In the name of Allah Who is the most beneficent & the most merciful

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Introduction to MCB A bank is a financial institution which deals with money and credit. It is an intermediate between two parties. A bank is a firm that takes deposits from household, firms and makes loans to household and firms.

History Muslim Commercial Bank Ltd. Unfold 57-years’ growth. MCB is not an overnight success story. The bank started corporate life in Calcutta on July 9, After the partition of the Indo-Pak Subcontinent, the bank moved to Dhaka from where it commenced business in August In 1956, the Bank transferred it Registered office to Karachi, where the Head Office is presently located. Main Muhammad Mansha Chairman and chief executive of MCB

P oAuto Loan oBusiness Sarmaya oTractor finance scheme oMORTGAGE S oMCB ATM Services oMCB Mobile Banking oMCB Call Center oBasic Banking Account (BBA) oCurrent Account oSaving Account oBusiness Account D

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,098330,274367, ,960262,510253, ,08996,256167, ,06822,66344,662 5,1309,19315,779 15,26515,37415, Authorize capital Deposits Advances Investment Borrowing Reserve Profit after tax Description

Organizational Hierarchy Chart President Chairman Vice president Chief Financial Advisor Audit Committee Regional Manager Branch Manager Senior Vice President

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Working Departments Remittance 1st week 2nd week 3rd week Customer service Account 4th week 5th week 6th week Collect External information Cash Clearing Departme nt

Activity Leverage Liquidity Ratios Market Profitability

Current Ratio Ratio Analysis Muslim Commercial Bank Limited Current Ratio = Current assets Current Liability Current Ratio / / /

Quick Ratio (Acid Test) Ratio Analysis Muslim Commercial Bank Limited Current Ratio = Current assets- prepaid Expenses Current Liability Quick Ratio / / /

Working Capital Ratio Ratio Analysis Muslim Commercial Bank Limited Working Capital ratio = Current Assets - Current Liability Working Capital Ratio

Working of Current Assets Current Assets 2007 (Rs) 2008 (Rs) 2009 (Rs) Cash and balances with treasury banks ,631,17238,774,871 Balances with other banks ,043,1006,009,993 Landings to financial institutions ,100,0793,000,000 Other assets – net ,810,47623,040,095 Total

Working of Current Liabilities Current Liabilities 2007 (Rs) 2008 (Rs) 2009 (Rs) Bills payable ,551,4688,201,090 Other liability ,345,78115,819,082 Total

Debt Ratio Ratio Analysis Muslim Commercial Bank Limited Debt Ratio = Total Debt / Total Assets Debt Ratio / / /509,223,

Working of Total (Liability) Debt Total debt 2007 (Rs) 2008 (Rs) 2009 (Rs) Bills payable ,551,4688,201,090 Borrowing ,663,84044,662,088 Deposit and other account ,181,624367,604,711 Other liability ,345,78115,819,082 Deferred tax liabilities – net ,1373,196,743 Sub-ordinate loan Total ,179,850439,483,714

Working of Total Assets Total Assets 2007 (Rs) 2008 (Rs) 2009 (Rs) Cash and balances with treasury banks ,631,17238,774,871 Balances with other banks ,043,1006,009,993 Lending to financial institution ,100,0793,000,000 Investment ,631,874167,134,465 Advances ,135,470253,249,407 Other asset ,810,47623,040,095 operating fixed Assets ,263,73318,014,896 Deferred tax Assets--- Total

Debt / Equity Ratio Ratio Analysis Muslim Commercial Bank Limited Debt to Equity Ratio: = Total liabilities (Debt) / Shareholder equity Debt / Equity Ratio / / /

Working of Shareholder Equity Share Holder Equity = Total Assets – Total Liabilities

Times Interest Earned Ratio Analysis Muslim Commercial Bank Limited Time Interest Earned Ratio = (EBIT) / Interest expenses Time Interest Earned / 7,865, /11,560, /15,841,

Working of EBIT EBIT2007 (Rs) 2008 (Rs) 2009 (Rs) Profit before tax ,867,56623,154,945 Add) interest / markup expenses ,560,74015,841,463 Total Interest / markup Expenses are available in P&L Account

TOTAL CAPITALIZATION RATIO Ratio Analysis Muslim Commercial Bank Limited Total Capitalization Ratio = Long term debt / Long term debt + Share holder equity Total Capitalizat ion ratio / / / / / /

Working of long term liabilities Long term Liabilities Year 2007 (Rs) Year 2008 (Rs) Year 2009 (Rs) Sub-ordinates loans Deferd tax liability ,1373,196,743 Liabilities against assets subject to finance lease Total ,1373,196,743

Total Assets Turnover Ratio Analysis Muslim Commercial Bank Limited Total Assets Turnover = Sales / Total Assets Total Asset Turnover / / /

Fixed Assets Turnover Ratio Analysis Muslim Commercial Bank Limited Fixed Assets Turnover = Sales / Total Fixed Assets Fixed Assets Turnover / / /

 Sale is the value of "Net Sales" or "Sales" from the company's income statement  Total Fixed Assets Total fixed assets are the value of all the assets which is not current assets. Total Fixed assets are available in the balance sheet.

Net Profit Margin Ratio Analysis Muslim Commercial Bank Limited Net Profit Margin = Net Income / sales * Net profit Margin 20,808,390 / or 65.4% 20,526,669 / or 51.2% 24,710,953 / or 47.8%

Working of Net Income Net Income Net mark–up / interest income after provisions ,463,96328,452,223 Add) Non–mark–up / interest income ,791,4405,642,885 Less) Non–mark–up / interest expenses ,387,83710,940,163 Profit before tax ,867,56623,154,945 Less) taxes ,492,9667,659,648 Profit after tax ,374,60015,495,297 Less) other expenses ,152,0699,215,656 Net income ,526,66924,710,953

Return on Assets Ratio Analysis Muslim Commercial Bank Limited Return on Assets = Net income after tax / Total Assets * Return on Assets / * % / * % / * %

Working of Net income after tax Net income after tax Net mark–up / interest income after provisions ,463,96328,452,223 Add) Non–mark–up / interest income ,791,4405,642,885 Less) Non–mark–up / interest expenses ,387,83710,940,163 Profit before tax ,867,56623,154,945 Less) taxes ,492,9667,659,648 Net income after tax ,374,60015,495,297

Operating Income Margin Ratio Analysis Muslim Commercial Bank Limited Operating margin = operating Income / Net sales* Operating income margin 24,369/ % 25,910 / % 30,620 / %

Operating Income = Available in Six year Analysis of the company

Return on Operating Assets Ratio Analysis Muslim Commercial Bank Limited Return on operating Assets = sales / operating assets Return on operating Assets / / /

Working of operating Assets Operating Assets Capital work–in– progress ,2261,099,749 Property and equipment ,562,30916,666,905 Intangible asset ,198248,242 Total ,263,73318,014,896

Return on Equity Ratio Analysis Muslim Commercial Bank Limited Return on Equity = Net income after tax / Total Equity* Return on equity / * % / * % / * %

Working of Total Equity Total equity Share capital ,282,7686,911,045 Reserves ,768,76538,385,760 Un appropriated profit ,193,33215,779,127 Total ,244,86561,075,932

Gross profit Margin Ratio Analysis Muslim Commercial Bank Limited Gross Profit Margin Ratio = Gross Profit / Net Sales Gross Profit Margin / / /

Working of Gross Profit Gross Profit Mark–up / return / interest earned ,043,82451,616,007 Less) Mark–up / return / interest expensed ,560,74015,841,463 Total ,483,08435,774,544

DuPont Return on Assets Ratio Analysis Muslim Commercial Bank Limited DuPont Return on Assets = Net Income * Sales_____ Sales Total Assets DuPont return on assets 20,808,390/ * / * ,526,669 / * / * ,710,953 / * / *

Dividend Per Share Ratio Analysis Muslim Commercial Bank Limited Dividend per share = Dividend paid to share holder Average common share outstanding Dividend per share / / /

Dividend paid to share holder Source: Cash flow statement of MCB Average common share outstanding source: financial statement analysis notes of MCB Note # 32 page # 106

Earning Per Share Ratio Analysis Muslim Commercial Bank Limited Earning Per share = Profit Available to shareholders or Net income after tax No of shares outstanding Earning per share 20,808,390 / ,526,669 / ,710,953 /

No of shares outstanding = Net income after tax EPS EPS is available in balance sheet Net income is available in P&L account of the MCB

Price Earning Ratio Ratio Analysis Muslim Commercial Bank Limited Price Earning Ratio = Current market Share price / Earning Per Share Price Earning ratio * * *

Working of Price Earning Ratio EPS is available in balance sheet PE Ratio is available in year analysis of the company. Current market Share price = PE * EPS

Conclusion  The overall analysis shows that MCB is in good condition throughout the analysis years 2007  In the next year 2008 & 2009, there is decrease in the value of profit as compare to previous year. During this year the operating cost was max and its operational profit was minimum as compare to previous year.The reason behind this due to uncertainty in the process of increase in payables, increase in capital work in progress and less investment during this year.  Earning per share is also increase during these years for the stocks holders and the persons interested in MCB investment.  Insufficient Staff in branches

Recommendation  MCB Should focus more on training needs of staff in line with practical banking, especially IT based products  Bank should acquire modern automation system to provide efficient and prompt service to the customers  Before lending loan to the client or financing a project a team of expert should physically visit the site and then evaluate its feasibility for investment. If the investment and project is profitable then should go on otherwise should not invest.  Increase in Mobile Banking including ATM, online Banking etc.  Take step to increase the profit.  Investment in assets should be appropriate.

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