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MCB Bank Ltd.

Project Report

Smt.K.K.Patel MBA/MCA College, Mehsana(818)

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MCB Bank Ltd.

ACKNOWLEDGEMENT

Above all, we thank Allah all Mighty who has grant us courage tofulfill our task. We here by all thank our course instructor Miss.Madia javed , as she has provided us with sufficient knowledgeand develop the criteria that we are now capable of gathering andcompilation of the relevant information.We are also thankful to our friends and batch mates for helping uswith the queries we had during the compilation of the report.

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MCB Bank Ltd.

TABLE OF CONTENTIntroduction:

MCB Bank Ltd. was incorporated in July 9, 1947. Among the first in new generation commercial bank. It has 1,146 branches and over 600 ATMs, in 110 cities in Pakistan. Over the last few years, MCB Bank Ltd. as a whole has been growing

steadily.

History of MCB Bank Ltd:

Muslim Commercial Bank Ltd. was founded by ISFHANI and ADAMJEEfamilies in July 9, 1947 in Calcutta, India. After the partition ofSubcontinent, the bank moved to Dhaka from where it started business inAugust 1948. In 1956 the Bank transferred its Head Office to Karachi. In2006 bank changed it name to MCB Bank Ltd.

MCB Bank is not an overnight success story rather good track of servicesare responsible for the leaps and bounds progress. MCB Bank is first ever inthe history of the country that is listed on the London Stock Exchange fortrading on the Professional Securities Market and issued Global DepositoryReceipts (GDRs) worth $150 Million.In the late 1990 when bank was privatized by the government the bankhas to start almost from the beginning. In April 1991, MCB Bank becamePakistan’s first privatized bank. The government of Pakistan transferred themanagement of the Bank to National group of leading industrialists of thecountry.

The consistency in growth and the resilience MCB Bank has shown after itsprivatization, especially in uncertain economic conditions are by allmeans outstanding. MCB Bank Limited received Euro money Award forExcellence Eight times in the last ten years, which include “Best Bank inAsia” in 2008; four times “The Best Bank in Pakistan” award and two time“The Best Domestic Bank” award besides being declared the “The Best

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MCB Bank Ltd.

Domestic Bank in Pakistan” by Asia Money for five times seven years. MCBBank also received the “The Strongest Bank 2010” award by The AsianBanker for being Pakistan’s best-performing financial institution in 2010.President and CEO MCB Bank, has been awarded “The Qatar FinancialCentre Asian Banker Leadership Achievement Award 2010.

Vision:

To be the leading financial services provider, partnering with ourcustomers for a more prosperous and secure future.

Mission:

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

Strategic Objectives:

Delivering remarkable returns to stakeholders, sustainableperformance, exceeding market and shareholder expectations.

Providing value added services through operational expansion,geography and upgraded systems.

Building a corporate culture of equality, trust and team spirit as weremain dedicated to be a socially responsible organization.

With the right combination of insight, foresight and hindsight, we canfocus on a variety of strategic and leadership goals to help bring ourvision to life in ways that add more perspective to the business.

Increasing market share in Pakistan’s expanding banking. Delivering high quality customer service Delivering more products to more customers Maintaining current high standards for asset quality

Segmentation strategy:Demographic variables:

Locations (Main Cities & Rural Areas) Occupation (business person, salaried class both Govt. & Pvt.) Age (Minor, Yound & Senior citizens)

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MCB Bank Ltd.

Psychographic variables: Life styles People who believes in modern banking with higher set of service i.e

internet banking.

Targeting strategy:

Target market: Corporate banking market-this market target the industries and fulfill

their financial needs. Capital market-this segment is targeted on the long term needs of the

individual as well as of industries. Retail banking market - this segment is for retail investors and provides

them short term financial credit for their personal, household useeds.

Positioning strategy:MCB Bank Ltd. has positioned itself as a bank which gives higher standardof services through product innovation for the diverse need of individualand corporate clients. So they want to highlight following points in theirpositioning segments: Customer centric Service oriented Product innovations

MCB Values:

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

Innovation: We encourage and reward people who challenge the statusquo and think beyond the boundaries of the conventional. Our teamswork together for the smooth and efficient implementation of ideas andinitiatives.

Excellence: We take personal responsibility for our role as leaders in pursuitof excellence. We are a performance driven, result oriented organizationwhere merit is the only criterion for reward.

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MCB Bank Ltd.

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 customerexpectations through superior services and solutions.

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

Awards (MCB – The Award Winning Bank)

2010 The Asian Banker: Strongest Bank in Pakistan 2010 The Asian Banker: Leadership Achievement Award 2010 MMT: Best Bank Led MMT Service 2010 ICAP / ICMAP: BCR Award 2009-Banking Sector 2010 SAFA: Certificate of Merit Award 2009 Asiamoney: Best Domestic Bank in Pakistan 2009 The Asset: Best Domestic Bank in Pakistan 2008 Euromoney: Best Bank in Asia 2008 Euromoney: Best Bank in Pakistan 2008 Asiamoney: Best Domestic Bank in Pakistan 2006 Asiamoney: Best Domestic Bank in Pakistan 2006 Euromoney: Best Bank in Pakistan 2005 Asiamoney: Best Domestic Bank in Pakistan 2005 Euromoney: Best Bank in Pakistan 2004 Euromoney: Best Bank in Pakistan 2004 Asiamoney: Best Domestic Bank in Pakistan 2003 Euromoney: Best Bank in Pakistan 2001 Euromoney: Best Bank in Pakistan 2000 Euromoney: Best Bank in Pakistan

Products:

Current Account: MCB Bank offers a variety of current accounts to caterto the everyday transactional needs of various customers. These accountsensure ease and freedom to bank from any of the 1100+ branches acrossthe country. The different accounts include: the Basic Banking Accountthat has no minimum balance; Business Account offering free onlinetransactions, Demand Drafts, Pay Orders and lots more to meet the day to

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MCB Bank Ltd.

day business requirements; Current Life Account which offers the securityof life insurance free of cost; and for all others, the conventional CurrentAccount.

Savings Account: MCB Bank offers a wide array of savings products thatsuit short term growth & transactional needs. Our savings accounts offerattractive profit rates as well as flexibility to transact. Savings Xtra istargeted for customers having Rs. 5 million + deposit, 365 Gold offers profitrate on daily balance while PLS savings has a lower minimum balancerequirement. In addition, two unique products: Smart Savings and SavingsMaximizer are special saving accounts run solely via debit cards and otherremote banking channels, offering a very competitive rate to both highand low end savers.

Term Deposit: MCB Term Deposit offer attractive short to mid-terminvestment options with flexibility, convenience and security. With varioustenor options available, customers can choose one that suit their needs.This is combined with different profit payout options and the added facilityof being able to avail credit facility against their deposits.

MCB Online Banking: MCB has a fast growing network of 1100+ onlinebranches in the country providing customers real-time online transactionfacilities.

MCB MNET: MNET is an electronic inter-bank connectivity platform foronline transactions on ATM and other remote banking channels. It offersother value added services that include a portfolio of e-banking andpayment system products as well as management and day-to-dayoperations of the same. Members include 10 local and foreign financialinstitutions enjoying ATM sharing and value added services.

MCB Cash Management: Cash Management provides a wide range ofvalue added services to large corporations through its vast network ofonline branches. Our structured and customized products enable ourcustomers to realize their sales proceeds swiftly from all over the country,supported by real-time MIS. Cash Management also provides paymentsolutions through MCB network and through third parties and customizedsolutions for dividend payouts.

MCB Channel Financing: MCB Channel Financing provides workingcapital facilities to dealers and vendors of selected companies under astructured product program. This product enables our customer’s dealersto leverage themselves and increase their business capacity with theirrespective business partners.

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MCB Bank Ltd.

MCB Local Rupee Drawing Arrangement: Transaction Banking Departmentat MCB, provides Local Rupee Drawing Arrangement, a product for smallbanks and financial institutions to use our vast branch network platform tomake payments in areas where their own branch network does not exist,thus extending their reach nationwide.

MCB Home Remittance: MCB Home Remittance provides a seamlessinflow of foreign remittances credited in the beneficiary’s account withinminutes. Cash payments can also be made at our designated brancheson behalf of XpressMoney, Samba (SpeedCashNow), MoneyGram andMaybank Money Express Malaysia, along with cash payments from othercorrespondents from all over the world under the brand name of MCBFast & Easy.

MCB Corporate Financing: MCB Corporate Financing provides access todiversified financing options, including working capital loans, term loans,trade finance services and investment banking.

MCB Project & Structured Finance: MCB Project & Structured Financeinvolves financing complex projects, usually in an SPV structure, where theloan is tightly structured around the cash flows, risks are allocatedamongst various stakeholders, and there is limited or no recourse to thesponsors.

MCB Syndicated Loans and Debt Capital Markets: MCB Syndicated Loansand Debt Capital Markets involves arrangement, underwriting andplacement services for significant financing requirements by largecorporate and institutional clients to other financial institutions or throughthe debt capital markets.

MCB Quasi Equity/Hybrid Instruments: MCB Quasi Equity/HybridInstruments structure and place a category of debt that has somecharacteristics of equity such as being unsecured, subordinated or with apotential equity upside.

MCB Equity Capital Raising: MCB Equity Capital Raising relates to raisingcapital for our clients by offering common or preferred equity to public orprivate investors, through initial public offers, offers for sale, rights issuesand private equity placements.

MCB Advisory Services: Financial and Capital Raising Advisory providesour clients with financial advisory services, commercial structuring support

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MCB Bank Ltd.

and access to capital resources to help companies successfully financetheir business/project.

MCB Islamic Banking: With the help of Shariah specialists, lawyers andprofessional commercial bankers, MCB Islamic Banking provides Riba Freeand Shariah Compliant products and services both on the liability andasset side of the statement of financial position to various customers of alldemographic segments with its presence in a growing number of cities.MCB’s Islamic Banking products are available to cater the need ofWorking Capital, Capital Expenditures, International/Local trade andconsumer’s requirements.

MCB Agri Products: MCB is committed to the farming community tosupport their national objectives of self sufficiency & food security to thepeople of Pakistan. Dedicated and specialized staff, supervised by theAgri Credit Division, is posted in lending branches to cater for strongbusiness relationships & facilitation. The bank’s extensive branch networkin all the provinces and diversified product range extends our reach ofagri credit facilities to farmers engaged in any type of activity,encompassing both crop & non crop sectors. We overwhelmingly cherishand stay committed to support the farmers in view of unparallelsignificance of agri sector in our national life aligned with economicpriorities of the country and role of our bank as a responsible corporatecitizen.

MCB Privilege: A first from a local bank, MCB Privilege through itsdedicated, world class Privilege Centers offers a higher level ofpersonalized services, more rewarding in-branch experiences and a widearray of deposit and investment products that are tailored to meet thefinancial expectations of our affluent clientele. As members of MCBPrivilege, customers experience unparalleled advantages that put themahead of others. MCB’s dedicated Privilege Centers await to welcomeyou in Karachi, Lahore, Islamabad and Multan, with plans to expand tomore locations.

MCB Salary Club: A payroll solution designed to make life easy; it simplifiesall the monthly payroll related banking needs of employers and opens thedoor to a world of special offers for employees. Salary Club provides theconvenience of having an extensive range of financial services availableto employees at their place of work.

MCB Investment Services: Make the most of your wealth with investmentopportunities that match our unique financial aspirations. MCB InvestmentServices offer distribution of mutual funds managed by the leading fund

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MCB Bank Ltd.

managers of Pakistan. We can suggest the products most suited for yourneeds, or work with you to create a personalized solution completelyfocused on your expectations of the capital markets.

MCB Visa Credit Card: MCB offers a complete suite of Classic, Gold andPlatinum Visa Credit Cards focusing on providing, superior services, travelprivileges & shopping pleasure. It also offers comprehensive insurance &installment plans, reward points and SMS alerts that give a different feel tothe world of credit cards. These unique features include i-revolve, whichmakes variable mark-up rate available to customers allowing them torepay at affordable rates.

MCB Car4U: MCB Car4U not only gets you a car of your own choice but isalso affordable with competitive mark-up, flexible conditions, easyprocessing and above all, no hidden costs.

MCB Instant Finance: With MCB Instant Finance, you can get a loaninstantly at any MCB branch against liquid collateral at competitivepricing.

MCB Smart Card: MCB Smart Card opens the opportunity to have accessto your funds via multiple banking channels. It enables you to withdrawcash from ATMs across Pakistan and around the world, transfer funds, payutility and mobile bills and register for mobile and virtual banking services.

MCB Rupee Travelers Cheque: MCB Rupee Travelers Cheque is the bestand safest alternate way of carrying cash. It can be used by travelers,businessmen or by the general public in meeting their day to day cashrequirements while they travel. It is a safe and secure way to makepayments because it gives the purchaser security that even if the chequeis lost it can be refunded. Unlike other modes of fund/remittance transferwhich can only be drawn at a particular branch and can be encashedonly at that branch, MCB Rupee Travelers Cheque can be encashed atany of our branches across the nation.

MCB ATMs: MCB has one of the nation’s largest ATM networks with 500ATMs covering 110 cities across the country and still growing. MCB ATMsgive you a 24-hours convenience of cash withdrawal, mini-statement,utility bill payments, mobile top-ups, funds transfer services and muchmore.

MCB Mobile ATM: Through our MCB Mobile ATM we allow for convenientworld class banking services. Our innovative MCB Mobile ATM van ensures

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MCB Bank Ltd.

that we offer our services wherever you are, be it concerts, fairs or anyother occasion/special event.

MCB Lockers: MCB Lockers are the best protection for your valuables.Lockers of different capacities are available nationwide.

MCB SMS Banking: With MCB SMS Banking, you can bank on yourfingertips. Once you’re registered onto the service you can SMS anytimeto get account information.

MCB Full-Day Banking: Enjoy the convenience of extended banking hoursfrom 9am to 5pm, including Saturdays at MCB Full-Day Banking branchesacross the country.MCB Bancassurance: Combining the best of banking and insurancesolutions, MCB Bancassurance has created a one-stop shop for all yourfinancial and insurance needs. Whether you want to save for your child’seducation or marriage, for the security of dignity after retirement orgaining maximum return on savings, MCB Bancassurance has a plan foryou. You can also buy instant insurance coverage through your mobilewithout any medical assessment.

MCB Call Centre: The simplest way to bank is with the new enhanced 24/7MCB Call Centre, which blends innovation and convenience to providebanking services that go beyond expectations. MCB Call Centre enablesyou to manage your VISA Credit & ATM/Debit Cards, confirm accountbalances & view last 5 transactions, pay utility/mobile phone & MCB VisaCredit Card bills, topup your mobile, transfer money within MCB networkaccounts and register complaints. Most importantly it provides you withour very own banking consultant to discuss your financial needs andrequirements. Simply call at 111-000-622 and we’ll do the rest.

MCB Mobile: MCB Mobile is a quick easy and secure way to rechargemobile phones, transfer money, pay bills and do much more. Visit thenearest MCB ATM or call 111-000-622 to register and logon towww.mcbmobile.com using your mobile phone to start transacting.

MCB Virtual Banking: MCB Virtual Banking Service is a convenient way toaccess your account(s) 24/7. It is secure, free of cost and lets you do yourbanking whenever and wherever. This service allows you to transfer funds,pay utility/mobile bills, set up standing order instruction, downloadaccount statement and much more.

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MCB Bank Ltd.

Organizational Structure:

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MCB Bank Ltd.

Culture & Social Responsibility:

Aiming at growth opportunities, MCB Bank strives to be a sociallyresponsible entity in all aspects of its operations. Our prime priority isobserving the principles of good governance, contributing to theeconomy at large and taking care of the social well being of ouremployees & the community. In 2010 the Bank continued to engage withall its stakeholders demonstrating the priority placed on corporateresponsibility.

MCB Bank advocates a culture of excellence, good governance,transparency, integrity and accountability. Controls andCompliance is an integral internal function. MCB Bank ensures that allactivities are carried out in accordance with prevailing regulations so thatthe interests of all our stakeholders are protected. Code of Ethics andConduct signed by all employees acts as a guide for them in dischargingtheir duties and sets out the standards of good practice.

Being a responsible corporate entity, MCB Bank continues to supportnational development in the area of public interest. Its branch operationsare located in urban and rural areas across Pakistan including remotelocations.

In line with our goal to facilitate consumers in making their bankingexperience more convenient, significant investments have been made todevelop alternate distribution channels. We are the first bank in Pakistanto offer a comprehensive mobile banking solution allowing customers toperform a host of basic banking transactions around the clock at theirconvenience. In addition, we also serve our customers with 1132 branchesand 493 ATMs installed nationwide. Our 24/7 call center and VirtualBanking enable the customers to access their account whenever andwherever they choose.

MCB Bank lends continuous support to several NGO’s, humanitariancauses and other public interest fund raising campaigns through itschannels.

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During 2010, MCB Bank made a sizeable donation to various relief funds,established by the Government and the Armed Forces. Beside above, theBoard also approved PKR 65 million for the construction of 226 houses intwo villages (Basti Darkhanwala and Verar Sipra, Distt. Muzaffargarh) forthe flood affected residents of the area.

MCB Bank continues to support aspects of social development withparticular focus on sports, culture, education and health. In 2010, besidesabove, the bank sponsors various government and national levelinitiatives covering issues on human rights, women, minorities and eventslike Swat Aman Mela. Sports also cover unconventional sports like Rugbyand Baseball. With more than 4 million customers, we must act as aresponsible corporate financial institution. This means ensuring that we dothe business in a socially and ethically responsible way, while working withour partners to ensure they adopt a similar set of principles. We believethat banks have an important role to play within the communities theyserve – even more so during the challenging economic times as the onesthe country faced in 2010.

Environment:

With a winning combination of leading professionals and best operatingpractices, we create teams that are geared towards value-creation andvalue-growth — driven by time-tested partnerships. Our alliances help usgain strategic advantage across all markets — helping us to secure andsustain our leadership and foster a spirit of partnership. Our integrity andtransparency in all aspects of our business, across the country, demandthat we build relationships on trust, confidence and the full measure ofdiscretion for both our internal and external customers.

How to motivate employees:

Motivation is the only thing to improve productivity & profitability of anyorganization. Today, world has become a global village and noorganization can survive without motivation to its employees. In past therewere many ways to motivate MCB employees towards their smoothworking i.e best performance bonuses, higher salaries, best medicalfacilities, training programs. But in between current & past era these wayswere not used by the management so the motivation level of employeeswas degraded. In recent year MCB Management decided to raise staffsalaries to a very handsome level. After this decision motivation level ofstaff is very high enabling them to participate in the profitability & growthof bank. In my observation following are the steps to be taken to motivateMCB employees:

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Handsome rise is salaries. Best Performance bonuses to best performers enabling others to put

their efforts to be the best. Medical facilities Job stress Less work burden Consistent training programs

SWOT analysis:

MCB bank limited has various strengths; in my stay at MCB I have beenable to conclude that bank’s strengths are more then it weakness andopportunities are more then threats. That is a positive thing for MCB Bank.

Strengths: Support of various promoters High level of services Knowledge of Pakistan market More than 1100 online branches all over Pakistan Fastest spreading branch network of Pakistan More than 500 ATM network Fastest spreading ATM network First bank to launch mobile banking Largest agricultural lender Strong credit risk management High profit earning

Weaknesses: Low job satisfaction Computerized system usually remains off line Low customer loyalty and satisfaction High transaction completion time Lack Of Training Facilities Less Experienced Staff

Opportunities: Growing Pakistan Banking Sector People are becoming more service oriented In the global market Joint ventures with big companies and banks Investments in Government projects Extension in banking network Introduction of new products and services

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MCB Bank Ltd.

Threats: Entry of foreign banks Perception of customer Changes in Governments policies Poor political condition in the country Economical crisis Devaluation of currency

BCG Matrix(MCB Bank Ltd.)

MCB Bank Ltd. stands as “STARS” because:

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Stars = High Growth & High Market Share

According to BCG Matrix a company which use large amounts of cashand are leaders in the business so they should also generate largeamounts of cash. Latest annual figures of MCB Bank Ltd show that marketshare & performance of the bank is outstanding.

Market Share and Performance:

The consistent growth in profitability of the Bank indicated through interimresults enabled the Bank to capture a considerable share in the market.The local equity markets depicted relative stability during 2010, resulting ina highest market capitalization over the last two years.

The equity share of the Bank traded at approximately 2.5X book valuethroughout the year and closed at Rs. 228.5 at December 31, 2010, 4%higher than the closing share price of Rs. 219.7 recorded last year. As aresult, the market capitalization of the Bank was reported at Rs. 174B,being the second highest in the last six years (2007: Rs. 251B).

As a result of significant growth in profit numbers, the earning per share(EPS) of the Bank was reported at Rs. 22.20 for the year end 2010 ascompared to Rs. 20.38 in 2009. This combined with the improved shareprice led to a P/E (Price to Earnings) ratio of 10.30. The book value of theBank was reported at Rs. 91 increasing from Rs. 80.3 as at December 31,2009. The return on equity of the Bank was reported at 25.9% (2009: 27.3%),with ROA reported at 3.13% (2009: 3.25%).

Credit Rating:

The Pakistan Credit Rating Agency (PACRA) maintained the long termcredit rating of AA+ [double A plus] and short term credit rating of A1+ [Aone plus] of the Bank, through its notification in June 2010 (2009: Longterm: AA+ [double A plus] and Short term: A1+ [A one plus]).

Conclusion:

Concluding the analyses presented before you, it gives us great pleasureto state that the Bank has cooped well with the challenges faced in the

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year 2010 financially, and met stakeholders’ expectations while ensuringpositive returns to the shareholders on their investment in the Bank, both interms of wealth and trust.