Consolidated Profit and loss account for the year ended December 31, 2008

2008 Mark-up 1 return I interest earned Mark-up 1 return I interest expensed Net mark-up I interest income 25 26 40,049,505 11,592,922 2,683,994 1,335,127

2007 (Rupees in '000) 28,456,583 31,791,754 7,858,819 23,932,935 105,269 2,959,583 199 3,065,051 20,867,884 2,772,615 5,859 535,813 693,408 1,507,610 X3,329) 1,002,160 6,514,136 27,382,020 5,440,305 (3,743)

Provision for diminution in the value of investments - net 9.3 Provision against loans and advances net 10.4.2 Bad debts written off directly 10.5.1 Net mark-up I Interest Income after provisions Non-mark up 1 Interest Income Fee, commission and brokerage income Income earned as trustee to various funds Dividend income Income from dealing in foreign currencies Gain on sale of securtties net Unrealized loss on revaluation of investments classified as held for trading Other income net Total non-mark-up 1 interest income Non-mark-up I interest expenses Administrative expenses Other provision I (reversal) net

4,019,121 24,437,462 2,878,663 21,867 451,312 727,564 748,139 (99,531) 1,201,834

27 9.5 28

5,929,848 30,367,310 13.2 7,580,302 10,120

29

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Other charges Total non-mark-up 1 Interest expenses Share of profit of associated Extra ordinary 1 unusual Item Profit before taxation Taxation -Current year - Prior years - Deferred Share of tax of associated undertaking Profit after taxation Profit attribuatble to minority interest Profit attribuatble to ordinary share holders Unappropriated profit brought forward Transfer from surplus on revaluation of fixed assets - net Profit available for appropriation Basic and diluted earnings per share - after tax

30 9.7

920,991 8,511,413 30,843 21,886,740 7,387,345 (865,344) 16,348 25,164 6,563,513 15,323,227 (12) 15,323,215 7,075,845 22,399,060 (Rupcos} 24.39

642,780 6,079,342 1,223,633 22,526,311 6,463,560 (1,294,586} 899,898 15,769 6,084,641 16,441,670 (11) 16,441,659 6,278,5903 11,860 6,290,453 22,732,112 26.17

9.7 31

7,054,472 21,373

34

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Consolidated Balance Sheet As at December 31,

2008
Nets Assets Cash and balances with treasury banks Balances with other banks Landings to financial institutions Investrnents - net Advances - net Operating foxed assets deferred tax assets net tither assets - net Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinated loan Uabllltles against assets subject to finance lease Deferred tax liabilities - net Other liabilities Nat assets Represented by: Share capital Reserves Unappropriated profit 15 16 17 18 12 19 10,551,468 22,663,844 330,245,080 10,479,058 39,406,831 292,088,347 479,232 1,183,586 11,716,465 355,353,519 57,547,322 2008 2007 {Rupees in '000) 39,631,219 4,106,526 4,100,079 97,790,391 262,508,830 17,320,485 19,828,228 445,285,758 39,683,883 3,867,591 1,051,372 115,358,590 218,959,786 16,082,781 17,896,838 412,900,841

6 7 8 9 10 11 13

440,295 21,252,942 385,153,625 60,132,133

20 21

6,282,768 36,772,321

6,282,768 34,000,927 11,065,723

7,054,472

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54,120,812 Minority interest Surplus on revaluation of assets - net of tax 22 6,011,252 69 54,120,881 10,209,092 60,132,133

47,338,167 63 47,338,230 57,547,322

Contingencies and commitments

23

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Financial ratios of MCB

SHORT TERM SOLVENCY

1. CURRENT RATIO:

Current Assets/Current liabilities = 145628215/363460388 = 40.06% = 378921224/342453268 = 110.64% (2007) (2008)

Interpretion:
This ratios shows the trend of the company and shows the fluctuations of the company. In 2007 company shows the highly liquid position of the organization

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2.CASH RATIO: Cash/Current Liabilities = 39631219/363460388 = 10.9% =39683883/342453268

= 11.58% (2007) (2008)

Interpretetion:
This ratio shows the current position of the organization and shows the position of cash out flow and in flow of the organization. In 2007 company generate more cash .

3.WORKING CAPITAL: Current Assets-Current liabilities = 145628215-363460688 = - 217832473 = 378921222-342453268 = 36467954

(2007) (2008)

Interpretation:
This ratio shows about the short term solvency of the business. 2007 is the better year for the short term loans of the organization .

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MCB
Long term solvency Liquidity of long term debts: 4. Time interest earned = EBIT/Interest
= 5929648/40049505 = 0.148 times = 6514186/31791754 = 0.204 times (2007) (2008)

Interpretation :
This ratio show the number of times interest is paid from operating profit of the company. This shows that company earned more interest in 2007.

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5.

DEBT RATIOS: Total liabilities/total Assets

= 385153625/445285758 = 86.49% = 355353619/412900841 = 86.06 % (2007) (2008)

Interpretation:
This ratio indicates the % of assets financed by creditors, and it helps to determine how well creditors are protected in case of insolvency . Creditors invest more in 2008 rather than 2007.

6. DEBT TO EQUITY: Total liabilities/Share holders equity

= 355353619/6282768 = 56.56% = 385153625/6282768 = 61.03% (2007) (2008)

Interpretation:
This ratio shows how well creditors are protected in case of insolvency. These ratios the internal and external investment in the company. More creditors are getting involved in the bank in 2007 rather than 2008

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MCB
PROFITABILITY RATIOS: 7.Net profit margin: EAT/Sales* 100
= 22399060/40049505 * 100 = 55.92% (2008)

= 22732112/31791754 * 100 = 71.50%

(2007)

Interpretation:
This ratio shows the ability of the firm to generate earnings from sale. In 2007 company generates more profit rather than 2008.

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8.Total Asset Turnover : Net Sales/Average total sales

= 40049505/222642879 = 17 times = 39683883/2064504205 = 19 times (2007) (2008)

Interpretation:
This ratio shows the productive use of assets to generate earning through sales. In 2007 bank generate earning more than 2008.

9.Du Pont Analysis:

= N P Margin * total asset turn over = 55.92% * 17 times = 95064 = 71.50% * 19 times = 135850 (2007) (2008)

Interpretation:
This ratio allows for improved analysis of changes in the return on asset percentage

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10.GP Margin: = CGS/Sales

= 115929505/40049505 * 100 = 28.94 % = 7858819/31791754 * 100 = 24.71% (2007) (2008)

Interpretation:
Due to competition GP margin is declining in 2008. CGS is a combination of = Opening Balance + Purchases - Closing Balance

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Conclusion and Summary:

I went the branch of Muslim Commercial Bank for my internship training . It is a part of our MBAs training at well established organization. Bank is well suitable for it. This branch is opened in 2008. This branch is situated at Satiana road Faisalabad. Major customers of this branch are businessman, employees of diffirent pulic and privete organizations, salaried and non salaried persons.

We calculate current ratio as a short term liability of the bank. In this ratio bank can use its assets in a fluent form in 2007 but not in 2008.So bank needs more chances to maintain its assets. This ratios shows the relationship between current assets and current liabilities. In cash ratio we can analyze the liquidity of the firm. This ratios shows the relationship of cash with current liabilities. A high cash ratio indicates that the firm is not using its cash to its best advantage in 2007. The working capital of the business indicates the short term solvency of the business. This ratio shows that the bank earned more profit in 2007 and it cannot maintain its position in 2008. Time interest earned ratio shows the ability of the firm to pay its long term debts. This means that the company fulfill its expenses in 2007 more than in 2008. Debt ratio indicates the percentage of assets financed by the creditors of the firm and it helps to determine how well creditors are protected in case of insolvency. Creditor invest more in 2008 and bank gain more capital in 2008. Debt to equity ratios compares the total debt with the total shareholders equity. This ratio indicates that the company can free from creditors and less risky in 2007 not in 2008.

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Net profit margin gives us a measure of net income generated by each sale. This ratio shows that the bank generated more profit in 2007and it has the ability to control itself in fluctuations. Total asset turnover ratio shows the productive use of assets to generate earning through sales. Bank can earn more profit in 2007. Du Pont analysis is the combination of net profit margin and total asset turnover ratio. This ratio shows that the bank can generate more profit in 2007. GP margin ratios shows the cost of the product sold during during the period. Comparing Gross Profit to net sales is termed as GP margin. GP margin of MCB is higher in 2008.

It is evident from this report and the financial statement and analysis of MCB that it is making progress by leaps and bounds. The profits of MCB have grown considerably during the last few years and this trend is expected to continue into the future. Therefore, we conclude that MCB has a very prosperous present and future, which assures the share holders of wealth maximization side by side of it one think that if bank would be able to cover the recommendations than it would be in such a situation that will really lead it towards the road of prosperity, development and integrity.

MCB limited has implemented a SYMBOL system which promises the efficiency growth of the bank. MIS and computerization of branches has enhanced the efficiency of the bank. Delegation of authority, wide branch network with ATM installation and wide participation of employees in the decision making provides the bank a competitive edge. The bank provides a conducive environment for career growth. The bank pays a too low rate of interest on deposits which in unattractive for its customers. There are too lengthy formalities and procedures involved in mortgage of properties offered as collateral to the bank.

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The MCB bank made substation progress, recording strong growth in revenues and earnings. The main derives were increase in outreach, strengthened human resources. Including changes at the senior management level, enhanced product portfolios, improved control and vigilant credit risk management. Our primary focus was our customers and we worked diligently through the year to increase satisfaction and loyalty as the needs and expectation of our diversified base of customers continued to expand. A key initiative aimed at including a segment based approach to the overall business was the segregation of the retail banking group into commercial and consumer banking groups. This expected to help the MCB bank in providing customer centric solution in a more group generated healthy deposit and strengthened its SME lending.

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Biblography

1. www.mcb.com.pk 2.www.google.com 3.www.kse.com.pk 4. www.scribd.com 5. www.mcb.com.pk 6. www.google.com 7. www.scribd.com 8. www.yahoo.com 9. www.google.com 10. www.mcb.com.pk

Introduction is retrived on 12-12-09 History is retrived on 20-12-09 Financial statement is retrived on 25-12-09 Competitors analysis is retrived on 30-12-09 Card categories is retrived on 5-01-10 Business volume is retrived on 10-01-10 Departments of MCB is retrived on 12-01-10 Financial analysis is retrived on 14-01-10 Directors report is retrived on 15-01-10 Scope is retrived on 16-01-10

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