5

29
 2018 2019 2020 2021 2022

Mark–up / return / interest 100% 100% 100% 100% 100%

earned
Mark–up / return / interest 55% 57% 58% 60% 64%
expensed
Net mark–up / interest income 45% 43% 42% 40% 36%
Provision against non– 9% 26% 21% 10% 8%
performing
loans and advances
Impairment loss on - - - - -
investment
Provision for impairment in - - - - -
the
value of investments
Bad debts written off directly - - 1% - -
9% 26% 22% 13% 11%

Net mark–up /interest income 36% 17% 20% 27% 25%

after provisions
Non mark–up/interest
income
Fee, commission and 8.0% 7.1% 7% 6% 5%
brokerage income
Dividend income 0.9% 0.9% 1% 1% 1%
Income from dealing in 4.6% 4.3% 5% 2% -
foreign currencies
Gain on sale of investments – 0.9% 15.6% - 1% 1%
net
Unrealized gain on - - - - -
revaluation of investments
classified as held for trading –
net
Other income 2.6% 2.2% 2% 2% 2&

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 Total non–markup / interest 17% 30% 15% 11% 8%
income
53% 47% 35% 38% 33%

Non mark–up/interest
expenses:
Administrative expenses 26% 32% 32% 31% 28%

Other charges - 0.1% - - -

Total non–markup / interest 26% 32% 32% 31% 28%

expenses
Profit before taxation 27% 15% 3% 7% 5%

Taxation – current 8% 1% - 2% 1%
prior years’ - -2% - 1% -

deferred 1% -2% 1% -1% -

9% -3% 0% 2% 1%
Profit after taxation 18% 18% 2% 5% 3%

Interpretation:

On the total mark up interest earned, the lager part is contributed by mark up interest expense in
2010 i.e. 64%

Profit after taxation is lower in 2010 as compared to previous years, because of more expenses
and payment of taxes by a bank in this year.

Return on Average Assets:

‗ Net operating Income × 100

Average Total Assets

31
 2018 2019 2020 2021 2022

Return on 1.40% 1.50% 2.01% 4.8% 3.3%

average
Ratio

Interpretation:

This ratio is also known as firm’s return on investment. It measures firm’s profit with its
available assets. In the year 2018 the MCB is generating profit through its available assets is
1.40%, while in last year 2022 it was 3.3% as shown in the graph. This shows that Bank is
generating more/high profit with its available assets, and its good for the Bank. The decline
regarding previous year is due to 14% decrease in profit for the year against 24% increase in
total assets.

Earning per share:

Net Income × 100

No.of shares outstanding

2018 2019 2020 2021 2022

Earning 7.48% 8.92% 0.95% 2.18% 1.48%

per Share

Interpretation:

This ratio represents the number of rupee earned on behalf of each outstanding share of
common stock. The graph shows that there is too much decrease in earning per share in 2022 i.e.
1.48% as compared to year 2018 i.e. 7.48%. The decrease is mainly due to less then expected
increase in net interest income, drop of 14% in non-markup-income and 12% increase in
operating expenses. Also, the increase in number of shares has resulted in EPS to show a
declining trend.

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Net Profit Margin:

‗ Net Profit × 100

Total Income

2018 2019 2020 2021 2022

Net 31.42% 19.57% 29.41% 42.53% 31.29%

profit
margin

Interpretation:

This ratio measures the percentage of each sales dollar remaining after all cost and expenses,
including interest and tax, have been deducted. The higher this ratio the better is company. The
graph shows that the Net Profit Margin of MCB (Pakistan) Limited increases from 21.94% in
2005 to 50.44% in 2021.

10. SWOT Analysis of MCB Bank Limited :

10.1 Strengths:

 It has the largest branch network among private banks of Pakistan.

 MCB is the market leader in introduction of e-banking and it has thelargest ATM
network in the country.
 The Banks’ Rupee Traveler Cheques have been market leaders for the pastsix years.
 MCB rated the best domestic bank for two consecutive years of 2000 and 2001 by euro
money, a leading international publication.
 MCB has forged strategic alliances with international banks for expandingits network
further, both locally and internationally.
 MCB has the ability to bring innovative products and services like personalized service,
electronic funds transfer, sophisticated financial products such as electronic banking,
auto-teller machines and evening banking.

33
10.2 Weakness:

 .The overseas branch network of MCB is limited. It has only four overseas branches
whereas HBL has twenty overseas branches, three subsidiaries, twoaffiliates, and one
representative office. Similarly NBP has fifteen overseas branches, one subsidiary, and
four representative offices.
 Employees at branch level are not properly motivated to work by heart.they take the all
routine activities as a boring job.
 Most of the employees lack managerial training as they are not properlyeducated. Due to
seniority, they have moved up on the hierarchy line to Grade-I,II or III positions having
hardly bachelor degrees. This type of senior staff cannotapply the modern and innovative
techniques of management in decision making.
 Mission of MCB is not well defined. It restricts MCB from extending itsoperations to
other countries. This is evident from this sentence of themission statement “Our mission
is to become the preferred provider of quality financial services in the country.. “either it
means that MCB willnot provide quality service in other countries where it operates or it
willnot extend its operations to other countries. In either case, the bank suffers.

10 .3 Opporunities:

 MCB may enhance its Rupee Travelers Cheques (RTCs) sales bysearching for new
market niches.
 It can introduce debit card system or may convert the existing ATM cardsinto a
complete debit card.
 New products like personal loans mortgage and auto leasing and eachmanagement
which diversify credit risk and add to revenue generating products are currently
provided in big cities like Lahore, Islamabad,Karachi and Rawalpindi, these products
may be tested for success in other areas like Peshawar, Quetta and Sargodha.
 Developing network for electronic transaction require huge investmentwhich cant be
made all at once, there exists an opportunity for MCB toenter into agreement with
other banks to use each others ATMs which willresult in an increased convenience to
MCB customers and customers of other banks

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  As all around the world remittances of money are strictly monitored so asthe money
remitted may not fall in hands of so called terrorists for that allconventional money
laundering through Hundies.
10.4 Threats:
 N e w c o m p e t it o r s s e t t i ng u p t h e i r I s l a m i c b a nk i n g s e c t io n s a n d
t he y h a v e t he infrastructure, skill, ability, resources & attitude to capture the
market more thanthe MCB bank.
 Rising customers’ expectations
 Change in Government's attitude towards Islamic banking.
 Fears on the credibility of Islamic banking ethical compliance and
monitoringsystems.
 High Interest Rate from SBP
 SBP has not special policy regarding Islamic Banking.
 G o v t . p o l i c i e s a r e m o s t l y fo r c o n v e nt i o n a l ba n k i n g s ys t e m no t f
o r s p e c i a l l y designed for Islamic banking.
 Fears on the credibility of Islamic banking ethical compliance and
monitoringsystems.

Reviewing this SWOT analysis from time to time would help evaluate the
bank's posit ion. It would help the management in comparing their strengths of the
past withthose of the present and to what extent the management has been able to
overcome the weaknesses.

11.First Two Weeks:

On the first day of my internship, the branch manager asked me some questions about my
studies. He told me some basic rules and regulations about banking operation and introduced me
with other staff members of the Bank, and introduce me with employees working in MCB

I start my internship by working in account opening department. Here I spent two weeks. In this
department under the supervision of Mr. Rizwan I learned about different types of account, how
to open account and documents require to open a specific account etc.

35
11.1 Account Opening:

To open an account is one of the primary functions of the banks because when a customer
opens an account in the bank then the deposits belongs to that branch and the business is carried
out from these deposits. To open an account an account opening form has been specifically
designed for everyone who wishes to open an account in that bank.

11.2 Account opening Form:

One of the major requirements of account opening department is to fill the form for opening a
new account. This Account Opening Form contains the required information necessary for
opening a new account.

 The account opening form contains:

 Basic information form
 Specimen signature card
 Cheque book requisition form
 ATM card form
 Branch and Code Name:

The branch name and the branch code is to be mentioned very clearly.

11.3 Types of accounts:

Here the type of account the customer chooses to open has to be selected by the client as the
bank offers many types of accounts. Some of the available accounts are

11.3.1 Current account

 Profit & loss sharing saving account

 Basic Banking Account
 Business plus Account

11.3.2 Currency of Account:

36
 Here the client mentions in which currency he or she wants to operate his or her account in as
the rules are very different for an account in local currency as compared to the account in foreign
currency. In Al Baraka Bank (Pakistan) Limited customers can open account in Pakistani
Rupees, US Dollars, Euro, GBP and Japanese Yen.

11.3.3 Title of Account:

Here the name, which the client wishes to give to the account, shall be written and the account
will be operated under that name.

Correspondence/Mailing Address:

In this category, the information of the customer is mentioned by which he or she can be
contacted with. This includes, address, alternate address, phone number, cell phone number, fax
number and email address. This is very important because in specific circumstances the bank
may have the need to contact the account holder.

11.3.4 Type of Entity:

In this category client selects whether he wishes the account to be individual, joint, sole
proprietorship, public limited or private limited company account and trust or society. All these
accounts have different requirements for opening.

11.3.5 Operational Instruction:

In this category, the account holder nominates anyone other than himself who may also operate
the account.

11.3.6 Introducer/ Reference:

This is one of the requirements to open an account. Reference of any other account holder is
needed to open an account because in case a person commits fraud then the bank must have
someone to question. However, this information is optional.

11.3.7 Next of Kinds

This is very important information to write the name of a close relative. This is taken so that in
case the account holder does not contact the bank for three years then the bank would get in
contact with the name mentioned as in the next to kin.

37
11.3.8 Specimen Signature Card:

Along with the Account Opening Form, we also get the client to fill in and sign four times on a
purposely-designed two specimen signature cards. One S. S. Card is send to Karachi and other is
kept for the branch’s record. Specimen Signature card is used to confirm the signatures on
instruments issued by the client. This is very important to prevent fraudulent cases. It is vital that
we have this card filled because from this verify the signatures on the cheques before any value
of money can be transferred or paid in cash.

When the account opening form is completed, the Business Development Manager views the
original CNIC and attaches a photocopy of customer. Moreover, it is vital to obtain the
Computerize National Identity Card of the next to kin.

The complete Account Opening Form along with document of Know Your Customer is
scanned and send to Branch Manager and Operation Manager. BR number is generated in Auto-I
Banker. While these original documents are, send to Head Office Karachi. Head Office assigns
account number. After this opening of new account is informed by updating record in system.

12. Third Week:

In third week I worked under the supervision of Customer Relationship Officer. Here I learnt I
learnt how to fill Pay-in-Slip. Pay-in-Slip is used to deposit cash and cheques in account.

 Date and Branch name must be clearly written on the top.

 Then account type and currency are to be check marked.
 Account title and account number should be written carefully.

Customer can use one Pay-in-Slip to deposit four cheques. Total amount in words and figures is
to be write-down clearly. In the last Pay-in-Slip must be signed by account holder.

I learnt how to fill phone banking form and SMS banking form. Through Phone Banking
Customers can get information about last five transactions and current account balance. Besides
phone banking Al Baraka Bank (Pakistan) Limited is also offering SMS service to its customers.
Form contains title of account, type of account and account number. An applicant can use Phone
Banking Subscription Form to avail the facility of phone banking for maximum six, link account.

38
SMS Banking subscription form requires the applicant to provide following information:

 Title of account
 Account number
 Type of account
 Mobile number

Amount of transaction for which customer wants to get informed

Maximum of six, linked account can be tagged to a mobile number. While a separate form is
used for each BRN.

In third week, filing was also included in my responsibilities.

12.1 Account maintenance certificate file:

In this file copy of account maintenance certificate along with original service request form are
kept.

12.2 Dormancy removal file:

In this, file I had to keep copy of activation of dormant account form along with copy of
attested Computerized National Identity Card.

12.3 ATM file:

In the, file I had to keep record of original ATM card application form along with print out of
delivery channel request and original card generation report.

12.4 File for Notice of closing of account:

In the, file I had to keep record of original TCS slip along with copy of notice and original seales
envelope containing notice for closing of account. Three notices for closing of account have to
be sent with the gap of three days and after fourteen days of last notice branch close account.

12.5 File of link account:

39
 In the, file I had to keep record of two carbon copy link account application form as original
form is sent to Head Office, Karachi.

12.6 Phone banking file:

In the, file I had to keep record of original form plus print out of delivery channel request.

12.7 File of on demand bank statement:

In the, file I had to keep record of original application form.

12.8 Change of address:

In the, file I had to keep record of copy of application form for changing corresponding address
in bank’s record along with copy of physical address verification memo or copy of utility bills
indicating the address of new residence.

12.9 Leave record:

This file is used to keep record of leaves and absence of employees. In the, file I had to keep
record of copy of application form plus report of leave record of each employee that is generated
on monthly basis. While original application form is sent to Head Office, Karachi.

13 Fourth Week:
In fourth week, my mentor was Mr. Irfan who was also managing credit department. Here I
knew about different types of financing that MCB Bank (Pakistan) Limited is offering to its
customers and procedure of granting these loans. As par sensitivity of the credit department, I
was not given any special task to do.

14. Fifth Week:

In fifth week, I worked under the supervision of Mr. Adnan. He was Remittance Officer Here I
learnt about issuance of demand draft and pay order. In this department, my duty was to deals
with customers who want to transfer funds and filled funds transfer application form. In
application form I entered all necessary details of beneficiary and remitter such as full name of

40
beneficiary and remitter, their full address and phone number, account number of both parties,
bank of beneficiary and CNIC or passport number of remitter.

In Funds Transfer Application form, following information must be provided:

14.1 Mode of transfer

 Currency
 Amount in words and figures
 Reason of remittance
 Date
 Signature of customer or remitter

Besides these, one of the following options to cover amount of remittance and bank charges must
be check marked as per will of applicant.

 Debit account number

 Payment of cash on bank counter
 Payment through cheque

15. Sixth Week:

 Inward Clearing:
When Cheques of other Banks are deposited in our bank, after clearing these Cheques through
NIFT by the other Banks on which these are drawn. Accounts of the customers are credited.
Afterwards the they check the amount in the specified account, signature are accurate and
authentic and there are accurate date and stamping is done than clearing takes place.

 Outward Clearing:
When Cheques of our bank are deposited in other Banks and these Cheques are sent to us for
verification, we debit the account of our client after verification of their account.
Nift person comes daily to branch for purpose of receiving checks for clearing.

On cheque transfer funds following four stamps must be required:

41
  Signature Verified
 Payee’s Account Credited
 Authorized Date
 MCB Bank Ltd.

16. RECOMENDATIONS:

As I have spent almost six weeks in MCB (Pakistan) Limited, Okara Branch for the Internship
purpose. During this period, I have tried my best to observe the banking environment in the
MCB. I have observed a lot of strengths and weaknesses in the branch. Based on the observation
I have come up with certain recommendations particularly related to the MCB(Pakistan)
Limited, okara Branch but generally can be applicable to all other branches of MCB (Pakistan)
Limited for improvement. These recommendations will help to cope with the problems being
faced by the Bank and will enhance the efficiency and performance of the MCB in particular and
all the banking sector of the country in general.

 Branch must possess sufficient number of employees to uplift the burden of work.
 MCB okara branch should focus on improving their system and operations by
streamlining processes and ensuring efficient customer service.
 To improve customer service, MCB Bank Okara can take steps like training staff on
effective communication, promptly addressing customer queries, and implementing
feedback mechanisms.
 Proper product information should be delivered to all the employees.
 Mismanagement of resources must be avoided as much as possible as it decreases profit
but also discourage hard worker and honest employees.
 Fresh graduates must be recruited. As the combination of Experienced and fresh can
produce, better results and it will improve the efficiency of management.

42
17. CONCLUSION :

It is evident from this report that MCB 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 i 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.

43
18. REFERENCE :

http://www.mcb.com.pk/

https://www.mcbgroup.com/en/investor-centre/financial-reports

44
45