MCB enjoys the unique position of being the Bank for Life because of its commitment to excellence and its constant endeavour to make banking convenient for everybody. MCB shares the element of convenience with water because not only is water the basis of life but also takes on the form and shape of the vessel it is kept in. MCB too quenches the thirst for convenience by taking on different forms according to the needs and requirements of the consumer. 2 Content 05 Vision Standalone Financial Statements 07 Mission 102 Auditors’ Report to the Members 09 Strategic Objectives 103 Statement of Financial Position 23 Core Values 104 Profit and Loss Account 25 Awards 105 Statement of Comprehensive Income 27 Products and Services 106 Cash Flow Statement 31 Corporate Information 107 Statement of Changes in Equity 32 Board of Directors 108 Notes to the Financial Statements 34 Profile of the Board of Directors 170 Annexure 39 Board Committees 42 Organizational Structure Consolidated Financial Statements 44 Management Committees 200 Directors’ Report on Consolidated Financial 47 Other Senior Management Statements 48 Entity Credit Rating 201 Auditors’ Report to the Members 49 Corporate Profile of the Bank 202 Consolidated Statement of Financial Position 50 Chairman’s Message 203 Consolidated Profit and Loss Account 51 President’s Review 204 Consolidated Statement of Comprehensive Income Stakeholder’s Information 205 Consolidated Cash Flow Statement 53 Annual Trend 2002 – 2012 206 Consolidated Statement of Changes in Equity 54 Highlights 2012 207 Notes to the Consolidated Financial Statements 55 Review of Six Years’ Performance 274 Annexure 58 Six Years’ Financial Summary 282 Branch Network 60 Six Years’ Non Financial Summary 284 Pattern of Shareholding 61 Six Years’ Summary of Concentration & Maturities 284 Categories of Shareholders 62 Concentration of Advances, Deposits, NPLs and 287 Notice of 65th Annual General Meeting Off Balance Sheet Items - 2012 291 Glossary of Terms 63 Maturity Analysis of Assets and Liabilities 293 Form of Proxy 63 Key Interest Bearing Assets and Liabilities 64 Graphical Presentation of Financial Statements 65 Statement of Value Added 66 Capital Structure 67 Groupwise Deposits & Advances 68 Non Performing Loans 69 Investments 70 Markup & Non Markup Income 71 Administrative Expenses 72 Vertical Analysis 73 Horizontal Analysis 74 Quarterly Performance 74 Six Years’ summary of Cash Flows 75 Market Statistics of MCB’s Share 76 MCB Calendar 77 Directors’ Report to the Members 92 Corporate Social Responsibility 93 Sustainability Report 96 Code of Conduct 99 Statement of Compliance with the Code of Corporate Governance 100 Auditors’ Review Report to the Members on Code of Corporate Governance 3 4 Vision To be the leading financial services provider, partnering with our customers for a more prosperous and secure future. 5 6 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. 7 8 Strategic Objectives Delivering remarkable returns to stakeholders, sustainable performance, exceeding market and shareholder expectations. Providing value added services through operational expansion, geography and upgraded systems. Building a corporate culture of equality, trust and team spirit as we remain dedicated to be a socially responsible organization. 9 10 Growth with Convenience By empowering businesses with tailored solutions that conveniently meet their requirements, MCB’s economic vision encompasses growth, prosperity and financial well-being of the people. 11 12 Care with Convenience At MCB, we are always eager and willing to help people who are less fortunate and people who are in any sort of distress. Our efforts are aimed at enriching their lives so that they can help themselves to live a life of convenience and ease. 13 14 Trust with Convenience We know that in these tough economic times, people need a reliable source to act as their partner for better investments and improved results. Our vast portfolio of convenient offerings and our image as a trustworthy Bank assures local investors to have faith in the economy and makes it easier for foreign investors to invest in Pakistan. 15 16 Earn with Convenience MCB is a firm believer in the age-old wisdom of ‘a rupee saved is a rupee earned’. We understand that people want to save and earn on their savings which is why we offer a plethora of convenient solutions for savings so that people can enjoy their today by overcoming their worries for tomorrow. 17 18 Move with Convenience With over 1100 branches all over Pakistan and virtual presence through various affiliations, MCB offers a convenient, fast and secure way of money transfer from anywhere in the world to Pakistan and all over Pakistan. 19 20 Luxury with Convenience It is always nice to feel and see that you are being treated in a special manner. By offering convenient solutions for unconventional needs, MCB treats all its customers as royalty. Our banking services are centered on offering a sense of luxury with utmost convenience. 21 22 Core Values Integrity We are the trustees of public funds and serve our community with integrity. We believe in being the best at always doing the right thing. We deliver on our responsibilities and commitments to our customers as well as our colleagues. Innovation We encourage and reward people who challenge the status quo and think beyond the boundaries of the conventional. Our teams work together for the smooth and efficient implementation of ideas and initiatives. Excellence We take personal responsibility for our role as leaders in pursuit of excellence. We are a performance driven, result oriented organization where merit is the only criterion for reward. 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. 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. 23 24 Awards 2012 The Asset Triple A: Best Domestic Bank - Pakistan 2012 Euromoney: Best Bank in Pakistan 2012 NFEH: CSR Business Excellence Award “Best Media Coverage” 2012 ICAP and ICMAP: 2nd Best Corporate Report Award 2011 - Banking Sector 2012 World Finance: Best Commercial Bank - Pakistan 2012 Pakistan Centre for Philanthropy: PCP Corporate Philanthropy Award 2011 CFA Association Pakistan: Most Stable Bank of the Year 2011 CFA Association Pakistan: Best Bank of the Year 2011 Euromoney: Best Bank in Pakistan 2011 ICAP / ICMAP: 1st - BCR Award 2010 - Banking Sector 2011 SAFA: Joint 2nd Runner-up for BCR 2010 2010 The Asian Banker: Strongest Bank in Pakistan 2010 The Asian Banker: Leadership Achievement Award 2010 MMT: Best Bank Led MMT Service 2010 ICAP / ICMAP: 1st - BCR Award 2009 - Banking Sector 2010 SAFA: Certificate of Merit Award for BCR 2009 2009 Asiamoney: Best Domestic Bank in Pakistan 2009 The Asset: Best Domestic Bank in Pakistan 2008 Euromoney: Best Bank in Asia 2008 Euromoney: Best Bank in Pakistan 2008 Asiamoney: Best Domestic Bank in Pakistan 2006 Asiamoney: Best Domestic Bank in Pakistan 2006 Euromoney: Best Bank in Pakistan 2005 Asiamoney: Best Domestic Bank in Pakistan 2005 Euromoney: Best Bank in Pakistan 2004 Euromoney: Best Bank in Pakistan 2004 Asiamoney: Best Domestic Bank in Pakistan 2003 Euromoney: Best Bank in Pakistan 2001 Euromoney: Best Bank in Pakistan 2000 Euromoney: Best Bank in Pakistan 25 26 Products & Services Current Account MCB Bank offers a variety of current accounts to cater the everyday MCB Project & Structured Finance transactional needs of various customers. These accounts ensure ease and MCB Project & Structured Finance involves financing complex projects, freedom to bank from any of the 1100+ branches across the country. The usually in an SPV structure, where the loan is tightly structured around the different accounts include: the Basic Banking Account that has no minimum cash flows, risks are allocated amongst various stakeholders, and there is balance requirement; Business Account offering free online transactions, limited or no recourse to the sponsors. Demand Drafts, Pay Orders and lots more to meet the day-to-day business requirements; Current Life Account that offers the security of life insurance MCB Syndicated Loans and Debt Capital Markets free of cost; and for all others, the conventional Current Account. MCB Syndicated Loans and Debt Capital Markets involves arrangement, underwriting and placement services for significant financing requirements Savings Account by large corporate and institutional clients to other financial institutions or MCB Bank offers a wide array of savings products that suit short-term growth through the debt capital markets. and transactional needs. Our savings accounts offer attractive profit rates as well as flexibility to transact. Savings Xtra is targeted for customers having MCB Quasi Equity/Hybrid Instruments Rs. 5 million + deposit and 365 Gold offers profit rates on daily balances MCB Quasi Equity/Hybrid Instruments structure and place a category with no minimum balance requirements. In addition, two unique products, of debt that has some characteristics of equity such as being unsecured, i.e. Smart Savings and Savings Maximizer, are special saving accounts run subordinated or with a potential equity upside. solely via debit cards and other remote banking channels, offering a very competitive rate to both high and low-end savers. MCB Equity Capital Raising MCB Equity Capital Raising relates to raising capital for our clients by offering Term Deposit common or preferred equity to public or private investors, through initial MCB Term Deposits offer attractive short to mid-term investment options with public offers, offers for sale, rights issues and private equity placements.