Xecutive Summary

8/3/2019 Xecutive Summary

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MCB BANK LIMITED

EXECUTIVE SUMMARY:

MCBBank Limited

MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solidfoundation of over 50 years in Pakistan, with a network of over 900 branches, over750 of which are Automated Branches, over 222 MCB ATMs in 41 citiesnationwide and a network of over 12 banks on the MNET ATM Switch.

MCB's operations continued to be streamlined with focus on rationalization ofexpenses, re-alignment of back-end processing to increase productivity,enhancement of customer service standards, process efficiency and controls. The

Bank has taken the lead in introducing the innovative concept of centralizing Trade

Services in the country by providing centralized foreign trade services to brancheswith a view to improve efficiency, expertise and reduce delivery cost.


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MCB online banking MCB mobile ATM MCB Lockers MCB salary club MCB Investment Services MCB Virtual banking Personal Banking


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1.MCB in Brief

2.

1.1. History

MCBBank Limited (Formerly Muslim Commercial Bank Limited) has a solidfoundation of over 50 years in Pakistan, with a network of over 900 branches, over

750 of which are Automated Branches, over 222 MCB ATMs in 41 citiesnationwide and a network of over 12 banks on the MNET ATM Switch, which as acombination is considered to be the core competence of MCB.

MCB has become the only bank to receive the Euro money award for the fourthtime in the last five years. MCB won the "Best Bank in Pakistan" in 2005, 2004,2003, 2001, and in 2000 the "Best Domestic Bank in Pakistan" awards. In addition,

MCB also has the distinction of winning the Asia Money 2005 & 2004 awards forbeing "The Best Domestic Commercial Bank in Pakistan".

Ten years after privatization, MCB is now in a consolidation stage designed to lockin the gains made in recent years and prepare the groundwork for future growth.The bank has restructured its asset portfolio and rationalized the cost structure inorder to remain a low cost producer.

MCB now focuses on three core businesses namely Corporate, Commercial and

Consumer Banking. Corporate clientele includes public sector companies as well

as large local and multinational concerns. MCB is also catering to the growingmiddle class by providing new asset and liability products. MCB looks withconfidence at year 2005 and beyond, making strides towards fulfillment of itsmission, "to become the preferred provider of quality financial services in thecountry with profitability and responsibility and to be the best place to work".

1.2. The Mission

To become the preferred provider of quality financial services in the country with

profitability and responsibility and to be the best place to work.


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1.3. The Business

MCB is in its over 50 years of operation. It has a network of over 900 branches allover the country with business establishments in Sri Lanka and Bahrain. The

branch break-up province wise is Punjab (57%), Sindh (21%), NWFP (19%) andBaluchistan (3%) respectively.

3.Principles ofPerformance

4.

2.1. Customer Focus

Over the years MCB has developed strong relationships with its customers byunderstanding their needs and treating them with respect, dignity and importance.The driving force behind its commitment and services is its focus on customers,ensuring that it not only meets, but exceeds their expectations.

2.2. Quest for Quality

MCB strives to achieve excellence by ensuring that every moment of our time is

spent in adding value, making sure that we do things right, first time, and everytime. With this quest for quality, MCB has always taken initiatives in bringing

banking into a new arena; from cash to the convenience of plastic; from branchbanking to internet banking and from face-to-face customer interaction to onlineaccessibility.

2.3. Employees Respect

MCB encourages diversity and treat each of our employees with fairness. MCB

gives constructive feedback for their continuous development and seek suggestions

from all employees for further improvement. The bank ensures that qualityperformance is acknowledged and rewarded and exercise utmost responsibility indecision-making with regards to our employees.


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2.4. Team Based Approach

MCB believes in achieving its Mission and Vision by working together as acombined group. MCB treats its employees as its internal customers and ensurethat the requirements of internal customer focus are always met. Equipped with in-depth product knowledge, and recognizing the strengths in each individual, the

bank strives for optimum-results from our co-workers and bringing out peakperformances by working towards common goals and objectives in today'sdynamic banking environment.

2.5. Good Corporate Citizenship

MCB seeks to continuously improve the quality of life in our communities. Thebank realizes that it has a responsibility to the society in which it operates and itseeks ways of playing a positive role for the betterment of the community at largefor a progressive environment, better living and a brighter future.

3. Corporate Information

Board of Directors

Mian Mohammad Mansha

Chairman

S. M. Muneer

Vice Chairman

Tariq Rafi

Mohammad Arshad

Shahzad Saleem

Sarmad Amin

Mian Umer Mansha

Aftab Ahmad Khan

Atif Yaseen


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Mohammad Aftab Manzoor

President & Chief Executive

Advisor

Raza Mansha

Audit Committee

Mian Mohammad Mansha

Chairman

Mian Umer Mansha

Member

Aftab Ahmad Khan

Member

Chief Financial Officer

Ali Munir

Company Secretary

TahirHassan Qureshi

Auditors

A.F.Ferguson & Co.Chartered Accountants

Riaz Ahmed & Co.Chartered Accountants

Legal Advisors

Mandiwalla & Zafar


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Advocates & Legal Consultants

Registered Office

MCB Building, F-6 / G-6,Jinnah Avenue, Islamabad.

Principal Office

MCB TowerI.I. Chundrigar Road, Karachi.

Registrar's and Share Registration Office

THK Associated (Pvt.) Ltd.

Shares Department, Ground Floor,Modern Motors HouseBeaumont Road, Karachi.

Business Operations

1. Banking Sector Overview

Pakistans banking and finance sector grew by over 21 percent from July 2004-

March 2005 amid the eight percent expansion in the services sector in Pakistan.

Financial sector in Pakistan is going through a fast-paced transition as new groupswere buying out foreign banks operations in Pakistan. The number of listed banks

is also increasing. While the income from core banking activity has increasing dueto higher business volume, earnings are also expected to improve due to ventures


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into consumer finance, housing finance and enhanced lending to the agriculturesector.

In just four years the banking industry has expanded tremendously and now thereare more than two dozen commercial and investment banks operating in thecountry. Commercial banks in the private sector had performed well since theirinception, registering overall growth in the deposit base and profits. The banks alsomanaged to maintain a healthy credit portfolio.

Foreign banks have a strong presence in all major cities and are targeting high networth individuals and blue chip companies. Their strategy is quite successful asthey account for about 34 percent of total sector profits, despite having only 15

percent of deposits and 16 percent of advances.

During the first six months of the ongoing fiscal year, total assets of all thescheduled banks increased by Rs 239 billion. Total assets grew by 8.5 percent fromRs 2,800 billion in June 2004 to Rs 3,039 billion in Dec 2004. During the first sixmonths of 2004-05, there was also an increase of Rs 277 billion in the net advancesof the scheduled banks. Net advances grew by 19.3 percent from Rs 1,437 billionin June 2004 to Rs 1,714 billion in Dec 2004.

2. MCBs Performance Overview

The first half of 2005 was very promising for MCB, as the bank has achieved pretax profits of Rs. 4.2 billion, compared with Rs. 2.2 billion for the same period in2004. Profit after tax has more than doubled compared to the corresponding periodfor 2004 and exceeds Rs. 3 billion highest ever profit in the history of MCB. Thistranslates into earning per shares of Rs. 7.43.

Advance and deposit increased to Rs. 156 billion and Rs. 241 billion reflecting a

growth of 14% and 10% respectively. Additionally the banks assets expanded by16% during the half year ended 2005 and crossed Rs. 300 billion marks.

Banks equity (capital and reserves) increased by 41% during the half year, whichwas due to the issue of right shares and retained earnings. Increase in equity wouldimprove the lending limit and would provide the opportunity for significant growth


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of the banks balance sheet. This would also help to meet the capital requirementunder Basel Accord II, which will be effective from 2007.

Based on continuing growth and consistently outstanding performance, MCB has

once again received the Euro money Award 2005 for the Best Bank inPakistan. MCB has become the only bank to receive the Euro money Award forExcellence for the fifth time in last six years. In addition, Asia Money has alsodeclared MCB as The Best Domestic Commercial Bank in Pakistan for the year2005.

3.Products and Services

1. MCB visa credit card:

MCB offers a complete suite of classic, Gold andplatinum visa card focusing on providing, superior service, travelprivileges & shopping pleasure. It also offers comprehensiveinsurance & installment plans, reward points and SMS alerts that givea different feel to the world of credit cards. These unique featuresinclude i-revolve, which makes variable markup rate available tocustomers allowing them to repay at affordable rates.

2. MCB Car4U:

MCB car4u not only gets you a car of your own choicebut is also affordable with competitive mark-up flexible conditions,easy processing and above all, no hidden costs.

3.MCB smart card:

MCB smart card is the key that enables access toconvenient banking services.Smart card allows you to manage your account, withdraw cash,

transfer fund, pay utility and mobile bills, recharge prepaidconnections, register for mobile and internet banking services andmuch more.


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4. MCB ATMs:

MCB has one of the nation ATM networks with over 450ATMs and still growing. MCB ATMs give you 24 hours convenience

of cash withdrawal, mini-statement, utility bill payment, fundstransfer services and much more.

5. MCB online banking:

MCB has a fast growing network of over 1,100online branches in the country providing customers real time onlinetransaction facility.

6.MCB mobile ATM:

With MCB Mobile ATM not only do we provideyou with world class banking service but we also provideconvenience. Our innovative mobile ATMs ensure that you are givenservice close to you.

7. MCB Lockers:

MCB Lockers are the best protection for your

valuables. Lockers of different capacities are available nationwide.

8. MCB salary club:

Salary club provides the convenience of having anextensive range of financial services available to employees at their

place of work.

9. MCB Investment Services:

MCB investment services offer

distribution of mutual funds managed by the leading fund manager ofPakistan. We can suggest the products most suited for your needs, orwork with you to create a personalized solution completely focused onyour expectations of the capital markets.


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MCB Virtual banking:

MCB provides the convenience of banking viainternet, whether at home, office or on travel, log on atwww.mcb.com.pkand enjoy 24 hours access to all your accounts atMCB for a great number of services such as funds transfer, utility bill

payments, Mobile Top-ups and much more.

10.MCB instant Finance:

With MCB instant Finance get loaninstantly at any MCB branch against liquid collateral at competitive

pricing.

Personal Banking

Deposit Accounts

Khushali Bachat Account

Khushali Bachat Account, a Rupee savings account is one of MCB Banksmost popular products. Due to the low initial deposit, the account can beopened by people from all walks of life and still avail the facility of daily

product profit calculation.

Mahana Khushali Bachat

MCB Monthly Khushali Scheme provides you with a steady income everymonth. Just purchase a Monthly Khushali Certificate and you will enjoy asteady income of your total deposit every month.

Pak Rupee Savings Account

MCBs Pak Rupee Savings Account offers you attractive returns on your

Pak Rupee investment.

In addition, you have access to a countrywide ATM network convenientcash accessibility 24 hours a day. The facility also provides you withunlimited daily transactions with a limit on maximum withdrawal amountthrough the ATM machines.


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Pak Rupee Current Account

MCBs Pak Rupee Current Account offers you the convenience of unlimitedwithdrawals i.e. access to your funds whenever you want without any notice.There is no limit on the number of transactions you make in a day plus youcan avail finance facility up to 75% of the total deposit.

In addition, you have access to a countrywide ATM network convenientcash accessibility 24 hours a day. The facility also provides you with

unlimited daily transactions with a limit on maximum withdrawal amountthrough the ATM machines.

PakRupee Term Deposit

MCB Pak Rupee Term Deposit gives a higher rate of return. It gives youchoice of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, 4 years and

5 year term deposits.

Saving 365

The MCB Saving 365 calculates profits on a daily product basis and givesyou the facility of unlimited withdrawals.

Foreign Currency Savings Account

MCBs Foreign Currency Savings Account offers you attractive returns onyour Foreign Currency investment.

You can invest in any of the four currencies i.e. US Dollar,UK Pound Sterling, Japanese Yen or Euro

Your foreign currency account is exempted from Zakat andwithholding tax

Foreign Currency CurrentA

ccount

MCBs Foreign Currency Current Account offers you the convenience ofunlimited withdrawals i.e. access to your funds whenever you want withoutany notice. There is no limit on the number of transactions you make in aday.


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MCB Foreign Currency Term Deposit

MCB Foreign Currency Term Deposit gives a higher rate of return. It givesthe choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, 4 yearsand 5 year term deposits.

Dollar Khushali Account

The Dollar Khushali Account, a Dollar based account was introduced in

1993 at selected MCB Bank branches. Today, you can open a DollarKhushali Account at over 200 branches in Pakistan.

Loan Products

MCB Business Sarmaya

MCB Business Sarmaya is the best Running Finance facility against yourresidential property which empowers you to manage your business dealings

better. So act today and get MCB Business Sarmaya and thus improve yourbusiness, avail lucrative opportunities and expand your business, withabsolute satisfaction of cash flows.

MCB Car4u

Life is like a chess board. You plan your career options. You analyze yourbusiness moves. But when you really want to improve your life, you make apower move.MCB CAR4U Auto Finance is the power move that assists youin more ways than you ever imagined. It is affordable, with lowest mark up,flexible conditions, easy processing and above all, no hidden costs.


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MCB Pyara Ghar

Some destinations require a long wait. Like waiting for a home of your own.But with MCB Pyara Ghar it is now easy to step into your home and start

living a real life.

MCB Pyara Ghar is an ideal Home Finance from your own bank that letsyou Purchase, Renovate or Construct your home the way you have alwayswanted. Having your own home was never so easy

Easy Personal Loan

MCB Easy Personal Loan provides you with the financial advantage to dothings you've always wanted to but never had the sufficient funds for. Takethat much-needed holiday. Buy a car. Refurnish your house. Purchase a newTV. Finance a better education for your children.

MCB Master Card

Since the beginning of time, people have tried to find more convenient ways topay, from gold to paper money and cheques. Today, money is moving away fromdistinct hard currencies and towards universal payment products that transcendnational borders, time zones, and, with the Internet, even physical space. Plastic or"virtual" money, credit, debit, and electronic cash products, inevitably will replace

cash and cheques as the money of the future.

MCB Rupee Traveler's Cheques

MCB Rupee Traveler's Cheques were first introduced in 1993 as safe cash fortraveling and travel related purposes. The product has been extremely popular andis preferred over cash by customers while traveling and in all walks of life.

MCB Rupee Traveler's Cheques- The safest way to Carry Cash


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Corporate Banking

Cash Management Services

MCBs network of over 900 branches in Pakistan enables it to collect and disbursepayments efficiently with its cash management services. This also enables it to

offer you a choice of paper based or electronic fund transfer solutions includingcollection amounts, cross branch online transactions etc.

Working Capital Loans

Based on the customers specific needs, the Corporate Bank offers a number of

different working capital financing facilities including Running Finance, CashFinance, Export Refinance, Pre-shipment and Post- shipment etc. Tailor- madesolutions are developed keeping in view the unique requirements of your business.

Term Loans

MCB offers Short to Medium Term Finance to meet capital expenditure and shortterm working capital requirements of our customers. The loans are structured onthe basis of underlying project characteristics and cash flows of the business.

Trade Finance Services

Under Corporate Banking MCB offers trade finance services that include an entire

range of import and export activities including issuing Letters of Credit (L/Cs),purchasing export documents, providing guarantees and other support services.

Online Services

MCB ATM Services

With a solid foundation of over 50 years in Pakistan, with more than 750automated branches, 269 online branches, over 222 MCB ATMs in 41 citiesnationwide and a network of over 12 banks on the MNET ATM switch, MCB is

positioned at the forefront of the banking industry in Pakistan. This success hasbeen possible because of a never-ending drive to achieve higher levels ofexcellence, constantly striving to raise the level of performance


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MCB Call Center

Keeping up with banking services can be tedious but not with MCB Bank, wherephone service is at your fingertips. Just dial our Call Centre from the comfort of

your home or office or wherever you happen to be. It offers basic banking servicesfor your convenience, eliminating the need for you to make unwanted trips to your

branch.

MCB Smart Card

MCB now brings you MCB SmartCard -a secure and convenient instrument ofpayment with unmatched functionalities. It provides 24-hour direct access to yourbank account.

The convenience and flexibility of MCB SmartCard will help you live a smarterlife. It not only helps you manage your expenses, but also eliminates undue intereston your day to day credit card transactions. Your balance is always within yourreach and you spend accordingly.

MCB Debit Card

Now MCB brings a secure, convenient and quick payment facility that enables youto do purchasing by using your existing MCB ATM / MCB Smart Card as aDEBIT CARD.

Virtual Banking

MCB Virtual Internet Banking offers you the convenience to manage and controlyour banking and finances when you want to, where you want to. MCBs VirtualInternet Banking facility is simple and secure. And its free of cost. With MCBVirtual Internet Banking you can access any of the banking services, 24 hours aday, 7 days a week and throughout the year.

MCB Virtual Internet Banking offers a wide range of online services which makesyour banking accessible anytime and from anywhere.

Detailed Account Summary of all listed accounts.


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Mini-statements of each of the listed accounts showing recenttransaction history for that account(s).

Statement-by-Period of each of the listed accounts, based on the

period specified.

Immediate or Scheduled Transfer of Funds between your ownaccounts, as well as to third-party accounts setup as beneficiaries,maintaining accounts with MCB.

Scheduling of One-Time as well as Recurring Funds Transfers.

Payment of utility bills for registered Utility Companies.

Immediate or Scheduled Bills Payment. Scheduling of One-Time as well as Recurring bill payments. Option for Full or

Partial payment based on the payment conditions specified by aparticular Utility Company.

Bulk Salary Transfer for Corporate Customers, to facilitate themin paying salary to the corporate employees, who maintain accountswith MCB.

Bulk Funds Transfer for Corporate Customers.

Cheque Book Request for any of your listed accounts.

Payment/Transfer Alerts for reminding, in advance, prior to the processing of specified payments and transfers.

Personal Alerts for reminding of pre-specified events andoccasions.

Islamic Banking


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Technology continued to play an important role in improving and expandingproduct offerings. The Bank introduced more IT based products to cater to thechanging lifestyles and needs of the customers. MCB Virtual-Internet Banking waslaunched with wide ranging banking solutions for the customers ranging fromindividual to corporate customers and it has become the most preferred Internet

banking solution in the country.

MCB also had the privilege of being the first Bank in Pakistan to launch thecomprehensive bill payment facility through its alternate delivery channels whichinclude Internet Banking, ATMs and MCB Call Centre, currently with six payment

partners. Similarly, the Bank also took initiatives to increase the usage of debitfacility. To provide timely and updated information, MCB has also provided a newlook to its website which is user friendly and considerably easy to browse.

The Islamic Banking initiative has been very successful in attracting newcustomer, both individuals and companies. Similarly, those relationships, whichwere confined only to current account facility, have grown into stronger businessrelationships. The branch network was expanded to Lahore and Multan during thelast year and recently been extended to Hyderabad and Faisalabad. The Bank plansto further expand its Islamic Banking branch network to other metropolitan areasand also to introduce new sharia compliant banking solutions to a wider range ofcustomers for satisfying their individual and business needs.

Some wide-ranging new strategic initiatives were also taken upwhich will be

important for the Bank in years to come. A private company has been formed inHong Kong (fully owned subsidiary of MCB) in partnership with StandardChartered Bank, handling trade transactions of select countries in the Asia-Pacificregion. It is projected to earn US$ 1 million in its first year of operations. Toincrease its international presence, the Bank will be opening its representativeoffice in Dubai and entering into major strategic alliances with banks in the UAE/especially for marketing our consumer banking products to non-residentPakistanis. Furthermore, feasibility is also being carried out for entering otherinternational markets.

MCB's operations continued to be streamlined with focus on rationalization ofexpenses, re-alignment of back-end processing to increase productivity,enhancement of customer service standards, process efficiency and controls. TheBank has taken the lead in introducing the innovative concept of centralizing TradeServices in the country by providing centralized foreign trade services to brancheswith a view to improve efficiency, expertise and reduce delivery cost.


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Management ofHuman Resources has been one of our core focus areas. MCB iscommitted towards attracting, retaining and motivating outstanding people.Challenge for MCB is to provide an environment in which employees can betterrealize their potential. The Bank introduced 'reward for performance' where high

potential officers were identified and rewarded accordingly. In view of thecompetitive environment, the Bank is focusing on performance and introducing amore robust performance management system. MCB is also strongly committed to

training its staff at all levels.

The Bank will also be implementing the full suite of the latest version ofSYMBOLS Version 8. MCB Bank will run SYMBOLS eFinance modules todeliver personalized services to its customers over multiple delivery channels,while SYMBOLS Enterprise Operations Center will serve as its core bankingtransaction-processing engine. By implementing SYMBOLS, MCB Bank aims to

raise the level of its customer service and its time to market in new productofferings for its three core banking businesses in Corporate, Commercial andConsumer Banking - retaining its market leadership as Pakistan's progressive

BanK

Documents

Xecutive Summary