FINI619 Internship Report MCB

8/11/2019 FINI619 Internship Report MCB

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In the name of AllahWho is the most beneficent

& the most merciful

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LOGO

MBA Finance


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I ntroduction to M CB

A bank is a financial institution which

deals with money and credit. It is anintermediate between two parties. A

bank is a firm that takes deposits fromhousehold, firms and makes loans to

household and firms.


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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 9,1947. After the partition of the Indo-Pak

Subcontinent, the bank moved to Dhaka from where itcommenced business in August 1948. 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


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P

oAuto Loan

oBusinessSarmayaoTractor financeschemeoMORTGAGE

S

oMCB ATMServicesoMCB MobileBankingoMCB CallCenter

oBasic BankingAccount (BBA)oCurrent AccountoSaving AccountoBusinessAccount

D


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Allied Bank Limited

United Bank Limited

Askari Bank Limited

Add Your

Title


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6500 6500 6500

292,098 330,274 367,604

218,960 262,510 253,149

113,089 96,256 167,134

394,068 22,663 44,662

5,130 9,193 15,779

15,265 15,374 15,495

2007 2008 2009

Authorizecapital

Deposits

Advances

Investment

Borrowing

Reserve

Profit after tax

Description


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Organizational H ierarchy Char t

President

Chairman

Vice president

Chief Financial Advisor

Audit Committee

Regional Manager

Branch Manager

Senior Vice President


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15-10-2010 30-11-2010

Joining Adjoining


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Working Departments

Remittance

1st week

2nd week

3rd week

Customer service

Account

4th week

5th week

6th week Coll ect External in formation

Cash

ClearingDepartme

nt


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Activity

L everage

Liquidity

Ratios

MarketProfitability


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Cur rent Ratio

RatioAnalysis

Muslim Commercial Bank LimitedCurrent Ratio = Current assets

Current Liability

2007 2008 2009 CurrentRatio

62411535/222015512.81

67584827/318972492.11

70824959/240201722.94

2.94

2.11

2.81

0 0.5 1 1.5 2 2.5 3 3.5

2 0 0 7

2 0 0 8

2 0 0 9


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Quick Ratio (Acid Test)

RatioAnalysis

Muslim Commercial Bank LimitedCurrent Ratio = Current assets- prepaid Expenses

Current Liability

2007 2008 2009 Quick Ratio 62411535/22201551

2.8167584827/31897249

2.1170824959/24020172

2.94

2.94

2.11

2.81

0 0.5 1 1.5 2 2.5 3 3.5

2 0 0 7

2 0 0 8

2 0 0 9


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Working Capital Ratio

RatioAnalysis

Muslim Commercial Bank Limited

Working Capital ratio = Current Assets - Current Liability

2007 2008 2009 WorkingCapitalRatio

62411535-2220155140209984

67584827-3189724935687578

70824959-2402017246804787

Working Capital Ratio

40209984

35687578

46804787

2 0 0 7

2 0 0 8

2 0 0 9


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Working of Current Assets

Current Assets2007(Rs)

2008(Rs)

2009(Rs)

Cash and balanceswith treasury banks

39683883 39,631,172 38,774,871

Balances with otherbanks

3807519 4,043,100 6,009,993

Landings tofinancial institutions

1051372 4,100,079 3,000,000

Other assets net 17868761 19,810,476 23,040,095

Total 62411535 67584827 70824959


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Working of Current L iabil i ties

Current Liabilities 2007(Rs)

2008(Rs)

2009(Rs)

Bills payable 10479058 10,551,468 8,201,090

Other liability 11722493 21,345,781 15,819,082

Total 22201551 31897249 24020172


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Debt Ratio

RatioAnalysis

Muslim Commercial Bank LimitedDebt Ratio = Total Debt / Total Assets

2007

2008

2009

DebtRatio

355365842/4104855170.86

385179850 /4436159040.868

439483714/509,223,7270.86

Debt Ratio

0.86

0.86

0.86

0 0.2 0.4 0.6 0.8 1

2 0 0 7

2 0 0 8

2 0 0 9


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Working of Total (L iabili ty) Debt

Total debt 2007(Rs)

2008(Rs)

2009(Rs)

Bills payable 10479058 10,551,468 8,201,090

Borrowing 39406831 22,663,840 44,662,088

Deposit andother account

292098066 330,181,624 367,604,711

Other liability 11722493 21,345,781 15,819,082

Deferred tax

liabilities net1180162 437,137 3,196,743

Sub-ordinateloan

479232 - -

Total 355365842 385,179,850 439,483,714


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Working of Total Assets

Total Assets 2007(Rs)

2008(Rs)

2009(Rs)

Cash and balances withtreasury banks

39683883 39,631,172 38,774,871

Balances with other banks 3807519 4,043,100 6,009,993Lending to financialinstitution

1051372 4,100,079 3,000,000

Investment 113089261 96,631,874 167,134,465

Advances 218960598 262,135,470 253,249,407

Other asset 17868761 19,810,476 23,040,095

operating fixed Assets 16024123 17,263,733 18,014,896

Deferred tax Assets - - -

Total 410485517 443615904 509223727


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Debt / Equi ty Ratio

RatioAnalysis

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

2007 2008 2009

Debt /EquityRatio

355365842 /551196756.44

385179850 / 584360546.59

439483714 / 697400130.63

Debt to Equity Ratio

6.44

6.59

0.63

0 1 2 3 4 5 6 7

2 0 0 7

2 0 0 8

2 0 0 9


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Working of Shareholder Equity

Share Holder Equity= Total Assets Total Liabilities


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Times I nterest Earned

RatioAnalysis

Muslim Commercial Bank LimitedTime Interest Earned Ratio = (EBIT) / Interest expenses

2007 2008 2009

TimeInterestEarned

29173568 / 7,865,5333.70

33428306 /11,560,7402.89

38996408 /15,841,4632.46

2.46

2.89

3.7 2 0 0 7

2 0 0 8

2 0 0 9


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Working of EBI T

EBIT 2007(Rs)

2008(Rs)

2009(Rs)

Profit before tax 21308035 21,867,566 23,154,945

Add) interest / markupexpenses

7865533 11,560,740 15,841,463

Total 29173568 33428306 38996408

Interest / markup Expenses are available in P&L Account


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TOTAL CAPI TALI ZATI ON RATI O

RatioAnalysis

Muslim Commercial Bank LimitedTotal Capitalization Ratio = Long term debt / Long term debt + Share holder equity

2007 2008 2009

TotalCapitalization ratio

1659394 /1659394+551196751659394 / 56779069

0.02

437137 /437137+58436054437137 / 58873191

0.13

3196743 / 3196743+697400133196743 / 72936756

0.04

TOTAL CAPITALIZATION RATIO

0.02

0.13

0.04

0 0.02 0.04 0.06 0.08 0.1 0.12 0.14

2 0 0 7

2 0 0 8

2 0 0 9


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Working of long term l iabil i ties

Long termLiabilities

Year 2007(Rs)

Year 2008(Rs)

Year 2009(Rs)

Sub-ordinates

loans

292098066 - -

Deferd tax liability 1180162 437,137 3,196,743

Liabilities against

assets subject tofinance lease

479232 - -

Total 293757460 437,137 3,196,743


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Total Assets Turnover

RatioAnalysis

Muslim Commercial Bank LimitedTotal Assets Turnover = Sales / Total Assets

2007 2008 2009TotalAssetTurnover

31786595 /4104855170.07

40043824 /4436159040.09

51616007 /5092237270.10

0.07

0.09

0.1

0 0.05 0.1

1

2 0 0

7

2 0 0 8

2 0 0 9

Total Asset Turnover

2009 51616007/509223727

2008 40043824/443615904

200731786595/410485517


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F ixed Assets Turnover

RatioAnalysis

Muslim Commercial Bank LimitedFixed Assets Turnover = Sales / Total Fixed Assets

2007 2008 2009FixedAssetsTurnover

31786595 /160241231.98

40043824 / 17263733 2.31

51616007 / 180148962.86

1.98

2.31

2.86

0 1 2 3

1

2 0 0 7

2 0 0 8

2 0 0 9

Fixed Asset Turnover

2009 51616007 /18014896

2008 40043824 /17263733

2007 31786595/16024123


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Sale is the value of "Net Sales" or "Sales" from thecompany's income statementTotal F ixed Assets Total fixed assets are the value ofall the assets which is not current assets. Total Fixedassets are available in the balance sheet.


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Net Profi t M argin

RatioAnalysis

Muslim Commercial Bank LimitedNet Profit Margin = Net Income / sales *100

2007 2008 2009

Net profitMargin

20,808,390 / 317865950.65 or 65.4%

20,526,669 / 400438240.51 or 51.2%

24,710,953 / 516160070.47 or 47.8%

65.40%

51.20%

47.80%

0.00% 20.00% 40.00% 60.00% 80.00%

1

2 0 0 7

2 0 0 8

2 0 0 9

Net Profit Margin

2009 24,710,953 /51616007

2008 20,526,669 /40043824

2007 20,808,390 /31786595


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Working of Net I ncome

Net Income 2007 2008 2009

Net mark up /interest income afterprovisions

20856011 24,463,963 28,452,223

Add) Non mark up /interest income

6011291 5,791,440 5,642,885

Less)Non mark up /interest expenses

26867302 8,387,837 10,940,163


Less) taxes 6042473 6,492,966 7,659,648

Profit after tax 15265562 15,374,600 15,495,297

Less) other expenses 5542828 5,152,069 9,215,656

Net income 20808390 20,526,669 24,710,953


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Return on Assets

Ratio Analysis Muslim Commercial Bank LimitedReturn on Assets = Net income after tax / Total Assets * 100

2007 2008 2009 Return onAssets

15265562/410485517*100

3.71%

15374600/443615904*100

3.46%

15495297/509223727*100

3.04%

3.71%

3.46%

3.04%

0.00% 1.00% 2.00% 3.00% 4.00%

1

2 0 0 7

2 0 0 8

2 0 0 9

Return on Asse ts

200915495297/509223727*100

200815374600/443615904*100

200715265562/410485517*100


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Working of Net income af ter tax

Net income aftertax

2007 2008 2009

Net mark up /interest income afterprovisions

20856011 24,463,963 28,452,223

Add) Non mark up /interest income

6011291 5,791,440 5,642,885

Less)Non mark up /interest expenses

26867302 8,387,837 10,940,163


Less) taxes 6042473 6,492,966 7,659,648

Net income after tax 15265562 15,374,600 15,495,297


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Operating I ncome M argin

RatioAnalysis

Muslim Commercial Bank LimitedOperating margin = operating Income / Net sales*100

2007 2008 2009

Operatingincomemargin

24,369/31786595 7.66 %

25,910 / 400438246.47%

30,620 / 516160075.93%

7.66

6.47

5.93

0 2 4 6 8

1

2 0 0 7

2 0 0 8

2 0 0 9

Operating income Margin

2009 30,620 / 51616007

2008 25,910 / 40043824

2007 24,369/ 31786595


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Operating Income = Available in Six year Analysis of the company


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Return on Operating Assets

RatioAnalysis


Return on operating Assets = sales / operating assets

2007 2008 2009 Return onoperatingAssets

31786595/160827811.97

40043824 / 173204852.31

51616007 / 180990102.85

Return on Operating Assets

1.97

2.31

2.85

0 0.5 1 1.5 2 2.5 3

2 0 0 7

2 0 0 8

2 0 0 9


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Working of operating Assets

Operating Assets 2007 2008 2009

Capital work in progress

233390 510,226 1,099,749

Property andequipment 15607660 16,562,309 16,666,905

Intangible asset 183073 191,198 248,242

Total 16024123 17,263,733 18,014,896


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Retur n on Equi ty

RatioAnalysis


Return on Equity = Net income after tax / Total Equity* 100

2007 2008 2009

Return onequity

15265562/45414156*100

33.6%

15374600/52244865*100

29.4%

15495297/61075932*100

25.4%

33.60%

29.40%

25.40%

0.00% 10.00% 20.00% 30.00% 40.00%

1

2 0 0 7

2 0 0 8

2 0 0 9

Return on E quity

200915495297/61075932*100

200815374600/52244865*100

200715265562/45414156*100


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Working of Total Equi ty

Total equity 2007 2008 2009

Share capital 6282768 6,282,768 6,911,045

Reserves 34000638 36,768,765 38,385,760

Un appropriated profit

5130750 9,193,332 15,779,127

Total 45414156 52,244,865 61,075,932


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Working of Gross Prof it

Gross Profit 2007 2008 2009

Mark up / return /interest earned

31786595 40,043,824 51,616,007

Less) Mark up /return / interestexpensed

7865533 11,560,740 15,841,463

Total 23921062 28,483,084 35,774,544


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DuPont Return on Assets

RatioAnalysis


DuPont Return on Assets = Net Income * Sales_____Sales Total Assets

2007 2008 2009 DuPontreturn onassets

20,808,390/31786595*

31786595/4104855170.65*0.07

0.04

20,526,669 / 40043824*

40043824 /4436159040.41*0.09

0.03

24,710,953 / 51616007*

51616007 /5092237270.47*0.10

0.04

0.04

0.03

0.04

0 0.01 0.02 0.03 0.04

1

2 0 0 7

2 0 0 8

2 0 0 9

DuPont Return on Assets

2009 24,710,953 /51616007 * 51616007/509223727 0.47*0.10

2008 20,526,669 /40043824 * 40043824/443615904 0.41*0.09

2007 20,808,390 /31786595 * 31786595

/410485517 0.65*0.07


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Dividend Per Share

RatioAnalysis


Dividend per share = Dividend paid to share holderAverage common share outstanding

2007 2008 2009 Dividendper share

4728496/ 691104527400.0

9834175/ 691104527125.9

6735510 / 691104527219.7

Dividend Per Share

400.0

125.9

219.7

0 100 200 300 400 500

2 0 0

7

2 0 0 8

2 0 0 9


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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


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Earning Per Share

RatioAnalysis


Earning Per share = Profit Available to shareholders or Net income after tax No of shares outstanding

2007 2008 2009

Earningper share

20,808,390 / 1102183 22.09

20,526,669 / 92130422.25

24,710,953 / 111864822.42

Earning Per Share

22.09

22.25

22.42

21.9 22 22.1 22.2 22.3 22.4 22.5

2 0 0 7

2 0 0 8

2 0 0 9


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No of shares outstanding= Net income after tax

EPSEPS is available in balance sheetNet income is available in P&L account of the

MCB


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Price Earning Ratio

RatioAnalysis


Price Earning Ratio = Current market Share price / Earning Per Share

2007 2008 2009 PriceEarningratio

18.11 * 22.09400.0

5.66 *22.25125.9

9.80 * 22.42219.7

PRICE EARNING RATIO

400.0

125.9

219.7

0 100 200 300 400 500

2 0 0 7

2 0 0 8

2 0 0 9


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Working of Pr ice Earning Ratio

EPS is available in balance sheetPE Ratio is available in year analysis of the company.

Cur rent market Share price = PE * EPS


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Conclusion

The overall analysis shows that MCB is in good conditionthroughout 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 theoperating cost was max and its operational profit wasminimum as compare to previous year .The reason behind thisdue to uncertainty in the process of increase in payables,increase in capital work in progress and less investmentduring 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


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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 provideefficient and prompt service to the customers

Before lending loan to the client or financing a project a teamof 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 Bankingetc.Take step to increase the profit.

Investment in assets should be appropriate.


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Documents

FINI619 Internship Report MCB