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FIN619VUMCBInternshipReportSlidesFall2010 Www.vustudents.ning.Com
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In the name of Allah Who is the most beneficent & the most merciful
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In the name of Allah Who is the most beneficent
& the most merciful
LOGO
Student Name
mc0……………
MBA
Finance www.VUsolutions.com
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,
1947. After the partition of the Indo-Pak
Subcontinent, the bank moved to Dhaka from where it
commenced 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
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
Allied Bank Limited
United Bank Limited
Askari Bank Limited
Add Your
Title
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
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
15-10-2010 30-11-2010
Joining Adjoining
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
2007 2008 2009
Current
Ratio
62411535/22201551
2.81
67584827/31897249
2.11
70824959/24020172
2.94
2.94
2.11
2.81
0 0.5 1 1.5 2 2.5 3 3.5
2007 2
008 2
009
Quick Ratio (Acid Test)
Ratio
Analysis
Muslim Commercial Bank Limited
Current Ratio = Current assets- prepaid Expenses
Current Liability
2007 2008 2009
Quick Ratio 62411535/22201551
2.81
67584827/31897249
2.11
70824959/24020172
2.94
2.94
2.11
2.81
0 0.5 1 1.5 2 2.5 3 3.5
2007 2
008 2
009
Working Capital Ratio
Ratio
Analysis
Muslim Commercial Bank Limited
Working Capital ratio = Current Assets - Current Liability
2007 2008 2009
Working
Capital
Ratio
62411535-22201551
40209984
67584827-31897249
35687578
70824959-24020172
46804787
Working Capital Ratio
40209984
35687578
46804787
2007
2
008
20
09
Working of Current Assets
Current Assets 2007
(Rs)
2008
(Rs)
2009
(Rs)
Cash and balances
with treasury banks
39683883 39,631,172 38,774,871
Balances with other
banks
3807519 4,043,100 6,009,993
Landings to
financial institutions
1051372 4,100,079 3,000,000
Other assets – net 17868761 19,810,476 23,040,095
Total 62411535 67584827 70824959
Working of Current Liabilities
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
Debt Ratio
Ratio
Analysis
Muslim Commercial Bank Limited Debt Ratio = Total Debt / Total Assets
2007 2008 2009
Debt
Ratio
355365842/410485517
0.86
385179850 /443615904
0.868
439483714/509,223,727
0.86
Debt Ratio
0.86
0.86
0.86
0 0.2 0.4 0.6 0.8 1
2007
2
008
20
09
Working of Total (Liability) 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 and
other account 292098066 330,181,624 367,604,711
Other liability 11722493 21,345,781 15,819,082
Deferred tax
liabilities – net
1180162 437,137 3,196,743
Sub-ordinate
loan 479232 - -
Total 355365842 385,179,850 439,483,714
Working of Total Assets
Total Assets 2007
(Rs)
2008
(Rs)
2009
(Rs)
Cash and balances with
treasury banks
39683883 39,631,172 38,774,871
Balances with other banks 3807519 4,043,100 6,009,993
Lending to financial
institution
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
Debt / Equity Ratio
Ratio
Analysis
Muslim Commercial Bank Limited Debt to Equity Ratio: = Total liabilities (Debt) / Shareholder equity
2007 2008 2009
Debt /
Equity
Ratio
355365842 /55119675
6.44
385179850 / 58436054
6.59
439483714 / 69740013
0.63
Debt to Equity Ratio
6.44
6.59
0.63
0 1 2 3 4 5 6 7
2007
2
008
20
09
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
2007 2008 2009
Time
Interest
Earned
29173568 / 7,865,533
3.70
33428306 /11,560,740
2.89
38996408 /15,841,463
2.46
2.46
2.89
3.7
2007 2
008 2009
Working of EBIT
EBIT 2007
(Rs)
2008
(Rs)
2009
(Rs)
Profit before tax 21308035 21,867,566 23,154,945
Add) interest / markup
expenses
7865533 11,560,740 15,841,463
Total 29173568 33428306 38996408
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
2007 2008 2009
Total
Capitalizat
ion ratio
1659394 /
1659394+5511967516
59394 / 56779069
0.02
437137 /
437137+58436054
437137 / 58873191
0.13
3196743 / 3196743+
69740013
3196743 / 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
2007
2
008
20
09
Working of long term liabilities
Long term
Liabilities 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 to
finance lease
479232 - -
Total 293757460 437,137 3,196,743
Total Assets Turnover
Ratio
Analysis
Muslim Commercial Bank Limited Total Assets Turnover = Sales / Total Assets
2007 2008 2009
Total
Asset
Turnover
31786595 /410485517
0.07
40043824 /443615904
0.09
51616007 /509223727
0.10
0.07
0.09
0.1
0 0.05 0.1
1
2007
2
008
20
09
Total Asset Turnover
2009 51616007
/509223727
2008 40043824
/443615904
2007
31786595/410485517
Fixed Assets Turnover
Ratio
Analysis
Muslim Commercial Bank Limited Fixed Assets Turnover = Sales / Total Fixed Assets
2007 2008 2009
Fixed
Assets
Turnover
31786595 /16024123
1.98 40043824 / 17263733
2.31
51616007 / 18014896
2.86
1.98
2.31
2.86
0 1 2 3
1
2007
20
08
2009
Fixed Asset Turnover
2009 51616007 /
18014896
2008 40043824 /
17263733
2007 31786595
/16024123
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 *100
2007 2008 2009
Net profit
Margin
20,808,390 / 31786595
0.65 or 65.4%
20,526,669 / 40043824
0.51 or 51.2%
24,710,953 / 51616007
0.47 or 47.8%
65.40%
51.20%
47.80%
0.00% 20.00% 40.00% 60.00% 80.00%
1
2007
20
08
2009
Net Profit Margin
2009 24,710,953 /
51616007
2008 20,526,669 /
40043824
2007 20,808,390 /
31786595
Working of Net Income
Net Income 2007
2008
2009
Net mark–up /
interest income after
provisions
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
Profit before tax 21308035 21,867,566 23,154,945
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
Return on Assets
Ratio Analysis Muslim Commercial Bank Limited Return on Assets = Net income after tax / Total Assets * 100
2007 2008 2009
Return on
Assets
15265562/410485517*1
00
3.71%
15374600/443615904*1
00
3.46%
15495297/509223727*1
00
3.04%
3.71%
3.46%
3.04%
0.00% 1.00% 2.00% 3.00% 4.00%
1
2007
20
08
2009
Return on Assets
2009
15495297/509223727*1
00
2008
15374600/443615904*1
00
2007
15265562/410485517*1
00
Working of Net income after tax
Net income after
tax
2007
2008
2009
Net mark–up /
interest income after
provisions
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
Profit before tax 21308035 21,867,566 23,154,945
Less) taxes
6042473 6,492,966 7,659,648
Net income after tax 15265562 15,374,600 15,495,297
Operating Income Margin
Ratio
Analysis
Muslim Commercial Bank Limited
Operating margin = operating Income / Net sales*100
2007 2008 2009
Operating
income
margin
24,369/31786595
7.66 %
25,910 / 40043824 6.47%
30,620 / 51616007 5.93%
7.66
6.47
5.93
0 2 4 6 8
1
2007
20
08
2009
Operating income Margin
2009 30,620 / 51616007
2008 25,910 / 40043824
2007 24,369/ 31786595
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
2007 2008 2009
Return on
operating
Assets
31786595/16082781
1.97
40043824 / 17320485
2.31
51616007 / 18099010
2.85
Return on Operating Assets
1.97
2.31
2.85
0 0.5 1 1.5 2 2.5 3
2007
20
08
2009
Working of operating Assets
Operating Assets 2007
2008
2009
Capital work–in–
progress 233390 510,226 1,099,749
Property and
equipment 15607660 16,562,309 16,666,905
Intangible asset 183073 191,198 248,242
Total 16024123 17,263,733 18,014,896
Return on Equity
Ratio
Analysis
Muslim Commercial Bank Limited
Return on Equity = Net income after tax / Total Equity* 100
2007 2008 2009
Return on
equity
15265562/45414156*10
0
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
2007
200
8 20
09
Return on Equity
2009
15495297/61075932*100
2008
15374600/52244865*100
2007
15265562/45414156*100
Working of Total Equity
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
Gross profit Margin
Ratio
Analysis
Muslim Commercial Bank Limited
Gross Profit Margin Ratio = Gross Profit / Net Sales
2007 2008 2009
Gross
Profit
Margin
23921062 / 31786595
0.75
28483084 / 40043824
0.71
35774544 / 51616007
0.69
0.75
0.71
0.69
0.66 0.68 0.7 0.72 0.74 0.76
1
2007
2008
2009
Gross Profit Margin
2009 35774544 /
51616007
2008 28483084 /
40043824
2007 23921062 /
31786595
Working of Gross Profit
Gross Profit 2007
2008
2009
Mark–up / return /
interest earned
31786595 40,043,824 51,616,007
Less) Mark–up /
return / interest
expensed
7865533 11,560,740 15,841,463
Total
23921062 28,483,084 35,774,544
DuPont Return on Assets
Ratio
Analysis
Muslim Commercial Bank Limited
DuPont Return on Assets = Net Income * Sales_____
Sales Total Assets
2007 2008 2009
DuPont
return on
assets
20,808,390/31786595
*
31786595/410485517
0.65*0.07
0.04
20,526,669 / 40043824
*
40043824 /443615904
0.41*0.09
0.03
24,710,953 / 51616007
*
51616007 /509223727
0.47*0.10
0.04
0.04
0.03
0.04
0 0.01 0.02 0.03 0.04
1
2007
20
08
2009
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
Dividend Per Share
Ratio
Analysis
Muslim Commercial Bank Limited
Dividend per share = Dividend paid to share holder
Average common share outstanding
2007 2008 2009
Dividend
per share
4728496/ 691104527
400.0
9834175/ 691104527
125.9
6735510 / 691104527
219.7
Dividend Per Share
400.0
125.9
219.7
0 100 200 300 400 500
2007
20
08
2009
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
2007 2008 2009
Earning
per share
20,808,390 / 1102183
22.09
20,526,669 / 921304 22.25
24,710,953 / 1118648 22.42
Earning Per Share
22.09
22.25
22.42
21.9 22 22.1 22.2 22.3 22.4 22.5
2007
20
08
2009
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
2007 2008 2009
Price
Earning
ratio
18.11 * 22.09
400.0
5.66 *22.25
125.9
9.80 * 22.42
219.7
PRICE EARNING RATIO
400.0
125.9
219.7
0 100 200 300 400 500
2007
20
08
2009
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.
LOGO
