TABLE OF CONTENTSChapter 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

CONCLUSION1.1History

MCB Bank Limited(formerly Muslim Commercial Bank) previously named as a (Mansoor Co-operative Bank) was incorporatedby theAdamjee Groupon 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 wasnationalizedin 1974 during the government ofZulfikar 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 byNishat Group. As of June 2008, the Nishat Group owns amajoritystake in the bank. 1.2Present 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 LandscapeIn 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.1.4Financial 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:2014 2013

Branch opened during the year Numbers 16 30

Credit cards issued during the year Numbers 7,505 7,187

Accounts opened during the year Numbers 349,021 367,808

ATM card issued during the year Numbers 488,706 508,241

ATM installed during the year Numbers 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

1.5.1VisionTo be the leading financial services provider, partnering with our customers for a more prosperous and secure future.1.5.2Mission

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.1.5.3Strategic 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

1.5.4Core 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.

1.6MCB 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

Hierarchy of of MCB

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

PlanningIn 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.

LeadingThe 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.

ControllingMCB 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

SWOT AnalysisThis 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.

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

SWOT Analysis

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

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 careerMCB 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: CentralizedAll 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 Structure and Design

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 managementIn 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

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.

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

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

STRATEGIC MANAGEMENT ANALYSIS

3.1 MCB STRATEGIES

3.1.1 CORPORATE STRATEGIES

Strategic PathFrom 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 GrowthMCBs 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 GrowthWith 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 STRATEGYFollowing 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 missionMCBs 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 ANALYSIS3.2.3 Porters modelIf 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..4Future 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

SVP

(Senior Vice President)

VP

(Vice President)

AVP

(Assistant Vice President)

OFFICERS

Grade1

Grade2

Grade3

EVP

(Executive Vice President)

SEVP

(Senior Executive Vice President)

JUNIOR OFFICIER

ASSISTANTS OR CLERKS

SECURITY STAFF

External Analysis

Opportunity

threats

Formulate strategies

Identify the organizations mission, goals and strategies

Evaluate

Implement strategies

Internal Analysis

Strengths

weakness

Innovation and Risk Taking

Team Orientation

Aggressiveness

Organizational Culture

Attention to Detail

Stability

Outcome Orientation

People Orientation

Top Management

Socialization

Organizations culture

Selection of Employees

Organization Founder

Competitors

Suppliers

Customers

Organization

Political groups

Employees

Customers

Social and Political Actions Groups

Unions

Competitors

Trade and Industry Associations

Organization

Shareholders

Communities

Governments

Media

Suppliers

Implement strategies

Identify the organizations mission, goals and strategies

Formulate strategies

Internal Analysis

Strengths

weakness

Evaluate

External Analysis

Opportunity

threats