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Download the Power point slides of MCB for finance students of VU. Remember me in your prayer... Mudassar Yameen
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• MCB is one of the leading banks of Pakistan with a deposit f Rs. 368” in 2005,2004,2003,2001 and 200 the “The Best Domestic Bank in Pakistan” award in addition; MCB also has the distinction of winning the Billion and total asserts over Rs. 500 Billion. Incorporated in 1947, MCB soon earned reputation of solid and conservative financial institution managed by expatriate executives. In 1947, MCB was nationalized along with all other private sector banks.
• 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.
• MCB has become the only bank to receive the Euro-money award for the fourth time in the last five years. MCB won the “Best Bank in Pakistan Asia Money 2005& 2004 awards for being “The Best Domestic Commercial Bank in Pakistan”
Following is the list of some bank that are the competitors of MCB Bank Limited
National bank of Pakistan (NBP) United bank limited (UBL) Habib bank limited (HBL) Bank-al-Fallah limited (BAFL) Khushali Bank limited Allied Bank limited First Woman Bank Bank of Punjab And some other foreign banks like Silk Bank, First Emirates
banks, My Bank etc These are all the competitors of the MCB bank in the financial
sector because they are also covering the market ad there own interest. MCB should has the policy and procedure to overcome the competition in the market and to retain in the market with the moderns facilities to its loyal customers
During my internship I work and learn in different departments these are the followings departments
• Account opening Department• Accounts Department • Remittance Department• General Banking Department• Credit Department
• The process of account opening is very simple and anybody who would like to open his account would open it easily
Types of Accounts CURRENT ACCOUNT
SAVING ACCOUNT
TERM DEPOSITS ACCOUNT
Application Form Green color-coded Application Form is available for each type of
account Form is given to the customer to fill in for opening a related
account.
Signature Specimen Card (SS)
“SIGNATURE SPECIMEN CARD” is the card is compulsory for opening the account.
Without getting the signature of the customers you cannot open the account
These are the signatures that verify the cheque because these cheques are kept by the bank
This card contains: four signatures of an applicant applicant account number account type
Banker uses this card at the time when he receives the cheque; he compares customer’s signature with the signature on the cheque for avoiding fraud
title of account
Account Opening Register
• The person who is opening the account of the persons records the necessary details into this register and allots an account number from this account opening register
• This register is maintained for each type of account and the account numbers are allotted serially
Cheque Book
Cheque book is issued to the customer when the bank accepts the account opening application form
Letter of Thanks
Bank prepares two ‘LETTER OF THANKS’ one for the new
customer and the other for his introducer. This act promotes
good will among the customer and the introducer.
Duties and learning in credit department I started my work and learning in credit department
of the branch. Mr. Usman Gul (Forex Manager) told me about the terms and conditions of the commercial loan, types of commercial loan like industrial loan and loan for merchants, how to make proposal for commercial loan, document required to make a proposal, markup of commercial loan (18.5 % annually). He also gave me chance to view some old proposals and the proposal on which he was working.
Mr. Iqbal (assistant for Mr. Usman Gul in Forex department) who is dealing consumer financing. He told me about different types of consumer financing.
Flexi loan (personal loan) Auto finance Lifestyle loan
In Sargodha region at this point of time from MCB only personal loan is active while auto finance is about to start again in near future and lifestyle loan is inactive. I came to know about the terms and conditions of personal loan. Only the government servant who has his salary account at least six month old in MCB can apply. Different markup for different categories like 21%, 23% and 25%.
21% for existing users’ up to 3 year duration
23% for existing users for 4 or 5 years duration.
25% for new customers
In Remittance Department I had learned following things: Learned basic operations of remittance department (PO, DD) Learned how to make entries and vouchers of incoming TT Made vouchers and entries for Incoming TT Learned the difference between DD and PO Observed other operations e.g. PO (Pay Order), DD (Demand Draft) Learned bank charges for PO, DD, TT & MT (Mail Transfer) Learned how to make entries and vouchers for Outgoing TT (Telegraphic
Transfer) Made few Outgoing TT Learned & Made Inter-Branch Credit Advices against the checks received
from outer city branches IBIT - 31 -
a) Liquidity Ratios
b) Leverage Ratio
c) Profitability Ratios
d) Activity Ratios
e) Market Ratios
f) Statements of Cash Flow
Ratio Analysis
MCB Bank limited
Current Assets / Current Liabilities
Year 2009 Year 2008 Year 2007
Current Ratio
226,656,076 / 420467889 = 0.54
204,801,921 / 363396932 = 0.56
198,525,463 / 342463187 = 0.58
Ratio AnalysisMCB Bank Limited
Current Assets – Investment / Current Liabilities
Year 2009 Year 2008 Year 207
Quick Ratio 468,160,736 – 167,134,465 / 420,467,889 = 0.72
406,541,695 – 96,631,874 / 363,396,932 = 0.85
376,592,633 – 113,089,261 / 342,463,187 = 0.77
Ratio AnalysisMCB Bank Limited
Revenue earned / Working Capital
Year 2009 Year 2008 Year 207
Sales to Working Capital
51,616,007 / 47,700,847 = 1.08
40,043,824 / 43,144,763 = 0.93
31,786,595 / 34,129,446 = 0.93
34,129,44634,129,44634,129,446
Ratio AnalysisMCB Bank Limited
Current Asset – Current Liabilities
Year 2009 Year 2008 Year 207
Working Capital
47,700,847 43,144,763 34,129,446
Leverage Ratio
Ratio AnalysisMCB Bank Limited
EBIT / FIXED INTERST CHARGES
Year 2009 Year 2008 Year 2007
Time Interest Earned Ratio
38,519,581 / 15,364,636 = 2.51
32,764,741 / 10,843,175 = 3.01
28,769,732 / 7,461,697 = 3.86
Ratio AnalysisMCB Bank Limited
TOTAL LIABILITIES / TOTAL ASSETS
Year 2009 Year 2008 Year 2007
Debt Ratio 439,483,714 / 509,223,727 = 0.86
385,179,850 / 443,615,904 = 0.87
355,365,842 / 410,485,517 = 0.87
Ratio AnalysisMCB Bank Limited
TOTAL LIABILITIES/ SHAREHOLDERS EQUITY
Year 2009 Year 2008 Year 2007
Debt to Equity Ratio
439,483,714 / 61,075,932 = 7.20
385,179,850 / 52,244,865 = 7.37
355,365,842 / 45,414,156 = 7.83
Ratio AnalysisMCB Bank Limited
total liabilities / net worth – net intangible assets
Year 2009 Year 2008 Year 2007
Debt to tangible net worth
439,483,714 / 69,740,013 = 6.30
385,179,850 / 58,436,054 = 6.59
355,365,842 / 55,119,675 = 6.45
Ratio AnalysisMCB Bank Limited
Long term debts / capital employed
Year 2009 Year 2008 Year 2007
Total Capitalization Ratio
19,015,825 / 80,091,757 = 0.24
21,782,918 / 74,027,783 = 0.29
12,902,655 / 46,704,422 = 0.28
Ratio AnalysisMCB Bank Limited
(Fixed asset/ total assets) / (shareholder’s equity / total assts)
Year 2009 Year 2008 Year 2007
Fixed Asset Ratio / Equity Ratio
(282,567,651 / 509,223,727) / (61,075,932 / 509,223,727) = 0.55/ .12 = 4.6
(238,813,983 / 443,615,904) / (52,244,865 / 443,615,904) = 0.54 / 0.12 = 4.5
(211,960,054 / 410,485,517) /(454,141,456 / 410,485,517) = 0.52 /0.11 = 4.7
Ratio AnalysisMCB Bank Limited
Long term assets / long term debts
Year 2009 Year 2008 Year 2007
Long term assets versus long term debts
41,054,991 / 19,015,825 = 2.16
37,074,209 / 21,782,918 = 1.70
33,892,884 / 12,902,655 = 2.63
Profitability Ratios
Ratio AnalysisMCB Bank Limited
Net Profit / Mark up Interest Earned * 100
Year 2009 Year 2008 Year 2007
Net Profit Margin
15,495,297 /51,616,007 * 100 = 30.02 %
15,374,600 / 40,043,824 * 100 = 38.39 %
15,265,562 / 31,786,595 * 100 = 48.03 %
Ratio AnalysisMCB Bank Limited
NET INCOME/ TOTAL ASSETS
Year 2009 Year 2008 Year 2007
RETURN ON ASSETS
15,495,297 / 509,223,727 = 0.03
15,374,600 / 443,615,904 = 0.03
15,265,562 / 410,485,517 = 0.04
0
0.005
0.01
0.015
0.02
0.025
0.03
0.035
0.04
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
Net income / Total Assets
Year 2009 Year 2008 Year 2007
DuPont Return on Assets
15,495,297 / 509,223,727 = 0.03
15,374,600 / 44,361,5904 = 0.03
15,265,562 / 4,104,855 = 0.04
0
0.005
0.01
0.015
0.02
0.025
0.03
0.035
0.04
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
net mark up / operating assets
Year 2009 Year 2008 Year 2007
Operating Assets Turnover
51,616,007 / 1,926,183,632 = 0.03
40,043,824 / 423,805,428 = 0.09
31,786,595 / 392,616,756 = 0.08
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
Net income / operating assets
Year 2009 Year 2008 Year 2007
Return on Operating Assets
15,495,297 / 196,183,632 = 0.01
15,374,600 / 423,805,428 = 0.04
15,265,562 / 392,616,756 = 0.04
0
0.005
0.01
0.015
0.02
0.025
0.03
0.035
0.04
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
Net income after Tax / Shareholder Equity
Indicates how much return in %age is earned by investing amount equal to equity
Year 2009 Year 2008 Year 2007
Return on Total Equity
15,495,297 / 61,075,932 = 0.34
15,374,600 / 52,244,865 = 0.29
15,265,562 / 45,414,156 = 0.25
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
Operating Income / Mark up interest earned * 100
Year 2009 Year 2008 Year 2007
Operating Income Margin
3,154,945 / 51,616,007 * 100 = 44.86 %
21,867,566 / 40,043,824 * 100 = 54.61 %
21,308,035 / 31,786,595 * 100 = 67.03 %
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
Net mark up / mark up interest earned * 100
Year 2009 Year 2008 Year 2007
Gross Profit Margin
35,774,544 / 51,616,007 * 100 = 69.31 %
28,483,084 / 40,043,824 * 100 = 71.13 %
23,921,062 / 31,786,595 * 100 = 75.25 %
66.00%
67.00%
68.00%
69.00%
70.00%
71.00%
72.00%
73.00%
74.00%
75.00%
76.00%
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
Net profit after tax/Total assets
Year 2009 Year 2008 Year 2007
Return on Investment
15,495,297 / 50,9223,727 = 0.03
15,374,600 / 443,615,904 = 0.03
15,265,562 / 410,485,517 = 0.04
0
0.005
0.01
0.015
0.02
0.025
0.03
0.035
0.04
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
mark up interest earned / Total Assets
Year 2009 Year 2008 Year 2007
Asset turnover Ratio
51,616,007 / 509,223,727 = 0.10
40,043,824 / 443,615,904 = 0.09
31,786,595 / 410,485,517 = 0.08
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.1
Ratio
2009 2008 2007
Year
Activity Ratios
Ratio AnalysisMCB Bank Limited
markup interest earned / total assets
Year 2009 Year 2008 Year 2007
Total asset turnover
51,616,007 / 509,223,727 = 0.10
40,043,824 / 443,615,904 = 0.09
31,786,595 / 410,485,517 = 0.08
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.1
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
markup interest earned / fixed assets
Year 2009 Year 2008 Year 2007
Fixed asset Turnover
51,616,007 / 41,054,991 = 1.26
40,043,824 / 37,074,209 = 1.08
31,786,595 / 33,892,884 = 0.94
0
0.2
0.4
0.6
0.8
1
1.2
1.4
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
dividend / number of shares
Year 2009 Year 2008 Year 2007
Dividend per share
6,735,510,000 / 691,104,527 = 9.75
9,834,175,000 / 628,276,843 = 15.65
4,728,496,000/ 628,276,843 = 7.53
0
2
4
6
8
10
12
14
16
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
net income / number of shares
Year 2009 Year 2008 Year 2007
Earning per share
15,495,297,000 / 691,104,527 = 22.42
15,374,600,000 / 628,276,843 = 24.47
15,265,562,000 / 628,276,843 = 24.30
21
21.5
22
22.5
23
23.5
24
24.5
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
market value per share / earning per share
Year 2009 Year 2008 Year 2007
Price earning ratio
244 / 22.42 =10.88
494.8 / 24.47 = 20.22
434.6 / 24.30 = 17.88
0
5
10
15
20
25
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
Net income – All dividend / Net Income
Year 2009 Year 2008 Year 2007
Percentage of earning retained
(15495297-6735510)/ 15495297 = 8759787 / 15495297 =
0.57
(15374600 – 9834175) / 15374600 = 5540425 / 15374600 =
0.36
(15265562 – 4728496) / 15265562 = 10537066 / 15265562 =
0.67
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
dividend per share / earning per share * 100
Year 2009 Year 2008 Year 2007
Dividend payout ratio
11.36 /22.42 * 100 = 50.67 %
13.20 / 24.47 * 100 = 53.94 %
13.67 / 24.30 * 100 = 56.26 %
47.00%
48.00%
49.00%
50.00%
51.00%
52.00%
53.00%
54.00%
55.00%
56.00%
57.00%
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
dividend per share / market price per share * 100
Year 2009 Year 2008 Year 2007
Dividend yield ratio
11.36 / 244 *100 = 4.66 %
13.20 / 494.80 * 100 = 2.67 %
13.67 /434.6 *100 = 3.15 %
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
share holders’ equity / number of shares
Year 2009 Year 2008 Year 2007
Book value per share
61,075,932 / 619,104,527 = 0.04
52,244,865 / 628,276,843 = 0.08
45,414,156 / 628,276,843 = 0.07
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
Ratio
2009 2008 2007
Year
Statements of Cash Flow
Ratio AnalysisMCB Bank Limited
operating cash flow / total debts
Year 2009 Year 2008 Year 2007
Operating cash flow to debt
78,148,082 / 4,394,83714 = 0.18
2,031,538/ 385,179,850 = 0.005
61,899,299 / 355,365,842 = 0.174
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
0.18
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
operating cash flow / number of share issued
Year 2009 Year 2008 Year 2007
Operating cash flow to shares
78,148,082 /619,104,527 = 0.11
2,031,538 / 628,276,843 =0.003
61,899,299 / 628,276,843 = 0.10
0
0.02
0.04
0.06
0.08
0.1
0.12
Ratio
2009 2008 2007
Year
Ratio AnalysisMCB Bank Limited
operating cash flow / cash dividend
Year 2009 Year 2008 Year 2007
Operating cash flow to cash dividend
78,148,082 / 2,418,865,845 = 0.032
2,031,538 / 1,570,692,108 = 0.001
61,899,299 / 3,141,384,215 = 0.02
0
0.005
0.01
0.015
0.02
0.025
0.03
0.035
Ratio
2009 2008 2007
Year
Working of Current Assets 2009 2008 2007
Rs M % Rs M % Rs M %
Balance sheetAssetsCash and balance with treasury banks 38,775 8% 39631 9% 39,684 10%
Balance with other banks 6,010 1% 4,043 1% 3,808 1%
Lending to financial institutions 3,000 1% 4,100 1% 1,051 0%
Investment 167,134 33% 96,632 22% 113,089 28%
Advances 253,294 50% 262,135 59% 218,961 53%
Operating fixed assets 18,015 4% 17,264 4% 16,024 4%
Deferred tax assets - - - - - -Other assets 23,040 5% 19,810 4% 17,869 4%
Total 509,224 100% 443,616 100% 410,486 100%
Liabilities
Bills payable 8,201 2% 10,551 2% 10,479 3%
Borrowings 44,662 9% 22,664 5% 39,407 10%
Deposits and other accounts 367,605 72% 330,182 74% 292,098 71%
Deferred tax liabilities - - - - 479 0%
Other liabilities 15,819 3% 21,346 5% 11,722 3%
Total 439,484 86% 385,180 87% 355,366 87%
Net assets 69,740 14% 58,436 13% 55,120 13%
• It is an evident while the analysis of the financial statement of the MCB that it is making progress leaps and bounds. The profit of the MCB is increasing and growing in last few years and that trend is to be shown in the future time period. So I have concluded that MCB has a very prosperous present and future, which is the assurance of the wealth maximization of the shareholder in the future. I also think that is that bank would be able to cover and control on the down mentioned recombination than it would be in such situations that will really lea it towards the road of prosperity, development and integrity.
• With Cooperation of all branch members, I have been able to learn and
experience many new things related to the banking sector and the banks workings. I am able to handle the public with respect to many different workings on many different instances and also in account opening for customers and can handle many other tasks as well.
• Finally I concluded that MCB is a good organization for a person for his long term career workings. Overall working and environment of the bank is very comfortable and the staff is very helpful and respectful of each other and it still maintains a professional environment. Management of the bank is very strong.
• Employees of MCB Liaqat Market branch work more than their working hours and all the workings take place in a very friendly atmosphere that does not induce pressure on the person working there. It also shows their loyalty and commitment to the organization. This branch of MCB relatively small and has climbed its way up very quickly and all that only because of the employee’s efforts and consideration for each other
• Understanding and the effective management of the human resources is the most difficult challenge faced not only by the bank but by all the organizations. Even though the people have been sacrificed in the new organizational developments, it is becoming clear that the true lasting competitive advantage comes through human resources and how they are managed. MCB seems to not focusing on this highly critical issue as the job satisfaction level of the employees working at MCB, was quite low.
• Current ratio shows a firm’s ability to cover its current liabilities with its current assets. So MCB should maintain its current ratio in the good positions by increasing the current assets and decreasing the current liabilities
• Quick ratio shows a firm’s ability to meets it current liabilities with its current assets excluding inventories and prepaid expenses, which are least liquid portion of the current assets. So MCB should maintain its current ratio in the good positions by increasing the current assets and decreasing the current liabilities
• Inventories are considered as current assets so they are included in current ratio calculation. Inventories are less liquid. MCB should maintain its inventories at liquid level
• Higher cash ratio also shows the higher rate of satisfaction like other liquidity ratios. MCB have to maintain its cash level at high portion
• Financial leverage is the extent to which a firm is financed with debt. The amount of the debt a firm uses has both positive and negative effects. Financial leverage should have a positive affect on the both side
• MCB have to maintain its debt ratio in good position because the debt equity ratio is a simple rearranged of the debt ratio.
• Coverage ratio shows the number of the times a firm can recover or meet particular financial obligations. The interest coverage ratio, which is also called the time interest earned ratio, measure the coverage of the firm s interest expense. And the interest is also the income of the bank so it should be the best source to measure the position of the interest coverage.
• All the financial ratios affect the position of the bank in the market so the bank have to maintain it in proper positions
Thank You