Student Name

Student IDMBA

Finance

Finance (FINI-619)Finance (FINI-619)

Internship reportInternship report

MCB Bank Thanil Fatohi MCB Bank Thanil Fatohi Branch(1177)Branch(1177)

Brief Introduction of the OrganizationBrief Introduction of the Organization

It was established under the Indian companies act V11 as limited company by adamjee group on 9th of July 1947 In 1974 it was nationalized during the government of Mr. Zulfiqar Ali Bhutto. In 1991Nishat group purchase this bank and it was the first bank which was privatize. It is awarded as the “Best Bank in Pakistan” in 2001, 2003, 2004 and 2005. The 2nd largest bank with deposit base Rs 431 billion and assets Rs 570 billion. Listen on London Stock Exchange.Head office is located in Karachi.

Business volume

Particulars 2012(In millions)Total Assets 765,899 Total Liabilities 664,148Total Sales 68,356Shareholder Equity 88,157Profit before tax 32,054Profit After Tax 20,941 Total income 50,009Earning Per Share 22.77Deposits 545,061Advances 239,583Investments 402,069Authorized Capital 10,000Paid up/ share capital 9,199Bonus share 920

Main Rivals of MCB

United Bank Limited Allied Bank Limited Bank al Habib Limited Bank al Falah Limited Askari Bank Faysal Bank Bolan Bank Limited Soneri Bank Limited Atlas Bank Limited Indus Bank Limited Meezan Bank LimitedBank IslamiThe Bank of Punjab

Training Program Training Program (Duties performed)(Duties performed)

Starting Date: 16th of Dec. 2013

Ending Date: 24th of Jan. 2014

Account opening, fill the account opening form

Deposits, fill the deposit slips

Demand draft and its working

Cash and bills, pay and receive the amount for accounts and also fill the scrolls for collection of bills.

Learning ExperienceKnowledge GainedI observe the role of manager and know about

management.Skills Learned:I learn about customer dealing and filling the concerned slips.Attitudes Observed/Values Gained:I practically know about team work and cooperation.Most Challenging Task Performed:The most challenging thing is to understand the behaviors and perception of different clients.

Ratio AnalysisRatio Analysis

Ratio analysis

MCB Bank

Net Profit Margin= (Net profit after taxation / Net sales) * 100

Net Profit Margin

Year 2010 Year 2011 Year 2012

16,873,175/54,821,296*100=30.77%= 30.77 %

19,424,906/68,146,588 *100 = 28.51%

20,940,696/68,356,191 *100 = 30.63%

Ratio analysis

MCB Bank

Gross spread ratio=Net interest margin / Mark-up earned*100

Gross spread ratio

Year 2010 Year 2011 Year 2012

=6,833,529/ 54,821,296*100=0.67 times*100=67%

=4,526,314/68,146,588*100=0.65 times*100=65%

40,856,172/68,356,191=0.59times*100=59%

Ratio analysis

MCB Bank

Spread Ratio = Interest Earned / Interest Expense

Spread ratio

Year 2010 Year 2011 Year 2012

54,821,296 / 17,987,767= 3.04 times

68,146,588/23,620,274=2.88 times

68,356,191/27,500,019=2.48 times

Ratio analysis

MCB Bank

Non Interest Income to Total Income Ratio = Non interest income / total income*100

Non Interest Income to Total Income Ratio

Year 2010 Year 2011 Year 2012

=6,265,306/ 61,086,602*100 =10.25%

=8,112,191/76,258,779*100=10.63%

=9,153,331/77,509,522*100=11.8%

Ratio analysis

MCB Bank

Return on Assets= Net income after tax/Average Total Assets*100

Return on Assets (ROA)

Year 2010 Year 2011 Year 2012

=16,873,175/538,388,170*100=3.13%

=19,424,906/610,392,918*100 =3.18%

=20,940,696/709,566,107*100 =2.95%

Ratio analysis

MCB Bank

Du Pont Return on Assets= (Net income /sales) *(sales/Average total assets)*100

Du Pont Return on Assets Ratio

Year 2010 Year 2011 Year 2012

=16,873,175/538,388,170*100=3.13%

19,424,906/610,392,918 *100 =3.18%

=20,940,696/709,566,107*100=2.95%

Ratio analysis

MCB Bank

Return on Equity (ROE) =Net income after tax/stockholder equity*100

Return on Equity (ROE)

Year 2010 Year 2011 Year 2012

=16,873,175/69,180,011=0.243*100=24.39%

=19,424,906/78,915,003 =0.246*100 =24.61%

=20,940,696 / 88,156,909 =0.237*100 =23.75%

Ratio analysis

MCB Bank

Debt Ratio = Total debt/Total Assets

Debt Ratio Year 2010 Year 2011 Year 2012

=488,348,404/567,552,613*100=0.86 *100 =86%

564,430,741/653,233,223*100=0.86 *100 =86%

=664,148,186/765,898,992*100=0.86*100 =86%

Ratio analysis

MCB Bank

Debt / Equity Ratio= Total Debt/Total equity

Debt to Equity Ratio

Year 2010 Year 2011 Year 2012

=488,348,404 / 69,180,011 =7.06 times

= 564,430,741/78,915,003=7.15 times

= 664,148,186/ 88,156,909 =7.53times

Ratio analysis

MCB Bank

Times Interest Earned Ratio =Earnings before interest and tax (EBIT)/interest expenses

Times Interest Earned Ratio

Year 2010 Year 2011 Year 2012

=44,240,842/17,987,767=2.46times

=55,103,453/ 23, 620, 274=2.33times

=59,553,763/27,500,019=2.16 times

Ratio analysis

MCB Bank

Advances / Deposits Ratio= Loans/deposits

Advances / Deposits Ratio

Year 2010 Year 2011 Year 2012

=254551,589/431,371,937=0.59 times

=227,580,139/491,188,710=0.46 times

=239,583,320/545,060,728=0.44 times

Ratio analysis

MCB Bank

Operating Cash Flow Ratio=operating cash Flow/current liabilities

Operating Cash Flow Ratio

Year 2010 Year 2011 Year 2012

=58,701,161/274,715,687=0.21 times

=124,459,950/ 550,726,395 =0.22times

=96,700,952/647,937,421=0.14 times

Ratio analysis

MCB Bank

Dividend per Share=Dividend amount/No of equity shares

Dividend per Share

Year 2010 Year 2011 Year 2012

= 8,880,716/760,215 =11.68Rs

=9,806,772/836,236=11.72Rs

=11,707,312/919860=12.72Rs

Ratio analysis

MCB Bank

Earnings per Share =Net income/No of outstanding share

Earnings per Share

Year 2010 Year 2011 Year 2012

=16,873,175/760,215 =22.19Rs

=19,424,906/836,236=23.22Rs

=20,940,696/919860=22.76Rs

Ratio analysis MCB Bank

Price/Earning Ratio =Price per share/Earning per share

Price/Earning Ratio

Year 2010 Year 2011 Year 2012

=228.54/22.19526=10.29 times

=134.60/23.22896=5.79 times

=209.76/22.76508=9.21 times

Conclusion

Bank should rely more on the interest income rather than non interest income

Bank has to pays its shareholders dividend from its income as it is capable of doing this

The ratios of the bank show profitability and smooth running of successful business

Recommendations for Improvement(According to learning experience)

MCB should focus more on quality of customer services in this era of competition. There is a need to improve the customer and employee relationship. Bank must focus on the application of new and updated technology and train their employees side by side. There must be a concept of job rotation so that each employee must be able to perform every activity. Internal control should be more strengthened so that the performance of organizations increases.

Recommendations for Improvement(According to Ratio analysis)Net profit margin decrease in 2011 but in 2012 it shows increasing trend but there is need to increase the profit margin by minimizing the cost.

There is a need to increase the interest income. Non interest income is not the guarantee of financial health of any business.

Bank must not rely on its own asset instead it takes fewer loans to lessen the interest income.

Return on equity is also shows diminishing trend in 2012 it shows that expenses are more.

Try to reduce the interest expenses and attract more customers to increase the income of bank.

THANK YOU