TABLE OF CONTENTS

Chapter 1
INTRODUCTION
1.1 History
1.2 Present Status
1.4 Economic Landscape
1.5 Financial Highlights
1.6 Future Outlook
1.7 STRATEGY
1.7.1 Vision
1.7.2 Mission
1.7.3 Objectives OF MCB
1.7.4 Values
1.8 MCB Culture
1.9MCB HIERARCHY
1.10 PRODUCTS AND SERVICES
Chapter 2
ANALYSIS OF INTERNAL ENVIRONMENT
2.1 Organization Structure and Design
2.2 Decision Making and Policy Making
2.3 Organizational culture
2.4 The Environment
2.5 Corporate Social Responsibility
Chapter 3
STRATEGIC MANAGEMENT ANALYSIS
3.1 MCB STRATEGIES
3.2 STRATEGYS ANALYSIS
3.3 SWOT ANALYSIS
3.4 STRATEGIC MANAGEMENT
CONCLUSION

1.1

History

MCB Bank Limited (formerly Muslim Commercial Bank) previously named as a

(Mansoor Co-operative Bank) was incorporated by the Adamjee Group on July 9, 1947,
under the Indian Companies Act, VII of 1913 as a limited company. The bank was
established to provide banking facilities to the business community of South Asia. The
bank was nationalized in 1974 during the government of Zulfikar Ali Bhutto. This was
the first bank to be privatized in 1991 and the bank was purchased by a consortium of
Pakistani corporate groups led by Nishat Group. As of June 2008, the Nishat Group owns
a majority stake in the bank.
1.2

Present status

MCB Bank truly adheres to its philosophy i.e. Bank for Life. MCB Bank is an
organization that firmly believes in nurturing the various facets of life and helps to foster
the growth of communities in which it operates. By initiating numerous projects and
services that facilitate the wider community in a socially responsible way, MCB ensures
sustainability of the greater environment and social wellbeing of its employees.
MCB Bank is one of the largest employers in Pakistan with strength of around 18,000
employees that proudly acknowledge the institution as one that promotes a culture of
equality, reflected through its diversified talent portfolio. This fair practice helps in the
promotion of cultural harmony within the organization that is quite evident from its
leading position in the industry/sector.
Customer satisfaction, being their utmost primacy, drives them to serve clients with
increased passion and dedication. For the first time their Customer Base stretched to 5.6
million accounts during the year due to the stellar performance of our Retail, Wholesale
and Islamic banking segments. In 2014 they strengthened their outreach to serve clients at
their doorstep by adding 16 new branches and 148 new ATM sites to their widespread
network. MCB is the leader in Mutual Fund Sales through branch network with coverage
in ~ 350 branches across Pakistan.
As a recognition of MCB s underlying credit strength, PACRA maintained MCBs long
term credit rating of AAA [Triple A] and short-term credit rating of A1+ [A one plus]
which reinforces
our strong financial position. MCB Banks performance was acknowledged by various
local and international entities. The Asian Banker (USA) again bestowed upon MCB the
Strongest Bank in Pakistan award for 2014, while Asiamoney Awards declared MCB to
be the Best of the Best Domestic Bank.

1.3

Economic Landscape

In 2014, the global economy witnessed its share of opportunities, challenges and risks
that steered respective markets. The positive indicators affecting the economic landscape
were the sudden and sharp decline in the oil prices at the end of 2014. Since oil is a major
component that determines
the movement of the consumer purchasing power in oil consuming countries, this
initiative helped curb inflation, push-up the value of the US dollar in these economies and
negatively impacting several oil-producing economies.
Pakistans economy continues to show signs of promise amidst the ongoing drawbacks of
an energy crisis, systematic terrorist activity, and fiscal deficit.The weakened law and
order situation coupled with severe energy crisis are the main challenges for us to
encounter on our road to success. The volatility in interest rates and regulatory revisions
remain a key risk to our profitability.The market dynamics have changed radically over
years with the need for every institution to perform to its full potential.
In November 2014, The State Bank of Pakistan reduced its policy rate by 50 basis points
as a result of the improved economic indicators. Single digit inflation, robust growth in
remittances, fiscal consolidation measures in place, improved foreign exchange reserves
and rise in exports are indications of upward trend in our economy. However, energy
crisis and security situation is still a substantial risk for business activity. In spite of these
challenges, we are optimistic about the outlook for our economy.
1.4

Financial Highlights

MCB Bank Limited delivered exceptional results for the year ended December 31, 2014,
meeting stakeholder expectations, ensuring significant contribution to the sector and
economy. From statement of financial position perspective, the total asset base of the
bank was reported at an all-time high of PKR 934.6B, reflecting a healthy increase of
15% over December,2013 and growing by 8% over September 30, 2014.
The analysis of the asset mix highlights that net advances have increased by 55B (22%)
whereas net investments have increased by 62B over December 31, 2013. Group wise
categorization of advances highlights an increase of 42.5B for Corporate Banking, with
increase of approximately Rs. 9.5B and Rs. 2.5B for Commercial Banking Group and
Islamic Banking Group respectively. Consumer Banking has continued to move in the
right direction with increased sales and enhancement in its product portfolio. Digital
Banking towards Revenue, Net Profit and customer
engagement continued on the increasing trend throughout 2014. One of the biggest
achievements of Retail Banking Group in 2014 was as a result of an extraordinarily
successful Hajj campaign.
During the year, the bank focused on its main stream business of credit growth.
Consumer Banking has continued to move in the right direction with increased sales and
enhancement in its product portfolio. Digital Banking towards Revenue, Net Profit and

customer engagement continued on the increasing trend throughout 2014. Growth in

transport, storage and communication sector was remarkable presenting 138% increase
over 2013.
Non-financial performance
Non-financial performance during the year is tabulated below:
Branch opened during the
year Numbers
Credit cards issued during
the year Numbers
Accounts opened during the
year Numbers
ATM card issued during the
year Numbers
ATM installed during the
year Numbers

2014

2013

16

30

7,505

7,187

349,021

367,808

488,706

508,241

148

109

During the year, the bank focused on its main stream business of credit growth.
Consumer Banking has continued to move in the right direction with increased sales and
enhancement in its product portfolio. Digital Banking towards Revenue, Net Profit and
customer engagement continued on the increasing trend throughout 2014. Growth in
transport, storage and communication sector was remarkable presenting 138% increase
over 2013.

1.5

Stratergy

1.5.1

Vision
To be the leading financial services provider, partnering with our customers for a
more prosperous and secure future.

1.5.2

Mission
We are a team of committed professionals, providing innovative and efficient
financial solutions to create and nurture long-term relationships with our
customers. In doing so, we ensure that our shareholders can invest with
confidence in us.

1.5.3

Strategic Objectives
Delivering remarkable returns to stakeholders, sustainable performance,
exceeding market and shareholder expectations

 Providing value added services through operational expansion, geography and

upgraded system
Building a corporate culture of equality, trust and team spirit as we remain
dedicated to being a socially responsible organization
1.5.4

Core values
Respect
We respect our customers values, beliefs, culture and history. We value the
equality of gender and diversity of experience and education that our employees
bring with them. We create an environment where each individual is enabled to
succeed.
Customer Centricity
Our customers are at the heart of everything we do. We thrive on the challenge of
understanding their needs and aspirations, both realized and unrealized. We make
every effort to exceed customer expectations through superior services and
solutions.

1.6

MCB Culture

The Bank adheres to several key principles that accredit it as an institution committed to
creating a better work place and a cleaner environment evident through various initiatives
undertaken with
respect to the greater good of the community at large. This is achieved by inculcating a
culture of excellence, good governance, transparency, integrity and accountability
through commitment to
prioritize controls and compliance thereby ensuring that all activities are carried out in
accordance to the prevailing regulations. The Bank has a well-defined Code of Ethics and
Conduct policy, a mandatory document that acts as a guideline for employees while
performing their duties.The Bank maintains a highly professional working culture that
includes mandatory compliance towards the betterment of its stakeholders at every level.
Hence various capacity building and welfare projects have been initiated in recent years
to promote the living standard of communities at large, and to instill a sense of
satisfaction amongst them.
1.7

Products & Services

Products
MCB Car4U
MCB Home Loan
MCB Student Personal Loan
MCB Fun Club Banking for Kids
MCB Bancassurance
MCB Corporate Financing
MCB Trade Products

MCB AGRI Products

Services
MCB Internet Banking
MCB Call Center
MCB E-Statements
MCB Mobile
MCB E-Commerce
Utility Bill Payment Services
Islamic Banking
Safe Deposit Lockers
Virtual Banking
MCB Smart Card
MCB Transaction Banking
MCB Advisory Services
MCB Investment Services

SEVP
(Senior Executive Vice President)

Hierarchy

ofEVP

of

(Executive Vice President)

SVP
(Senior Vice President)

VP
(Vice President)

AVP
(Assistant Vice President)

OFFICERS
Grade1
Grade2
Grade3

JUNIOR
OFFICIER
ASSISTANTS OR CLERKS

SECURITY STAFF

MCB

Management Functions:
In MCB the management functions are performed as follow

Planning
In MCB, decision making is highly centralized because all the
decisions and plans are made at the top level of management.

Organizing
No autonomy is provided to MCB employees. MCB strives to
become a cohesive and unified force, to offer the customer, a level
of service beyond their expectations. This force is derived from
participative and collective endeavors, a common set of goals and
a spirit to share the glory and the strength to face failures together.
And there is also a high degree of interaction among department
managers.

Leading
The leadership approach established in MCB is team leadership
and the positive attitude of MCB employees towards their job is
because of increasing employee job satisfaction.

Controlling
MCB impose external control on its employees and the criterion used by
management to evaluate the employees is their performance. Annual reports
are sent to the top level management about each and every employee which
evaluates their performance.

Strategic management and

SWOT analyses
Process

External Analysis

Opportunity
threats

Identify the
organizations
mission, goals
and strategies

SWOT Analysis

Formulate
strategies

Implement
strategies

Internal Analysis
Strengths
weakness

This analysis makes the managers aware of the organizations external and
internal affairs and helps them to grip opportunities and exploits the
resources.
.3 SWOT ANALYSIS
3.3.1 Strengths:
The staff of the bank is skilled, well trained and competent.
MCB is having Centralized decision making.
MCB is the Pioneer in introducing the ATM in the country and are
widely used in the business transactions.

Evaluate

 MCB is the fourth largest bank in Pakistan, having 1449 branches

divided in to 19 regions.
MCB is having extensive branch network throughout the country
.it has now 680 online branches in Pakistan.
The reserves of bank are higher.
Employees are the valuable assets of MCB.
MCB has the fastest mode of home remittance of 3 days.
MCB provide courteous services to its customers.
Every 10th Pakistani is the account holder of MCB.
I have also observed that the employees of the bank are dealing
with their clients so friendly as if it is their own problem.
3.3.2 Weaknesses:
Marketing department of MCB is not so effective.
Bad debt rate is very high.
Poor system of recovery.
Sense of insecurity in employees due to downsizing.
MCB has become victim of political, legal and socio cultural
pressure.
Employees are not satisfied due to unfair promotion system. There
is not a right criterion for promotion; many vacancies are filled at
approach basis.
Advances of MCB are also very low with respect to its competitors.
Non popularity of travelers cheques, deposits of having a large
network of branches.
Administrative cost is very high.
Employees have lethargic attitude especially in main branches.
3.3.3 Opportunities:
IT can establish their branches online.
Bank can open more branches in foreign countries in order to
make it more stable and strong.

 MCB is the oldest bank in the country; people can rely on that
bank.
The presence of more technical and professional staff can help the
bank in making progress especially in marketing department.
Although ATM and online banking has started but can be make
more effective by applying its own ATM network.
Steps should be taken to increases banks deposits and as these
are less than other competing banks such policies should be
adopted to attract customers and the rate of deposit can increased.
There is an opportunity to open an entirely separate section for
ladies which is a new idea and will attract female customers.
MCB has also an opportunity to expand its tale banking and
internet banking facilities in order to serve the customer more
efficiently.
3.3.4 Threats:
Profit is becoming low due to higher cost.
Poor policies of MCB as compare to other banks are also a threat
for MCB.
Financial environment is changing day to day, new technologies are
introduced by foreign banks that provide customer efficient and
quick service.
Due to low entry barriers, there are more competitors, so the global
competition has increased.
Branches are not paying sufficient role in competition due to
manual system.
Because of unfair promotion system and absence of proper and
recruitment techniques competent persons may move to other
banks.
The working condition and the outlook of the building can be a
threat for MCB.
Growing global technological advancement.

 Loss of confidence of overseas customers due to freezing of

accounts.

3.4 STRATEGIC MANAGEMENT AND SWOT ANALYSIS

Process

External Analysis

Opportunity
threats

Identify the
organizations
mission, goals
and strategies

SWOT Analysis

Formulate
strategies

Implement
strategies

Internal Analysis

Strengths
weakness

This analysis makes the managers aware of the organizations

external and internal affairs and helps them to grip opportunities
and exploits the resources.
Strengths

An old and well established organization

Evaluate

 Customers are loyal

It is a well known organization.
Good reputation
Weakness

Organization is quite behind in the field of IT. Its employees lack IT

knowledge.

Out of 1400 branches only 600 branches provide online banking

facility.

Overstaffing is serious problem for the organization.

Threads

Other banks have high and new IT technology.

Other banks offer different valuable packages to the customers.
Opportunities

Our Internship Program offers promising students with the

exciting opportunity to apply their classroom learning experience to
real life corporate assignments.

MCB provide good opportunities for the employees in developing

their careers.
MCB is an organization that provides opportunities for its staff to have a
challenging and rewarding long-term career

MCB is an organization that provides opportunities for its

staff to have a challenging and rewarding long-term career.

Decision Making and Policy

Making:
Decision making process at MCB has following points:

Centralized
All major policies, plans, rules and regulations and controls etc. are devised
by head office of MCBin Karachi. Then these policies are conveyed to the
regional heads and branch heads.

Decentralized

All routine maters are decided at branch level by the respective heads of
departments with permission of branch head. If any problem or matter is
beyond limits of branch, then it is referred to the Regional Head quarter.

Organization
Design

Structure

and

The MCB is divided in main group in its organization structure. The one
which performs the core business activities and the second which perform

the support activities to achieve the business object effectively and

efficiently. Further division of these groups is given below.

MCB is an organization that provides opportunities for its staff to have a

challenging and rewarding long-term career. To this end the Human
Resource Group (HRG) encourages and motivates its employees to excel in
the responsibility that they have in the organization. We believe that
creativity and innovation comes from talent, knowledge and experience and
it is our endeavor to provide and maintain an environment which not only
nourishes these strengths but also provides opportunities for the staff to have
a career which has multidimensional growth opportunities.
In doing so, HBG has been restructuring and redesigning the overall
structure of the organization, which includes rationalization, cutting down
the decision layers, improvement in staff training and hiring professionals
and MBAs at entry-level management.
The overall direction of HRG has been towards nurturing the strengths of the
human capital to its maximum with a defining principal to help create a
progressive environment and sustain a thorough commitment of our staff
towards focused customer service.

HRG therefore recognizes the need to proactively invest in staff training and
develop courses on a regular basis. Under the umbrella of our Management
and Organization Development Division (MODD) our Management
Development Institute (MDI) with its three fully equipped chapters at
Karachi, Lahore & Islamabad regularly conducts and outsource technical
and personal development courses for our all level of staff enabling them to
meet the challenges of the ever-changing business requirements and
customer needs. During 2003, 529 courses, workshops, skill development
clinics and seminars in the disciplines of Service & Attitude, Market
Research & Selling, Management & Communication, Credit & Finance, I.T.
& e-Banking, Treasury & Trade Finance, Global/ Domestic Banking
Operations and on other diverse subjects were conducted by In / Ex-House
professionally skilled, qualified and certified faculty and industry experts for
10233 people of senior / middle line management & staff carving 1334 days
training days. There is no budget limit for Training and Education at Habib
Bank. HR Group aims to maintain and further improve the service-oriented
culture and to make employment not only satisfying but also enjoyable.

Omnipotent or Symbolic View of

management
In MCB, managers are also responsible for the success or failure of the
organization but there are also some factors that have great effect on
organization and that type of affairs are out of control of managers.

Culture of the organization:

At MCB we have created a challenging environment that encourages
creativity and commitment. In our pursuit of excellence, we are focused on
attracting, developing and retaining the best talent in the marketplace. Our
dynamic culture offers diverse growth opportunities across Pakistan and in
25 countries around the world. MCB fosters a work environment where
employees can realize their potential whether locally or in the international
arena. Thus, we enable our employees to achieve their professional goals
while keeping in synch with the banks overall objectives.

Dimensions of Organizational Culture

Attention to
Detail
Innovation and
Risk Taking
People
Orientation

Outcome
Orientation

Organizational
Culture
Stability
Team
Orientation

Aggressiveness

The Source of Culture

[[[

MCB has a strict rule and regulations and employees learn culture by
managers, trainings are conducted, books and different workshops are
organized for the employees.

Top Management
Organization
Founder

Selection of
Employees

Organizations
culture

Socialization

How Employees learn culture:

In MCB, the employees learn culture by stories and by rituals.

Innovative culture:

MCB has innovative culture. MCB promotes the new ideas and appreciate
its employees for giving new and innovative ideas. That helps the employees
in achieving their goals and, they try to show their best at job.

Customer-responsive culture

MCB has customer responsive culture. The employees of the MCB are
continues in their desire to please the customers and provide good service to
their customers and satisfy the needs of customers.

Focus on individual development

MCB focus on individual development, MCB try to create the good culture,
in which every employee can adjust, work properly, learn the new thing and
give best.

Trust and openness

In MCB, top management have full trust on their employees. Mostly

employees are honest and they

Employees Empowerment
In MCB, managers have trust on their employees and they want that their

employees also try to make decisions at their own job level.

Toleration of Employees Expression:

In MCB, there is no toleration of employees expression. They want work

and

The Environment
Competitors
Suppliers

Customers
Organization

Political
groups

MCB has good relationship with their customers, suppliers. Managers try
their best to great good environment with them and solve problems in well
manner.[
The general environment effects on MCB economic. MCB work in legal
way, all the decisions of the managers are legal and they give benefit to their
customers, stakeholder, stockbroker and employees. MCB fulfils the
demographic conditions; MCB is introducing new types of accounts of
different age groups, level of education income of family location. Now in
MCB, there is a bit change of technology.

Stakeholder relationships
MCB have very good relation with his stakeholder and try to provide them
better facilities and fulfil their need in proper and good manner.

Employee
Unions
Shareholde
rs
Communities
Suppliers

Customer

Organization

Social and
Political Actions
Competit
Groups
Trade and Industry
Associations
Governme
nts

Media

STRATEGIC MANAGEMENT ANALYSIS

3.1 MCB STRATEGIES

3.1.1 CORPORATE STRATEGIES

Strategic Path
From the very beginning the main focus of the management of MCB is
the implementation of growth strategies. During the entire period of
continuous straggle they adapted almost all types of strategies according
to situation and market demand of that time except restructuring of
defensive

strategies.

MCB

never

faced

any

type

of

liquidation,

bankruptcy, sale or removal of any business unit. Their main strength is

to avoid insecure financing. It is big organization that ever during their
dark periods of straggle; they never lose their market share. If we talk
about GROWTH STRATEGIES they are as followed
Incremental Growth
MCBs key areas of operations encompass product offering and services
in retail and consumer banking. They introduce their products to
expand their clients base by bringing innovation and improving the
channels of distribution. They put their all efforts to reduce the
business and make their services accessible for all customers.
International Growth
With a presence in 25 countries subsidiaries in Hong Kong and the Uk,
affiliates in Nepal, Nigeria, Kenya and Kyrgyzstan and representation
offices

in

Iran

and

China.

MCB is

also

the

largest

domestic

multinational. The bank is expanding its presence in principal

international markets including the UK, UAE, SOUTH AND CENTRAL
ASIA, AFRICA and the far EAST.

3.1.2 CORPORATE LEVEL STRATEGIES

MCB has following corporate level strategies
.
Growth strategy:
MCB has adopted growth strategy by expanding its operations. MCB
actually have different products and services for both individuals and
business customers. MCB product and services for individual customers
are credit cards, debit cards, and deposit accounts. MCB product and
service

for

business

customer

are

commercial

banking,

cash

management and asset management.

Related Diversification:
MCB has also adopted related diversification strategy, because at first
function of MCB was only accepting deposit and advancing loans but
now MCB has many related functions like flexi loans, ATM and credit
cards.

3.1.3 BUSINESS LEVEL STRATEGY

Cost Leader Ship strategy:
At business level MCB has adopted cost leadership strategy in a way that
cost of advancing loans is less as compare to some other well reputed
banks like Alfalfa, bank Al habib,
Differentiation Strategy:
At business level, MCB has also adopted differentiation strategy by
introducing some new products into the market earlier to other banks
like debit cards.

3.1.4 DIVISIONAL LEVEL STRATEGY

Following are the main divisional level strategy fallowed by MCB

To establish sound relationships with top industrial groups and
various multinationals.
To make the bank customer focused
To increase the no of online branches
To increase the ATM network to further improve the bank market
shares.
To implement the performance appraisal process to provide
motivation and merit oriented culture in the bank
To improve extensive tanning to the employees in the process,
products, marketing and selling skills.
Upgrading skills level of employees.
Evaluation of vision and mission
MCBs all strategies are directly matched with its vision with is;
ENABLING

PEOPLE

TO

ADVANCE

WITH

CONFIDENCE

AND

SUCCESS. They are successful in providing their desired value &

importance to their internal as well as external customers. MCB proved
that its objective is not to bring profit only but to enhance the
satisfaction and improve the life style of their stakeholders also.

3.2 STRATEGYS ANALYSIS

3.2.3 Porters model
If we talk about MCB in porters perspective, they are implementing
BEST-COST PROVIDER STRATEGY. They give their customer more
value for the money they are spending to satisfy them in a props way.
They focus on innovation as well as low cost. It is also because they
believe if they facilitate their customers, ultimately will get return in
future. MCBs products cover all the customers belonging from various
classes. A salaried person having 3 to 5000 and rich industrialist are
entertained equally in MCB.

3.2.4 Intensive Strategies

MCB focused on all 3 Strategies in Different periods to get more return.
Now days they think the need to implement market pares-ration Strategy
Because of growing number of banks opening in Pakistan. MCB played
an important role to flourish the banking sector by introducing their
products all over the world especially in Pakistan. In this process of wide
coverage they follow market development strategy.
3.2.5 Diversification Strategies
MCB is mainly focus on related Diversification to provide services and
contribute in high self esteem of their customer.

.4
Future Outlook
With exceptional performance for 2014, the excitement for 2015 builds up as the Bank
positions itself to gain from its strengths and exploit opportunities that exist. They are
confident that their expanding network of branches would impressively contribute to
meet our valuable shareholders expectations. Increasing international footprint,
improvement in asset quality, low cost deposit base, deployment of cost efficient
techniques and increased contribution from non-markup income would be our key areas
of focus. They will continue to tap the unbanked segments through our operational
network and branchless banking proposition as financial inclusion is the dire need of the
time ahead. They would remain dynamic and committed in retail banking, corporate
banking, Islamic banking, SME financing and agricultural credit. Development of branch
less banking agent network, expansion in E-commerce Business, introduction of M-POS
merchant terminals and deployment of cash deposit machine would also make significant
contribution to nonmarkup income in 2015. The Bank re-affirmed its commitment to
Islamic Banking customers by incorporating its Islamic Banking subsidiary for which
statutory approvals are awaited to start commercial operations. This initiative will help to
enhance Islamic Banking Business and to serve its valued customers by offering a
complete range of Sharia compliant products. They are committed in maintaining our
status of one of the leading banks operating in Pakistan through enriched service quality,
financially viable tailored products to meet requirements of our esteemed customer and
translating the underlying financial strength of the entity into profits