In the name of Allah

Who is the most beneficent

& the most merciful

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MBA
Finance

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

D
oBasic Banking
Account (BBA)
oCurrent Account
oSaving Account
oBusiness
Account

Allied Bank Limited

United Bank Limited

Askari Bank Limited

Add Your
Title

Description

Authorize
capital

2007

2008

2009

6500

6500

6500

292,098

330,274

367,604

218,960

262,510

253,149

Investment

113,089

96,256

167,134

Borrowing

394,068

22,663

44,662

5,130

9,193

15,779

15,265

15,374

15,495

Deposits

Advances

Reserve
Profit after tax

Organizational Hierarchy Chart

President
Chairman
Vice president

Senior Vice President

Chief Financial Advisor
Audit Committee
Regional Manager
Branch Manager

Joining

Adjoining

15-10-2010

30-11-2010

Working Departments

1st week

Customer service

2nd week

Account

3rd week

Remittance

4th week

Departme
nt

Clearing

5th week

Cash

6th week

Collect External information

Leverage
Liquidity

Activity

Ratios
Profitability

Market

Current Ratio
Muslim Commercial Bank Limited

Ratio
Analysis

2008

2009

62411535/22201551
2.81

67584827/31897249
2.11

70824959/24020172
2.94

2009

2007

2008

2.94

2.11

2007

Current
Ratio

Current Ratio = Current assets

Current Liability

2.81
0

0.5

1.5

2.5

3.5

Quick Ratio (Acid Test)

Muslim Commercial Bank Limited

Ratio
Analysis

Current Ratio = Current assets- prepaid Expenses

Current Liability

2008

2009

62411535/22201551
2.81

67584827/31897249
2.11

70824959/24020172
2.94

2009

Quick Ratio

2007

2008

2.94

2007

2.11

2.81
0

0.5

1.5

2.5

3.5

Working Capital Ratio

Muslim Commercial Bank Limited

Ratio
Analysis

Working Capital ratio = Current Assets - Current Liability

Working
Capital
Ratio

2007

2008

2009

62411535-22201551
40209984

67584827-31897249
35687578

70824959-24020172
46804787

Working Capital Ratio

2007 2008 2009

46804787

35687578

40209984

Working of 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

Current Assets

Working of 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

Current Liabilities

Debt Ratio
Muslim Commercial Bank Limited

Ratio
Analysis

Debt Ratio =

Debt
Ratio

Total Debt / Total Assets

2007

2008

2009

355365842/410485517

385179850 /443615904

439483714/509,223,727

0.86

0.868

0.86

2007 2008 2009

Debt Ratio

0.86
0.86
0.86

0.2

0.4

0.6

0.8

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

1180162

437,137

3,196,743

479232

385,179,850

439,483,714

liabilities net
Sub-ordinate
loan
Total

355365842

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

410485517

443615904

509223727

Deferred tax Assets

Total

Debt / Equity Ratio

Ratio
Analysis

Muslim Commercial Bank Limited

Debt to Equity Ratio: = Total liabilities (Debt) / Shareholder equity

Debt /
Equity
Ratio

2007

2008

2009

355365842 /55119675
6.44

385179850 / 58436054
6.59

439483714 / 69740013
0.63

2007 2008 2009

Debt to Equity Ratio

0.63
6.59
6.44

Working of Shareholder Equity

Share Holder Equity

= Total Assets Total Liabilities

Times Interest Earned

Time Interest Earned Ratio = (EBIT) / Interest expenses

2008

2009

29173568 / 7,865,533
3.70

33428306 /11,560,740
2.89

38996408 /15,841,463
2.46

2009

2007

2.46

2008

Time
Interest
Earned

Muslim Commercial Bank Limited

2.89

2007

Ratio
Analysis

3.7

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

Total
Capitalizat
ion ratio

Muslim Commercial Bank Limited

Total Capitalization Ratio = Long term debt / Long term debt + Share holder equity

2007

2008

2009

1659394 /
1659394+5511967516
59394 / 56779069
0.02

437137 /
437137+58436054
437137 / 58873191
0.13

3196743 / 3196743+
69740013
3196743 / 72936756
0.04

TOTAL CAPITALIZATION RATIO

2007 2008 2009

Ratio
Analysis

0.04
0.13
0.02

0.02

0.04

0.06

0.08

0.1

0.12

0.14

Working of long term liabilities

Long term
Liabilities

Year 2007
(Rs)

Year 2008
(Rs)

Year 2009
(Rs)

Sub-ordinates

292098066

Deferd tax liability

1180162

437,137

3,196,743

Liabilities against
assets subject to
finance lease

479232

293757460

437,137

3,196,743

loans

Total

Total Assets Turnover

Muslim Commercial Bank Limited

Ratio
Analysis

2007

2008

2009

31786595 /410485517
0.07

40043824 /443615904
0.09

51616007 /509223727
0.10

Total Asset Turnover

2007 2008 2009

Total
Asset
Turnover

Total Assets Turnover = Sales / Total Assets

0.1

2009 51616007
/509223727
0.09

2008 40043824
/443615904
0.07

0.05

2007
31786595/410485517

0.1

Fixed Assets Turnover

Muslim Commercial Bank Limited

Ratio
Analysis

2007

2008

2009

31786595 /16024123
1.98

40043824 / 17263733
2.31

51616007 / 18014896
2.86

Fixed Asset Turnover

2007 2008 2009

Fixed
Assets
Turnover

Fixed Assets Turnover = Sales / Total Fixed Assets

2009 51616007 /
18014896

2.86
2.31

2008 40043824 /
17263733

1.98

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

Net profit
Margin

Muslim Commercial Bank Limited

Net Profit Margin = Net Income / sales *100

2007

2008

2009

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%

Net Profit Margin

2007 2008 2009

Ratio
Analysis

2009 24,710,953 /
51616007

47.80%
1

51.20%

2008 20,526,669 /
40043824
65.40%

0.00%

20.00%

40.00%

2007 20,808,390 /
31786595

60.00%

80.00%

Working of Net Income

Net Income

2007

2008

2009

Net markup /
interest income after
provisions

20856011

24,463,963

28,452,223

Add) Nonmarkup /
interest income

6011291

5,791,440

5,642,885

Less)
Nonmarkup /
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
Muslim Commercial Bank Limited

Ratio Analysis

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

Return on
Assets

2007

2008

2009

15265562/410485517*1
00
3.71%

15374600/443615904*1
00
3.46%

15495297/509223727*1
00
3.04%

2007 2008 2009

Re turn on Asse ts

2009
15495297/509223727*1
00

3.04%
1

2008
15374600/443615904*1
00

3.46%
3.71%

2007
15265562/410485517*1
00
0.00%

1.00%

2.00%

3.00%

4.00%

Working of Net income after tax

Net income after
tax

2007

2008

2009

Net markup /
interest income after
provisions

20856011

24,463,963

28,452,223

Add) Nonmarkup /
interest income

6011291

5,791,440

5,642,885

Less)
Nonmarkup /
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

Muslim Commercial Bank Limited

Ratio
Analysis

Operating margin =

Operating
income
margin

operating Income / Net sales*100

2007

2008

2009

24,369/31786595

25,910 / 40043824

30,620 / 51616007

7.66 %

6.47%

5.93%

2007 2008 2009

Operating income Margin

2009 30,620 / 51616007

5.93

2008 25,910 / 40043824

6.47

2007 24,369/ 31786595

7.66

Operating Income = Available in Six year Analysis of the company

Return on Operating Assets

Muslim Commercial Bank Limited

Ratio
Analysis

Return on operating Assets = sales / operating assets

2008

2009

31786595/16082781
1.97

40043824 / 17320485
2.31

51616007 / 18099010
2.85

Return on Operating Assets

2007 2008 2009

Return on
operating
Assets

2007

2.85
2.31
1.97

0.5

1.5

2.5

Working of operating Assets

Operating Assets
Capital workin
progress
Property and
equipment
Intangible asset
Total

2007

2008

2009

233390

510,226

1,099,749

15607660

16,562,309

16,666,905

183073

191,198

248,242

16024123

17,263,733

18,014,896

Return on Equity
Muslim Commercial Bank Limited

Ratio
Analysis

Return on Equity = Net income after tax / Total Equity* 100

Return on
equity

2007

2008

2009

15265562/45414156*10
0
33.6%

15374600/52244865*
100
29.4%

15495297/61075932*
100
25.4%

2007 2008 2009

Return on Equity

2009
15495297/61075932*100

25.40%
1

2008
15374600/52244865*100

29.40%

2007
15265562/45414156*100

33.60%

0.00%

10.00%

20.00%

30.00%

40.00%

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

Muslim Commercial Bank Limited

Ratio
Analysis

Gross Profit / Net Sales

2007

2008

2009

23921062 / 31786595
0.75

28483084 / 40043824
0.71

35774544 / 51616007
0.69

Gross Profit Margin

2007 2008 2009

Gross
Profit
Margin

Gross Profit Margin Ratio =

2009 35774544 /
51616007

0.69

2008 28483084 /
40043824

0.71
0.75

0.66

0.68

0.7

2007 23921062 /
31786595

0.72

0.74

0.76

Working of Gross Profit

Gross Profit

2007

2008

2009

Markup / return /
interest earned

31786595

40,043,824

51,616,007

Less) Markup /
return / interest
expensed

7865533

11,560,740

15,841,463

Total

23921062

28,483,084

35,774,544

DuPont Return on Assets

Muslim Commercial Bank Limited

Ratio
Analysis

DuPont Return on Assets = Net Income *

Sales
DuPont
return on
assets

Sales_____
Total Assets

2007

2008

2009

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

2007 2008 2009

DuPont Return on Assets

2009 24,710,953 /
51616007 * 51616007
/509223727 0.47*0.10

0.04

2008 20,526,669 /
40043824 * 40043824
/443615904 0.41*0.09

0.03

0.04

0.01

0.02

2007 20,808,390 /
31786595 * 31786595
/410485517 0.65*0.07
0.03

0.04

Dividend Per Share

Muslim Commercial Bank Limited

Ratio
Analysis

Dividend per share = Dividend paid to share holder

Average common share outstanding

Dividend
per share

2007

2008

2009

4728496/ 691104527
400.0

9834175/ 691104527
125.9

6735510 / 691104527
219.7

2007 2008 2009

Dividend Per Share

219.7
125.9
400.0

100

200

300

400

500

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

Muslim Commercial Bank Limited

Ratio
Analysis

Earning Per share = Profit Available to shareholders or Net income after tax
No of shares outstanding

Earning
per share

2007

2008

2009

20,808,390 / 1102183

20,526,669 / 921304

24,710,953 / 1118648

22.09

22.25

22.42

2007 2008 2009

Earning Per Share

22.42
22.25
22.09

21.9

22

22.1

22.2

22.3

22.4

22.5

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

Muslim Commercial Bank Limited

Ratio
Analysis

Price Earning Ratio = Current market Share price / Earning Per Share

Price
Earning
ratio

2007

2008

2009

18.11 * 22.09
400.0

5.66 *22.25
125.9

9.80 * 22.42
219.7

2007 2008 2009

PRICE EARNING RATIO

219.7
125.9
400.0

100

200

300

400

500

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.

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