Post on 27-Mar-2020
To be the leading financial services provider, partnering with our customers for a more prosperous and secure future
Our Vision
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 ensurethat our shareholders can invest with confidence in us
Our Mission
The standards and principles which determine our behavior and how we interact with our customers and each other
Our Values
MCB
MCBMCB Bank Limited
CORPORATE PROFILE
Mian Mohammad Mansha Chairman
S.M. Muneer Vice ChairmanTariq Rafi Director
Shahzad Saleem Director
Sarmad Amin Director
Director
Director
Director
Director
Director
Director
Director
M.U.A. Usmani
Abdul Farid Bin Alias
President / CEO
Board of Directors:
Mian Raza Mansha
Aftab Ahmad Khan Manzar Mushtaq
Dato’ Seri Ismail Shahudin
Mian Umer Mansha
Member
Member
Member
Tariq Rafi Chairman
Audit Committee:
Aftab Ahmad Khan
Dato’ Seri Ismail Shahudin
Ahmad Alman Aslam
Ahmad Alman Aslam
Company Secretary: Abdus S. Sami
Auditors: M/s. A.F. Fergusons & Co.
Chartered Accountants
Legal Advisors: M/s.
Advocates & Legal Consultants
Khalid Anwer & Co.
Chief Financial Officer: Salman Zafar Siddiqi
Registrar's and Share
Registration Office:
M/s. THK Associates (Pvt.) Ltd
State Life Building No. 3
Dr. Ziauddin Ahmed Road
Karachi, Pakistan
Principal Office: MCB 15 Main Gulberg,
Lahore, Pakistan.
Registered Office: MCB Building F-6/G-6,
Jinnah Avenue, Islamabad,
Pakistan.
April, 24, 2012
MCBMCB Bank Limited
Ratings
Economy Review
Future Outlook
Acknowledgement
PACRA maintained the long term credit rating of AA+ [double A plus] and short term credit rating of A1+ [A one plus] of the Bank, through its notification in June 2011 (2010: Long term: AA+ [double A plus] and Short term: A1+ [A one plus]).
The macroeconomic platform of the economy is in much need of prudent corrections and instigation of enforced measures to curb the impaired controls on inflationary pressures. The prevalent political unrest, trade gaps, deteriorating reserves and international pressure on commodity prices are reaping its adversities at a much higher pace. In the banking sector, remarkable results have been witnessed in a continuing trend despite economic disturbances. However, the modes and quality of financing is a major concern vis-à-vis the invisible demand in the private sector and limited growth opportunities in the area. Growing concentration levels in government securities at banking industry level has raised concerns internationally and is likely to impact ratings of financial institutions. However, to spur private sector credit, concrete remedial actions are required with stable discount rate being the only factor considered so far.
Moving forward, unless the adversities are reversed there remains little room for foreign investments and injections in the economy. Main industries have already suffered the loss on part of power shortages and lack of government support. Tax evasion issues, rising deficit, impact of negative parity on exchanges and debt repayments is putting the economy under further strain. Although equity market has performed exceptionally well in the first quarter of 2012, necessary measures should be adopted to repose international confidence going forward.
MCB Bank Limited is determined in growth and creating opportunities to strengthen itself further to meet the fore coming challenges. The Bank's focus shall be in product and services innovation, further improvements in quality of services on offer, improved use of technology, strengthening of internal policy and control frameworks and adding value in the economy through its channel of businesses.
In the end the Board would like to greet and thank all shareholders and customers for their trust, our staff for their continuous hard work and dedication, and the Government and the State Bank of Pakistan for their patronage and support.
MCBMCB Bank Limited
DIRECTORS' REPORT - MARCH, 2012
43 First Quarterly Report, 2012
On behalf of Directors
First Quarterly Report, 2012
I am pleased to place before you, on behalf of the Board of Directors, the quarterly financial statements of your Bank for the period ended March 31, 2012.
Performance Review
The Bank registered remarkable performance in the first quarter as profit before and after tax increased to Rs. 8.656 billion and Rs. 5.644 billion respectively, increasing by 10% and 12% over the corresponding quarter last year. Net markup income of the Bank decreased by 2% over March 2011 whereas non-markup income increased by 20% to Rs. 2.413 billion. On the operating expenses side, gross administrative expenses (excluding the impact of pension fund reversal) increased by a controlled growth of 11% over March 2011, whereas provisions significantly reduced by 94% to Rs. 75 million.
The asset base of the Bank grew to Rs. 666.644 billion from Rs. 653.233 billion as at year end 2011. Advances (gross) of the Bank registered a growth of 2% over December 31, 2011, increasing to Rs. 252.787 billion. The classified portfolio of the Bank decreased by 1% owing to effective risk management framework adopted by the Bank, improving the quality of advances with a lower infection ratio of 10.38% from 10.75% in December 31, 2011. The investment portfolio increased by 3% over December 2011 to Rs. 327.630 billion. The deposit base of the Bank went up by 4%, with 3% and 8% increase reported in current and saving deposits respectively, improving the CASA percentage to 82% from 81% as of December 31, 2011.
Earnings per share (EPS) for the quarter was reported at Rs. 6.14 compared to Rs. 5.46 for the corresponding quarter last year. Return on assets improved to 3.42% (2011: 3.18%) whereas return on equity improved to 28.09% (2011: 26.23%).
ChairmanMian Mohammad Mansha
Financial Highlights
Transfer from Surplus on Revaluation of Fixed Assets (net of tax)
Profit Available for Appropriation
Appropriations:Statutory ReserveFinal Cash Dividend – December 2011
Issue of Bonus Shares – December 2011
Total Appropriations
Un-appropriated Profit Carried Forward
Profit Before Taxation
Un-appropriated Profit Brought Forward
Profit After Taxation
Taxation
8,656
9
28,375
34,019
564 2,509
836
3,909
30,110
Rs. in Millions
28,366
5,644
(3,012)
Unconsolidated Condensed Interim Statement of Financial Position (Un-audited)As at March 31, 2012
MCBMCB Bank Limited MCBMCB Bank Limited
Unconsolidated Condensed Interim Profit and Loss Account (Un-audited)
65 First Quarterly Report, 2012 First Quarterly Report, 2012
Unaudited Audited
Note March 31, December 31,
2012 2011
Assets
Cash and balances with treasury banks 46,915,513
53,122,522
Balances with other banks 2,451,944
2,281,263
Lendings to financial institutions 7 2,819,768
955,087
Investments - net 8 327,630,294
316,651,613
Advances - net 9 230,456,782
225,801,259
Operating fixed assets 22,368,978
22,007,903
Deferred tax assets - net -
-
Other assets - net 34,000,787
32,413,576
666,644,066
653,233,223
Liabilities
Bills payable 8,404,870
9,466,818
Borrowings 10 28,544,617
39,100,627
Deposits and other accounts 11 512,067,061 491,188,710 Sub-ordinated loan - - Liabilities against assets subject to finance lease -
-
Deferred tax liabilities - net 12 6,538,486
6,294,886 Other liabilities 18,658,258
18,379,700
574,213,292
564,430,741
Net assets 92,430,774
88,802,482
Represented by:
Share capital 9,198,601
8,362,365
Reserves 42,505,941
42,186,467
Un-appropriated profit 30,109,900
28,366,171
81,814,442
78,915,003
Surplus on revaluation of assets - net of tax 10,616,332
9,887,479
92,430,774
88,802,482
Contingencies and commitments 13
---------- (Rupees in '000) ----------
The annexed notes 1 to 21 form an integral part of these unconsolidated condensed interim financial statements.
Note
Mark-up / return / interest earned 17,545,206 15,960,038
Mark-up / return / interest expensed 6,846,822 5,036,886
Net mark-up / interest income 10,698,384 10,923,152
Provision against loans and advances - net 74,532 1,002,304
Provision for diminution in the value of investments - net 591 187,177
Bad debts written off directly 120 7,394
75,243 1,196,875
Net mark-up / interest income after provisions 10,623,141 9,726,277
Non mark-up / interest income
Fee, commission and brokerage income 1,462,470 1,182,288
Dividend income 505,117 188,515
Income from dealing in foreign currencies 255,268 213,995
Gain on sale of securities - net 55,436 278,448
Unrealized loss on revaluation of investments classified as held for trading (1,486) -
Other income 136,694 144,772
Total non mark-up / interest income 2,413,499 2,008,018
13,036,640 11,734,295
Non-mark-up / interest expenses
Administrative expenses 4,123,496 3,668,980
Other provisions / (reversals) 15,775 (13,763)
Other charges 241,136 242,705
Total non mark-up/interest expenses 4,380,407 3,897,922
8,656,233 7,836,373
Extra ordinary / unusual item - -
Profit before taxation 8,656,233
7,836,373
Taxation - current period 2,769,475 2,705,674
- prior years - -
- deferred 242,617 107,082
3,012,092 2,812,756
Profit after taxation 5,644,141 5,023,617
Earnings per share - basic and diluted - Rupees 14 6.14 5.46
The annexed notes 1 to 21 form an integral part of these unconsolidated condensed interim financial statements.
Quarter ended
March 31,
2011
Quarter ended
March 31,
2012
---------- (Rupees in '000) ----------
For the three months period ended March 31, 2012
Sarmad Amin
Director S.M. Muneer
President / CEO M.U.A. Usmani Mian Umer Mansha Sarmad Amin
Director
S.M. MuneerPresident / CEO M.U.A. Usmani Mian Umer Mansha
Unconsolidated Condensed Interim Cash Flow Statement (Un-audited)For the three months period ended March 31, 2012
MCBMCB Bank LimitedMCBMCB Bank Limited
Unconsolidated Condensed Interim Statement of Comprehensive Income (Un-audited) For the three months period ended March 31, 2012
87 First Quarterly Report, 2012 First Quarterly Report, 2012
Profit after tax for the period 5,644,141
5,023,617
Other comprehensive income
Effect of translation of net investment in foreign branches (244,940) 4,773
Comprehensive income transferred to equity 5,399,201 5,028,390
Components of comprehensive income not reflected in equity
Net change in fair value of available for sale securities 738,786 34,146
Deferred tax (985) (80,094)
737,801 (45,948)
Total comprehensive income for the period 6,137,002 4,982,442
The annexed notes 1 to 21 form an integral part of these unconsolidated condensed interim financial statements.
Quarter ended
March 31,
2012
Quarter ended
March 31,
2011
March 31, March 31,2012 2011
Cash flows from operating activitiesProfit before taxation 8,656,233 7,836,373Less: Dividend income (505,117) (188,515)
8,151,116 7,647,858Adjustments for non-cash charges
Depreciation 312,693 265,918Amortization 62,391 47,025Provision against loans and advances - net 74,532 1,002,304Provision for diminution in the value of investments - net 591 187,177Other provisions / (reversals) 15,775 (13,763)Bad debts written off directly 120 7,394Unrealized loss on revaluation of investments classified as held for trading 1,486 -Gain on disposal of fixed assets (4,298) (3,798)
463,290 1,492,257
8,614,406 9,140,115(Increase) / decrease in operating assetsLendings to financial institutions (1,864,681) 3,376,781
Net investment in held for trading securities (5,198,447) -
Advances - net (4,730,175) (5,514,460)
Other assets - net 1,522,562 (233,589)(10,270,741) (2,371,268)
Increase / (decrease) in operating liabilities
Bills payable (1,061,948) (638,933)
Borrowings (10,556,010) 3,985,767
Deposits and other accounts 20,878,351 30,929,050
Other liabilities (1,895,995) (2,042,505)
7,364,398 32,233,379
5,708,063 39,002,226Income tax paid (5,657,112) (3,953,961)
Net cash flows from operating activities 50,951 35,048,265
Cash flows from investing activitiesNet investments in available-for-sale securities (6,631,753) (37,400,104)Net investments in held-to-maturity securities 1,588,228 118,598Investment in associated undertaking - (52,521)Dividend income received 267,203 117,509Investment in operating fixed assets - net of disposals (731,861) (765,522)
Net cash flows from investing activities (5,508,183) (37,982,040)
Cash flows from financing activities
Dividend paid (334,156) (258,570)
Net cash flows from financing activities (334,156) (258,570)
Exchange difference on translation of net investment in foreign branches (244,940)
4,773
---------- (Rupees in '000) ----------
Increase in cash and cash equivalents (6,036,328) (3,187,572)
Cash and cash equivalents at January 1 55,403,785 46,885,752
Cash and cash equivalents at March 31 49,367,457 43,698,180
The annexed notes 1 to 21 form an integral part of these unconsolidated condensed interim financial statements.
Sarmad Amin
Director S.M. Muneer
President / CEO M.U.A. Usmani Mian Umer Mansha Sarmad Amin
Director
S.M. MuneerPresident / CEO M.U.A. Usmani Mian Umer Mansha
---------- (Rupees in '000) ----------
MCBMCB Bank Limited
Unconsolidated Condensed Interim Statement of Changes in Equity (Un-audited)For the three months period ended March 31, 2012
MCBMCB Bank Limited
Notes to the Unconsolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
9 10
First Quarterly Report, 2012 First Quarterly Report, 2012
Balance as at December 31, 2010 7,602,150
-
9,702,528
345,979
11,514,399
18,600,000
21,414,955
69,180,011
Change in equity for three months ended March 31, 2011
Transferred from surplus on revaluation of fixed
assets to unappropriated profit - net of tax -
-
-
-
-
-
8,947
8,947
Exchange differences on translation of net
investment in foreign branches -
-
-
4,773
-
-
-
4,773
Profit after taxation for three months period
ended March 31, 2011 -
-
-
-
-
-
5,023,617
5,023,617
Total comprehensive income for the period ended March 31, 2011 -
-
-
4,773
-
-
5,023,617
5,028,390
Transferred to statutory reserve -
-
-
-
502,362
-
(502,362)
-
Transfer to reserve for issue of bonus shares -
760,215
-
-
-
-
(760,215)
-
Final cash dividend - December 31, 2010 -
-
-
-
-
-
(2,280,645)
(2,280,645)
Balance as at March 31, 2011 7,602,150
760,215
9,702,528
350,752
12,016,761
18,600,000
22,904,297
71,936,703
Change in equity for nine months ended December 31, 2011
Transferred from surplus on revaluation of fixed
assets to unappropriated profit - net of tax -
-
-
-
-
-
26,841
26,841
Exchange differences on translation of net
investment in foreign branches -
-
-
76,297
-
-
-
76,297
Profit after taxation for nine months period
ended December 31, 2011 -
-
-
-
-
-
14,401,289
14,401,289
Total comprehensive income for nine months ended December 31, 2011 -
-
-
76,297
-
-
14,401,289
14,477,586
Transferred to statutory reserve -
-
-
-
1,440,129
-
(1,440,129)
-
Issue of bonus shares - December 31, 2010 760,215
(760,215)
-
-
-
-
-
-
Interim cash dividend - March 31, 2011 -
-
-
-
-
-
(2,508,709)
(2,508,709)
Interim cash dividend - June 30, 2011 -
-
-
-
-
-
(2,508,709)
(2,508,709)
Interim cash dividend - September 30, 2011 -
-
-
-
-
-
(2,508,709)
(2,508,709)
Balance as at December 31, 2011 8,362,365
-
9,702,528
427,049
13,456,890
18,600,000
28,366,171
78,915,003
Change in equity for three months ended March 31, 2012
Transferred from surplus on revaluation of fixed
assets to unappropriated profit - net of tax -
-
-
-
-
-
8,947
8,947
Exchange differences on translation of net
investment in foreign branches -
-
-
(244,940)
-
-
-
(244,940)
Profit after taxation for three months period
ended March 31, 2012 -
-
-
-
-
-
5,644,141
5,644,141
Total comprehensive income for the period ended March 31, 2012 -
-
-
(244,940)
-
-
5,644,141
5,399,201
Transferred to statutory reserve -
-
-
-
564,414
-
(564,414)
-
Transfer to reserve for issue of bonus shares -
836,236
-
-
-
-
(836,236)
-
Issue of bonus shares - December 31, 2011 836,236 (836,236) - - - - - -
Final cash dividend - December 31, 2011 - - - - - - (2,508,709) (2,508,709)
Balance as at March 31, 2012 9,198,601 - 9,702,528 182,109 14,021,304 18,600,000 30,109,900 81,814,442
The annexed notes 1 to 21 form an integral part of these unconsolidated condensed interim financial statements.
Reserve for
issue of bonus
shares
Revenue Reserves
---------------------------------------------------------- (Rupees in'000) ----------------------------------------------------------
Share
premium
Statutory
reserve
Total Share capital
Capital Reserves
General
reserve
Exchange
translation
reserve
Unappropriated
profit
1 STATUS AND NATURE OF BUSINESS
2 BASIS OF PRESENTATION
2.1
2.2
3 STATEMENT OF COMPLIANCE
3.1
3.2
3.3
4 BASIS OF MEASUREMENT
4.1
4.2
5 SIGNIFICANT ACCOUNTING POLICIES AND RISK MANAGEMENT
5.1
5.2
MCB Bank Limited('the Bank') is a banking company incorporated in Pakistan and is engaged in commercial banking and related
services. The Bank's ordinary shares are listed on all the stock exchanges in Pakistan whereas its Global Depositary Receipts
(GDRs) (representing two ordinary equity shares) are traded on the International Order Book (IOB) system of the London Stock
Exchange. The Bank's registered office and principal office are situated at MCB Building, Jinnah Avenue, Islamabad and MCB 15-
Main, Gulberg, Lahore, respectively. The Bank operates 1,165 branches including 22 Islamic banking branches (December 31, 2011:
1,165 branches including 22 Islamic banking branches) with in Pakistan and 8 (December 31, 2011: 8) branches outside the country
(including the Karachi Export Processing Zone Branch).
In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes, the State
Bank of Pakistan has issued various circulars from time to time. Permissible forms of trade-related modes of financing include
purchase of goods by banks from their customers and immediate resale to them at appropriate mark-up in price on deferred payment
basis. The purchases and sales arising under these arrangements are not reflected in these unconsolidated condensed interim
financial statements as such but are restricted to the amount of facility actually utilized and the appropriate portion of mark-up
thereon.
The financial results of the Islamic banking branches have been consolidated in these unconsolidated condensed interim financial
statements for reporting purposes, after eliminating material intra branch transactions / balances. Key financial figures of the Islamic
banking branches are disclosed in note 18 to these unconsolidated condensed interim financial statements.
These unconsolidated condensed interim financial statements have been prepared in accordance with approved accounting standards
as applicable in Pakistan. Approved Accounting Standards comprise of such International Financial Reporting Standards (IFRS)
issued by the International Accounting Standards Board (IASB) as are notified under the Companies Ordinance, 1984, provisions of
and directives issued under the Banking Companies Ordinance, 1962, the Companies Ordinance, 1984, and the directives issued by
SBP. In case requirements differ, the provisions of and directives issued under the Banking Companies Ordinance, 1962, the
Companies Ordinance, 1984, and the directives issued by SBP shall prevail.
The State Bank of Pakistan has deferred the applicability of International Accounting Standard (IAS) 39, 'Financial Instruments:
Recognition and Measurement' and International Accounting Standard (IAS) 40, 'Investment Property' for Banking Companies
through BSD Circular No. 10 dated August 26, 2002. The Securities and Exchange Commission of Pakistan (SECP) has deferred
applicability of IFRS-7 "Financial Instruments:Disclosures" on banks through S.R.O 411(1) /2008 dated April 28, 2008. Accordingly,
the requirements of these standards have not been considered in the preparation of these unconsolidated condensed interim financial
statements. However, investments have been classified and valued in accordance with the requirements prescribed by the State Bank
of Pakistan through various circulars.
The disclosures made in these unconsolidated condensed interim financial statements have, however been limited based on the format
prescribed by the State Bank of Pakistan vide BSD Circular No. 2 dated May 12, 2004 and International Accounting Standard 34,
"Interim Financial Reporting". They do not include all of the disclosures required for annual financial statements and these
unconsolidated condensed interim financial statements should be read in conjunction with the financial statements of the Bank for the
year ended December 31, 2011.
These unconsolidated condensed interim financial statements are presented in Pak Rupees, which is the Bank's functional and
presentation currency.
The financial risk management objectives and policies are consistent with those disclosed in the annual financial statements of the
Bank for the year ended December 31, 2011.
These unconsolidated condensed interim financial statements have been prepared under the historical cost convention except that
certain fixed assets are stated at revalued amounts, certain investments, commitments in respect of certain forward foreign exchange
contracts and derivative financial instruments have been marked to market and are carried at fair value.
The accounting polices adopted in the preparation of these unconsolidated condensed interim financial statements are the same as
those applied in the preparation of the annual financial statements of the Bank for the year ended December 31, 2011.
Sarmad Amin
Director S.M. Muneer
President / CEO M.U.A. Usmani Mian Umer Mansha
MCBMCB Bank Limited
Notes to the Unconsolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
MCBMCB Bank Limited
Notes to the Unconsolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
1211 First Quarterly Report, 2012 First Quarterly Report, 2012
Surplus on revaluation of available for sale securities - net
Investments at revalued amounts - net of provisions
8.2 Investments include Pakistan Investment Bonds amounting to Rs. 232.600 million (December 31, 2011: Rs. 232.600 million)
earmarked by the State Bank of Pakistan and National Bank of Pakistan against TT / DD discounting facilities and demand note
facilities sanctioned to the Bank. In addition, Pakistan Investment Bonds amounting to Rs. 5 million (December 31, 2011: Rs. 5 million)
have been pledged with the Controller of Military Accounts on the account of Regimental Fund Account.
472,254
291,848,744 13,483
24,802,869
485,737 316,651,613
6
7. LENDINGS TO FINANCIAL INSTITUTIONS March 31, December 31,
2012 2011
-
-
2,819,768 955,087
2,819,768 955,087
8 INVESTMENTS - NET
8.1 Investments by types
Held-for-trading securities 5,198,447
-
5,198,447
Available-for-sale securities 8.2 301,670,391
13,548,342
315,218,733
Held-to-maturity securities 8.2 7,304,613
62,087
7,366,700
314,173,451
13,610,429
327,783,880
Associates 8.3 1,059,421
-
1,059,421
Subsidiaries 482,208
-
482,208
1,541,629 - 1,541,629
Investments at cost 315,715,080 13,610,429 329,325,509
Less: Provision for diminution in the value of investments (2,918,252)
-
(2,918,252)
Investments (net of provisions) 312,796,828
13,610,429
326,407,257Surplus / (deficit) on revaluation of available for sale securities - net 1,231,109
(6,586)
1,224,523Deficit on revaluation of held-for-trading securities - net (1,486)
-
(1,486)
Investments at revalued amounts - net of provisions 314,026,451
13,603,843
327,630,294
Held-for-trading securities -
-
-
Available-for-sale securities 8.2 284,689,998
24,306,386
308,996,384
Held-to-maturity securities 8.2 8,471,928
483,000
8,954,928
293,161,926 24,789,386 317,951,312
Associates 8.3 1,059,421 - 1,059,421
Subsidiaries 482,208 - 482,208
1,541,629 - 1,541,629
Investments at cost 294,703,555 24,789,386 319,492,941
Less: Provision for diminution in the value of investments (3,327,065) - (3,327,065)
Investments (net of provisions) 291,376,490 24,789,386 316,165,876
Given as
collateral
Held by
bank
Given as
collateral
Call money lendings
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS
TotalHeld by
bank
The basis for significant accounting estimates and judgments adopted in the preparation of these unconsolidated condensed interim
financial statements are the same as those applied in the preparation of the annual financial statements of the Bank for the year ended
December 31, 2011.
Repurchase agreement lendings
---------- (Rupees in '000) ----------
March 31, 2012
December 31, 2011
Total
8.3
9 ADVANCES - NETMarch 31, December 31,
2012 2011
Loans, cash credits, running finances, etc
- In Pakistan 229,558,248
223,963,444
- Outside Pakistan 10,686,204
10,959,873
240,244,452
234,923,317Net Investment in finance lease
- In Pakistan 1,214,765
1,226,014
- Outside Pakistan 220,928
151,463
1,435,693
1,377,477Bills discounted and purchased (excluding treasury bills)
- Payable in Pakistan 861,262
722,522
- Payable outside Pakistan 10,245,156
11,111,385
11,106,418
11,833,907
Advances - gross 252,786,563
248,134,701
Less: Provision against loans and advances
- Specific provision 9.1 (21,868,395)
- General provision (252,787)
- General provision against consumer loans (188,441)
- General Provision for potential lease losses (in Srilanka operations) (20,158)
(22,329,781)
(21,869,401)
(248,135)
(198,340)
(17,566)
(22,333,442)
Advances - net of provision 230,456,782 225,801,259
9.1
Other Assets Especially
Mentioned (OAEM) 9.1.1 10,605
-
10,605
-
-
Substandard 2,007,885
-
2,007,885
439,221
439,221
Doubtful 358,140
3,324
361,464
178,247
178,247
Loss 19,600,150
4,290,188
23,890,338
21,250,927
21,250,927
21,976,780
4,293,512
26,270,292
21,868,395
21,868,395
Other Assets Especially
Mentioned (OAEM) 9.1.1 - - - - -
Substandard 2,036,968 7,857 2,044,825 461,374 461,374
Doubtful 292,466 - 292,466 115,289 115,289
Specific
Provision
HeldDomestic
------------------------------------- Rupees in '000 ------------------------------------
Classified Advances
Category of Classification
Domestic
Total
Overseas
Investment of the Bank in Adamjee Insurance Company Limited is carried at cost amounting to Rs. 943.600 million (December 31,
2011: Rs. 943.600 million)as at March 31, 2012 in accordance with the treatment specified in International Accounting Standard
(IAS) 28 "Accounting for Investments in Associates". The market value of the investment in Adamjee Insurance Company Limited
as at March 31, 2012 amounted to Rs. 2,039.867 million (December 31, 2011: Rs. 1,675.927 million).
Category of Classification
Specific
Provision
Required
March 31, 2012
---------- (Rupees in '000) ----------
December 31, 2011
------------------------------------- Rupees in '000 ------------------------------------
Specific
Provision
Held
Classified Advances
Total
Specific
Provision
Required
Overseas
Advances includeRs. 26,270.292million(December 31, 2011:Rs. 26,664.873million)which have been placed under non-performing
status as detailed below:
Loss 20,061,976 4,265,606 24,327,582 21,292,738 21,292,738
22,391,410 4,273,463 26,664,873 21,869,401 21,869,401
9.1.1 This represents non-performing portfolioof agricultural financing classified as OAEM as per the requirements of the Prudential
Regulation for Agricultural Financing issued by the SBP.
---------- (Rupees in '000) ----------
---------- (Rupees in '000) ----------
MCBMCB Bank Limited
Notes to the Unconsolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
MCBMCB Bank Limited
Notes to the Unconsolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
1413 First Quarterly Report, 2012 First Quarterly Report, 2012
10 BORROWINGS March 31, December 31,
2012 2011
In Pakistan 26,737,202 37,397,843
Outside Pakistan 1,807,415 1,702,784
28,544,617 39,100,627
10.1 Details of borrowings (secured / unsecured)
Secured
Borrowings from State Bank of Pakistan
Export refinance scheme 9,926,134
9,903,657
Long term financing facility 1,511,310
2,026,175
Long term financing - export oriented projects scheme 1,310,028
949,375
Financing Facility for Storage of Agricultural Produce 460,799
219,932
Scheme for Revival of SMEs & Agricultural Activities in Flood Affected Areas -
450
13,208,271
13,099,589
Borrowings from other financial institutions 13,362
293,113
Repurchase agreement borrowings 13,591,017
24,781,254
13,604,379
25,074,367
26,812,650
38,173,956Unsecured
Call borrowings 991,480
816,139
Overdrawn nostro accounts 740,487
110,532
1,731,967
926,671
28,544,617
39,100,627
11 DEPOSITS AND OTHER ACCOUNTS
Customers
Fixed deposits 90,839,753
91,501,846
Savings deposits 244,609,624
225,920,953
Current accounts 166,504,701
161,680,596
Margin accounts 3,067,361
3,511,830
505,021,439
482,615,225Financial institutions
Remunerative deposits 4,911,666
6,319,827
Non-remunerative deposits 2,133,956
2,253,658
7,045,622
8,573,485
512,067,061
491,188,710
12 DEFERRED TAX LIABILITY / (ASSET) - NET
The details of the tax effect of taxable and deductible temporary differences are as follows:
Taxable temporary differences on:
Surplus on revaluation of operating fixed assets 778,160
782,977
Accelerated tax depreciation 972,090 1,033,028
Receivable from pension fund 5,261,164 5,156,165
Surplus on revaluation of securities 50,378 49,393
7,061,792 7,021,563Deductible temporary differences on:
Provision for bad debts (228,171)
Provision for contributory benevolent scheme (1,080)
Provision for post retirement medical benefits (294,055)
---------- (Rupees in '000) ----------
(523,306)
6,538,486
(414,114)
(5,655)
(306,908)
(726,677)
6,294,886
12.1
March 31, December 31,
2012 2011
13 CONTINGENCIES AND COMMITMENTS
13.1 Direct credit substitutes
Contingent liabilities in respect of guarantees given favouring
- Government 4,369,412
2,634,218
- Banks and financial institutions 2,744,964
2,519,451
- Others 5,022,186
4,885,951
12,136,562
10,039,62013.2 Transaction-related contingent liabilities
Guarantees in favour of:
- Government 1,001,775
2,761,601
- Others 4,982,788
4,217,157
Suppliers credit / payee guarantee 2,457,093
2,373,006
8,441,656
9,351,764
13.3 Trade-related contingent liabilities 63,830,600
77,075,699
13.4 Other contingencies
Claims against the Bank not acknowledged as debts 818,363
844,099
13.5 Commitments to extend credit
13.6 Commitments in respect of forward foreign exchange contracts
Purchase 26,888,166
32,395,900
Sale 26,658,002
35,030,445
13.7 Commitments for the acquisition of fixed assets 191,335
276,277
13.8 Taxation
March 31, March 31,
2012 2011
14 BASIC AND DILUTED EARNINGS PER SHARE - AFTER TAX
Profit after taxation 5,644,141 5,023,617
Number of shares
Weighted average number of shares outstanding during the period 919,860,123 919,860,123
Rupees
Basic and diluted Earnings per share - after tax 6.14 5.46
15 CREDIT RATING
---------- (Rupees in '000) ----------
The Finance Act, 2009 and 2010 have made significant amendments in the Seventh Schedule to Income Tax Ordinance, 2001. The
deduction for provision for doubtful and loss categories of advances and off balance sheet items is allowable up to a maximum of 1%
of total advances whereas provisions for advances and off-balance sheet items for consumer and small and medium enterprises
(SMEs) ("as defined under the SBP's Prudential Regulations") is now allowed at 5% of total consumer and SME portfolio. The
amount of bad debts classified as substandard under Prudential Regulations issued by State Bank of Pakistan would not be allowed asan expense.
PACRA throughits notificationin June 2011,has assigned longterm credit rating of AA+ [doubleA plus] and short-term credit rating
of A1+ [A one plus] to the Bank.
---- (Rupees in '000) ----
The Bank makes commitmentsto extend credit in the normal course of its business but these being revocablecommitments do not
attract any significant penalty or expense if the facility is unilaterally withdrawn.
Three months ended
The income tax assessments of the Bank have been framed upto and including the Tax Year 2011. For the Assessment
Year 1988-89 through Tax Year 2011, the department has amended the assessments on certain issues against the Bank.
The Bank has filed appeals which are pending at various appellateforums. in addition, certain decision made in favour of
the Bank are being contested by the department at higher forums. No provision has been made in the financial
statements as the management and the Bank's legal counsel are of the view that the issues will be decided in the Bank's
favour as and when these are taken up by the Appellate Authorities.
MCBMCB Bank Limited
Notes to the Unconsolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
MCBMCB Bank Limited
Notes to the Unconsolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
1615 First Quarterly Report, 2012 First Quarterly Report, 2012
16 SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES
The segment analysis with respect to business activity is as follows:
Total income 28,479 10,357,788 3,655,716 5,916,722 19,958,705
Total expenses (5,935)
(1,773,834)
(8,542,758)
(979,945)
(11,302,472)
Income tax expense -
-
-
-
(3,012,092)
Net income 22,544
8,583,954
(4,887,042)
4,936,777
5,644,141
Segment assets - (Gross of NPLs Provisions) -
358,035,312
120,268,037
201,331,006
679,634,355
Advance taxation (payment less provision) -
-
-
-
8,878,106
Total assets -
358,035,312
120,268,037
201,331,006
688,512,461
Segment non performing loans -
-
8,061,887
18,208,405
26,270,292
Segment specific provision required -
-
6,711,023
15,157,372
21,868,395
Segment liabilities -
21,189,519
515,896,953
30,588,334
567,674,806
Deferred tax liabilities - net 6,538,486
Total liabilities - net -
21,189,519
515,896,953
30,588,334
574,213,292
Segment return on assets (ROA) (%) 11.57% 12.88% 12.71% -
Segment cost of fund (%) 11.37% 4.44% 6.11% -
Total income 3,858
7,478,375
3,470,816
7,015,007
17,968,056
Total expenses (3,393)
(1,456,446)
(7,121,176)
(1,550,668)
(10,131,683)
Income tax expense -
-
-
-
(2,812,756)
Net income 465
6,021,929
(3,650,360)
5,464,339
5,023,617
Segment assets - (Gross of NPLs provision) -
274,667,774
112,698,621
233,524,193
620,890,588
Advance taxation (payment less provision) -
-
-
-
3,782,057
Total assets -
274,667,774
112,698,621
233,524,193
624,672,645
Segment non performing loans -
-
6,700,062
18,193,854
24,893,916
Segment specific provision required -
-
5,376,326
14,599,279
19,975,605
Segment liabilities - 24,466,656 463,742,920 29,460,264 517,669,840
Deferred tax assets - - - - 5,121,195
Three months ended March 31, 2012
Three months ended March 31, 2011
Total
---------------------------------------------(Rupees in '000)-----------------------------------------
Corporate
Finance
Trading
and
Sales
Retail &
Consumer
Banking
Commercial
Banking
Total liabilities - net - 24,466,656 463,742,920 29,460,264 522,791,035
Segment return on assets (ROA) (%) - 10.89% 12.94% 12.82% -
Segment cost of fund (%) - 11.39% 3.96% 5.64% -
17 RELATED PARTY TRANSACTIONS
DepositsDeposits at beginning of the period / year 4,398,756
2,088,985
766,387 955,014 77,043 24,677,392 90,816
Deposits received during the period / year 1,100,134
20,407,581
30,536,355 169,261,154 986,420 250,452,445 830,780
Deposits repaid during the period / year (1,064,312)
(18,097,810)
(30,733,501) (169,449,781) (1,019,609) (249,736,033) (871,418)
Deposits at the end of the period / year 4,434,578
4,398,756
569,241 766,387
43,854
312,093
(312,884)
43,063 43,854
25,393,804
74,117,220
(73,141,611)
26,369,413 25,393,804
50,178
190,356
(178,102)
62,432 50,178
Advances (secured)
Balance at beginning of the period / year -
-
- - 449,729 112,548 81,302 - 49,743 54,474
Loan granted during the period / year -
-
- - 3,580 337,759 67,815 81,302 1,796 3,525
Repayment during the period / year -
-
- - - (578) (54,072) - (4,895) (8,256)
Balance at end of the period / year -
-
- - 453,309 449,729 95,045 81,302 46,644 49,743
Outstanding Balance of credit card 713
1,137
- - - - - - 866 856
Receivable from Pension Fund -
-
- - - - 15,031,898 14,731,898 - -
Adamjee Insurance Company LimitedInsurance premium paid-net of refund - - 202,676 - - - - - - -
Insurance claim settled - - 17,863 8,443 - - - - - -
Rent Income received - - 405 1,638 - - - - - -
Outstanding commitments and contingent liabilities - - 8,365 8,365 - - - - - -
Commission income from bancassurance - - 89,554 38,144 - - - - - -
Adamjee Life Assurance Company LimitedInsurance Premium Paid - - 25,262 26,342 - - - - - -
Outstanding commitments and contingent liabilities - - 500 500 - - - - - -
Euronet Pakistan Private LimitedATM Outsourcing Revenue - - 29,258 5,607 - - - - - -
Capital injection - - - 52,519 - - - - - -
Trade payable - - 4,292 7,317 - - - - - -
Training expenses reimbursed - - - 27 - - - - - -
The Bank has related party relationship with its associates, subsidiaries, employee benefit plans and its key management personnel (including their associates) and companies with common directors.
The Bank enters into transactions with related parties in the normal course of business. Contributions to and accruals in respect of staff retirement benefits and other benefit plans are made in accordance with the actuarial
valuations / terms of the contribution plan. Remuneration to the executives / officers is determined in accordance with the terms of their appointment.
Three months
ended
March 31,
2012
Three months
ended
March 31,
2012
Associates
Associates
Details of transactions with related parties and balances with them as at the period-end were as follows:
Subsidiary companies Key management personnel
Three months
ended
March 31,
2012
Year
ended
Dec 31,
2011
Key management personnel
Year
ended
Dec 31,
2011
---------------------------------------------------------- (Rupees in '000) --------------------------------------------------------------
Subsidiary companies
Year
ended
Dec 31,
2011
Three months
ended
March 31,
2012
Other Related Parties
Year
ended
Dec 31,
2011
Three months
ended
March 31,
2012
March 31,
2012
Directors Other Related Parties
Directors
March 31 /
December 31,
2011
March 31 /
December 31,
2011
Year
ended
Dec 31,
2011
---------------------------------------------------------- (Rupees in '000) --------------------------------------------------------------
March 31,
2012
March 31,
2012
March 31,
2012
March 31 /
December 31,
2011
March 31,
2012
March 31 /
December 31,
2011
March 31 /
December 31,
2011
Mayban International Trust (Labuan) BerhadForward foreign exchange contracts (Notional) - - - - - - - 1,913,753 - -
Unrealized loss on forward foreign exchange contracts - - - - - - - 40,914 - -
MNET Services (Private) LimitedDividend received - - - - - 4,998 - - - -
Outsourcing service expenses - - - - 15,283 16,115 - - - -
Payment system managed service revenue (PSM) - - - - - 6,449 - - - -
Payable for trade debts - - - - 20,814 16,506 - - - -
Receivable for other expenses - - - - - 3,490 - - - -
"MCB Leasing" Closed Joint Stock CompanyMarkup Receivable - - - - 2,960 4,265 - - - -
MCB Trade Services LimitedDividend received - - - - - 4,664 - - - -
Arif Habib Investments LimitedDividend received - - - - 27,718 29,998 - - - -
Markup payable - - - - 193 610 - - - -
Commission Receivable - - - - 12,744 1,924 - - - -
Commission on distribution of units and managementfee sharing
- - - - 10,391 15,762 - - - -
MCB Employees FoundationService expenses - - - - - - 4,594 4,378 - -
Cash sorting expenses - - - - - - 8,966 10,889 - -
Stationery Expenses - - - - - - 40,095 31,484 - -
Advance receivable - - - - - - 20,000 20,000 - -
Payable for stationery expenses - - - - - - 6,834 1,255 - -
MCB Employees Security System
and Services (Private) LimitedSecurity guard expenses - - - - - - 63,507 47,384 - -
Remuneration and non-executive directors' fee 16,134 15,302 - - - - - - 46,828 40,212
Mark-up expense on deposits 89,899 21,785 20,410 16,535 1,056 723 995,318 1,058,302 1,059 1,025
Markup income on advances - - - - 4,739 1,264 2,346 - 888 636
Clearing expenses paid to NIFT - - - - - - 29,268 30,065 - -
Other miscellaneous expenses - - - - - - 3,195 3,924 - -
Investment in Metro-Bank Pakistan Sovereign Fund-Perpetual - - - - - - 4,000,000 4,000,000 - -
Dividend Income - - - - - - 216,893 - - -
Contribution to provident fund - - - - - - 43,941 39,703 - -
Commission Received - - 919 - - - 13 - - -
Gas charges - - - - - - 3,115 2,239 - -
Rent Paid - - - - - - 53 42 - -
The chairman has been provided with free use of the Bank maintained car. The Chief Executive and certain executives are provided with free use of the Bank's maintained cars and household equipment in accordance with the terms of their employment.
Others
MCBMCB Bank Limited
Notes to the Unconsolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
18
MCBMCB Bank Limited
Notes to the Unconsolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
17 First Quarterly Report, 2012 First Quarterly Report, 2012
18 ISLAMIC BANKING BUSINESS
March 31, December 31,
2012 2011
Assets
Cash and balances with treasury banks 278,465
334,398
Investments - net 2,818,271
2,938,706
Financing and receivables
- Murabaha 4,490,409
4,094,212
- Ijara 95,899
96,146
- Islamic export refinance 1,189,248
1,420,784
Fixed Assets 996,394
1,008,864
Deferred tax assets 720
-
Other assets 3,059,821
3,330,885
12,929,227
13,223,995
Liabilities
Bills payable 108,607
45,297
Deposits and other accounts - - - Current accounts 813,666
1,022,119
- Saving accounts 1,578,387
1,636,924
- Term deposits 3,259,045
4,565,234
- Others 13,759
81,503
Borrowing from SBP 1,391,682
1,664,996
Due to head office 4,367,708
2,558,624
Deferred tax liability -
8,182
Other liabilities 372,270
449,518
11,905,124
12,032,397
Net assets 1,024,103
1,191,598
Represented by:
Islamic Banking Fund 1,000,000
1,000,000
Other Reserves (124)
70
Unappropriated profit 25,564
176,334
1,025,440
1,176,404
Surplus / (deficit) on revaluation of assets - net of tax (1,337)
15,194
1,024,103
1,191,598
CHARITY FUND
Opening balance 782 1,763
Additions during the year
Received from customers on delayed payments 829 1,397
Profit on charity saving account 14 122
843 1,519
---------- (Rupees in '000) ----------
The Bank is operating 23 Islamic banking branches including 1 overseas branch (December 31, 2011: 23 branches including 1
overseas). The statement of financial position of the Bank's Islamic Banking Branches as at March 31, 2012 is as follows:
Payments / utilization during the year
Social Welfare - (1,500)
Health - (1,000)
Education - -
Relief and disaster recovery -
- (2,500)
Closing balance 1,625 782
Quarter ended Quarter ended
March 31,
2012
March 31,
2011
Income / return / profit earned 349,420
380,684
Income / return / profit expensed 278,248
266,914
Net Income / Profit 71,172
113,770
Provision against loans and advances - net (130)
9,290
Provision for diminution in the value of investments -
-
Bad debts written off directly -
-
(130)
9,290
Net profit / income after provisions 71,302
104,480
Other income
Fees, commission and brokerage income 8,904
13,723
Dividend income -
Income from dealing in foreign currencies 2,342
412
Other Income 30,406
5,467
Total other income 41,652
19,602
112,954
124,082
Other expenses
Administrative expenses 87,045 65,895
Other provisions / write offs -
-
Other charges (Penalty paid to SBP) 344
237
Total other expenses 87,389
66,132
Extra ordinary / unusual items -
-
Profit before taxation 25,565
57,950
Remuneration to Shariah Advisor / Board 486
420
19 GENERAL
- Figures have been rounded off to the nearest thousand of rupees unless otherwise stated.
-
20 NON-ADJUSTING EVENT
21 DATE OF AUTHORIZATION FOR ISSUE
Comparative information has been reclassified and rearranged in these unconsolidated condensed interim financial statements for the
purpose of comparison.
The profit and loss account of the Bank's Islamicbankingbusiness for the three monthsperiod ended March 31, 2012 is as
follows:
---------- (Rupees in '000) ----------
The Board of Directors in its meeting held on April 24, 2012 has announced cash dividend in respect of the three months period ended
March 31, 2012 of Rs. 3.00 per share (March 31, 2011: Rs. 3.00 per share). These unconsolidated condensed interim financial
statements for the three months period ended March 31, 2012 do not include the effect of these appropriations which will be
accounted for subsequent to the period end.
These unconsolidated condensed interim financial statements were authorized for issue by the Board of Directors of the Bank in their
meeting held on April 24, 2012 .
Sarmad Amin
Director S.M. Muneer
President / CEO M.U.A. Usmani Mian Umer Mansha
-
MCBMCB Bank Limited
19
(Consolidated Financial Statements of MCB Bank Limited and its Subsidiary Companies)
First Quarterly Report, 2012
MCBMCB Bank Limited & Subsidiary Companies
Consolidated Condensed Interim Profit and Loss Account (Un-audited)For the three months period ended March 31, 2012
MCBMCB Bank Limited & Subsidiary Companies
2221
Consolidated Condensed Interim Statement of Financial Position (Un-audited)As at March 31, 2012
First Quarterly Report, 2012 First Quarterly Report, 2012
Unaudited Audited
Note March 31, December 31,
2012 2011
Assets
Cash and balances with treasury banks 46,915,598
53,122,620
Balances with other banks 2,542,298
2,357,418
Lendings to financial institutions 7 2,819,768
955,087
Investments - net 8 330,522,492
319,005,983
Advances - net 9 230,442,850
225,794,738
Operating fixed assets 22,775,547
22,418,450
Deferred tax assets - net -
-
Other assets - net 34,242,301
32,670,511
670,260,854
656,324,807
Liabilities
Bills payable 8,404,870
9,466,818
Borrowings 10 28,544,617 39,100,627
Deposits and other accounts 11 512,027,617 491,146,798
Sub-ordinated loan - - Liabilities against assets subject to finance lease - - Deferred tax liabilities - net 12 6,760,596 6,497,097 Other liabilities 18,731,596
18,459,162
574,469,296
564,670,502
Net assets 95,791,558
91,654,305
Represented by:
Share capital 9,198,601
8,362,365
Reserves 42,732,393
42,412,588
Un-appropriated profit 32,107,021
30,259,449
84,038,015
81,034,402
Minority interest 486,006
492,497
84,524,021
81,526,899
Surplus on revaluation of assets - net of tax 11,267,537
10,127,406
95,791,558
91,654,305
Contingencies and commitments 13
---------- (Rupees in '000) ----------
The annexed notes 1 to 21 form an integral part of these consolidated condensed interim financial statements.
Note
Mark-up / return / interest earned 17,560,674 15,969,922
Mark-up / return / interest expensed 6,846,237 5,036,958
Net mark-up / interest income 10,714,437 10,932,964
Provision against loans and advances - net 74,532 1,002,304
Provision for diminution in the value of investments - net 591 187,177
Bad debts written off directly 120 7,394
75,243 1,196,875
Net mark-up / interest income after provisions 10,639,194 9,736,089
Non mark-up / interest income
Fee, commission and brokerage income 1,463,841 1,182,967
Income earned as trustee to various funds 4,787 5,525
Dividend income 477,399 149,042
Income from dealing in foreign currencies 255,519 214,890
Gain on sale of securities - net 43,922 256,755
Unrealized gain on revaluation of investments classified as held for trading 23,473 32,945
Other income 240,102 203,806
Total non mark-up / interest income 2,509,043 2,045,930
13,148,237 11,782,019 Non-mark-up / interest expenses
Administrative expenses 4,205,129 3,722,592
Other provisions / (reversals) 15,775 (13,763)
Other charges 241,136 243,405
Total non mark-up/interest expenses 4,462,040 3,952,234
Share of profit of associates 130,309 139,462
Extra ordinary / unusual item - -
Profit before taxation 8,816,506
7,969,247
Taxation - current period 2,779,174 2,716,762
- prior years - -
- deferred 262,828 116,983
Share of tax of associates 6,880 22,969
3,048,882 2,856,714
Profit after taxation 5,767,624 5,112,533
(Profit) / Loss attributable to minority interest (19,709) 357
Profit attributable to ordinary share holders 5,747,915 5,112,890
Earnings per share - basic and diluted - Rupees 14 6.25 5.56
The annexed notes 1 to 21 form an integral part of these consolidated condensed interim financial statements.
Quarter ended
March 31,
2011
Quarter ended
March 31,
2012
---------- (Rupees in '000) ----------
Sarmad Amin
Director S.M. Muneer
President / CEO M.U.A. Usmani Mian Umer ManshaSarmad Amin
Director
S.M. MuneerPresident / CEO M.U.A. Usmani Mian Umer Mansha
MCBMCB Bank Limited & Subsidiary Companies
Consolidated Condensed Interim Cash Flow Statement (Un-audited)For the three months period ended March 31, 2012
MCBMCB Bank Limited & Subsidiary Companies
Consolidated Condensed Interim Statement of Comprehensive Income (Un-audited) For the three months period ended March 31, 2012
2423 First Quarterly Report, 2012 First Quarterly Report, 2012
Profit after tax for the period 5,767,624 5,112,533
Other comprehensive income
Effect of translation of net investment in foreign branches and subsidiaries
- Equity shareholders of the Bank (244,609)
4,719
- Minority interest 17 8
(244,592) 4,727
Comprehensive income transferred to equity 5,523,032
5,117,260
Components of comprehensive income not reflected in equity
Net change in fair value of available for sale securities 738,786
34,146
Deferred tax (985)
(80,094)
737,801
(45,948)
Total comprehensive income for the period 6,260,833 5,071,312
The annexed notes 1 to 21 form an integral part of these consolidated condensed interim financial statements.
Quarter ended
March 31,
2012
Quarter ended
March 31,
2011
March 31, March 31,2012 2011
Cash flows from operating activities
Profit before taxation 8,816,506 7,969,247
Less: Dividend income & share of profit of associates (607,708) (288,504)
8,208,798 7,680,743Adjustments for non-cash charges
Depreciation 312,693
265,918
Amortization 62,391
47,025
Provision against loans and advances - net 74,532
1,002,304
Provision for diminution in the value of investments - net 591
187,177
Other provisions / (reversals) 15,775
(13,763)
Bad debts written off directly 120
7,394
Unrealized gain on revaluation of investments classified as held for trading (23,473)
(32,945)
Gain on disposal of fixed assets (4,298)
(3,798)
438,331
1,459,312
8,647,129
9,140,055(Increase) / decrease in operating assets
Lendings to financial institutions (1,864,681)
3,376,781
Net investment in held for trading securities (5,176,473)
21,693
Advances - net (4,722,764)
(5,511,279)
Other assets - net 1,528,284
(230,052)
(10,235,634)
(2,342,857)
Increase / (decrease) in operating liabilities
Bills payable (1,061,948) (638,933)
Borrowings (10,556,010)
3,985,767
Deposits and other accounts 20,880,819
30,959,449
Other liabilities (1,902,119)
(2,037,808)
7,360,742
32,268,475
5,772,237
39,065,673
Income tax paid (5,657,426)
(3,969,237)
Net cash flows from operating activities 114,811
35,096,436
Cash flows from investing activities
Net investments in available-for-sale securities (6,631,753)
(37,400,104)
Net investments in held-to-maturity securities 1,588,228
118,598
Investment in associated undertaking -
(52,521)
Dividend income received 239,485
78,036
Investment in operating fixed assets - net of disposals (727,883)
(761,915)
Net cash flows from investing activities (5,531,923)
(38,017,906)
Cash flows from financing activities
Dividend paid (360,438)
(258,574)
Net cash flows from financing activities (360,438) (258,574)
Exchange difference on translation of net investment in foreign branches and subsidiaries (244,592) 4,727
Increase in cash and cash equivalents (6,022,142) (3,175,317)
Cash and cash equivalents at January 1 55,480,038 46,958,782
Cash and cash equivalents at March 31 49,457,896 43,783,465
The annexed notes 1 to 21 form an integral part of these consolidated condensed interim financial statements.
---------- (Rupees in '000) ----------
Sarmad Amin
Director S.M. Muneer
President / CEO M.U.A. Usmani Mian Umer ManshaSarmad Amin
Director
S.M. MuneerPresident / CEO M.U.A. Usmani Mian Umer Mansha
---------- (Rupees in '000) ----------
Notes to the Consolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
MCBMCB Bank Limited & Subsidiary CompaniesMCBMCB Bank Limited & Subsidiary Companies
Consolidated Condensed Interim Statement of Changes in Equity (Un-audited)For the three months period ended March 31, 2012
2625 First Quarterly Report, 2012 First Quarterly Report, 2012
Balance as at December 31, 2010 7,602,150 - 9,702,528 347,599 11,514,399 18,600,000 23,458,429 71,225,105 2,698 71,227,803
Change in equity for three months ended March 31, 2011
Profit after taxation for three months period
ended March 31, 2011 -
-
-
-
-
-
5,112,533
5,112,533
- 5,112,533
Profit attributable to minority interest -
-
-
-
-
-
357
357
(357) -
Profit after taxation for the three months ended March 31, 2011
attributable to ordinary shareholders of the group -
-
-
-
-
-
5,112,890
5,112,890
(357) 5,112,533
Exchange differences on translation of net
investment in foreign branches and subsidiaries -
-
-
4,719
-
-
-
4,719
8 4,727
Total comprehensive income for the three months period ended
March 31, 2011 -
-
-
4,719
-
-
5,112,890
5,117,609
(349) 5,117,260
Transferred from surplus on revaluation of fixed
assets to unappropriated profit - net of tax -
-
-
-
-
-
9,071
9,071
- 9,071
Share of dividend attributable to minority shareholders -
-
-
-
-
-
-
(4) (4)
Transferred to statutory reserve -
-
-
-
502,362
-
(502,362)
-
- -
Transfer to reserve for issue of bonus shares -
760,215
-
-
-
-
(760,215)
-
- -
Final cash dividend - December 2010 -
-
-
-
-
-
(2,280,645)
(2,280,645)
- (2,280,645)
Balance as at March 31, 2011 7,602,150
760,215
9,702,528
352,318
12,016,761
18,600,000
25,037,168
74,071,140
2,345 74,073,485
Profit after taxation for the year ended
December 31, 2011 -
-
-
-
-
-
14,189,950
14,189,950
- 14,189,950
Profit attributable to minority interest -
-
-
-
-
-
(28,524)
(28,524)
28,524 -
Profit after taxation for the nine months ended December 31, 2011
attributable to ordinary shareholders of the group - - - - - - 14,161,426 14,161,426 28,524 14,189,950
Exchange differences on translation of net
investment in foreign branches and subsidiaries - - - 78,942 - - - 78,942 134 79,076
Total comprehensive income for the nine months
ended December 31, 2011 - - - 78,942 - - 14,161,426 14,240,368 28,658 14,269,026
Transferred from surplus on revaluation of fixed
assets to unappropriated profit - net of tax - - - - - - 27,111 27,111 128 27,239
Transferred to statutory reserve -
-
-
-
1,440,129
-
(1,440,129)
-
- -
Issue of bonus shares - December 2010 760,215
(760,215)
-
-
-
-
-
-
- -
Adjustments pertaining to additional issue of share capital to minority
interest on amalgamation of MCB Assets Management Company
Limited with Arif Habib Investments Limited -
-
221,910
-
-
-
-
221,910
513,947 735,857
Share of dividend attributable to minority interest -
-
-
-
-
-
-
-
(52,581) (52,581)
Interim cash dividend - March 2010 -
-
-
-
-
-
(2,508,709)
(2,508,709)
- (2,508,709)
Interim cash dividend - June 2010 -
-
-
-
-
-
(2,508,709)
(2,508,709)
- (2,508,709)
Interim cash dividend - September 2010 -
-
-
-
-
-
(2,508,709)
(2,508,709)
- (2,508,709)
Balance as at December 31, 2011 8,362,365
-
9,924,438
431,260
13,456,890
18,600,000
30,259,449
81,034,402
492,497 81,526,899
Profit after taxation for the three months period ended
March 31, 2012 -
-
-
-
-
-
5,767,624
5,767,624
- 5,767,624
Profit attributable to minority interest -
-
-
-
-
-
(19,709)
(19,709)
19,709 -
Profit after taxation for the three months period ended
March 31, 2012 attributable to ordinary shareholders of the group -
-
-
-
-
-
5,747,915
5,747,915
19,709 5,767,624
Exchange differences on translation of net
investment in foreign branches and subsidiaries -
-
-
(244,609)
-
-
-
(244,609)
17 (244,592)
Total comprehensive income for the three months period
ended March 31, 2012 -
-
-
(244,609)
-
-
5,747,915
5,503,306
19,726 5,523,032
Transferred from surplus on revaluation of fixed
assets to unappropriated profit - net of tax -
-
-
-
-
-
9,016
9,016
65 9,081
Transferred to statutory reserve -
-
-
-
564,414
-
(564,414)
-
- -
Transfer to reserve for issue of bonus shares - 836,236 - - - - (836,236) - - -
Issue of bonus shares - December 2011 836,236 (836,236) - - - - - - - -
Share of dividend attributable to minority interest - - - - - - - - (26,282) (26,282)
Final cash dividend - December 2011 - - - - - - (2,508,709) (2,508,709) - (2,508,709)
Balance as at March 31, 2012 9,198,601 - 9,924,438 186,651 14,021,304 18,600,000 32,107,021 84,038,015 486,006 84,524,021
The annexed notes 1 to 21 form an integral part of these consolidated condensed interim financial statements.
---------------------------------------------------------- (Rupees in'000) ----------------------------------------------------------
Share
capital
Capital reserves Revenue Reserves
SubtotalMinority
InterestTotalReserve for issue
of bonus sharesShare premium
Exchange
translation
reserve
Statutory reserve General reserve Unappropriated
profit
3 STATEMENT OF COMPLIANCE
3.1 These consolidatedcondensed interimfinancialstatements have been prepared in accordance with approved accounting standards as
applicable in Pakistan. Approved Accounting Standards comprise of such International Financial Reporting Standards (IFRS) issued
by the International Accounting Standards Board (IASB) as are notified under the Companies Ordinance, 1984, provisions of and
directives issued under the Banking Companies Ordinance, 1962, the Companies Ordinance, 1984, and the directives issued by SBP.
In case requirements differ, the provisions of and directives issued under the Banking Companies Ordinance, 1962, the Companies
Ordinance, 1984, and the directives issued by SBP shall prevail.
1 STATUS AND NATURE OF BUSINESS
2 BASIS OF PRESENTATION
2.1
2.2
2.3
a)
b)
c)
The Group consists of:
Holding Company
- MCB Bank Limited
"Percentage holding of
MCB Bank Limited"Subsidiary Companies
- MCB Financial Services Limited 99.99%
- MNET Services (Private) Limited 99.95%
- MCB Trade Services Limited 100%
- Arif Habib Investments Limited 51.329%
- "MCB Leasing" Closed' Joint Stock Company 95.00%
The consolidated condensed financial statements include the financial statements of MCB Bank Limited and its subsidiary companies
and associates.
Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies accompanying a
shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently
exercisable are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the
date on which control is transferred to the Group. They are de-consolidated from the date when control ceases. The assets and
liabilities of subsidiary companies have been consolidated on a line by line basis based on the unaudited financial statements for the
period ended March 31, 2012 and the carrying value of investments held by the Group is eliminated against the subsidiaries'
shareholders' equity in these consolidated condensed interim financial statements. Material intra-Group balances and transactions have
been eliminated.
Associates are entities over which the Group has significant influence but not control. Investments in associates are accounted for
under the equity method of accounting and are initially recognised at cost, thereafter adjusted for the post-acquisition change in the
Group's share of net assets of the associate. The cumulative post-acquisition movements are adjusted in the carrying amount of the
investment. Accounting policies of the associate have been changed where necessary to ensure consistency with the policies adopted
by the Group. The Group's share in associate has been accounted for based on the financial statements for the period ended March
31, 2012.
Minority interest are that part of the net results of operations and of net assets of subsidiary companies attributable to interests which
are not owned by the Group.
MCB Bank Limited ('the Bank') is a banking company incorporated in Pakistan and is engaged in commercial banking and related
services. The Bank's ordinary shares are listed on all the stock exchanges in Pakistan whereas its Global Depositary Receipts
(GDRs) (representing two ordinary equity shares) are traded on the International Order Book (IOB) system of the London Stock
Exchange. The Bank's registered office and principal office are situated at MCB Building, Jinnah Avenue, Islamabad and MCB 15-
Main, Gulberg, Lahore, respectively. The Bank operates 1,165 branches including 22 Islamic banking branches (December 31, 2011:
1,165 branches including 22 Islamic banking branches) with in Pakistan and 8 (December 31, 2011: 8) branches outside the country
(including the Karachi Export Processing Zone Branch).
In accordance with the directives of the Federal Government regarding the shifting of the banking system to Islamic modes, the State
Bank of Pakistan has issued various circulars from time to time. Permissible forms of trade-related modes of financing include
purchase of goods by banks from their customers and immediate resale to them at appropriate mark-up in price on deferred payment
basis. The purchases and sales arising under these arrangements are not reflected in these consolidated condensed interim financial
statements as such but are restricted to the amount of facility actually utilized and the appropriate portion of mark-up thereon.
The financial results of the Islamic banking branches have been consolidated in these consolidated condensed interim financial
statements for reporting purposes, after eliminating material intra branch transactions / balances. Key financial figures of the Islamic
banking branches are disclosed in note 18 to these consolidated condensed interim financial statements.
Sarmad Amin
Director S.M. Muneer
President / CEO M.U.A. Usmani Mian Umer Mansha
Notes to the Consolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
MCBMCB Bank Limited & Subsidiary Companies
Notes to the Consolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
MCBMCB Bank Limited & Subsidiary Companies
2827 First Quarterly Report, 2012 First Quarterly Report, 2012
3.2
3.3
4 BASIS OF MEASUREMENT
4.1
4.2
5 SIGNIFICANT ACCOUNTING POLICIES AND RISK MANAGEMENT
5.1
5.2
6
7. LENDINGS TO FINANCIAL INSTITUTIONS March 31, December 31,
2012 2011
-
-
2,819,768 955,087
2,819,768 955,087
8 INVESTMENTS - NET
8.1 Investments by types
Held-for-trading securities 5,538,691
-
5,538,691
Available-for-sale securities 8.2 301,982,653
13,548,342
315,530,995
Held-to-maturity securities 8.2 7,304,613 62,087 7,366,700
314,825,957 13,610,429 328,436,386
Adamjee Insurance Company Limited 8.3 3,614,503 - 3,614,503
Euronet Pakistan (Private) Limited 8.4 53,413 - 53,413
First Women Bank Limited 8.5 63,300 - 63,300
These consolidated condensed interim financial statements have been prepared under the historical cost convention except that certain
fixed assets are stated at revalued amounts, certain investments, commitments in respect of certain forward foreign exchange
contracts and derivative financial instruments have been marked to market and are carried at fair value.
The accounting polices adopted in the preparation of these consolidated condensed interim financial statements are the same as those
applied in the preparation of the annual financial statements of the Bank for the year ended December 31, 2011.
The basis for significant accounting estimates and judgments adopted in the preparation of these consolidated condensed interim
financial statements are the same as those applied in the preparation of the annual financial statements of the Group for the year ended
December 31, 2011.
Repurchase agreement lendings
---------- (Rupees in '000) ----------
March 31, 2012
TotalHeld by
bank
The financial risk management objectives and policies are consistent with those disclosed in the annual financial statements of the
Group for the year ended December 31, 2011.
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS
The State Bank of Pakistan has deferred the applicability of International Accounting Standard (IAS) 39, 'Financial Instruments:
Recognition and Measurement' and International Accounting Standard (IAS) 40, 'Investment Property' for Banking Companies
through BSD Circular No. 10 dated August 26, 2002. The Securities and Exchange Commission of Pakistan (SECP) has deferred
applicability of IFRS-7 "Financial Instruments:Disclosures" on banks through S.R.O 411(1) /2008 dated April 28, 2008. Accordingly,
the requirements of these standards have not been considered in the preparation of these consolidated condensed interim financial
statements. However, investments have been classified and valued in accordance with the requirements prescribed by the State Bank
of Pakistan through various circulars.
The disclosures made in these consolidated condensed interim financial statements have, however been limited based on the format
prescribed by the State Bank of Pakistan vide BSD Circular No. 2 dated May 12, 2004 and International Accounting Standard 34,
"Interim Financial Reporting". They do not include all of the disclosures required for annual financial statements and these
consolidated condensed interim financial statements should be read in conjunction with the financial statements of the Group for the
year ended December 31, 2011.
Given as
collateral
These consolidated condensed interim financial statements are presented in Pak Rupees, which is the Bank's functional and
presentation currency.
Call money lendings
3,731,216 - 3,731,216
Investments at cost 318,557,173 13,610,429 332,167,602
Less: Provision for diminution in the value of investments (2,918,252) - (2,918,252)
Investments (net of provisions) 315,638,921 13,610,429 329,249,350
Surplus / (deficit) on revaluation of available for sale securities - net 1,256,255 (6,586) 1,249,669Gain on revaluation of held-for-trading securities - net 23,473 - 23,473
Investments at revalued amounts - net of provisions 316,918,649 13,603,843 330,522,492
Held-for-trading securities 345,602 - 345,602
Available-for-sale securities 8.2 285,002,260 24,306,386 309,308,646
Held-to-maturity securities 8.2 8,471,928 483,000 8,954,928
293,819,790 24,789,386 318,609,176
Adamjee Insurance Company Limited 8.3 3,101,352
-
3,101,352
Euronet Pakistan (Private) Limited 8.4 53,917
-
53,917
First Women Bank Limited 8.5 63,300
-
63,300
3,218,569
-
3,218,569
Investments at cost 297,038,359
24,789,386
321,827,745
Less: Provision for diminution in the value of investments (3,327,065)
-
(3,327,065)
Investments (net of provisions) 293,711,294
24,789,386
318,500,680
Surplus on revaluation of available for sale securities - net 475,204
13,483
488,687
Gain on revaluation of held-for-trading securities - net 16,616
-
16,616
Investments at revalued amounts - net of provisions 294,203,114
24,802,869
319,005,983
8.2
8.3
March 31, December 31,2012 2011
Opening Balance 3,101,352
3,703,265
Share of profit / (loss) for the period / year before tax 130,707
(73,069)
Dividend from associate -
(90,084)
Share of tax (6,774)
71,214
123,933
(91,939)
Share of unrealized surplus on assets -net of tax 389,218
(509,974)
Closing Balance 3,614,503
3,101,352
8.4
March 31, December 31,
2012 2011
Opening balance 53,917 -
Investment made during the year - 52,521
Investment in Adamjee Insurance Company Limited under equity method - holding 29.13%
December 31, 2011
Total
Investments include Pakistan Investment Bonds amounting to Rs. 232.600 million (December 31, 2011: Rs. 232.600 million)
earmarked by the State Bank of Pakistan and National Bank of Pakistan against TT / DD discountingfacilitiesand demand note
facilities sanctioned to the Bank. In addition, Pakistan Investment Bonds amounting to Rs. 5 million (December 31, 2011: Rs. 5 million)
have been pledged with the Controller of Military Accounts on the account of Regimental Fund Account.
Held by
bank
Investment of the Group in Adamjee Insurance Company Limitedhas been accounted for under the equity method of accountingin
accordance with the treatment specified in International Accounting Standard 28, (IAS 28) 'Accounting for Investments in
Associates'. The market value of the investment in Adamjee Insurance Company Limited as at March 31, 2012 amounted to Rs.
2,039.867 million (December 31, 2011: Rs. 1,675.927 million).
Investment of the Group in Euronet Pakistan Private Limited has been accounted for under the equity method of accounting in
accordance with the treatment specified in International Accounting Standard 28, (IAS 28) 'Accounting for Investments in
Associates'.
Investment in Euronet Pakistan Private Limited under equity method - holding 30%
Given as
collateral
Share of profit / (loss) for the period / year before tax (398) 1,562
Share of tax (106) (166)
(504) 1,396
Closing Balance 53,413 53,917
8.5 The Group's investment in First Women Bank Limited is carried at cost and have not been accounted for under equity method of
accounting as the Group does not have significant influence over the entity.
---------- (Rupees in '000) ----------
---------- (Rupees in '000) ----------
---------- (Rupees in '000) ----------
---------- (Rupees in '000) ----------
Notes to the Consolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
MCBMCB Bank Limited & Subsidiary Companies
Notes to the Consolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
MCBMCB Bank Limited & Subsidiary Companies
3029 First Quarterly Report, 2012 First Quarterly Report, 2012
9 ADVANCES - NETMarch 31, December 31,
2012 2011
Loans, cash credits, running finances, etc
- In Pakistan 229,558,248 223,963,444
- Outside Pakistan 10,232,896 10,511,019
239,791,144 234,474,463Net Investment in finance lease
- In Pakistan 1,214,765
1,226,014
- Outside Pakistan 660,304
593,796
1,875,069
1,819,810Bills discounted and purchased (excluding treasury bills)
- Payable in Pakistan 861,262
722,522
- Payable outside Pakistan 10,245,156
11,111,385
11,106,418
11,833,907
Advances - gross 252,772,631
248,128,180Less: Provision against loans and advances
- Specific provision 9.1 (21,868,395)
- General provision (252,787)
- General provision against consumer loans (188,441)
- General Provision for potential lease losses (in Srilanka Operations) (20,158)
(22,329,781)
(21,869,401)
(248,135)
(198,340)
(17,566)
(22,333,442)
Advances - net of provision 230,442,850
225,794,738
9.1
Other Assets Especially
Mentioned (OAEM) 9.1.1 10,605
-
10,605
-
-
Substandard 2,007,885
-
2,007,885
439,221
439,221
Doubtful 358,140
3,324
361,464
178,247
178,247
Loss 19,600,150
4,290,188
23,890,338
21,250,927
21,250,927
21,976,780
4,293,512
26,270,292
21,868,395
21,868,395
Other Assets Especially
Mentioned (OAEM) 9.1.1 - - - - -
Substandard 2,036,968 7,857 2,044,825 461,374 461,374
Doubtful 292,466 - 292,466 115,289 115,289
Overseas
Advances includeRs. 26,270.292million(December 31, 2011:Rs. 26,664.873million)which have been placed under non-performing
status as detailed below:
Classified Advances
Category of Classification
Specific
Provision
Held
Classified Advances
Total
Specific
Provision
RequiredCategory of Classification
Specific
Provision
Required
March 31, 2012
---------- (Rupees in '000) ----------
December 31, 2011
------------------------------------- Rupees in '000 ------------------------------------
Domestic
Total
Overseas
Specific
Provision
HeldDomestic
------------------------------------- Rupees in '000 ------------------------------------
Loss 20,061,976 4,265,606 24,327,582 21,292,738 21,292,738
22,391,410 4,273,463 26,664,873 21,869,401 21,869,401
9.1.1 This represents non-performing portfolioof agricultural financing classified as OAEM as per the requirements of the Prudential
Regulation for Agricultural Financing issued by the SBP.
10 BORROWINGS March 31, December 31,
2012 2011
In Pakistan 26,737,202 37,397,843
Outside Pakistan 1,807,415 1,702,784
28,544,617 39,100,627
10.1 Details of borrowings (secured / unsecured)Secured
Borrowings from State Bank of Pakistan
Export refinance scheme 9,926,134
9,903,657
Long term financing facility 1,972,109
2,026,175
Long term financing - export oriented projects scheme 849,229
949,375
Financing Facility for Storage of Agricultural Produce 460,799
219,932
Scheme for Revival of SMEs & Agricultural Activities in Flood Affected Areas -
-
450
13,208,271
13,099,589
Borrowings from other financial institutions 13,362
293,113
Repurchase agreement borrowings 13,591,017
24,781,254
13,604,379
25,074,367
26,812,650
38,173,956Unsecured
Call borrowings 991,480
816,139
Overdrawn nostro accounts 740,487 110,532
1,731,967
926,671
28,544,617
39,100,627
March 31, December 31,
2012 2011
---------- (Rupees in '000) ----------11 DEPOSITS AND OTHER ACCOUNTS
Customers
Fixed deposits 90,814,753
91,476,846
Savings deposits 244,606,406
225,916,109
Current accounts 166,493,475
161,668,528
Margin accounts 3,067,361
3,511,830
504,981,995
482,573,313Financial institutions
Remunerative deposits 4,911,666
6,319,827
Non-remunerative deposits 2,133,956
2,253,658
7,045,622
8,573,485
512,027,617
491,146,798
12 DEFERRED TAX LIABILITY / (ASSET) - NET
The details of the tax effect of taxable and deductible temporary differences are as follows:
Taxable temporary differences on:
Surplus on revaluation of operating fixed assets 779,895 788,352
Accelerated tax depreciation 1,002,131 1,057,564
Receivable from pension fund 5,261,164 5,156,165
Investments in associates 205,531 193,138
Others 10,219
Surplus on revaluation of securities 50,378 49,393
7,299,099 7,254,831
---------- (Rupees in '000) ----------
Deductible temporary differences on:
Provision for bad debts (228,493) (414,436)
Provision for contributory benevolent scheme (1,080) (5,656)
Provision for post retirement medical benefits (294,055) (306,908)
Provision for gratuity (1,019) (1,019)
Taxable losses (13,856) (29,715)
(538,503) (757,734)
6,760,596 6,497,097
Notes to the Consolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
MCBMCB Bank Limited & Subsidiary Companies
Notes to the Consolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
MCBMCB Bank Limited & Subsidiary Companies
3231 First Quarterly Report, 2012 First Quarterly Report, 2012
12.1
March 31, December 31,
2012 2011
13 CONTINGENCIES AND COMMITMENTS
13.1 Direct credit substitutes
Contingent liabilities in respect of guarantees given favouring
- Government 4,369,412
2,634,218
- Banks and financial institutions 2,744,964
2,519,451
- Others 5,022,186
4,885,951
12,136,562
10,039,62013.2 Transaction-related contingent liabilities
Guarantees in favour of:
- Government 1,001,775
2,761,601
- Others 4,982,788
4,217,157
Suppliers credit / payee guarantee 2,457,093
2,373,006
8,441,656
9,351,764
13.3 Trade-related contingent liabilities 63,830,600
77,075,699
13.4 Other contingencies
Claims against the Bank not acknowledged as debts 818,363
844,099
13.5 Commitments to extend credit
13.6 Commitments in respect of forward foreign exchange contracts
Purchase 26,888,166
32,395,900
Sale 26,658,002
35,030,445
13.7 Commitments for the acquisition of fixed assets 191,335
276,277
13.8 Taxation
March 31, March 31,
2012 2011
14 BASIC AND DILUTED EARNINGS PER SHARE - AFTER TAX
Profit after taxation 5,747,915
5,112,890
Number of shares
Weighted average number of shares outstanding during the period 919,860,123 919,860,123
Rupees
Basic and diluted Earnings per share - after tax 6.25 5.56
15 CREDIT RATING
The Bank makes commitmentsto extend credit in the normal course of its business but these being revocable commitmentsdo not
attract any significant penalty or expense if the facility is unilaterally withdrawn.
Three months ended
The income tax assessments of the Bank have been framed upto and including the Tax Year 2011. For the Assessment
Year 1988-89 through Tax Year 2011, the department has amended the assessments on certain issues against the Bank.
The Bank has filed appeals which are pending at various appellateforums. in addition, certain decision made in favour of
the Bank are being contested by the department at higher forums. No provision has been made in the financial
statements as the management and the Bank's legal counsel are of the view that the issues will be decided in the Bank's
favour as and when these are taken up by the Appellate Authorities.
---------- (Rupees in '000) ----------
The Finance Act, 2009 and 2010 have made significant amendments in the Seventh Schedule to Income Tax Ordinance, 2001. The
deduction for provision for doubtful and loss categories of advances and off balance sheet items is allowable up to a maximum of 1%
of total advances whereas provisions for advances and off-balance sheet items for consumer and small and medium enterprises
(SMEs) ("as defined under the SBP's Prudential Regulations") is now allowed at 5% of total consumer and SME portfolio. The
amount of bad debts classified as substandard under Prudential Regulations issued by State Bank of Pakistan would not be allowed as
an expense.
PACRA throughits notificationin June 2011,has assigned longterm credit rating of AA+ [doubleA plus] and short-term credit rating
of A1+ [A one plus] to the Bank.
16 SEGMENT DETAILS WITH RESPECT TO BUSINESS ACTIVITIES
The segment analysis with respect to business activity is as follows:
Total income 34,072
10,408,817
3,689,738
5,971,787
116,223
(20,611)
20,200,026
Total expenses (10,812)
(1,783,236)
(8,553,789)
(997,798)
(58,496)
20,611
(11,383,520)
Income tax expense -
-
-
-
-
-
(3,048,882)
Net income 23,260
8,625,581
(4,864,051)
4,973,989
57,727
-
5,767,624
Segment assets - (Gross of NPLs Provisions) 49,597
359,757,327
120,848,353
202,281,771
1,335,740
(1,011,946)
683,260,842
Advance taxation (payment less provision) -
-
-
-
-
-
8,868,407
Total assets 49,597
359,757,327
120,848,353
202,281,771
1,335,740
(1,011,946)
692,129,249
Segment non performing loans -
-
8,061,887
18,208,405
-
-
26,270,292
Segment specific provision required -
-
6,711,023
15,157,372
-
-
21,868,395
Segment liabilities 4,631
21,695,261
516,062,029
30,858,885
99,840
(1,011,946)
567,708,700
Deferred tax liabilities - net -
-
-
-
-
-
6,760,596
Total liabilities - net 4,631
21,695,261
516,062,029
30,858,885
99,840
(1,011,946)
574,469,296
Segment return on assets (ROA) (%) -
11.57% 12.93% 12.77% 34.80% -
-
Segment cost of fund (%) -
11.37% 4.44% 6.11% -
-
-
Total income 10,212
7,506,536
3,507,540
7,084,788
71,678
(25,440)
18,155,314
Total expenses (7,651)
(1,459,525)
(7,132,321)
(1,572,564)
(39,446)
25,440
(10,186,067)
Income tax expense -
-
-
-
-
-
(2,856,714)
Net income 2,561
6,047,011
(3,624,781)
5,512,224
32,232
-
5,112,533
Segment assets - (Gross of NPLs provision) 41,497
276,077,842
113,288,322
234,726,399
535,092
(709,094)
623,960,058
Advance taxation (payment less provision) -
-
-
-
-
-
3,764,352
Total assets 41,497
276,077,842
113,288,322
234,726,399
535,092
(709,094)
627,724,410
Segment non performing loans -
-
6,700,062
18,193,854
-
-
24,893,916
Segment specific provision required -
-
5,376,326
14,599,279
-
-
19,975,605
Segment liabilities 3,976
24,748,306
463,859,918
29,698,803
24,644
(709,094)
517,626,553
Deferred tax assets - - - - - - 5,343,810
Total liabilities - net 3,976 24,748,306 463,859,918 29,698,803 24,644 (709,094) 522,970,363
Segment return on assets (ROA) (%) - 10.88% 13.00% 12.87% 53.58% - -
Segment cost of fund (%) - 11.39% 3.96% 5.64% - - -
Asset
Management
Three months ended March 31, 2012
Three months ended March 31, 2011
Elimination Total
---------------------------------------------(Rupees in '000)-----------------------------------------
Corporate
Finance
Trading
and
Sales
Retail &
Consumer
Banking
Commercial
Banking
---------- (Rupees in '000) ----------
17 RELATED PARTY TRANSACTIONS
Deposits
Deposits at beginning of the period / year 4,398,756
2,088,985 766,387
955,014 25,393,804
24,677,392 50,178 90,816
Deposits received during the period / year 1,100,134
20,407,581
30,536,355
169,261,154
74,117,220
250,452,445
190,356 830,780
Deposits repaid during the period / year (1,064,312)
(18,097,810)
(30,733,501)
(169,449,781)
(73,141,611)
(249,736,033)
(178,102) (871,418)
Deposits at the end of the period / year 4,434,578
4,398,756
569,241
766,387
26,369,413
25,393,804
62,432 50,178
Advances (secured)
Balance at beginning of the period / year -
-
-
-
81,302
-
49,743 54,474
Loan granted during the period / year -
-
-
-
67,815
81,302
1,796 3,525
Repayment during the period / year -
-
-
-
(54,072)
-
(4,895) (8,256)
Balance at end of the period / year -
-
-
-
95,045
81,302
46,644 49,743
Outstanding Balance of credit card 713
1,137
-
-
-
-
866 856
Receivable from Pension Fund -
-
-
-
15,031,898
14,731,898
- -
Adamjee Insurance Company Limited
Insurance premium paid-net of refund -
-
202,676
-
-
-
- -
Insurance claim settled -
-
17,863
8,443
-
-
- -
Rent Income received -
-
405
1,638
-
-
- -
Outstanding commitments and contingent liabilities -
-
8,365
8,365
-
-
- -
Banca Revenue -
-
89,554
38,144
-
-
- -
---------------------------------------------------------- (Rupees in '000) --------------------------------------------------------------
March 31,
2012
March /
December 31,
2011
March 31,
2012
March 31,
2012
Three months
ended
March 31,
2012
March 31,
2012
Three months
ended
March 31,
2012
Year
ended
Dec 31,
2011
Key management personnel
Year
ended
Dec 31,
2011
March /
December 31,
2011
March /
December 31,
2011
Year
ended
Dec 31,
2011
Key management personnel
Three months
ended
March 31,
2012
Other Related Parties
Year
ended
Dec 31,
2011
Directors Other Related Parties
March /
December 31,
2011
Directors
The Group has related party relationship with its associates, employee benefit plans and its key management personnel (including their associates) and companies with common directors.
The Groupentersinto transactionswith relatedpartiesin the normalcourseof business.Contributionsto andaccrualsin respectof staff retirementbenefitsandotherbenefitplansaremadein accordancewith the
actuarial valuations / terms of the contribution plan. Remuneration to the executives / officers is determined in accordance with the terms of their appointment.
Three months
ended
March 31,
2012
Associates
Associates
Details of transactions with related parties and balances with them as at the period-end were as follows:
---------------------------------------------------------- (Rupees in '000) --------------------------------------------------------------
Adamjee Life Assurance Company Limited
Insurance Premium Paid - - 25,262 26,342 - - - -
Insurance claim settled - - 18,686 - - - - -
Outstanding commitments and contingent liabilities -
-
500
500
-
-
- -
Euronet Pakistan Private Limited
ATM Outsourcing Revenue -
-
29,258
5,607
-
-
- -
Capital injection -
-
-
52,519
-
-
- -
Trade payable -
-
4,292
7,317
-
-
- -
Training expenses reimbursed -
-
-
27
-
-
- -
Mayban International Trust (Labuan) Berhad
Forward foreign exchange contracts (Notional) -
-
-
-
-
1,913,753
- -
Unrealized loss on forward foreign exchange contracts -
-
-
-
-
40,914
- -
MCB Employees Foundation
Service expenses -
-
-
-
4,594
4,378
- -
Cash sorting expenses -
-
-
-
8,966
10,889
- -
Stationery Expenses -
-
-
-
40,095
31,484
- -
Advance receivable -
-
-
-
20,000
20,000
- -
Payable for stationery expenses -
-
-
-
6,834
1,255
- -
MCB Employees Security System
and Services (Private) Limited
Security guard expenses -
-
-
-
63,507
47,384
- -
Remuneration of key management personnel 16,134 15,302 - - - - 46,828 40,212
Mark-up expense on deposits 89,899 21,785 20,410 16,535 995,318 1,058,302 1,059 1,025
Markup income on advances - - - - 2,346 - 888 636
Clearing expenses paid to NIFT - - - - 29,268 30,065 - -
Other miscellaneous expenses - - - - 3,195 3,924 - -
Investment in Metro-Bank Pakistan Sovereign Fund-Perpetual - - - - 4,000,000 4,000,000 - -
Dividend Income - - - - 216,893 - - -
Contribution to provident fund - - - - 43,941 39,703 - -
Commission Received - - 919 - 13 - - -
Gas charges - - - - 3,115 2,239 - -
Rent Paid - - - - 53 42 - -
Others
The chairman has been provided with free use of the Bank maintained car. The Chief Executive and certain executives are provided with free use of the Bank's maintained cars and household
equipment in accordance with the terms of their employment.
MCBMCB Bank Limited & Subsidiary Companies
Notes to the Consolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
MCBMCB Bank Limited & Subsidiary Companies
Notes to the Consolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
3433 First Quarterly Report, 2012 First Quarterly Report, 2012
18 ISLAMIC BANKING BUSINESS
March 31, December 31,
2012 2011
Assets
Cash and balances with treasury banks 278,465
334,398
Investments - net 2,818,271
2,938,706
Financing and receivables
- Murabaha 4,490,409
4,094,212
- Ijara 95,899
96,146
- Islamic export refinance 1,189,248
1,420,784
Fixed Assets 996,394
1,008,864
Deferred tax assets 720
-
Other assets 3,059,821
3,330,885
12,929,227
13,223,995
Liabilities
Bills payable 108,607
45,297
Deposits and other accounts - - - Current accounts 813,666 1,022,119 - Saving accounts 1,578,387
1,636,924
- Term deposits 3,259,045
4,565,234
- Others 13,759
81,503
Borrowing from SBP 1,391,682
1,664,996
Due to head office 4,367,708
2,558,624
Deferred tax liability -
8,182
Other liabilities 372,270
449,518
11,905,124
12,032,397
Net assets 1,024,103
1,191,598
Represented by:
Islamic Banking Fund 1,000,000
1,000,000
Other Reserves (124)
70
Unappropriated profit 25,564
176,334
1,025,440
1,176,404
Surplus / (deficit) on revaluation of assets - net of tax (1,337)
15,194
1,024,103
1,191,598
CHARITY FUND
Opening balance 782 1,763
Additions during the year
Received from customers on delayed payments 829 1,397
Profit on charity saving account 14 122
843 1,519
---------- (Rupees in '000) ----------
The Bank is operating 23 Islamic banking branches including 1 overseas branch (December 31, 2011: 23 branches including 1
overseas). The statement of financial position of the Bank's Islamic Banking Branches as at March 31, 2012 is as follows:
Payments / utilization during the year
Social Welfare - (1,500)
Health - (1,000)
- (2,500)
Closing balance 1,625 782
MCBMCB Bank Limited & Subsidiary Companies
Notes to the Consolidated Condensed Interim Financial Statements (Un-audited)For the three months period ended March 31, 2012
35
MCBMCB Bank Limited & Subsidiary Companies
36First Quarterly Report, 2012 First Quarterly Report, 2012
19
20
21
Quarter ended Quarter ended
March 31,
2012
March 31,
2011
Income / return / profit earned 349,420
380,684
Income / return / profit expensed 278,248
266,914
Net Income / Profit 71,172
113,770
Provision against loans and advances - net (130)
9,290
Provision for diminution in the value of investments -
-
Bad debts written off directly -
-
(130)
9,290
Net profit / income after provisions 71,302
104,480
Other income
Fees, commission and brokerage income 8,904
13,723
Dividend income -
Income from dealing in foreign currencies 2,342
412
Other Income 30,406
5,467
Total other income 41,652
19,602
112,954
124,082
Other expenses
Administrative expenses 87,045
65,895
Other provisions / write offs -
-
Other charges (Penalty paid to SBP) 344
237
Total other expenses 87,389
66,132
Extra ordinary / unusual items -
-
Profit before taxation 25,565
57,950
Remuneration to Shariah Advisor / Board 486
420
GENERAL
- Figures have been rounded off to the nearest thousand of rupees unless otherwise stated.
-
NON-ADJUSTING EVENT
DATE OF AUTHORIZATION FOR ISSUE
Comparative information has been reclassified and rearranged in these unconsolidated condensed interim financial statements for the
purpose of comparison.
The profit and loss account of the Bank's Islamicbankingbusiness for the three monthsperiod ended March 31, 2012 is as
follows:
---------- (Rupees in '000) ----------
The Board of Directors in its meetingheld on April24, 2012 has announced cash dividendin respect of the three months periodended
March 31, 2012 of Rs. 3.00 per share (March 31, 2011: Rs. 3.00 per share). These consolidated condensed interim financial
statements for the three months period ended March 31, 2012 do not include the effect of these appropriations which will be
accounted for subsequent to the period end.
These consolidatedcondensed interimfinancialstatements were authorizedfor issue by the Board of Directors of the Bank in their
meeting held on April 24, 2012 .
Sarmad Amin
Director S.M. Muneer
President / CEO M.U.A. Usmani Mian Umer Mansha